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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 slide as oil prices decline after OPEC meeting London stocks finished lower on Friday as oil prices slid and as a better-than-estimated US non-farm payrolls report added to bets the Federal Reserve will raise interest rates this month.
Oil and gas stocks were under pressure after the price of crude fell as the Organization of Petroleum Exporting Countries maintained the 'current' production level last published at 30 million bpd. However, OPEC declined to offer an exact number on Friday at the conclusion of its oil ministers' summit in Vienna, Austria.
Following the conclusion of proceedings, Secretary General Abdalla Salem El-Badri said, "OPEC will wait and see how the market develops over the next six months and saw no need to alter the current production level during a period of market adjustment."
Brent crude declined 1.8% to $43.06 per barrel while West Texas Intermediate plunged 2.7% to $40.01 per barrel at 1639 GMT.
Among the biggest fallers on the FTSE 350 were BP, Royal Dutch Shell, Tullow Oil and Nostrum Oil & Gas.
Meanwhile, US non-farm payrolls in November rose by 211,000 compared with October's upwardly revised 298,000 gain and with analysts' expectations for a 200,000 reading, according to the Labor Department.
The unemployment rate was unchanged at 5%, as analysts had forecast, while the labour-force participation rate rose by one tenth of a percentage point to 62.5%.
Average hourly wages increased 0.2% month-on-month in November, in line with consensus but slightly below the 0.4% gain registered in October.
"The 211,000 gain in November's non-farm payrolls, along with the 35,000 upward revision to the gains in the preceding two months, would appear to seal an interest rate hike at the Fed's upcoming FOMC meeting, which concludes on 16 December," according to Capital Economics.
In other US data, the trade gap widened to $43.9bn in October from September's upwardly revised deficit of $42.5bn as exports declined, according to the Department of Commerce.
Elsewhere, there was positive news from Germany, where factory orders beat expectations in October, and Japan, where consumer confidence grew for the second consecutive month in November.
German retail activity, however, contracted in November with Markit's purchasing managers' index falling to 49.6 from 52.4 in October. The Eurozone retail PMI also dropped to 48.5 in November from 51.3 a month earlier. A reading below 50 signals a contraction, while a level above that indicates expansion.
Among companies, Premier Inn and Costa Coffee owner Whitbread dropped after Barclays downgraded the stock to 'equalweight' from 'overweight' and cut the price target to 5,200p from 5,800p.
Inmarsat also sat in the red after Citigroup downgraded the stock back to 'neutral' from 'buy' but retained its £11.50 target.
Berkeley Group jumped after saying it is well-placed to meet its targets for the next three years and to meet its enhanced longer term commitment to return a further £12 per share to shareholders by 2021.
easyJet gained after reporting a 9.6% increase in passengers for the November despite the situation in Sharm el-Sheikh and heavy fog at the beginning of the month.
JD Sports Fashion was higher after it said late on Thursday that it expects headline profit before tax and exceptional items for the current financial year to exceed consensus market expectations of £125m by £10m.
Power company Drax was sharply lower, giving back some of the gains from earlier in the week when it surged on news that the European Commission had approved the UK government's support for converting the Lynemouth power station from coal to biomass. |
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| | Market Movers
FTSE 100 (UKX) 6,228.97 -0.73%
FTSE 250 (MCX) 17,354.50 -0.21%
techMARK (TASX) 3,203.43 -0.19%
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 3,596.00p 7.28%
Sage Group (SGE) 611.50p 5.16%
easyJet (EZJ) 1,672.00p 2.58%
Randgold Resources Ltd. (RRS) 4,283.00p 2.49%
International Consolidated Airlines Group SA (CDI) (IAG) 582.50p 1.30%
Taylor Wimpey (TW.) 198.60p 1.27%
GKN (GKN) 295.80p 1.27%
Barratt Developments (BDEV) 613.00p 1.24%
Merlin Entertainments (MERL) 428.10p 1.09%
Aberdeen Asset Management (ADN) 304.00p 0.93%
FTSE 100 - Fallers
Glencore (GLEN) 87.29p -3.25%
Mondi (MNDI) 1,491.00p -3.24%
Whitbread (WTB) 4,573.00p -2.91%
Anglo American (AAL) 376.05p -2.79%
Royal Dutch Shell 'A' (RDSA) 1,584.50p -2.46%
Pearson (PSON) 782.00p -2.43%
BP (BP.) 359.70p -2.40%
Royal Dutch Shell 'B' (RDSB) 1,597.00p -1.96%
Intu Properties (INTU) 311.00p -1.68%
Antofagasta (ANTO) 492.90p -1.62%
FTSE 250 - Risers
JD Sports Fashion (JD.) 1,055.00p 4.66%
esure Group (ESUR) 258.30p 3.07%
Allied Minds (ALM) 442.80p 2.98%
Enterprise Inns (ETI) 107.00p 2.79%
Bwin.party Digital Entertainment (BPTY) 108.00p 2.66%
Vesuvius (VSVS) 341.00p 2.56%
Foxtons Group (FOXT) 179.90p 2.51%
NMC Health (NMC) 912.00p 2.30%
Betfair Group (BET) 3,772.00p 2.19%
Acacia Mining (ACA) 184.30p 2.05%
FTSE 250 - Fallers
CLS Holdings (CLI) 1,666.00p -7.70%
Drax Group (DRX) 229.80p -5.97%
Tullow Oil (TLW) 188.20p -5.47%
Big Yellow Group (BYG) 808.50p -3.46%
Weir Group (WEIR) 1,070.00p -3.43%
Keller Group (KLR) 837.00p -3.13%
Investec (INVP) 533.50p -3.09%
AA (AA.) 281.60p -2.80%
Petrofac Ltd. (PFC) 809.00p -2.71%
Savills (SVS) 900.00p -2.49% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Markets edge lower amid ECB disappointment European stocks ended the week on a beat note as they failed to shrug off the disappointment generated by the European Central Bank's latest policy measures.
The benchmark Stoxx Europe 600 index closed down 0.30%, while France's CAC 40 lost 0.32% and Germany's DAX fell 0.35%.
As of 163 GMT, the euro was 0.25% lower against the dollar but gained 0.12% against the yen and was broadly flat against the pound, while Brent crude slid 0.81% to $43.49 after OPEC ended its two-day meeting in Vienna and agreed to keep a production ceiling that reflects "current actual production".
"Mario Draghi's failure to live up to inflated expectations has left continental markets firmly on the back foot, with a rising euro doing its best to make life difficult for stock markets," said IG's senior market analyst Chris Beauchamp.
"As December progresses, we may see them move from anger to acceptance, but for now the continent is not the place for equity market bulls."
On the macroeconomic front, data released earlier in the session by Destatis showed Germany's factory orders gained 1.8% month-on-month in October, snapping a three-month losing streak and exceeding expectations for orders to grow 1.2% in the period after an upwardly revised 0.7% fall in September.
Meanwhile, the headline index of Markit's Germany construction purchasing managers' index rose from 51.8 to an eight-month high of 52.2 in November, marking the tenth consecutive month of expansion in building activity.
News, however, was not as positive in the retail sector, as sales fell for the first time in over 12 months in November.
Markit's seasonally adjusted retail purchasing managers' index fell from 52.4 in October to 49.6 last month, the first time in 14 months the index has fallen under the 50 threshold that indicates no change.
Fed December rate hike firmly on the cards
Across the Atlantic, a strong non-farm payrolls report for November has all but guaranteed the US Federal Reserve will hike interest rates later this month.
According to data released by the Labor Department, the US economy added 211,000 last month compared with October's upwardly revised 298,000 gain and with analysts' expectations for a 200,000 reading.
"This month's non-farm employment change may not have been quite as spectacular as last month's figure but it seems nevertheless enough to secure the announcement of a rate hike at December's FOMC meeting," said Spreadex's financial analyst Connor Campbell.
In company news, AXA rallied after the insurer set a range for its solvency ratio under the European industry's new capital rules, which it said would enable it to pay out higher dividends and invest in the business.
Sandvik slid after JP Morgan downgraded the stock to 'underweight' from 'neutral' and cut its target. |
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| | US Market Report | | US open: Stocks rally as non-farm payrolls pave way for Fed rate hike in December US equities jumped early on Friday, after a stronger-than-expected non-farm payrolls report all but guaranteed the Federal Reserve will raise interest rates later this month.
Shortly before 1500 GMT, the Dow Jones Industrial Average was up 118 points to 17,595.19, while the S&P 500 and the Nasdaq were respectively 16 and 41 points higher.
Non-farm payrolls pave way to December rate hike
According to the Labor Department, non-farm payrolls in November rose by 211,000 compared with October's upwardly revised 298,000 gain and with analysts' expectations for a 200,000 reading.
The unemployment rate was unchanged at 5%, as analysts had forecast, while the labour-force participation rate rose to 62.5%.
"The 'data dependent' Fed will be reassured that the economy is showing no sign of succumbing to worries about the global outlook, as had been feared recently, and that domestic demand is strong enough to withstand an initial hike in interest rates from what were seen as emergency record-low levels some six years ago," said Markit's chief economist Chris Williamson.
"A December rate hike now looks to be in the bag."
Meanwhile, average hourly wages increased 0.2% month-on-month in November, in line with consensus but slightly below the 0.4% gain registered in October.
Still to come, Philadelphia Fed president Patrick Harker is set to speak at a Philadelphia Fed conference at 1515 GMT, while St Louis Fed president James Bullard and Minneapolis Fed president Narayana Kocherlakota will speak at the same event at 2045 GMT and 2110 GMT respectively.
In company news, Avon Products jumped 12.3% after sources cited by the Wall Street Journal suggested the group was edging closer to a deal with private-equity firm Cerberus Capital Management.
Medical devices group Cooper Companies tumbled 10.6% after analysts at JP Morgan downgraded the stock to 'neutral' from 'overweight' and cut their target from $175 to $145.
Media retailer Barnes & Noble plunged 20.6% after its second quarter results missed expectations late on Thursday.
Elsewhere, Asian stocks ended the week on a downbeat note, as investors were left disappointed by the latest round of stimulus measures introduced by the European Central Bank, while European equities headed for their worst week in over three months on the back of the ECB decision.
The dollar fell 0.15% against the euro but gained 0.23% against the yen and was broadly flat against the pound, while gold spot jumped 1.11% to $1,073.89 |
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| | Broker Tips | | Broker tips: Inmarsat, Cobham, Whitbread Inmarsat shares dipped on Friday after Citigroup downgraded the stock to 'neutral' from 'buy' but retained its £11.50 target.
It said the company has performed strongly, outperforming the telecoms sector by 19% over the last six months and 37% over the last 12 months.
"We see considerable long term, untapped potential in Aviation but note that commercial availability is still some way off for the European Aviation network," it noted.
"We see potential for upside to near term capex depending on the company's launch plans, during a period that previously had been expected to be the investment lull part of the cycle."
Deutsche Bank downgraded Cobham to 'sell' from 'hold', noting that after the recent run in the stock, the 265p price target is now 12% below the current share price.
The bank said although US defence budgets have reached inflexion point, post recent M&A Cobham is now less geared into US defence end markets.
Deutsche expects full year 2015 net debt to EBITDA of 2.6x, which though well below covenant 3.5x, leaves Cobham unable to execute M&A for at least two to three years.
Near-term, DB expects no earnings per share growth in 2016, below the growth of the EU defence peers which are all much cheaper on EV/EBIT valuation - a more appropriate metric than price-to-earnings ratio due to balance sheet leverage differences.
It added that exposure to some difficult commercial end markets could create residual forecast risk.
Premier Inn and Costa Coffee owner Whitbread was under pressure after Barclays downgraded the stock to 'equalweight' from 'overweight' and cut the price target to 5,200p from 5,800p.
The bank pointed to slower UK revenue per available room (RevPAR) growth, deteriorating leading indicators and reduced corporate capex expectations from its economists.
It said that while Whitbread remains a high-quality, long-term growth story with a compelling total shareholder return, its positive view had in part been predicated on its belief that RevPAR growth could beat consensus given the various data points it tracks.
However, Barclays now reckons these indicators may be delivering the opposite message. | | |
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