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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 creep higher but risk appetite limited ahead of elections UK stocks finished a choppy session marginally in positive territory on Wednesday as investor risk appetite was curbed by pre-election uncertainty and cautious comments from Federal Reserve chair Janet Yellen. The FTSE 100 closed up 6.16 points (+0.09%) at 6,933.74, rebounding slightly after settling at a one-month low the previous session.
However, the index ended well below the intraday high of 6,974.82 reached early on. Not even a forecast-beating survey on the UK services sector could lift the mood as City traders attempted to predict the outcome of Thursday's electoral vote.
"With fewer than 24 hours before the UK goes to the polls, the picture is still unclear as to who will be running the country in the coming days," said analyst Alastair McCaig from IG. McCaig said the latest IG general election binary is currently showing a 94% chance there will be no majority government.
Corporate earnings were mostly well-received by investors on Wednesday, with blue chips Sage Group, Imperial Tobacco, Legal & General and GKN all impressing, though Sainsbury's disappointed with its first annual loss in a decade.
Stocks had temporarily dropped into the red before the close following a weak start on Wall Street after Yellen warned of the "dangers" in an environment of elevated stock markets and low interest rates. Equity valuations are "generally quite high", the Fed chair said, and there could be a large increase in long-term rates when the Fed eventually tightens policy.
Economic data in focus
Service-sector from across the globe was also on investors' minds on Thursday, along with labour-market figures in the States.
The Markit/CIPS UK services purchasing managers' index (PMI) rose to 59.5 in April from 58.9 a month earlier, more than the 58.5 predicted by analysts. The final reading of the Markit Eurozone services PMI was unexpectedly revised up to 54.1 from the 'flash' estimate of 53.7, more or less in line with the 54.2 level in March. Meanwhile, the HSBC Chinese services PMI rose to a four-month high of 52.9, up from 52.3 in March but slightly below expectations.
The closely-watched ADP employment report showed just a 169,000 increase in US private payrolls in April, compared with a revised 175,000 reading in March and well below the 200,000 consensus forecast.
While it is only seen as a very rough guide to official US non-farm payrolls data, the weak figure may temper some optimism surrounding the government data due on Friday. Analysts currently predict the non-farm payrolls to jump 230,000 in April, from 126,000 the month before.
Earnings impress but Sainsbury's bucks the trend
Sainsbury's fell sharply after reporting a loss for the full year, though results still came in ahead of analysts' expectations. The grocer reported a loss before tax of £72m for the year ended March, compared with a £898m profit previously, prompting it to slash it full-year dividend by 23.7%.
After an early fall, software company Sage surged after saying it's on track to meet 2015 targets, as it reported a 6.2% rise in organic revenue for the first half of this year.
Imperial Tobacco gained after lifting its dividend 10% as its growth brands delivered strong growth and earnings beat expectations in the first half. Adjusted earnings per share were up 4% to 93.3p.
Legal & General also impressed with an 8% increase in first-quarter net cash generation to £326m, while annuity sales jumped 19%.
Engineering giant GKN was in demand after saying it still expects growth in 2015 as a strong automotive performance drove a 1% increase in organic sales in the first quarter.
Vodafone was also making decent gains after Exane BNP Paribas raised its rating on the stock to 'outperform' and lifted its target from 220p to 270p. The broker said: "There are much better times ahead in our view."
Market Movers
techMARK 3,193.99 +0.64%
FTSE 100 6,933.74 +0.09%
FTSE 250 17,412.08 -0.23% |
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| | FTSE 100 - Risers
Sage Group (SGE) 536.00p +7.96%
St James's Place (STJ) 886.50p +1.84%
Imperial Tobacco Group (IMT) 3,175.00p +1.76%
Vodafone Group (VOD) 232.20p +1.60%
Mondi (MNDI) 1,311.00p +1.55%
International Consolidated Airlines Group SA (CDI) (IAG) 545.00p +1.49%
Centrica (CNA) 260.20p +1.40%
Dixons Carphone (DC.) 431.10p +1.22%
BT Group (BT.A) 454.30p +1.14%
Capita (CPI) 1,173.00p +1.12%
FTSE 100 - Fallers
Aberdeen Asset Management (ADN) 431.10p -4.33%
Sainsbury (J) (SBRY) 266.30p -3.16%
Hikma Pharmaceuticals (HIK) 1,980.00p -2.17%
Antofagasta (ANTO) 782.50p -2.00%
London Stock Exchange Group (LSE) 2,436.00p -1.66%
3i Group (III) 485.30p -1.54%
Randgold Resources Ltd. (RRS) 4,914.00p -1.54%
British Land Company (BLND) 805.50p -1.35%
Carnival (CCL) 2,903.00p -1.29%
Glencore (GLEN) 310.45p -1.24%
FTSE 250 - Risers
Supergroup (SGP) 1,071.00p +7.42%
Aveva Group (AVV) 1,875.00p +7.14%
Evraz (EVR) 205.70p +5.81%
Ocado Group (OCDO) 375.10p +5.45%
Soco International (SIA) 197.70p +4.00%
Wetherspoon (J.D.) (JDW) 764.50p +3.87%
Ted Baker (TED) 2,962.00p +3.57%
Marston's (MARS) 169.20p +3.55%
Millennium & Copthorne Hotels (MLC) 600.50p +3.27%
Premier Oil (PMO) 184.90p +3.07%
FTSE 250 - Fallers
Genus (GNS) 1,274.00p -7.95%
Diploma (DPLM) 758.50p -7.05%
Man Group (EMG) 172.90p -5.78%
PayPoint (PAY) 799.50p -5.27%
AL Noor Hospitals Group (ANH) 855.50p -5.16%
AO World (AO.) 172.50p -4.17%
Brown (N.) Group (BWNG) 322.10p -3.85%
Kaz Minerals (KAZ) 259.30p -3.82%
Centamin (DI) (CEY) 61.90p -3.81% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks gain as Greek government repays IMF debt and unemployment eases European stocks rose after a report showed Greek unemployment eased in February as the government made a debt repayment to the International Monetary Fund. Greece's jobless rate fell to 25.4% in February from a downwardly revised 25.6% the previous month, according to ELSTAT.
It marked the lowest since July 2012 when unemployment was at 25.3% and came as Greece repaid €200m in debt to the IMF.
The euro rose 1.37% to $1.1338 at 16:53 London time.
The European Central Bank was expected to increase emergency liquidity assistance to Greek banks on Wednesday as the nation continues negotiations with creditors to unlock further aid.
In other European news, Markit's purchasing managers' index (PMI) on services was revised upwards to 54.1 in April from an earlier estimate of 53.7, surprising analysts who had expected an unchanged figure. A reading above 50 signals expansion in the sector while a level below indicates a contraction.
Chinese services PMI rose to a four-month high of 52.9, up from 52.3 in March but slightly below expectations.
UK services PMI rose to 59.5 in April from 58.9 a month earlier, more than the 58.5 predicted by analysts.
Stateside, private sector payrolls in April hit the lowest level since January 2014. According to consultancy ADP payrolls dropped to 169,000 last month after rising by a downwardly revised 175,000 in March. The consensus forecast had been for a reading of 200,000, while March's tally had previously been estimated at 189,000.
The data comes ahead of the official US non-farm payrolls report on Friday.
Federal Reserve Chairwoman Janet Yellen said on Wednesday that equity market valuations were quite high and warned of the potential dangers.
Companies: Vestas Wind Sytems, Allianz
Vestas Wind Systems A/S surged after raising its forecast for sales and income for the year.
Allianz SE rallied after the European insurer posted an 11% increase in first-quarter profit.
Societe Generale declined despite reporting a better-than-expected increase in net profit, as the French bank bounced back from heavy losses in Russia.
Anheuser-Busch InBev NV jumped after the brewer reported revenue growth that exceeded analysts' estimates. |
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| | US Market Report | | US open: Dow declines 70 points after disappointing ADP report US stocks fluctuated early on Wednesday, after a disappointing ADP employment report. Just after 15:00 BST, the Dow Jones Industrial Average was down 70 points, while the S&P 500 and the Nasdaq were up by five and 13 points respectively.
Private sector payrolls in the US hit their lowest level since January 2014 in April, falling to 169,000, well short of the 200,000 reading analysts had estimated.
March's tally, which had previously been estimated at 189,000, was revised downward to 175,000.
"The frequent revisions to and relatively short history of the ADP employment series limit the weight we put on the series," Barclays analysts said in a note.
"On balance, however, this morning's report highlights downside risks to our forecast of a 245k increase in private sector payrolls in Friday's employment report."
US non-farm labour productivity fell by 1.9% in annualised terms during the first quarter after a 2.1% drop over the previous three months, according to the Bureau of Labour Statistics (BLS).
The consensus forecast had been for a fall of 1.9%.
Investors will switch to Federal Reserve speakers in the afternoon, with Kansas City Fed President Esther George, a non-voting member of the Federal Open Market Committee, set to appear at a conference in Washington at 18:15 BST.
Meanwhile, Atlanta Fed President Dennis Lockhart will give a speech to the Baton Rouge Rotary Club in Louisiana at 18:30 BST.
In corporate news, nutrition-supplement maker Herbalife jumped 16.6% after it lifted its annual outlook late on Tuesday, after earnings rose 4.8% in the first quarter, exceeding expectations.
New York-listed shares of Anheuser-Busch InBev climbed 2.3%, after the drinks giant said a derivatives gain boosted its first quarter profit.
US-listed shares of Nokia Corp climbed 1.7% after reports emerged linking a consortium of German car makers with a bid for the majority stake in Nokia's here mapping unit.
Videogame maker Electronic Arts jumped 5.5% after its fourth quarter profit and sales beat expectations
Clothing and accessories chain Fossil Group plunged 6.4% despite posting better-than-expected results late on Tuesday, while Groupon declined 3.9% despite its first quarter loss shrank 62.1% to $14.3m.
The earnings season continues with 21st Century Fox, Tesla Motors, Wholefoods and MetLife reporting after the closing bell.
Oil prices rebounded, with both West Texas Intermediate and Brent crude climbing 2.3% to $61.83 and $69.10 a barrel respectively. |
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| | Broker Tips | | Broker tips: Vodafone, Sainsbury's, Aberdeen, Greene King Exane BNP Paribas said it sees "much better times ahead" for Vodafone as it upgraded its view on the stock from 'neutral' to 'outperform'.
"The combination of a dramatically improved proposition (both absolute and relative), the secular trend of increased data consumption and the benefits of an improving market structure (and hence data monetisation) should see a return to revenue and [profit] growth on an underlying basis in YTM2016e (and on a reported basis the following year)," said analyst Michael Williams.
Annual underlying profits at Sainsbury's beat analysts' forecasts on Wednesday, but Shore Capital still recommended investors to 'sell' shares of the grocery giant.
The broker said it is worried that the supermarket has not yet reached then end of its downgrade cycle, especially on speculation of a "revitalising Tesco".
RBC Capital Markets cut its price target for Aberdeen Asset Management to 440p from 455p as it revised estimates following the company's first-half results Tuesday.
"Our core concerns remain ongoing high margin net outflows and the investment performance of key funds which are lagging benchmarks," said RBC.
N+1 Singer has cut its recommendation for Greene King from 'buy' to 'hold' after a "soft trading update" from the pubs group on Tuesday.
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