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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 open: FTSE lower as economists still see Grexit risks Investors were in a holding pattern ahead of quarterly results due out from a raft of US technology majors after the close of trading, with traders also wary ahead of the release of tomorrow's MPC minutes and a barrage of economic data scheduled for release at the end of the week.
Against that backdrop, as of 08:51 the Footsie was 3.07 points lower to 6,785.65.
That came as the risk of Grexit receded, or at least for the next few weeks.
No less than 71% of economists participating in a Bloomberg survey thought there was still a risk that Greece would crash out of the euro by the end of 2016. Half of those canvassed thought the size of the current bailout package was too small.
Looking out to the medium-term, on Monday the Financial Times's Wolfgang Munchau warned of "revolution in the air" in Greece.
Coincidentally, or not, in two separate reports sent to clients on 17 July analysts at Barclays held out the possibility the European Central bank might still be prompted into extending its bond purchase programme.
Gold hit a five-year low on Monday and the Bloomberg Commodity Index was at its nadir since 2002 as investors focused on the prospect for Fed interest rate hikes this year (followed close behind by the BoE) and after a bear raid in the gold market by Chinese funds.
Goldman Sachs also waded into the debate surrounding recent weakness in the commodity complex, emphasising the role which the weak outlook for Chinese demand has been playing.
After the close of trading in New York US tech giants Apple, Microsoft and Yahoo were set to update the market on their progress in the latest financial quarter, with signs of dollar strength taking their toll on earnings being a key risk factor to watch for.
The Greenback's robustness was thought to be one of the chief factors staying the Fed's hand.
Second quarter earnings for S&P 500 companies were seen dropping by 3.7% year-on-year, according to estimates from FactSet, their first fall since late 2012 - albeit with much of the weakness accounted for by the oil sector.
The DJ Stoxx 600 was on track for a tenth consecutive session of gains on Monday, with corporate earnings in Europe seen speeding ahead at a 12% in 2015.
AO World shares push ahead
Shares in appliance maker AO World surged following a pre-AGM update when the company said its first quarter growth would be 'muted'.
Croda International said the first half of the year has been encouraging, with the recovery in underlying sales trends that began in the second half of last year continuing, as it posted a 7.3% jump in pre-tax profit. For the six months ended 30 June, adjusted pre-tax profit came in at £135.7m up from £125.3m last year. Sales were up 5.2% at £564.6m from £537.4m, reflecting growth in all sectors and all regions, particularly the Life Sciences division.
Telecoms provider Cable & Wireless Communications reported a 4% increase in revenue in the first quarter and reiterated guidance for its current financial year. In a statement released on Tuesday, the FTSE 250 group attributed the rise in overall revenue to a strong performance in its broadband and video arms, which rose 14% and 11% respectively thanks to a sharp increase in subscribers.
Housebuilding and construction group Galliford Try has signed contracts with Birmingham City University to build the £46m Conservatoire in central Birmingham. The new landmark building, designed by Feilden Clegg Bradley Studios, will move the Conservatoire from its existing home to the Eastside area of the city centre, adjacent to the university's Parkside building. The facility will house teaching facilities and a 500-seat auditorium as well as two additional performance spaces.
Royal Mail delivered a mixed first half trading statement, with group revenues flat as UK parcel volumes were higher than expected across the year but letter volumes worse. Guidance for the full year was kept steady as the three months to 28 June, a period of relative lesser importance compared to the key Christmas season, saw a 2% decline in revenues at the parcel and letter arm UKPIL counterbalanced by 8% growth at European parcels arm GLS.
PZ Cussons increased its full year dividend again, despite revenues and profits being dragged down by the major currency devaluation in Nigeria, its largest business. These challenges are expected to continue in the new year, the company cautioned, as further weakening in exchange rates in the west African country, Australia and Indonesia is seeing imported inflation affecting margins as well as consumer disposable income |
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| | Market Movers
techMARK 3,205.13 -0.33%
FTSE 100 6,769.50 -0.28%
FTSE 250 17,774.08 -0.04%
FTSE 100 - Risers
Fresnillo (FRES) 642.50p +2.15%
Admiral Group (ADM) 1,478.00p +1.72%
Randgold Resources Ltd. (RRS) 3,855.00p +1.00%
GKN (GKN) 310.80p +0.75%
RSA Insurance Group (RSA) 434.00p +0.72%
Kingfisher (KGF) 368.60p +0.63%
SABMiller (SAB) 3,514.00p +0.54%
Antofagasta (ANTO) 644.00p +0.47%
Smiths Group (SMIN) 1,160.00p +0.43%
Coca-Cola HBC AG (CDI) (CCH) 1,328.00p +0.38%
FTSE 100 - Fallers
Persimmon (PSN) 1,951.00p -1.66%
easyJet (EZJ) 1,694.00p -1.57%
Centrica (CNA) 278.90p -1.45%
Taylor Wimpey (TW.) 188.20p -1.41%
Barratt Developments (BDEV) 633.50p -1.25%
Hikma Pharmaceuticals (HIK) 2,115.00p -1.21%
Ashtead Group (AHT) 1,056.00p -1.12%
Prudential (PRU) 1,600.50p -1.08%
ARM Holdings (ARM) 1,020.00p -0.97%
GlaxoSmithKline (GSK) 1,367.00p -0.94%
FTSE 250 - Risers
AO World (AO.) 131.60p +9.94%
Premier Oil (PMO) 143.00p +4.23%
Croda International (CRDA) 2,887.00p +3.29%
Petrofac Ltd. (PFC) 870.00p +1.99%
Evraz (EVR) 118.80p +1.97%
Kaz Minerals (KAZ) 192.80p +1.69%
Acacia Mining (ACA) 243.00p +1.67%
Wood Group (John) (WG.) 601.50p +1.60%
Nostrum Oil & Gas (NOG) 575.50p +1.59%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 521.00p +1.56%
FTSE 250 - Fallers
IG Group Holdings (IGG) 757.00p -6.20%
Mitchells & Butlers (MAB) 390.50p -2.74%
Zoopla Property Group (WI) (ZPLA) 240.10p -2.04%
Allied Minds (ALM) 482.40p -1.83%
Victrex plc (VCT) 1,917.00p -1.79%
Ladbrokes (LAD) 128.20p -1.61%
PZ Cussons (PZC) 354.40p -1.56%
Marston's (MARS) 155.40p -1.33%
Shawbrook Group (SHAW) 329.20p -1.29% |
| | UK Event Calendar | | INTERIMS
Synectics
Q2
Verizon Communications
FINALS
IG Group Holdings, PZ Cussons
ANNUAL REPORT
Private & Commercial Finance Group
IMSS
National Grid
AGMS
AO World, Big Yellow Group, British Land Company, Cable & Wireless Communications, HICL Infrastructure Company Ltd, Investec Structured Products Calculus VCT, Investec Structured Products Calculus VCT 'C' Shares, JPMorgan European Inv Trust Growth Shares, National Grid, Northcote Energy, Quantum Pharma, Red Leopard Holdings, TR Property Inv Trust, Ventus 2 VCT, Ventus VCT, VP
TRADING ANNOUNCEMENTS
Cable & Wireless Communications, Royal Mail, Science In Sport, Synety Group
UK ECONOMIC ANNOUNCEMENTS
Public Sector Finances (09:30) INTERIMS
Synectics
Q2
Verizon Communications
FINALS
IG Group Holdings, PZ Cussons
ANNUAL REPORT
Private & Commercial Finance Group
IMSS
National Grid
AGMS
AO World, Big Yellow Group, British Land Company, Cable & Wireless Communications, HICL Infrastructure Company Ltd, Investec Structured Products Calculus VCT, Investec Structured Products Calculus VCT 'C' Shares, JPMorgan European Inv Trust Growth Shares, National Grid, Northcote Energy, Quantum Pharma, Red Leopard Holdings, TR Property Inv Trust, Ventus 2 VCT, Ventus VCT, VP
TRADING ANNOUNCEMENTS
Cable & Wireless Communications, Royal Mail, Science In Sport, Synety Group
UK ECONOMIC ANNOUNCEMENTS
Public Sector Finances (09:30) |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks steady as focus shifts to corporate earnings European stocks were steady in early trade as investors paused for breath following nine days of gains, with attention shifting back to corporate earnings now that worries about Greece have receded.
By 0910 BST, the benchmark Stoxx Europe 600 was down 0.2%t, France's CAC 40 was down 0.1% and Germany's DAX was flat.
"Now that the Greek problem has been kicked into the long grass, the key question for investors is whether the recent gains in European equity markets are simply a relief rally - or whether fears over Greece obscured a wider improvement in European economies and there is still significant value to be found?" said Rebecca O'Keeffe, head of investment at Interactive Investor.
"As we progress through second quarter earnings, investors from the dollar bloc may begin to see European assets as increasingly attractive. Corporations too may see European companies as potential targets for M&A. So while Greek problems may be far from over, there is scope for European markets to capitalise on the back of lower currency and commodity prices and an increasing interest from a wider global market seeking value," she added.
Greek banks reopened on Monday following three weeks of closure, with capital controls still in place. Meanwhile, the country repaid the €2.05bn it owed the International Monetary Fund and the €4.2bn that was due back to the European Central Bank, with the help of the €7bn bridging loan it secured from the EU last week.
On the corporate front, shares in Zalando slumped after the online fashion retailer said profitability slowed in the second quarter.
Novartis fell into the red after posting a 32% drop in second-quarter profit.
Dutch mapping company TomTom was also on the back foot after it said net income fell 71% in the second quarter from a year ago.
French spirits company Remy Cointreau dropped after saying that organic sales in the three months to 30 June fell 9%, in line with its expectations.
German business software provider SAP nudged lower after posting a 15% decline in second-quarter net profit. |
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| | US Market Report | | US close: Stocks edge higher as Nasdaq closes at record high, gold and oil tumble US stocks edged higher on Monday, with optimism over Greece's crisis and strong earnings reports pushing the S&P 500 and the Nasdaq Composite in record territory. The Dow Jones Industrial Average closed up 14 points to 18,100.41 while the S&P 500 climbed two points and the Nasdaq Composite notched a record close of 5,218.86 after gaining 8.72 points.
Greece banks reopen Athens has reportedly begun paying back the €4.2bn it owes the European Central Bank, thanks to the €7.16bn bridge loan that was approved last week by the European Union
"With Greece set to make its debt payment to the ECB on Monday and accommodative monetary policy from the ECB for the foreseeable future, optimism is picking up in Europe again," said CMC Markets' analyst Jasper Lawler.
"US stocks are near record peaks but the direction of interest rates in the United States is higher according to Fed Chair Janet Yellen."
Earnings in focus
With no major economic reports out on Monday, investors will focus on the earnings season, with a number of big firms set to report.
Banking giants Morgan Stanley shed 0.48% even though its second quarter earnings and revenue beat expectations.
Oil and gas services provider Halliburton rose 1.79% after its second quarter earnings and revenue declined less than expected.
Toy-maker Hasbro surged 6.36% after its quarterly revenue and profits topped expectations, while PayPal rallied 5.81% in its first trading after being spun off by eBay, whose shares climbed 2.44%.
IBM fell 2.42% in after-hour trading despite reporting better-than-expected second quarter profits soon after the closing bell.
With Microsoft and Apple slated to report later this week, the earning season will play a key role in determining the path US equities will follow in the short-term future.
"The US reporting season looks to kick it up another gear this week with some of the bigger names all revealing their numbers within the first two days alone," said IG's analyst Alastair McCaig.
"Analytical expectations for this latest reporting season have been so low that the bar looks to have been set for limbo dancing rather than hurdling."
Gold tumbles
Elsewhere, Asian indices started the week on a mixed note due to a weaker commodities market, with gold slumping to a five-year low, losing 2.53% to $1,103.30.
The dollar was broadly flat against the euro but gained 0.25 and 0.12%% against the pound and the yen respectively, while oil prices tumbled, with West Texas Intermediate losing 1.58% to $50.10 a barrel and Brent falling 1.01% to $56.53 a barrel.
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| | Newspaper Round Up | | Tuesday newspaper round-up: Bank of England, Capital buffers, Bank regulation The Bank of England will be made to show that it is providing taxpayers with value for money under reforms unveiled today by George Osborne. Mark Carney, the governor, has agreed to open the Bank's books to the National Audit Office (NAO), bringing it into line with government departments, the BBC and the royal household. MPs have long questioned its exemption from scrutiny, with some suggesting that access might have provided a warning of Britain's vulnerability to a global financial crash. - The Times The Federal Reserve has announced final draft rules that require the eight leading US banks, who are deemed to be systemically important, to hold extra capital buffers totalling $200bn. - Financial Times
Tighter bank regulation may end up destabilising financial markets and trigger a larger crisis than the 2008 crash, a report has warned.Researchers at the Systemic Risk Centre (SRC) at the London School of Economics said that regulation forcing banks to take the same approach to risk may end up making financial markets less safe. - The Daily Telegraph
Officials at the City watchdog have visited the offices of Barclays more than twice as often as any other bank, an indication of the concern among regulators about the lender and its scandal-hit investment bank. Barclays met supervisors at the Financial Conduct Authority 186 times last year, 101 more visits than were performed on HSBC, the second most frequently seen bank, according to figures released under a Freedom of Information request. - The Times
An unprecedented coalition of the UK's most eminent scientific, medical and engineering bodies says immediate action must be taken by governments to avert the worst impacts of climate change. But the joint communiqu, issued by 24 academic and professional institutions, also says that tackling global warming would drive economic progress, benefit the health of millions by cutting air pollution and improve access to energy, water and food. - The Guardian
The Bank of England is offering extra help to any lenders struggling to cope with the changes to the deposit protection limits, raising the prospect of flexibility for those banks and building societies caught by surprise by the rule change. Banks had complained that they had just finished training staff and printing advisory material to explain to customers that their deposits were guaranteed up to £85,000 - only for the deposit protection limit to be cut at the start of this month, forcing them to re-do much of the work. - The Daily Telegraph |
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