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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: FTSE nears record high as investors shrug off Greek concerns London's FTSE 100 rose to within touching distance of its all-time high on Tuesday despite uncertainty surrounding Greece, as improving economic data in Germany and hopes for strong consumer spending in the UK gave markets a boost.
The UK benchmark index finished up 0.6% at 6,898.13, with consumer staples stocks rising after UK inflation fell to its lowest on record.
The Footsie has not settled above this level since reaching an all-time closing high of 6,930.20 in late-December 1999.
German investor confidence improved for the fourth straight month, with the ZEW economic sentiment survey rising to 53 in February from 48.4 in January. The news followed data last week which revealed that the economy expanded faster than expected in the fourth quarter.
The Office for National Statistics revealed that the annual rate of UK consumer-price inflation dropped to a record low of 0.3% in January from 0.5% in December, under the 0.4% consensus forecast.
Economist Howard Archer from IHS Global Insight said the slowdown in price rises "bodes very well" for consumer spending this year: "With inflation likely to fall further and earnings growth now finally trending upwards, consumers should see appreciable improvement in their purchasing power as 2015 progresses."
US indices failed to join their European counterparts in positive territory as Wall Street reopened after a long weekend, catching up with the latest newsflow surrounding Greece. The Dow Jones Industrial Average in particular was retreating after surpassing 18,000 on Friday for the first time in 2015.
Greece's new government and Eurozone finance ministers butted heads in Brussels on Monday with the meeting ending early as Greek leaders stood firm on their opposition to an extension of their €240bn bailout. The Eurogroup have now failed in the past two meetings to make any progress and the current aid agreement is due to expire at the end of the month.
However, Greek finance minister Yanis Varoufakis said there was still enough time to reach a "very good outcome", ahead of the next meeting on Friday.
Consumer staples rise, IHG underwhelms
Beverage groups Diageo, SABMiller, Britvic and AG Barr were in demand on hopes that consumer-spending power in the UK may increase this year. Tobacco stocks Imperial and British American Tobacco and consumer products peers Unilever and Reckitt Benckiser also rose.
Hotels group IHG managed to narrowly beat analysts' forecasts with its annual results but shares declined. The Crowne Plaza and Holiday Inn operator said reported operating profit for 2014 totalled $651m, down 3% but slightly ahead of the consensus estimate of $646m.
Oil and gas engineer John Wood Group jumped after growing sales and profits by double-digit rates last year and said it expected to deliver growth despite the lower oil price environment.
Royal Mail was hit by gloomy comments from Morgan Stanley as it noted "continued operational risk" at the postal delivery group. The bank cut its target for the shares from 350p to 340p, saying that its recent concerns about a slowdown in revenue growth are "playing out as expected".
Insurer Brit surged after accepting a £1.22bn cash takeover offer from Canadian rival Fairfax Financial.
Market Movers
techMARK 3,128.53 +0.53%
FTSE 100 6,898.13 +0.60%
FTSE 250 16,887.70 +0.16% |
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FTSE 100 - Risers
Diageo (DGE) 1,885.50p +2.50%
Imperial Tobacco Group (IMT) 3,063.00p +2.20%
British American Tobacco (BATS) 3,663.50p +1.92%
Smith & Nephew (SN.) 1,177.00p +1.90%
Unilever (ULVR) 2,801.00p +1.89%
AstraZeneca (AZN) 4,552.50p +1.88%
Shire Plc (SHP) 5,185.00p +1.87%
Lloyds Banking Group (LLOY) 77.03p +1.72%
Dixons Carphone (DC.) 430.00p +1.65%
Morrison (Wm) Supermarkets (MRW) 186.60p +1.41%
FTSE 100 - Fallers
Tullow Oil (TLW) 406.10p -3.36%
Royal Mail (RMG) 437.60p -2.32%
Randgold Resources Ltd. (RRS) 5,005.00p -1.67%
InterContinental Hotels Group (IHG) 2,545.00p -1.66%
Rolls-Royce Holdings (RR.) 922.50p -1.49%
Sage Group (SGE) 464.90p -1.17%
G4S (GFS) 281.10p -1.13%
Coca-Cola HBC AG (CDI) (CCH) 1,179.00p -1.09%
Marks & Spencer Group (MKS) 489.10p -0.89%
CRH (CRH) 1,811.00p -0.82%
FTSE 250 - Risers
Afren (AFR) 8.25p +17.94%
Brit (BRIT) 305.00p +11.23%
Nostrum Oil & Gas (NOG) 556.00p +8.59%
De La Rue (DLAR) 546.50p +5.00%
Wood Group (John) (WG.) 660.00p +4.76%
Allied Minds (ALM) 512.50p +4.23%
Just Eat (JE.) 369.10p +3.88%
Oxford Instruments (OXIG) 767.00p +3.65%
Smith (DS) (SMDS) 332.60p +3.23%
Man Group (EMG) 177.70p +3.13%
FTSE 250 - Fallers
Game Digital (GMD) 248.80p -4.09%
Soco International (SIA) 296.10p -3.55%
Serco Group (SRP) 195.40p -2.93%
Aveva Group (AVV) 1,525.00p -2.93%
Supergroup (SGP) 992.50p -2.50%
Thomas Cook Group (TCG) 121.10p -2.34%
Infinis Energy (INFI) 196.00p -2.24%
Booker Group (BOK) 153.00p -1.99%
Acacia Mining (ACA) 273.40p -1.97% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed as all eyes on Greece bailout European stocks were mixed as Greece was pressured by Eurozone finance ministers on Tuesday to remain part of the euro area.
The new Greek government rejected a bailout offer from the Eurozone late Monday night. Eurozone members fear that if further bailout negotiations fail to come to terms by the time the credit line expires in 10 days, Greece will exit the single-currency region.
European commissioner Pierre Moscovici has insisted that the compromise plan he had presented to Greek finance minister Yanis Varoufakis did not mean Europe is divided over the Mediterranean nation.
German finance minister Wolfgang Schaeuble said Greece needs to make a decision on whether to extend the bailout.
"None of my colleagues so far understands what Greece wants [...] whether Greece itself knows is not clear either," he added.
The euro rose 0.32% to $1.1391.
UK inflation, German confidence
Inflation in Britain rose 0.3% year-on-year in January, easing back from December's 0.5% gain and missing expectations of 0.4%. It marks the lowest rate of consumer price index (CPI) inflation since estimates of the measure began in 1988 and comes amid weak oil and food prices.
"CPI inflation reached a record low in January and we think that it is more likely than not that inflation turns negative soon," according to Capital Economics. "But with few signs that low inflation is becoming ingrained, the UK's period of deflation should be of the 'good' sort."
Another report showed German economic confidence rose albeit less than anticipated in February. ZEW's sentiment index rose to 53 this month from 48.4 in January, compared to analysts' estimates for a reading of 55.
"The further improvement provides evidence that the Greek crisis is not having much economic or financial impact on the rest of the Eurozone yet," said Christian Schulz, analyst at Berenberg.
"Economic sentiment has been improving since the autumn 2014 as the Putin impact faded, cheap oil boosted real spending power, the weaker euro boosted competitiveness and the more aggressive ECB stance improved funding conditions."
Meanwhile, Brent crude increased 0.59% to $61.77 per barrel at noon, according to the ICE, as the International Energy Agency warned of supply risks in the Middle East.
Bollore, Orange
Bollore jumped after Carson Block said Muddy Waters LLC had invested in the company.
Orange SA declined after the French telecommunications company said it predicts a fall in earnings this year.
Pandora A/S gained after reporting fourth-quarter profit that surpassed analysts' estimates.
TNT Express NV slumped after saying this year will be affected by adverse trading conditions. |
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| | US Market Report | | US open: Greek uncertainty and weak data hit Wall Street stocks early on Weaker-than-expected economic data and a failed Eurogroup meeting on Greece weighed on US stocks after the opening bell on Tuesday.
As of 09:55 in New York, the Dow Jones Industrial Average was down 0.2% at 17,977, the Nasdaq fell 0.2% to 4,886, while the S&P 500 declined 0.3% to 2,091.
The retreat followed a strong performance by US markets last week, with the Dow surpassing 18,000 for the first time in 2015 on Friday. Wall Street was closed for Presidents Day on Monday.
"US stocks look like starting a shortened week on the back foot on Tuesday following another breakdown in negotiations over the Greek bailout at last night's Eurogroup meeting," said analyst Jasper Lawler from CMC Markets.
Greece's new government and Eurozone finance ministers butted heads in Brussels on Monday with the meeting ending early as Greek leaders stood firm on their opposition to an extension of their €240bn bailout.
The Eurogroup have now failed in the past two meetings to make any progress and the current aid agreement is due to expire at the end of the month.
However, Greek finance minister Yanis Varoufakis said there was still enough time to reach a "very good outcome", ahead of the next meeting on Friday.
In other news, a report showed manufacturing in the New York area grew at a slower pace in February. The so-called Empire State general activity index fell to 7.78 from 9.95 in January, compared to estimates of 9.
Meanwhile, the National Association of Home Builders' housing market index unexpectedly fell from 57 to a four-month low of 55 in February, showing that builders view market conditions as less favourable than the month before. Analysts had expected a pick-up to 58.
Goodyear jumps
Goodyear Tire & Rubber was a high riser after a one-time tax benefit of $2.2bn helped it register a net income of $2.13bn for the fourth quarter, compared with just $235m a year before.
"The release of our $2.2bn US tax valuation allowance after 12 years is a major milestone for Goodyear. It marks the completion of the successful turnaround of our North America business," said chief executive Richard Crammer.
Halliburton advanced following reports ValueAct Capital Management LP has purchased a new stake in the company of about 3.5%. |
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| | Broker Tips | | Broker tips: Royal Mail, StanChart, TSB, UK construciton Morgan Stanley has noted "continued operational risk" at Royal Mail, as it maintained its 'underweight' rating on the postal delivery group.
The bank cut its target for the shares from 350p to 340p on Tuesday, saying that its recent concerns about a slowdown in revenue growth are "playing out as expected". Royal Mail's valuation - shares trade on a 6.6% free cash flow yield for this year, in line with peers - is "too generous", it said.
Investec has "very reluctantly" lowered its rating for emerging markets-focused banking group Standard Chartered from 'buy' to 'hold', saying it sees a heightened risk of a capital-raising in 2015. The broker slashed its target for the shares from 1,250p to 1,000p.
"Given heightened speculation of further management change, we see increased risk of such shareholder-unfriendly action being taken. If management, old or new, has the courage to face down its critics, and deliver credible reassurance that it will not raise capital, we think the shares could recover strongly, but that's now an 'if'."
Berenberg has reiterated its 'sell' recommendation on TSB Banking Group saying that recent speculation about a possible acquisition of Aldermore raises "strategy concerns".
"If it is true that management was considering a large-scale dilutive acquisition only nine months into a five-year plan, this could raise questions on the delivery of TSB's current strategy," Berenberg said.
Panmure Gordon has maintained a 'overweight' position on UK construction stocks on the back of an improving outlook, as it highlighted SIG as its top 'buy' in the sector. | | |
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