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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: Stocks start lower, weighed down by losses in China A sharp drop in Chinese stocks overnight weighed on risk sentiment early on as investors prepared themselves for the US central bank's policy announcement on Wednesday and a wave of corporate results in the UK, US and over on the continent this week.
As of 08:33 BST, the FTSE 100 was down by 22.78 points or 0.35% to 6,557.03, while the pan-European DJ Stoxx 600 lost 1.26%.
"Any suggestion that the Fed remains on track to raise interest rates in September, the next planned meeting, is likely to stoke quite a reaction in the markets. Investors remain in denial despite the repeated warnings from Yellen that they intend to raise rates this year.
"This makes earnings increasingly important as the current levels, not far from record highs, can only be justified by ultra-loose monetary policy or strong fundamentals. The absence of both could prompt investors to begin looking elsewhere for value. Already a lot of people consider there to me far more value in Europe and weaker earnings in the US will not help that," said Craig Erlam, Senior Market Analyst at Oanda.
The Shanghai Stock Exchange Composite Index closed 8.48% lower at 3,725.558 - its largest single day decline since June 2007. On Friday, the country's State Council announced a widening in the Yuan's trading band, which could lead a modest depreciation, analysts at Deutsche Bank said.
No less than 168 S&P 500 companies are due to report this week while over in Europe, 192 Stoxx 600 companies were due to update investors.
Oil majors in particular were expected to garner a great deal of attention. According to the Financial Times, the world's biggest energy companies have delayed $200bn-worth of investments in new projects after the latest sell-off in oil markets.
Troubling news-flow out of Greece
Investors were also keeping an eye on events in the troubled Mediterranean nation amid reports of delays to the arrival of technical staff from its Troika of creditors. Weekend reports that a clique of hard-left members of the ruling Syriza party had at one point planned to raid the euro cash reserve in the country's mint and arrest the central bank Governor led to harsh criticism of the current government.
IFO index, US durable goods orders on today's agenda
In the economic sphere, markets will be watching today for the latest German business confidence index courtesy of the IFO institute and the latest data on the euro area's money supply.
The latter will help investors gauge how bank lending to the economy is holding up.
Later in the day, the Confederation of British Industry will release the results of its Industrial Trends survey for July, followed by the latest data on orders for durable goods Stateside.
RyanAir falls, Merlin Entertainments crashes
RyanAir posted a 25% jump in first-quarter profit on the back of rising traffic, as it said full-year profit should be towards the upper end of its guidance range. The budget carrier reported profit after tax of €245m in the three months to 30 June, up from €197m in the same period last year, on revenue of €1.65bn from €1.50bn, as traffic grew 16% to 28m. In addition, the company said it was raising its full-year 2016 traffic target by 3m to 103m.
The part-owner of The Economist, Pearson Group said it is negotiating to sell its 50% stake in the publication. Pearson, which last week sold the Financial Times to Japanese company Nikkei, said it was in discussions but "there is no certainty that this process will lead to a transaction."
Shares Merlin Entertainment plunged after it warned full-year earnings would be about half of what it made last year, following a roller-coaster crash at its Alton Towers theme park in June. The company said in a half-year trading update while mid-year results were on track, the crash which seriously injured four people had impacted trade during the critical summer period. After the incident the company closed its Alton Towers resort and suspended marketing.
Shares in consumer goods company Reckitt Benckiser gained after it raised its like-for-like revenue growth target for the full year, as it posted a jump in first-half pre-tax profit amid broad-based growth across its businesses. Pre-tax profit for the six months ended 30 June came in at £912m from £838m in the same period last year, on net revenue of £4.36bn, up 4% from 2014. Like-for-like revenue growth at constant currencies was 5%, ahead of analysts' expectations for a gain of around 3.6%.
Insurer Hiscox reported a lift in pre-tax profit for the first half of the year, but warned mother nature could impact its business. The FTSE 250 firm reported pre-tax profits for the first six months up 8.4% to £135.1m from £124.6m, and said it benefited from a lack of major catastrophes.
Food producer Cranswick reported an increase in revenue and underlying sales in the first quarter, as trading was in line expectations. In a short statement released on Monday, the group said revenue in the quarter to the end of June rose 8% year-on-year, as volume grew strongly across the company's divisions. |
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| | Market Movers
techMARK 3,152.94 -0.42%
FTSE 100 6,561.75 -0.27%
FTSE 250 17,399.02 -0.57%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 3,861.00p +3.12%
BHP Billiton (BLT) 1,150.00p +2.36%
Anglo American (AAL) 795.80p +2.29%
Fresnillo (FRES) 631.00p +2.02%
Weir Group (WEIR) 1,526.00p +1.73%
Reckitt Benckiser Group (RB.) 6,000.00p +1.56%
Rio Tinto (RIO) 2,430.00p +1.23%
BT Group (BT.A) 467.30p +1.08%
Centrica (CNA) 274.40p +0.92%
Royal Dutch Shell 'B' (RDSB) 1,781.50p +0.65%
FTSE 100 - Fallers
Merlin Entertainments (MERL) 400.00p -5.46%
Experian (EXPN) 1,151.00p -2.87%
Pearson (PSON) 1,195.00p -1.97%
Persimmon (PSN) 1,915.00p -1.95%
Hargreaves Lansdown (HL.) 1,157.00p -1.87%
Barratt Developments (BDEV) 606.50p -1.78%
Ashtead Group (AHT) 924.50p -1.65%
Aberdeen Asset Management (ADN) 359.10p -1.62%
easyJet (EZJ) 1,697.00p -1.62%
3i Group (III) 550.00p -1.61%
FTSE 250 - Risers
Centamin (DI) (CEY) 55.60p +2.87%
CLS Holdings (CLI) 1,885.00p +2.00%
Pets at Home Group (PETS) 289.60p +1.86%
Acacia Mining (ACA) 239.00p +1.70%
Bwin party Digital Entertainment (BPTY) 110.10p +1.38%
Card Factory (CARD) 326.60p +1.33%
Polymetal International (POLY) 452.40p +0.82%
Drax Group (DRX) 256.80p +0.82%
Ophir Energy (OPHR) 111.90p +0.81%
Pace (PIC) 367.60p +0.74%
FTSE 250 - Fallers
Fidelity China Special Situations (FCSS) 138.00p -6.50%
Vedanta Resources (VED) 417.00p -3.54%
Ocado Group (OCDO) 397.90p -2.95%
Evraz (EVR) 101.50p -2.87%
Shawbrook Group (SHAW) 333.20p -2.29%
Zoopla Property Group (WI) (ZPLA) 236.00p -2.28%
Jimmy Choo (CHOO) 167.00p -2.22%
Genus (GNS) 1,417.00p -2.14%
Ashmore Group (ASHM) 271.30p -2.09% |
| | UK Event Calendar | | Monday 27 July
INTERIMS
Dialight, Fevertree Drinks, Hiscox Limited (CDI), One Media IP Group, Reckitt Benckiser Group, Senior, Torchmark Corp., XP Power Ltd. (DI)
INTERIM DIVIDEND PAYMENT DATE
Aukett Swanke Group , Compass Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Durable Goods Orders (US) (13:30)
IFO Business Climate (GER) (09:00)
IFO Business Climate (GER) (09:30)
IFO Current Assessment (GER) (09:00)
IFO Current Assessment (GER) (09:30)
IFO Expectations (GER) (09:00)
IFO Expectations (GER) (09:30)
M3 Money Supply (EU) (09:00)
Q2
Torchmark Corp.
GMS
Empyrean Energy
FINALS
Nakama Group
ANNUAL REPORT
Park Group, Redcentric
AGMS
Alpha Returns Group, Capital Management & Investment, China Nonferrous Gold Limited (DI), Clear Leisure, EPE Special Opportunities, Westside Investments
TRADING ANNOUNCEMENTS
Petra Diamonds Ltd.(DI), PJSC Novorossiysk Commercial Sea Port GDR (Reg S)
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
FINAL DIVIDEND PAYMENT DATE
Aurora Investment Trust, Fuller Smith & Turner, Lombard Risk Management, Montanaro European Smaller Companies Trust, ULS Technology
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Shares take downbeat cue from Asia; earnings, Fed in focus European stocks fell in early trade, taking their cue from a downbeat session in Asia where the Shanghai Composite fell more than 8%, as investors sifted through another batch of corporate news.
At 0855 BST, the benchmark Stoxx Europe 600 index was down 1.2%, France's CAC 40 was off 1.1% and Germany's DAX was down 1%.
The Shanghai Composite tumbled on Monday as data showed industrial profits fell 0.3% in June from a year earlier and as commodity prices retreated. The disappointing figures followed on from Friday's weak manufacturing data, compounding fears of a slowdown in the world's second-largest economy.
"European shares are starting the new trading week on a negative note as Chinese shares are getting hit hard again," said Markus Huber, senior analyst at Peregrine & Black. "Concerns regarding another slowdown of the Chinese economy are hurting investors' confidence. With China becoming ever more important especially for European exporters any signs of a weakening economy are very likely to negatively impact growth of countries like Germany who rely heavily on exports."
Huber said that for now, European shares appear not to have priced in any further bad news out of China which makes them vulnerable to further losses.
Shares in UBS slipped into the red despite the Swiss bank, which reported a day early, posting a better-than-expected second-quarter profit.
Budget carrier Ryanair was also under pressure after its first-quarter numbers. Although it posted a 25% jump in profit and said full-year results will be at the top ends of its guidance range, the company warned that over-capacity could weigh on average fares.
Publisher Pearson, which was in the spotlight last week after confirming the sale of FT Group to Nikkei for £844m, was also on the back foot after saying it was in discussions regarding the sale of its 50% stake in The Economist.
Reckitt Benckiser bucked the trend, trading up after the consumer goods company raised its like-for-like revenue growth target for the full year and posted a jump in first-half pre-tax profit amid broad-based growth across its businesses. As well as earnings, investors were looking ahead to the Federal Reserve's Open Market Committee meeting that will take place on Tuesday and Wednesday, culminating in a rate decision. Although no change in rates is expected until at least September, all eyes will be on the Fed's guidance for any further clues on the timing of a rate hike. |
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| | US Market Report | | US close: Weakness in commodities and biotech weighs on Wall Street Wall Street ended the session and the week firmly in negative territory as investors reacted to a weak batch of corporate results and a spate of weaker data both at home and abroad.
The Dow Jones Industrial Average ended the day lower by 0.92% to 17,568.53, while the S&P 500 retreated 1.07% to finish at 2,079.65 and the Nasdaq Composite lost 1.12%, closing at 5,088.63.
For the week, the Dow Industrials lost a cumulative 2.9% and the S&P 500 slipped 2.2%, although the latter did manage to set a new record intraday high on Monday.
Figures out overnight revealed Chinese manufacturing sector activity was at a 15-month low in July, which dragged commodities and their associated stocks broadly lower.
By Industrial groups the worst performers were: Non-ferrous metals (-9.9%), Biotechnology (-5.14%) and Industrial metals (-4.04%).
Ahead of next week's Federal Reserve policy meeting the central bank released its own staff's forecasts prepared for the 16-17 June FOMC. The decision to publish the confidential materials was taken after it was learned that they had been inadvertently leaked.
It was revealed that Fed staff had projected an average value for the value of the Fed Funds rate in the fourth quarter of 2015 of 0.35%. In the opinion of Barclays that might be consistent with either a Fed hike in September, followed by a pause in December, or two Fed hikes before the year was out.
As of 24 July economists canvassed by Bloomberg were putting the odds of a September hike at 50%.
Amazon jumps, Biogen in the dumps
On Thursday, the Dow Jones Industrials had turned negative for the year in the wake of disappointing earnings from Caterpillar - linked to weakness in China - and American Express, which joined IBM and Apple in the list of companies whose results were met by a lukewarm reception.
"The strong dollar has been mentioned a lot in the earnings statements of the big US corporates," said CMC Markets' analyst Jasper Lawler.
"But there are also clearly some issues over domestic demand looking at the poor retail sales numbers as well as demand overseas from China with its manufacturing sector seen slumping again in July."
In company news, Amazon jumped 9.8% after the e-commerce giant reported an unexpected profit and a sharp hike in sales for the second quarter late on Thursday.
Shares in Biogen on the other hand cratered 22% after the company cut its 2015 profit forecasts.
Starbucks rose 1.29% after the coffee retailer reported an 18% jump in quarterly revenue, exceeding analysts' expectations.
Health benefit group Anthem declined 2.08% after announcing it had agreed an agreement to purchase sector peer Cigna in a $54.2bn cash and stock deal.
Weak data, but economists stick to their forecasts
Sales of new single-family homes in the US dropped 6.8% in June to an annual rate of 482,000, the slowest pace in seven months, according to figures released by the Commerce Department.
Despite those figures Barclays kept its tracking estimate for second quarter US GDP growth at 3.0%.
Meanwhile, activity at US factories picked up slightly in July according to Markit's purchasing managers' index, which rose to a reading of 53.8 points from a 20-month low of 53.6 in June.
The dollar was broadly flat against the yen, but rose 0.03% and 0.08% against the pound and the euro respectively, while gold futures edged higher by 0.38% to $1,099.
West Texas Intermediate crude futures slid 0.99% to to $47.97 a barrel on NYMEX. |
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| | Newspaper Round Up | | Monday newspaper round-up: Co-op Bank, British aerospace, Morrisons Shareholders in The Co-operative Bank are considering buying the remaining 20 per cent stake as they look for ways to recover their investment. Several American hedge funds are understood to be considering making an offer for The Co-operative Group's holding as they explore a potential future sale or merger of the business with one of Britain's growing band of challenger banks. - The Times
Nearly two thirds of British aerospace engineers believe that their companies face productivity problems that prevent the industry from competing properly overseas. According to research from BDO, the accountancy firm, and the Institution of Mechanical Engineers, the problem is contributing to a wider struggle in what is a demanding global aerospace sector. - The Times
Buyers at Morrisons have attempted to secure one-off payments from about 20 suppliers in a potential breach of a government-backed code, with only "a handful" blocked by the supermarket's legal team. A government-backed code prohibits one-off demands and states that supermarkets must not "vary any supply agreement retrospectively", except in very specific circumstances. - The Guardian
UK households can withstand a rise in interest rates as they have been "toughened up" by the financial crisis, according to a new report. With the Bank of England just months away from increasing rates for the first time in nine years to tackle inflationary pressures, some experts fear that mortgage holders could struggle to meet higher repayments. - The Daily Telegraph
A secret cell at the Greek finance ministry hacked into the government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the "flick of a button". The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe's creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation. - The Daily Telegraph Tourists are returning to Greece in big numbers, easing fears that capital controls and anti-austerity protests would undermine one of the cash-strapped country's few successful industries in the middle of the summer season. - The Wall Street Journal | | |
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