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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 at best levels this year as Tesco jumps 15% London's FTSE 100 surged by 2.3% on Thursday to close at its best level this year as a massive gain in the share price of heavyweight supermarket group Tesco gave fellow retailers a lift. Increased hopes for central-bank stimulus in Europe, a stabilisation of oil prices and improving economic data from the States also boosted sentiment across financial markets worldwide.
The Footsie finished the day up 150 points at 6,569.96, its best close since 29 December 2014 when it settled at 6,633.50.
"US confidence has coerced a solid triple-digit climb from the FTSE and the majority of European equity indices, as the bulls have taken control of traders risk appetite," said analyst Alastair McCaig from IG.
Wall Street markets got off to a good start on Thursday after data showed that US initial jobless claims fell from 298,000 to 294,000 last week, more or less in line with forecasts. Barclays economists said the figures "reflect continued labour-market improvement, which we expect will continue through the year".
Both economic confidence and producer-price figures in the Eurozone came in below forecasts on Thursday morning, and followed the news on Wednesday that the region experienced consumer-price deflation in December.
While the figures add to concerns that the recovery in the single-currency region is faltering, the data puts further pressure on the European Central Bank to fire off on full-blown quantitative easing when it meets later this month.
Meanwhile, the announcement by the Bank of England at noon that interest rates were left unchanged didn't have a major impact on the market, with most economists not expecting a rate rise until the latter part of the year at the earliest.
Brent crude was up 0.1% at $51.22 a barrel by the close in London as the recent slide in prices abated following the news that US stockpiles unexpectedly shrank last week.
Tesco impresses with turnaround, Christmas sales
Tesco's shares surged finished the day 15% higher after the company said it would cut costs substantially next year, close 43 unprofitable stores and lower prices, as chief executive Dave Lewis attempts to turn around the struggling business. The news came as Tesco unveiled a "broad-based improvement" in UK trading with the like-for-like (LFL) sales decline easing to just 0.3% over Christmas.
Rival chains such as J Sainsbury, Wm Morrison and online counterpart Ocado also surged.
In contrast, department-store retailer Marks & Spencer fell sharply after sales of general merchandise and womenswear over the Christmas period were significantly worse than had been expected, falling 5.8% on a LFL basis.
Also lower were airline peers Easyjet and IAG as oil prices steadied. Airline stocks have risen sharply recently on hopes that the collapse in crude will lead to lower fuel costs.
Halfords took a tumble after the boss of the car- and bike-parts retailer Matt Davies left for Tesco. Investec labelled the departure as "disappointing" given that Davies was the "architect of [Halfords'] recovery strategy".
Mining stocks were mostly higher on Thursday, but Egyptian gold producer Centamin bucked the trend after disappointing the market with its guidance for production in 2015. |
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| | Market Movers
techMARK 2,996.90 +2.02%
FTSE 100 6,569.96 +2.34%
FTSE 250 16,085.54 +1.48%
FTSE 100 - Risers
Tesco (TSCO) 209.25p +14.97%
Sainsbury (J) (SBRY) 252.40p +9.93%
Morrison (Wm) Supermarkets (MRW) 184.70p +7.76%
Intertek Group (ITRK) 2,430.00p +5.24%
Vodafone Group (VOD) 225.75p +4.51%
Aviva (AV.) 483.20p +4.30%
Imperial Tobacco Group (IMT) 2,950.00p +4.24%
SABMiller (SAB) 3,362.50p +4.02%
Friends Life Group Limited (FLG) 365.10p +4.02%
CRH (CRH) 1,552.00p +3.74%
FTSE 100 - Fallers
Marks & Spencer Group (MKS) 446.90p -3.52%
easyJet (EZJ) 1,616.00p -1.70%
International Consolidated Airlines Group SA (CDI) (IAG) 473.70p -1.56%
Tullow Oil (TLW) 393.90p -0.48%
TUI AG Reg Shs (Post- 16/12/14)(DI) (TUIJ) 1,078.00p -0.28%
Persimmon (PSN) 1,539.00p -0.13%
BG Group (BG.) 842.50p -0.08%
British Land Co (BLND) 778.50p -0.06%
FTSE 250 - Risers
NMC Health (NMC) 503.00p +6.68%
Ocado Group (OCDO) 415.00p +6.33%
Ted Baker (TED) 2,384.00p +5.49%
Mitchells & Butlers (MAB) 418.60p +5.18%
Ashmore Group (ASHM) 274.70p +5.09%
Nostrum Oil & Gas (NOG) 450.00p +4.97%
Howden Joinery Group (HWDN) 411.20p +4.84%
Laird (LRD) 331.70p +4.31%
Kier Group (KIE) 1,475.00p +4.31%
Elementis (ELM) 267.70p +4.20%
FTSE 250 - Fallers
Halfords Group (HFD) 423.30p -8.48%
AO World (AO.) 254.30p -6.23%
Zoopla Property Group (WI) (ZPLA) 181.50p -5.81%
Dairy Crest Group (DCG) 470.00p -3.49%
Centamin (DI) (CEY) 62.75p -3.16%
Rathbone Brothers (RAT) 2,001.00p -2.63%
Jimmy Choo (CHOO) 170.70p -2.46%
Allied Minds (ALM) 368.70p -2.28%
Paragon Group Of Companies (PAG) 410.90p -2.10%
Oxford Instruments (OXIG) 1,107.00p -2.04% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks gain as ECB stimulus hopes rise Stocks in the euro-area edged higher following reports Mario Draghi said any stimulus implemented by the European Central Bank (ECB) could include government bond purchases.
Draghi made the comments in a letter to European Parliament official Luke Flanagan after the ECB's policy meeting on 4 December.
The letter was published on the ECB's website today ahead of the 22 January meeting and amid speculation the monetary authority will introduce full-blown quantitative easing.
In other euro-area news, Eurozone retail sales rose 1.5% year-on-year in November following a 1.6% increase a month earlier, more than the 0.2% gain expected by analysts.
Separately a report showed Eurozone economic confidence remained unchanged. The sentiment index came in at 100.7 in December, lower than the 101.2 forecast.
Data on Eurozone industrial confidence showed a decline in December. The index dropped to -5.2 from -4.3 in November, compared to estimates of -4.
German factory orders fell 0.4% year-on-year in November following a 2.6% the previous month. Economists had pencilled in a 0.1% increase.
In the UK, the Bank of England decided to keep asset purchases at £375bn and interest rates at 0.50%, as expected.
Stateside jobless claims for the week to 3 January fell from 298,000 to 294,000, more or less in line with the 290,000 that was predicted by analysts.
Santander gains on suspension
Santander SA was in focus after the Spanish market regulator suspended the stock as the lender announced plans to raise €7.5bn.
Marks & Spencer Group slumped after reporting disappointing sales at its struggling womenswear division in the third quarter.
Tesco jumped after chief executive Dave Lewis revealed his plans for turning around the struggling UK grocer with up to 43 stores set to close.
Standard Chartered rallied after saying it is closing its institutional equities business and eliminating about 200 jobs to cut costs.
The euro fell 0.27% to $1.1807. |
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| | US Market Report | | US open: Markets rise after latest Fed news as jobless claims fall Markets rose on Thursday as US initial jobless claims met with consensus expectations.
Early in the day the Dow Jones Industrial Average increased 1.23% to 17,584.52, the S&P 500 rose by 1.16% and Nasdaq ascended 1.20%. The S&P 500 snapped a five-day losing streak.
US initial jobless claims fell to 294,000 from 298,000 in the week ending 3 January, in line with consensus expectations of 290,000, leaving the four-week moving average unchanged at 291,000.
Barclays Research said: "Claims data, particularly on the continuing claims side, continue to be volatile as seasonal factors work their way through the data."
Following the most recent positive Fed news, US markets received a mild boost. Financial analyst for Spreadex Connor Campbell said: "Last night the US Fed spoke of its confidence in a US economic recovery, and its faith in the country's ability to ignore the international unrest that is looming over many of the other markets.
"Unsurprisingly, this bullish sentiment was felt by the US markets, as the Dow slowly began to lurch into gear and try and climb back up to 18,000."
Meanwhile, crude futures fell with WTI down 0.3% at $48.49 a barrel, while Brent declined 0.6% to $50.85 a barrel.
Campbell noted: "Oil is currently a serving a lesson in relativity; a stable price of $51 per barrel is now seen as a positive from markets that were decrying a potential fall to $70 per barrel mere months ago.
"However, it looks like the markets will have to keep shifting what a relatively positively price for oil looks like as the commodity remains constantly on the precipice of yet another decline."
Over on COMEX, gold futures were falling 0.06% to $1,211.40 while the dollar was prevailing against the pound, the yen and the euro. |
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| | Broker Tips | | Broker tips: Tesco, Persimmon, M&S, Interserve After an "unimaginatively bad 2014", things are starting to improve at supermarket giant Tesco after a much better-than-expected Christmas trading performance, according to analysts at Shore Capital.
Shore retained its 'hold' recommendation for investors, but said that measures being taken by new chief executive Dave Lewis to shore up the balance sheet should lower the likelihood of a near-term rights issue. Meanwhile, Hargreaves Lansdown Stockbrokers said that the current consensus rating on Tesco of a 'sell' is "unlikely to budge" for the moment but said: "Perhaps, at last, there are some glimmers of light at the end of the tunnel."
Credit Suisse has downgraded its rating for Persimmon from 'neutral' to 'underperform', saying that the shares are overvalued, as it cut its targets for stocks across the UK housebuilding sector.
"There has been a lot to like about the Persimmon equity story in recent years, and we remain of the view that it is a quality operator. However, we believe valuations have reached a point that we cannot justify," said the bank's Harry Goad and Samuel Thomas. They said that valuations in the sector are 75% more expensive than their 20-year average, and Persimmon's premium to the sector has expanded to 25% from 10% historically.
Despite Marks & Spencer's disappointing Christmas trading update on Thursday, brokers Investec and The Share Centre have retained their 'buy' recommendations on the stock.
Given the number of issues in different areas of the business, it is perhaps remarkable that full-year profit guidance was maintained," said The Share Centre's research analyst Ian Forrest. Investec said that the stock's current valuation does not reflect the company's "gross margin opportunity and shift to cash generation".
Broker Numis said trading at support services and construction group Interserve was in line with expectations, though it lowered its 2015 earnings estimates by 3% to 63.1p per share because of higher investments. | | |
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