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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 finish higher as UK construction PMI beats forecasts London stocks finished higher on Tuesday after wavering throughout the session as construction data came in better than expected.
The Markit/CIPS construction purchasing managers' index rose to 57.8 from 55.3 in November, beating expectations for a reading of 56. A level above 50 indicates an expansion while a reading below that signals a contraction.
Howard Archer, chief European and UK economist at IHS Global Insight, said: "This is a largely decent, reassuring survey that boosts hopes that construction output contributed to GDP growth in the fourth quarter of 2015 after being a drag in the third quarter."
The report marks a contrast to Monday's unexpected dip in UK manufacturing PMI, which sent mining shares lower.
In the Eurozone, consumer prices rose 0.2% year-on-year compared with expectations for a 0.3% increase and unchanged from November, piling pressure on the European Central Bank to do more to bring inflation back to target.
Core CPI, meanwhile, was steady at 0.9% in December. "The soft inflation print increases the pressure on the ECB next week, and also increases the risk of additional easing," said Pantheon Macroeconomics.
"But we think the central bank will refrain from adding stimulus, opting to wait for a bit more data in Q1 before potentially acting. Another disappointment in the January inflation data likely would see the central bank adding to its stimulus."
The ECB last month decided to cut the deposit facility rate by 10 basis points and extend its asset purchase programme until at least March 2017. Elsewhere in Europe, German unemployment fell 14,000 in December, beating forecasts for a 8,000 decrease.
The unemployment rate remained at 6.3% last month, as predicted by economists.
On the company front, oil stocks were under the cosh amid concerns about a supply glut. Brent and WTI prices slid 2.02% to $36.48 per barrel and 1.43% to $36.24 per barrel, respectively at 1654 GMT. Among the fallers were Tullow Oil and Nostrum Oil & Gas.
Mining stocks, on the other hand, reversed Monday's declines after the upbeat construction PMI report. Anglo American, Glencore and Fresnillo were on the front foot.
Royal Mail jumped after Cantor Fitzgerald upgraded its rating on the stock to 'buy', citing progress on cost savings and earnings in November that met expectations.
Tesco was also one the market's stars of the day after Deutsche Bank upgraded the stock from 'hold' to 'buy' while cutting its target from 210p to 200p ahead of Christmas trading figures due out later this month.
Royal Bank of Scotland rallied after RBC Capital Markets upgraded the lender's stock to 'outperform' from 'sector perform' and lifted the target to 375p from 350p.
Next slumped after reporting Christmas period sales that missed analysts' expectations, reflecting "mainly" mild weather.
Bwin.party gained as it said its fourth quarter net revenue was up 5% on the previous year, driven primarily by sports betting and casino games through mobile channels.
Wizz Air flew higher after posting record passenger numbers in the 12 months to 31 December 2015. |
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| | Market Movers
FTSE 100 (UKX) 6,122.49 0.48%
FTSE 250 (MCX) 17,178.91 0.33%
techMARK (TASX) 3,209.86 0.60%
FTSE 100 - Risers
Glencore (GLEN) 87.83p 3.00%
Travis Perkins (TPK) 1,986.00p 2.58%
International Consolidated Airlines Group SA (CDI) (IAG) 611.00p 2.52%
TUI AG Reg Shs (DI) (TUI) 1,235.00p 2.32%
Bunzl (BNZL) 1,882.00p 2.23%
Rio Tinto (RIO) 1,939.50p 1.94%
Johnson Matthey (JMAT) 2,649.00p 1.88%
AstraZeneca (AZN) 4,562.00p 1.88%
Kingfisher (KGF) 327.70p 1.80%
DCC (DCC) 5,585.00p 1.73%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 242.10p -5.17%
Next (NXT) 6,860.00p -4.59%
Aberdeen Asset Management (ADN) 275.20p -2.41%
Burberry Group (BRBY) 1,116.00p -2.11%
Standard Chartered (STAN) 531.00p -1.98%
Berkeley Group Holdings (The) (BKG) 3,547.00p -1.77%
Direct Line Insurance Group (DLG) 386.30p -1.60%
Associated British Foods (ABF) 3,241.00p -1.07%
St James's Place (STJ) 968.50p -0.87%
London Stock Exchange Group (LSE) 2,628.00p -0.64%
FTSE 250 - Risers
Home Retail Group (HOME) 139.30p 41.13%
Evraz (EVR) 72.70p 6.05%
Euromoney Institutional Investor (ERM) 984.50p 4.57%
CLS Holdings (CLI) 1,785.00p 4.51%
Spire Healthcare Group (SPI) 314.90p 4.41%
Big Yellow Group (BYG) 847.00p 4.12%
IP Group (IPO) 207.60p 3.70%
UBM (UBM) 527.00p 2.83%
Workspace Group (WKP) 975.00p 2.47%
Centamin (DI) (CEY) 66.80p 2.45%
FTSE 250 - Fallers
Supergroup (SGP) 1,542.00p -6.26%
AO World (AO.) 145.30p -6.20%
BTG (BTG) 656.00p -4.93%
Cairn Energy (CNE) 153.30p -4.43%
OneSavings Bank (OSB) 328.30p -4.15%
Poundland Group (PLND) 196.00p -3.64%
Tullow Oil (TLW) 164.40p -3.35%
Zoopla Property Group (WI) (ZPLA) 236.20p -3.20%
Weir Group (WEIR) 927.50p -2.78%
Acacia Mining (ACA) 180.30p -2.59% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stockmarkets bounce as China acts to ease jitters European markets managed a small bounce on Tuesday after Chinese authorities acted to soothe jitters in the country's stockmarkets.
The benchmark DJ Stoxx Europe 600 index finished up by 0.62% at 358.88 points, while Germany's DAX advanced 0.26% and France's CAC 40 closed the session higher by 0.34%.
That followed very heavy lossses in the previous session in line with a retreat in Asian markets.
Nonetheless, the situation in Asia remained volatile. The Shanghai Composite ended a choppy session slightly lower after the People's Bank of China pumped 130bn yuan into the financial system as it attempted to calm markets following Monday's rout.
In Europe, signs of stagnating inflation did little to lift the mood.
Data from Eurostat showed Eurozone consumer prices rose 0.2% year-on-year compared with expectations for a 0.3% increase and unchanged from November, piling pressure on the European Central Bank to do more to bring inflation back to target.
Core CPI, meanwhile, was steady at 0.9% in December.
"The soft inflation print increases the pressure on the ECB next week, and also increases the risk of additional easing," said Pantheon Macroeconomics.
"But we think the central bank will refrain from adding stimulus, opting to wait for a bit more data in Q1 before potentially acting. Another disappointment in the January inflation data likely would see the central bank adding to its stimulus."
Elsewhere, figures from the Federal Labor Agency revealed that unemployment in Germany fell a seasonally-adjusted 14,000 last month, which was far better than the 8,000 drop economists had pencilled in.
The unemployment rate was unchanged at 6.3%, in line with consensus and at its lowest since German reunification.
On the corporate front, FTSE 100 clothing retailer Next slid after its Christmas sales disappointed.
Beleaguered German car maker Volkswagen skidded after the US Justice Department sued the company over the installation of emissions-cheating devices.
On the upside, navigation software maker TomTom gained ground after saying BMW chose its traffic information in Russia, New Zealand and Australia.
Dialog Semiconductor was higher following a media report that Microchip Technology is planning to submit a bid for Atmel Corp by early next week, challenging Atmel's planned merger with Dialog Semiconductor.
France's Bouygues and Orange were both on the front foot after confirming preliminary discussions over a possible tie-up.
In London, Tesco rallied after Deutsche Bank upgraded the stock to 'buy' from 'hold'. |
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| | US Market Report | | US open: Stocks rise as PBoC tries to soothe markets US stocks edged higher on Tuesday as the People's Bank of China tried soothe concerns about the nation's slowdown.
At 1439 GMT, the Dow rose 0.11%, the Nasdaq rose 0.14% and the S&P 500 increased 0.17%.
There are very few economic drivers for the day with the only notable data release being the ISM New York Index on the areas business conditions at 1445 GMT.
Elsewhere, Asian stocks closed lower after worse-than-expected manufacturing data, a weaker yen and the imminent expiration of a ban on the share sales by major stakeholders.
The China Securities Regulatory Commission said on Tuesday that shareholders should not sell shares when the six-month ban expires on Friday.
Furthermore, several large Chinese companies said their major shareholders and senior executives would voluntarily extend a ban on sales of shares in the secondary market, Reuters reported.
Meanwhile, the PBoC tried to calm nerves as it injected 130bn yuan (£13.6bn) into the financial system via reverse repurchase agreements and fixed the yuan stronger to the dollar in reaction to the currency hitting four-and-a-half month lows.
"The PBOC's offer of 130bn yuan (almost $20bn) of reverse repurchase agreements appears to have eased liquidity concerns in Chinese money markets and offered some layer of comfort for equity investors," said Jasper Lawler at CMC Markets.
"With rising capital outflows thanks to the weakening currency, tight liquidity has forced the PBOC to offer alternative funding."
Oil prices were in the red, with Brent down 1.3% to 36.73% a barrel and West Texas Intermediate down 1.07% to $36.37 a barrel at 1425 GMT.
The dollar was up against the euro and the pound, rising 0.18% and 0.69% respectively, while it dropped 0.33% against the yen. Spot gold was up 0.33% to $1,078.15.
In company news, Eli Lilly gained despite saying it expects the year's revenue to range from $20.2bn to $20.7bn, below consensus levels. |
| | The Top Stock Picks for 2016 | | Who should you consider for the year ahead? With 2015 a notably volatile year and many a stock now trading at heavily discounted levels, we’re approaching what could be a turning point. Not only do we have a couple of potentially exciting drivers moving forward, we’ve also got some very reasonably priced stocks. That’s what makes 2016 a real year of opportunity. Download The Top Stock Picks for 2016 and discover our selection of stocks to watch in 2016. Losses can exceed deposits |
| | Broker Tips | | Broker tips: Cairn Energy, RBS, Aberdeen Asset Management Canaccord Genuity on Tuesday raised its target on Cairn Energy to 185p from 170p after the company announced the successful testing of the SNE-2 appraisal well offshore Senegal with positive results.
The oil and gas exploration and production company on Monday said operations have been safely and successfully completed following drilling, coring, logging and drill-stem testing and the well is now being plugged and abandoned.
Cairn said drill-stem testing was carried over a 12 metre interval which produced a stabilised but constrained oil flow rate of 8,000 barrels per day of high quality pay.
"This is an excellent result for Cairn (40%, operator) and partners ConocoPhillips, FAR Ltd, and Petrosen (state oil company)," Canaccord analyst Charlie Sharp said.
"Cairn has not provided any updated resource figures (currently 150-670 mmbbls) with 2C of 330 mmbbls, but we would expect an uplift to the base and mid case estimates following the SNE-3 well."
Cannacord reiterated its 'speculative buy' rating on the stock.
Sharp said despite the difficult market for exploration and production firms, there is "sufficient relatively low-risk newsflow coming up to continue our positive view on Cairn Energy".
"Catalysts include the SNE-3 well result in mid/late February with a resource update then or shortly after, the Bellatrix exploration result late Q1 which could de-risk the potential of additional exploration targets, the possibility of committing to the full six-well programme to include additional exploration targets based on new 3D seismic, and even a resolution to the Indian tax dispute."
RBC Capital Markets upgraded to 'outperform' from 'sector perform' and lifted the price target to 375p from 350p.
"2016 should be a year of meaningful progress for RBS with the passing of the bulk of litigation and restructuring charges and ending with a successful stress test that leads to regulatory approval for capital return," said the bank.
It argued that the share price overly discounts the amount of excess capital and with 28% potential all-in return, it upgraded the shares.
RBC said the London-listed bank has made good progress in the first two of the six-year restructuring programme under chief executive Ross McEwan.
"We believe execution of the plan and return of excess capital is not sufficiently discounted in the current share price and we think risk is skewed to the upside given recent underperformance."
It added that RBS is the best-capitalised UK bank. "Following the Citizens Financial Group disposal, RBS will report the highest CET1 ratio at 31 December 2015 on our estimates, at 17.0%."
Aberdeen Asset Management was under pressure after Barclays downgraded the stock to 'underweight' from 'equalweight' and cut the price target to 250p from 350p.
The bank said that while it is tempting to view the shares as solely a macro call on emerging market sentiment, significant other areas remain vulnerable to outflow risk.
Barclays highlighted that in 2015, there were significant outflows from Global Equities and the Multi-Asset area of Aberdeen Solutions .
In total, it identifies around £191bn or 2/3 of Aberdeen's stock of assets under management as concentrated in areas of significant outflows in 2015, and said sentiment into 2016 still appears negative.
It forecasts a slowing of group outflows to £20bn in full year 2016 from £34bn in 2015, but reckons the risks are to the downside.
With a significantly lower asset base in 2016 year-on-year, revenue declines of 13% are projected.
Barclays noted the shares are a trading at 12.6x calendar 2016 price-to-earnings for a projected 25% decline in earnings per share year-on-year.
"In the light of this negative earnings momentum and outflow risk, we downgrade," it said. | | |
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