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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: Energy stocks lift markets ahead of Budget, as investors await Fed After dipping into the red around midday, UK stocks rallied into the close with the FTSE 100 finishing 0.5% higher on the back of decent gains in the oil sector ahead of Wednesday's Budget statement.
Rumours about potential tax breaks for North Sea oil and gas producers were providing energy stocks with a much-needed boost on Tuesday, even as the price of crude continued to tumble.
Brent crude prices were down 2.3% at $53.44 a barrel in afternoon trade, trading at a six-week low, while West Texas Intermediate oil was 1.8% lower at $43.10, extending losses after hitting a six-year low on Monday.
Ongoing speculation about possible future stimulus in China was also giving mining stocks a lift, along with a well-received statement from the world's largest miner, BHP Billiton.
As such, the Footsie finished up 33.53 points at 6,837.61 as it continued to recover after a 2.5% drop last week, its worst weekly performance of the year so far.
Along with events in Westminster, a much-anticipated Federal Reserve meeting will dominate proceedings on Wednesday. While no change is expected in policy, markets will be watching the central bank's forward guidance closely, given recent speculation that policymakers could hike interest rates sooner than expected. Economists say the Federal Open Market Committee is likely to remove the word 'patient' from its statement on the timing of policy tightening.
Stocks fell into negative territory temporarily after data from Germany showed that analysts' confidence in the economic outlook didn't improve as much as hoped in March. The ZEW institute's gauge of economic confidence in Germany improved to 54.8 from 53, missing the consensus forecast of 59.4, with Greece and Ukraine said to be dampening sentiment.
Energy stocks jump on Budget hopes
Premier Oil, Tullow Oil, Centrica were leading the risers with gains of 17%, 6% and 5% respectively ahead of the Budget on Wednesday, given their exposure to the North Sea. Other oil and gas producers and energy services groups such as BG Group, Shell, Hunting and Ophir Energy were also putting in decent gains.
Mining stocks were also up on hopes for easing measures from Beijing, with BHP Billiton, Anglo American, Rio Tinto and Glencore rising strongly.
BHP Billiton was the standout riser in the sector, jumping 3% after shareholders welcomed the company's recommendation to approve its proposed demerger as it spins off its non-core activities into a new company called South32. The group said one-off costs associated with the transaction would be $738m, though it promised not to cut its dividend post-demerger.
Platinum miner Lonmin surged after an upgrade by Citigroup to 'buy'. The company also appointed a new chief operating officer to replace Johan Viljon who resigned one month ago.
However, Antofagasta was bucking the trend after profits sank by a more-than-expected 18% in 2014, prompting the company to slash its dividend by 77.4%. The miner also warned of "some inherent uncertainty" surrounding flagship Los Pelambres project in Chile.
Tesco shares were in the red, reversing from Monday, alongside Morrison, as Sainsbury's warned it expects another year of challenging trading conditions following a weak trading update, in which sales fell for a fifth consecutive quarter. Sainsbury's was also lower despite beating analysts' forecasts with a less-than-expected decline in like-for-like sales.
Analysts also said that planned increases to the minimum wage as part of the Budget were also dampening shares in the supermarket sector.
Building materials group CRH was extending losses after Holcim rejected the terms of its proposed tie-up with Lafarge. CRH is set to snap up €6.5bn of assets from the two cements companies when they merge. |
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| | Market Movers
techMARK 3,217.44 -0.09%
FTSE 100 6,837.61 +0.49% FTSE 250 17,202.91 +0.01%
FTSE 100 - Risers
Tullow Oil (TLW) 298.40p +6.12%
Centrica (CNA) 251.20p +4.97%
easyJet (EZJ) 1,792.00p +3.34%
BHP Billiton (BLT) 1,463.00p +3.32%
Babcock International Group (BAB) 956.00p +2.41%
BG Group (BG.) 840.30p +2.23%
Coca-Cola HBC AG (CDI) (CCH) 1,146.00p +2.23%
SSE (SSE) 1,501.00p +2.18%
Hargreaves Lansdown (HL.) 1,174.00p +2.18%
Royal Dutch Shell 'B' (RDSB) 2,068.50p +2.12%
FTSE 100 - Fallers
Antofagasta (ANTO) 687.00p -2.83%
CRH (CRH) 1,687.00p -2.54%
Morrison (Wm) Supermarkets (MRW) 201.30p -2.19%
Schroders (SDR) 3,199.00p -2.11%
Tesco (TSCO) 237.15p -1.74%
GKN (GKN) 368.80p -1.44%
ARM Holdings (ARM) 1,189.00p -1.33%
Mondi (MNDI) 1,342.00p -1.32%
St James's Place (STJ) 930.00p -1.27%
G4S (GFS) 290.60p -1.19%
FTSE 250 - Risers
Premier Oil (PMO) 140.90p +17.22%
Hunting (HTG) 473.90p +8.54%
Lonmin (LMI) 119.70p +7.84%
Spire Healthcare Group (SPI) 354.70p +5.00%
Ophir Energy (OPHR) 122.00p +4.10%
Workspace Group (WKP) 863.00p +3.98%
Indivior (INDV) 185.00p +3.70%
Petrofac Ltd. (PFC) 855.50p +3.70%
Vesuvius (VSVS) 513.00p +3.43%
Aveva Group (AVV) 1,521.00p +2.98%
FTSE 250 - Fallers
Afren (AFR) 3.21p -14.14%
Allied Minds (ALM) 633.00p -3.65%
Alent (ALNT) 386.40p -2.87%
Carillion (CLLN) 338.20p -2.73%
Moneysupermarket.com Group (MONY) 270.10p -2.31%
AO World (AO.) 178.20p -2.14%
Thomas Cook Group (TCG) 150.60p -2.14%
Dechra Pharmaceuticals (DPH) 958.00p -1.94%
Essentra (ESNT) 996.50p -1.92% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mostly lower as German economic confidence misses forecasts European stocks were mostly lower after data showed German economic confidence rose by less than expected and Eurozone consumer prices fell.
ZEW's economic sentiment index for Europe's biggest economy increased to 54.8 in March, well below forecasts for a reading of 59.4, from the previous month's level of 53.
"March's modest rise in the ZEW German investor sentiment index suggests that hopes for the German economy have been tempered by worries about the impact of the Greek crisis," said Jennifer McKeown, senior European economist at Capital Economics.
"Admittedly, the index remains at a high level, with a significant majority of investors still expecting economic conditions to improve in the next six months. Very roughly speaking it points to an increase in annual German GDP growth from Q4's 1.5% to just over 2%."
Eurostat confirmed Eurozone consumer prices fell 0.3% year-on-year in February, as expected, compared to a 0.6% drop in January. The European Central Bank (ECB) launched a €1.1trn quantitative easing (QE) programme last Monday in an effort to bring inflation back towards its target of just below 2%.
The Royal Bank of Scotland's market research team said: "After a very powerful QE rally, euro investment grade credit has sold off over the past few days. We view this underperformance as a supply-driven pause.
"We have taken some profits and a bit of weight off the long euro investment grade duration/spread trade earlier, but overall we think demand for euro assets remains strong on ECB QE, and new corporate supply appears like a drop in the ocean in comparison, especially in the absence of any significant sovereign supply/investment."
Meanwhile, Greece was reportedly outlining emergency plans to parliament to boost liquidity on late Tuesday. The meeting comes ahead of Friday's deadline for repaying more than €2bn.
Bank of England official Alex Brazier warned that a failure to find a solution to Greece's mounting debt could have serious repercussions for financial markets.
Looking ahead to Wednesday, the Federal Reserve's policy decision and UK Budget will be closely watched.
The Fed is expected to keep interest rates unchanged but recent data pointing to improvements in the labour market has fuelled speculation of an earlier rate hike than was previously priced in by markets.
"Given the better-than-expected labour market data, the FOMC is likely to open the door to a June rate hike," according to Philip Marey, senior US strategist at Rabobank.
The UK budget will be scrutinised excessively as the 7 May general election looms. Report on Monday revealed the Budget will confirm an increase in the minimum wage by 20p to £6.70 per hour.
Antofagasta falls
Antofagasta slipped after the miner posted annual earnings and sales that trailed analysts' forecasts.
Holcim and Lafarge declined as Kepler Cheuvreux SA cut the odds of the chances of a successful deal to below 50% from 95%
CRH, which last month agreed to spend €6.5bn on assets that Holcim and Lafarge needed to sell for antitrust approval, also edged lower.
UK oil stocks gained following reports that the government may look at tax cuts on operations in the North Sea to help the market amid a slump in prices.
Brent crude fell 1.4% to $53.17 per barrel at close of trading, according to the ICE, on signs of higher output in the US and Libya and a possible nuclear deal in Iran, which would release more oil into the sector. |
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| | US Market Report | | US open: Dow drops 160 points as investors remain jittery ahead of FOMC meeting US stocks opened lower on Tuesday, as investors moved cautiously ahead of the two-day Federal Open Market Committee meeting that concludes on Wednesday.
Just after 10:00 in New York, the Dow Jones Industrial Average was down 158 points, while the S&P 500 and the Nasdaq lost 11 and 13 points respectively.
Wall Street started the week in positive fashion, as weak data fuelled speculations that the Federal Reserve might delay its interest rate hike.
"The rally in US stocks following disappointing data on Monday shows we're back to 'bad news is good news'," said CMC Markets analyst Jasper Lawler.
"The US dollar fell and stocks rallied on Monday when manufacturing and industrial production data missed expectations and raised hopes that the Fed may choose to hold off on ending its forward guidance of zero-percent interest rates."
Construction on new US homes fell 17% in February, as severe winter weather hit the country's Midwest and Northeast regions.
In February, housing starts dropped to an annual rate of 897,000 from a revised 1.08m in January, against expectations of a 1.04m reading.
Meanwhile, permits for new construction, a key indicator of future housing demand, rose to an annual rate of 1.09m from an upwardly revised reading of 1.06m in the previous month.
In company news, American Airlines Group jumped 6% after Standard & Poor's announced late on Monday that the airline will be included in the S&P 500 index.
Discount retailer Burlington climbed almost 4% after its fourth quarter profit and revenue beat Wall Street's expectations, while outdoor sports gear group Black Diamond soared 28.5% after being upgraded from 'hold' to 'buy' by Stifel Nicolaus.
Going the other way, alternative energy provider PlugPower plummeted over 10% after its fourth quarter sales missed estimates, while the loss for the period widened more than expected.
Gold futures fell 0.87% to $1,143.20, while the dollar climbed 0.3% against the pound but relinquished 0.1% and 0.7% against the yen and against the euro respectively. |
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| | Broker Tips | | Broker tips: Sainsbury's, Lonmin, Wolseley Sainsbury's surpassed City expectations on Tuesday with a less-than-feared fall in like-for-like (LFL) sales in its fourth quarter, though that wasn't enough to change Shore Capital's 'sell' rating on the stock.
The broker said: We continue at this stage to forecast falling [profits] over the next two years and we look for an end to the downgrade cycle before re-visiting our recommendation on Sainsbury's shares."
Citigroup has lifted its recommendation for platinum miner Lonmin from 'neutral' to 'buy', saying it sees substantial upside after a recent plunge in the share price.
The stock has dropped 36% since 10 February alone - from 172p to 110p - after Glencore announced it would sell its 24% stake in the platinum miner. The drop has taken the shares to a price which now offers 29% upside to Citi's new target of 145p, down from 187p previously due to the platinum price fall and re-evaluation of costs.
Shares in Wolseley were retreating on Tuesday after solid gains the previous day, though analysts at UBS hiked their target for the stock and gave a positive outlook ahead of the plumbers and builders merchant's interim results next week. | | |
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