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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 open in the red after Fed keeps rates unchanged UK stocks opened in negative territory on Friday as the market continued to process the Federal Reserve's decision to keep interest rates unchanged. The Federal Open Market Committee announced it would hold rates at 0.25% amid low inflation and the recent global market turbulence. Concerns over China's slowdown have triggered an international decrease in commodity prices, dragging prices in the US lower.
"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in a statement.
However, Richmond Fed president Jeffrey Lacker voted in favour of raising the key rate by 0.25 percentage point.
Fed Chair Janet Yellen said an interest rate hike will depend on a wide range of economic and financial indicators.
"In reality the decision to hold rates shouldn't really have been in doubt given the tepid wage growth and declining inflation, yet the fact that we only got one dissenter in the form of Jeffrey Lacker, President of the Richmond Fed suggests that there was probably a certain degree of unanimity," said Michael Hewson, chief market analyst at CMC Markets.
"While markets chose to focus on the improvement in the labour market in the lead up to this month's meeting, it was clear from the July statement with the removal of the paragraph about the stabilisation in energy prices, that the Fed was concerned about renewed weakness in this area, yet there was very little attention paid to that."
Chris Williamson, chief economist at Markit, said the Fed's decision may be seen by many as appropriate in the wake of slowing growth in China but "this is likely to be merely a temporary forestalling of the inevitable".
He said "the lack of action leaves lingering uncertainty about the outlook for US policymaking, which will no doubt fuel further volatility in the markets".
"Speculation will now shift to December as the next most likely month for US rates to start rising."
Away from the Fed, there is very little on the economic calendar on Friday following a busy week which saw UK and US inflation releases.
Company-wise, Ryanair descended as the Civil Aviation Authority began enforcement action against the airline over flight disruptions following a judgement from the European court of justice.
Petra Diamonds declined after saying full-year revenues dropped 10% to $425m on the back of lower diamond prices, as expected.
Pace advanced as it said its recommended combination with Arris Group continues to progress in line with expectations but reported that revenue is likely to be lower than previously guided.
Miners Randgold Resource and Fresnillo were top risers as the price of gold and silver rose. |
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| | Market Movers
techMARK 3,064.62 +0.14%
FTSE 100 6,171.59 -0.25%
FTSE 250 17,019.71 -0.14%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 3,854.00p +3.35%
Fresnillo (FRES) 608.00p +3.05%
AstraZeneca (AZN) 4,347.50p +1.80%
Land Securities Group (LAND) 1,246.00p +1.47%
British Land Company (BLND) 815.50p +1.24%
United Utilities Group (UU.) 889.50p +1.14%
Inmarsat (ISAT) 1,003.00p +1.06%
Sainsbury (J) (SBRY) 226.90p +0.84%
Intu Properties (INTU) 319.80p +0.69%
National Grid (NG.) 856.40p +0.68%
FTSE 100 - Fallers
Weir Group (WEIR) 1,262.00p -1.71%
Barclays (BARC) 256.25p -1.61%
Ashtead Group (AHT) 987.00p -1.60%
Rolls-Royce Holdings (RR.) 700.00p -1.48%
Glencore (GLEN) 130.35p -1.36%
BAE Systems (BA.) 438.20p -1.33%
Royal Bank of Scotland Group (RBS) 321.80p -1.29%
Standard Life (SL.) 405.90p -1.19%
3i Group (III) 468.80p -1.18%
BP (BP.) 341.70p -1.16%
FTSE 250 - Risers
Zoopla Property Group (WI) (ZPLA) 215.90p +3.65%
Barr (A.G.) (BAG) 582.00p +3.56%
Riverstone Energy Limited (RSE) 960.00p +3.23%
Poundland Group (PLND) 326.90p +2.80%
esure Group (ESUR) 255.20p +2.65%
John Laing Group (JLG) 212.70p +2.11%
Centamin (DI) (CEY) 63.65p +1.92%
Worldwide Healthcare Trust (WWH) 1,900.00p +1.88%
Brown (N.) Group (BWNG) 302.50p +1.82%
Lonmin (LMI) 22.40p +1.68%
FTSE 250 - Fallers
Premier Oil (PMO) 79.70p -5.06%
Kaz Minerals (KAZ) 153.70p -3.45%
Tullow Oil (TLW) 205.80p -2.46%
Evraz (EVR) 70.40p -1.74%
Rotork (ROR) 189.30p -1.71%
Debenhams (DEB) 75.25p -1.63%
Allied Minds (ALM) 491.20p -1.54%
Mitie Group (MTO) 281.10p -1.54%
Premier Farnell (PFL) 110.30p -1.52%
Bodycote (BOY) 608.50p -1.38%
FTSE TechMARK - Risers
Oxford Instruments (OXIG) 606.00p +2.36%
KCOM Group (KCOM) 91.50p +0.83%
Skyepharma (SKP) 348.75p +0.72%
NCC Group (NCC) 260.25p +0.68%
Spirent Communications (SPT) 76.00p +0.66%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 201.04 +0.58%
E2V Technologies (E2V) 235.00p +0.32%
SDL (SDL) 368.25p +0.07%
FTSE TechMARK - Fallers
BATM Advanced Communications Ltd. (BVC) 18.50p -1.99%
Innovation Group (TIG) 39.75p -0.62%
Consort Medical (CSRT) 920.00p -0.43%
Sepura (SEPU) 174.50p -0.29% |
| | UK Event Calendar | | Friday 18 September
INTERIM DIVIDEND PAYMENT DATE
Baronsmead VCT 3, Baronsmead VCT 4, Baronsmead VCT 5, BlackRock World Mining Trust, Concurrent Technologies, Ferrexpo, Henderson Group, IMI, LPA Group, Secure Trust Bank, Telecity Group
QUARTERLY PAYMENT DATE
BP, Real Estate Credit Investments PCC Ltd
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (EU) (09:00)
Current Account (EU) (09:00)
Leading Indicators (US) (15:00)
GMS
Vela Technologies
FINALS
Petra Diamonds Ltd.(DI)
AGMS
City of London Group, ECO Animal Health Group, Frontline Ld, Imagination Technologies Group, Kuala Innovations Limited, Legendary Investments, PetroNeft Resources, Private & Commercial Finance Group
FINAL DIVIDEND PAYMENT DATE
Aberdeen Private Equity Fund Ltd. Sterling Part Shares, Hazel Renewable Energy VCT 1, Hazel Renewable Energy VCT 2, JPMorgan Brazil Inv Trust , SSE, World Trust Fund |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks drop in early trade as Fed decision sparks growth concerns European stocks fell into the red early on Friday as the Federal Reserve's decision to stand pat on rates and a dovish statement prompted investor worries about global growth. At 0900 BST, the benchmark Stoxx Europe 600 index was down 0.6%, while France's CAC 40 and Germany's DAX were 0.9% weaker. The Stoxx 600 banks index was down 1.4%, while the corresponding index for basic resources was 0.8% weaker.
Fed Chairwoman Janet Yellen said the central bank had not turned "significantly less confident", adding that the result of the Federal Open Market Committee meeting should not be interpreted as such. In addition, she said a rate hike next month was still a possibility.
The policy statement highlighted "solid job gains and declining unemployment" and reiterated that "economic activity will expand at a moderate pace".
However, FOMC members lowered their long-term inflation projections and their growth estimates.
"The FOMC claims that its outlook for the US economy is 'not fundamentally altered' and the risks are still 'nearly balanced'. And yet, the Committee appears to be more concerned about the downside risks - notably the slowdown in China and potential spill-over effects thereof - because it decided not to raise rates on Thursday," said Societe Generale.
The bank maintained its central scenario for one move this year. "Given yesterday's messaging, December appears more likely than October," it said.
Meanwhile, Mike van Dulken, head of research at Accendo Markets said it was uncertainty weighing on investors' minds.
"Markets had anticipated either a dovish hike (easy does it) or a hawkish hold (be prepared), but the potential 'surprise' (we remain concerned) we had discussed was duly delivered. While markets had desired clarity, it appears that uncertainty and volatility may be here to stay," he said.
On the corporate front, shares in German utility RWE slipped after the company ruled out selling a stake to a Middle East investor. |
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| | US Market Report | | US close: Wall Street ends volatile day on mixed note after Fed Equities ended on a mixed note in a volatile day of trading following the US Federal Reserve's decision to keep interest rates unchanged, while keeping the door open to a rate rise come its October meeting. The Federal Open Market Committee referenced weakness in emerging markets - and not just China - as the reason why it wanted a "little more time" to assess the situation.
The announcement was followed by a sharp rise in stocks which later petered out, after Fed chair Janet Yellen said that every meeting would be a 'live' one and an October rate hike "remains a possibility".
The Dow Jones Industrials ended the session lower by 0.39% or by 65 points at 16,675, after notching an intra-day high of 16,933 as of 19:48BST.
Mimicking those moves, Wall Street's so-called 'fear gauge', the CBOE Volatility Index or 'VIX', at one point dropped about 20% - as traders initially grew less fearful of market losses - but afterwards turned around and ended slightly up on the day, as caution set in.
"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near-term," the statement issued after the two-day meeting to decide on policy read.
Nevertheless, in her press conference Fed Chair Janet Yellen emphatically said the decision should not be interpreted as a signal that the FOMC had suddenly become "significantly less confident". "Traders are clearly sitting on the fence until the Fed's announcement this evening," said IG's market analyst David Madden before today's Fed decision.
"Dealers are very cautious today, and the fear of hawkish commentary in the press conference after is keeping the buyers at bay.
"No change to the interest rate has been heavily priced in, but the dealers know deep down what the US central bank is drifting towards and that is holding them back from buying."
Nonetheless, some traders remained seemingly unconvinced if not defiant.
The Fed funds futures markets was left pricing in a probability of just under 60% of a January 2016 move on rates.
Mixed day on the data front as well
According to the Department of Labor, new unemployment claims declined by 11,000 to 264,000 in the week to 12 September, plumbing their lowest level since mid-July.
Analysts had been expecting jobless claims to hold steady at 275,000.
Elsewhere, housing starts fell 3% last month to an annualised rate of 1.13m, against expectations for a decline to 1.16m, while the figures for July suffered a drastic downward revision to show a 4.1% drop to 1.16m instead of the prior estimate of a 0.2% gain to 1.21m.
Figures from the Department of Commerce revealed the current account deficit declined to $109.7bn in the second quarter of 2015, amounting to 2.5% of the country's gross domestic product (GDP), versus an upwardly revised -2.7% of GDP shortfall in the first quarter.
The Federal Reserve bank of Philadelphia's regional manufacturing gauge slipped to a reading of -6 (consensus: -5.8) for September from 8.3 in the month before, its lowest print since February 2013.
Apple maps out its future
In company news, shares in Cablevision Systems surged 13.9% after European cable group Altice announced it would buy the US firm in a $10bn deal.
Apple slid 2.14% after reports claimed the tech giant had secured mapping visualisation startup Mapsense for a fee of between $25m to $30m.
US Treasury yields, Dollar index drop
In overseas markets, Asian stocks finished in positive territory for a second consecutive day, although Chinese equities relinquished early gains and closed in the red. European markets were broadly flat ahead of the Fed's decision.
Front month West Texas crude futures dipped 0.53% to $46,90 per barrel in NYMEX trading.
The yield on the policy-sensitive two-year US Treasury note saw its largest decline since March, retreating by 12 basis points to 0.69% in the aftermath of the Fed's meeting. Further out on the interest rate curve, the more inflation expectations sensitive benchmark 10-year Treasury note yield ended the day off by 10 basis points at 2.19%.
The US dollar index surrendered 0.88% to 94.50.
S&P 500 - Risers
Cablevision Systems Corp. (CVC) $32.51 +13.91%
Eli Lilly and Company (LLY) $89.98 +6.55%
Avon Products Inc. (AVP) $4.07 +4.36%
Zoetis Inc (ZTS) $46.01 +3.37%
Expedia Inc. (EXPE) $128.83 +3.33%
Windstream Holdings Inc (WIN) $7.20 +3.15%
Health Care REIT Inc. (HCN) $66.18 +2.64%
Edison International (EIX) $61.10 +2.33%
American Electric Power Co. Inc. (AEP) $55.87 +2.27%
Amazon.Com Inc. (AMZN) $538.87 +2.18%
S&P 500 - Fallers
Peabody Energy Corp. (BTU) $1.41 -10.76%
Keurig Green Mountain Inc (GMCR) $57.19 -4.92%
Wynn Resorts Ltd. (WYNN) $70.27 -4.76%
Southwestern Energy Co. (SWN) $15.41 -4.40%
Chesapeake Energy Corp. (CHK) $8.61 -4.33%
Charles Schwab Corp. (SCHW) $29.78 -4.28%
Intuit Inc. (INTU) $85.77 -4.14%
Oracle Corp. (ORCL) $36.74 -4.00%
Comerica Inc. (CMA) $41.62 -3.70%
MetLife Inc. (MET) $47.78 -3.65%
Dow Jones I.A - Risers
Unitedhealth Group Inc. (UNH) $123.26 +1.74%
Pfizer Inc. (PFE) $33.48 +0.90%
Coca-Cola Co. (KO) $39.38 +0.59%
Chevron Corp. (CVX) $79.41 +0.49%
Johnson & Johnson (JNJ) $94.84 +0.24%
Walt Disney Co. (DIS) $104.20 +0.23%
Exxon Mobil Corp. (XOM) $74.46 +0.22%
Procter & Gamble Co. (PG) $70.24 +0.20%
Boeing Co. (BA) $137.45 +0.18%
Merck & Co. Inc. (MRK) $53.96 +0.17%
Dow Jones I.A - Fallers
JP Morgan Chase & Co. (JPM) $62.65 -2.32%
General Electric Co. (GE) $25.35 -2.24%
Apple Inc. (AAPL) $113.92 -2.14%
Caterpillar Inc. (CAT) $74.06 -2.09%
Verizon Communications Inc. (VZ) $45.23 -2.08%
Goldman Sachs Group Inc. (GS) $186.45 -1.16%
3M Co. (MMM) $142.95 -0.87%
McDonald's Corp. (MCD) $97.84 -0.86%
Cisco Systems Inc. (CSCO) $25.88 -0.73%
E.I. du Pont de Nemours and Co. (DD) $48.08 -0.68%
Nasdaq 100 - Risers
Dish Network Corp. (DISH) $61.48 +4.63%
Expedia Inc. (EXPE) $128.83 +3.33%
Illumina Inc. (ILMN) $210.06 +2.32%
Charter Communications Inc. (CHTR) $192.22 +2.32%
Amazon.Com Inc. (AMZN) $538.87 +2.18%
Liberty Global plc Series A (LBTYA) $48.80 +2.13%
Regeneron Pharmaceuticals Inc. (REGN) $550.97 +1.84%
Amgen Inc. (AMGN) $153.91 +1.81%
Biogen Inc (BIIB) $325.30 +1.80%
Cerner Corp. (CERN) $64.52 +1.78%
Nasdaq 100 - Fallers
Keurig Green Mountain Inc (GMCR) $57.19 -4.92%
Wynn Resorts Ltd. (WYNN) $70.27 -4.76%
Intuit Inc. (INTU) $85.77 -4.14%
KLA-Tencor Corp. (KLAC) $51.31 -3.53%
Seagate Technology Plc (STX) $47.76 -2.83%
Baidu Inc. (BIDU) $147.06 -2.19%
Apple Inc. (AAPL) $113.92 -2.14%
Sandisk Corp. (SNDK) $54.67 -2.01%
eBay Inc. (EBAY) $26.27 -1.76% |
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| | Newspaper Round Up | | Friday newspaper round-up: HSBC, Ryan Air, Lidl HSBC's chairman has suggested the bank could retain its domicile in the UK, as his bank mulls moving its headquarters back to the Far East. Douglas Flint warned that he expected the Black Monday stock market crash, which was sparked in China, would be repeated, and that Britain's regulatory system was better suited to a global banking titan. - The Daily Telegraph Britain's aviation regulator has begun enforcement action against Ryanair to make the budget airline pay compensation to thousands of delayed passengers in the wake of a European court judgment. Its announcement came hours after a final ruling from the European court of justice opened the floodgates for compensation claims against airlines that could run into hundreds of millions of pounds. - The Guardian
One year after Scots rejected independence, David Cameron will say it is "time to move on" from the vote, while Nicola Sturgeon will warn that the country will "inevitably ask about the possibility of another referendum". The exchange highlights the failure of the supposed "once in a generation" independence referendum to settle the issue. - The Financial Times
Shopworkers at Lidl UK are to be paid a new living wage in a move that the fast-growing discount chain claims is a first in the British supermarket industry. From next month, all entry-level Lidl UK employees will receive a minimum wage of £8.20 an hour in England, Scotland and Wales and £9.35 an hour in London. - The Times |
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