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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 100 books new all-time highs to close above 7000 Dovish central banks and fading worries about Greece exiting the Eurozone propelled the London market to record fresh all-time highs on Friday. At Friday's close, the FTSE 100 index stood strong at 7022.51, up 0.8% on the day, off a touch from its session high of 7024.21.
"The FTSE 100's landmark move above 7000 came at the right time. With 47 days left until the most uncertain UK election in decades. The index can expect to go through some jittery times in the coming month, meaning that if it had missed this opportunity come the end of March it may not have had another chance until after May," said Connor Campbell, market analyst at Spreadex.
Price-action was driven by Wednesday's dovish Federal Reserve comments in which the central bank said it's in no rush to hike rates. Closer to home, the Bank of England's chief economist and member of the Monetary Policy Committee Andy Haldane on Thursday said rate cuts and rate hikes are evenly balanced, alluding to the possibility that the BoE will cut rates, if necessary.
The ongoing activism by central banks to provide liquidity boosted stocks. Low interest rates and unconventional stimulus measures are favourable for risk assets like equities. The FTSE 100 was also helped by a stabilisation in oil markets with Brent Crude recovering to $55 per barrel.
Furthermore, the UK equity market responded optimistically to events in Brussels where Greece's government is setting out a list of specific reforms to present to its international creditors. Financial markets are hoping both parties agree on a deal in a fresh attempt to avert a credit default by the southern European nation.
FTSE 100: Recovery in commodity prices lifts miners
The recovery in silver and gold prices from previous session lows lifted UK mining stocks with Fresnillo, Anglo American and Kaz Minerals all gaining over 4% each.
Vedanta Resources meanwhile spiked after the company's chief said there is no rationale to pay a $3.3bn cash charge on its Cairn India business. Earlier in the session, Vedanta shares slumped after cutting its capital expenditure budget for 2015 by $400m and halving its 2016 budget.
CRH was the biggest gainer on the index after building materials giants Lafarge and Holcim agreed upon terms for a merger.
Tullow Oil shares surged after the West Africa-focused exploration outfit announced it had successfully negotiated for access to £450m in fresh financing.
WM Morrison also traded higher, after revealing that its new boss David Potts bought over £1m worth of shares in the company just days after joining the struggling chain, with the job of trying to turn it around.
Centrica however dipped as Moody's lowered their issuer rating and senior unsecured ratings of Centrica from to Baa1 from A3. The ratings action came after the close of markets on Thursday, an indication of lower energy prices and generally poorer trading conditions.
FTSE 250: Broker upgrades boost Ophir Energy and Debenhams
Ophir Energy was boosted as investment analysts at Deutsche Bank raised their price target on shares from 180p to 185p.
Meanwhile, Debenhams was trading lower after the department store was downgraded by N+1 Singer, who moved its rating from 'buy' to 'hold'.
Hikma Pharmaceuticals was in the red on its last day in the FTSE 250. The group will replace replacing Tullow Oil in the FTSE 100 next week. |
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| | Market Movers
techMARK 3,262.57 +0.25%
FTSE 100 7,022.51 +0.86%
FTSE 250 17,537.62 +0.57%
FTSE 100 - Risers
Anglo American (AAL) 1,100.50p +5.21%
CRH (CRH) 1,840.00p +5.08%
Glencore (GLEN) 299.30p +4.74%
Fresnillo (FRES) 706.50p +4.05%
BHP Billiton (BLT) 1,539.00p +3.60%
Weir Group (WEIR) 1,841.00p +3.49%
Tullow Oil (TLW) 320.30p +3.46%
BG Group (BG.) 884.00p +2.85%
Antofagasta (ANTO) 714.50p +2.81%
Rio Tinto (RIO) 2,914.50p +2.42%
FTSE 100 - Fallers
Persimmon (PSN) 1,689.00p -5.01%
Imperial Tobacco Group (IMT) 3,105.00p -1.58%
Kingfisher (KGF) 370.00p -1.18%
Dixons Carphone (DC.) 427.20p -1.16%
Diageo (DGE) 1,924.00p -0.85%
Associated British Foods (ABF) 3,038.00p -0.75%
Travis Perkins (TPK) 1,984.00p -0.60%
Next (NXT) 7,275.00p -0.55%
Meggitt (MGGT) 574.50p -0.52%
Reckitt Benckiser Group (RB.) 5,960.00p -0.50%
FTSE 250 - Risers
Vedanta Resources (VED) 525.00p +16.23%
Kaz Minerals (KAZ) 227.00p +10.25%
Euromoney Institutional Investor (ERM) 1,113.00p +7.95%
Lonmin (LMI) 134.30p +6.84%
Workspace Group (WKP) 916.00p +6.08%
Dechra Pharmaceuticals (DPH) 1,033.00p +5.89%
Afren (AFR) 3.50p +5.74%
Acacia Mining (ACA) 262.00p +5.65%
RPS Group (RPS) 253.50p +5.62%
AL Noor Hospitals Group (ANH) 1,060.00p +5.58%
FTSE 250 - Fallers
Hikma Pharmaceuticals (HIK) 2,185.00p -3.40%
Game Digital (GMD) 255.20p -2.97%
BTG (BTG) 758.00p -2.70%
Provident Financial (PFG) 2,765.00p -2.61%
Cable & Wireless Communications (CWC) 58.80p -2.16%
Balfour Beatty (BBY) 235.00p -1.88%
Diploma (DPLM) 850.00p -1.79%
Bank of Georgia Holdings (BGEO) 1,746.00p -1.74%
Cranswick (CWK) 1,385.00p -1.63%
Alent (ALNT) 377.70p -1.61% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally on receding Greek exit fears European stocks jumped, with the FTSE 100 breaking above the 7000 level for the first time in its history. The London benchmark moved above the 7,000 mark in late afternoon trading in Europe as global equity markets advanced on receding Greek exit fears and dovish central banks.
The Federal Reserve on Wednesday said it would wait to raise interest rates until it sees further improvement in the labour market while the Bank of England's Andy Haldane alluded to the possibility of cutting rates if necessary.
Greek Prime Minister Alexi Tsipras was on Friday reportedly expected to present a detailed final list of reforms to unlock further aid from international creditors, soothing fears about the country's finances.
German Chancellor Angela Merkel and French President Francois Hollande said that Greece needed to speed up the process of implementing new measures.
"We have to take that at face value and say we trust that this will happen," Merkel told reporters on the sidelines of the EU summit in Brussels on Friday morning. "And then we'll see what comes."
Royal Bank of Scotland said that it expected tough negotiations but no Grexit.
"Several avenues of temporary funding remain, including issuing additional t-bills to banks if the ECB raises the cap and partial disbursement of the €7.2bn delayed programme tranche payment," the RBS analysts added. "We still don't believe a Grexit will occur, but the negotiation on reforms will be tough, with the potential for further headline risk, as we have discussed before."
The Greek ASE Index increased 2.9%, as Alpha Bank AE and National Bank of Greece SA climbed more than 12%.
Following the latest news out of Brussels, the euro currency surged by 1.72% against the US dollar to $1.0843.
In economic data, German producer prices fell 2.1% year-on-year in February, compared to forecasts for a 2% drop.
UK public finances improved in February, the Office for National Statistics revealed, putting Chancellor George Osborne on track to meet his borrowing targets before the 7 May general election. Public sector net borrowing, which excludes state-controlled banks, totalled £6.9bn in February, a 34% drop from the previous year. Analysts had pencilled in a shortfall of £8.5bn.
Companies: Pirelli & C. SpA, Zodiac Aerospace
Pirelli & C. SpA was a high riser after its biggest shareholder said it's looking to transfer its holding in the tyremaker to an unidentified partner for €15 per share.
Zodiac Aerospace declined after the aeronautical-equipment manufacturer warned that first-half current operating income will be affected by costs due to problems in its Seats business.
Lafarge and Holcim gained after agreeing a $40bn merger to form the world's biggest cement company. CRH, which agreed to buy assets in the companies, also rallied.
Tullow Oil jumped after saying it received a fresh $450m in funding commitments and capital.
TSB Banking Group advanced after it agreed takeover terms with Banco de Sabadell SA in a £1.7 bn deal. Sabadell also edged higher. |
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| | US Market Report | | US open: Dow gains 130 points on positive news on Greece and dovish Fed US stocks rallied on Friday supported by healthy gains in European markets as 'Grexit' fears receded on hopes the Greek government and the EU can work out a deal in Brussels. Just after 10:00 in New York, the Dow Jones Industrial Average was up 137 points, while the S&P 500 and the Nasdaq gained 14 and 34 points respectively.
A joint statement by Greece and their EU counterparts said the country will submit a "full list of specific reforms" in the next few days and the Greek prime minister, Alexis Tsipras, said he was optimistic the EU will work to restore funding as soon as possible.
European stocks were mostly higher, with Britain's FTSE extending its foray into record territory after gaining almost 0.3%, while the Greece's Athex Composite rose 2.6% after German chancellor Angela Merkel said Athens had agreed to send a list of overhauled reforms to European officials within days.
Having relinquished some gains on Thursday, US markets were continuing to take confidence from Wednesday's dovish statement from the Federal Reserve, as the central bank indicated it was in no rush to raise interest rates.
Friday sees two Fed members speaking, with Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans, both voting member of the Fed's rate-setting board this year, giving a speech at 14:15 GMT and 15:30 GMT respectively.
Following the Fed's statement, economists said that speeches from individual members could shed some light on future rate hikes.
In company news, Biogen Idec jumped 10% after the biotechnology group said trials on its new Alzheimer cure had returned positive results, while sector peer Prothena soared as high as 48% after announcing positive results overnight for its Parkinson's disease study.
Sports apparel giant Nike rose 4% after reporting third quarter earnings that beat Wall Street's expectations, while Amazon rose over 1% after receiving an official approval to test-fly its drones.
Darden Restaurants edged forward 1.3% after the restaurant chain owner reported better-than expected earnings.
Going the other way, jewellery group Tiffany & Co dropped almost 3% on the back of a small drop in sales.
The dollar was stable against the yen but suffered large declines against the pound and the euro, falling 0.82% and 1.11% respectively, while gold futures rose 0.41% to $1,173.80. |
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| | Broker Tips | | Broker tips: StanChart, Michael Page, Next Standard Chartered's rating on Friday was downgraded to 'sell' from 'hold' at Investec Securities as the scale and pace of the stock's absolute and relative share price recovery "has finally tipped us over the edge." The broker noted that year-to-date, the stock has materially outperformed all other FTSE100 banks sector, but, it is the "strength of the market's implicit endorsement of management change and a material strategic repositioning of the group as at odds with the scale of negative impact on expected financial performance."
It added that although Standard Chartered can and should choose to avoid a capital raise, "we are not confident that it will remain resolute."
As such, the broker reduces its target on the stock to 970p from 1000p.
Shares in recruiter Michael Page are trading below their average mid-cycle earnings multiples and analysts' estimates have now come down to sensible levels.
Hence, owning stock in the later-cycle staffer "makes sense" to Morgan Stanley analysts Toby W Reeks and Allen D Wells, as they explained in a research note e-mailed to clients.
Indeed, they admit the shares have performed strongly even in the face of the expected decline in analysts' earnings forecasts. In anticipation of that, in January they lowered their recommendation to equal-weight.
In Friday's research note they lower their 2015 and 2016 estimates for the firm's earnings per share (EPS) by between 5% to 10%. However, they caution that should be taken in the context of highly cyclical earnings. Michael Page now trades on a 2016 forward price-to earnings ratio of 18.8 versus an average value of 20 times.
Morgan Stanley upped its price target on the shares to 590p from 500p previously. The recommendation now returns to overweight.
Fashion retailer Next's trading model is still solid but prospects of a reduced profit stream from credit customers, the company's admission that UK Directory may now be ex-growth and lowered guidance on sales, will lead markets to reassess the potential for the stock, analysts at Canaccord Genuity wrote on Friday.
Analysts David Jeary and Mark Photiades reiterated their belief that the shares should be a core holding, thanks to its philosophy of continual enhancement of the Next brand.
While the lowered sales guidance is in line with management's conservative style, when combined the above factors mean that total shareholder returns (TSR) of 9% can be expected. That is attractive but well below the between 18% to 25% increases seen over the fiscal years 2011 to 2015. | | |
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