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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 hit two-week high as blue chips rise UK stocks reached a two-week high on Friday on the back of decent performances from heavyweights Vodafone and HSBC, along with gains in defensive categories such as pharmaceuticals.
Markets across Europe were struggling to push higher on concerns about Greece, while Wall Street opened in the red on speculation surrounding interest rates.
However, gains from a number of the biggest blue chips in London gave the FTSE 100 a boost, with the index settling 18.25 points higher (+0.26%) at 7,031.72. It has not closed above this level since 8 May.
US stocks fell after the opening bell after data showed that the core rate of US consumer price inflation picked up to its highest since January 2013, raising concerns that the Federal Reserve may move sooner than expected to tighten monetary policy.
Data released during the morning showed that the UK budget deficit narrowed in April from last year. Public sector net borrowing excluding state-controlled banks fell 27% from a year earlier to £6.8bn, compared with economists' expectations for a shortfall of £8.1bn, thanks to stronger tax receipts.
Meanwhile, the German Ifo business climate index nudged down to 108.5 in May from 108.6 in April, marking its first drop since October last year, but still a touch ahead of analysts' expectations for a reading of 108.3.
Vodafone and HSBC lead markets higher
Vodafone's stock continued its surge this week as speculation continued about a merger or partial take over by Liberty Global. Positive comments from the likes of Goldman Sachs and Deutsche Bank about Vodafone's recent results were also seen helping the shares.
"A successful outcome to any discussions would signal that big M&A is back on the agenda, after a relatively quiet period following the end of 'tax inversion' deals being pursued by US firms," said IG analyst Chris Beauchamp.
HSBC rose after confirming rumours that it is looking at a possible disposal of its Brazilian operations, though it has not yet made a decision. Recent reports suggested that Banco Santander's Brazilian unit could be a potential buyer.
Defensive sectors such as pharmaceuticals, beverages and tobacco were performing well with investors looking for higher-yielding stocks towards the end of the week. Glaxosmithkline, Astrazeneca, SABMiller, Diageo, British American Tobacco and Imperial Tobacco, all within the top 25 of the FTSE 100 in terms of market cap, all finished in positive territory.
Tobacco stocks may also have been bolstered by the news that British American and Philip Morris have filed a challenge to the UK government's plain packaging laws.
Shares of building materials peers Wolseley, Travis Perkins, Howden Joinery Grafton Group were all on the rise after Jefferies upgraded all four stocks by two notches from 'underperform' to 'buy'.
Shareholders of Costa and Premier Inn owner Whitbread gave a cool reaction to the news that the company has appointed Alison Brittain, current head of Lloyds's high street banking division, as its new chief executive. |
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| | Market Movers
techMARK 3,302.85 +0.50%
FTSE 100 7,031.72 +0.26%
FTSE 250 18,192.69 +0.21% FTSE 100 - Risers
Vodafone Group (VOD) 253.75p +4.64%
Travis Perkins (TPK) 2,208.00p +1.47%
Dixons Carphone (DC.) 468.00p +1.41%
Randgold Resources Ltd. (RRS) 4,779.00p +1.40%
Weir Group (WEIR) 1,937.00p +1.10%
AstraZeneca (AZN) 4,473.50p +1.10%
National Grid (NG.) 918.50p +1.03%
G4S (GFS) 298.50p +1.02%
Rio Tinto (RIO) 2,902.50p +1.01%
London Stock Exchange Group (LSE) 2,459.00p +0.99%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 542.50p -2.08%
TUI AG Reg Shs (DI) (TUI) 1,180.00p -1.99%
BT Group (BT.A) 451.05p -1.76%
Antofagasta (ANTO) 774.00p -1.40%
easyJet (EZJ) 1,591.00p -1.18%
Royal Dutch Shell 'B' (RDSB) 2,000.50p -1.01%
Aggreko (AGK) 1,595.00p -0.99%
Whitbread (WTB) 5,210.00p -0.95%
BG Group (BG.) 1,156.00p -0.90%
Aviva (AV.) 538.00p -0.74%
FTSE 250 - Risers
Just Eat (JE.) 456.00p +5.16%
Zoopla Property Group (WI) (ZPLA) 230.00p +3.05%
Dairy Crest Group (DCG) 501.00p +2.85%
Allied Minds (ALM) 604.00p +2.81%
Fidelity China Special Situations (FCSS) 173.50p +2.60%
Halfords Group (HFD) 488.50p +2.41%
Keller Group (KLR) 999.00p +2.10%
Interserve (IRV) 627.00p +2.03%
Bank of Georgia Holdings (BGEO) 1,939.00p +2.00%
Acacia Mining (ACA) 299.70p +1.97%
FTSE 250 - Fallers
PayPoint (PAY) 875.00p -3.21%
Premier Oil (PMO) 164.80p -3.06%
Tullow Oil (TLW) 414.90p -2.45%
Telecom Plus (TEP) 836.00p -2.45%
Ophir Energy (OPHR) 133.90p -2.33%
Poundland Group (PLND) 314.70p -2.05%
Soco International (SIA) 190.10p -1.86%
Playtech (PTEC) 827.50p -1.84%
Euromoney Institutional Investor (ERM) 1,177.00p -1.83% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed as Draghi urges reforms European stocks were little changed as European Central Bank president Mario Draghi urged governments in the bloc to do more to boost their economies.
Speaking at an ECB conference in Portugal, Draghi said government structural reforms and aggressive monetary easing are the key to lasting stability in the Eurozone.
He also said that the economic outlook for the Eurozone is "brighter today than it has been for seven long years."
Greece continued to be closely watched after government spokesman Gabriel Sakellaridis told Skai TV that the country expects to reach a reforms deal with lenders in the next 10 days.
German Chancellor Angela Merkel sounded a much more cautious note, however, saying there was "still a lot to do" following her late-night talks with French President Francois Hollande and Greek Prime Minister Alexis Tsipras on Thursday on the sidelines of the EU summit in Riga.
Data-wise, German gross domestic product expanded by 0.3% in the first quarter after 0.7% growth at the end of 2014, confirming a preliminary estimate published last week.
A slightly better than expected German Ifo survey for May failed to have any impact on markets. The Ifo Institute index of German business confidence printed at 108.5 from 108.6 in April, which was a touch ahead of analysts' estimates of 108.3.
Elsewhere, the French manufacturing confidence index rose to 103 in May from 102 in April - better than expected and its highest level since August 2011.
The euro fell 0.71% to $1.1033.
Stateside, the consumer price index (CPI) rose 0.1% month-on-month in April, easing back from a 0.2% in March, as forecast by analysts. The Bureau of Labor Statistics said compared to a year ago the US fell further into deflation, down 0.2% year-on-year in April, as expected, following a 0.1% drop in March.
Excluding energy and food, core inflation rose 0.3% month-on-month in April, better than the 0.2% gain expected. The Federal Reserve is looking for signs that inflation is picking up towards its 2% target as they determine the timing of the first interest rate hike since June 2006. Fed Chair Janet Yellen will speak in Providence, Rhode Island at 18:00 BST, potentially shedding further light on the central bank's next move.
"The 0.3% month-on-month increase in core consumer prices in April, which pushed the three-month annualised rate of core inflation up to a four-year high of 2.6%, leaves the Fed with less scope to delay raising interest rates," Capital Economics said.
In corporate news, Swiss luxury goods company Richemont fell after it posted a 36% drop in annual profit on the back of previously-announced losses on financial instruments.
HSBC nudged higher after the bank confirmed rumours that it is looking at a disposal of its Brazilian operators, although it has not made any decisions on the matter yet.
Shares in UK water company Severn Trent slipped after it posted a 53.5% drop in full-year pre-tax profit, pointing to a fair value loss on financial instruments, largely due to lower expectations for future interest rates, and an exceptional tax credit in the previous year.
Bouygues SA and Orange SA dropped as the French economy minister told Les Echos now is not the time for industry consolidation in the nation. |
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| | US Market Report | | US open: Stocks mostly lower on interest rate speculation Wall Street stocks were mostly in the red after a better-than-expected increase in core US inflation fuelled speculation about an interest rate hike.
Excluding energy and food, core inflation rose 0.3% month-on-month in April, ahead of the previous month and estimates of 0.2%, respectively, the Bureau of Labor Statistics revealed.
Including food and energy, which declined further, the US consumer price index (CPI) rose 0.1% month-on-month in April, easing back from a 0.2% in March, as forecast by analysts.
Compared to a year ago the US fell further into deflation, down 0.2% year-on-year in April, as expected, following a 0.1% drop in March.
The dollar rose against the euro and the pound following the report.
"The 0.3% month-on-month increase in core consumer prices in April, which pushed the three-month annualised rate of core inflation up to a four-year high of 2.6%, leaves the Fed with less scope to delay raising interest rates," Capital Economics said.
"Admittedly, the annual core inflation rate remained at 1.8%, but the upward trend in the monthly increases since January is pretty clear now."
The Federal Reserve is looking for signs that inflation is picking up towards its 2% target as they determine the timing of the first interest rate hike since June 2006.
Fed Chair Janet Yellen will speak in Providence, Rhode Island at 18:00 BST, potentially shedding further light on the central bank's next move.
Company-wise, JP Morgan Chase & Co. snapped an earlier rise after the bank defeated claims that it mismanaged trust accounts established for an Indianapolis church endowed by the descendants of drug company founder Eli Lilly.
Deere & Company gained as the agricultural company reported second-quarter earnings that exceeded analysts' expectations. |
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| | Broker Tips | | Broker tips: BHP Billiton, BP, Building materials sector Investec has upgraded its stance on BHP Billiton from 'sell' to 'hold' following the spin-off of the miner's South32 portfolio this week, as well as recent reduced capital and operating cost guidance.
While many of BHP's remaining key commodities at prices not seen since 2009, the broker said: "We expect ongoing earnings growth to support the credit rating and the progressive dividend policy." Investec lifted its target for the stock slightly from 1,329p to 1,383p.
JPMorgan Cazenove analysts have lifted their rating on oil major BP from 'underweight' to 'neutral' but retained a gloomy outlook on the European integrated energy sector.
Following recent outperformance, it recommended investors to sell shares in the sector "which will fade if the oil-price momentum weakens".
Shares of building materials peers Wolseley, Travis Perkins, Howden Joinery and Grafton Group were all on the rise on Friday after Jefferies took positive stance on the sector. | | |
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