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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 gains ground on Tuesday despite miner sell-off Despite a sell-off of the blue chip miners, UK shares gained ground on Tuesday but failed to hold above the 7,000-point mark as policymakers painted the first fall in inflation since the 1960s as "good" deflation that would benefit consumers.
At the close, the FTSE 100 had accumulated 26.2 extra points, or 0.38%, to end the session at 6,995.10.
UK inflation fell 0.1% in the year to April, the first annual fall in the consumer prices index since the 1960s.
Data from the Office for National Statistics said UK core inflation slowed to 0.8% in April, the lowest since 2001, and worse than the market had feared.
But economists backed the Chancellor George Osborne's argument that the fall in the inflation was only temporary and that "we should not mistake this for damaging deflation".
Bank of England Governor Mark Carney added in televised interview that the public should "enjoy" the very low inflation while it lasts over the coming few months but that the Bank were confident of lifting inflation up to the 2% target by the end of the year.
In Europe, Eurostat data showed the asset buying programme had helped arrest the decline in consumer prices in April following four months of falls.
Furthemore ECB governing council member Christian Noyer said the central bank was ready to "go further if necessary" to deliver on its mandate of maintaining inflation close to 2%. This followed a speech in by fellow board member Benoit Coeure, who said the asset purchase scheme would be ramped up over May and June, and that short-term interest rates going below zero were not a problem for monetary policy.
Corporate news
Property developer Land Securities was a big riser after it has raised its dividend by 3.7% to 31.85p following a surge in demand for commercial property which has boosted its adjusted net asset value 27.6% to 1,293p. This helped boost the wider property-related sectors.
A heavy weight on the blue chip index was the 2.8% fall in Vodafone's shares in spite of final results showing a return to growth in the fourth quarter. The telecoms giant's 7% decline in EBITDA, although anticipated, disappointed analysts who had hoped for more of a boost from the first year of its Project Spring programme.
Depressed by falling metal prices, a widespread sell-off saw BHP, Fresnillo, Rio Tino, Gelcore, Antofagasta, Randgold and Anglo American all leading the fallers.
Rising highest on the FTSE 100 was Coca-Cola HBC after a positive note from Moody's. The credit agency said the rebounding Russian rouble would reduce the weight on the company's corporate debt slightly.
DCC was another riser after the FTSE 250 company made a €464m bid for oil giant Shell's Butagaz liquefied petroleum gas business in France. Analysts at Berenberg said the deal would significantly boost earnings.
Second highest was Big Yellow, as the self storage company reported rising annual profits thanks to higher occupancy and prices. Land Securities net asset value was 5% better than consensus, noted Societe Generale.
Icap was also higher despite a 21% full year decline in profit and a warning that it expected headwinds to continue. But management said they had "materially re-engineered" the business, with a significant reshaping of the global broking division.
Going the other way was Aveva as its adjusted pre-tax profits sank 21% to £62.1m as margins shrank to 29.8% from 33% a year ago. Shares in the company have been inflated recently due to intense bid speculation. The outlook appears tough, said analysts at RBC Capital Markets.
BTG was a major faller as its annual profits declined as acquisitions and foreign exchange movements offset revenue growth. |
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| | Market Movers
techMARK 3,253.61 +0.08%
FTSE 100 6,995.10 +0.38%
FTSE 250 18,176.13 +0.85% FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,480.00p +4.30%
Land Securities Group (LAND) 1,363.00p +3.97%
Intu Properties (INTU) 354.10p +3.12%
Hikma Pharmaceuticals (HIK) 2,128.00p +2.75%
Old Mutual (OML) 236.10p +2.74%
Admiral Group (ADM) 1,495.00p +2.68%
GKN (GKN) 366.30p +2.49%
Kingfisher (KGF) 363.20p +2.31%
Wolseley (WOS) 4,029.00p +2.26%
Hammerson (HMSO) 703.50p +2.18%
FTSE 100 - Fallers
BHP Billiton (BLT) 1,405.50p -3.93%
Fresnillo (FRES) 764.50p -3.53%
Vodafone Group (VOD) 226.60p -3.20%
Rio Tinto (RIO) 2,847.00p -2.67%
Glencore (GLEN) 289.65p -2.47%
Antofagasta (ANTO) 775.00p -2.27%
Randgold Resources Ltd. (RRS) 4,802.00p -2.16%
Anglo American (AAL) 1,061.00p -1.49%
Weir Group (WEIR) 1,914.00p -1.14%
Dixons Carphone (DC.) 467.80p -1.06%
FTSE 250 - Risers
DCC (DCC) 4,954.00p +12.85%
Big Yellow Group (BYG) 703.00p +7.25%
Alent (ALNT) 373.30p +4.86%
Clarkson (CKN) 2,522.00p +4.69%
Fidelity China Special Situations (FCSS) 169.00p +3.55%
TalkTalk Telecom Group (TALK) 392.00p +3.27%
Savills (SVS) 940.50p +3.18%
Betfair Group (BET) 2,600.00p +3.17%
Galliford Try (GFRD) 1,586.00p +2.99%
Homeserve (HSV) 418.10p +2.98%
FTSE 250 - Fallers
BTG (BTG) 708.50p -9.51%
Kaz Minerals (KAZ) 250.40p -5.58%
Acacia Mining (ACA) 294.30p -5.06%
Evraz (EVR) 186.10p -4.76%
Drax Group (DRX) 400.60p -3.84%
Aveva Group (AVV) 1,925.00p -3.75%
Petra Diamonds Ltd.(DI) (PDL) 170.70p -3.07%
Cairn Energy (CNE) 173.80p -3.01%
Premier Oil (PMO) 165.90p -2.98%
Hunting (HTG) 588.50p -2.97%
FTSE TechMARK - Risers
Innovation Group (TIG) 29.75p +4.39%
Ricardo (RCDO) 910.00p +4.00%
Anite (AIE) 94.50p +2.72%
BATM Advanced Communications Ltd. (BVC) 14.50p +1.75%
Sepura (SEPU) 150.88p +1.60%
Consort Medical (CSRT) 948.00p +1.28%
Filtronic (FTC) 12.50p +1.01%
E2V Technologies (E2V) 241.00p +0.94%
Oxford Instruments (OXIG) 1,075.00p +0.94%
Spirent Communications (SPT) 87.00p +0.87%
FTSE TechMARK - Fallers
Oxford Biomedica (OXB) 9.90p -10.00%
XP Power Ltd. (DI) (XPP) 1,555.00p -2.69%
NCC Group (NCC) 214.75p -1.94%
Torotrak (TRK) 7.85p -1.88%
RM (RM.) 145.00p -1.19%
Skyepharma (SKP) 288.00p -0.69%
Optos (OPTS) 339.12p -0.26%
Dialight (DIA) 752.50p -0.20% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities jump on positive remarks from ECB officials Equities in the euro-area gained on upbeat remarks from European Central Bank (ECB) policymakers.
ECB governing council member Christian Noyer said the monetary authority is prepared to take further action against inflation if needed and that the quantitative easing programme had already made a positive impact on prices.
"The purchase program will continue until the end of September 2016 and beyond if we do not see a sustained adjustment in the path of inflation," Noyer said.
His comments came as Eurostat confirmed the Eurozone consumer price index registered zero growth in April compared to a year ago, up from a year-on-year fall of 0.1% in March. The ECB is targeting inflation of just below 2%.
The market also reacted positively to comments from ECB's Benoit Coeure, who said the bank would front-load asset purchases in May and June due to low market liquidity during the summer months.
"Equity markets are ecstatic over the news that the ECB will front-load its bond buying scheme, and the short-term boost to the QE scheme has driven stock markets around Europe higher," said David Madden, market analyst at IG. "The euro smashed through the $1.12 level as traders moved quickly to short the single currency, and this in turn is making Eurozone stocks even more attractive to investors outside the currency region," he added.
The euro was down 1.45% to $1.1151 at close of trading.
The positive reaction to the news offset a downbeat ZEW survey that showed the economic sentiment index fell to 41.9 from 53.3 a month earlier, falling short of expectations for a reading of 48.
Greece, meanwhile, remained in focus although was not moving markets. Finance Minister Yanis Varoufakis said in an interview with Star TV Channel on Monday that his government is "very close" to an agreement to unlock more creditor aid, but market participants are sceptical.
In the US, housing starts surged 20.2% month-on-month in April, smashing expectations for a 9.6% rise.
The UK's consumer price index dropped unexpectedly by 0.1% in April, compared to estimates of 0%. However, Bank of England Governor Mark Carney told ITV after the report that he sees CPI returning to growth in the back half of 2015.
Company stocks
European carmakers, including BMW and Daimler jumped, after data showed that car sales in the single currency bloc rose for a 20th consecutive month in April.
Unilever rallied after the company announced that its chief financial officer Jean-Marc Huet has decided to step down from his role after four and a half years, to be replaced by Graeme Pitkethly, the executive vice president of Unilever's UK and Ireland business.
Julius Baer advanced after the company reported a 1% drop in assets under management for the first four months of the year.
Vodafone bucked the trend after posting a drop in adjusted operating profit and delivering a more cautious outlook than investors had expected.
Interdealer broker ICAP declined after it posted a 21% fall in full-year profit and saying it expects headwinds to continue. |
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| | US Market Report | | US open: Dow and S&P retreat amid strong dollar, housing data and mixed earnings US stocks pulled slightly back early on Tuesday, as mixed earnings reports met a dollar surging on the back of better-than-expected housing data.
Just after 15:00 BST, the Dow Jones Industrial Average was down 14.5 points, while the S&P 500 and the Nasdaq both lost just over two points.
US housing starts rocketed by 20.2% month-on-month in to reach an annualised rate of 1.14m in April, according to the US Department of Commerce.
The increase was the largest one-month gain for the series since 1991 and dwarfed economists' expectations of a rise of 9.6% over the month.
Meanwhile, building permits rose to 1.14m from 1.04m last month, beating the consensus forecast of a 1.02m reading and leading to predictions of solid starts and construction data in the months ahead.
"After the weather-related weakness in starts during the first quarter we think the April data are consistent with housing activity returning to normal," analysts at Barclays said in a note.
An hour after the open, the greenback was up 0.87% against the pound, while gold futures fell 1.05% to $1,214.70.
Mixed earnings on Wall Streets
Ahead of the opening bell, Wal-Mart reported sales that fell of short of Wall Street's estimates, dragging shares down 2.85%.
In other company news, video-game maker Take-Two Interactive Software jumped 14.3%, despite saying on Monday that its fourth-quarter loss widened and issued a weak outlook that fell short of Wall Street's expectations.
Measurement group Agilent Technologies fell 3.8% after reporting a decline in second quarter earnings and revenue on Monday.
Home-improvement retailer Home Depot edged 0.4% higher after reporting a rise in first quarter earnings and sales ahead of the bell.
The group lifted its full-year guidance for 2015 and confirmed it will repurchase another $3.4bn in shares within the end of the year.
European stocks rally, euro tumbles
Elsewhere, European stocks surged forward on Tuesday, after Benot Coeur, a member of the European Central Bank executive board said that the bank will increase its purchases of euro-zone assets in May in June ahead of expected low liquidity during the summer months.
Asian shares ended higher, building on Wall Street's gains late on Monday, while the dollar rallied over 1.5% against the euro. |
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| | Broker Tips | | Support services group DCC maintained its track record after another year of strong earnings growth, analysts at Berenberg said in a note on Tuesday.
Dublin-based company said its pre-tax profit for the year to 31 March rose 8.1% year-on-year to £163.3m, while earnings before interest, tax, depreciation and amortisation climbed 6.8% to 199.6m and operating profits for period rose 10.5% to £221.7m.
The brokerage underlined how the strong performance in the 12 months to the end of March led to a 10% growth in dividend, which marked the 21st consecutive year of dividend growth since the company listed in 1994.
"This track record of stable earnings growth, strong cash conversion and high rates of return make DCC a core holding in our view," Berenberg analysts said.
Meanwhile, the brokerage said the FTSE 250 group's decision to submit a €464m (£332m) binding offer to oil giant Shell for its Butagaz liquefied petroleum gas business in France was welcome news, as it would significantly enhance the group's earnings, whic makes the deal "particularly attractive".
Berenberg retained its 'buy' rating on the stock with a price target of 4,780p.
Analysts were somewhat disappointed in full-year results from Vodafone, with Nomura bemoaning the lack of profits bounce generated Project Spring in its first year, while Societe General wondered if the giant £19bn investment programme should be renamed Project Summer.
Thanks to a return to growth in the fourth quarter, revenues from the telecoms titan rose 10% at the reported level to £42.2bn, 0.8% ahead of consensus estimates, with earnings before interest, tax, depreciation and amortisation of £11.89bn down 6.9% on the previous year but beat forecasts by 0.4%.
But this beat was only thanks, analysts from both banks pointed out, to £135m in one-offs due to some interconnect settlements in the second half, otherwise the figure would have been 0.7% short of expectations.
Nomura, which reiterated its 'reduce' rating, added: "Organic EBITDA fell 7% in year one of Vodafone's Project Spring, and any expectations for an EBITDA bounce as Project Spring moves towards break-even have been dashed."
Land Securities' full year reported net asset value beat consensus by 5%, while adjusted earnings per share were in line, Societe Generale said in a note on Tuesday.
The French bank said that adjusted diluted NAV per share of 1,293p was 3% above its in-house forecast of 1,251p, while the dividend of 31.85p was in line with consensus but slightly below its own 32p estimate.
"The beat in NAV comes from all segments," said SocGen. "In offices, the performance was impressive, with a 23.2% year-on-year growth largely above our 14.5% estimates and around four percentage points above British Land's performance."
The bank has a buy recommendation on the stock and a 1,620p price target that reflects a 7% premium to its estimated fair value of 1,510p. | | |
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