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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 end choppy session firmly lower as data disappoints It was a volatile day for the UK equity market with stocks swinging between losses and gains for most of the session, with a late sell-off sending the FTSE 100 firmly in the red by the close.
Service-sector activity data from across the globe largely came in below expectations with weak figures from the US in particular behind that steep declines seen by the end of the session.
The FTSE 100 finished the day down 0.8% at 6,367, its worst close since 17 December when it settled at 6,336.48.
Mining stocks had given the market a boost in the early afternoon by the news that top metals consumer China has fast-tracked $1trn of infrastructure projects in a bid to spur growth.
However, data showing that growth in the US services sector slowed to a six-month low in December dampened sentiment by the close. The ISM non-manufacturing purchasing managers' index (PMI) fell from 59.3 to 56.2 last month, missing the forecast of 58.
It was a similar story back home where the UK services PMI dropped from 58.6 in November to a 19-month low of 55.8. Meanwhile, the final reading of the Eurozone services PMI was unexpectedly revised lower from 51.7 to 51.4.
Oil prices continued to be a worry for many, with the selling pressure on crude showing no signs of abating, adding to deflationary concerns for the global economy. West Texas oil fell 3.8% to $48.14 a barrel, while Brent slumped 2.9% to $51.59 a barrel.
Miners rise, Ashtead and banks fall
Mining stocks rose strongly by the end of trade with Randgold, Fresnillo, Anglo American, Rio Tinto and Centamin among the best performers. Gold and silver miners were particularly in demand as precious metal prices gained.
Heading the other way was equipment rental firm Ashtead on the back of negative readacross from US peer United Rentals which was hit with a broker downgrade on Monday night. Evercore lowered its rating for United Rentals from 'buy' to 'sell', saying that the recent collapse in oil will affect energy investments and the construction market.
The heavyweight banking sector was mostly lower as continued concerns about Greek leaving the Eurozone hit financial shares such as RBS, Barclays, HSBC and Lloyds.
"Banking stocks are being battered for fears that the political uncertainty in Greece could turn into a region-wide financial crisis," said analyst David Madden from IG.
Retailers were also weaker with Kingfisher, Ocado and Marks & Spencer finishing lower. Investors of Sports Direct and JD Sports Fashion meanwhile were reacting to the news that retail peer Bank Fashion has entered into administration. |
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| | Market Movers
techMARK 2,911.36 -1.04%
FTSE 100 6,366.51 -0.79%
FTSE 250 15,778.65 -0.90%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 4,757.00p +4.87%
Fresnillo (FRES) 790.50p +2.86%
Anglo American (AAL) 1,155.00p +2.53%
Rio Tinto (RIO) 2,944.50p +2.12%
Shire Plc (SHP) 4,542.00p +1.23%
Imperial Tobacco Group (IMT) 2,834.00p +1.03%
SSE (SSE) 1,600.00p +1.01%
Royal Mail (RMG) 414.20p +0.98%
Intertek Group (ITRK) 2,298.00p +0.97%
BG Group (BG.) 848.50p +0.81%
FTSE 100 - Fallers
Ashtead Group (AHT) 1,109.00p -6.18%
ARM Holdings (ARM) 943.50p -4.41%
Kingfisher (KGF) 316.80p -3.44%
Sports Direct International (SPD) 692.00p -3.01%
Smiths Group (SMIN) 1,047.00p -2.79%
Hargreaves Lansdown (HL.) 956.50p -2.79%
Schroders (SDR) 2,563.00p -2.70%
RSA Insurance Group (RSA) 419.90p -2.64%
International Consolidated Airlines Group SA (CDI) (IAG) 480.80p -2.57%
St James's Place (STJ) 768.00p -2.54%
FTSE 250 - Risers
Centamin (DI) (CEY) 64.80p +6.84%
Renishaw (RSW) 2,059.00p +4.94%
Lonmin (LMI) 174.80p +4.92%
Acacia Mining (ACA) 270.70p +4.48%
Mitchells & Butlers (MAB) 395.00p +4.41%
Just Eat (JE.) 330.00p +3.19%
Tate & Lyle (TATE) 614.00p +2.76%
esure Group (ESUR) 211.20p +2.18%
Debenhams (DEB) 77.15p +2.05%
TSB Banking Group (TSB) 283.50p +1.80%
FTSE 250 - Fallers
Ocado Group (OCDO) 387.10p -7.83%
JD Sports Fashion (JD.) 472.00p -6.90%
SSP Group (SSPG) 272.50p -6.00%
Ladbrokes (LAD) 102.50p -5.62%
Oxford Instruments (OXIG) 1,140.00p -4.92%
Euromoney Institutional Investor (ERM) 1,026.00p -4.11%
Hays (HAS) 141.50p -4.00%
Spectris (SXS) 1,997.00p -3.99%
Ophir Energy (OPHR) 134.60p -3.58%
Nostrum Oil & Gas (NOG) 436.60p -3.41% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed after service sector data European stocks were little changed following the release of a raft of data on the service sector and a continued decline in oil prices.
Markit's purchasing managers' index (PMI) for Eurozone service sector activity growth was revised down to 51.6 in December from a previous estimate of 51.9, surprising analysts who had expected it to remain unchanged. A reading above 50 signals expansion.
Capital Economics said: "The downward revision to December's Eurozone PMI added to signs that the economy is barely expanding. And with the price indices highlighting the threat of deflation, the European Central Bank (ECB) remains under intense pressure to increase its support."
The ECB meets on 22 January when the central bank may introduce full-blown quantitative easing to address the threat of deflation. Analysts predict figures on Wednesday to show Eurozone deflation.
The UK's services PMI fell back to a reading of 55.8 in December - its lowest reading in 19 months - from 58.6 the month before, Markit revealed separately. Economists had expected a reading of 58.4.
HSBC's China services PMI for December rose from 53 in November to 53.4 in December, pushing mining stocks higher including Anglo American, Fresnillo, Rio Tinto and Randgold.
Japan's services PMI also increased to 51.7 last month from 50.6 in November.
However, weighing heavily on the market was another fall in oil prices with Brent crude falling to $51.42 per barrel and West Texas Intermediate at $48.12.
In the US, ISM's non-manufacturing composite index fell to 56.2 in December from 59.3 a month earlier, worse than the 58 estimated by analysts.
Markit's US services PMI was revised lower to 53.3 last month from the 53.6 previous estimate, surprising analysts which had projected a reading of 53.7.
Elsewhere in the US, a report on factory orders is revealed a 0.7% decline in November, a bigger drop than the 0.4% that was forecast.
Eenergy stocks were continuing to drag on the oil plunge, including Nostrum Oil & Gas, Tullow Oil and Ophir Energy.
"The recent sharp falls in the oil price reflect OPEC putting the squeeze on non-OPEC producers (primarily shale oil), to see who will blink first," Schroders said in a note.
Meanwhile, continuing to loom on markets was the prospect of Greece exiting the euro. German Chancellor Angela Merkel is reportedly planning to accept a Greek euro exit ahead of the Mediterranean country's elections in three weeks.
"After years of political fighting and billions of euros in bailout money it could be that we are closer to a Greek exit than we have ever been as the greatest power in the Eurozone now see the exit of Greece from the Euro as a viable option for a sustainable and recovery Eurozone," according to James Hughes, chief market analyst at Alpari UK.
On the company front, TomTom NV rallied after saying Volkswagen AG chose the Dutch company to use its navigation devices in some of its car models.
A gauge of banks declined including HSBC Holdings, Banco Santander SA and BNP Paribas SA. |
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| | US Market Report | | US open: Markets in decline as ISM data rolls in lower than expected US stocks were declining on Tuesday after the latest factory orders and non-manufacturing ISM data came in lower than expected.
The Dow Jones Industrial Average fell 0.40% to 17,432.16 while the Nasdaq dropped 0.38% to 4,145.30 and S&P 500 decreased 0.34% to 2,013.64.
Financial analyst Connor Campbell from Spreadex said: "After a quiet Monday led to doom-laden afternoon for the US markets which saw red marks across the board, the Dow et al. will be looking to American ISM non-manufacturing PMI and factory orders to try and lift not only the US markets, but the worldwide indices, from what looks set to be another difficult morning."
The ISM services survey's employment gauge fell to 56.0 from a previous score of 56.7, while that for prices paid dropped to 49.5 from 54.4, marking the first time since September 2009 that it had been below 50.
Meanwhile, crude futures opened lower by 3.667%, moving down to $48.27 a barrel while Brent futures were retreating by 2.886% to $51.62 a barrel early in the day.
Over on COMEX, gold futures were gaining 0.35% to $1,208.20 while the dollar advanced against the pound and the euro but fell against the yen. |
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| | Broker Tips | | Broker tips: Supermarkets, Oil services, Sky, Premier Foods After one of the worst years in living memory for investors and management in the British supermarket sector, broker Shore Capital expects expect 2015 to be another "very active and interesting" year, though the sector's nadir "may have been reached".
"Given the collapse of profits over the last 12-24 months, to a considerable degree reflecting a somewhat delayed reaction to market conditions, we see grounds to believe that the new year will be less disappointing from a performance and earnings outcome," wrote analysts Clive Black and Darren Shirley in a note to clients, but they lamented that there did not appear to be any "quick fix" to sector's woes.
The outlook for the European oil and gas sector in 2015 is "not encouraging", according to UBS which cut targets for energy services stocks Petrofac and Hunting on Tuesday.
UBS said: "We remain cautious on [oil] services despite share price declines as capex delays and reductions are likely to impact earnings and sentiment across the sector."
Broker Liberum has reiterated its 'sell' call on pay-TV and broadband group Sky, saying that the company is at risk given its "surprisingly shallow" profit base.
"Most of Sky's profitability comes from outside its core retail base, from areas such as pubs and clubs, wholesale and advertising," said analyst Ian Whittaker. "This is not necessarily negative but it does mean Sky is more vulnerable to a negative outcome for the Premier League rights."
Upside risk at Premier Foods remains substantial, according to Credit Suisse which highlighted "signs of stability" in the food producer's sales. | | |
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