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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: Footsie at five-month high as Greek concerns ease, oil stocks surge Strong gains in the oil sector pushed UK stocks to their highest in five months on Tuesday, helped by an easing of concerns about Greece.
The FTSE 100 finished 1.3% higher at 6,872, its best close since 4 September when it settled at 6,878.
The new government in Greece has proposed swapping its outstanding debt for new growth-linked bonds, backing down from earlier calls for a complete write-off of its debt. Finance minister Yanis Varoufakis labelled it "smart debt engineering".
While the plan was reportedly rebuffed by the European Central Bank, the proposals were welcomed by markets worldwide, with Athens' own stock exchange in particular soaring over 11%.
"For the first time it looks as if the new Greek government is reacting, rather than driving events. A switch to a more conciliatory tone on the part of the finance minister and the prime minister has raised hopes that a deal may be possible," said analyst Chris Beauchamp from IG.
Economic data came in mixed on Tuesday, with UK construction activity growth unexpectedly picking up in January and US factory-goods orders falling more than expected in December.
Investors were also focusing on comments from James Bullard, the president of the St Louis Federal Reserve, who said that the central bank should strip the "patient" language out of its next policy meeting in March.
BP impresses after Q4 results
Oil major BP ended the session nearly 3% higher after beating estimates with its fourth-quarter results. Underlying profits dropped 20% to $2.2bn on the back of weak oil prices, but not as much as the 40% plunge predicted by analysts.
BP also announced that it had cut its capital expenditure budget by $4bn-6bn this year to $20bn, pushing oil prices higher on Tuesday. Brent rose 2.4% to $56.05 a barrel, further boosted by an ongoing US refinery strike.
Sector peers Shell, Tullow, Premier Oil and Soco International all finished with decent gains, along with Afren as concerns about funding for the Africa-focused explorer eased.
Mining stocks also performed well, such as blue chips Glencore, Antofagasta and BHP Billiton, though Fresnillo and Randgold fell into the red as gold prices eased.
Aberdeen Asset Management declined after registering net outflows in the three months to end-December due to a weakening of investor sentiment towards emerging markets in December. Assets under management fell to £323.3bn from £324.4bn over its first quarter.
Online food retailer Ocado jumped after making its first-ever annual profit despite "intense competition" in the grocery industry.
Market Movers
techMARK 3,062.32 +0.65%
FTSE 100 6,871.80 +1.32%
FTSE 250 16,570.30 +1.31% |
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FTSE 100 - Risers
Intertek Group (ITRK) 2,429.00p +6.54%
Glencore (GLEN) 269.35p +6.42%
Weir Group (WEIR) 1,830.00p +5.54%
Royal Dutch Shell 'A' (RDSA) 2,180.00p +5.36%
Barclays (BARC) 248.45p +5.34%
Antofagasta (ANTO) 706.00p +5.06%
BHP Billiton (BLT) 1,558.50p +5.02%
Hargreaves Lansdown (HL.) 1,045.00p +4.87%
Tullow Oil (TLW) 417.40p +4.61%
Royal Dutch Shell 'B' (RDSB) 2,268.50p +4.52%
FTSE 100 - Fallers
Aberdeen Asset Management (ADN) 425.00p -3.43%
Imperial Tobacco Group (IMT) 3,085.00p -1.44%
SABMiller (SAB) 3,574.00p -1.42%
Diageo (DGE) 1,926.00p -1.23%
Compass Group (CPG) 1,145.00p -1.21%
Associated British Foods (ABF) 3,079.00p -1.12%
Randgold Resources Ltd. (RRS) 5,535.00p -1.07%
Johnson Matthey (JMAT) 3,239.00p -0.98%
Next (NXT) 7,095.00p -0.98%
Kingfisher (KGF) 332.00p -0.93%
FTSE 250 - Risers
Afren (AFR) 11.84p +18.40%
Hunting (HTG) 478.70p +14.41%
Vedanta Resources (VED) 451.20p +13.97%
Premier Oil (PMO) 171.00p +8.99%
Aveva Group (AVV) 1,443.00p +7.77%
Kaz Minerals (KAZ) 220.00p +7.37%
RPS Group (RPS) 207.80p +7.28%
Soco International (SIA) 297.60p +7.01%
Ladbrokes (LAD) 124.00p +6.80%
Computacenter (CCC) 673.00p +6.74%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,030.00p -3.38%
Centamin (DI) (CEY) 65.75p -2.66%
Go-Ahead Group (GOG) 2,453.00p -2.04%
Petra Diamonds Ltd.(DI) (PDL) 151.50p -1.94%
Acacia Mining (ACA) 282.10p -1.43%
Northgate (NTG) 590.00p -1.42%
Tate & Lyle (TATE) 665.00p -1.34%
Croda International (CRDA) 2,651.00p -1.27%
Just Eat (JE.) 349.70p -1.21% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks advance on Greek debt plans, oil price recovery European stocks advanced as investors weighed economic data and plans for Greek debt.
In the UK, data from Markit showed construction activity unexpectedly expanded further in January on strong demand for materials.
The purchasing managers' index rose to 59.1 last month from 57.6 in December, with analysts having pencilled in a reading of 57.
US factory orders fell 3.4% in December, more than the 2.4% drop that was anticipated, after a 1.7% decline the previous month.
Meanwhile, Greece's new government has proposed using debt swaps for new growth-linked bonds. It has backed down from calls for European leaders to write-off its foreign debt.
The European Central Bank has reportedly refused to accept the debt swap suggested by Greek finance minister Yanis Varoufakis, wanting full repayment only.
"While the initial proposals could well run into obstacles with respect to EU rules about monetary financing, the fact that a new approach is being tried has to be welcome given how much of a disaster the current bailout program has been," said Michael Hewson from CMC Markets UK.
The euro rose 1.01% to $1.1456.
In a boost to markets, oil prices continued to recover with Brent crude up 2.1% to $55.96 per barrel, according to the ICE.
BP, Santander
BP gained after underlying profits fell a less-than-feared, by 20% year-on-year to $2.2bn.
Banco Santander SA rallied as Spain's largest lender reported a 68% rise in profit in the fourth quarter, as expected by most analysts.
Aberdeen Asset Management slumped after the money manager reported a drop in funds under management in the quarter ended December amid a downturn in Asia. |
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| | US Market Report | | US open: Stocks rise amid positive news from Greece, while oil jumps again US stocks rose on Tuesday buoyed by strong gains in Europe, on the back of encouraging news from Greece.
Just before 10:00 in New York, the Dow Jones Industrial Average was up 173.33 points, while the S&P 500 and the Nasdaq rose 0/74% and 0.55% respectively.
Speaking in London on Monday, Yanis Varoufakis, Greece's new finance minister, said the country aimed to swap outstanding debt for growth-related bonds, while running a budget surplus and clamping down on wealthy tax evaders.
"The outlook remains rocky," said Berenberg analyst Holger Schmieding
"Time is not on Greece's side. Capital flight, a drain in deposits and the plunge in economic sentiment and the manufacturing purchasing managers' index all suggest that Greece is at risk of falling into a renewed recession if it cannot end the uncertainty about the Greek outlook and the standoff with its creditors fast.
Stocks in Australia reached a seven-year high after the Reserve Bank of Australia surprised markets by cutting rates to a record low.
"With yet another central bank cutting rates, the case for additional upside in equities remains intact," said Brenda Kelly, chief market strategist at IG.
"Add to this the bounce in oil prices and we have some additional enthusiasm for risk assets."
In corporate news, AutoNation, gained almost 9% after sales rose over 10%, while Staples and Office Depot both surged 11% and 19% respectively, after sources cited by the Wall Street Journal suggested the two companies have opened negotiations ahead of a merger.
Lending Club rose almost 5% after announcing a deal with Alibaba Group Holding to provide sales financing to small businesses buying from Chinese suppliers.
RadioShack plunged after the New York Stock Exchange said it would move to delist the stock, and a Wall Street Journal report said the company would file for Chapter 11 protection in the near future.
Meanwhile, a report at 15:00 GMT is expected to show US factory orders fell 2.4% in December after a 0.7% drop a month earlier.
After a strong rebound on Monday, oil prices rose again on Tuesday with Brent crude rising over 2% to $55.87 a barrel, while West Texas Intermediate crude gained just under 2% to $50.58 a barrel.
"If oil prices don't spend too long sub-$50 per barrel in the first quarter and the oil majors were able to weather the storm in the fourth quarter, it raises hopes that the worst for blue chip oil companies could be behind them," said CMC Markets analyst Jasper Lawler. |
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| | Broker Tips | | Broker tips: BP, Ocado, Zoopla BP is broadly rated by the market consensus at a 'buy' after results beat forecasts on Tuesday, though Hargreaves Lansdown Stockbrokers warned investors not to be complacent if crude prices remain at depressed levels.
It said: "The current oil price, if it is to remain at these levels, will eventually pile further pressure on the sector in general, and it remains to be seen whether dividend payments will at some point need consideration. BP's Russian exposure is a further drag on prospects, whilst the fallout from the Gulf of Mexico spill has yet to be finalised once and for all."
Ocado has delivered its first-ever annual profit and analysts at Shore Capital have welcomed the milestone but still kept a 'sell' recommendation on the online grocer.
The broker said investors will still have to wait before Ocado can deliver "material" earnings per share, which stood at just 1.18p last year. The company would need to achieve this before its stock price can be considered a sensible value, Shore Capital said.
Numis Securities has reiterated its 'add' stance on Zoopla but has lowered its forecasts for the group due to heightened competition in the estate agent portal industry after the launch of OnTheMarket last month. | | |
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