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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: Stocks slide as investors weigh US data London stocks were on the back foot on Thursday as a "weak" report on US durable goods orders backed the Federal Reserve's argument to keep interest rates unchanged. US durable goods orders dropped 2% in August following a 1.9% increase a month earlier, although it was better than the 2.3% fall expected. Excluding transportation, orders were flat compared to forecasts for a 0.1% increase.
"Today's weak durable goods figures are perhaps a sign that Fed chair Janet Yellen was right to sit on her hands with regard to the interest rate rise," said Dennis de Jong, managing director at UFX.com.
"Though it's no fault of her own, the air of anticipation and uncertainty of when the increase will happen is keeping investors guessing, much of the reason for the underwhelming figures.
Yellen may shed further light on the timing of the first rate hike in nine years when speaks in Massachusetts at a lecture after the markets close.
Mixed data on both sides of the Atlantic
In other US economic data, the Commerce Department revealed new home sales jumped 5.7% in August compared to a month ago following a 5.4% rise in July. It smashed analysts' projections for a 1.6% gain.
Initial jobless claims rose to 267,000 in the week to 19 September from 264,000 the previous week, compared to forecasts of 272,000.
"We view the steady trend in continuing unemployment claims and historically low level of overall jobless claims as indicative of solid labour market separations through mid-September," according to Barclays Research analysts.
In the Eurozone, GfK's forward-looking index on German consumer confidence fell to 9.6 in October from 9.9 a month earlier, missing forecasts of 9.8.
The IFO's business confidence index, however, rose to 108.5 from 108.3, beating estimates of 107.9.
Closer to home, a British Bankers' Association revealed UK net mortgage lending hit a five-year high in August. Loans for house purchases came in at 46,473 in August, up from 46,315 in July and 40,454 a year ago.
In company news, Lloyds Banking Group surged on the news that fund manager Alex Wright tipped the bank to become a dividend heavyweight over the next two years. That sent stock prices up over 1.7%. Relx benefitted from Bank of America recommending buying shares of the information-solutions provider, which lifted the stock up 1.68%.
Next advanced after Nomura upgraded the retailer to 'buy' from 'neutral' and lifted the price target to 8,000p from 7,600p.
Rolls-Royce dropped as EDF Energy announced the engineering group is set to supply heat exchangers to be used at the Hinkley Point C nuclear power station.
Poundland plunged after making an application to place new shares on the market and raise approximate £50m ahead of its acquisition of 99p Stores.
Smiths Group tumbled as CEO Philip Bowman prepared to step down after announcing the full-year results.
Thomas Cook gained as the travel company said it was on track to meet full-year profit targets.
Market Movers
techMARK 2,996.31 -0.87%
FTSE 100 5,961.49 -1.17%
FTSE 250 16,514.53 -0.87% |
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| | FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 3,946.00p +5.51%
Fresnillo (FRES) 621.00p +3.41%
Imperial Tobacco Group (IMT) 3,465.00p +1.94%
Lloyds Banking Group (LLOY) 73.84p +1.22%
Whitbread (WTB) 4,649.00p +1.11%
Johnson Matthey (JMAT) 2,398.00p +0.84%
National Grid (NG.) 869.10p +0.82%
Persimmon (PSN) 2,090.00p +0.77%
Relx plc (REL) 1,077.00p +0.65%
British American Tobacco (BATS) 3,535.00p +0.58%
FTSE 100 - Fallers
Glencore (GLEN) 98.61p -9.62%
Smiths Group (SMIN) 975.00p -6.16%
Anglo American (AAL) 624.60p -5.09%
Old Mutual (OML) 184.00p -4.27%
Rolls-Royce Holdings (RR.) 650.50p -4.27%
CRH (CRH) 1,759.00p -4.04%
Aberdeen Asset Management (ADN) 301.80p -3.45%
Standard Chartered (STAN) 650.00p -2.67%
Ashtead Group (AHT) 930.00p -2.62%
Intertek Group (ITRK) 2,361.00p -2.56%
FTSE 250 - Risers
Evraz (EVR) 69.00p +5.67%
Genus (GNS) 1,492.00p +5.00%
Zoopla Property Group (WI) (ZPLA) 212.10p +3.56%
Tate & Lyle (TATE) 569.50p +3.26%
Jimmy Choo (CHOO) 140.80p +3.07%
Thomas Cook Group (TCG) 119.00p +2.67%
Card Factory (CARD) 381.70p +2.39%
AO World (AO.) 160.20p +2.23%
Foxtons Group (FOXT) 242.80p +2.19%
Riverstone Energy Limited (RSE) 940.00p +2.12%
FTSE 250 - Fallers
Allied Minds (ALM) 375.00p -14.97%
Poundland Group (PLND) 268.00p -13.44%
Petra Diamonds Ltd.(DI) (PDL) 87.25p -11.87%
Drax Group (DRX) 240.10p -7.40%
Euromoney Institutional Investor (ERM) 1,001.00p -5.92%
Tullow Oil (TLW) 169.60p -5.62%
Morgan Advanced Materials (MGAM) 279.50p -5.35%
Premier Oil (PMO) 63.90p -5.33%
Just Retirement Group (JRG) 171.80p -5.24%
Brewin Dolphin Holdings (BRW) 271.60p -4.87%
FTSE TechMARK - Risers
RM (RM.) 173.50p +2.06%
Skyepharma (SKP) 353.00p +1.58%
Dialight (DIA) 627.00p +1.05%
Ricardo (RCDO) 910.00p +0.89%
Oxford Biomedica (OXB) 8.92p +0.22%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.38 +0.02%
FTSE TechMARK - Fallers
Triad Group (TRD) 32.50p -8.45%
Spirent Communications (SPT) 74.25p -4.19%
E2V Technologies (E2V) 224.50p -2.50%
Oxford Instruments (OXIG) 557.00p -1.42%
CML Microsystems (CML) 347.50p -1.42%
BATM Advanced Communications Ltd. (BVC) 19.00p -1.30%
KCOM Group (KCOM) 89.00p -1.11%
SDL (SDL) 331.25p -0.97%
Gresham Computing (GHT) 110.00p -0.90%
Torotrak (TRK) 6.87p -0.79% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks tumble as BMW speculation puts brakes on DAX European equity markets tumbled on Thursday, as car-makers stocks continue to decline amid speculations of breaching pollution limits. The benchmark Stoxx Europe 600 index closed down 2.12%, while France's CAC 40 and Germany's Dax lost 1.93% and 1.92% respectively.
The euro was broadly flat against the yen, but rose 0.77% against the dollar and gained 0.69% against the pound.
Mixed data in Germany
On the economic data front, the Ifo business climate index rose to a seasonally-adjusted 108.5 from 108.3 in August, ahead of expectations for a reading of 108.
The business expectations index increased to 102.3 from 102.2 and better than estimates of 101.5. The current assessment index, however, fell to 114 in September from 114.8 in August, missing expectations for a reading of 114.7.
"The German IFO business survey reported an improvement in economic sentiment in September, but this survey was done before the VW scandal broke and it is quite likely given the repercussions this event is likely to have on German supply chains that if the survey were done now the result would likely be very different," said Michael Hewson from CMC Markets.
However, according to the forward-looking GfK survey, the German consumer sentiment index declined from 9.9 in September to 9.6 in October, slightly below analysts' expectations for a 9.8 reading.
Across the Atlantic, homes sold at the fastest rate in seven years in August, while US durable goods declined less than expected last month.
Orders for long-lasting goods declined 2% in August compared with the 2.3% drop analysts had forecast and with the 1.9% increase registered in the previous month.
Meanwhile, according to the Department of Labor, new unemployment benefits claims rose by 3,000 to 267,000 in the week to 19 September, compared with analysts' expectations for a 272,000 reading.
Investors will now focus on Janet Yellen's speech, with the Fed Chairwoman set to speak at 2200 BST in her first public appearance since the US central bank opted to keep interest rates unchanged last week.
Car stocks slow down
In company news, BMW tumbled 5.60% following a report in German newspaper Auto Bild that one of its diesel vehicles exceeded EU pollution limits by 11 times.
"The scrutiny that the automotive sector is under is having a particularly detrimental effect on the DAX, as 10% of the equities in the index come from this sector and even more disturbing is the fact that its index weighting is even higher," said Alastair McCaig, senior market analyst at IG.
"The ripple effect from this will reach the four corners of Germany, as it is estimated that as many as one in six work in the automotive industry or an ancillary business."
Volkswagen slid 0.38% after the company's chief executive Michael Winterkorn announced his resignation on Wednesday on the back of the emissions scandal. A successor is expected to be chosen at a meeting on Friday.
Monte dei Paschi di Siena was firmly on the front foot after it settled with Nomura over a derivative trade called "Alexandria" that hit the bank's profits. |
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| | US Market Report | | US open: Dow plunges over 200 points ahead of Yellen's speech US stocks were firmly in the red early on Thursday, ahead of a widely anticipated speech from Federal Reserve chairwoman Janet Yellen. Shortly after 1500 BST, the Dow Jones Industrial Average was down 204 points to 16,075.62, while the S&P 500 and the Nasdaq were 24 and 62 points lower respectively.
Yellen will address the University of Massachusetts Amherst at 2200 BST in what will be her first speech since the US central bank opted against hiking interest rates last week.
"Investors don't know what to make of the market landscape at the moment, with the indices lurching between losses and gains throughout the morning," said Spreadex's financial analyst Connor Campbell.
"The lack of a consistent trading direction is likely a product of a market cocktail containing a dash of post-Fed statement confusion, a shot of lingering China-fear, and a sprinkling auto-sector sickness, a brew that leaves few economic anchors for investors to cling to."
Better-than-expected data
According to the Labor Department, new claims rose by 3,000 to 267,000 in the week to 19 September, compared with analysts' expectations for a 272,000 reading.
Meanwhile, the average of new claims over the last four weeks fell by 750 to a seasonally adjusted 271,750, the report added.
The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly report and, as such, is seen as a more accurate indicator of the health of the labour market.
Meanwhile, according to the Commerce Department, orders for long-lasting goods declined 2% in August compared with the 2.3% drop analysts had forecast and with the 1.9% increase registered in the previous month.
Excluding transportation, however, orders were unchanged, while orders for core capital goods fell 0.2%
"The downward revision to inventories in July and flat reading for August suggest an even sharper drag on GDP growth from private inventory investment in the third quarter than had been tracking ahead of the report," analysts at Barclays said.
"This larger anticipated drag from inventories offset the boost from better equipment investment. On net, our third quarter GDP tracking estimate fell one-tenth to 2.2%."
There was more positive news from the housing market, as new home sales rose 5.2% in August, reaching their highest rate since 2008.
Elsewhere, Asian equity markets struggled for direction on Thursday, as Japanese stocks were dragged lower by a slump in car stocks and tepid economic data, while European stocks were in the red.
The dollar was broadly flat against the pound but declined 0.75% against the yen and 0.68% against the euro.
Gold futures climbed 1.19% to $1,145.00, while oil prices were mixed, with West Texas Intermediate losing 0.43% to $44.29 a barrel, while Brent rose 0.17% to $47.83 a barrel.
In company news, while Nike, Bed Bath and Beyond and Jabil Circuit will publish results after the closing bell. |
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| | Broker Tips | | Broker tips: Tate&Lyle, Asos, Premier Farnell Tate & Lyle was the standout gainer on the FTSE 250 after Liberum upgraded the stock to 'buy' from 'sell' and lifted its price target to 670p from 505p. "While history is disappointing - four profit warnings and a collapse of around 40% in pre-tax profits since full-year 2014 - we see early signs of change and scope for significant upside," it said.
Liberum said the key question is whether management's strategy can deliver visible, sustainable earnings growth beyond FY17.
In order to determine the potential, it benchmarked Tate's operations with US-based Ingredion, which is the group's closest peer. It said the results are reassuring.
"As we suspected, many facets of Tate's operations compare favourably to Ingredion. In our view, Tate's historical difficulties are grounded in execution and strategic ambition, areas that management is working to address."
Liberum upgraded ASOS to 'buy' from 'hold', saying three things have changed its view of the stock.
Firstly, it believes that the investment in infrastructure coming on stream should drive operating leverage over the next few years.
Secondly, it pointed to the recent sharp fall in the shares and said this tilts the risk/reward balance back towards reward. It noted the shares have dropped 39% since their April 2015 highs, meaning they now trade at a 16% discount to the long-term price-to-earnings average.
Finally, Liberum said that with easing comps over the next few reporting periods, it expects the company to report strong sales growth, which has historically been the main driver of the share price.
Premier Farnell was under pressure after Citigroup downgraded the stock to 'sell' from 'neutral' and cut its price target to 90p from 140p following the company's profit warning last week.
The bank said it was downgrading its full-year 2016 earnings before interest and amortisation estimate to £74m, in line with management guidance, which implies a 20% contraction in second-half EBITA year-on-year. |
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