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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 led lower by mining shares as commodity prices drag The FTSE 100 was dragged lower by a slump in mining stocks following weak Chinese data and broadly bearish sentiment in the commodities market.
Glencore and Anglo American were the top fallers after Investec said the challenging environment for the sector calls into question the equity value of the mining companies. The note from the brokerage came as Glencore agreed to sell its Araguaia nickel project to Horizonte Minerals for a discount price of $8m.
Other miners, including BHP Billiton and Rio Tinto, also declined as commodity prices dropped and a report showed an 8.8% decrease in Chinese industrial profits in August, adding to concerns about the nation's slowdown.
"None of the major mining companies could avoid the chaos of the panic selling, and it will be a long time before confidence is restored," said IG's market analyst David Madden.
Elsewhere in Asia, Bank of Japan governor Haruhiko Kuroda said inflation would not reach 2% without further improvement in wages, employment and prices.
In European news, pro-independence parties in Spain's Catalonia region won an absolute majority in regional elections but they fell just short of getting 50% of the vote, winning 1.9m out of 4m ballots cast. Spain's central government in Madrid said it would challenge the move towards independence but the pro-independence parties are expected to form a coalition.
US data, interest rates
Personal spending in the US rose 0.4% in August from a month earlier, the Commerce Department revealed, beating forecast of 0.3% growth. Personal incomes climbed 0.3% in August, worse than the 0.4% rise expected.
"Admittedly, the more modest 0.3% month-on-month increase in personal income last month is a little discouraging at first glance," said Paul Ashworth, chief US economist at Capital Economics.
"But there are few signs of weakness linked to the labour market. Wages and salaries increased by a strong 0.5% month-on-month in August, following an even bigger 0.6% month-on-month rise in July."
Another report showed US pending home sales fell unexpectedly last month to reach their lowest-level in five months. The index from the National Association of Realtors decreased 1.4% month-on-month in August to 109.4 compared with analysts' expectations for a 0.4% gain and with a 0.5% increase in the previous month.
Meanwhile, Federal Reserve official William Dudley said the central bank will "probably" raise interest rates later this year. Speaking at an event in New York hosted by The Wall Street Journal the president of the New York Fed said, "I think that the economy is doing pretty well", although his expectation was for growth in the second half to be "a little bit weaker" than the first half.
His remarks mirrored that of Fed Chair Janet Yellen's last week when she said a rate hike was expected this year unless the global economic outlook worsened.
Companies
SABMiller jumped following a Sunday Times report that Anheuser-Busch InBev SA could bid about $106m for the company much sooner than originally anticipated. Talks between the two brewing giants are said to have been warming up and carried on over the weekend.
Vodafone dropped after ending talks with Liberty Global about a merger of the European businesses.
BAE Systems gained after Bernstein upgraded the stock 'outperform' from 'market perform', with an unchanged price target of 545p.
Ultra Electronics rallied after JP Morgan Cazenove upgraded the stock to 'overweight' from 'neutral'.
Home Retail Group advanced after Cantor Fitzgerald upgraded the company to 'buy' from 'hold'. |
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| | Market Movers
techMARK 3,006.07 -1.78%
FTSE 100 5,958.86 -2.46%
FTSE 250 16,614.16 -1.11%
FTSE 100 - Risers
SABMiller (SAB) 3,634.50p +1.30%
BAE Systems (BA.) 444.50p +1.02%
ITV (ITV) 250.50p +0.93%
National Grid (NG.) 898.00p +0.80%
Morrison (Wm) Supermarkets (MRW) 155.50p +0.78%
Sky (SKY) 1,041.00p +0.68%
Associated British Foods (ABF) 3,251.00p +0.31%
FTSE 100 - Fallers
Glencore (GLEN) 68.62p -29.42%
Anglo American (AAL) 552.70p -10.09%
BHP Billiton (BLT) 964.10p -6.03%
Antofagasta (ANTO) 481.00p -4.94%
Standard Chartered (STAN) 627.80p -4.91%
Vodafone Group (VOD) 207.20p -4.80%
Rio Tinto (RIO) 2,111.00p -4.78%
ARM Holdings (ARM) 940.00p -4.28%
Johnson Matthey (JMAT) 2,415.00p -3.94%
Barclays (BARC) 245.20p -3.82%
FTSE 250 - Risers
Home Retail Group (HOME) 136.30p +2.10%
Renishaw (RSW) 2,011.00p +1.98%
Ultra Electronics Holdings (ULE) 1,684.00p +1.51%
Poundland Group (PLND) 279.20p +1.42%
Saga (SAGA) 204.00p +1.34%
Ophir Energy (OPHR) 82.30p +1.29%
Mitie Group (MTO) 287.40p +1.23%
AO World (AO.) 161.80p +1.12%
Big Yellow Group (BYG) 719.00p +0.98%
Ted Baker (TED) 3,195.00p +0.95%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 74.75p -26.35%
Allied Minds (ALM) 334.10p -12.08%
Tullow Oil (TLW) 157.60p -7.02%
Worldwide Healthcare Trust (WWH) 1,700.00p -6.90%
Just Retirement Group (JRG) 162.40p -6.67%
Premier Oil (PMO) 63.10p -6.03%
Vedanta Resources (VED) 429.10p -5.78%
John Laing Group (JLG) 190.00p -4.95%
Weir Group (WEIR) 1,114.00p -4.46%
CLS Holdings (CLI) 1,795.00p -4.22%
FTSE TechMARK - Risers
BATM Advanced Communications Ltd. (BVC) 20.75p +2.47%
Filtronic (FTC) 6.62p +1.92%
Torotrak (TRK) 6.85p +1.86%
SDL (SDL) 329.00p +1.86%
Consort Medical (CSRT) 934.50p +1.03%
NCC Group (NCC) 270.25p +0.84%
Ricardo (RCDO) 900.00p +0.61%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.30 +0.37%
Dialight (DIA) 630.00p +0.32%
FTSE TechMARK - Fallers
Oxford Biomedica (OXB) 8.35p -2.34%
RM (RM.) 162.00p -1.82%
Oxford Instruments (OXIG) 566.50p -1.56%
XP Power Ltd. (DI) (XPP) 1,575.00p -1.44%
Skyepharma (SKP) 359.75p -0.90%
Sepura (SEPU) 172.50p -0.72%
E2V Technologies (E2V) 227.50p -0.66%
Innovation Group (TIG) 39.00p -0.64%
Spirent Communications (SPT) 74.25p -0.34%
KCOM Group (KCOM) 89.75p -0.28% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks tumble as disappointing Chinese data fuels fear of slowdown European equity markets began the week on a downbeat note, extending early falls as growth concerns resurfaced following disappointing Chinese data as auto stocks continued to slide.
The benchmark Stoxx Europe 600 index closed down 2.13%, while France's CAC 40 fell 2.76% and Germany's DAX lost 2.12%.
In the UK, a dismal performance by mining stocks led the FTSE down, as Glencore flirted with an all-time low throughout the session, closing 16.25% in the red.
"The DAX and huge losses go hand in hand at the moment," said Spreadex's financial analyst Connor Campbell.
"Akin to the FTSE's commodity stocks, the European auto sector has been the biggest weight for the region's indices, with a near 9% plunge by Volkswagen leading the downward charge."
Elsewhere, the euro was broadly flat against the dollar but fell 0.38% against the yen and gained 0.19% against the pound, while Brent crude fell 2.27% to $47.52 a barrel.
Chinese data disappoints
Data released by the National Statistics Bureau showed Chinese industrial profits fell 8.8% on the year in August compared with a 2.9% drop in July and marking the biggest drop since records began in 2011.
On a quiet day data-wise in the Eurozone, investors across the Atlantic had plenty to analyse.
According to the Department of Commerce, US personal incomes grew 0.3% month-on-month in August, while personal spending climbed 0.4% against analysts' expectations for a 0.4% and 0.3% increase, respectively.
Personal consumption expenditure remained flat on a month-on-month basis, while it edged up from 1.2% to 1.3% compared with the same period in 2014.
"As the deflationary pressure from the stronger dollar and lower commodity prices begins to fade next year, we expect core inflation to accelerate," said Paul Ashworth, chief US economist at Capital Economics.
"The domestic economy is approaching full employment, which will put more upward pressure on both wages and prices."
A report hinting the International Monetary Fund is likely to downgrade its global economic growth estimates due to slower expansion in emerging economies also weighed on sentiment.
"A forecast of 3.3% growth this year is no longer realistic," said IMF head Christine Lagarde.
"A forecast of 3.8% for next year neither. We will however remain above the 3% threshold."
In company news, Royal Dutch Shell dropped 2.60% after the company said it was stopping its offshore explorations in Alaska.
Banks were in focus after Swiss competition commission said it was probing UBS, HSBC, Deutsche Bank, Julius Baer, Barclays, Morgan Stanley and Mitsui over possible price fixing in the precious metals market. |
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| | US Market Report | | US open: Dow slides 120 points as Chinese data disappoints yet again US equity markets fell early on Monday, as Wall Street remained wary of the slowdown in the Chinese economy.
Shortly before 1500 BST, the Dow Jones Industrial Average was down 119 points to 16,195.95, while the S&P 500 and the Nasdaq were respectively 14 and 24 points lower.
Chinese data disappoints
Asian markets began the week on a mixed note, as sluggish data from China tempered sentiment in the region.
According to the country's National Bureau of Statistics, industrial profits in August declined 8.8% year-on-year compared with a 2.9% drop in the previous month, registering their biggest drop since records began in October 2011.
Elsewhere, European markets were in the red, while oil prices fell, with West Texas Intermediate losing 2.37% to $44.64 a barrel, and Brent down 2.23% to $47.54 a barrel.
The dollar lost 0.20% against the yen but gained 0.30% and 0.15% against the euro and the pound respectively, while gold futures tumbled 1.28% to $1,130.90.
PCE falls flat in August
On the economic data front, according to the Department of Commerce, US personal incomes grew 0.3% month-on-month in August, while personal spending climbed 0.4% against analysts' expectations for a 0.4% and 0.3% increase, respectively.
Personal consumption expenditure remained flat on a month-on-month basis, while it edged up from 1.2% to 1.3% compared with the same period in 2014.
"As the deflationary pressure from the stronger dollar and lower commodity prices begins to fade next year, we expect core inflation to accelerate," said Paul Ashworth, chief US economist at Capital Economics.
"The domestic economy is approaching full employment, which will put more upward pressure on both wages and prices."
Chicago Fed president Charles Evans, a voting member of the FOMC, will give a speech on monetary policy in Milwaukee at 1800 BST, while San Francisco Fed president John Williams, also a voting FOMC member, will speak in Los Angeles at 2200 BST.
In company news, oil giant Royal Dutch Shell saw its US-listed shares fall 1.99% after it said it would stop exploration near Alaska.
Danish drug-maker Novo Nordisk gained 3.08% after the Food and Drug Administration approved the company's Tresiba insulin product. |
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| | Broker Tips | | Broker tips: Glencore, BAE Systems, Speedy Hire Glencore shares tumbled on Monday on the back of a fairly downbeat assessment from Investec, which warned the stock holds little value for shareholders.
"The challenging environment for mining companies leads us to the question of how much value will be left for equity holders if commodity prices do not improve," the brokerage said.
"Despite the drastic action that management has announced recently (even assuming all of the measures are successfully implemented), a spot price scenario results in an almost complete collapse in forward earnings such that no meaningful estimate of shareholder value can be derived under our price-to-earnings methodology."
It also said that Anglo American was also in a weaker position than rivals BHP Billiton and Rio Tinto if commodity prices remain depressed.
"While it offers upside potential for equity holders on our base case assumptions, applying spot pricing suggests a meaningfully negative impact on equity value."
Bernstein upgraded BAE Systems to 'outperform' from 'market perform', with an unchanged price target of 545p.
It said the recent pullback in BAE's share price has widened the valuation gap compared to US peers considerably, without any corresponding deterioration of fundamentals.
The broker added that it had an incrementally more positive view towards BAE's outlook for growth in international markets, buoyed by recent news of Typhoon sales to Kuwait, and the potential for further orders to come from Saudi Arabia and Oman.
The analysts also said there was upside potential for contract wins for aircraft and ground combat vehicles, though timing the timing was difficult to estimate.
Investec downgraded Speedy Hire to 'hold' from 'buy' and put its 100p price target under review until it gets more clarity on a turnaround after the company issued its second profit warning in three months.
"This is another disappointing update and underlines the scale of the task faced by the new management. Given the scale of the downgrades and level of uncertainty, it is difficult to ascribe a target at present," it said.
The brokerage cut its full-year 2016 earnings per share estimate by 58% to 1p and its full-year 2017 forecast by 55% to 1.5p. |
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