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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: Vodafone, banks lead markets higher but Greek concerns weigh Decent gains from blue chips Vodafone, Barclays and RBS gave UK stock markets a lift on Wednesday, with the Footsie settling above the 7,000 level for the first time in seven sessions. The FTSE 100 finished 12.16 points higher (+0.17%) at 7,007.26, a level it has not closed above since 11 May.
However, despite the positive finish, concerns about Greece were limiting upside in London after comments from German finance minister Wolfgang Schaeuble on Wednesday afternoon.
Speaking to The Wall Street Journal, Schaeuble said he couldn't rule out a Greek default, saying that the election of the left-wing government "has left us in a very different situation [than in 2012]".
With economic data thin on the ground, minutes from the Bank of England's 7-8 May meeting were in focus on Wednesday morning as they showed that the decision to keep its policy unchanged was unanimous.
Policymakers pointed to inflation remaining below the BoE's 2% target before agreeing that key interest rates should remain at 0.5% and asset purchases at £375bn.
Vodafone, Barclays and RBS rise
Vodafone was making decent gains, rebounding after Tuesday's falls following its annual results, as the owner of Liberty Global said the UK telecom would be a "great fit" to the business.
Barclays and RBS rose in afternoon trade despite the news that the banks, along with JPMorgan, Citigroup and UBS, have been fined a combined $5.6bn for their alleged manipulation of FX markets.
Barclays was hit the hardest with a fine of $2.4bn, though shares jumped on the news. "All of this was music to Barclays' investors' ears", according to analyst Connor Campbell from Spreadex, who said that the bank already had £2.5bn ($3.9bn) in provisions.
Shares in Burberry slumped after the fashion house cautioned that it was seeing increased uncertainty in some of its markets and warned over the potential impact of currency movements. It now expects earnings this year to be around £40m less than previously estimated due recent sterling strength.
Marks & Spencer finished lower after swinging between gains and losses for most of the session following its annual results. While analysts were pleased with the retailer's 6% gain in full-year profits, its first increase in earnings in four years, some expressed disappointment with a £150m capital return and 5.9% dividend hike.
Annual profits crawled slightly higher at SSE, though the utility company disappointed with its warning that dividend cover would fall due to the pressure of "significant uncertainties" on earnings.
Financial services provider Hargreaves Lansdown reported a record level of inflows over the first four months of 2015, but shares fell as the company said revenue headwinds limited year-to-date top-line growth to just 0.7%.
Market Movers
techMARK 3,272.46 +0.58%
FTSE 100 7,007.26 +0.17%
FTSE 250 18,135.53 -0.22% |
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| | FTSE 100 - Risers
Vodafone Group (VOD) 238.85p +5.41%
Barclays (BARC) 271.55p +3.37%
Mondi (MNDI) 1,521.00p +2.42%
Barratt Developments (BDEV) 598.50p +1.79%
Royal Bank of Scotland Group (RBS) 354.70p +1.78%
3i Group (III) 555.50p +1.37%
Persimmon (PSN) 1,924.00p +1.26%
HSBC Holdings (HSBA) 622.90p +1.01%
Glencore (GLEN) 292.50p +0.98%
Sage Group (SGE) 575.50p +0.88%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,717.00p -5.03%
Intu Properties (INTU) 346.80p -2.06%
Hammerson (HMSO) 690.00p -1.92%
Hargreaves Lansdown (HL.) 1,256.00p -1.88%
Land Securities Group (LAND) 1,338.00p -1.83%
Dixons Carphone (DC.) 459.50p -1.77%
Prudential (PRU) 1,643.00p -1.56%
easyJet (EZJ) 1,649.00p -1.49%
Aggreko (AGK) 1,607.00p -1.47%
Weir Group (WEIR) 1,888.00p -1.36%
FTSE 250 - Risers
Bank of Georgia Holdings (BGEO) 1,808.00p +6.48%
Aveva Group (AVV) 2,027.00p +5.30%
Crest Nicholson Holdings (CRST) 541.50p +3.44%
Telecom Plus (TEP) 860.00p +2.99%
COLT Group SA (COLT) 150.40p +2.80%
IP Group (IPO) 215.00p +2.33%
Morgan Advanced Materials (MGAM) 342.30p +2.30%
Polymetal International (POLY) 561.00p +2.28%
Renishaw (RSW) 2,521.00p +2.27%
TalkTalk Telecom Group (TALK) 400.00p +2.04%
FTSE 250 - Fallers
Allied Minds (ALM) 595.00p -8.46%
Great Portland Estates (GPOR) 829.00p -5.31%
Bwin.party Digital Entertainment (BPTY) 103.40p -3.81%
Imagination Technologies Group (IMG) 202.90p -3.38%
Thomas Cook Group (TCG) 152.10p -3.12%
Big Yellow Group (BYG) 681.50p -3.06%
Kaz Minerals (KAZ) 242.80p -3.04%
Keller Group (KLR) 1,004.00p -3.00%
Elementis (ELM) 304.50p -2.96% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks gain on rally in banks and telecoms European stocks gained, as a rally in telecommunication and bank shares offset concerns about Greece. Vodafone was a top riser after Liberty Global chairman said a tie-up with the UK phone company would be a good fit for his cable business.
UBS, Barclays and Royal Bank of Scotland jumped after agreeing to pay fines to settle interest-rate rigging. JP Morgan Chase & Co. and Citigroup also agreed to pay a fine. The five banks will pay a combined penalty of $5.6bn to US and UK state authorities.
Barclays was hit the hardest with a fine of $2.4bn. "All of this was music to Barclays' investors' ears", according to analyst Connor Campbell from Spreadex, who said that the bank already had £2.5bn ($3.9bn) in provisions.
On a negative note for the market, German finance minister Wolfgang Schäuble warned that a Greek default can't be ruled out. Speaking to The Wall Street Journal and French daily Les Echos, he said he would not repeat an assurance he gave in late 2012 that Greek would default on its debt, as Athens and its creditors struggle to come to an agreement.
His remarks came amid reports Greece will miss its June debt payment to the International Monetary Fund unless the country receives more aid.
"Overall, we continue to believe an interim agreement will be reached before Greece's next IMF loan redemption of €0.3bn on 5 June that could, at least initially, unlock the disbursement of €1.9bn in ECB Securities Markets Programme profits to Greece," said Gizem Kara, senior European economist at BNP Paris. "But, if history is any guide, potential increase in tensions between the two sides and delays in the process cannot be ruled out."
By 16:54 BST, the euro continued to drop against the dollar, down 0.63% to $1.1080.
The currency had fallen sharply on Tuesday after comments from European Central Bank members. 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 ECB's Benoit Coeure, meanwhile, said the bank would front-load asset purchases in May and June due to low market liquidity during the summer months.
On the corporate front, France's Altice surged after it said it was buying a controlling stake in US cable company Suddenlink in a deal valued at $9.1bn.
Lafarge was in the red after it proposed to cut 380 jobs before it closes its merger with Holcim.
Shares in luxury retailer Burberry slumped after the company cautioned that it was seeing increased uncertainty in some of its markets and warned over the potential impact of currency movements in the release of its full-year results.
In commodities, oil prices advanced after government data showed that US crude inventories fell last week for the third straight week. Brent crude was up 1.41% to $64.94 per barrel.
Looking ahead, the release of minutes from the Fed's meeting at the end of April is due after the European close.
"Since removing its forward guidance earlier this year, the Fed has offered very little insight into when that first rate hike will come and that is making investors quite anxious, particularly around these kinds of releases.," said Craig Erlam, senior market analyst at Oanda.
The Fed has said that a rate hike will depend on data, but hasn't made it clear what they're looking for when they say they're waiting for further improvement, said Erlam. |
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| | US Market Report | | US open: Dow and S&P edge lower ahead of Fed minutes US stocks edged slightly lower early on Wednesday, as investors awaited the release of minutes from the latest Federal Reserve meeting. Just after 15:00 London time, the Dow Jones Industrial Average was down 31 points, while the S&P 500 and the Nasdaq lost four and 20 points respectively.
On Wednesday, investors will closely monitor minutes from the Federal Open Market Committee's April 29 meeting, which are released at 19:00 BST and could shed light on the timing of the first interest rates hike.
"Since removing its forward guidance earlier this year, the Fed has offered very little insight into when that first rate hike will come and that is making investors quite anxious, particularly around these kinds of releases," said Craig Erlam at Oanda.
"The Fed has claimed any rate hike will be data dependent which doesn't offer the kind of transparency than we've had in the past."
Meanwhile, applications for US home mortgages fell, data released on Wednesday showed.
The Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, dropped 1.5% in the week ended 15 May.
Retailers disappoint
In company news, home improvement retailer Lowe's Companies fell 3.83% after its first quarter earnings fell short of estimates.
Craft selling website Etsy plunged 22.7% after its first quarterly earnings fell short of expectations late on Tuesday.
Office goods retailer Staples fell 1.07% after reporting a drop in sales, while Hormel Foods advanced 0.13% after its second quarter earnings per share rose 29%, while retailer Target Corporation rose 0.82%.
Pharmaceutical group Sarepta Therapeutics surged 35.5% after saying late on Tuesday it will start submitting data to the Food and Drug Administration for its muscular dystrophy treatment to begin the marketing-approval process.
Elsewhere, Japanese stocks ended at their highest level in 15 years, while European markets moved in tight ranges.
The dollar gained 0.28% and 0.33% against the yen and the euro respectively but fell 0.44% against the pound, while gold futures fell 0.24% to $1,209.60. |
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| | Broker Tips | | Broker tips: Vodafone, Burberry, M&S, Talktalk Vodafone's share price is likely to be buoyed by speculation regarding a Liberty Global merger over the coming days, though analysts at Bank of America Merrill Lynch remained cautious. The US bank reiterated an 'underperform' rating on the stock, saying that concerns about each companies' valuations are likely to be a "major stalling point" for any potential deal. Aside from the Liberty speculation, Merrill said: "Our concern remains that [Vodafone's] mid-term capex guidance is too low and that dividend cover is at risk from an already high payout."
Nomura has lowered its forecasts for Burberry due to the impact of sterling strength on the fashion house's bottom line, though a 'buy' recommendation was maintained on its "solid underlying strategy".
The broker said it still sees upside to the stock, recommending shareholders to use any short-term weakness in the stock "as an opportunity". "However, we note a cautious outlook statement and pricing decisions, which we will watch carefully for short-term read-across," it said.
After a weak start to Wednesday's trading session, shares in Marks & Spencer jumped into the green after the department store retailer's results beat forecasts, with Investec lifting its target from 580p to 620p.
The broker kept a 'buy' rating, saying: "A more confident outlook, highlighting the material gross margin opportunity within GM, ongoing outperformance within the Food business, with more space opening, and the announcement of capital returns, should be taken well in our view."
Citigroup has upgraded Talktalk from 'neutral' to 'buy' and hiked its target from 320p to 475p. | | |
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