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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 sink on Eurozone deflation, US GDP Macro concerns weighed on UK stock markets on Friday after Eurozone consumer prices fell more than forecasts and the rate of US economic growth slowed sharply. London's FTSE 100 finished the session down 0.9% at 6,749, ending at its lowest close since 21 January.
The Eurozone fell further into deflation in January with consumer prices falling at an annual rate of 0.6% after a 0.2% fall the month before, worse than the 0.5% drop expected.
It marked the largest decrease since July 2009 and comes after the European Central Bank announced a €60bn a month quantitative easing package to address the risk of deflation. Policymakers are trying to move inflation towards its target of just below 2%.
Over on Wall Street, strong gains from internet heavyweights Amazon.com and Google weren't enough to keep US markets afloat after the opening bell following figures which showed that annualised gross domestic product (GDP) growth eased to just 2.6% in the final three months of 2014, from 5% the preceding quarter, Analysts had expected a slowdown to 3%.
Chris Beauchamp, market analyst at IG, said: "GDP figures from across the North American continent were below expectations, lending further weight to the idea that the previously high-achieving US economy is running into tougher going."
IAG and BT provide a drag, gold miners rise
After an initial rise, British Airways and Iberia owner IAG finished with steep losses after the news that Qatar Airways has bought a 9.99% stake in the company. While the Doha-based group said it may consider raising its interest in IAG over time, analysts at Liberum said a full takeover was "highly unlikely".
Telecoms giant BT declined despite beating analysts forecasts with a solid rise in profits in its third quarter, as it announced a new 16-year "recovery plan" to pay down its expanding pension deficit, which now stands at £7bn. The company also revealed that it would upgrade its fibre network with large-scale pilots this summer of ultrafast broadband with G.fast.
Gold miners such as Randgold Resources and Fresnillo jumped as gold prices rebounded from a two-week low.
Oil producer Afren was continuing its volatile moves, surging over 26% after extending its deadline for Seplat to make a firm offer for the UK group. The Nigerian producer now has until 13 February to 'put up or shut up'.
Market Movers
techMARK 3,050.88 -1.02%
FTSE 100 6,749.40 -0.90%
FTSE 250 16,305.77 -0.33% |
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| | FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 5,685.00p +4.89%
Fresnillo (FRES) 899.00p +4.23%
Tullow Oil (TLW) 365.00p +4.02%
Dixons Carphone (DC.) 435.00p +2.55%
BHP Billiton (BLT) 1,443.00p +2.09%
Weir Group (WEIR) 1,680.00p +2.07%
Smiths Group (SMIN) 1,127.00p +1.53%
Anglo American (AAL) 1,113.00p +1.41%
Rio Tinto (RIO) 2,925.00p +1.35%
WPP (WPP) 1,466.00p +1.10%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 544.50p -3.46%
Sainsbury (J) (SBRY) 255.40p -3.18%
Ashtead Group (AHT) 1,088.00p -2.77%
Morrison (Wm) Supermarkets (MRW) 179.90p -2.70%
BT Group (BT.A) 417.90p -2.61%
Diageo (DGE) 1,970.00p -2.60%
Barratt Developments (BDEV) 458.40p -2.55%
Severn Trent (SVT) 2,152.00p -2.14%
Hargreaves Lansdown (HL.) 1,011.00p -2.13%
Royal Dutch Shell 'A' (RDSA) 2,018.00p -2.04%
FTSE 250 - Risers
Afren (AFR) 5.30p +26.19%
Petrofac Ltd. (PFC) 706.00p +5.61%
Nostrum Oil & Gas (NOG) 627.00p +4.76%
Ophir Energy (OPHR) 134.30p +4.51%
Acacia Mining (ACA) 281.90p +3.95%
Cairn Energy (CNE) 192.00p +3.78%
Brit (BRIT) 273.60p +3.44%
Centamin (DI) (CEY) 66.90p +3.40%
AO World (AO.) 307.20p +2.88%
Homeserve (HSV) 337.40p +2.83%
FTSE 250 - Fallers
Zoopla Property Group (WI) (ZPLA) 180.00p -5.61%
Cobham (COB) 326.70p -4.84%
Saga (SAGA) 183.30p -4.53%
Petra Diamonds Ltd.(DI) (PDL) 153.40p -3.58%
Rexam (REX) 425.00p -3.03%
Big Yellow Group (BYG) 611.00p -3.02%
Game Digital (GMD) 275.50p -2.99%
National Express Group (NEX) 255.50p -2.89%
Oxford Instruments (OXIG) 744.50p -2.74% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks fall as Eurozone consumer prices drop more than forecast European stocks declined as investors weighed Eurozone reports on consumer prices and unemployment along with US economic growth data. The EU's statistics agency said consumer prices fell 0.6% year-on-year, following a 0.2% decline in December amid sluggish oil prices. Analysts had pencilled in a 0.5% drop.
It marked the largest decrease since July 2009 and comes after the European Central Bank (ECB) announced a €60bn a month quantitative easing package to address the risk of deflation. The ECB is trying to move towards its target of just below 2%.
"January's Eurozone consumer prices figures have brought further evidence that deflationary pressures in the currency union go well beyond the effect of falling energy prices," said Capital Economics chief European economist Jonathan Loynes.
The Eurozone unemployment rate dropped to 11.4% in December from 11.5% the previous month, compared to analysts' estimates for no change.
The euro fell 0.26% to $1.1291 at close of trading.
US GDP
In the US, economic growth cooled more than expected in the fourth quarter. Gross domestic product (GDP) rose 2.6%, easing back from the previous quarter's 5% and missing estimates of 3%.
"The slowdown in GDP growth should not be too concerning for the US economy," said CEBR economist Sam Alderson. "Whilst the result [...] is disappointing when compared with the previous six months, the US economy is still carrying solid momentum moving into 2015."
The University of Michigan's consumer confidence index was unexpectedly revised lower to 98.1 in January from a previous estimate of 98.2.
Greece bailout, Russia rate cut
Greek finance minister Yanis Varoufakis has said the government will not cooperate with the EU and IMF mission bankrolling and will not seek an extension to the bailout programme.
Greece and EU will decide on the next move before the programme ends on 28 February, said Jeroen Dijsselbloem, head of the Eurozone finance ministers' group.
Meanwhile, Russia has unexpectedly cut benchmark interest rates amid concerns over an impending recession. The one-week auction rate was reduced to 15% from 17 %, the central bank said in a statement on its website Friday. Most analysts had predicted no change.
Banca Monte slides
Banca Monte dei Paschi di Siena SpA slipped after a report the Italian lender may raise more capital than previously planned.
Salvatore Ferragamo SpA rallied after reporting 2014 sales growth excluding currency swings that beat analysts' estimates.
Lagardere SCA slumped following reports the French media group is negotiating with private-equity firms to fund a $1.2bn deal with World Duty Free SpA.
BT Group declined after reporting third-quarter earnings in line with analysts' estimates.
International Consolidated Airlines was in the red after Qatar Airways bought a 9.99% stake in the British Airways owner. |
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| | US Market Report | | US open: Stocks fluctuate as economy slows down in Q4 US stocks fluctuated on Friday, after government data showed economy slowed down more than anticipated in the fourth quarter. Just after 09:40 in New York, the Dow Jones Industrial Average was down 48.97 points at 17,367.88, while the S&P 500 fell 0.35% and the Nasdaq rose 0.25%.
The US economy slowed down to a 2.6% growth rate in the fourth quarter, more than analysts had expected.
Gross domestic product (GDP), the broadest measure of goods and services produced across the economy, grew at a 2.6% annual rate in the fourth quarter, the Commerce Department said.
According to figures released on Friday, the US economy grew 5% in the third quarter and 4.6% in the second quarter after declining in the first three months of the year, while economists had expected GDP to grow by a seasonally adjusted 3.2%.
"There are signs, however, that economic growth could start to pick up again in coming months," said Markit chief economist Chris Williamson.
"Consumer confidence rose to its highest since August 2007 in January, according to the conference board, most likely buoyed by the boost to spending power from lower oil costs and the recent slide in inflation.
"The announcement of full-scale quantitative easing by the European Central Bank should also help boost business and consumer confidence in Europe, which remains a major export market for the US."
In corporate news, Google rose over 1% after failing to satisfy investors in the latest disappointing turn of earnings season. The tech giant said profits rose almost 30% but it failed to meet revenue forecasts.
"The strong US dollar was a major concern heading into the fourth quarter earnings season and that was precisely the reason given by Google for missing earnings estimates overnight and is contributing towards a lower open on Friday and could lead to a loss for major indices in January," said CMC Markets analyst Jasper Lawler.
Amazon surged over 10% after announcing late on Thursday that sales surged 15% and profits fell less than expected.
Mattel fell over 1.5% after confirming a decline in sales and profit ahead of the bell and saying it will "thoroughly evaluate" its business, while Eli Lilly & Co. edged 0.3% higher after reporting adjusted fourth-quarter earnings of 75 cents a share, beating expectations.
Intercept Pharmaceuticals surged 17% after the drug maker said late Thursday its investigational treatment for a liver disease was granted breakthrough-therapy status, while MasterCard Inc. rose 2% after reporting a rise in fourth-quarter revenue that was better than expected.
Gold futures rose 0.7% to $1,263.50, while the dollar rose against the pound and the euro but lost over 0.5% against the yen. |
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| | Broker Tips | | Broker tips: IAG, BT Group, Imperial Tobacco IAG was in focus on Friday after the revelation that Qatar Airways had purchased a 9.99% stake in the airline, though broker Liberum reckons that a full takeover of the Anglo-Spanish group is "highly unlikely".
The broker said a bid for the whole company is not likely to happen "due to the ownership restrictions on non-EU shareholders which are required to ensure that IAG's airlines retain their traffic rights".
Hargreaves Lansdowne Stockbrokers has applauded BT's strong cash generation and plans to cut its pension deficit, though competition in the telecoms sector is of some concern.
The broker noted that the current consolidation happening in the wider sector means that competition will stay "ferocious" and ongoing talks to secure Premier League TV rights "could prove costly". "Even so, BT clearly means business and is flexing its corporate muscles successfully. The shares have risen 16% over the last year [...] but appetite remains undiminished with the market consensus still coming in at a 'buy'," it said.
UBS has hiked its target for Imperial Tobacco by 15%, saying that it sees the prospect of a "significant step-up" in cash flow at the cigarette company. The bank lifted its 12-month target for the shares from 2,900p to 3,350p and reiterated a 'buy' rating. | | |
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