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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: Analysts see further downside risks for copper UK stocks finished the session with slight gains, tracking the ebb and flow of trading Stateside as analysts continued to weigh in with their opinions on the US Federal Reserve's decision on 17 September to stay put.
Investors were also digesting remarks from various Fed officials over the weekend.
The Footsie finished 4.60 points up on the day at 6,108.71.
In a very critical vein, on Saturday the President of the St.Louis Fed, James Bullard, said in a speech: "Why do the committee's policy settings remain so far from the normal when the objectives have essentially been met? The committee has not, in my view, provided a satisfactory answer to this question."
Bullard was not a voting member of the FOMC in 2015.
"[The St.Louis Fed president's] record on voting for rate rises isn't exactly a compelling one given he was pushing for a rise in rates in 2013, before changing his mind," Michael Hewson, chief market analyst at CMC Markets UK pointed out.
Closer to home, in remarks to the Journal, BoE Deputy Governor Sir John Cunliffe said the economic picture points to the next move on monetary policy being up, although it also looks like it will be a limited and gradual rise when it happens.
However, Cunliffe also commented on recent events in China, adding that: "If you put those things together, in net terms, the external environment is a bit weaker than it was."
Greek 10-year bond yields were six basis points higher to 8.26% at the end of the day following the victory by Alexis Tsipras' Syriza party in Greece's elections, on Sunday.
The outcome was greeted by financial market analysts, who said it showed the reformist camp in Athens had obtained a clear mandate from the electorate.
A splinter group of hard-left Syriza members who had triggered the vote failed to win sufficient votes for them to be represented in parliament.
Nomura sees further downside risks to copper
Analysts at Nomura on Thursday attributed the circa 22% fall in PetraDiamonds's share price since its end-July trading update to "weakness in the diamond market and higher capex spend at Cullinan." That delays the inflection point in the company's free cash flow by one year to 2017, they explained to clients. Nonetheless, it kept its target on the shares at 190p.
In other research, the broker lowered its targets on a swathe of miners, including for Glencore and Kaz Minerals. Its target on the former was cut 120p from 230p and that for the latter to 100p from 200p. Nomura made the above changes on the back of the further downside risks it had identified for the price of copper.
Shire was the top riser on the FTSE 100 after the pharmaceuticals company said its Intuniv drug has been awarded European approval for use as a non-stimulant drug for attention deficit hyperactivity disorder in children and adolescents for whom stimulants are not suitable.
RSA Insurance announced that Zurich Insurance had terminated discussions with the London-listed insurer regarding a possible offer. Zurich, which issued third-quarter results on Monday said in a statement that it has terminated talks with RSA due to the recent deterioration in the trading performance of its general insurance business. "The group's focus instead will be on taking the necessary actions to deliver on the required performance of the General Insurance business," it said.
Analysts at Credit Suisse believe the outperformance by shares of Wolseley versus the sector and the index in the last three years - thanks to its margin and market share expansion in the US - can be maintained. They see a multi-year growth opportunity in the US and up their target to 490p from 440p. The stock has also been added to the Swiss broker's European and Global Focus lists.
Standard Chartered came under pressure following a press report suggesting the bank has been involved in transactions that could put it at risk of further sanctions penalties. The Financial Times said findings of its investigation into the bank suggest it continued to seek new business from Iranian and Iran-connected companies after committing in 2007 to stop working with such clients.
Shares in industrial components manufacturer Rotork were under the cosh again as JPMorgan Cazenove downgraded the stock to 'neutral' from 'overweight' and slashed its price target to 180p from 245p following the company's profit warning last week. JPM said it's clear that end-market challenges are having a greater impact on the group than it expected and it has cut its 2015/2016/2017 earnings before interest, tax and amortisation forecasts by 16%/27%/25% as a result. |
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| | Market Movers
techMARK 3,059.54 -0.01%
FTSE 100 6,108.71 +0.08%
FTSE 250 16,893.31 -0.34%
FTSE 100 - Risers
London Stock Exchange Group (LSE) 2,444.00p +2.17%
Wolseley (WOS) 4,223.00p +2.10%
Lloyds Banking Group (LLOY) 74.23p +2.09%
Hikma Pharmaceuticals (HIK) 2,490.00p +1.84%
Smith & Nephew (SN.) 1,165.00p +1.84%
Hargreaves Lansdown (HL.) 1,223.00p +1.83%
Morrison (Wm) Supermarkets (MRW) 159.30p +1.72%
Sainsbury (J) (SBRY) 231.60p +1.45%
Taylor Wimpey (TW.) 201.70p +1.41%
Carnival (CCL) 3,506.00p +1.33%
FTSE 100 - Fallers
RSA Insurance Group (RSA) 403.30p -20.84%
Glencore (GLEN) 119.00p -5.56%
Standard Chartered (STAN) 692.10p -4.23%
Anglo American (AAL) 694.90p -3.49%
Aberdeen Asset Management (ADN) 323.00p -2.48%
Antofagasta (ANTO) 565.50p -2.42%
Fresnillo (FRES) 597.00p -2.13%
BHP Billiton (BLT) 1,076.00p -2.00%
Ashtead Group (AHT) 964.50p -1.68%
Burberry Group (BRBY) 1,361.00p -1.23%
FTSE 250 - Risers
NMC Health (NMC) 808.00p +5.41%
Kier Group (KIE) 1,435.00p +3.99%
Synergy Health (SYR) 1,550.00p +2.65%
Genus (GNS) 1,490.00p +2.55%
Daejan Holdings (DJAN) 6,100.00p +2.09%
Bwin . party Digital Entertainment (BPTY) 107.70p +1.99%
Cranswick (CWK) 1,643.00p +1.92%
OneSavings Bank (OSB) 400.40p +1.88%
National Express Group (NEX) 290.50p +1.79%
Croda International (CRDA) 2,742.00p +1.74%
FTSE 250 - Fallers
Petra Diamonds Ltd.(DI) (PDL) 101.10p -8.92%
Premier Oil (PMO) 71.60p -8.32%
Kaz Minerals (KAZ) 139.70p -7.30%
Rotork (ROR) 175.10p -6.16%
Ophir Energy (OPHR) 85.45p -5.58%
Evraz (EVR) 65.25p -5.09%
Tullow Oil (TLW) 190.70p -4.55%
AO World (AO.) 162.90p -4.12%
Vesuvius (VSVS) 364.00p -4.11%
PayPoint (PAY) 1,047.00p -4.03% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks break two-day losing streak as volatility recedes European equities markets rebounded from a two-day losing streak on Monday, with rallies across the majority of sectors pushing stocks higher.
The benchmark Stoxx Europe 600 index closed up 0.87%, while France's CAC 40 climbed 1.09% higher and Germany's DAX reversed earlier losses to gain 0.33%.
The euro was on the back foot, falling 0.86% against the dollar and losing 0.71% and 0.41% against the pound and the yen respectively, while Brent crude rose 1.60% to $48.23 a barrel.
Greece's Athex Composite, meanwhile, was off earlier lows, down 0.4% as the country's leader Alexis Tsipras emerged triumphant from a snap general election.
However, while the new coalition is expected to bring some much-needed stability to the debt-ridden country, some analysts suggested it might not necessarily be good news for all market participants.
"Considering this new coalition is being spearheaded by Alexis Tsipras, volatility traders will no doubt be hoping that a re-appearance of Yanis Varoufakis is on the cards as Europe has been noticeably more tranquil since his departure," said IG's senior market analyst Alastair McCaig.
German producer prices disappoint
On the economic data front, figures released on Monday showed producer prices in Germany fell more than expected in August, dragged lower by energy prices.
Prices were down 0.5% on the month and 1.7% lower on the year, according to Destatis, while economists had been expecting a 1.6% drop for the month. |
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| | US Market Report | | US open: Dow jumps over 130 points, as investors await raft of Fed speakers US stocks gained ground early on Monday, as Wall Street looked to overcome last week's Federal Reserve-driven volatility.
Shortly after 1500 BST, the Dow Jones Industrial Average was up 139 points to 16,523.58, while the S&P 500 and the Nasdaq were 12 and 31 points higher respectively.
All eyes on the Fed
"The Fed's negative tone following its decision not to raise rates on Thursday is weighing on investor sentiment," said Oanda's senior market analyst Craig Erlam.
"Many influential people had been calling for the Fed to leave rates unchanged due to the impact it could have on emerging markets at a time when we'd already seen a fair amount of volatility."
On Monday investors will focus on the speech of Atlanta Fed president Dennis Lockhart, who will speak in Atlanta at 1800 BST.
Lockhart, a voting member of the FOMC, is the first of a number of Fed officials speaking this week, with Fed chairwoman Janet Yellen due to address investors on Thursday.
Over the weekend, St Louis Fed president James Bullard revealed he was in favour of hiking interest rates as he believed the economy had shown sufficient signs of recovery to justify the move.
Meanwhile, John Williams, the president of the San Francisco Fed said it would be an "appropriate step" for the US central bank to hike rates before the end of the year.
Monday data
According to the figures, existing home sales declined 4.8% month-on-month to a seasonally-adjusted annual rate of 5.31m, compared with consensus for a decline to 5.50m.
Last month's reading was revised up down from 5.59m to 5.58m, which remains the highest level in eight years.
Median home prices rose 4.7% over the past 12 months to $228,700.
In company news, Apple climbed 0.84% and could be in focus after the Wall Street Journal reported some of China's most popular names in Apple's App Store were infected with malware. The dollar was broadly flat against the pound and rose 0.39% and 0.35% against the euro and the yen respectively, while gold futures slid 0.45% to $1,132.70. |
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| | Broker Tips | | Broker tips: BT Group, Rotork, Wolseley Nomura downgraded BT Group to 'neutral' from 'buy' and cut its price target to 490p from 560p.
The Japanese bank said it senses a negative shift in regulatory risk, which along with renewed public sector headwinds dents its confidence in BT achieving its target of profitable top-line growth for the medium term.
"Without top-line growth, we think further rating expansion relative to telecom peers will be difficult and we downgrade to neutral," it said.
In addition, the bank said it anticipates renewed pressure on BT's public sector revenue streams.
"We expect renewed pressure on public sector budgets with the new government's Autumn Spending Review, and, in particular, we are concerned about the impact of a new government framework designed to secure efficiencies from centralised procurement and to allocate more business to small and medium-sized suppliers."
Pricing pressure and market share loss also seem likely for BT, the broker told clients.
Shares in industrial components manufacturer Rotork were under the cosh again as JPMorgan Cazenove downgraded the stock to 'neutral' from 'overweight' and slashed its price target to 180p from 245p following the company's profit warning last week.
The analysts said that for now, the key word is uncertainty; uncertainty on the timing of current orders and deliveries, uncertainty on project cancellations and uncertainty on the outlook.
"We have previously been positive on the stock and our view on the quality of the business is unchanged but against this backdrop and with sentiment on the stock taking a significant hit following the profit warning the rarest of events for Rotork we see the near-term upside for the shares as limited."
Wolseley got a boost on Monday as Credit Suisse added the stock to its European and Global Focus Lists and raised its price target to 4,900p from 4,400p.
The Swiss broker said Wolseley has delivered a very impressive operational performance in its US division in recent years in terms of margin expansion and market share growth, and as a result the stock price performance has been noteworthy, with consistent outperformance versus sector and index over the last three years. The US division accounts for around 75% of group profit. |
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