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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: FTSE ends lower for a third straight week Investors pushed stocks lower following weaker than forecast numbers on growth from the Eurozone, with more hawkish comments out of the US Federal Reserve and lingering worries about China not helping matters.
The FTSE 100 skidded into the weekend, ending near the day's lows after retreating by 0.98% or 60.40 points to 6,118.28.
For the week - the third straight one in the red - it lost 235.55 points.
Mining shares bounced back despite another day of losses in the commodities space. Three-month copper futures ended 0.6% down at $4,808 per metric tonne on the LME. Brent oil futures slipped 0.43% to end at $43.87 in ICE trading.
Economic growth in the single currency bloc slowed to 0.3% quarter-on-quarter for the three months to September, with spending by households propping up activity as exports slowed and - surprisingly, according to Barclays - investment in Germany fell.
For economist Apolline Menut, "the key question is the extent to which real fixed investment will take over consumption as a major growth driver, in a situation where global demand could remain depressed for a longer period than currently foreseen."
Flat GDP growth in Portugal - due to the political uncertainty - was another negative surprise, while the Dutch economy actually shrunk as global trade slowed down.
Fed hike nearer, US rate-setter says
Late in the afternoon, the president of the US Federal Reserve bank of Cleveland, Loretta Mester, added marginally to the downward bias in stocks.
Speaking at The City Club of Cleveland, Mester said the time for the first rate hike was "quickly approaching".
"Uncertainty about the longer-run destination is not an argument to delay taking the first step."
Headline US retail sales volumes in the US rose by 0.1% month-on-month in October, half of what was expected, although revisions to the data for previous months made up for that partially, some economists said.
Oil continues to move lower on China concerns
Concerns about China weren't far from traders' minds either.
"The lack of a significant pick-up in sequential activity in China's 'old economy' since the collapse during the first quarter of 2015 is of increasing concern to us, given the easing in financial conditions over the past six months," Goldman Sachs said in a research note sent to clients on 12 November.
According to the International Energy Agency, global oil stocks hit a record near-3bn barrel by end-September. The developed world's oil watchdog also projected a slowdown in global oil demand in 2016 to a 1.2m barrel per day pace after an increase of 1.8m p/d in 2015.
FTSE 100: Brasilia slaps suspension on Anglo-Australian miner's JV
BHP Billiton confirmed on Friday that there were nine fatalities at the incident at its Samarco Minerao SA joint venture with Brazilian miner Vale SA and said the operating licence for the mine has been suspended. In addition, four people previously unaccounted for have been found, while 19 people remain unaccounted for.
Burberry was lower, with analyst Guillaume Gauville trimming his forecasts for the company's earnings in fiscal years 2017 and 2018 by 2% on average to reflect currency moves. The Swiss broker reiterated his 'underperform' recommendation and target of 1,250p.
Stock in Rolls Royce was again lower, hit by price target cuts out of JP Morgan, Credit Suisse and RBC. One group of analysts said they were losing count of the company's profit warnings.
Pearson won a reprieve, edging into positive territory following the recent sharp losses in the company's stock.
FTSE 250: Security firm G4S knocked lower
G4S shares slumped after RBC Capital Markets cut its price target on the stock to 210p from 230p, noting that organic growth has slowed of late.
Second half earnings have been motoring at Auto Trader Group, seven months after the classifieds publisher listed. The company - which listed in March in a 2bn IPO - announced on Friday that revenue was up 8% on the previous period to 138.2m, with reported operating profit growing by 23% to 82.9m in the six months to 27 September. The firm's basic earnings per share from continuing operations increased more than sixfold - from 0.95p in the first half, to 5.98p.
Industrial valve maker Rotork said orders were down 17% in the third quarter due to the slowdown in the oil sector, but was maintaining its full year guidance with revenue in the range of 530m-555m and adjusted operating profit of 120m-130m at current exchange rates. Revenue for the third quarter was 18.1% lower.
Housebuilding and construction group Galliford Try said it continues to see good market conditions in all of its businesses and remains confident of achieving its expectations for the current financial year. The company said its housing business, Linden Homes, has enjoyed improved rates of sale of 0.60 units per outlet per week since the start of the financial year, compared with 0.48 for the equivalent period last year, from an average of 75 outlets.
Russian gold and silver producer Polymetal said it was taking 100% control of the Lichkvaz property in Armenia. Polymetal said it had bought the remaining 75% of the property's holding company for 1.08m Polymetal shares equal to $9.7m or 0.26% of increased share capital.
Luxury shoe-maker Jimmy Choo announced the appointment of Elisabeth Murdoch - daughter of media mogul Rupert Murdoch - as an independent non-executive director. Murdoch is an executive and entrepreneur in the media and technology sectors. |
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| | Market Movers
FTSE 100 (UKX) 6,118.28 -0.98%
FTSE 250 (MCX) 16,775.63 -0.56%
techMARK (TASX) 3,056.85 -0.56%
FTSE 100 - Risers
Anglo American (AAL) 456.20p 1.40%
CRH (CRH) 1,777.00p 1.37%
Pearson (PSON) 781.50p 0.97%
Intertek Group (ITRK) 2,545.00p 0.79%
GKN (GKN) 281.30p 0.75%
Randgold Resources Ltd. (RRS) 3,956.00p 0.71%
Royal Mail (RMG) 444.10p 0.70%
BHP Billiton (BLT) 884.90p 0.70%
Hammerson (HMSO) 580.00p 0.69%
easyJet (EZJ) 1,790.00p 0.51%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 513.50p -4.29%
G4S (GFS) 227.60p -3.64%
Aberdeen Asset Management (ADN) 323.70p -3.46%
Burberry Group (BRBY) 1,268.00p -3.43%
Kingfisher (KGF) 341.50p -3.23%
TUI AG Reg Shs (DI) (TUI) 1,134.00p -2.99%
Glencore (GLEN) 93.11p -2.93%
Schroders (SDR) 2,894.00p -2.82%
Tesco (TSCO) 167.00p -2.74%
Taylor Wimpey (TW.) 173.80p -2.36%
FTSE 250 - Risers
FirstGroup (FGP) 104.60p 5.02%
PZ Cussons (PZC) 315.80p 4.80%
BTG (BTG) 539.50p 2.85%
Auto Trader Group (AUTO) 376.60p 2.62%
OneSavings Bank (OSB) 402.20p 2.60%
Poundland Group (PLND) 278.70p 2.20%
esure Group (ESUR) 255.30p 2.00%
Card Factory (CARD) 369.00p 1.51%
Drax Group (DRX) 231.10p 1.45%
Enterprise Inns (ETI) 100.50p 1.41%
FTSE 250 - Fallers
Petra Diamonds Ltd.(DI) (PDL) 56.05p -6.48%
Ophir Energy (OPHR) 91.65p -4.08%
Nostrum Oil & Gas (NOG) 367.50p -4.07%
Thomas Cook Group (TCG) 107.00p -3.78%
Kaz Minerals (KAZ) 80.00p -3.56%
IMI (IMI) 870.00p -3.11%
Tullow Oil (TLW) 184.30p -3.05%
Ocado Group (OCDO) 358.10p -2.85%
B&M European Value Retail S.A. (DI) (BME) 324.30p -2.79%
Investec (INVP) 493.80p -2.75% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities decline after disappointing GDP data European stocks ended the week on a downbeat note as data showed growth in the Eurozone unexpectedly slowed in the third quarter, and investors mulled the possibility of a US rate hike next month.
The benchmark Stoxx Europe 600 index closed down 0.82%, while Germany's DAX lost 0.69% and France's CAC 40 fell 1%.
Eurozone GDP figures disappoint
Figures released by Eurostat showed gross domestic product in the Eurozone grew 0.3% month-on-month in the third quarter compared with a 0.4% gain in the previous three months and missing analysts' expectations for an unchanged reading.
On a year-on-year basis, GDP grew 1.6%, slightly better than the 1.5% gain posted in the previous quarter but short of the expected 1.7% figure.
"The latest official growth data from Europe suggests a slowdown in activity, but a reasonably robust and stable recovery," said Azad Zangana, senior European economist at Schroders.
"There is little here to cause alarm, and would not be enough to trigger any major change in monetary policy.
"The case for more stimulus has weakened, especially as markets have increased bets on the Federal Reserve raising its policy interest rate in December."
Individual GDP data showed that France's economy returned to growth in the third quarter, while Germany's slowed down as exports and investment declined sharply.
Across the Atlantic, according to data released by the US Commerce Department, retails sales grew 0.1% last month compared with a 0.1% gain in the previous month falling short of analysts' expectations for a 0.3% rise.
That, however, was not enough to prevent the dollar from extending its weekly gains against the euro, which lost 0.70% against the greenback.
As of 1635 GMT, the European currency was down 0.52% and 0.56% against the pound and the yen respectively, while Brent crude lost 0.64% to $43.78 a barrel.
"When the dollar rises even after poor economic news, it is a clear sign that markets have concluded that a rate hike is on its way," said IG's senior market analyst Chris Beauchamp.
Rolls-Royce remains under the cosh
In company news, aerospace and engineering firm Rolls-Royce lost 3.97%, suffering losses for a second day running after it said on Thursday that earnings for the year will be at the low end of guidance as it downgraded its expectations for next year and warned of a possible dividend cut.
Roche slid 0.34% after the Swiss drug maker said it will stop manufacturing at four sites in Europe and the US, putting up to 1,200 jobs at risk.
Shares in Syngenta surged 5.41% following media reports the agricultural company was offered $42bn in a takeover offer by ChemChina, which was then rejected. |
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| | US Market Report | | US open: Stocks slide as retail sales figures disappoint US equities markets slid early on Friday, as investors digested a disappointing retail sales data.
Shortly before 1500 GMT, the Dow Jones Industrial Average was down 34 points to 17,413.73, while the S&P 500 and the Nasdaq were down four and 21 points respectively.
Retail sales miss expectations
On the macroeconomic front, retail sales rose by less-than-expected last month.
According to data released by the US Commerce Department, retail sales grew 0.1% last month compared with a 0.1% gain in the previous month falling short of analysts' expectations for a 0.3% rise.
"October retail sales report was a little bit weaker than expected, but doesn't change our view that fourth-quarter GDP growth will be a respectable 2.5% annualised," said Steve Murphy, US economist at Capital Economics.
"October is the month that the PPI switches from one year's model to the next, and the estimated price and quality changes often cause big jumps either up or down each October."
Still to come, the University of Michigan preliminary reading on consumer confidence for November is scheduled at 1500 GMT, with a report for business inventories for September out at the same time.
In company news, fashion accessories designer Fossil slumped 29.5% after the company's quarterly missed estimates.
Nordstrom tumbled 18.1% after the fashion retailer cut its profit forecast on the back of weak quarterly earnings.
Networking equipment Cisco Systems fell 4.81% after its revenue and profit outlook for the current quarter fell short of analysts' expectations,
PayPal slid 0.97%, following a Wall Street Journal report on Thursday suggested that Apple was in talks with US banks to develop a rival payment service.
Going the other way, Yum Brands, the owner of Pizza Hut and KFC, rose 2.47% after its like-for-like sales in China rose between 5% and 6% in September.
US-listed shares of Syngenta jumped 6.10% after the pesticide maker rejected an initial $42bn takeover offer from China National Chemical, according to a Bloomberg report.
Elsewhere, Asian equity markets ended the week on a downbeat note, as investors in the region remained jittery over what looks a probable December rate hike by the Fed, while European stocks pulled back.
The dollar was broadly flat against the pound and gained 0.13% and 0.72% against the yen and the euro respectively, while gold spot declined 0.31% to $1,081.85. |
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| | Broker Tips | | Broker tips: IMI, Daily Mail&General Trust, G4S Societe Generale downgraded IMI to 'hold' from 'buy' and slashed the price target to 975p from 1,350p after the company said on Thursday that earnings for the year would be at the low end of market views.
"We remain upbeat on the longer-term benefits of the strategic turnaround programme but with global industrial demand taking another leg-down we see little scope for upside surprise over the next 12 months."
It said the third-quarter statement confirmed a highly challenging operating environment with sales down 5% LFL year-on-year.
With a further fall in 2016 sales and management highlighting rising competitive pressure, margins in the critical engineering division look set to be capped next year at a lower level. IMI also ruled out M&A in the short - term given the macro, removing another potential earnings catalyst, the bank said.
Shares in Daily Mail & General Trust fell sharply after Panmure Gordon downgraded the stock to 'sell' from 'hold' and cut the price target to 700p from 760p ahead of the company's prelims.
It said DMGT usually offers its first view of FY16 guidance with its FY15 prelims, which are due on 25 November.
Ahead of this, the brokerage has taken a look at current estimates and found them still looking materially too high.
Panmure cut its 20167 earnings per share estimate by 7% to 58p and its 2017 estimate by 19% to 56.6p.
G4S shares slumped on Friday after RBC Capital Markets cut its price target on the stock to 210p from 230p, noting that organic growth has slowed of late.
The Canadian bank said management is talking a long-term improvement story.
"However, exceptionals, business shrinkage and downgrades continue," said RBC, adding that investment is tough while net debt/EBITDA remains high. | | |
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