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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 plunges 2.5% to seven-week low as commodity stocks tank A stronger US dollar and falling commodity prices led to a rout in the heavyweight energy and mining sectors on Tuesday, pushing the FTSE 100 down 2.5% to its lowest level in seven weeks.
The Footsie ended the day down 173.63 points at 6,702.84, with ongoing concerns about Greece further weighing on sentiment.
"Rising share prices are few and far between on the FTSE 100 this afternoon, thanks to a heady cocktail of worries that has sent investors scurrying for safe havens," said analyst Chris Beauchamp from IG.
The index has retreated for the last three sessions since reaching a new record closing high of 6,961.14 last week and now stands at a level not seen 20 January when it settled at 6,620.10.
Eurozone creditors have put more pressure on Greece to implement reforms to unleash aid and avoid bankruptcy. The Eurogroup ended discussions about Greece on Monday after about an hour in Brussels, as Greek finance minister Yannis Varoufakis was told to map out a realistic programme of fiscal reforms.
The European commission, the International Monetary Fund and the European Central Bank will begin technical talks over the Greek bailout proposals on Wednesday.
The euro fell 1.3% on the dollar to 1.0712, with the greenback rising further amid ongoing speculation that the Federal Reserve will raise rates sooner than anticipated on the back of Friday's forecast-smashing jobs report.
Worries about a slowdown in China were also on investors' minds on Tuesday after the annual drop in producer prices picked up to 4.8% in February from -4.3% the month before. While consumer-price inflation bounced off a five-year low of 0.8% to 1.4%, the data raises the prospect of further stimulus measures by the country's central bank.
Commodity stocks hammered
Energy stocks were falling sharply in afternoon trade, with blue chips BG Group and Tullow Oil both falling around 7% each, while heavyweight producers Shell and BP dropped 5% and 2% respectively. Brent crude was down 3.4% at $56.53 a barrel ahead of data which is forecast to show that US oil inventories rose for the ninth week in a row.
Weaker metal prices were also weighing on stocks in the mining sector, including Antofagasta, Anglo American and Fresnillo. Antofagasta in particular slipped on a court ruling that it must destroy at least part of its tailings dam at the Los Pelambres copper project in Chile due to environmental concerns.
Insurer Prudential fell after confirming speculation that Credit Suisse has poached its boss Tidjane Thiam to replace its long-standing chief executive Brady Dougan. Prudential also released final results showing operating profits growth slowed to 14% from 17% at the half-year stage.
Sector peer Esure also dropped after saying that annual profits declined 12.8% on the back of challenging conditions in the insurance market and costs associated with the takeover of Gocompare.
Not even G4S managed to finish in positive territory in spite of decent gains earlier on after the security group reported a better-than-expected rise in full-year profits and raised its final dividend by 5%. The company did, however, raise provisions for underperforming UK government contracts by £45m. |
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| | Market Movers
techMARK 3,106.47 -1.36%
FTSE 100 6,702.84 -2.52%
FTSE 250 16,922.49 -1.42%
FTSE 100 - Risers
Standard Life (SL.) 451.10p +0.98%
Shire Plc (SHP) 5,245.00p +0.67%
easyJet (EZJ) 1,713.00p +0.65%
BAE Systems (BA.) 533.50p +0.09%
FTSE 100 - Fallers
BG Group (BG.) 851.20p -7.40%
Tullow Oil (TLW) 321.80p -7.02%
Antofagasta (ANTO) 711.00p -5.51%
Anglo American (AAL) 1,081.50p -4.96%
Royal Dutch Shell 'B' (RDSB) 2,037.50p -4.83%
BHP Billiton (BLT) 1,471.00p -4.70%
Royal Dutch Shell 'A' (RDSA) 1,936.50p -4.61%
Admiral Group (ADM) 1,449.00p -4.55%
Fresnillo (FRES) 657.00p -4.23%
BP (BP.) 428.10p -3.95%
FTSE 250 - Risers
Afren (AFR) 6.26p +14.44%
Allied Minds (ALM) 608.50p +7.70%
Inchcape (INCH) 788.00p +6.34%
Fisher (James) & Sons (FSJ) 1,374.00p +4.89%
NMC Health (NMC) 645.50p +2.46%
Just Eat (JE.) 346.20p +1.64%
Daejan Holdings (DJAN) 5,795.00p +1.58%
Ocado Group (OCDO) 376.10p +1.51%
Countrywide (CWD) 520.00p +1.17%
CLS Holdings (CLI) 1,701.00p +0.89%
FTSE 250 - Fallers
Lonmin (LMI) 113.50p -10.13%
esure Group (ESUR) 212.50p -9.11%
Petra Diamonds Ltd.(DI) (PDL) 171.70p -7.64%
Cairn Energy (CNE) 183.40p -7.42%
Vedanta Resources (VED) 535.00p -6.88%
Premier Oil (PMO) 144.40p -6.84%
Kaz Minerals (KAZ) 206.00p -6.79%
Ophir Energy (OPHR) 130.60p -6.78%
Centamin (DI) (CEY) 54.00p -6.01% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Oil prices, Greek woes and US interest rate speculation weigh on stocks A decline in oil prices, concerns over Greece and speculation of a US interest rate hike dragged European stocks into the red.
A measure of oil and gas stocks slid, including Total, BG Group and BP, as crude prices fell for a fifth day amid signs a global supply glut will continue. Brent crude dropped 3.3% to $56.66 per barrel at close of trade, according to the ICE.
Meanwhile uncertainty over Greece's financial future continued to weigh on markets. Eurogroup finance ministers urged Greece to stop wasting time and implement structural reforms to unlock further aid and avoid bankruptcy.
The European commission, the International Monetary Fund and the European Central Bank will begin technical talks over the Greek bailout proposals on Wednesday.
In the US, an interest rate hike seemed nearer after Friday's impressive non-farm payrolls report as the Federal Reserve's 17-18 March policy meeting loomed.
"The large rise in US employment during February has brought forward expectations on the timetable for a rate hike and is fuelling risk-off sentiment in equities," said Jasper Lawler, analyst at CMC Markets.
The euro fell 1.3% on the dollar to 1.0712, with the greenback rising further amid the interest rate speculation.
In China, inflation grew more than expected in February. The consumer price index rose 1.4% compared to 0.8% in January, beating analysts' estimates of 1%.
"February's seasonal pick-up in food inflation will likely prove short-lived and we still expect inflation to fall back below 1% in coming months," said Capital Economics. "Nonetheless, today's inflation data suggest that downward pressure on broader prices has begun to ease."
Prudential slides as Credit Suisse poaches boss
Prudential declined after announcing its boss Tidjane Thiam is moving over to Credit Suisse as it reported a 14% increase in annual operating profits. Credit Suisse rallied.
Hannover Re gained on news the reinsurer plans to pay a special dividend after fourth-quarter profit beat analysts' estimates.
RWE AG dropped after Germany's largest electricity generator reported a 45% fall in full-year profit. |
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| | US Market Report | | US open: Dow plunges over 200 points as investors fear rate hike US stocks swung to losses early on Tuesday, as investors feared the Federal Reserve will raise interest rates soon.
Just after 10:00 in New York, the Dow Jones Industrial Average was down by 220 points, with the S&P 500 and the Nasdaq losing 21 and 55 points respectively.
The dollar soared to near a 12-year high against the euro, gaining 0.8% against the European currency and 0.2% against the pound. However, the greenback slid 0.2% against the yen, while gold futures advanced 0.25% to $1,169.40.
"Regardless of whether the Fed hikes in June or September, it's coming and it's not very far away," said Craig Erlam, senior market analyst at Oanda.
"That makes the dollar very strong compared to its peers, even sterling which is in a similar position with the Bank of England seen raising rates later this year. Today's rally in the dollar has weighed on commodities as a stronger dollar makes them more expensive when priced in other currencies."
Meanwhile, job openings in the US rose 2.4% to 5m in January, reaching a 14-year high, according to the Labor Department.
Official figures showed that the number of people hired fell marginally to 5m, while separations - which include layoffs, workers who quit and who are fired - dropped from 4.90m to 4.82m.
In company news, Urban Outfitters gained almost 9% after reporting better-than-expected fourth quarter earnings on Monday night.
Lumber Liquidators Holdings jumped 10% after releasing the agenda for a conference call with investors scheduled for Thursday, in which it will provide an update on its products' safety.
Newmont Mining gained 1% in the wake of an upgrade from analysts at Jeffries.
Bookseller Barnes & Noble fell over 3% after its quarterly profit fell share of analysts' expectations.
United Rentals was another among the S&P 500 biggest losers, with shares in the equipment rental group down 3%, or 14% in the year to date. |
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| | Broker Tips | | Broker tips: HSBC, Morrisons, Capita, G4S Recent strength in US interest rates, together with opportunities to streamline some of its less profitable operations, should act as catalysts for shares in the world's local bank, HSBC.
That was the opinion of analysts at Goldman Sachs who upgraded their view on shares of HSBC to 'buy' from 'neutral'.
Analysts at JPMorgan have removed their 'underweight' recommendation on Morrisons' stock, saying that bad news is already baked into the price of the supermarket.
"We upgrade Morrison to 'neutral' from 'underweight' as we believe the combination of new management, improved trading and greater cost cutting opportunities, stronger balance sheet and less demanding valuation vs the other UK grocers may limit share price downside in the coming months," the US bank said.
Shares in British outsourcing group Capita were hit on Tuesday by a downgrade at Credit Suisse, as the Swiss bank raised concerns about "uncomfortable political uncertainty".
Credit Suisse has lowered its rating from 'neutral' to 'underperform' and cut its target from 1,200p to 1,080p, saying that political risks are rising before the general election in May. At the same time, it highlighted that Capita's valuation is currently at a 13% premium to its 12-year historical average.
G4S is "back on firmer ground", according to Hargreaves Lansdown Stockbrokers, which struck a note of cautious optimism about the security services company on Tuesday. | | |
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