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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 jumps to new record high on ECB stimulus Details of the European Central Bank's (ECB) quantitative easing package helped the FTSE 100 to another record close on Thursday, with financial stocks making solid gains by the end of the session. The Footise finished the day 41.9 points higher (+0.61%) at 6,961.14, surpassing a previous closing record of 6,949.73 reached last week.
"ECB-inspired afternoon resilience in European equity markets drags the FTSE ever closer to the 7,000 level," said analyst Alastair McCaig from IG.
ECB president Mario Draghi confirmed the Bank's €1.1trn quantitative easing programme will begin on 9 March, with €60bn of asset purchases each month through to September 2016 and thereafter if needed. It also raised emergency liquidity assistance for Greece by €500m and announced that it has removed the waiver on purchases of the nation's debt.
The ECB also raised its Eurozone growth projections for 2015 and 2016 to 1.5% and 1.9%, from 1% and 1.5% respectively, though inflation is forecast to average 0% in 2015 before rising to 1.7% by 2017.
"The ECB effectively acknowledged that even with this programme, it would fall short of its below but close to 2% target over the next three years," said analyst Craig Erlam from Oanda.
In other news, the Bank of England decided to keep the Bank Rate at 0.5%, marking the sixth consecutive year of inaction.
Economic data mostly came in worse than expected on Thursday, with Germany factory orders slumping 3.9%, US jobless claims unexpectedly rising 7,000 and US factory orders registering a surprise 0.2% fall.
Aviva and Friends Life lead financials higher
Insurers Aviva and Friends Life Group each jumped over 7% on Thursday as investors celebrated the companies' 2014 results ahead of the proposed merger. The impressive figures also helped to allay fears across the wider sector, showing that companies have been able to withstand sharp falls in annuity sales following the reforms announced at the time of the Autumn Budget.
Insurance peers including Standard Life, Legal & General, Prudential and Old Mutual were all putting in decent gains in afternoon trade, along with non-life counterpart Admiral despite reporting a 4% fall in profits for last year.
Shares in Betfair surged after the online gaming group upgraded its guidance for full-year profits following a strong third quarter with revenues up 20%.
Leading the downside were Rio Tinto and HSBC after going ex-dividend, while travel peers IAG and Easyjet also fell as crude prices gained.
Market Movers
techMARK 3,184.44 +0.77%
FTSE 100 6,961.14 +0.61%
FTSE 250 17,310.31 +1.02% |
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| | FTSE 100 - Risers
Friends Life Group Limited (FLG) 434.90p +7.07%
Aviva (AV.) 569.50p +7.05%
Schroders (SDR) 3,178.00p +4.75%
Standard Life (SL.) 442.00p +4.44%
Admiral Group (ADM) 1,514.00p +3.77%
Rolls-Royce Holdings (RR.) 985.00p +3.68%
Glencore (GLEN) 291.85p +3.04%
Wolseley (WOS) 4,083.00p +2.85%
Weir Group (WEIR) 1,739.00p +2.78%
Legal & General Group (LGEN) 277.80p +2.77%
FTSE 100 - Fallers
Rio Tinto (RIO) 2,985.00p -2.88%
HSBC Holdings (HSBA) 570.60p -2.64%
International Consolidated Airlines Group SA (CDI) (IAG) 562.00p -1.32%
Ashtead Group (AHT) 1,129.00p -1.31%
BG Group (BG.) 922.20p -1.13%
Tullow Oil (TLW) 356.50p -1.00%
Shire Plc (SHP) 5,200.00p -0.95%
Standard Chartered (STAN) 1,014.50p -0.93%
easyJet (EZJ) 1,722.00p -0.92%
RSA Insurance Group (RSA) 423.40p -0.75%
FTSE 250 - Risers
Betfair Group (BET) 2,105.00p +17.86%
Spirax-Sarco Engineering (SPX) 3,407.00p +10.62%
Pace (PIC) 382.50p +6.37%
Essentra (ESNT) 1,039.00p +5.38%
Serco Group (SRP) 217.80p +5.32%
Moneysupermarket.com Group (MONY) 272.00p +5.02%
Morgan Advanced Materials (MGAM) 339.00p +4.92%
Synthomer (SYNT) 288.30p +4.38%
Hellermanntyton Group (HTY) 348.00p +4.35%
Greggs (GRG) 1,001.00p +3.95%
FTSE 250 - Fallers
Afren (AFR) 5.83p -11.67%
Allied Minds (ALM) 587.00p -5.85%
Lonmin (LMI) 136.50p -3.94%
Kaz Minerals (KAZ) 232.30p -3.61%
Cobham (COB) 321.70p -3.39%
Jimmy Choo (CHOO) 170.50p -2.46%
Daejan Holdings (DJAN) 5,860.00p -2.17%
Brown (N.) Group (BWNG) 427.80p -2.02%
Euromoney Institutional Investor (ERM) 1,038.00p -1.98%
Aveva Group (AVV) 1,500.00p -1.90% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally as ECB reveals details of QE programme European stocks rallied as the European Central Bank (ECB) said bond purchases would start on Monday and as it left the door open on the programme to be extended. The ECB revealed the €1.1trn quantitative easing programme would run at €60bn a month through September 2016 and thereafter if needed to boost the euro-area recovery and help bring inflation back towards the target of just below 2%.
Speaking at a press conference after the ECB unsurprisingly announced it would keep its main refinancing rate at 0.05% and deposit facility at -0.20%, President Mario Draghi said Greece and Cyprus were exempt from QE until certain conditions are met.
The ECB raised emergency liquidity assistance for Greece by €500m and announced that it has removed the waiver on purchases of the nation's debt. Draghi said the ECB stands ready to reinstate the waiver as soon as successful review is completed.
The ECB also raised its gross domestic product (GDP) projections for 2015 to 1.5% from 1% and 2016 estimates were revised to 1.9% from 1.5%. The central bank sees GDP moving towards 2.1% in 2017. Inflation is expected to rise to 1.8% in 2017 but average 0% in 2015.
Oanda senior market analyst Craig Erlam highlighted the negative reaction to the ECB's inflation projection for 2017 which is deemed to be not close enough to target.
"All things considered, I will be very surprised if this programme does not run past September next year, which Draghi did leave the door open to."
The euro fell 0.58% to $1.1014 in afternoon trade.
Meanwhile, the Bank of England (BoE) kept its policy unchanged, as expected, leaving interest rates at 0.5% and asset purchases at £375bn.
In economic data, German factory orders fell 0.1% year-on-year in January, well below analysts' estimates for a 2.6% increase, after rising 3.9% a month earlier.
European retail sales contracted in February, according to data from Markit. The purchasing managers' index on retail sales rose to 46.4 in February from 46.6 a month earlier but was below the 50 level, which signalled a contraction. A reading above 50 indicates expansion.
Companies: Aviva, Schroders
Aviva rallied after the insurer increased its dividend for 2014 by 30% on the back of a rise in profit.
Schroders jumped after the asset manager said investors injected £24.8bn into its funds last year, up from £7.9bn in 2013.
Carrefour SA advanced as the French retailer posted a 6.7% rise in full-year earnings, boosted by sales growth in Brazil and Argentina.
Adidas AG gained after the sporting-goods maker forecast a 10% increase in 2015 net income from continuing operations. |
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| | US Market Report | | US open: Markets edge higher as ECB stimulus offsets weak data US stock markets rose on Thursday despite some weaker-than-expected domestic economic data, as investors focused on the European Central Bank (ECB) significantly upgraded GDP growth forecasts and details of its stimulus programme. By 10:26 in New York, the Dow Jones Industrial Average was up 0.3%, the Nasdaq gained 0.4% while the S&P 500 was 0.2% higher.
A bullish ECB revealed that its €1.1trn quantitative easing programme would begin on 9 March and carry through at €60bn a month through September 2016 and thereafter if needed.
The central bank raised GDP growth forecasts for 2015 by 0.5 percentage points (ppt) to 1.5%, for 2016 by 0.3 ppt to 1.8% and released a first forecast of 2.1% for 2017.
Policymakers also raised emergency liquidity assistance for Greece by €500m and removed the waiver on purchases of the nation's debt.
In economic data, factory orders unexpectedly declined 0.2% in January after a revised 3.5% drop in December; the consensus estimate was for 0.2% growth. Non-farm productivity in the fourth quarter was revised to show a 2.2% fall.
Meanwhile, initial US jobless claims rose 7,000 in the week ended 28 February to 320,000, a level not seen since May 2014. Analysts had been anticipating a fall to 295,000 from 313,000 the week before.
"This news hampered the gains the US markets had made on the back of the ECB conference, and suggest a worrying jobs trend before the all-important non-farm figures tomorrow," said Connor Campbell from Spreadex.
Nevertheless, economists broadly expect a continued improvement in the labour market in February, with government figures due Friday predicted to show that the jobless rate declined to 5.6% from 5.7% in January. Non-farm payrolls are expected to have increased by 235,000 in February, from 257,000 the month before.
In company news, Pharmacyclics surged nearly 11% after AbbVie said it would spend $21bn on the company to boost its cancer drug pipeline.
Others in the pharma sector including Johnson & Johnson, Biogen, Infinity and Sevion were also making decent gains. |
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| | Broker Tips | | Broker tips: Rightmove, Spirax-Sarco, Aviva As competition in the property portal space heats up, and on the back of a 54% gain in the share price, the time may have come for investors in Rightmove to move on, Credit Suisse believes. Nonetheless, the Swiss broker continues to like the sector, both in terms of the cyclical and structural growth stories. Even so, it believes the level of the company's current valuation now looks fair, as it lowered his recommendation on the shares to 'neutral' from 'outperform'. However, the price target has been lifted to 3,220p from 2,700p.
Currency headwinds buffeted Spirax Sarco's profitability on a pre-tax basis, but analysts at Investec continue to see clear sailing ahead.
The broker said: "Today's news has all of Spirax's typically positive characteristics and investors should be very content with the group's progress. We expect estimates to rise a little and there will also be upward pressure on the share valuation." Investec placed its recommendation and target on the stock "under review".
Life insurer Aviva's latest full-year results provided a small beat with respect to consensus on nearly every key metric, analysts at Panmure Gordon mused.
That drove the firm's IFRS net asset value figure to 274p per share, ahead of the broker's estimate of 240p. Analyst Barrie Cornes maintained his target of 660p and 'buy' recommendation on the shares. | | |
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