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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: Chinese stimulus lifts stocks despite ongoing Greek uncertainty Stocks rebounded on Monday after as measures by policymakers in China to boost bank lending helped to repair sentiment after recent losses, despite ongoing uncertainty in Greece.
London's FTSE 100 finished the session 0.82% higher at 7,052.13, with mining stocks leading the rise on increased hopes for the world's top metals consumer. The index had closed Friday's session at 6,994.63, its lowest close since 8 April.
The People's Bank of China, under pressure to support the economy following a recent batch of weak economic data, on Sunday lowered its reserve requirement ratio by one percentage point. The move, which was the most aggressive cut since 2008, was twice as much as some analysts had expected.
"There is optimism that the measures will free up capital for lending and help reignite growth in China and globally," said analyst Jasper Lawler from CMC Markets.
Despite the rebound, uncertainty in Greece continued to be in focus as Greek short-term bond yields shot up to new record highs ahead of a Eurogroup meeting this week. Yields on two-year notes surged to over 26% ahead of a meeting to discuss the release of a further €7.2bn bailout tranche to Athens.
According to the director of the International Monetary Fund's European department, Poul Thomsen, said negotiations between Greece and its creditors have gained some momentum but the two parties remain distant.
In economic data, Rightmove said house prices in the UK rose 1.6% to a new record high of ?286,133 in April, while construction output in the Eurozone declined by 1.8% in February led by a drop in civil engineering.
Miners gain, IHG up on M&A speculation
Miners such as Anglo American, Rio Tinto, BHP Billiton and Antofagasta were rising strongly as stimulus measures in China spurred buying across the sector. Others groups exposed to China such as HSBC and Prudential were also in demand.
Hotels group IHG was also on the up as the stock extended gains made Friday on rumours that it could merger with US peer Starwood Hotels & Resorts.
Russia-focused steel producer Evraz rose after reporting stable output levels in the first quarter of 2015.
Oilfield services outfit Petrofac dropped 10% after saying it expects to report a further loss of $195m in 2015 for the Laggan-Tormore gas plant project on Shetland. The company already recognised a $230m loss on the project in 2014 and had told investors earlier this year that it would not lose any more money.
After an earlier rise, engineering software group Aveva dropped into the red with investors underwhelmed by a short, albeit positive, pre-close trading update which said annual results should meet analysts' forecasts.
Polymer products group Victrex was advancing after Exane BNP Paribas lifted its rating on the stock to 'outperform'. |
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| | Market Movers
techMARK 3,211.01 +0.51%
FTSE 100 7,052.13 +0.82%
FTSE 250 17,603.47 +0.18%
FTSE 100 - Risers
Ashtead Group (AHT) 1,144.00p +2.88%
Anglo American (AAL) 1,038.00p +2.72%
Rio Tinto (RIO) 2,874.00p +2.61%
BHP Billiton (BLT) 1,481.50p +2.46%
InterContinental Hotels Group (IHG) 2,786.00p +2.35%
HSBC Holdings (HSBA) 613.30p +2.22%
Antofagasta (ANTO) 747.00p +2.05%
ARM Holdings (ARM) 1,150.00p +2.04%
Smith & Nephew (SN.) 1,158.00p +1.94%
Aggreko (AGK) 1,630.00p +1.88%
FTSE 100 - Fallers
Fresnillo (FRES) 716.00p -1.72%
Associated British Foods (ABF) 2,863.00p -1.48%
Capita (CPI) 1,107.00p -1.25%
G4S (GFS) 295.00p -1.07%
Persimmon (PSN) 1,716.00p -0.98%
Coca-Cola HBC AG (CDI) (CCH) 1,345.00p -0.96%
Carnival (CCL) 3,189.00p -0.87%
Kingfisher (KGF) 351.60p -0.82%
RSA Insurance Group (RSA) 422.20p -0.80%
Royal Mail (RMG) 442.10p -0.79%
FTSE 250 - Risers
Imagination Technologies Group (IMG) 214.00p +5.68%
Vedanta Resources (VED) 578.00p +4.81%
RPS Group (RPS) 250.00p +4.56%
Northgate (NTG) 650.50p +3.83%
Bwin party Digital Entertainment (BPTY) 81.65p +3.49%
Kaz Minerals (KAZ) 234.80p +3.07%
Victrex plc (VCT) 2,043.00p +2.25%
Playtech (PTEC) 800.50p +2.23%
Allied Minds (ALM) 678.50p +2.11%
Debenhams (DEB) 89.45p +2.11%
FTSE 250 - Fallers
Petrofac Ltd. (PFC) 912.50p -10.01%
Bank of Georgia Holdings (BGEO) 1,957.00p -4.07%
Polymetal International (POLY) 543.50p -3.12%
Lonmin (LMI) 136.00p -2.93%
Indivior (INDV) 200.80p -2.67%
Hunting (HTG) 600.50p -2.36%
Pets at Home Group (PETS) 258.30p -2.23%
Brown (N.) Group (BWNG) 320.40p -2.14%
Fidessa Group (FDSA) 2,289.00p -1.80%
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Upbeat remarks on Eurozone economy and Chinese stimulus lift stocks Further stimulus measures in China and upbeat remarks from European Central Bank President Mario Draghi lifted stocks in the euro-area.
The Peoples Bank of China lowered the reserve requirement ratio (RRR) by 100 basis points to 18.5%, effective from 20 April. The cut was bigger than expected by analysts and was the largest decrease since late 2008.
"The markets were buoyed [...] by the news that China's central bank has taken fresh, if tentative, steps in combatting the economic slowdown," said Spreadex analyst Connor Campbell.
Mining stocks, including BHP Billiton and Rio Tinto, gained following the report as industrial metals rose.
Meanwhile, Draghi said the monetary authority was confident that the Eurozone growth will accelerate.
Writing in the bank's 2014 annual report, Draghi said the common currency bloc would overcome last year's struggle, adding he also expected inflation to return to its medium-term target "without undue delay".
Echoing his remarks, Standard & Poor's said it expects the Eurozone to "grow faster" along with the US and Japan, despite the slowdown in China.
"The European Central Bank's quantitative easing programme is a significant policy shift that should help underpin a surprisingly robust cyclical upswing," S&P said in a report.
Fears over a Greek debt default continued as International Monetary Fund (IMF) chief Poul Thomsen said talks have gathered momentum but still have a long way to go.
Greece is negotiating with the IMF and the EU on a package of economic reforms in order to unlock a further €7.2bn bailout tranche.
"The unlikelihood of a deal being struck between Greece and its creditors has sent short-term Greek bond yields to new record highs again on Monday," said Jasper Lawler, market analyst at CMC Markets.
"For now Greece's troubles are contained within Greek markets but once the positive sentiment from Chinese stimulus has worn off, other European markets may follow suit closer to the Eurogroup meeting on Friday."
The euro fell 0.43% to $1.0739 at the close.
In commodities, Brent crude rose 0.016% to $63.46 per barrel at 11:58 BST while West Texas Intermediate grew 1.2% to $56.42, ICE data revealed.
Companies
Fresenius Medical Care AG gained after a report said it's discussing a purchase of Israel's Nephromor.
Telenet Group Holding jumped after agreeing to buy Royal KPN NV's Belgian mobile-phone business Base for €1.33bn. KPN gained.
Petrofac slumped after saying it expects a further loss on its Shetland gas project this year, due to delays and higher costs.
Tesco dropped after the Financial Times reported the grocer may post an annual loss of as much as 5bn on Wednesday. |
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| | US Market Report | | US open: Dow jumps triple digit as stocks are buoyed by Chinese stimulus and earnings US stocks advanced on Monday, boosted by new monetary easing measures from China's central bank and upbeat earnings reports.
Just before 15:00, the Dow Jones Industrial Average was up 187 points, while the S&P 500 and the Nasdaq gained 14 and 24 points respectively.
The People's Bank of China, under pressure to boost growth following a recent batch of weak economic data, this weekend lowered its reserve requirement ratio by one percentage point, the most aggressive cut since 2008.
However, the bigger-than-expected move, intended to boost bank lending, failed to spark a rally on Asian indices with stocks across the continent firmly in the red on Monday.
"This is only likely to provide temporary relief for US stocks which are facing a tough few weeks," said Oanda's senior market analyst Craig Erlam.
"Earnings season may have got off to a good start but it has included a lot of financial institutions which were expected to announce decent results."
Over 32% of the S&P 500 companies will publish results during the week, with IBM set to report after the closing bell, while Microsoft, Apple and Google will publish results this week.
"Despite being the single biggest drag on US corporate earnings growth, the energy sector was the best performing last week, as crude oil broke above its 2015 trading range," said Jasper Lawler, market analyst at CMC Markets.
"Energy sector earnings expectations are now very low, so stocks in the sector could benefit by beating those lowered expectations."
In company news, Morgan Stanley climbed 1.7% after its first quarter results beat analysts' estimates, while toy-maker Hasbro jumped 8.2% after profit and sales beat expectations.
Discount voucher company Groupon advanced 3.7% after revealing it had agreed to sell a controlling 46% stake in South Korean e-commerce site Ticket Monster to KKR & Co. and Anchor Equity Partners for $360m.
Oilfield services giant Halliburton climbed 1.3% after reporting better-than-expected earnings per share, even though it posted a first-quarter net loss of $643m, or 76 cents a share, as volatility in oil prices continued.
Industrial real estate developer Prologis slid 0.3% after securing a deal to buy industrial-property owner KTR Capital Partners for $5.9bn, in one of the biggest real estate deals this year.
Defence technology group Raytheon Company fell 0.7% after announcing it plans to invest $1.7bn in a cyber unit, while The Wall Street Journal reported the group has completed the acquisition of Websense Inc. from private-equity firm Vista Partners.
The dollar began the week in strong fashion, rising 0.76% against the euro and gaining 0.51% and 0.23% against the pound and the yen respectively, while gold futures slid 0.43% to $1,197.90. |
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| | Broker Tips | | Broker tips: Lloyds, Aldermore, Aveva News that the Conservatives want to sell discounted shares in Lloyds to the public if they win the election should not alter the investment case for the bank, according to Investec.
However, the broker kept a 'hold' rating on the stock, saying that the inevitable sale of the government's stake, whoever comes into power, will weigh on the share price over the next 12 months.
Challenger bank Aldermore has an interesting growth story, according to Credit Suisse, though the broker initiated coverage with a 'neutral' rating.
The Swiss bank said the main attraction of Aldermore is its "simple and legacy-free business model, well-positioned to tap into the high profitability UK retail and commercial segment". However, it said: "We are more cautious about the long-term sustainability of 20%+ returns through the cycle."
A short trading update from engineering software group Aveva received a mixed reaction from the market on Monday, though Numis Securities reiterated its positive rating on the stock. | | |
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