| | | | | The Top 10 Stocks for Q4 | | Your guide to the best investments for the new quarter
Our latest Top 10 Stocks report takes a look at a fresh selection of blue chips that have the potential to offer exciting trading opportunities for the new quarter and into year-end.
Get your copy of this report and discover our top picks for the quarter.
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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 struggle to find direction on lack of drivers London stocks ended Wednesday's session flat after wavering throughout the day amid a lack of economic drivers.
Equities struggled to find direction as there were few data releases apart from UK public finances, Markit's Household Finance Index and Japanese trade data.
UK's headline public borrowing declined from an upwardly revised £11.6bn to £9.4bn in September, compared with analysts' expectations for a £10.1bn reading, according to the Office for National Statistics. Public borrowing was driven by record revenues for the month from income, VAT and corporation tax.
"The Chancellor will obviously be hoping that the economy can kick on and is not hampered by global growth being held back by a marked slowdown in China and emerging markets," said Howard Archer, chief UK and European economist at IHS Global Insight.
The Household Finance Index survey by Markit showed less British households believed the Bank of England will raise interest rates in the next six months.
It revealed 34% of households polled in October expect the central bank will increase rates within six months, compared to 42% in September and 48% in August.
BoE and PBoC reach deal
Meanwhile, the BoE and the People's Bank of China have agreed to renew an existing reciprocal sterling/renminbi currency swap line for another three years.
In an announcement during a state visit to Britain by Chinese President Xi Jinping, the BoE said the maximum value of the swap line will be raised to 350bn renminbi.
The BoE also announced separately that Britain's smaller lenders and British units of foreign investment banks will avoid the central bank's annual stress tests on their ability to withstand a financial crisis. Major lenders will be the focus of the tests as they account for 80% of lending to Britons, the BoE said.
The Bank's governor Mark Carney is due to speak later this evening on the analysis of banks but has told MPs it will be a "bit of a yawner".
In Japan, the trade deficit narrowed in September to 114.5bn yen from 569.4bn yen but exports fell short of expectations as demand from China waned. Exports rose 0.6% to 6.42trn yen while imports fell 11% to 6.53trn yen.
"No surprise here, in light of economic worries about China and Asia," said Mickey Levy, Berenberg's chief economist of the US, Americas and Asia. "Decelerating exports are a drag on Japan's economy, which has been struggling to grow since spring 2014 when domestic demand was sidetracked by its misguided VAT hike."
Among companies, Pearson tumbled after reporting a 4% drop in third quarter underlying sales and reducing its earnings guidance range for the full year by 5p to 70p-75p.
Home Retail slumped as it posted a 47% plunge in pre-tax profits at its Argos stores and warned that group full-year profits will fall short of expectations due to trading uncertainty caused by Black Friday.
ARM Holdings surged after posting a jump in third-quarter pre-tax profit as revenue grew on the back of premium chip pricing and the broadening adoption of its technology.
Reckitt Benckiser Group rallied after lifting its full-year like-for-like sales growth estimate to 5% from a previous range of between 4% and 5% as it posted better-than-expected third-quarter revenue.
Smiths Group got a boost after Citigroup raised the stock to 'buy' from 'neutral' and lifted the price target to 1,200p from 1,050p to reflect an improved pension position and stability in the medical and detection businesses .
Sky was higher as it reported a strong first quarter with new paid-for subscription products boosting the company's revenue.
Merlin Entertainments was also on the front foot after announcing a joint venture with state-backed China Media Capital to develop a Legoland Park in Shanghai, among other attractions in China.
Fidessa gained as it revealed it expects to announce a further special dividend when it publishes its full year results in February. |
| | The Top 10 Stocks for Q4 | | Your guide to the best investments for the new quarter
Towards the end of September, we've seen markets rally as buyers return to pick up some nicely discounted shares while inflation concerns look to be pushing a US interest rate rise further into the future. Our latest Top 10 Stocks report takes a look at a fresh selection of blue chips that have the potential to offer exciting trading opportunities for the new quarter and into year-end.
Download your copy of this report and discover our top picks for the quarter.
Losses can exceed deposits |
| | FTSE 250 - Risers
Fidessa Group (FDSA) 1,955.00p 5.11%
Card Factory (CARD) 365.70p 4.43%
Ocado Group (OCDO) 351.10p 3.72%
National Express Group (NEX) 282.20p 3.41%
Evraz (EVR) 83.30p 3.35%
Brown (N.) Group (BWNG) 392.00p 3.16%
Bank of Georgia Holdings (BGEO) 2,099.00p 3.14%
Stagecoach Group (SGC) 350.50p 3.06%
esure Group (ESUR) 261.00p 3.04%
Balfour Beatty (BBY) 255.30p 2.86%
FTSE 250 - Fallers
Home Retail Group (HOME) 123.90p -17.23%
TalkTalk Telecom Group (TALK) 275.90p -4.66%
Kaz Minerals (KAZ) 119.40p -3.94%
Weir Group (WEIR) 1,120.00p -3.03%
Drax Group (DRX) 271.60p -1.52%
Templeton Emerging Markets Inv Trust (TEM) 428.30p -1.43%
Debenhams (DEB) 82.60p -1.14%
Indivior (INDV) 212.00p -1.12%
Polymetal International (POLY) 589.50p -1.09%
Diploma (DPLM) 631.00p -1.02% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks move in tight ranges as investors await Thursday's ECB meeting European equity markets edged slightly on Wednesday, as investors sifted through a raft of corporate earnings ahead of Thursday's eagerly-awaited European Central Bank meeting.
The benchmark Stoxx Europe 600 index ended the session flat, while Germany's DAX rose 0.89% and France's CAC 40 gained 0.46%.
As of 1639 BST, the euro was broadly flat against the dollar and the yen but lost 0.22% against the pound, while Brent crude slid 1.04% to $48.20.
"Although we doubt that the ECB will alter the stance of policy at Thursday's meeting, we think that concerns over the inflation outlook and risks from emerging markets will prompt the central bank to step up the pace of its asset purchases before long," said analysts at Capital Economics.
"This may now be partly, or even largely, discounted in the foreign exchange market but we would be surprised if there were no effect on the euro from such an announcement."
In company news, Italian luxury car maker Ferrari jumped 15% on its first day of trading in New York, while shares in Fiat Chrysler, which owns an 80% stake in the group, slid 3.08%.
"For Fiat, it has now accessed a new pool of liquidity to service its substantial debt ahead of a possible 2016 GM merger," said IG's market analyst Joshua Mahony.
"For new Ferrari shareholders, there will be substantial interest in exactly where the company goes from here."
Credit Suisse slid 3.78% after the Swiss banking giant announced a capital increase as it posted weaker-than-expected results for the third quarter.
Net income at the Swiss lender fell to 779m Swiss francs from 1.03bn in the year ago period, falling short of consensus estimates of 858m. |
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| | US Market Report | | US open: Stocks edge higher as investors analyse raft of mixed earnings US stocks edged higher early on Wednesday, as investors analysed a deluge of mixed corporate earnings reports.
Shortly before 1500 BST, the Dow Jones Industrial Average was up 37 points to 17,254.29 while the S&P 500 and the Nasdaq were four and 15 points higher respectively.
Boeing impresses, Coca-Cola and Baker Hughes on the back foot
Among the companies that reported ahead of the bell, Biogen surged 8.19% after lifting its outlook for 2015 as profit surged 25%.
However, the biopharmaceutical giant unveiled plans to cut its workforce by 11%, adding that its multiple sclerosis drug trial was unsuccessful.
Boeing climbed 2.18% after the aerospace company also raised the outlook for the full year after better-than-expected profits, while oil field services giant Baker Hughes climbed 0.43%, even though revenue plunged 39% in the wake of a slump in oil prices.
Coca-Cola slid 1.18% after third quarter revenues fell more than expected due to adverse currency movements, while eBay and American Express are among the companies that will report after the close.
"So far earnings at America's top 500 companies have mostly exceeded estimates but revenues are falling short because of weak growth and a strong dollar," said CMC Markets' analyst Jasper Lawler.
In other company news, Yahoo! declined 2.71% after revealing late on Tuesday that its third quarter sales fell 8% and saying its revenue could suffer from a weak holiday period.
Chipotle Mexican Grill tumbled 7.17% after reporting weaker-than-expected profit late on Tuesday, as sales growth continued to slow in the third quarter.
Japanese exports slow down in September
The Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, jumped 11.8% in the week ended 16 October.
Elsewhere, Asian stocks closed on a mixed note after data showed Japanese exports grew at their slowest pace in over a year in September, rekindling talk of the need for further monetary stimulus out of the Bank of Japan.
"Japan is at risk of falling back into recession in the third quarter and today's trade data did nothing to suggest that this would be avoided," said Oanda's senior market analyst Craig Erlam.
"If the country does fall back into recession in the third quarter it will make the job of returning inflation to 2% even more difficult and could pursued the Bank of Japan to consider further stimulus."
European stocks edged slightly higher, while oil prices slid, with West Texas Intermediate falling 1.94% to $45.42 a barrel, while Brent crude lost 1.02% to $48.22 a barrel. |
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| | Broker Tips | | Broker tips: Home Retail, Smiths Group, Genel Energy Home Retail's interims did little to dispel the doubts of analysts at Canaccord Genuity about the ability of the company to turn around the financial performance of its Argos division.
"The investment case on the shares hinges on a view of Argos, with Homebase in effect something of a sideshow. While we believe Argos's embracing of a digital future is the correct strategy, we have concerns on its ability to transform its financial performance," analyst David Jeary said in a research note sent to clients .
Initiatives such as its new next day "Fast Track" delivery service and increased marketing spend will boost costs before any longer-term benefits flow through, Jeary added.
Indeed, had it not been for £8m in timing benefits then Argos, the company's general retailing arm, would have reported a £2m operating loss.
The company is a late arrival in the digital space and there is intense competition, the broker said.
The stock's approximately 25% discount to its peers on a price-to-earnings multiple basis, "clearly reflects market doubts on the group's ability to deliver a sustainable improvement in its profit delivery over the medium- and longer-term".
Canaccord Genuity placed its previous investment recommendation of 'hold' and target on the shares under review.
Smiths Group got a boost after Citigroup raised the stock to 'buy' from 'neutral' and lifted the price target to 1,200p from 1,050p to reflect an improved pension position and stability in the medical and detection businesses .
The bank said it sees several areas of upside optionality at Smiths which the market is not pricing appropriately.
Citi said a new chief executive offers a fresh perspective to address Smiths' corporate strategy, reassess medium-term targets in light of low global industrial growth and develop options to realise value.
"Portfolio action and self-help, through further cost and working capital rationalisation, provide opportunity, with support from recent (and ongoing) investment and research and development."
In addition, it noted that the pension position has markedly improved versus recent years, providing additional strategic optionality or least lower barriers to portfolio change.
The bank also pointed to operational improvement in terms of margins, selling, general and administrative expenses, working capital and return on capital employed.
UBS downgraded Genel Energy to 'neutral' from 'buy' and cut the price target to 400p from 500p, highlighting concerns that an increasingly complex geopolitical landscape is raising the risk profile of the gas business .
UBS said Genel's portfolio can be neatly split into two: an oil business and a gas business.
The bank said there appears, after some delay, to be a tentatively workable oil export payment mechanism, with the Kurdistan regional government having made two monthly payments to contractors.
UBS said this should see Genel's cash cycle move positive through the second half of the year.
On Tuesday, Genel said it received total payments of $45m from the Kurdistan regional government, having suffered payment delays for years as it got caught up in a revenue-sharing dispute between regional authorities and Iraq's federal government.
"However, to see decent upside in the stock one needs unwavering confidence that firstly, oil payments ramp-up smoothly; and, secondly, its unsanctioned 8.4TCF Miran/Bina Bawi gas export project will progress to plan." |
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