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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 finish flat on global economic data comes in mixed A barrage of mixed economic data from across the globe had an equally mixed impact on the markets on Thursday, with UK stocks finishing broadly flat after swinging between gains and losses for most of the session. Mining shares were lifted by stimulus speculation in China while the energy sector was bolstered by a falling dollar, however a handful of ex-dividend stocks and weakness in the airline sectors limited upside.
The FTSE 100 settled just 6.21 points higher (+0.09%) at 7,013.47 by the close, after having traded within a narrow range.
"Much-stronger-than-expected retail sales in the UK for April sent the pound roaring higher but didn't do much to bolster a lacklustre FTSE 100 that has been languishing around the 7,000 mark all week," said CMC Markets analyst Jasper Lawler.
Meanwhile, concerns about Greece continued to rumble on in the background following comments from the German finance minister that he could not rule out a Greek default. According to reports, Greek prime minister Alexis Tsipras is expected to present a debt-restructuring proposal at a two-day summit of EU leaders which starts on Thursday in Riga.
Economic data comes in mixed
UK retail sales jumped 1.2% in April, according to the Office for National Statistics, more than making up for the 0.7% decline in March and smashing the consensus forecast of +0.4%.
The 'beat' lifted expectations that national economic growth will regain momentum after a slowdown in the first quarter. "April's strong retail sales figures offer another reason to think that the economic recovery is not about to fizzle out," said Paul Hollingsworth at Capital Economics.
Elsewhere, the 'flash' Markit Eurozone manufacturing purchasing managers' index (PMI) jumped to a 13-month high, the HSBC China manufacturing PMI remained in negative territory, while the Markit US manufacturing PMI dropped to a 16-month low.
Miners and energy stocks rise
Mining stocks such as BHP Billiton, Glencore and Rio Tinto were on the rise after the HSBC China manufacturing PMI came in shy of forecasts, raising speculation about further stimulus from Beijing. The PMI rose from 48.9 to 49.1 this month, missing the consensus forecast of 49.3.
Oil majors BP and Shell finished higher as Brent crude gained 2.3% to $66.52 a barrel on a weaker dollar. However, rising oil prices had the opposite effect on airlines Easyjet and IAG.
Bunzl, Carnival, HSBC, Intertek and Taylor Wimpey all went ex-dividend on Thursday, collectively taking 6.41 points off the FTSE 100.
Royal Mail was flat after meeting forecasts with its annual profits but giving a somewhat cautious statement on the highly competitive market. Full-year revenues were just about flat at £9.3bn, with pre-tax profit slumping by more than two thirds, as expected, to £400m.
Technology outfit Smiths Group edged higher after reiterating guidance for full-year growth in spite of a weakening of underlying results over the first three quarters.
Electricity and gas utility group National Grid hailed "another successful year" as it beat forecasts with an 11% increase in adjusted annual profits, though investors were left underwhelmed with smaller-than-expected increase in the dividend.
Food wholesaler Booker jumped after beating full-year earnings forecasts and proposing a deal to buy Musgrave Retail Partner, which comprises the Londis and Budgens businesses, for £40m.
Market Movers
techMARK 3,286.37 +0.43%
FTSE 100 7,013.47 +0.09%
FTSE 250 18,154.55 +0.10% |
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| | FTSE 100 - Risers
Aberdeen Asset Management (ADN) 448.50p +2.19%
Marks & Spencer Group (MKS) 593.50p +1.71%
Hargreaves Lansdown (HL.) 1,277.00p +1.67%
Smiths Group (SMIN) 1,190.00p +1.54%
Vodafone Group (VOD) 242.50p +1.53%
Weir Group (WEIR) 1,916.00p +1.48%
Kingfisher (KGF) 366.50p +1.41%
BP (BP.) 458.00p +1.30%
Hikma Pharmaceuticals (HIK) 2,149.00p +1.08%
Royal Dutch Shell 'B' (RDSB) 2,021.00p +0.92%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 184.00p -4.07%
easyJet (EZJ) 1,610.00p -2.37%
International Consolidated Airlines Group SA (CDI) (IAG) 554.00p -2.29%
Carnival (CCL) 3,141.00p -1.87%
Randgold Resources Ltd. (RRS) 4,713.00p -1.79%
Hammerson (HMSO) 678.50p -1.67%
SSE (SSE) 1,656.00p -1.49%
London Stock Exchange Group (LSE) 2,435.00p -1.38%
HSBC Holdings (HSBA) 614.50p -1.35%
TUI AG Reg Shs (DI) (TUI) 1,204.00p -1.31%
FTSE 250 - Risers
Booker Group (BOK) 170.00p +11.84%
QinetiQ Group (QQ.) 239.20p +11.15%
Imagination Technologies Group (IMG) 213.40p +5.17%
Bank of Georgia Holdings (BGEO) 1,901.00p +5.14%
Tullow Oil (TLW) 425.30p +5.01%
Soco International (SIA) 193.70p +4.76%
Electra Private Equity (ELTA) 3,252.00p +4.50%
DCC (DCC) 5,125.00p +4.17%
Intermediate Capital Group (ICP) 581.50p +3.84%
Petrofac Ltd. (PFC) 901.50p +3.50%
FTSE 250 - Fallers
Electrocomponents (ECM) 234.30p -6.05%
Dairy Crest Group (DCG) 487.10p -5.97%
Inchcape (INCH) 853.50p -4.53%
SSP Group (SSPG) 302.00p -3.27%
Redefine International (RDI) 56.10p -3.03%
Just Eat (JE.) 435.20p -2.64%
Keller Group (KLR) 978.50p -2.54%
Computacenter (CCC) 729.00p -2.54%
Thomas Cook Group (TCG) 148.40p -2.43% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities little changed after mixed Eurozone data European equities were little changed as investors weighed mixed Eurozone data. Sentiment among consumers in the Eurozone declined this month, according to data from the European Commission. A flash estimate of the consumer confidence indicator fell by 0.9 points to -5.5, from -4.6 in April, worse than the consensus forecast for a smaller fall to -4.8.
Markit's flash manufacturing purchasing managers' index (PMI) for the Eurozone jumped to a 13-month high of 52.3, better than consensus expectations for a reading of 51.8, but the services PMI dropped to a 4-month low of 53.3 and fell short of expectations for a reading of 53.9.
Germany's flash manufacturing PMI for May printed at a three-month low of 51.4 from 52.1 in April, while the services PMI came in at five-month low of 52.9 from 54.
"Europe's biggest exporter is more affected than others by the growth weakness in the US and China," said Christian Schulz , senior economist at Berenberg. "In addition, German businesses tend to react more sensitively to sources of uncertainty such as the Greek situation than others," he added.
Meanwhile, minutes from the European Central Bank's (ECB) 14-15 April meeting showed policymakers agreed that the quantitative easing programme was having a good impact on the Eurozone. Officials also reiterated that governments needed to press ahead with key reforms in order to feel the full benefits of QE, which was put in place to boost the economy and bring inflation back towards the target of just below 2%.
Greek remained in focus, as prime minister Alexis Tsipras was expected to present a debt-restructuring proposal at a two-day summit of EU leaders which began on Thursday in Riga.
In the US, initial jobless claims rose by 10,000 to 274,000 from the previous week, compared with analysts' expectations for a rise to 270,000.
Miners rally
Mining stocks were in the black, boosted by rising metal prices and weak manufacturing data from China, which have added to expectations of more stimulus from the Chinese central bank.
Data released on Thursday showed that China's manufacturing sector accelerated less than expected in May, with the HSBC/Markit index rising to 49.1 from a 12-month low of 48.9, but still below expectations for a reading of 49.3.
On the corporate front, shares in London-listed United Utilities edged lower after the company's full-year results. It posted a rise in underlying profit to £664.3m from £634.6m, on revenue of £1.7bn.
Royal Mail rebounded from earlier losses after delivering a mixed bag of full-year results, with numbers in-line with expectations but lower than anticipated revenue from the core UK parcel business and continued caution about the highly competitive market.
Booker Group advanced after saying it will buy the Londis and Budgens businesses from Musgrave Group.
Raiffeisen Bank International AG dropped after reporting first-quarter profit that almost halved. |
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| | US Market Report | | US open: Stocks flat as investors digest raft of economic data US stocks were largely flat on Thursday, as investors analysed disappointing housing data and a largely uninspiring jobless claims report. Just after 15:00 BST, the Dow Jones Industrial Average was up three points, while the S&P 500 and the Nasdaq both fell by less than a point.
Weekly jobless claims in the US increased a little more than expected in the week ending May 16, according to data released by the Labor Department on Thursday.
Initial jobless claims rose by 10,000 to 274,000 from the previous week, compared with analysts' expectations for a rise to 270,000.
"Looking through the uptick in initial claims due to this week's seasonal adjustment factor, labor market separations remain at historically low levels and US labor market momentum remains solid in mid-May," analysts at Barclays said in a note.
The Chicago Fed's national activity index edged up to -0.15 from -0.36 in March, while the three-month average rose to -0.23 from -0.27.
The index declined from 7.5 in April to 6.7 this month, falling short of the 8.8 reading analysts had expected, although it remained way above the expansion threshold.
Existing-home sales in the States unexpectedly slumped 3.3% in April after a revised 6.5% jump in March, missing the +0.8% forecast, while the flash Markit US manufacturing PMI dropped to 53.8 in May from 54.1 in April, surprising analysts who had expected a rise to 54.5.
"The survey is likely to encourage policymakers to err on the side of caution, especially in relation to any further damaging impact of the stronger dollar on growth and earnings if policy were to be tightened," said Markit chief economist Chris Williamson.
"Any decision on hiking interest rates is therefore likely to be put off until later in the year."
Federal Reserve vice chairman Stanley Fisher and San Francisco Fed president John Williams, both voting members of the Federal Open Market Committee, will speak at 18:30 BST and 22:00 BST respectively.
In company news, electronics retailer Best Buy surged 9.53% after reporting better-than-expected first quarter results earlier on Thursday.
Cloud-computing group Salesforce.com jumped 6.19% ahead of the bell after its quarterly earnings beat analysts' expectations late on Wednesday, while storage data company NetApp plunged 10.8% after its earnings fell short of Wall Street's estimates.
Hardwood flooring retailer Lumber Liquidators Holdings plunged after its chief executive, Robert M. Lynch, resigned unexpectedly as concerns over the safety of the group's products continue to mount.
Clothing retailer Gap, software company Intuit, computer giant Hewlett-Packard and retailer Ross Stores will report after the close.
Oil prices moved north, with both West Texas Intermediate and Brent climbing 1.3% to $59.77 a barrel and $65.93 a barrel respectively. |
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| | Broker Tips | | Broker tips: Royal Mail, Vodafone, M&S, Smiths Group, Booker, Aveva Royal Mail's full year results were given the stamp of approval by analysts at Deutsche Bank and Shore Capital on Thursday, although there remained caution about the highly competitive environment. ShoreCap retained a 'buy' rating, while Deutsche Bank reiterated its 'hold' stance on the shares and target of 400p. Deutsche pointed out that RMG trades on a calendarised 2016 expected dividend yield of roughly 4%, which compares with Austrian Post, "which faces less transformational headwinds", on 4.6%.
Vodafone shares continued to advance on Thursday on speculation about a possible tie-up with Liberty Global, with Nomura providing an extra boost by lifting its stance on the stock from 'reduce' to 'neutral'.
The broker hiked its target from 185p to 235p, saying it sees a potential break-up of the UK telecoms titan. "Vodafone's slow standalone progress and potential need to extend its investment phase and reset its dividend should give its board cause to consider alternative routes for value creation," Nomura said.
Barclays has upgraded Marks & Spencer to 'equalweight' from 'underweight' and pushed the target to 600p from 390p following the company's full-year results on Wednesday.
"While we are still concerned with a long lasting trend of market share losses in General Merchandise, which we consider structural, we recognise a benign gross margin and returns outlook over the next three years which no longer warrants our negative stance on earnings," said Barclays.
Credit Suisse has cut its rating for Smiths Group to 'neutral' and lowered its target from 1,270p to 1,250p, saying it sees limited upside.
The bank said that the scope for "portfolio rationalisation" at Smiths Group is the stock's key attraction, given its current conglomerate structure and undemanding valuation. However, current management changes mean that there is unlikely to be any decisions to realise this value in the near term, it said.
Investec has lifted its target for Booker at the food wholesaler's annual results beat forecasts, saying that the proposed acquisition of Londis and Budgens represents a "strong fit" to the business.
The broker reiterated its 'buy' recommendation on the stock, saying that if the deal is cleared by regulators it "would significant extend the group's symbol outlet network and enhance its delivery capability".
Citigroup downgraded its stance on Aveva to 'neutral' from 'buy' saying the valuation is up with events. | | |
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