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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Stocks end lower after raft of economic data UK equities finished broadly flat as investors sifted through a mixed batch of manufacturing reports. The FTSE 100 rose 0.01% to 6,361.80 points at close of trading. The China government’s purchasing mangers’ index on manufacturing showed a reading of 49.8 for October, unchanged from the previous month but below the 50 that was forecast. A level below 50 signals a contraction while a reading below that indicates expansion. The Caixin’s PMI on manufacturing rose to 48.3 in October from 47.2 in September but marked the eighth successive month of contraction. “The official PMI showed new export orders contracting for a 13th consecutive month which is consistent with the cooling global growth that we’ve been seeing but the more worrying thing is that the domestic economy isn’t doing enough to pick up the slack,” said Craig Erlam, senior market analyst at Oanda. “The PBOC recently announced another batch of stimulus measures but with the data continuing to point to slower growth, more is likely to be needed.” In contrast, growth in the UK manufacturing sector gained momentum in October. The Markit PMI rose from an upwardly revised 51.8 in September to a 16-month high of 55.5 last month, exceeding analysts’ expectations for a 51.3 reading. “The revival provides a tentative suggestion that the manufacturers are pulling out of their recent funk, having been dogged by recession since the start of the year, and may help boost economic growth in the fourth quarter,” said Markit’s senior economist Rob Dobson. Stateside, ISM’s index on manufacturing fell to its lowest level since May 2013 in October. The index fell to 50.1 from 50.2 in September, remaining marginally above analysts’ expectations for a 50 reading. Markit’s US PMI on manufacturing, on the other hand, expanded at a slightly faster pace than expected in October to reach a six-month high. It rose from 54 in September to 54.1 last month, slightly above the flash reading of 54 that was initially reported. Meanwhile, US construction spending rose 0.6% month-on-month in September, better than analysts’ forecasts for a 0.5% gain but slightly below the 0.7% increase that was recorded in August, the Commerce Department revealed. Among corporate stocks, Hikma Pharmaceuticals slumped after saying its generics division is currently below its expectations due to slower-than-expected growth in colchicine sales. The group lowered full-year guidance for the generics business to revenues of around $150m, down from a previous range of $175m to $200m. Compass Group headed south after Credit Suisse downgraded the catering company’s stock to ‘underperform’ from ‘neutral' and cut the target price to 1,050p from 1,100p. EasyJet descended after HSBC downgraded the stock to ‘reduce’ from ‘hold’ and cut the target price to 1,600p from 1,800p. Travis Perkins gained after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold' and lifted the price target to 2,234p from 1,991p. HSBC slid after reporting adjusted third quarter pre-tax profit that missed analysts’ expectations. Other banks, including Barclays, Royal Bank of Scotland and Lloyds Banking Group, rallied as sentiment in the sector was lifted after Commerzbank said it will pay a dividend for the first time since 2007. Germany's positive reaction to Greek bank stress tests also provided financial stocks a boost. Ryanair soared after posting a 37% rise in first-half profit after tax, saying full-year net profit will be towards the upper end of its guidance range and lifting its traffic target. WPP climbed after strengthening its creative video offering with the acquisition of London design studio ManvsMachine. Housebuilder Persimmon was under the cosh after JPMorgan Cazenove cut its stance on the shares to ‘underweight’ from ‘neutral’ as it took a look at UK housebuilders. Mining stocks were under pressure on the back of China factory data, including Rio Tinto and Randgold Resources. |
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| | Market Movers
FTSE 100 (UKX) 6,342.26 -0.84%
FTSE 250 (MCX) 17,085.00 -0.17%
techMARK (TASX) 3,072.12 -0.38%
FTSE 100 - Risers
Taylor Wimpey (TW.) 197.20p 1.75%
Anglo American (AAL) 545.80p 1.64%
Glencore (GLEN) 112.50p 1.53%
Meggitt (MGGT) 351.40p 1.18%
Wolseley (WOS) 3,800.00p 1.12%
Sports Direct International (SPD) 694.00p 1.02%
Bunzl (BNZL) 1,851.00p 0.93%
Smith & Nephew (SN.) 1,106.00p 0.91%
InterContinental Hotels Group (IHG) 2,589.00p 0.90%
Intertek Group (ITRK) 2,618.00p 0.89%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 579.00p -3.10%
Barclays (BARC) 231.10p -2.59%
Morrison (Wm) Supermarkets (MRW) 167.80p -2.16%
Randgold Resources Ltd. (RRS) 4,354.00p -2.14%
Shire Plc (SHP) 4,911.00p -1.74%
Unilever (ULVR) 2,887.00p -1.67%
Pearson (PSON) 861.00p -1.66%
BP (BP.) 385.25p -1.65%
Royal Mail (RMG) 443.90p -1.64%
Hammerson (HMSO) 633.50p -1.63%
FTSE 250 - Risers
Vectura Group (VEC) 173.50p 5.86%
Ophir Energy (OPHR) 96.20p 5.60%
SIG (SHI) 132.30p 4.58%
Evraz (EVR) 84.65p 4.51%
TalkTalk Telecom Group (TALK) 252.10p 4.43%
Home Retail Group (HOME) 112.30p 4.17%
Elementis (ELM) 234.10p 3.86%
National Express Group (NEX) 299.30p 3.56%
Lookers (LOOK) 174.90p 3.49%
Petra Diamonds Ltd.(DI) (PDL) 74.30p 3.05%
FTSE 250 - Fallers
Pets at Home Group (PETS) 287.60p -7.58%
Cineworld Group (CINE) 550.00p -7.41%
Acacia Mining (ACA) 192.20p -3.90%
Zoopla Property Group (WI) (ZPLA) 242.20p -3.31%
Jardine Lloyd Thompson Group (JLT) 945.00p -2.78%
Supergroup (SGP) 1,454.00p -2.74%
Indivior (INDV) 204.50p -2.62%
BTG (BTG) 552.00p -2.30%
Playtech (PTEC) 853.50p -2.23%
Shawbrook Group (SHAW) 338.00p -2.14% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks end session in the green European stocks reversed early losses to push higher as encouraging Eurozone manufacturing figures helped to offset mixed Chinese data.
The benchmark DJ Stoxx 600 ended the session 0.34% or 1.28 points up at 376.75, the Dax-30 gained 0.93% or 100.53 points to reach 10.950.67 while the FTSE 100 advanced 0.01% or 0.71 points to close at 6,361.80.
Equities on other side of the Pond kicked off the session on a slightly weaker note following the release of fairly uninspiring Chinese manufacturing figures.
The Caixin China manufacturing purchasing managers' index rose to 48.3 in October from 47.2 in the previous month. Although this was a slight tick higher and better than analysts' expectations for a nudge up to 47.5, it remained in contractionary territory, below 50.
China's official manufacturing PMI, which was released on Sunday, missed expectations at 49.8, unchanged from the previous month and also below the 50 threshold that separate contraction from expansion.
Still, the mood was lifted after Markit's purchasing managers index for Eurozone manufacturing came in at 52.3 for October, up from a five-month low of 52.0 the previous month and a touch above the flash estimate of 52.0.
"While the numbers weren't great, they did provide more cause for optimism than was expected. It would appear that concerns over Chinese and emerging market demand may be overblown, which is particularly good news for Germany which has strong trade ties with the region," said Craig Erlam, senior market analyst at Oanda.
"The data is certainly more encouraging than the preliminary releases would have had us believe."
On the corporate front, HSBC was in the red. The bank posted a better-than-expected 32% rise in third-quarter pre-tax profit thanks to its cost-cutting programme and reduced fines, but adjusted pre-tax profit fell short of estimates.
Budget carrier Ryanair reversed opening losses to trade a little higher. The company reported a 37% rise in first-half profit after tax and said full-year net profit will be towards the upper end of its guidance range. However, analysts also pointed to news that ticket prices will be broadly flat this quarter and could fall 4% between January and March.
Shire slipped after announcing that it has agreed the $5.9bn acquisition of Dyax Corp, which is a US-based specialist focused on hereditary angiodema.
Compass Group was under pressure after Credit Suisse downgraded the stock to 'underperform' from 'neutral'.
On the upside, Commerzbank shares rallied after the German lender posted better-than-expected third-quarter profit. |
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| | US Market Report | | US open: Equities climb after manufacturing data US stocks advanced early on Monday, as investors digested a raft of mixed manufacturing data and earnings reports.
Shortly after 1500 GMT, the Dow Jones Industrial Average was up 85 points to 17,748.74, while the S&P 500 and the Nasdaq were respectively 10 and 24 points higher.
Mixed manufacturing data
On the economic data front, the US ISM manufacturing index fell to its lowest level since May 2013 last month, declining to 50.1 from 50.2 in September, but remaining marginally above analysts' expectations for a 50 reading.
The employment sub-index declined to 47.6, its lowest level post the 2009 recession, while the ISM's new-orders index climbed 2.8 points to a three-month high of 52.9.
Meanwhile, Markit's manufacturing purchasing managers' index rose from 54 in September to 54.1 last month, slightly above the flash reading of 54.
Elsewhere, according to the Commerce Department, construction spending grew 0.6% month-on-month in September, compared with analysts' expectations of a 0.5% gain but slightly below the 0.7% increase recorded in the previous month.
Still to come, San Francisco Federal Reserve president John Williams will speak at a Fed conference in San Francisco at 1700 GMT.
In company news, payments technology group Visa fell 3.40% after it announced an agreement to acquire Visa Europe in a deal worth as much as €21.2bn (£15.1bn).
The group posted a 41% year-on-year increase in fourth quarter profit to $1.51bn, as the $283m it booked in charge litigation expenses in the previous year did not recur, while adjusted profit excluding one-off items came in at 62 cents a share, slightly below consensus of 63 cents a share.
Restaurant chain Chipotle Mexican Grill declined 3.96% after revealing it closed 43 of its Washington state and Oregon stores over an investigation into an E.coli outbreak.
Going the other way, skincare and makeup products manufacturer Estee Lauder jumped 8.66% after its quarterly profit surged and the group lifted its dividend.
Elsewhere, Asian markets were dragged lower after data showed a private gauge of China's manufacturing activity remained in contraction for the eighth consecutive month, while European stocks edged higher after some positive PMI data.
The dollar was broadly flat against both the pound and the yen but fell 0.29% against the euro, while gold futures shed 0.60% to $1,135.29. |
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| | Broker Tips | | Broker tips: RBS, easyJet, IAG, Serco Exane BNP Paribas upgraded Royal Bank of Scotland to 'outperform' from 'neutral' and lifted the price target to 370p from 360p.Over the last year, the bank has maintained a relatively cautious investment stance on RBS.
Over the last year, the bank has maintained a relatively cautious investment stance on RBS.
It said that despite the appeal of the restructuring story and potential excess capital, its concern was that the eventual earnings power of the bank was likely lower than many thought.
However, with the share price down 20% since the start of 2015, a greater appreciation of the medium-term prospects for earnings, and substantial improvements in the balance sheet over the last 10 months, Exane turned more positive on the stock.
Shares in outsourcing group Serco got a boost after RBC Capital Markets upgraded the stock to 'sector perform' from 'underperform', keeping the price target at 9,500p.
"Whilst risks clearly remain and the recovery will take time, for the first time in a while we see more limited downside and the balance sheet is no longer an issue post the Intelenet disposal," the bank said.
Nonethless, RBC said there were still a number of issues with the stock, which has been hit by a string of profit warnings.
It said that gauging where the revenue base will trough is tough, and there remains some uncertainty around the Atomic Weapons Establishment contract, which accounted for £17m of 2014 EBITA and where it would expect some commentary from the government in early 2016.
In addition, the bank said the cost of exiting the remaining business process outsourcing units is still unclear.
However, RBC pointed out there were some areas of potential upside.
It said there is some scope for the final outcome on onerous contracts to be better than expected.
HSBC downgraded EasyJet to 'reduce' from 'hold' and cut the price target to 1,600p from 1,800p.
The bank said EasyJet is an excellent business and has traded very well this summer. However, it expects increasing unit revenue pressure from accelerating capacity growth into winter 2015.
HSBC said it has reverted to its view that the European short-haul market looks inherently unstable, with five companies pursuing the number three position in the industry.
The bank also cut its stance on International Consolidated Airlines Group, to 'hold' from 'buy' and trimmed the target to 6,250p from 7,000p. "We think that investor expectations on IAG are very high," it said. "We think that the company will deliver strong profit growth in full-year 2016 and is now starting shareholder cash returns. | | |
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