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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: Stocks at highest since September on ECB optimism, upbeat data UK stocks pushed higher on Friday, finishing at levels not seen in over four months, lifted by improving economic data and continued optimism surrounding a massive bond-buying plan by the European Central Bank (ECB). The FTSE 100 settled up 0.5% at 6,832.83 by the end of the session despite heavy falls in the mining sector. This was the index's first close above the 6,800 mark since 19 September 2014.
Nevertheless, nervousness ahead of Sunday's general election in Greece was limiting gains in London. Analysts at Barclays said that while the latest polls suggest a victory for the anti-austerity Syriza party, "we nonetheless do not rule out a more adverse scenario in which a second round of general elections are needed, prolonging political uncertainty, affecting the economy".
The ECB unveiled on Thursday that it would buy €60bn-worth of private and public securities each month until September 2016 in a bid to revive growth and lift the euro area out of deflation.
ECB Executive Board member Benoit Coeure said in an interview on Friday that the quantitative easing programme could be increased if it doesn't have its intended impact on inflation. He said if the rate of price rises does not reach just under 2%, "then we'll have to do more or we have to do it for longer".
Global data beats forecasts
UK retail sales registered an unexpected 0.4% rise in December, boosted by an increased demand for fuel and steady sales over Christmas. Analysts had forecast sales to decline after 1.6% growth in November following the Black Friday sales. As such, sales were up 2.3% over the quarter as a whole, the highest quarterly increase since April 2002.
Business activity growth in the Eurozone accelerated at its fastest pace in five months, according to the preliminary January purchasing managers' index (PMI) data published by Markit. The preliminary estimate of the Eurozone PMI composite output index rose from 51.4 in December to 52.2, ahead of the consensus estimate of 51.8.
Meanwhile, the HSBC/Markit Chinese manufacturing PMI edged higher to 49.8 in January from 49.6 the previous month; analysts had expected a slight dip to 49.5.
Mining stocks drop
Miners such as Glencore, Antofagasta, Randgold and BHP Billiton were trading with heavy losses as metal prices weakened. Anglo American was also falling on rumours that it is looking at offloading the Dawson and Foxleigh coal mines in Australia, while Glencore was hit by a downgrade to 'underweight' by JPMorgan Cazenove.
Heading the other way were heavyweight consumer staples stocks such as Associated British Foods, Reckitt Benckiser, Unilever and Imperial Tobacco.
Vodafone was also on the rise after UBS said at the decline in organic revenues is estimated to have eased in its third quarter. The bank forecasts a return to growth in the first quarter of next year, saying that the stock "remains one of our preferred picks in the sector".
Building materials firm CRH was extending gains made on Thursday after confirming speculation that it could buy some of Lafarge and Holmium's assets ahead of their proposed merger.
The share price of oil and gas group EnQuest surged after it renegotiated covenants on its debt facilities with lenders and reassured its financial position "remains resilient" despite the recent collapse in crude prices. The company also slashed its spending budget for this year.
Market Movers
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FTSE 100 6,832.83 +0.53%
FTSE 250 16,458.90 +0.49% |
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| | FTSE 100 - Risers
Associated British Foods (ABF) 3,080.00p +3.18%
Reckitt Benckiser Group (RB.) 5,560.00p +2.96%
CRH (CRH) 1,680.00p +2.50%
Unilever (ULVR) 2,854.00p +2.48%
Pearson (PSON) 1,349.00p +2.35%
BT Group (BT.A) 431.10p +2.35%
Imperial Tobacco Group (IMT) 3,091.00p +2.35%
Reed Elsevier (REL) 1,160.00p +2.29%
Shire Plc (SHP) 4,816.00p +2.16%
International Consolidated Airlines Group SA (CDI) (IAG) 536.00p +2.10%
FTSE 100 - Fallers
Glencore (GLEN) 249.40p -5.82%
Antofagasta (ANTO) 684.50p -4.80%
Tullow Oil (TLW) 371.30p -4.38%
Anglo American (AAL) 1,103.50p -3.62%
Rio Tinto (RIO) 2,883.00p -2.81%
Randgold Resources Ltd. (RRS) 5,420.00p -2.43%
Capita (CPI) 1,082.00p -2.17%
BG Group (BG.) 891.70p -2.11%
Fresnillo (FRES) 897.00p -1.97%
BHP Billiton (BLT) 1,425.00p -1.86%
FTSE 250 - Risers
Jimmy Choo (CHOO) 178.00p +5.95%
Interserve (IRV) 523.50p +5.57%
Balfour Beatty (BBY) 227.00p +5.29%
AO World (AO.) 288.30p +5.03%
Euromoney Institutional Investor (ERM) 1,057.00p +4.86%
SSP Group (SSPG) 277.00p +4.53%
Workspace Group (WKP) 803.50p +4.35%
St. Modwen Properties (SMP) 427.80p +4.32%
Crest Nicholson Holdings (CRST) 371.30p +4.01%
Henderson Group (HGG) 237.40p +3.94%
FTSE 250 - Fallers
Vedanta Resources (VED) 430.00p -8.43%
Centamin (DI) (CEY) 66.40p -7.91%
Hunting (HTG) 460.40p -7.90%
Acacia Mining (ACA) 290.90p -6.16%
Kaz Minerals (KAZ) 197.10p -5.65%
Telecom Plus (TEP) 1,038.00p -5.12%
Supergroup (SGP) 954.00p -4.60%
PayPoint (PAY) 890.00p -3.78%
Lonmin (LMI) 174.00p -3.12% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally after ECB's Coeure says QE could be extended Stocks in the euro-area gained after European Central Bank (ECB) Executive Board member Benoit Coeure said the quantitative easing (QE) programme could be extended or expanded if the impact on inflation was not enough. Couere told Bloomberg at the World Economic Forum in Davos, Switzerland on Friday that if the ECB fails to bring inflation back to its target of close to but below 2% with its QE programme, then "we'll have to do more or we have to do it for longer".
The ECB on Thursday announced a €1.1trn package QE, with the purchase of €60bn-worth of private and public securities each month until September 2016.
Bank of England governor Mark Carney said the programme was "absolutely necessary" for medium-term prosperity in the bloc.
"I welcome the steps that the ECB took yesterday," Carney told a panel at Davos on Friday.
The euro was down 0.73% at $1.1283.
With the ECB announcement out of the way, the market is now turning to the Greek elections on Sunday, with Syriza leading the polls. Ahead of the elections, German Chancellor Angela Merkel said she wanted Greece to remain part of the Eurozone but must take responsibility for its debt.
Eurozone PMI beats estimates
The flash estimate of Markit's Eurozone purchasing managers' index for composite output, which includes manufacturing and service activity, rose from 51.4 in December to 52.2. It beat the consensus estimate of 51.7. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.
A preliminary reading of the HSBC Chinese PMI for manufacturing activity rose to 49.8 in January from a final reading of 49.6 in December, more than the 49.5 expected.
The US manufacturing PMI fell to 53.7 in January from 53.9 a month earlier. Analysts had forecast a reading of 54.
Meanwhile, US existing home sales in the US increased 2.4% in December following a 6.1% drop a month earlier but missing analysts' estimates for a 3% rise.
In the UK, data showed retail sales increased 4.2% in December, compared to a 6.8% rise a month earlier and forecasts for a 3.5% gain.
Oil prices recover
Brent crude increased 1.4% to $49.22 per barrel, according to the ICE, at 16:40 London time. Saudi Arabia's King Abdullah died overnight with Prince Salman named as successor. Salman is expected to continue his predecessor's policy of maintaining oil production to preserve the country's 20% share of global crude sales.
A gauge of miners declined, including Antofagasta, Glencore, and Fresnillo, as metal prices dropped.
Telefonica SA gained on reports Asian tycoon Li Ka-shing is in talks to buy Britain's mobile provider O2 for up to £10.25bn from the Spanish firm.
CRH was a top riser after confirming it was in talks to buy some of Lafarge and Holcim's assets ahead of their proposed merger.
Portugal Telecom SGPS SA jumped after its shareholders approved a €7.4bn sale of Oi SA's Portuguese telecommunications assets to Altice SA. |
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| | US Market Report | | US open: Stocks mostly lower following worse-than-forecast data US stocks were mostly lower following the release of worse-than-expected reports on US manufacturing and existing home sales.
Markit's purchasing managers index (PMI) for manufacturing fell to 53.7 in January from 53.9 a month earlier. Analysts had forecast a reading of 54. A figure above 50 indicates expansion, while a level below 50 indicates contraction.
It follows a preliminary reading of the HSBC Chinese PMI for manufacturing activity which rose to 49.8 in January from a final reading of 49.6 in December, beating expectations of 49.5.
Meanwhile, existing home sales in the US increased 2.4% in December following a 6.1% drop a month earlier but missing analysts' estimates for a 3% rise.
"After appearing to reverse its New Year slump this week, the US markets were dealt a blow as both flash manufacturing data and existing home sales both came in lower than expected," said Connor Campbell, financial analyst at Spreadex.
"This has been the trend for 2015's US data, and after the astonishing run the Dow Jones went on last year, investors have been thoroughly disappointed in the USA's start to the New Year."
Company-wise, UPS slumped after it reported a worse-than-forecast fourth quarter, citing the underperformance of the US market.
General Electrics edged up after reporting fourth-quarter earnings of $56 cents a share, narrowly beating consensus of $55 cents a share.
Honeywell International rose after reporting fourth-quarter profit of $975m. Excluding the pension mark-to-market adjustment, per-share earnings were $1.43, beating forecast of $1.42.
Starbucks gained 5% after reporting late on Thursday that first-quarter profit rose to $983.1m.
Capital One Financial fell over 1% after its fourth-quarter earnings missed Wall Street's estimates. |
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| | Broker Tips | | Broker tips: Vodafone, EnQuest, Vedanta Resources The decline in organic revenues at Vodafone continued to ease in its third quarter, according to UBS, which hailed the telecom giant's "good progress in key markets". The bank reiterated its 'buy' stance and 265p target for the stock, saying that third-quarter results due 5 February should show the company on the way to a return to growth.
Westhouse Securities analysts welcomed Friday's news that EnQuest had renegotiated the terms of its debt and cut its capital expenditure budget for this year, saying that the oil firm "is a play on oil-price recovery".
Westhouse said: "This is a positive update. The risk of EnQuest breaching its covenants is now mitigated with covenants relaxed and capex cut without a delay to major development projects."
Canaccord Genuity has reiterated its 'speculative buy' recommendation on Vedanta Resources, hailing the resilience of Cairn India's third-quarter financial performance. | | |
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