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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 lower despite US jobs data London stocks ended the session lower after a better than expected reading on the US jobs market pressured US Treasury yields higher and amid continuing worries over the situation in Greece. US non-farm payrolls increased by 280,000 in May (consensus: 215,000).
Shares were also weighed down by Greece's announcement that it had decided to defer a payment to the International Monetary Fund until the end of the month.
The FTSE 100 ended 54.64 points lower at 6,804.60.
The announcement came amid on-going negotiations over the terms of a deal that if successful will unlock the last tranche of its bailout deal.
That comes amid concerns about the latest US non-farm payrolls figures, which are due to be unveiled mid-afternoon, particularly after the International Monetary Fund said on Thursday that the Federal Reserve should hold fire on raising rates until 2016.
"Expectations for May payrolls is for 226,000 new jobs, a slight increase in April's 223,000, with the unemployment rate set to remain unchanged at 5.4%, though this week's weak ISM services employment components could see this number come in short, said Michael Hewson, chief market strategist at CMC Markets.
The unemployment rate is expected to remain at 5.4%.
On the company front, just a handful of blue chips - all of them miners - were in positive territory, while the downside was led by Marks & Spencer, following closely by housebuilders.
M&S was retreating after yesterday's results, which showed its first increase in profits in four years.
Shares in Vodafone fell after the company quashed hopes of a merger with Liberty Global. Responding to recent media speculation, Vodafone said that is in early-stage talks with Liberty Global about a possible exchange of assets, but not regarding a merger.
An interim management statement from Bellway revealed the housebuilder expects its full year operating margin to increase by around 300 basis points to over 20%, up from 17.2% in 2014 following what it described as a strong trading performance.
Market Movers
techMARK 3,234.00 -1.05%
FTSE 100 6,804.60 -0.80%
FTSE 250 17,931.29 -0.88% |
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| | FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 357.00p +1.48%
Anglo American (AAL) 1,015.50p +1.04%
Weir Group (WEIR) 1,935.00p +0.83%
RSA Insurance Group (RSA) 435.00p +0.79%
International Consolidated Airlines Group SA (CDI) (IAG) 530.00p +0.76%
BP (BP.) 443.35p +0.73%
Pearson (PSON) 1,296.00p +0.70%
AstraZeneca (AZN) 4,367.50p +0.70%
Ashtead Group (AHT) 1,149.00p +0.61%
BG Group (BG.) 1,106.00p +0.41%
FTSE 100 - Fallers
Marks & Spencer Group (MKS) 560.00p -3.20%
Hikma Pharmaceuticals (HIK) 1,998.00p -2.82%
Morrison (Wm) Supermarkets (MRW) 173.60p -2.64%
Imperial Tobacco Group (IMT) 3,185.00p -2.57%
Smiths Group (SMIN) 1,180.00p -2.56%
Aberdeen Asset Management (ADN) 421.40p -2.48%
Vodafone Group (VOD) 242.05p -2.44%
Schroders (SDR) 3,262.00p -2.36%
London Stock Exchange Group (LSE) 2,391.00p -2.33%
British American Tobacco (BATS) 3,440.00p -2.27%
FTSE 250 - Risers
Infinis Energy (INFI) 187.80p +2.85%
Evraz (EVR) 160.80p +2.16%
BlackRock World Mining Trust (BRWM) 311.00p +2.10%
Fisher (James) & Sons (FSJ) 1,335.00p +2.06%
Barr (A.G.) (BAG) 620.00p +2.06%
Ted Baker (TED) 2,832.00p +2.02%
Premier Farnell (PFL) 195.20p +1.99%
Thomas Cook Group (TCG) 146.50p +1.95%
Euromoney Institutional Investor (ERM) 1,198.00p +1.87%
Rotork (ROR) 257.50p +1.86%
FTSE 250 - Fallers
Just Eat (JE.) 422.80p -5.54%
Betfair Group (BET) 2,509.00p -5.14%
TalkTalk Telecom Group (TALK) 390.40p -4.50%
Provident Financial (PFG) 2,862.00p -2.92%
Big Yellow Group (BYG) 633.00p -2.91%
Elementis (ELM) 296.00p -2.73%
BTG (BTG) 688.50p -2.69%
St. Modwen Properties (SMP) 438.90p -2.62%
Ocado Group (OCDO) 359.90p -2.57% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks slide as Greece misses IMF debt repayment European stocks ended lower on Friday, along with German government bonds, following news that Greece has delayed its €300m debt payment to the International Monetary Fund and as a solid jobs report in the US underpinned expectations of an interest-rate hike by the Federal Reserve this year. Greece has decided to pay its debt in one payment at the end of the month.
"It came as a slight surprise that Greece on short notice has decided to make one lump payment at the end of June instead of repaying the money it owes to the IMF in June," said Markus Huber, senior analyst at Peregrine & Black. "Overall not much has changed except that at this stage it appears that negotiations between Greece and its creditors will drag on quite a bit longer than previously hoped meaning that plenty of uncertainty regarding Greece is here to stay."
At the close, the benchmark Stoxx 600 index was down x%, Germany's DAX was x% weaker and France's CAC 40 was off x%.
Greece's ASE Composite suffered the heaviest losses, ending down x% at xxx.xx. Banks took a beating, with Piraeus Bank down x%, Eurobank Ergasias x% lower and National Bank of Greece off x%.
The yield on the 10-year German Bund was up x basis points at x.xxx%, wider on the day but off weekly highs. The yield on the 10-year Greek government bond was x basis points higher at xx.xx%.
A strong reading from the non-farm payrolls in the US also weighed on sentiment as it fuelled interest rate speculation. Payrolls increased by 280,000 in May, beating expectations for a 226,000 rise, while the unemployment rate was unchanged at 5.5%, as expected.
"An impressive, consensus-smashing rate of US hiring puts a September rate hike firmly on the table," said Chris Williamson, chief economist at Markit. "Job creation is surging as the economy shows signs of rebounding strongly from the weak spell seen at the start of the year, pulling wages higher and allaying worries that the upturn lacks sustainable."
On the corporate front, shares in Deutsche Bank closed down amid media reports that it is conducting an internal probe into possible money laundering by Russian clients that could involve about $6bn of transactions between 2011 and early 2015.
In London, Vodafone shares ended lower after the company confirmed that it is in talks with Liberty Global over a possible swap of selected assets, but denied media reports that the two were discussing a merger. |
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| | US Market Report | | US open: Stocks fluctuate after impressive payrolls data US stock struggled for direction early on Friday, after a positive job report fuelled expectations of an interest rate hike this year. Just after 15:00 BST, the Dow Jones Industrial Average was down 13 points, while the S&P 500 gained one point and the Nasdaq fell by the same margin.
Employment data impresses
US non-farm payrolls increased by 280,000 in May, ahead of the 226,000 predicted by economists, official data showed on Friday.
The unemployment rate was unchanged at 5.5%, as expected, while the average hourly earnings increased 0.3% month-on-month, slightly ahead of the 0.2% analyst had forecast.
The US Bureau of Labor Statistics said job gains occurred in professional and business services, leisure and hospitality, and health care, while mining employment continued to decline.
"At this stage this evident strength in the labour market probably isn't enough to persuade the Fed to hike rates by July, but it definitely makes a rate cut by September probable," said Capital Economics' chief US economist Paul Ashworth.
Investors could get more clues over the Federal Reserve's stance when William Dudley, the New York Fed president, speaks to the Economic Club of Minnesota at 17:30 BST.
Elsewhere, European stocks slid on Friday, along with German government bonds following news that Greece has delayed its €300m debt payment to the International Monetary Fund.
"It came as a slight surprise that Greece on short notice has decided to make one lump payment at the end of June instead of repaying the money it owes to the IMF in June," said Markus Huber, senior analyst at Peregrine & Black.
OPEC decision
Oil prices fell, after OPEC decided to maintain its quota at 30m barrels per day in line with market expectations following the conclusion of its meeting in Vienna.
West Texas Intermediate shed 0.45% to $57.74 a barrel, while Brent lost 0.52% to $61.71 a barrel.
The dollar surged, gaining 0.85% against the euro and 0.96% against the yen and rising 1.06% against the euro, while gold futures fell 0.85% to $1,165.20.
In company news, clothing retailer Gap shed 0.60% after announcing late on Thursday that its like-for-like sales fell 1% in May.
Cardinal Health fell 1.38% after the company announced it would acquire privately-held genetics firm The Harvard Drug Group for $1.1bn. |
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| | Broker Tips | | Broker tips: Betfair, Lloyds Shares in Betfair fell 5% on Friday after Numis Securities cut its rating on the stock to 'sell' from 'reduce'.
Numis said it normally reserves 'sell' recommendations for companies that have fundamental problems, but Betfair is not one of those.
"However, we have been meekly increasing our share price target in line with the outperforming share price for some time. But, after further outperformance, we simply cannot make sense of a share price of more than our new target of 2,100p (up from 1,620p), 21% below the current price and, in our recommendation system, a sell."
Numis pointed out that since the company creditably rejected a 1,086p per share takeover offer in May 2013, the share price is up 145%.
Betfair's share price has outperformed its peers and now stands on a valuation that does not reflect the challenges the business faces, including the impact of new duties, lapping a very successful start to full-year 2015 and the challenge from a very competent set of competitors, said Numis.
It added that a key attraction of Betfair has been the sharp improvement in the conversion of reported profit to bottom-line cash flow. "While the cash generation remains appealing there is little scope for a further underlying improvement in our view," said Numis, which forecasts a deterioration in the short-term.
HSBC upgraded Lloyds Banking Group to 'buy' from 'hold' and raised the target to 103p from 87p.
"Though unchanged, our earnings remain 9-10% higher than consensus reflecting a more positive stance on margin," it said.
The sell-down of the government stake has acted as a glass ceiling on share price performance, but will ultimately come to an end with a retail placing in the next 12 months, it added.
HSBC noted that Lloyds offered investors a 15% return on tangible equity a level exceeded by only a handful of European banks.
Evidence of intensifying competition in the UK mortgage market has raised justifiable concern about the sustainability of returns.
However, management has raised margin guidance twice so far this year reflecting their capacity to lower the cost of liabilities whilst the possibility of rising domestic rates raise the prospect of further gains in 2016, said HSBC. | | |
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