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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 fall ahead of UK jobs data, after China cuts yuan further UK stocks fell ahead of the release of jobs data that may provide clues on the timing of an interest rate increase by the Bank of England. Analysts expect the data from the Office for National Statistics to show UK jobless claims rose 1,000 in July, compared to 7,000 a month earlier. The unemployment rate in the three months through June is forecast to hold at 5.6%. Average weekly earnings are predicted to reveal a 2.3% year-on-year increase during the quarter while the employment change is expected to have fallen by 55,000 jobs.
The BoE last week decided to keep interest rates unchanged at 0.5%. Governor Mark Carney said the timing of a first interest rate hike was drawing closer but the exact time could not be predicted and will be "data dependent".
Meanwhile the People's Bank of China has moved again to cut its national currency, the yuan, by another 1.6%, after Tuesday's 1.9% devaluation. The action was the biggest two-day lowering of the yuan against the dollar in more than two decades.
China's commerce ministry said the lower rate would help struggling exporters. However, the news sent commodity stocks lower including Rio Tinto and Anglo American.
"The weight of the commodity drag means the UK's fairly significant, and rate-hike relevant, jobs data might struggle to make itself heard this Wednesday," said Connor Campbell, financial analyst at Spreadex. "Wage growth, claimant count change and the unemployment rate are all expected to be the same-or-worse than their last set of figures, and will likely just exacerbate the FTSE's misery as the morning goes on."
Adding pressure on commodities, Chinese industrial production data on Wednesday morning came in worse than expected. Output rose 6% year-on-year in July, well below forecasts for an increase of 6.6% and the previous month's 6.8% gain.
Chinese retail sales climbed 10.5% in July, compared to analysts' projections for a 10.6% rise in line with June's growth.
"The data are weaker than expected which will undoubtedly add to speculation that policymakers are trying to engineer a sustained devaluation of the renminbi in order to shore up growth," said Julian Evans-Pritchard, China economist at Capital Economics.
In company news, Unilever slumped after Goldman Sachs downgraded the stock to 'sell' from 'neutral' and cut its target to 2,560p from 2,820p.
G4S declined after the outsourcing and security group reported a 12.5% drop in first-half profit, reflecting restructuring charges and one-off costs.
Reckitt Benckiser was in the red after being ordered to license the K-Y personal-lubricant brand in Britain to a competitor for eight years after the UK competition regulator found that its purchase of the label could lead to price increases. |
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| | Market Movers
techMARK 3,161.52 -1.48%
FTSE 100 6,550.82 -1.71%
FTSE 250 17,398.41 -1.52%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 3,975.00p +0.58%
FTSE 100 - Fallers
Glencore (GLEN) 181.40p -5.03%
Unilever (ULVR) 2,798.00p -3.91%
Burberry Group (BRBY) 1,479.00p -3.71%
Anglo American (AAL) 750.00p -3.20%
ARM Holdings (ARM) 930.00p -3.07%
Rio Tinto (RIO) 2,479.00p -2.92%
International Consolidated Airlines Group SA (CDI) (IAG) 533.50p -2.91%
BHP Billiton (BLT) 1,116.00p -2.83%
Fresnillo (FRES) 634.50p -2.83%
Antofagasta (ANTO) 556.00p -2.80%
FTSE 250 - Risers
CLS Holdings (CLI) 1,940.00p +3.80%
Nostrum Oil & Gas (NOG) 587.00p +2.53%
AO World (AO.) 132.40p +1.85%
Centamin (DI) (CEY) 55.55p +1.65%
Zoopla Property Group (WI) (ZPLA) 258.20p +1.53%
Riverstone Energy Limited (RSE) 950.00p +1.23%
Just Retirement Group (JRG) 189.90p +1.12%
Saga (SAGA) 218.20p +1.07%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 473.60p +0.94%
TR Property Inv Trust (TRY) 311.50p +0.61%
FTSE 250 - Fallers
ICAP (IAP) 470.40p -6.20%
Interserve (IRV) 589.00p -5.84%
Lonmin (LMI) 39.52p -5.00%
Hays (HAS) 159.80p -4.77%
Ocado Group (OCDO) 358.10p -4.30%
Man Group (EMG) 159.50p -4.03%
Evraz (EVR) 90.95p -3.60%
Vedanta Resources (VED) 438.20p -3.48%
Hunting (HTG) 466.60p -3.48%
Investec (INVP) 566.50p -3.33%
FTSE TechMARK - Risers
KCOM Group (KCOM) 96.25p +0.79%
Innovation Group (TIG) 33.00p +0.76%
Dialight (DIA) 553.50p +0.64%
XP Power Ltd. (DI) (XPP) 1,713.00p +0.32%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.25 +0.27%
FTSE TechMARK - Fallers
UCW Limited (UCW) A$0.01 -7.69%
Oxford Instruments (OXIG) 915.00p -1.61%
BATM Advanced Communications Ltd. (BVC) 18.00p -1.37%
Spirent Communications (SPT) 79.75p -0.93%
Promethean World (PRW) 38.50p -0.65%
E2V Technologies (E2V) 225.00p -0.55%
NCC Group (NCC) 236.75p -0.42%
Consort Medical (CSRT) 930.00p -0.32% |
| | UK Event Calendar | | Wednesday 12 August
INTERIMS
Balfour Beatty, Capital & Regional, G4S, Interserve, Lookers, New Europe Property Investments, OJSC Magnitogorsk Iron & Steel Works GDR (Reg S), Sampo OYJ, TBC Bank Joint Stock Company GDR (REGS)
TRADING ANNOUNCEMENTS
Volution Group (WI)
Q2
OJSC Magnitogorsk Iron & Steel Works GDR (Reg S), TBC Bank Joint Stock Company GDR (REGS)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Industrial Production (EU) (10:00)
MBA Mortgage Applications (US) (12:00)
Treasury Budget Statement (US) (15:00)
UK ECONOMIC ANNOUNCEMENTS
Claimant Count Rate (09:30)
Unemployment Rate (09:30)
GMS
LMS Capital, Oilex Ltd.
EGMS
HICL Infrastructure Company Ltd, PJSC Novorossiysk Commercial Sea Port GDR (Reg S)
AGMS
Alpha Real Trust Ltd., Tata Steel Ltd GDR (Reg S), Yujin International Ltd. (DI)
FINAL DIVIDEND PAYMENT DATE
Babcock International Group, Charles Stanley Group, Invesco Asia Trust, Montanaro UK Smaller Companies Inv Trust, Speedy Hire, Vedanta Resources
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks fall as China concerns grow, with resources and autos under pressure European stocks were in the red again as worries about a Chinese slowdown gathered pace after the central bank there further devalued the yuan, with basic resources and autos under pressure. At 0900 BST, the benchmark Stoxx Europe 600 was down 2.2%, France's CAC 40 was 2.6% weaker and Germany's DAX was down 2.4%.
The People's Bank of China cut its currency again, by another 1.6% following Tuesday's 1.9% devaluation. This was the biggest two-day lowering of the yuan against the dollar in more than two decades.
"Who are the winners and losers? Chinese exporters stand to gain, at the potential expense of other manufacturers around the world, including Germany, Japan and many other Asian countries. With the exception of precious metals, commodities and commodity producers are also suffering as the devaluation crimps the dollar buying power of Chinese importers," said Rebecca O'Keeffe, head of investment at Interactive Investor.
"Taking a longer-term view, the Chinese devaluation demonstrates clearly how monetary policy around the world is currently being executed more through exchange rates rather than interest rates. Europe and Japan are actively seeking to devalue their currencies via QE, while the Fed and MPC are tacitly accepting a revaluation with talk of potential rate hikes.
"The PBOC's surprise move makes the possibility of rate hikes from the Fed and MPC far more difficult and policy-makers at both central banks will have to think very carefully about the health of their respective manufacturing sectors before making any move towards higher interest rates."
In terms of sectors, autos and basic resources took a beating, while luxury goods stocks such as Burberry and LVMH fell sharply due to their exposure to China.
The Stoxx 600 basic resources index dropped 3.5%, while the corresponding index for autos and parts fell 1.8%.
Shares in Credit Suisse lost ground following reports the bank has entered settlement negotiations with the New York attorney general and the Securities and Exchange Commission over allegations of wrongdoing in private trading venues.
German consumer goods group Henkel slumped. The company posted a 14% rise in second-quarter sales and core profit, but organic sales, which account for half of total sales, slowed in the quarter.
Shares in German utility group E.ON were flat after it reported a drop in first-half profit.
In London, security and outsourcing group G4S fell after its first-half revenue figures missed expectations.
Education and publishing company Pearson was on the back foot after saying it has agreed to sell its 50% stake in The Economist Group for £469m in cash.
Unilever was under the cosh after Goldman Sachs downgraded the stock to 'sell' from 'neutral' and cut its price target to 2,560p from 2,820p. It said the company is negatively positioned with respect to the changes in the retail environment as the e-commerce channel grows. |
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| | US Market Report | | US Close: Stocks fall on Chinese currency tumble US equities closed lower on Tuesday after China devalued its currency by lowering the daily fix to the dollar by 1.9%.
The Dow Jones Industrial Average closed down 1.2%, the S&P 500 fell 0.96% and the Nasdaq ended 1.27% lower.
Analysts noted the Dow Jones Industrial Average hit its so-called 'death cross', which is viewed by some as a signal to sell.
The 'death cross' is the moment when the index's 50-day moving average slows below its 200-day moving average.
Tuesday data
Labour Productivity slowed again for the second quarter at 1.3%, slightly slower than the expected 1.6%, but better than the average in recent years.
Capital Economics labelled productivity growth the "number one economic problem."
"The bigger story is the almost unprecedented weakness of productivity, not just since the recession but going all the way back to 2004 when the IT-related boost faded," researchers said in a note.
Wholesale inventory figures for June showed 0.9% month on month growth, coming in above consensus expectations of 0.4% growth.
Part of this boost, researchers at Capital Economics said, was due to a downward revision to May data.
The dollar was 0.35% higher against the yen, 0.2% higher against the euro and 0.2% up against the pound, while gold futures were up 0.36% at $1,108.10.
Oil prices slid, with West Texas Intermediate losing 3.6% to $43.39 a barrel, while Brent shed 2.2% to $49.32 a barrel.
Google boosted after name change
In company news, Google closed up by 4.27% after the technology giant announced it built a new umbrella company and called it Alphabet.
Shares in insurer Symetra Financial Corporation were up by 6.71% after Japanese company Sumitomo said it planned to buy the company in deal valued about $3.8bn.
Apple was performed poorly as China's currency moves prompted concerns about Chinese demand for iPhones, which are more expensive than its rivals, especially local brands. Shares in that tech stock fell by 5.2% by the end of the day.
Meanwhile metals producer Freeport-McMoRan slumped 12.27%, after recovering on Monday. In a move that would significantly dilute its value, the resources company said it would issue up to $1bn in common shares.
S&P 500 - Risers
Marathon Petroleum Corporation (MPC) $55.86 +4.88%
Google Inc. Class C (GOOG) $660.78 +4.27%
Google Inc. (GOOGL) $690.30 +4.10%
Range Resources Corp. (RRC) $38.55 +2.53%
PulteGroup Inc. (PHM) $20.55 +2.14%
Valero Energy Corp. (VLO) $70.43 +2.07%
Tesoro Corp. (TSO) $109.43 +1.93%
General Growth Properties Inc. (GGP) $28.04 +1.85%
Apartment Investment & Management Co. (AIV) $39.93 +1.81%
Delta Airlines Inc. (DAL) $47.10 +1.68%
S&P 500 - Fallers
Freeport-McMoRan Inc (FCX) $10.22 -12.27%
United States Steel Corp. (X) $19.48 -8.93%
Avon Products Inc. (AVP) $6.11 -7.98%
Symantec Corp. (SYMC) $21.34 -6.85%
Allegheny Technologies Inc. (ATI) $21.03 -6.74%
CF Industries Holdings Inc. (CF) $57.27 -6.04%
Alcoa Inc. (AA) $9.48 -5.95%
Harman International Industries Inc. (HAR) $111.97 -5.34%
Apple Inc. (AAPL) $113.55 -5.15%
Denbury Resources Inc. (DNR) $4.06 -5.14%
Dow Jones I.A - Risers
Verizon Communications Inc. (VZ) $47.60 +0.78%
Wal-Mart Stores Inc. (WMT) $71.93 +0.63%
American Express Co. (AXP) $81.34 +0.10%
Home Depot Inc. (HD) $117.69 +0.08%
Travelers Company Inc. (TRV) $105.89 +0.07%
Dow Jones I.A - Fallers
Apple Inc. (AAPL) $113.55 -5.15%
Walt Disney Co. (DIS) $108.00 -2.70%
Caterpillar Inc. (CAT) $78.04 -2.64%
Intel Corp. (INTC) $28.99 -2.19%
Goldman Sachs Group Inc. (GS) $201.70 -2.07%
General Electric Co. (GE) $25.71 -2.02%
Cisco Systems Inc. (CSCO) $28.03 -1.96%
Microsoft Corp. (MSFT) $46.41 -1.94%
E.I. du Pont de Nemours and Co. (DD) $53.39 -1.84%
3M Co. (MMM) $148.48 -1.82%
Nasdaq 100 - Risers
Google Inc. Class C (GOOG) $660.78 +4.27%
Google Inc. (GOOGL) $690.30 +4.10%
Express Scripts Holding Co (ESRX) $89.50 +0.82%
Sba Communications Corp. (SBAC) $124.32 +0.70%
Amazon.Com Inc. (AMZN) $527.46 +0.66%
Liberty Interactive Corporation QVC Group (QVCA) $30.57 +0.49%
Tractor Supply Company (TSCO) $93.47 +0.39%
CH Robinson Worldwide Inc (CHRW) $69.84 +0.37%
Adobe Systems Inc. (ADBE) $83.90 +0.33%
Ross Stores Inc. (ROST) $53.82 +0.17%
Nasdaq 100 - Fallers
Symantec Corp. (SYMC) $21.34 -6.85%
Apple Inc. (AAPL) $113.55 -5.15%
Baidu Inc. (BIDU) $167.93 -5.04%
Micron Technology Inc. (MU) $17.88 -4.99%
Wynn Resorts Ltd. (WYNN) $99.53 -4.30%
Sandisk Corp. (SNDK) $59.10 -3.16%
Nxp Semiconductors Nv (NXPI) $96.28 -3.02%
Yahoo! Inc. (YHOO) $36.03 -3.01%
Keurig Green Mountain Inc (GMCR) $52.97 -3.00% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: China devalues again, Oil slide, GE sale, insider trading ring China stunned the world's financial markets on Wednesday by devaluing the yuan for the second day running, sparking fears that the world's second largest economy is in worse shape than investors believed. The currency hit a four-year low on Wednesday after the People's Bank of China set the yuan's daily midpoint even weaker than in Tuesday's devaluation, with the bank having said that Tuesday's move was a "one-off depreciation". - The Guardian The price of oil continued its slide after China, the world's biggest importer, devalued its currency and new Opec figures pointed to a widening global supply glut. On a dramatic day for commodity markets, the latest 3.4% fall in prices to $48.71 for a barrel of Brent crude - close to its lowest level in six years - came as traders warned that the 2% devaluation would raise the cost of imports for China, where a stock market plunge and a slowing economy have hit demand. - The Times
General Electric has taken another big step in unwinding its finance arm by agreeing an $8.5bn sale of its healthcare finance unit to Capital One bank. Capital One will pay a 6% premium to the value of the unit's loans to acquire the business, in a move that will help the ambitious second-tier US bank become a bigger player in commercial lending. - The Financial Times
McDonald's plans to shrink by 59 locations this year in the US, the first time in at least 45 years that the fast food restaurant has closed more US stores than it has opened, as the company cuts costs and tries to revive sales. The world's biggest restaurant chain has not reduced the net number of its US stores since at least 1970. - The Telegraph
An insider trading ring has hacked into stores of corporate press releases to profit from the market-moving news, according to the US authorities. Prosecutors have charged nine people they believe form part of an insider trading scheme that made $30m by acting on about 800 releases from roughly 150,000 documents stolen from the servers of three firms that distribute company announcements: Business Wire, MarketWired and PR Newswire. - The Telegraph
The head of Marks & Spencer's troubled womenswear division, Frances Russell, has left the retailer after a review of the company's leadership team. The departure comes just three weeks after Steve Rowe stepped in to take control of the group's general merchandise division following the surprise exit of M&S lifer John Dixon. Russell will be replaced by Jo Jenkins, who currently heads the retailer's lingerie and beauty division. - The Telegraph
China's decision to devalue the renminbi may be the start of a new, debilitating round of currency wars. Brazil, which coined the term in 2010 when China was last suppressing the exchange rate, immediately warned that Beijing's move could hurt its exports, despite a 24% depreciation this year. - The Times
China yesterday carried out the biggest devaluation of the renminbi in two decades to boost its slowing economy, marking an escalation of international "currency wars", surprising markets and risking a clash with Washington. The 1.9% downward move by the central bank was its biggest one-day change since 1994 - and since China abandoned its tight currency peg for a managed float in 2005. It pushed the renminbi's "daily fix" to Rmb6.2298 against the dollar, compared with a Rmb6.1162 rate the day before. The biggest shift this year had been a 0.16% adjustment. - The Financial Times
China's authorities took the shock decision to devalue the yuan for the first time in modern history yesterday, as Beijing attempts to fend off lower growth. The yuan, which is also known as the renminbi, saw its largest one-day fall in more than two decades as the People's Bank of China (PBoC) decided to weaken the currency by almost 2% against the US dollar. Analysts took the surprise move as a signal that China's policy-makers had become afraid of slower growth. Data released over the weekend showed that exports crumbled in July - falling by 3.8% compared with the same month a year earlier. - The Telegraph
Greece has agreed the broad terms of a new three-year bail-out deal with its international creditors, though experts warned that severe austerity demands mean the country's fiscal targets remained "utterly unachievable". Technical details of the deal were finalised in the early hours of Tuesday morning, paving the way for Greece to unlock around €85bn in new loans. The measures include increases in the retirement age, opening up the energy and pharmaceutical industries and new taxes on shipping firms. More measures will follow in October. - The Telegraph
Spain's government was on Tuesday facing a potentially damaging scandal after the country's interior minister was revealed to have held a private meeting in his office with Rodrigo Rato, the disgraced former head of the IMF at the centre of multiple fraud investigations. Jorge Fernández Díaz, the interior minister, said he would give parliament a full explanation of the meeting with Mr Rato, but his officials have insisted the talks were "exclusively personal". - The Financial Times |
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