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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 boosted by housebuilding stocks after Autumn Statement The FTSE 100 rose on Wednesday with housebuilding stocks leading the way after Chancellor George Osborne announced measures to support the sector in his joint Spending Review and Autumn Statement.
The Chancellor's housing market measures included a £2.3bn funding pledge and reform of the planning laws towards delivering 400,000 affordable housing starts by 2020-21, plus an extension of the Help-to-Buy and shared ownership schemes and a new London Help-to-Buy scheme.
The announcement of higher stamp duty for those buying and selling second homes and buy-to-let properties saw housebuilding stocks come off earlier highs but they remained the top risers including Taylor Wimpey, Persimmon and Barratt Developments.
Osborne also made a giant U-turn on tax credits, alongside an increased state pension and rejigging of the NHS finances.
He confirmed the government will deliver a budget surplus of £10bn by 2019/20 and that £12bn of welfare savings would be delivered in full. The government will borrow £8bn less than forecast to reach this goal.
Osborne predicted the UK economy will grow by 2.4% in 2015-16, 2.5% in 2016-17 before returning to 2.4% in 2017-18 and 2.3% in 2019-20.
Economic data
The Council of Mortgage Lenders said first-time buyer loans in London rose 17% quarter-on-quarter to 12,800 in the third quarter, although that marked a 1% decline on a year-on-year basis. First-time buyers borrowed £3.4bn, 24% more than in the previous quarter and 4% more than in the corresponding period a year ago, while the number of home-movers loans in London rose 32% quarter-on-quarter and 5% year-on-year to 10,800.
Meanwhile, the US saw a raft of economic reports published ahead of Thanksgiving on Thursday.
US durable goods orders rose 3% last month, compared to forecasts for a 1.5% gain and September's upwardly revised 0.8% decrease, according to the Commerce Department.
Separately the Commerce Department revealed US consumer spending rose 0.1% month-on-month in October compared with a 0.1% increase in September and with analysts' expectations for a 0.3% rise. Personal income rose 0.4% month-on-month in October, in line with expectations and up from an upwardly revised 0.2% increase registered in September.
US jobless claims declined by 12,000 to 260,000 in the week to 21 November, less than analysts' expectations for a 271,000 reading, the according to the Labor Department.
Finally, US consumers were slightly more confident than expected in November, data showed. The final reading of the University of Michigan index monitoring consumer sentiment was revised upward to show a 91.3 reading compared with initial estimates of a 90.0 reading.
Company news
Premier Inn and Costa Coffee owner Whitbread rallied as HSBC initiated coverage of the stock at 'buy' with a 5,400p price target.
Anglo American was under pressure after HSBC downgraded the stock to 'reduce' from 'hold' and slashed the price target to 410p from 770p as it pointed to the miner's precarious cash flow situation.
Other miners including BHP Billiton, Glencore and Rio Tinto slid as metal prices declined including copper (-0.51%), silver ( -0.30%) and gold (-0.24%).
Shire retreated after Reuters reported that the drug maker was preparing to make a new bid for US biotech firm Baxalta.
Daily Mail and General Trust plunged as the newspaper owner warned that challenging market conditions in the UK print advertising market and those facing Euromoney in the investment banking and commodities sectors are likely to have an adverse impact on the new financial year. The announcement came as the firm reported a 4% drop in adjusted pre-tax profit to £281m for the full-year.
UK Mail slumped as its chief executive for the last decade, Guy Buswell, was given the axe as the company struggles with the transition to its new high-tech parcel sorting hub.
On the upside, Thomas Cook jumped as it reported its first annual profit after tax since 2010 and said it had got off to a positive start to the next year as well.
Ophir Energy rallied on reports it received informal takeover and merger interest from a number of possible suitors amid a drop in oil prices.
BG Group climbed as it began commercial operations from the second train at its Queensland Curtis liquefied natural gas operation. |
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| | Market Movers
FTSE 100 (UKX) 6,336.21 0.94%
FTSE 250 (MCX) 17,102.96 0.90%
techMARK (TASX) 3,194.29 1.01%
FTSE 100 - Risers
Taylor Wimpey (TW.) 184.50p 3.59%
St James's Place (STJ) 1,000.00p 3.52%
Compass Group (CPG) 1,117.00p 3.43%
Rolls-Royce Holdings (RR.) 608.00p 3.40%
Barratt Developments (BDEV) 578.50p 3.40%
Pearson (PSON) 834.50p 3.22%
Persimmon (PSN) 1,836.00p 3.03%
WPP (WPP) 1,528.00p 2.90%
Intertek Group (ITRK) 2,740.00p 2.81%
Ashtead Group (AHT) 1,061.00p 2.81%
FTSE 100 - Fallers
Anglo American (AAL) 417.55p -7.62%
Glencore (GLEN) 90.60p -3.60%
BHP Billiton (BLT) 853.50p -2.55%
Rio Tinto (RIO) 2,245.50p -1.25%
Royal Mail (RMG) 481.80p -1.15%
Shire Plc (SHP) 4,597.00p -1.05%
United Utilities Group (UU.) 951.00p -0.73%
Randgold Resources Ltd. (RRS) 4,043.00p -0.66%
Royal Bank of Scotland Group (RBS) 300.40p -0.63%
Royal Dutch Shell 'B' (RDSB) 1,668.00p 0.03%
FTSE 250 - Risers
Thomas Cook Group (TCG) 108.80p 10.63%
NMC Health (NMC) 878.50p 8.46%
Ophir Energy (OPHR) 91.00p 7.57%
TalkTalk Telecom Group (TALK) 239.90p 7.10%
RPC Group (RPC) 713.00p 4.70%
Serco Group (SRP) 107.60p 4.67%
Ocado Group (OCDO) 358.90p 4.57%
Enterprise Inns (ETI) 103.50p 4.44%
Atkins (WS) (ATK) 1,574.00p 4.31%
Diploma (DPLM) 698.50p 4.25%
FTSE 250 - Fallers
OneSavings Bank (OSB) 341.30p -7.28%
Mitchells & Butlers (MAB) 324.00p -5.90%
Aldermore Group (ALD) 244.00p -5.83%
Drax Group (DRX) 230.30p -5.46%
Paragon Group Of Companies (PAG) 376.00p -5.34%
Home Retail Group (HOME) 102.60p -3.66%
BBA Aviation (BBA) 172.40p -3.36%
Poundland Group (PLND) 210.00p -3.23%
Vedanta Resources (VED) 371.00p -3.21%
Pets at Home Group (PETS) 266.40p -3.06% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Equities rally as geopolitical tensions abate briefly European equities rallied on Wednesday, extending earlier gains as investors shrugged off strained relations between Russia and Turkey.
The benchmark Stoxx Europe 600 index closed up 1.38%, while France's CAC 40 gained 1.51% and Germany's DAX jumped 2.15%.
As of 1639 GMT, the euro was broadly flat against the yen but lost 0.41% and 0.28% against the pound and the dollar respectively, while Brent crude was 1.47% to $45.45 a barrel.
Turkey shot down a Russian warplane on the Syrian border on Tuesday, claiming that it had entered Turkish airspace, although Russia rejected the claim.
Russian President Vladimir Putin called the incident "a stab in the back" and said it could have serious consequences for the countries' relationship.
On Wednesday, Russia said it planned to send an advanced air defence system to reinforce its air base in Syria and was considering cancelling a raft of joint business projects with Turkey.
"The geopolitical issue has rapidly lost its importance outside the Turkish borders as the risks of an escalating military interaction are very low at this stage," said Ipek Ozkardeskaya, market analyst at London Capital Group.
"Although the Russian President [Vladimir] Putin sounds very sharp on the matter, the Turkish response has been quite anodyne.
"Turkish President [Recep] Erdogan has been crystal clear on the issue, stating that Turkey has no intention whatsoever to escalate the tensions."
US data takes centre stage
With very little of note on the economic calendar in the Eurozone, investors across the Atlantic welcomed a deluge of data ahead of Thursday's annual Thanksgiving Day celebration.
According to the Commerce Department, orders for US durable goods increased 3% last month, compared to forecasts for a 1.5% gain. September's 1.2% drop was revised to a 0.8% decrease. Elsewhere, consumer spending rose 0.1% month-on-month in October compared with a 0.1% increase in September and with analysts' expectations for a 0.3% gain.
Meanwhile, according to the Labor Department, new claims declined by 12,000 to 260,000 in the week to 21 November, compared with analysts' expectations for a 271,000 reading.
"With such a raft of important figures released in one day, it was always going to be difficult to ascertain one single message from the data," said IG's market analyst Joshua Mahony.
"Yet with US services activity rising to a seven-month peak, core durable goods at a three-month high and jobless claims at the lowest level in a month, there is no doubt that the US economy is moving in the right direction.
"Unfortunately, the issue of inflation is likely to remain a crucial issue, with the Fed's favoured measure, the core PCE price index, failing to grow for the first time in ten months."
In company news, Thomas Cook surged 8.19% after posting its first profit in five years and expressing confidence over 2016, while Metro rallied 5.62% after the German retailer lifted its 2015 dividend payout more than analysts were expecting.
Construction materials company LafargeHolcim gained 4.48% as it raised its dividend despite a drop in third-quarter sales. |
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| | US Market Report | | US open: Equities edge higher after raft of economic reports US stocks edged slightly higher early on Wednesday as Wall Street digested a deluge of economic reports.
The Dow Jones Industrial Average was 11 points up to 17,822.78, while the S&P 500 and the Nasdaq were one and 11 points higher respectively.
Raft of data on Wall Street
With Wall Street closed on Thursday and trading closing at 1pm Eastern Time on Friday (1800 GMT), investors had plenty to analyse on Wednesday.
According to the Commerce Department, orders for US durable goods increased 3% last month, compared to forecasts for a 1.5% gain. September's 1.2% drop was revised to a 0.8% decrease.
Elsewhere, consumer spending rose 0.1% month-on-month in October compared with a 0.1% increase in September and with analysts' expectations for a 0.3% gain, while personal income rose 0.4% month-on-month in October in line with expectations and up from an upwardly revised 0.2% increase registered in September.
On a core level, which strips out food and energy, the personal consumption expenditure was flat, falling short of the 0.1% reading analysts had expected and lower than an upwardly revised 0.2% gain in the previous month.
Meanwhile, according to the Labor Department, new claims declined by 12,000 to 260,000 in the week to 21 November, compared with analysts' expectations for a 271,000 reading, while the average of new claims over the last four weeks were unchanged at a seasonally adjusted 271,000.
Still to come on the economic calendar, a preliminary reading of the Markit composite and services purchasing managers' index for November are on tap at 1445 GMT.
Shortly after that, at 1500 GMT, a reading on new home sales for October is scheduled for release, as is a reading on consumer sentiment for November.
In company news, Hewlett-Packard climbed 4.94%, despite posting weak quarterly sales late on Tuesday, while biotech group Baxalta rose 0.20% after a report suggested Dublin-based Shire was preparing a fresh takeover bid.
Elsewhere, Asian stocks declined amid fresh geopolitical tensions, while European equities gained ground and oil prices relinquished overnight gains. West Texas Intermediate fell 1.90% to $42.07 a barrel, while Brent crude lost 1.67% to $45.36 a barrel. |
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| | Broker Tips | | Broker tips: Anglo American, London-listed recruiters Anglo American was under pressure after HSBC downgraded the stock to 'reduce' from 'hold' and slashed the price target to 410p from 770p as it pointed to the miner's precarious cash flow situation.
HSBC said that before further capex cuts, Anglo would likely burn at least $2.7bn in 2016 on spot prices to maintain the dividend.
"We see high likelihood of a zeroed dividend (now in our numbers), which saves $1.1bn cash annually," it said.
Should Anglo reinstate the dividend at a later stage, a payout ratio - with provision for specials - is more prudent.
HSBC said further cost cuts are likely at the 8 December update, but the bank questioned whether this would be enough.
"We see scope for capex to be reduced to around $2.7bn post 2016 and $3.3bn in 2016 (current guidance $3.6-3.9bn)," it said.
HSBC reckons corporate costs and overheads are the key area of viable opex cuts, although not a new target area. Any further cost cut efforts at operations will only go some way to offset more than 5% South African inflation.
The bank estimates that Anglo will still burn $1.6bn in annual cash flow post expected opex, capex and divi cuts on spot prices.
Recruitment consultancy stocks were under the cosh after RBC Capital Markets downgraded some key names as it took a look at the Pan European staffing sector.
The Canadian bank downgraded Hays to 'sector perform' from 'outperform', keeping the 150p price target, as it sees little upside remaining after the recent rally.
"We also see growth remaining muted in the UK, while Australia remains volatile."
It cut Michael Page International to 'sector perform' from 'outperform', trimming the target to 530p from 610p as it looks for a better entry point.
"We remain supportive of Michael Page for the longer-term, but see greater short-term macroeconomic headwinds compared to our original expectations of accelerating growth into 2016E."
RBC also downgraded SThree to 'sector perform' from 'outperform' and cut its price target to 400p from 460p.
The bank said it likes the stock for the long term, as it is well-placed with its developments in Life Sciences and the US.
In the shorter term, however, uncertainty, especially in the UK, has led it to lower all of its white collar staffing forecasts and recommendations. | | |
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