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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: Stocks higher as focus shifts towards Greece UK equities registered slight gains as traders digested the policy announcement issued by the US Federal Reserve overnight and despite the renewed tensions evident in Greek funding markets. The Footsie ended the day 17 points higher at 6,962.32, with some effects from Wednesday's Budget from Chancellor George Osborne also still filtering through.
As expected, the US central bank yesterday omitted any reference to being "patient" when starting to tighten interest rates, but the 17 members of the Federal Open Market Committee nearly halved their median projection for the level of the Fed funds rate at year-end 2015 to 0.625%.
Investors were increasingly focusing on Thursday's summit of European Union heads of government and the news-flow surrounding the negotiations with Greece.
The yield on the benchmark 10-year Greek government bond sprinted 104 basis points higher to 12.14%.
That was despite reports earlier in the day that the European Central Bank had opposed forbidding Greek lenders from purchasing short-term government securities.
Some market reports cited sources according to whom the daily outflows of Greek deposits had reached one-month highs.
Against analysts' predictions Norway's central bank maintained its deposit rate at 1.25%, instead of reducing it by 25 basis points. Nonetheless, the monetary authority clearly signalled that it will soon be lowering its key rate further, analysts at Capital Economics said.
Earlier in the day Switzerland's central bank, the SNB, kept its target range for the three-month Libor unchanged, at between -1.25% and -0.25%, as expected. However, the SNB cautioned that it could cut rates further or intervene in foreign exchange markets, if necessary, to curb strength in the swiss franc's value.
Next drops after full-year profits UK clothing retailer
Next grew its underlying pre-tax profit by 12.5% last year as overall sales rose by 7.2%. The company said its share buyback scheme meant that underlying EPS grew by 14.7% and dividends for the full year will increase by 16.3%, to 150p.
Auto Trader Group, the UK car classified ad company on Thursday priced 590m shares at 235p/share in its initial public offering in the London market. The company is raising £437m of net proceeds in the offer with its private equity owner, Apax expected to raise around £926.2m out of the flotation. As of 12:18 the shares were changing hands at 268.75p.
Chip designer ARM Holdings's market share in servers may reach 20% by 2020, versus less than 1% at present, the company has reportedly said. The London-listed outfit was scheduled to make a presentation at today's Bank of America Merrill Lynch Technology & Beyond Conference, in Taiwan.
Electronics components distributor Premier Farnell reported adjusted profits before tax down 3% to reach £74m in 2014 but maintained its full-year dividend pay-out at 10.4p. That came on the back of a 0.8% fall in full-year revenues to £960.1m.
However, the company's operating margins declined by less than forecast by analysts, slipping by 40 basis points, to 9.2%. The analyst consensus was for margins of 9%. Earnings per share (EPS) on an adjusted basis came in at 13.8p, down 3.5% from the prior year but ahead of the 13.5p which analysts had pencilled in.
AstraZeneca has signed an agreement with Japanese-headquartered company Daiichi Sankyo to jointly commercialise a new drug called Movantik, an oral treatment for opioid-induced constipation in adults with chronic non-cancer pain. No longer labelled a controlled substance by the US Drug Enforcement Administration, its launch has been scheduled to take place early in April 2015.
Savills reported a 21% increase in pre-tax profit to £84.7m, as revenue rose 19% to £1.08bn driven by a 38% increase in transaction advisory revenue, which the company attributed to the performance of the Savills Studley business in the US, strong performances in Asia and the UK and recovery in some European markets.
Market Movers
techMARK 3,254.47 +0.15%
FTSE 100 6,962.32 +0.25%
FTSE 250 17,438.15 +0.43% |
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FTSE 100 - Risers
Fresnillo (FRES) 679.00p +5.43%
Randgold Resources Ltd. (RRS) 4,826.00p +3.23%
Marks & Spencer Group (MKS) 531.50p +3.10%
Tullow Oil (TLW) 309.60p +2.25%
Antofagasta (ANTO) 695.00p +1.98%
Aviva (AV.) 566.00p +1.89%
BHP Billiton (BLT) 1,485.50p +1.89%
Kingfisher (KGF) 374.40p +1.88%
Friends Life Group Limited (FLG) 432.10p +1.86%
GKN (GKN) 375.10p +1.74%
FTSE 100 - Fallers
Next (NXT) 7,315.00p -4.00%
British American Tobacco (BATS) 3,668.00p -3.37%
TUI AG Reg Shs (DI) (TUI) 1,181.00p -2.24%
Anglo American (AAL) 1,046.00p -2.20%
Meggitt (MGGT) 577.50p -1.70%
Imperial Tobacco Group (IMT) 3,155.00p -1.44%
Hargreaves Lansdown (HL.) 1,189.00p -1.41%
Admiral Group (ADM) 1,518.00p -1.24%
St James's Place (STJ) 966.50p -1.18%
CRH (CRH) 1,751.00p -1.13%
FTSE 250 - Risers
Soco International (SIA) 160.10p +8.25%
Premier Oil (PMO) 146.70p +8.03%
Indivior (INDV) 201.90p +5.98%
Acacia Mining (ACA) 248.00p +5.58%
Afren (AFR) 3.31p +5.28%
Supergroup (SGP) 918.50p +5.15%
Renishaw (RSW) 2,588.00p +4.65%
Centamin (DI) (CEY) 53.70p +4.07%
Evraz (EVR) 195.20p +3.77%
Crest Nicholson Holdings (CRST) 441.00p +3.72%
FTSE 250 - Fallers
Brit (BRIT) 278.50p -8.60%
Lancashire Holdings Limited (LRE) 632.50p -6.92%
Hiscox Ltd (CDI) (HSX) 805.00p -5.07%
Jupiter Fund Management (JUP) 412.80p -3.12%
Jimmy Choo (CHOO) 170.00p -2.86%
Ted Baker (TED) 2,746.00p -2.52%
Serco Group (SRP) 170.60p -2.29%
FirstGroup (FGP) 92.95p -2.05%
Ladbrokes (LAD) 111.20p -2.03%
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mostly higher as energy stocks rally European stocks were mostly higher, driven by gains in energy stocks. A gauge of oil stocks rallied, including Ophir Energy, Total, Eni SpA and Royal Dutch Shell, after Chancellor George Osborne revealed tax cuts for the North Sea oil and gas industry in the 2015 UK Budget to help spur investment.
The market also continued to move higher on news that the Federal Reserve was in no rush to raise interest rates.
The Federal Open Market Committee on late Wednesday removed the term "patience" from its statement on interest rates. However, it said won't tighten until the job market improves.
Meanwhile, German Chancellor Angela Merkel dampened any hopes of a resolution to Greece's woes.
She told reporters outside the European summit on Friday that Greece should not expect a solution to its debt crisis tonight, dealing a blow to Prime Minister Alexis Tsipras's hopes of a political deal.
The yield on 10-year Greek bonds was rising 77 basis points to 12.04% at 1630 GMT.
In other Eurozone news, the European Central Bank (ECB) said its quantitative easing (QE) programme, launched last week, is already soothing financial woes in the region.
The ECB also said lower bank funding costs are helping the euro-area, according to the monetary authority's monthly economic bulletin. However, the central bank warned that the pace of structural reforms by individual Eurozone governments were getting in the way of further improvements.
The euro/dollar dropped 2.11% to $1.0635.
AstraZeneca climbs
AstraZeneca rallied after it signed an agreement with Japanese-headquartered company Daiichi Sankyo to jointly commercialise a new drug called Movantik, an oral treatment for opioid-induced constipation in adults with chronic non-cancer pain.
HeidelbergCement AG advanced as the cement maker raised its dividend and cut debt more than analysts expected as it reported a its annual results.
Next slumped as the fashion retailer took a cautious view of the outlook for the 2015-2016 financial year, saying some of its collections are "not as strong as they were at this point last year". |
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| | US Market Report | | US open: Markets relinquish Fed-fueled gains as Apple makes Dow debut US markets moved slightly lower on Thursday, as stocks relinquished some of the gains generated by the Federal Reserve's announcement on Wednesday. Just after 10:00 in New York, the Dow Jones Industrial Average was 99 points down, while the S&P 500 and the Nasdaq shed six and 0.05 points respectively.
The central bank's Federal Open Market Committee slashed its forecasts for the main policy rate, gross domestic product, inflation and unemployment over the coming three years.
The move to reduce the latter was considered to be especially significant by some observers, who interpreted as a reduction in the Fed's estimate of the so-called Non-accelerating inflation rate of unemployment (NAIRU).
The tone of the latest economic data, released before the start of trading, was slightly negative.
Meanwhile, the US current account deficit widened in the fourth quarter of 2014 to reach $113.5bn, well above the downwardly revised reading of $98.9bn for the previous three months.
In the week ended 19 March, weekly unemployment claims rose by 2,000 to reach 291,000, according to the Department of Labor.
That was slightly lower than the 293,000 forecast by economists.
"As things stand, we would anticipate another sizeable gain in payroll employment in March which, despite the weakness of current inflation, is why we expect the Fed to begin raising interest rates in June," said Paul Ashworth, chief US economist at Capital Economics.
In company news, GoDaddy, the website hosting company, was planning to issue 22m shares at between $17 to $19 each, regulatory filings showed. That would allow the outfit to fetch a market capitalisation of between $2.57bn and $2.87bn.
Apple rose 0.3% on its debut as a Dow Jones component.
While home builder Lennar Corp climbed 1.65% after reporting better-than-expected earnings and revenue.
Biotech group Amicus Therapeutics jumped almost 27% after reporting that a meeting with regulators over a treatment for Fabry disease had been successful.
Having rebounded strongly in the wake of the Fed's announcement on Wednesday, oil prices tumbled again, with West Texas Intermediate crude losing 3.98% to $42.95 a barrel, while Brent crude lost 2.92% to $54.32 a barrel.
Gold futures gained 1.02% to $1,163.00, while the dollar recouped some of its Fed-fuelled losses. |
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| | Broker Tips | | Broker tips: Hargreaves Lansdown, Reckitt Benckiser, Greggs Proposals from the government to shake-up the personal savings market are positive but the reaction they triggered in shares of Hargreaves Lansdown seems overdone, UBS said in a research note e-mailed to clients. Allowing retirees to sell their annuities for cash would be positive for UK exposed asset managers and asset gatherers the Swiss broker believes.
However, asset managers may be asked to provide financial advice, whereas Hargreaves Lansdown is a non-advised player.
As well, going on the basis of the government's own estimates the Bristol-based firm only stands to gain approximately 5% in assets under administration. It now administers £49bn of assets with roughly 56% of those in funds.
The lack of a banking license also means that HL will not be interested in offering the mooted new Help-to-Buy ISAs, which may in fact compete with shares and ISAs for flows, particularly from younger savers.
For all of the above reasons, analysts Gregory Simpson and Arnaud Giblat reiterated their recommendation to 'sell' and 12-month price target of 830p.
Reckitt Benckiser has had its rating raised to 'overweight' from 'equalweight' over at Morgan Stanley, as the stock is "one of the best risk/rewards" in the home and personal care sector.
The broker said that's because of the launch of the Reckitt's cost saving program, dubbed as 'Supercharge'. The programme is an engine of sales and EBIT growth to 2017, said Morgan Stanley. "The market underestimates the potential for Supercharge to drive both top-line and EBIT growth from 2015, we argue," said the bank.
"We expect the organisational streamlining that Supercharge entails to boost top-line growth as Reckitt better leverages scale with larger, more rapid innovation," Morgan Stanley added.
Broker Berenberg has begun coverage of Greggs with a 'sell' recommendation on the fast food chain's shares as the market appears to be ignoring several potential risks ahead.
Greggs's recent strategy to focus on its core food-on-the-go market and improve the supply chain has been met with initial success, helping the company pick itself up after struggles in the face of new market entrants and the rapid expansion of other rivals.
But with the stock responding well to the improvement in business performance, analysts at the German bank believe risks still remain in the recovery story that are not being captured in the share price, which is now up 90% since July 2014.
The stock trades at 19.8 times forecast 2015 earnings versus UK food service peers on 21.9 times earnings.
Berenberg's UK food retail team say potential risks lie in the competitive nature of a market growing at circa 2-6% per year and driven by both like-for-like growth in existing sites and continued roll-outs of new sites from a plethora of competitors such as coffee shops, supermarket convenience stores, specialists and fast food operators.
Like-for-like comparisons are expected to become tougher through 2015, demanding more from the existing product offering.
Then, while the plan to refurbish stores and exit poorly performing ones has seen initial success, the analysts believe the net store additions will be limited in the coming years and will not contribute materially to top-line growth.
Finally, it is likely to be hard for the company to replicate the type of margin growth seen between 2013 and 2014 when EBIT margins rose 1.8% to 7.2%. | | |
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