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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 inch higher as miners gain, but upside limited Gains from mining stocks kept the FTSE 100 afloat on Tuesday, though investors were showing caution with markets near record highs amid uncertainty in Greece and macro concerns.
After swinging between positive and negative territory throughout the day, the Footsie finished the session just 10.96 points higher (+0.16%) at 7,075.26. The index had set a new all-time closing high of 7,089.77 on Friday.
"Were it not for a sterling performance by the mining sector today, picking itself up off the floor following yesterday's sell-off, then the FTSE 100 would have joined its Eurozone and US stablemates in negative territory," said IG analyst Chris Beauchamp.
Speculation that Greece is preparing for a debt default hit sentiment on the continent on Tuesday, with indices in Spain, Italy and Germany in particular registering heavy losses.
Athens was forced to come out and deny a Financial Times report that cited a government official as saying there is "no alternative" to a default if Athens does not reach a deal with its lenders. However, the office of prime minister Alexis Tsipras said in a statement that negotiations are "proceeding swiftly towards a mutually beneficial solution".
In economic data, Britain narrowly avoided a dip into deflation with official figures showing the UK consumer price inflation rate remained at a record low of 0% in March, in line with consensus. Cheaper clothing and footwear helped to maintain prices for a second month, though there are fears that the economy could enter deflation in the near future.
US retail sales grew by just 0.9% in March after a revised 0.5% fall the month before, missing the 1.1% gain expected by economists. This was just the first increase in sales in four months after spending declined over winter.
In other news, the International Monetary Fund reiterated its 3.5% growth forecast for the global economy for 2015, but upgraded its 2016 estimate by 10 basis points to 3.8%. However, whilst upgrading its forecasts for Europe and Japan, the IMF downgraded its outlook for the US economy.
Miners and oil stocks rise
Mining stocks were dominating the risers list on the top-flight index, including Anglo American, Rio Tinto, Glencore, BHP Billiton and Antofagasta as investors picked up shares after heavy falls on Monday.
A 1% increase in the price of Brent crude to $58.51 a barrel was also helping shares in the oil sector, including Shell, Soco International, Tullow Oil and Premier Oil. Tullow in particular surged after Citigroup raised its rating on the stock from 'neutral' to 'buy', saying that the oil group's portfolio quality was "undervalued" by the market.
Broker comments were also helping Barclays after Credit Suisse said the UK lender was its second-favourite investment banking stock in Europe behind UBS.
In contrast, Aberdeen Asset Management fell after a downgrade of the company's stock to 'underperform' from 'sector perform' by RBC Capital Markets. Financial peer Hargreaves Lansdown was also hit by the news that its co-founder Peter Hargreaves has stepped down from the board.
UK hospital operator Spire Healthcare dropped sharply after private equity group Cinven sold down its stake to 38.3% with a £136m share sale. Meanwhile, reports that Ithmar Capital was planning to sell a stake worth £216m in Dubai-based Al Noor sent its shares into the red.
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| | Market Movers
techMARK 3,258.10 -0.08%
FTSE 100 7,075.26 +0.16%
FTSE 250 17,858.81 +0.16% FTSE 100 - Risers
Weir Group (WEIR) 1,880.00p +5.09%
Anglo American (AAL) 1,039.50p +4.09%
BHP Billiton (BLT) 1,459.50p +3.07%
Antofagasta (ANTO) 743.00p +2.91%
Glencore (GLEN) 293.35p +2.88%
Rio Tinto (RIO) 2,892.50p +2.79%
Fresnillo (FRES) 722.50p +1.83%
Ashtead Group (AHT) 1,112.00p +1.74%
AstraZeneca (AZN) 4,800.00p +1.73%
Aggreko (AGK) 1,600.00p +1.65%
FTSE 100 - Fallers
Shire Plc (SHP) 5,535.00p -2.55%
Aberdeen Asset Management (ADN) 493.80p -2.51%
International Consolidated Airlines Group SA (CDI) (IAG) 595.50p -2.38%
Hargreaves Lansdown (HL.) 1,210.00p -2.18%
Standard Chartered (STAN) 1,083.50p -2.03%
Barratt Developments (BDEV) 542.50p -1.81%
Carnival (CCL) 3,296.00p -1.73%
London Stock Exchange Group (LSE) 2,530.00p -1.67%
BAE Systems (BA.) 529.00p -1.40%
3i Group (III) 504.50p -1.37%
FTSE 250 - Risers
Soco International (SIA) 197.40p +8.94%
Tullow Oil (TLW) 368.60p +8.57%
Vedanta Resources (VED) 558.00p +7.83%
Premier Oil (PMO) 165.50p +6.57%
Lonmin (LMI) 133.60p +6.37%
Enterprise Inns (ETI) 116.70p +5.61%
Hunting (HTG) 583.50p +4.95%
Kaz Minerals (KAZ) 229.80p +4.60%
Supergroup (SGP) 1,000.00p +3.95%
Bank of Georgia Holdings (BGEO) 2,037.00p +3.56%
FTSE 250 - Fallers
Spire Healthcare Group (SPI) 330.00p -10.11%
AL Noor Hospitals Group (ANH) 905.00p -8.82%
Hiscox Ltd (CDI) (HSX) 851.00p -3.46%
Allied Minds (ALM) 701.00p -3.31%
De La Rue (DLAR) 585.00p -2.17%
International Personal Finance (IPF) 476.40p -2.06%
Zoopla Property Group (WI) (ZPLA) 204.00p -1.92%
Man Group (EMG) 211.80p -1.85%
Telecity Group (TCY) 915.50p -1.77% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end mostly in the red on UK 'noflation' and Greek debt concerns Most of the European equities closed in the red following reports of the UK's 'noflation' and Greece's debt woes.
The Office for National Statistics said UK consumer prices remained at zero in March compared to year ago, as expected by analysts. Analysts said "noflation" is likely to hang around amid a slump in oil prices.
"We expect inflation to remain close to zero until the latter months of this year, at which point the base effects, caused by the collapse in oil prices, will begin to kick in," said Martin Beck, senior economic advisor to the EY ITEM Club.
"Against this backdrop we continue to expect the Bank to wait until early 2016 before raising interest rates, with consumers continuing to enjoy a healthy boost to their spending power in the interim."
Meanwhile, Greek finance minister Yanis Varoufakis will meet with President Obama in Washington on Thursday as EU officials warned the country was far from reaching an agreement with creditors to unlock further aid.
The Greek government's next payment to the International Monetary Fund is due on 1 May for €203m amid fears the country is rapidly running out of cash.
The euro was up 1.04% at $1.0677 at close of trading.
Meanwhile, a report from Eurostat showed industrial production increased 1.6% year-on-year in February following a 0.4% rise a month earlier. Analysts had pencilled in a 0.8% gain.
In the US, retail sales rose 0.9% in March after a 0.5% drop a month earlier, missing expectations for a rise of 1.1%.
"Today's retail sales report was not entirely free of disappointments. But the main message is that the US recovery has started to bounce back in March after being restrained by inclement weather, Retail sales are the first major indicator to form the eagerly awaited 'V'," wrote Unicredit's Dr. Harm Bandholz in reaction to the data.
In other news, the International Monetary Fund reiterated its 3.5% growth forecast for the global economy for 2015, but upgraded its 2016 estimate by 10 basis points to 3.8%. However, whilst upgrading its forecasts for Europe and Japan, the IMF downgraded its outlook for the US economy.
Companies
Alcatel-Lucent SA gained on news Nokia Oyj is in advanced talks to buy the company.
Hargreaves Lansdown was in negative territory as the company's co-founder stepped down.
Kuehne & Nagel International AG slipped as the world's biggest sea-freight forwarder reported first quarter earnings that were unchanged from a year earlier due to a stronger Swiss franc. |
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| | US Market Report | | US open: Wall Street equities book losses amid economic growth woes US stock markets fell in early trading on Tuesday amid some weaker-than-expected economic data, the International Monetary Fund's downgrade of US growth forecast and another round of earnings.
The Dow Jones Industrial Average fell 0.41% to 17,920 while the S&P 500 index is off 0.44% to 2,083 and the Nasdaq 100 is down 0.8% to 4,373.2.
Traders were reacting to the IMF's latest move to reduce its forecast US economic growth this year to 3.1% from 3.6% previously. The estimate for 2016 was also lowered by 20% to 3.1%, according to the World Economic Outlook.
Earlier, traders assessed an improvement in US producer prices, which rose 0.2% on the month thanks to stabilising inflation.
However, data showing the biggest rise in US retail sales in a year was being scrutinised.
Though the March data showed 0.9% jump after Febuary's 0.5% decline, the report from the Commerce Department also revealed that a measure of core retail sales, which excludes cars and gasoline, was revised lower for January and February.
"The 0.9% m/m rebound in retail sales in March would seem to confirm that the coldest winter on record in the Northeast explains much of the weakness in the preceding two months," noted Capital Economics.
Attention was also on earnings. US investment banking giant JPMorgan Chase & Co on Tuesday grew profits 12.2% in the first quarter of this year driven by a surprise rebound in the fixed-income trading division.
Meanwhile Wells Fargo reported a drop in first quarter profits though the lender managed to grow revenues by 3% to $21.3bn.
US drugmaker Johnson & Johnson however warned that full-year earnings would miss its earlier targets as the US dollar's sharp rise cut into its results from abroad. |
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| | Broker Tips | | Broker tips HSBC, Shell, BP, Morrisons, Tullow, Aberdeen Investec has recommended investors to 'sell' shares of global banking giant HSBC, downgrading the stock from 'hold' after a "very disappointing" set of annual results last month.
In spite of the weak results, which were some 33% below consensus, HSBC's UK shares have rebounded 10% over the past month. "We do continue to believe that HSBC's generous payout is sustainable. However, when the dust settles, we think investors will see RoE>CoE as merely a 2018 aspiration and act accordingly. 'Sell'," he said.
Shell's proposed £47bn takeover of BG Group, while strategically sound, "negates our previous investment thesis", according to Jefferies which downgraded the stock from 'buy' to 'hold' on Tuesday.
"We believe Shell paid a full price that constrains its financial flexibility - the primary driver of our previous view that Shell was the most defensive stock in the sector if oil prices remain low. We expect that many investors held a similar view. Our preference would now be Chevron," the broker said.
Oil major BP had its rating dropped to 'neutral' from 'buy' over at Citigroup on Tuesday as it believes 'value' is now reflected in the share price.
"We think the market now better reflects the inherent value in BP. A good-news story around a self-help agenda, narrowing Russian discount rates and a favourable Macondo Phase II ruling have all driven the equity story in recent months," said Citi.
Broker Shore Capital has applauded the rapid swishing blade of Morrison's new chief executive David Potts, who on Monday night removed the seventh of the 10 board members in place when he started in March.
ShoreCap reiterated its 'buy' stance on Morrison's shares on the belief that the group "can deliver strong free cash generation to shareholder benefit in due course, predicated upon an ongoing improvement in trading, a material cut in capital expenditure and moderate responsibilities to landlords and the pension fund. Speedy cultural change represents a good start for the new CEO."
Tullow Oil's share price surged on Tuesday after Citigroup raised its rating on the stock from 'neutral' to 'buy', saying that the oil group's portfolio quality is "undervalued" by the market.
The bank highlighted the "quality and defensiveness" of Tullow's portfolio, and said concerns about its balance sheet and timing of the TEN development are "more than discounted in the current valuation".
Aberdeen Asset Management shares fell on Tuesday with traders attributing the decline to a rating downgrade of the company's stock to 'underperform' from 'sector perform' by RBC Capital Markets. | | |
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