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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 retreat from record with investors nervous ahead of busy week Decent gains from financial stocks were outweighed by heavy falls in the mining sector on Monday as the UK equity market pulled back from a record high reached last week.
Political uncertainty and nervousness ahead of busy week had prompted a bout of profit-taking in London, with the FTSE 100 down 0.36% at 7,064.30 by the end of trade. Mining stocks in particular were falling sharply as a number of investment banks lowered their price assumptions for iron ore.
The Footsie reached a new all-time closing high of 7,089.77 on Friday, setting an intraday record of 7,095.36 that same day.
Investors were treading carefully ahead of a busy week on the market worldwide with UK inflation, US retail sales and a policy meeting at the European Central Bank likely steal the spotlight over the coming days.
Wednesday's gross domestic product figures from China will also be in focus after figures overnight revealed that Chinese exports dropped at an annual rate of 15% in March, causing the trade surplus to drop significantly.This was a significant miss on the 10% increase expected by analysts and added to speculation that Beijing will inject further stimulus measures to prop up the economy.
Closer to home, the UK election campaign stepped up a gear over the weekend with various parties continuing to come out with promises in a bid to secure votes. However, the latest polls continue to showed a big variation with just four weeks to before voting begins.
"These last two polls [YouGov and The Guardian] are a sign of the kind of uncertainty the nation faces. If this kind of divergence keeps up, it's a real risk to the new record highs being set by UK stocks and the value of the British pound," said analyst Jasper Lawler from CMC Markets.
In other news, ECB bond buying slowed down slightly in the fifth week of its quantitative easing programme, purchasing €9.159bn of bonds. This was less than it had bought the previous seven days and below the average amount needed to keep its QE programme on track.
Mining stocks tank
Citigroup, UBS and S&P all lowered their price forecasts for iron ore over the coming years, sending shares across the mining sector lower. Citigroup in particular lowered Rio Tinto, Glencore, BHP Billiton and Lonmin to 'neutral' and cut Vedanta Resources and Anglo American to 'sell', as it shifted its stance on the sector to 'neutral' from 'bullish'.
A number of gold miners, however, were bucking the trend, including Fresnillo, Centamin and Acacia Mining.
Financial stocks were outperforming, with Aviva, Barclays, RBS, HSBC and Hargreaves Lansdown among the best performers. Aviva was rising on the first day of trading after taking over Friends Life, as analysts at Barclays, JP Morgan and Morgan Stanley raised their ratings on the stock.
HSBC was boosted after Morgan Stanley lifted its rating on the stock to 'equal weight' following a 17% underperformance against the Stoxx 600 banks index so far this year.
Tesco was among the worst performers in the aftermath of a research report on Friday from Barclays, which said the retailer could follow in the footsteps of Morrison and Sainsbury by taking a large property impairment in its annual results on 22 April - " £3bn does not seem an unreasonable estimate", Barclays said. |
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| | Market Movers
techMARK 3,260.87 -0.40%
FTSE 100 7,064.30 -0.36%
FTSE 250 17,829.83 -0.25% FTSE 100 - Risers
Ashtead Group (AHT) 1,093.00p +1.58%
Royal Bank of Scotland Group (RBS) 353.20p +1.23%
Aviva (AV.) 561.50p +1.17%
HSBC Holdings (HSBA) 618.00p +0.96%
Barclays (BARC) 259.45p +0.93%
Royal Dutch Shell 'B' (RDSB) 2,065.50p +0.85%
Fresnillo (FRES) 709.50p +0.85%
Merlin Entertainments (MERL) 458.80p +0.81%
BG Group (BG.) 1,177.00p +0.77%
Hargreaves Lansdown (HL.) 1,237.00p +0.65%
FTSE 100 - Fallers
BHP Billiton (BLT) 1,416.00p -3.25%
Tesco (TSCO) 244.30p -2.67%
Antofagasta (ANTO) 722.00p -2.50%
Anglo American (AAL) 998.70p -2.28%
Pearson (PSON) 1,443.00p -1.90%
Burberry Group (BRBY) 1,778.00p -1.55%
Glencore (GLEN) 285.15p -1.55%
Imperial Tobacco Group (IMT) 3,233.00p -1.49%
Marks & Spencer Group (MKS) 567.00p -1.48%
GKN (GKN) 355.90p -1.47%
FTSE 250 - Risers
Home Retail Group (HOME) 174.40p +5.63%
Indivior (INDV) 219.90p +4.07%
Drax Group (DRX) 408.00p +3.16%
Acacia Mining (ACA) 287.60p +3.16%
De La Rue (DLAR) 598.00p +3.10%
Bank of Georgia Holdings (BGEO) 1,967.00p +2.98%
Centamin (DI) (CEY) 60.50p +2.89%
Aveva Group (AVV) 1,587.00p +2.59%
Tullow Oil (TLW) 339.50p +2.54%
Just Eat (JE.) 449.60p +2.44%
FTSE 250 - Fallers
Ladbrokes (LAD) 105.50p -3.39%
Lonmin (LMI) 125.60p -3.38%
Redefine International (RDI) 57.25p -3.38%
Daejan Holdings (DJAN) 5,750.00p -3.36%
Big Yellow Group (BYG) 684.50p -2.91%
Law Debenture Corp. (LWDB) 518.50p -2.72%
Millennium & Copthorne Hotels (MLC) 575.00p -2.46%
Ashmore Group (ASHM) 306.80p -2.45%
Ocado Group (OCDO) 366.40p -2.29% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities mixed on Greek woes, China trade data, ECB QE Eurozone equities ended the session mixed as concerns over Greek debt continued and as the Chinese trade surplus shrank.
Greece has quashed rumours that the government is considering snap elections, denying a report in a German newspaper which suggested that Syriza may seek an outright majority if Athens fails to reach a deal with its creditors.
Greece repaid a €450m loan to the International Monetary Fund last week but faces another deadline on 12 May for a further €747m payment.
Renewed fears were sparked by a report from German newspaper Frankfurter Allgemeine Sonntagszeitung that Eurozone officials were "disappointed" with talks so far.
In response, Greece's 10-year bonds dropped, sending yields up 16 basis points to 11.06%. The euro fell 0.21% against the US dollar to change hands at $1.0582.
The Chinese trade surplus narrowed to $3.08bn in March from $60.62bn the previous month, compared to analysts' estimates of $40.20bn.
Exports declined by 15% in March, well below predictions for a 10% gain and following a 48.3% jump in February. Imports dropped 12.7% last month after a 20.5% slide in February, more than the 10% fall expected.
Meanwhile, the European Central Bank (ECB) revealed it purchased €9.159bn in government bonds in the week to 10 April, compared with €11.506bn growth in the week before, bringing the total to €61.681bn. The pace of average daily purchases slowed down to €1,832m from €2,301m in the previous reporting period.
It comes ahead of the ECB's latest policy decision and press conference on Wednesday when the central bank may discuss the progress of its quantitative easing programme.
Companies: Nokia, Sydbank
Nokia Oyj climbed amid reports the Finnish communications and IT company is considering the sale of its maps business.
Sydbank A/S advanced after the Danish lender said it will buy back shares.
MorphoSys AG was a high riser on news one of its experimental drugs to treat arthritis is entering a second phase of trials.
Aviva jumped after Barclays, Morgan Stanley and JPMorgan Chase & Co. recommended buying the stock.
BHP Billiton and Rio Tinto declined after the premier of Western Australia said the iron ore miners are pursuing a "flawed strategy" of increasing output in an oversupplied market.
Tesco dropped after The Telegraph reported, citing analysts from Barclays, that the supermarket will announce an impairment charge of 3bn when it reports results on 22 April. |
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| | US Market Report | | US open: Dow and S&P edge higher as earnings season shifts up a gear US stocks edged higher on Monday, as investors digested disappointing Chinese trade data, while the earnings season was set to begin in its earnest.
Just after 15:00 BST in New York, the Dow Jones Industrial Average was up 0.19%, while the S&P 500 and the Nasdaq gained 0.03% and 0.17% respectively.
On Friday, stocks finished higher with the Dow Jones above 18,000 for the first time in almost three weeks. On Monday, there's little economic data of note other than the Federal budget for March, due at 18:00 BST.
The Chinese trade surplus fell to $3.08bn in March from $60.62bn the previous month, compared to analysts' estimates of $40.20bn.
Exports declined by 15% in March, below predictions for a 10% gain and following a 48.3% jump in February. Imports dropped 12.7% last month after a 20.5% slide in February, more than the 10% fall expected.
The General Administration of Customs said the decline was due to weak external demand, the slowdown in China's economic growth and the fall in international commodity prices.
The earnings season, which began last week, clicks into gear on Tuesday with JP Morgan Chase & Co, Wells Fargo & Co and Johnson & Johnson due to report before the bell.
On Monday, Layne Christensen Co and Pep Boys will report after the close.
"The market reaction to the earnings season is typically a reflection of results versus expectations," said Jasper Lawler, analyst at CMC Markets.
"Expectations have taken a beating leading into the first quarter reporting but this may be a good thing."
However, Lawler added that lowered corporate expectations meant the market had a better chance to negotiate a potentially difficult earnings season.
"Corporations have proven very adept at lowering guidance in order to beat it," he said.
"Even if average income does decline amongst top US companies, if lowered expectations are beaten, the market might come through the next couple of months unscathed."
In company news, Qualcomm Inc climbed 2.30%, after The Wall Street Journal reported that the chip maker was being pressured to consider a breakup to boost its weak share price by activist investor Jana Partners LLC.
Builders FirstSource jumped 60.4% after unveiling plans to buy ProBuild.
The dollar slid against yen, euro and the pound, while gold futures edged 0.02% higher to $1,204.90. |
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| | Broker Tips | | Broker tips: Mining stocks, HSBC, BG Group, Pearson Citigroup downgraded its stance on the UK metals and mining sector on Monday to 'neutral' from 'bullish' after cutting its short and medium term outlook for iron ore.
Citi now expects iron ore price to $45 per tonne in 2015 and $40 per tonne in 2016 and said "upside in the sector is now capped". The bank lowered Rio Tinto, Glencore, BHP Billiton and Lonmin to 'neutral' and cut Vedanta Resources and Anglo American to 'sell'.
UBS has lowered its stance on miner Ferrexpo from 'neutral' to 'sell', saying it now expects iron ore to suffer a "super down cycle".
The bank cut its profit forecasts for Ferrexpo and said that the company is at risk of becoming cash flow negative by 2016. There is also risk of liquidity "getting tight" over the next 12 months ahead of the repayment of a remaining $285m loan in April 2016.
Banking giant HSBC had its rating on Monday upgraded to 'equalweight' from 'underweight' by Morgan Stanley.
Analysts at the US investment bank said the reason behind the rating upgrade is because HSBC's stock has underperformed the Stoxx 600 banks index by around 17% year-to-date.
Investec has raised its rating for natural gas outfit BG Group from 'sell' to 'hold' following last week's surprise 47bn takeover bid by Shell.
The broker said that despite the market's concerns, the deal is unlikely to be rejected by shareholders. However, given that Shell's offer represents a 50% premium to the closing price the day before the deal, "we do not anticipate a counter-offer", Investec said.
Pearson, the provider of educational books and the owner of the Financial Times, had its rating lowered to 'underperform' from 'buy' byJefferies. | | |
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