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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 sink sharply as risk appetite scaled back The UK stock market suffered a sharp sell-off on Thursday, dropping to its lowest level in over a week, as geopolitical and macroeconomic fears hammered investor sentiment. The FTSE 100 finished down 1.37% at 6,895.33, as it continues to retreat from a record closing high of 7,037.67 reached on Monday. The index has not closed below the 6,900 mark since 17 March.
Financial, airline and mining stocks were among the worst performers by the end of the session as investors scaled back their appetite for risk, with just three companies on the Footsie finishing with gains.
Airline stocks in particular were feeling the brunt of a spike in the price of oil after Saudi Arabia launched air strikes in Yemen overnight in an effort to defeat rebel Houthi fighters from the north. Brent was up 4% at $58.71 a barrel by afternoon trade, as a widening conflict in that Gulf country could pose risks for global oil supplies.
Markets were also digesting news that Greece had failed in a bid on Wednesday to secure a quick cash payment from the Eurozone bank bailout fund to help stave off potential bankruptcy next month.
Economic data was mostly positive on Thursday with UK retail sales rising a seasonally adjusted 0.7% in February and German consumer confidence improving more than expected.
US jobless claims also fell more than predicted to a five-week low, though that didn't stop stocks falling on Wall Street after the opening bell. "Investors took this strong jobs figure as a boost to the hawks in the Fed," said analyst Connor Campbell from Spreadex.
LSEG leads fallers
Shares in London Stock Exchange Group dropped sharply after Borse Dubai offloaded 60m shares in the exchange operator, equal to a 17.4% stake worth £1.5bn.
Other financials such as Hargreaves Lansdown, St James's Place and Aviva were also in the red. Schroders and Prudential were registering losses after going ex-dividend, along with real estate group British Land.
Oil and gas stocks, which traded higher early on, couldn't hold on to gains despite the spike in the oil price with Shell among the fallers after doubling its planned job cuts at its North Sea operations. BP and BG Group finished owe, along with mining peers BHP Billiton, Anglo American and Rio Tinto.
The jump in oil, however, was having an effect on travel stocks with Easyjet falling sharply even though it lifted its guidance for the first half. The company said it could now make a small profit in the first six months of the year, compared with previous expectations of a £10m-30m loss.
Airline peers IAG, Wizzair and Dart were also out of favour.
Banks were also under the weather: RBS fell after confirming it expects to make at least $3.2bn from the partial sale of shares in US subsidiary Citizens, while Lloyds declined after the government sold a stake worth £569m in the lender.
Market Movers
techMARK 3,176.41 -1.27%
FTSE 100 6,895.33 -1.37%
FTSE 250 17,260.56 -1.38% |
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| | FTSE 100 - Risers
Weir Group (WEIR) 1,777.00p +0.51%
Hikma Pharmaceuticals (HIK) 2,194.00p +0.46%
Randgold Resources Ltd. (RRS) 4,902.00p +0.41%
FTSE 100 - Fallers
London Stock Exchange Group (LSE) 2,395.00p -5.63%
ARM Holdings (ARM) 1,080.00p -4.17%
Schroders (SDR) 3,207.00p -4.07%
St James's Place (STJ) 945.00p -3.47%
Hargreaves Lansdown (HL.) 1,166.00p -3.40%
International Consolidated Airlines Group SA (CDI) (IAG) 587.00p -3.37%
Prudential (PRU) 1,685.00p -3.27%
Direct Line Insurance Group (DLG) 320.30p -2.94%
RSA Insurance Group (RSA) 424.40p -2.93%
Dixons Carphone (DC.) 418.40p -2.83%
FTSE 250 - Risers
Supergroup (SGP) 991.00p +6.16%
Just Eat (JE.) 408.70p +5.34%
Card Factory (CARD) 292.30p +2.89%
Ophir Energy (OPHR) 141.30p +1.80%
AA (AA.) 431.80p +1.55%
Greggs (GRG) 1,035.00p +1.47%
COLT Group SA (COLT) 142.00p +1.00%
Hunting (HTG) 539.50p +0.94%
Infinis Energy (INFI) 191.70p +0.89%
Cranswick (CWK) 1,404.00p +0.86%
FTSE 250 - Fallers
Bodycote (BOY) 729.50p -5.14%
Ladbrokes (LAD) 104.10p -5.10%
BlackRock World Mining Trust (BRWM) 306.00p -4.32%
Phoenix Group Holdings (DI) (PHNX) 845.00p -4.30%
Serco Group (SRP) 174.00p -4.29%
Entertainment One Limited (ETO) 310.10p -4.02%
Euromoney Institutional Investor (ERM) 1,086.00p -3.89%
Workspace Group (WKP) 854.00p -3.88%
Booker Group (BOK) 149.60p -3.86% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities stage a late session recovery despite closing in the red European equity markets finished in the red on Thursday as geopolitical tensions in the Middle East allowed the bears to overcome the bulls. Saudi Arabia overnight launching air strikes on neighbouring Yemen triggered a wave of selling across Asian and European markets early Thursday.
Naturally, oil prices, which are sensitive to geopolitical tensions in the Middle East due to oil supply, spiked with WTI crude and Brent rising as high as 5% each.
By late afternoon in Europe, both had eased from session highs to trade up 4% and 1.3% respectively, as concerns about a prolonged offensive started to fade.
Late afternoon in Europe, the selling pressure eased across Eurozone stock markets, due in part to a recovery Stateside with the Dow Jones Industrial Average and S&P500 both trading flat - moving up from session lows on the back of improving weekly jobless claims.
Late in Europe, blue-chip stocks finished lower but were far off their worst levels of the day. The German DAX was off 0.2%, the French CAC-40 was down 0.3% and the Spanish IBEX 35 finished flat. The broader Stoxx Europe 600 index fell 0.7%. The UK's FTSE 100 under-performed, down 1.4%.
Economic data comes in strong
A slew of upbeat Eurozone economic data offered the bulls some inspiration as data showed the Spanish economy grew by 0.8% in the first quarter of 2015 and France's deficit narrowing faster than anticipated to 4% of GDP in 2014, from 4.3% in the previous year.
Lending data from the Eurozone, commonly known as M3, pointed to improvement in the 17-nation bloc economy, indicting the European Central Bank's stimulus measures were in effect.
Data showed lending to firms and households rose on the month in February, with loans to corporates rising by €8 billion and loans to households by €1bn. Moreover, the broad monetary aggregate M3 was up 4% in February in annual terms, above January's growth of 3.7%.
Speaking of the ECB, head honcho Mario Draghi said the central bank's bond-buying programme will boost Eurozone economic recovery in a speech to policymakers in Italy's parliament. Draghi said that recent economic figures "are comforting about the contribution that monetary policy is supplying to reinforce the cyclical recovery".
Greece in focus, euro gains
Events surrounding Greece's financial situation remained unclear after the country was legally denied by EU finance ministers to dip into the region's bank bailout fund on Wednesday.
On Thursday however, Greece's Economy Minister George Stathakis threw some optimism to the market by reportedly saying that the government could reach an agreement with EU finance ministers by 'next week.'
Elsewhere, In the FX market, the euro had a roller-coaster of the session as it earlier responded favourably to the better sounds out of Eurozone data, which helped it to move above the $1.10 mark against the US dollar after sagging to a 12-year low earlier this month.
At 16:50 GMT, the euro fell 0.4% to change hands with the US dollar at $1.09214, surrendering gains to a rising greenback thanks to the improving US weekly jobless claims.
Similarly, the British pound erased session gains to trade 0.2% lower against the advances made by the US dollar despite the strong UK retail sales figures released earlier in the session. The pound was last seen switching hands at 1.48566.
In company news, advertiser Havas slumped 4.9% after French billionaire Vincent Bolloré launched an accelerated placement to sell about 17% of his majority stake in French advertising group.
Airliner Lufthansa's shares tumbled 4% as investors remained concerned about the future of the airline's Germanwings business and its reputation following a crash in the French Alps which killed everyone on-board. Latest developments suggest one of the co-pilots locked the other one out of the cockpit before starting the jet's descent lower.
In the aerospace and defence sector, Airbus shares lost 0.8% after it raised €1.64bn from the sale of a 17.5% stake in Dassault Aviation. |
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| | US Market Report | | US open: S&P500 erases 2015 gains as Mid-East tensions rattle sentiment US stock markets fell on Thursday amid growing worries about the recent string of weak economic data and rising tensions in the Middle East. The Dow Jones Industrial Average fell 0.5% to 17661 while the S&P500 index fell 0.4% to 2055. The S&P500 has now erased its gains for 2015 so far, after three years of booking annual double digit gains.
Saudi Arabia's attack on anti-government rebels in Yemen triggered a flight out of riskier assets like equities in favour for safe-haven investments like gold, which rose 0.9% to trade at $1206 per troy ounce.
Gold tends to see capital inflows in times of uncertainty. The CBOE's VIX index which measures volatility and regarded as the best gauge of fear in the market rose 2.7% to stand at 17
Geopolitical tensions aside, market participants were concerned about the string of weaker US economic data following this week's news that inflation is at zero. Thursday's labour market data was better with weekly initial jobless claims falling by 9,000 to 282,000 in the week ending 21 March.
That pushed US government bonds to retreat with the yield on the benchmark 10-year Treasury note at 1.946%, compared with 1.920% on Wednesday. When bond prices fall, their yields rise.
The 10-year yield had fallen to 1.892% during earlier global trade as investors sought safety in Treasury bonds after Saudi Arabia launched airstrikes in Yemen.
In FX markets, the dollar declined 0.3% against the pound and the euro and fell 0.6% against the yen. In oil markets, WTI crude rose 3% to $50.34 a barrel while Brent, the international benchmark, gained 3.5% to $56.23, as worries about the Middle East situation triggered worries about supply, particularly Saudi supply.
In the absence of more US economic data, eyes were on comments from Atlanta Federal Reserve head Dennis Lockhart who said the US central bank will move in a very deliberate fashion when it begins to normalise its monetary policy, so there is little risk that it might be forced to backtrack.
"I take the decision pretty seriously. Once we start, I want to be able to move deliberately," said Lockhart, who regards an initial move at the June, July or September Fed meetings as a high probability.
In company news, data storage solutions producer SanDisk Corp plummeted 17% after cutting its sales outlook. |
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| | Broker Tips | | Broker tips: Easyjet, Antofagasta, Whitbread Shares in Easyjet and a number of other travel stocks took a hammering on Thursday from the spike in oil prices, though the budget airline did manage to impress analysts with its latest trading update. Credit Suisse maintained an 'outperform' rating and 2,050p target for Easyjet after first-half numbers beat expectations due to favourable currency movements. It remained upbeat about Easyjet's pricing growth and said the outlook is "conservative but comforting".
Chilean-focused miner Antofagasta had its rating chopped to 'sell' from 'hold' by Investec Securities which cited the company's stock as "fundamentally overvalued."
Investec said that the latest disruptions at Los Pelambres and ongoing issues with power and water and rising taxes are starting to undermine the attraction of Chile, long viewed as one of the most attractive jurisdictions for miners.
Costa coffee and Premier Inn owner Whitbread was out of favour among investors, with Panmure Gordon downgrading its rating on the stock from 'hold' to 'sell'. | | |
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