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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 end higher after well-received services data The FTSE 100 ended higher on Wednesday as investors weighed upbeat reports on the service sector in the UK, China and the US.
The latest Markit/CIPS UK survey showed the purchasing managers' index monitoring growth in the UK services sector rose from 53.3 in September to 54.9 last month, registering its first increase since June and remaining above the 50 threshold that indicates expansion for the 34th consecutive month. Analysts had been expecting a reading of 54.5.
"The slight bounce-back in the Markit/CIPS services survey in October brought more evidence of what we expect will be a rebound in growth in the fourth quarter, after the slowdown in the third quarter, Capital Economics said in a note.
Caixin's PMI on China services rose to 52 in October from 50.2 a month earlier, in contrast to Monday's manufacturing PMI which showed a contraction in October activity.
ISM's US non-manufacturing composite reached its highest level in three months in October. The index climbed to 59.1 last month from 56.9 in September and compared with analysts' expectations for a 56.5 reading.
Markit's final estimate on US services PMI was revised up to 54.8 from 54.4 in October, compared to estimates of 54.5. However, it marked a drop from September's reading of 55.1.
"Services account for approximately 79% of US GDP and thus today's reading will no doubt have substantial implications for growth expectations," said IG market analyst Joshua Mahoney.
In other US data, the trade deficit slumped 15% in September, as imports declined because of cheaper oil prices, the Commerce Department revealed. The trade gap declined to a seasonally adjusted $40.8bn in September from a downwardly revised $48bn in the previous month and compared with analysts' expectations for a $41bn reading.
The US private sector generated slightly more jobs than expected last month, according to private consultancy ADP. Employers added 182,000 jobs in October compared with a downwardly revised 190,000 reading in the previous month and with analysts' expectations of 180,000 reading.
The report comes ahead of the government's official non-farm payrolls report on Friday, which will be closely monitored by the market.
The Federal Reserve is taking into account a number of economic data releases in determining the best timing for an interest rate hike.
Meanwhile, European Central Bank president Mario Draghi reiterated that the level of asset purchases will be reviewed in December and that the governing council is willing to use all instruments at its disposal if needed.
In company news, Glencore surged after it reported "significant progress" on plans to cut net debt to the low $20bns by the end of 2016 and increased output from its mines generally in line with estimates.
Marks & Spencer gained after reporting an increase in first half profit as strong food counterbalanced weak clothing sales.
Legal & General rallied as it posted a 14% rise in net cash generation for the first nine months of the year as it said it is ahead of its target to deliver £80m of operating cost savings this year. Ryanair flew higher after posting record October passenger numbers.
Wizz Air Holdings declined after announcing its chief financial officer was stepping down and saying that while third quarter bookings were robust it had limited visibility over the final period.
Countrywide slumped after saying the slow pace of recovery in housing sales transactions will most likely result in volumes for the year being at least 5% below 2014 at 950,000 in total. "We anticipate our EBITDA for full year will be less than £121.1 million achieved in 2014".
Housebuilders Taylor Wimpey, Berkeley Group Holdings and Persimmon continued their slide after Liberum downgraded the housebuilders' stance to 'sell' from 'hold' on Tuesday. |
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| | Market Movers
FTSE 100 (UKX) 6,411.24 0.43%
FTSE 250 (MCX) 17,173.49 -0.09%
techMARK (TASX) 3,087.82 0.35%
FTSE 100 - Risers
Glencore (GLEN) 125.85p 5.36%
Morrison (Wm) Supermarkets (MRW) 176.90p 3.51%
G4S (GFS) 252.10p 3.11%
Anglo American (AAL) 578.70p 2.99%
Smiths Group (SMIN) 1,020.00p 2.87%
HSBC Holdings (HSBA) 518.90p 2.77%
Sainsbury (J) (SBRY) 276.70p 2.71%
Intertek Group (ITRK) 2,701.00p 2.58%
Aberdeen Asset Management (ADN) 364.80p 2.50%
Marks & Spencer Group (MKS) 533.50p 2.50%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 180.30p -3.94%
Berkeley Group Holdings (The) (BKG) 3,092.00p -3.25%
Persimmon (PSN) 1,859.00p -3.23%
British Land Company (BLND) 835.00p -2.57%
Barratt Developments (BDEV) 572.00p -2.47%
Hammerson (HMSO) 609.50p -1.93%
Whitbread (WTB) 4,747.00p -1.78%
Land Securities Group (LAND) 1,300.00p -1.74%
Intu Properties (INTU) 338.20p -1.51%
Compass Group (CPG) 1,070.00p -1.38%
FTSE 250 - Risers
Premier Oil (PMO) 88.05p 8.17%
Drax Group (DRX) 280.50p 5.73%
Aggreko (AGK) 983.50p 3.96%
Petrofac Ltd. (PFC) 873.50p 3.74%
Wood Group (John) (WG.) 627.00p 3.29%
Ashmore Group (ASHM) 278.70p 3.22%
Ocado Group (OCDO) 396.90p 3.20%
Redefine International (RDI) 56.50p 3.10%
Clarkson (CKN) 2,192.00p 3.01%
Senior (SNR) 235.50p 2.84%
FTSE 250 - Fallers
Countrywide (CWD) 412.90p -11.20%
Wetherspoon (J.D.) (JDW) 716.50p -7.67%
TalkTalk Telecom Group (TALK) 236.10p -7.30%
Foxtons Group (FOXT) 187.80p -6.10%
International Personal Finance (IPF) 365.70p -4.29%
Evraz (EVR) 84.90p -4.23%
Wizz Air Holdings (WIZZ) 1,854.00p -3.99%
Crest Nicholson Holdings (CRST) 513.50p -3.84%
Keller Group (KLR) 841.50p -3.83%
Hansteen Holdings (HSTN) 115.60p -3.26% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks moved in tight ranges after Draghi's comments European equity markets on Wednesday, as comments from European Central Bank president Mario Draghi were offset by some mixed data and by decline in German stocks.
The benchmark Stoxx Europe 600 index closed up 0.50%, while France's CAC 40 gained 0.25% and Germany's Dax fell 0.97%.
As of 1636 GMT, the euro was down 0.89% against the dollar and fell 0.62% and 0.53% against the pound and the yen respectively, while Brent crude tumbled 3.79% to $48.70
Draghi hints at more stimulus
Draghi said at a forum on banking supervision that the central bank remains ready to act to maintain support for the Eurozone.
"Mario Draghi has done little to dispel expectations of an expansion to ECB QE at its December meeting, with the president once more giving a heads up that the current policy will be reviewed in little over a month," said IG's market analyst Joshua Mahony.
In company news, Volkswagen fell 2.37% after the beleaguered German car maker admitted the diesel emissions scandal also included petrol engines.
Barry Callebaut slumped 10.2% after the maker of bulk chocolate cut its mid-term volume growth forecast and highlighted the difficult cocoa market this year.
Mixed Eurozone data
On the economic data front, the final reading of Markit's purchasing managers' index rose from September's four-month low of 53.7 to 54.1 last month, slightly below the 54.2 flash estimate released last week.
The reading means the index has now remained above the neutral 50.0 mark since August 2013, as business optimism in the 19-country block remained largely positive.
Meanwhile, the Eurozone composite PMI rose from 53.6 in September to 53.9 in October, slightly below the 54.0 flash estimate, while figures from Eurostat showed Eurozone producer prices fell at the fastest pace since the turn of the year in September.
The producer price index for the domestic market dropped 3.1% year-on-year following a 2.6% decline in the previous month and compared with the 3.3% drop analysts had expected.
"October's rise in the Eurozone composite PMI suggested that the region's recovery maintained its pace at the start of fourth quarter," said Jack Allen, European economist at Capital Economics.
"But current rates of growth are too slow to put upward pressure on inflation."
Across the Atlantic, private consultancy ADP said employers added 182,000 jobs in October compared with a downwardly revised 190,000 reading in the previous month and with analysts' expectations for a 180,000 reading.
Elsewhere, the Institute for Supply Management's non-manufacturing index climbed to 59.1 last month from 56.9 and compared with analysts' expectations for a 56.5 reading. |
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| | US Market Report | | US open: Stocks struggle for direction after raft of economic data US equities moved in tight ranges early on Wednesday, as investors analysed a number of important economic reports.
Shortly after 1500 GMT, the Dow Jones Industrial Average was down 12 points to 17,905.32, while the S&P 500 and the Nasdaq were respectively one point lower and and five points higher.
ADP payroll meets expectations
On the economic data front, the US private sector generated slightly more jobs than expected last month, data released on Wednesday showed.
According to private consultancy ADP, employers added 182,000 jobs in October compared with a downwardly revised 190,000 reading in the previous month and with analysts' expectations for a 180,000 reading.
"For Friday's official employment report from the Labor Department, we expect nonfarm payroll growth of 175k and a one-tenth decline in the unemployment rate, to 5.0%," analysts at Barclays said in a note.
Elsewhere, the Institute for Supply Management's (ISM) non-manufacturing index, which surveys the sector's purchasing and supply executives, climbed to 59.1 last month from 56.9 and compared with analysts' expectations for a 56.5 reading.
The US monthly trade deficit narrowed sharply to $40.8bn in September, down from the revised estimate of $48.0bn in August and compared with analysts' forecast of $41bn.
Meanwhile, the Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 0.8% in the week ended 30 October.
Still to come, New York Fed president William Dudley will give a press briefing on research on income inequality at 1930 GMT, while Fed vice chairman Stanley Fischer will speak to the National Economists Club at 2300 GMT.
Mixed earnings
In company news, electric car maker Tesla surged 8.98% after it reiterated its sales guidance for the remainder of the year, despite posting a wider quarterly loss late on Tuesday.
Handmade and vintage good marketplace Etsy tumbled 5.98% after posting a bigger net loss and issuing a warning over fourth quarter profit, while online deals firm Groupon slumped 30.9% after issuing a weak outlook and naming a new chief executive.
Lumber Liquidators reversed earlier losses and surged 11.5% despite posting a quarterly loss, while Michael Kors rose 4.06% after profits and revenue soared.
Avon Products tanked 15.7% after profit fell short of expectations, while Facebook, Qualcomm and Whole Foods Market are on tap after the close.
Elsewhere, Asian equity markets rose on Wednesday, as Chinese stocks jumped on speculations Beijing will open a trading link between Shenzhen and Hong Kong by the end of the year. European markets rallied after European Central Bank president Mario Draghi hinted the central bank was ready to implement more stimulus measures in December.
Oil prices edged lower, with West Texas Intermediate sliding 0.55% to $47.64 a barrel and Brent crude gaining 0.68% to $50.20 a barrel. |
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| | Broker Tips | | Broker tips: Vesuvius, Royal Dutch Shell, Weir Broker Panmure Gordon warned that FTSE 250-listed Vesuvius is likely to be hit by the same industry pressures as German rival SGL Carbon, which issued a profit warning on Tuesday.
SGL Carbon warned that, despite its cost-cutting efforts, it expects group profit to decline significantly in 2016 due to renewed pressure on prices in the graphite electrode market.
"It appears that steel customers are starting to reduce and/or postpone their demand for graphite electrodes already for first quarter of 2016," Panmure said.
Analysts expect Vesuvius to face similar pressures, particularly from its US and European customers, some of whom are having to close plants.
Panmure believes the consensus EPS forecast of 30.6p and 31.2p for 2015 and 2016 remains "too high" and expects pressure on revenues and margins particularly in 2016.
Charles Stanley reiterated its 'accumulate' rating on Royal Dutch Shell on Wednesday after the company said it expects increased synergies from its £40bn deal to buy BG.
Shell on Tuesday said its estimates of pre-tax synergies from the deal had risen 40% to $3.5bn by 2018.
The group also reiterated that the proposed deal with BG Group should boost cash flow, reduce debt, and improve Shell's capacity to pay dividends and deliver share buybacks.
"After disappointing third quarter results, the share price has underperformed the peer group and a valuation discount appears to have been created," said Charles Stanley analyst Tony Shepard.
"With the high dividend yield and potential long-term growth for the combined Group, we maintain our 'accumulate' recommendation."
Weir got a boost after RBC Capital Markets upgraded its stance on the stock to 'sector perform' from 'underperform' and lifted the price target to 1,200p from 1,150p.
"We believe the risk/reward at Weir is now reasonably balanced, with the shares valued at close to 14x trough earnings," it said.
The bank said concerns over price-downs in the minerals division may have been overdone and it expects to see the trading performance of the oil and gas business bottom soon.
"It remains difficult to forecast recovery, but when it comes, strong sales growth and high operational gearing will likely result in future earnings higher than our 2017 forecast of 98p." | | |
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