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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 rebound as investors shrug off Chinese woes FTSE 100 snapped ten consecutive days of declines on Tuesday, shrugging off a second day of falls in Chinese stocks on worries over slowing growth in the world's second largest economy.
The Shanghai Composite dropped 7.6% on Tuesday after losing 8.5% a day earlier. China's so-called "Black Monday" saw global stocks plunge with the FTSE 100 ending down 4.67%.
US equities also took a hammering on Monday. The Dow Jones Industrial Average ended down 3.6%, while the Nasdaq closed 3.8% lower and the S&P 500 slid 3.9%.
As a result some analysts pushed back their expectations for an interest rate hike by the Federal Reserve.
"We move our call to for the first rate hike from September 2015 to March 2016," said Barclays analysts.
International shares have taken a hit since the People's Bank of China decided to devalue to the yuan on 11 August. Investors are concerned that countries and businesses that rely heavily on business in China will be hurt by the nation's shrinking economy.
"In seeking to nudge its currency lower Chinese authorities appear to have triggered widespread concerns that all is not as well as previously thought with the world's second biggest economy, and in the process triggered a widespread reassessment of valuations in some of the most sensitive sectors to the business and commodity cycle," said Michael Hewson, chief market analyst at CMC Markets.
However, he said the recent slump in the market is perhaps "long overdue". He noted that since 2009 the FTSE100 is still up over 50%, the DAX is up 150% and the Nasdaq is up 250%.
"For the last six years investors have been spoilt by central bankers who have been extraordinarily successful in pushing stock markets to record highs with the use of large scale loose monetary policy, while the Chinese economy has been growing at a fairly decent clip."
In company news, Tesco gained on reports that the supermarket chain has received three separate binding bids for its South Korean unit from a consortium of Affinity Equity Partners and KKR & Co, Carlyle Group LP, and MBK Partners.
The Royal Bank of Scotland Group advanced despite losing a bid against a US regulator's lawsuit accusing it of misleading Fannie Mae and Freddie Mac into buying $32bn of mortgage-backed securities ahead of the financial crisis.
Petrofac rallied after reporting strong first half revenues despite a slump in the oil sector.
Poundland edged higher after the Competition and Markets Authority said it was minded to approved the acquisition of rival 99p Stores. |
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| Market Movers
techMARK 2,964.41 +1.60%
FTSE 100 6,031.30 +2.25%
FTSE 250 16,508.58 +1.82%
FTSE 100 - Risers
BHP Billiton (BLT) 1,020.00p +5.43%
RSA Insurance Group (RSA) 517.50p +4.55%
Lloyds Banking Group (LLOY) 76.71p +4.42%
St James's Place (STJ) 893.00p +3.96%
Glencore (GLEN) 143.15p +3.81%
Aviva (AV.) 476.40p +3.72%
Antofagasta (ANTO) 552.00p +3.56%
London Stock Exchange Group (LSE) 2,453.00p +3.46%
Prudential (PRU) 1,406.00p +3.38%
Barratt Developments (BDEV) 609.00p +3.22%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,068.00p -1.93%
TUI AG Reg Shs (DI) (TUI) 1,105.00p -0.54%
FTSE 250 - Risers
Regus (RGU) 266.00p +6.78%
Henderson Group (HGG) 257.60p +6.53%
Poundland Group (PLND) 348.50p +5.61%
Premier Oil (PMO) 93.55p +5.29%
Cranswick (CWK) 1,615.00p +5.14%
Wood Group (John) (WG.) 573.50p +4.46%
Tullow Oil (TLW) 189.40p +4.35%
Entertainment One Limited (ETO) 298.00p +4.20%
Man Group (EMG) 152.20p +4.18%
National Express Group (NEX) 294.20p +3.99%
FTSE 250 - Fallers
Fisher (James) & Sons (FSJ) 970.50p -4.01%
Lonmin (LMI) 36.00p -3.64%
Home Retail Group (HOME) 146.40p -2.14%
Euromoney Institutional Investor (ERM) 1,040.00p -1.89%
Fidelity China Special Situations (FCSS) 110.50p -1.34%
LondonMetric Property (LMP) 157.30p -1.07%
Polymetal International (POLY) 468.50p -0.74%
Lookers (LOOK) 153.20p -0.52%
Wizz Air Holdings (WIZZ) 1,758.00p -0.51%
Petra Diamonds Ltd.(DI) (PDL) 146.40p -0.48%
FTSE TechMARK - Risers
XP Power Ltd. (DI) (XPP) 1,625.00p +4.17%
Oxford Instruments (OXIG) 858.50p +3.12%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 205.10 +2.08%
Triad Group (TRD) 34.50p +1.47%
NCC Group (NCC) 228.50p +1.22%
Consort Medical (CSRT) 929.50p +1.03%
Skyepharma (SKP) 260.00p +0.87%
KCOM Group (KCOM) 89.50p +0.85%
SDL (SDL) 373.50p +0.74%
Sepura (SEPU) 161.00p +0.62%
FTSE TechMARK - Fallers
Spirent Communications (SPT) 78.25p -0.95%
Innovation Group (TIG) 33.50p -0.74%
Microgen (MCGN) 104.50p -0.48%
CML Microsystems (CML) 357.50p -0.42%
Dialight (DIA) 543.50p -0.37% |
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INTERIMS
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | European stocks rose on Tuesday, recovering from sharp falls in the previous session that were sparked by fears of a slowdown in China, shrugging off another heavy selloff on the Shanghai Composite.
At 0900 BST, the benchmark Stoxx Europe 600 index was up 2.3%, while France's CAC 40 was 2.1% higher and Germany's DAX was up 2.2%.
It was a different picture in Asia, however, where the Shanghai Composite closed down 7.6% and the Nikkei 225 ended 4% lower.
Meanwhile, oil prices recovered from steep declines on Monday, with West Texas Intermediate up 1.5% at $38.80 a barrel and Brent crude up 1.3% at $43.25.
The dollar also staged a recovery. The currency was 0.5% higher against the euro, 0.9% firmer versus the yen and flat against the pound.
"Investors will be hoping for some calm to be restored in today's session, but with the underlying fragility of the market clear for all to see, we could witnessing a dead cat bounce," said Mike McCudden, head of derivatives at Interactive Investor.
"China is still under severe pressure and with talk that the US may still raise rates this year, investors could be in for a rude awakening."
On the corporate front, shares in RSA Insurance surged in London after the company said it has received a revised proposal from Zurich Insurance regarding a possible all cash offer at 550p per share.
BHP Billiton rose. Although the mining giant reported a 52% drop in first-half underlying profit on the back of tumbling commodity prices and a slowdown in China, investors welcomed the company's commitment to cutting costs and its progressive dividend policy.
Antofagasta was also on the front foot. The Chilean copper miner posted a large drop in first-half pre-tax profit as revenue fell on the back of declining copper and by-product prices, but the results were not as bad as analysts had feared.
Elsewhere, shares in Syngenta rose sharply following media reports that US-based Monsanto has upped its bid for the Swiss company to around $47bn. rose on Tuesday, recovering from sharp falls in the previous session that were sparked by fears of a slowdown in China, shrugging off another heavy selloff on the Shanghai Composite.
At 0900 BST, the benchmark Stoxx Europe 600 index was up 2.3%, while France's CAC 40 was 2.1% higher and Germany's DAX was up 2.2%.
It was a different picture in Asia, however, where the Shanghai Composite closed down 7.6% and the Nikkei 225 ended 4% lower.
Meanwhile, oil prices recovered from steep declines on Monday, with West Texas Intermediate up 1.5% at $38.80 a barrel and Brent crude up 1.3% at $43.25.
The dollar also staged a recovery. The currency was 0.5% higher against the euro, 0.9% firmer versus the yen and flat against the pound.
"Investors will be hoping for some calm to be restored in today's session, but with the underlying fragility of the market clear for all to see, we could witnessing a dead cat bounce," said Mike McCudden, head of derivatives at Interactive Investor.
"China is still under severe pressure and with talk that the US may still raise rates this year, investors could be in for a rude awakening."
On the corporate front, shares in RSA Insurance surged in London after the company said it has received a revised proposal from Zurich Insurance regarding a possible all cash offer at 550p per share.
BHP Billiton rose. Although the mining giant reported a 52% drop in first-half underlying profit on the back of tumbling commodity prices and a slowdown in China, investors welcomed the company's commitment to cutting costs and its progressive dividend policy.
Antofagasta was also on the front foot. The Chilean copper miner posted a large drop in first-half pre-tax profit as revenue fell on the back of declining copper and by-product prices, but the results were not as bad as analysts had feared.
Elsewhere, shares in Syngenta rose sharply following media reports that US-based Monsanto has upped its bid for the Swiss company to around $47bn. |
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| | US Market Report | | US stocks ended a volatile session off their worst levels but still sharply lower on the back of a major selloff that saw Chinese shares plunge to their lowest point since 2007.
The Dow Jones Industrial Average, which had fallen by over 1,000 points at the open, ended down 588.47 points or 3.6%, while the Nasdaq closed 3.8% or 179.79 points weaker. The S&P 500, meanwhile, slumped 77.65 points or 3.9%, formally entering correction territory.
Chinese stock plunge
China's 'Black Monday' rattled global equity markets, with stocks tumbling the most since 2007 as recent government support measures failed.
The Shanghai Composite closed 8.49% lower, while the Shenzhen Composite was down 7.7% and the start-up focused Chinext was down 8.08%.
The latest move by the People's Bank of China saw the central bank announce that local government-managed pension funds will be able to invest in the markets for the first time, in an attempt to pour billions of yuan into its equity markets.
"The Chinese government's intervention into stock markets has proven counter-productive," said CMC Marketsanalyst Jasper Lawler.
"Forcing institutions to buy and banning them from selling has just added to the panic of retail investors who make up 80% of stock ownership in China.
"China in the past eighteen months has been reminiscent of fables told about America during the 1920s before the Great Depression."
Elsewhere, the dollar plunged 3.9% against the yen on Monday to its lowest level since 2007, and by the time of the US close was down 2.8%. The greenback lost 0.6% against the pound and 2.1% against the euro. Gold futures slid 0.5% to $1,1540.
Aside from China, the timing of the next rate hike by the Federal Reserve was also on investors' minds. On Monday, speaking at the 2015 Public Pension Funding Forum in Berkeley, California, Federal Reserve Bank of Atlanta President Dennis Lockhart said he expects a rate hike "sometime this year".
However, he did not repeat his call for a move in September. Instead, he said the hike would be a gradual process in which rates would remain low "for quite some time."
Oil prices tumble
Oil prices continued to slump in the wake of the rout in Asian markets, with West Texas Intermediate down 5.7% at $38.13 a barrel and Brent crude down 6.4% at $42.54.
On the corporate front, growing concerns over China led to widespread losses. Alibaba, which had tumbled nearly 15% during the session, ended off its lows, down 3.4%, while Yahoo, which has a stake in the Chinese e-commerce giant, closed 4.3% weaker.
Netflix tumbled 6.6% after saying on Monday that it will team up with Japan's SoftBank Group when launching its video streaming service next month.
Elsewhere, Google dropped 3.2%, Facebook slid 4.2% and Tesla lost 4.7%.
Utilities company AGL Resources bucked the trend, ending up 28.4% on news it is being acquired by Southern Company in a $12bn deal. |
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| | News Paper Round-Up | | Tuesday newspaper round-up: Black Monday, Asia divergence, Apple, Shell-BG deal off? A global stock market sell-off and tumbling oil prices have increased fears that some of this year's largest takeover deals are at risk of falling apart - including Royal Dutch Shell's $70bn bid for UK rival BG Group. Over the past week, the gap between the agreed price of several takeovers and the market price of the target companies' shares has widened, as funds that specialise in profiting from these situations have taken fright. - The Financial Times
Chinese stocks sank again on Tuesday with the two main indices opening more than 6% lower, but other markets across Asia began to diverge from the mainland rout. A recovery in US stock futures helped offset another big drop for Chinese shares, with futures pointing to a gain of 2% for the S&P 500 and Dow Jones Industrial average. - The Financial Times
Black Monday reviews
A tumultuous fall in Chinese equities dubbed "Black Monday" by Xinhua, the official state news agency, triggered a ferocious sell-off in international markets yesterday as fear spread of the potential impact of slowing growth in China on the global economy. The market turmoil appeared to reduce the chances of the US Federal Reserve lifting interest rates next month and could even spur it to keep them on hold until 2016. - The Financial Times
A collapse in the value of Chinese shares sent tremors through stock markets yesterday, triggering the ugliest day of global trading since the depths of the financial crisis eight years ago. Billions of dollars were wiped off the value of indices across the world in a day of frenetic selling during which the Shanghai composite plunged 8.5pc, its worst daily fall since 2007. - The Daily Telegraph
Sterling and the dollar took a pounding on currency markets yesterday as speculation mounted that central banks in Britain and the US would respond to the stock market rout by freezing interest rates until well into next year. The pound suffered its most volatile trading day against the euro in six years as traders quashed any idea of the Bank of England lifting the cost of borrowing from its record low of 0.5 per cent this year. - The Times
France and Germany have shrugged off a rout in world markets over China's slowing growth, with French President Francois Hollande saying that the global economy was "strong enough" to withstand any such downturn. "The world economy is strong enough to also have prospects for growth which are not simply linked to the situation in China," Mr Hollande told reporters on the sidelines of a meeting in Berlin with German Chancellor Angela Merkel, who added: "I'm convinced that China will do everything it can to stabilise its economic situation." - The Telegraph
Other news
Claims management companies have driven a spike in complaints about packaged banks accounts and a stubbornly high number of payment protection insurance grievances, according to the latest figures from the Financial Ombudsman Service. The overall number of complaints to the ombudsman rose 8pc to 173,994 new cases in the first six months of the year. Just over half of the cases opened by the ombudsman were upheld. - The Telegraph
Apple chief executive Tim Cook halted a 13pc drop in the tech giant's stock on Monday after taking the unusual step of emailing a media organisation to reassure investors about the business's Chinese operation. With Chinese stocks plunging, Apple shares slumped as much as 13% to a year-low of $92 amid a sell-off in the broader US market before Cook took the rare step of commenting on the health of Apple's business midway through a financial quarter. Before the opening bell on Wall Street on Monday, he wrote to CNBC to reveal that iPhone activations in China had accelerated over the past few weeks. - Telegraph
British companies including Royal Dutch Shell, Amec and Weir risk being outmanoeuvred by European rivals in a race for projects worth up to $185 billion in Iran's shattered oil industry. Despite the prospect of sanctions against the country being lifted as early as next spring, fewer than ten UK executives joined Philip Hammond, the foreign secretary, at the reopening of the British embassy in Tehran at the weekend. - The Times |
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