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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: UK stocks jump to four-month high as ECB unveils QE plan News of a massive bond-buying plan by the European Central Bank (ECB) sent UK stocks to a four-month high on Thursday, as policymakers failed to disappoint with stimulus measures to revive the struggling Eurozone economy.
London's FTSE 100 finished the session up 1%, gaining 68.59 points to 6,796.63. The index has not closed above this level since 19 September 2014 when it settled at 6,837.92.
"European stocks and bonds rallied as the ECB finally came through after months of promises and delivered a quantitative easing (QE) programme that is bigger than expected to attack the curse of deflation in the Eurozone," said analyst Jasper Lawler from CMC Markets UK.
"There were some fears of under-delivery heading into the press conference but those were quickly dissolved," he said.
ECB president Mario Draghi unveiled QE totalling €1.1trn, with the purchase of €60bn-worth of private and public securities each month until September 2016, slightly ahead of investors' expectations.
The news sent the euro to a fresh 11-year low against the dollar, while bond in the Eurozone periphery dropped sharply.
Yoram Lustig, at fund manager at AXA Investment Managers, said the news was the "long-awaited bazooka from the ECB", but expected equity markets range bound in the month ahead, "oscillating between fear and hope".
Royal Mail and miners lead the rise
Royal Mail was a high riser after saying it expects to meet full-year forecasts following a "busy festive period" with parcel numbers up 4% at 120m in December alone, though competition in the parcel market held back revenue growth.
Mining stocks were also in demand as risk appetite increased following the ECB announcement. Anglo American, BHP Billiton, Glencore and Rio Tinto were all putting in decent gains.
Oil and gas producers were higher despite the dip in crude prices, with Norstrum Oil & Gas, Soco International, BP and Shell on the rise.
Financials Shroders, Aberdeen Asset Management, Old Mutual, Ashmore and RSA Insurance were also advancing, with RSA being lifted by an upgrade by Credit Suisse to 'outperform'.
Shares in Oxford Instruments plunged nearly 27% after the nanotechnology group said second-half revenues will "fall short of market expectations" due to tightening sanctions against Russia and a slower recovery from Japan.
Card Factory dropped sharply after a pre-close trading update underwhelmed. Sales at the UK greeting cards and gifts retailer rose 8.1% year-on-year over the 11 months to end-December, in line with forecasts, though investors took profits following a steady rise in the stock since its flotation last May.
Property services firm Countrywide fell after saying that despite record results for 2014 it experienced a "significant deceleration of market growth" during the course of the year.
Market Movers
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FTSE 100 6,796.63 +1.02%
FTSE 250 16,378.94 +0.77% |
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| | FTSE 100 - Risers
Smiths Group (SMIN) 1,136.00p +4.99%
Schroders (SDR) 2,832.00p +4.16%
easyJet (EZJ) 1,710.00p +3.83%
3i Group (III) 457.80p +3.60%
Royal Mail (RMG) 445.80p +3.55%
RSA Insurance Group (RSA) 466.80p +3.32%
Aberdeen Asset Management (ADN) 441.50p +3.20%
BAE Systems (BA.) 518.00p +3.19%
WPP (WPP) 1,479.00p +3.14%
Tesco (TSCO) 235.85p +2.99%
FTSE 100 - Fallers
Dixons Carphone (DC.) 430.70p -2.07%
Shire Plc (SHP) 4,714.00p -1.75%
Fresnillo (FRES) 915.00p -1.03%
SABMiller (SAB) 3,408.00p -0.99%
Aggreko (AGK) 1,547.00p -0.96%
SSE (SSE) 1,490.00p -0.93%
Standard Life (SL.) 402.00p -0.72%
Marks & Spencer Group (MKS) 469.60p -0.70%
Next (NXT) 7,010.00p -0.64%
AstraZeneca (AZN) 4,689.50p -0.47%
FTSE 250 - Risers
Evraz (EVR) 175.10p +10.82%
Nostrum Oil & Gas (NOG) 551.50p +9.21%
Vedanta Resources (VED) 469.60p +7.36%
Soco International (SIA) 278.20p +7.21%
Playtech (PTEC) 698.00p +7.14%
NMC Health (NMC) 508.00p +6.95%
CLS Holdings (CLI) 1,540.00p +6.94%
Bank of Georgia Holdings (BGEO) 2,068.00p +6.65%
Ashmore Group (ASHM) 284.10p +6.40%
Hunting (HTG) 499.90p +6.36%
FTSE 250 - Fallers
Oxford Instruments (OXIG) 795.00p -27.73%
Card Factory (CARD) 256.20p -7.07%
Afren (AFR) 20.00p -4.76%
Countrywide (CWD) 414.00p -3.99%
Zoopla Property Group (WI) (ZPLA) 150.80p -3.46%
Saga (SAGA) 161.50p -3.24%
Interserve (IRV) 495.90p -3.05%
Telecom Plus (TEP) 1,094.00p -2.84%
Workspace Group (WKP) 770.00p -2.72% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally as ECB announces major QE programme European stocks jumped after the European Central Bank (ECB) announced a quantitative easing programme. The programme will include €60bn of public and private sector asset purchases for at least 18 months from March 2015.
The €60bn monthly total will include existing central bank bond purchase programmes, which amount to roughly €10bn per month, meaning the announcement was roughly in line with expectations.
Totalling at least €1trn, the bond-buying scheme is the equivalent of just over 10% of Eurozone gross domestic product, economists noted, making it close in size to the initial bouts of QE undertaken by the US Federal Reserve and the Bank of England.
Versus the dollar the euro, which had been trading at $1.1629, before sliding to $1.1468 in mid-afternoon, down 1.29% against, creating fresh 11-year lows.
Brent crude fell 1.15% to $48.46 per barrel, according to the ICE, following the announcement.
IFO President Hans Wener Sinn said the ECB's decision to introduce a QE programme is illegal when it comes to monetary state financing, saying it violated European treaties.
Jonathan Loynes, chief European economist at Capital Economics, noted that the purchases will consist of both investment grade sovereign debt and the debt of "agencies and European institutions" and that the ECB will abandon the traditional 'loss-sharing' of its monetary policy operations.
"In other words, the risks will remain with national central banks, as had been mooted over recent days. This will surely limit the beneficial effects on the indebted peripheral countries."
John Cridland, director-general of the UK Confederation of British Industry, said: "Quantitative easing will give the Eurozone recovery a much-needed boost, which should also have a positive economic effect in the UK."
Meanwhile, Denmark's central bank has slashed its main policy rate for a second time this week. The country's monetary authority announced it had lowered its deposit rate by another 15 basis points to -0.35%.
Ahead of Sunday's Greek election, German chancellor Angela Merkel has warned that the Mediterranean nation must take responsibility for its debts. Speaking at the World Economic Forum in Davos, Merkel insisted that she wanted Greece to remain in the Eurozone but needed to pay back its borrowings.
SABMiller, Remy Cointreau
SABMiller dropped after Berenberg Bank trimmed its target on the drink giant's shares to 3,700p from 3,800p.
Remy Cointreau SA advanced after reporting an unexpected increase in cognac sales in the third quarter.
Roche Holding AG and Novartis AG declined, sending a gauge of health-care shares lower. |
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| | US Market Report | | US open: Markets edge forward as ECB announces bond-buying programme US stocks edged forward on Thursday, buoyed by the European Central Bank's (ECB) decision to commit to buy government bonds as part of an asset-purchase programmed worth about €1.1trn.
Just after 09:45 in New York, the Dow Jones Industrial Average was up 10.26 points, while the S&P 500 and the Nasdaq rose 0.3% and 0.5% respectively.
ECB president Mario Draghi unveiled plans for a bond-buying programme designed to inject new life into the flagging Eurozone economy. Starting in March, the ECB will buy €60bn worth of private and public securities each month until September 2016.
"Mario Draghi has been left with little choice than to begin a more robust than expected quantitative easing programme in a bid to awake the economies of the Eurozone from their slumber," said Dennis de Jong, managing director at UFX.com.
"This play is seen by many as the last roll of the dice for the beleaguered euro. Quantitative easing has had some success in the US and UK, but with such a patchwork of economies and banking systems in the Eurozone, the jury is very much out.
"There will be a lot of people holding their breath over the coming months."
US initial jobless claims fell 10,000 to 307,000 in the week ended 17 January, stabilising above the reading of 300,000 analysts had estimated, while claims for the previous week were revised up to 317,000.
Reflecting the recent volatility, the four-week moving average for initial claims rose from 300,000 to 307,000.
Southwest Airlines rose after reported better-than-expected quarterly profits on the back of greater passenger traffic and a hefty drop in fuel costs.
Covidien and Union Pacific rose 2% and 4% respectively after both beat analysts' forecast for earnings, while insurance group Travelers rose 1% after posting fourth-quarter profit above Wall Street's estimates.
Land's End plummeted by over 20% after the group offered up a disappointing outlook, while eBay rose almost 4% after announcing late on Wednesday that its fourth-quarter results had met expectations.
After the bell on Wednesday, American Express announced its fourth-quarter earnings and revenue both rose but shares fell almost 3% after the group said it will cut 4,000 jobs.
Royal Bank of Canada fell after agreeing to purchase US rival City National Corp. for about $5.4bn, its largest takeover on record.
On the back of Draghi's announcement, the dollar rose over 1% against the euro, though it lost almost 0.5% against the yen and almost 0.1% against the pound. |
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| | Broker Tips | | Broker tips: Royal Mail, RSA Insurance, Card Factory Royal Mail shareholders were likely "breathing a sigh of relief" on Thursday after the postal delivery group reported a resilient Christmas trading update, according to Galvan Research. Analyst Alex Joyner said the "demise of City Link last month has certainly helped", as the company took the lion's share of parcel delivery business in December. "There's still a fair bit of downwards momentum behind the shares, but as the company continues to cut costs and restructure we may see more upside potential soon," he said.
RSA Insurance's shares were given a boost on Thursday by an upgrade by Credit Suisse from 'neutral' to 'outperform', as the bank delivered an upbeat outlook for the UK insurance sector.
"The fundamental appeal of the UK life and savings companies is underpinned by low interest rate risk, solid growth dynamics and attractive dividend profiles," Credit Suisse said.
Card Factory's share price dropped on Thursday morning despite an in-line trading statement from the greeting cards and gifts retailer, with broker Canaccord Geunity weighing on the stock after downgrading its recommendation from 'buy' to 'hold'. | | |
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