| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Equities close higher as oil prices rise, BoJ loosens policy The UK equity market closed higher on Friday as oil prices rose and the Bank of Japan's latest policy decision was well received.
Oil prices gained on hopes of a deal by major exporters to cut production to address the global supply glut. At 1640 GMT, Brent crude rose 1.4% to $34.38 per barrel and West Texas Intermediate grew 0.39% to $33.35 per barrel.
Crude prices had fallen slightly at one point during the session after a Reuters survey showed OPEC oil production jumped to its highest in recent history in January. Output was lifted by increased sales in Iran following the lifting of sanctions and supply from Saudi Arabia and Iraq.
Russia's Deputy Prime Minister Arkady Dvorkovich said on Friday Russian output could fall as a result of lower investment. However, he said the state would not intervene to balance the market.
Further afield, the Bank of Japan unexpectedly decided to introduce a negative interest rate of -0.1% for new commercial banks' current account deposits. It means the banks will charged by the BoJ for some deposits and hopefully encourage them to use reserves to lend to businesses. The central bank said the rate could be extended further into negative territory in future.
"While this is likely to help undermine the recent appreciation in the Japanese yen, it is highly likely that these actions could prompt similar easier monetary policy from Chinese authorities as they look to offset the deflationary forces at work in their own economy, and is also likely to make that much more difficult for the US Federal Reserve to tighten further in the coming months, and that's before we even talk about further measures from the ECB, which are expected in March," according to Michael Hewson, chief market analyst at CMC Markets.
In economic data, GfK's UK consumer confidence survey showed an unexpected improvement in January. The sentiment index rose to 4 this month from 2 in December, beating estimates of 1.
"UK consumers remain resiliently bullish this month with no sign of the January Blues denting their view on the state of their personal finances for both the past year and also for the rest of 2016," said Joe Staton, head of market dynamics at GfK.
US gross domestic product growth slowed sharply in the fourth quarter to an annualised rate of 0.7% from 2% in the third, preliminary data from the Commerce Department showed. This was weaker than the 0.8% expected by economists.
"The outlook was pretty bright for the Federal Reserve when it raised interest rates for the first time in nearly a decade in December. It's most definitely gloomier now," said Dennis de Jong, managing director at UFX.com.
The University of Michigan's headline consumer confidence index slipped from 92.6 to 92.0, according to revised data. Analysts had predicted a reading of 93.0.
The Chicago purchasing managers' index rose to 55.6 in January from 42.9 the previous month. The data, released by the Institute for Supply Management, comfortably beat economists' expectations for a reading of 45.3 and marked the highest pace of growth in a year. A level above 50 signals expansion in the sector while a figure below that indicates a contraction in activity.
In company news, Old Mutual's shares rallied after South Africa's central bank raised interest rates for the second time in two months on Thursday. The bank also cut its growth forecast as it tried to offset inflationary pressures by tightening policy.
Imperial Tobacco Group was also up after analysts at Citi added the stock to its Europe Focus list.
BT Group climbed after it said it has completed its £12.5bn acquisition of mobile network operator EE.
Sky gained after reporting strong revenue growth for the first half of the year and announcing that James Murdoch will return as chairman.
AG Barr edged higher after the maker of Irn-Bru said it expected to deliver fourth quarter revenue growth in excess of 2.5%, which would be lapping the 5% growth seen in the corresponding period a year prior.
Tullett Prebon surged after it said market activity in the last two months of 2015 was higher than experienced in the same period a year earlier
Mining stocks were in the red, including Antofagasta, Anglo American, Glencore and BHP Billiton on the combination of the BoJ's surprise move on interest rates and on tepid data from the US.
Home Retail Group slumped after a report in the Financial Times that Sainsbury's proposed acquisition of the company had stalled. |
| | FREE Guide - Learn a winning Strategy | | Learn the SIMPLE strategy that has made 23620 pips since Jan 2013. In the last month I have made over 1,900 pips – Lisa Beaney (Trendsignal Client) Click here and get your FREE Strategy Guide NOW |
| | Market Movers
FTSE 100 (UKX) 6,059.50 2.15%
FTSE 250 (MCX) 16,466.23 1.67%
techMARK (TASX) 3,166.12 2.21%
FTSE 100 - Risers
Inmarsat (ISAT) 1,096.00p 4.78%
Old Mutual (OML) 168.50p 4.40%
Hargreaves Lansdown (HL.) 1,363.00p 4.28%
Barclays (BARC) 186.00p 4.26%
St James's Place (STJ) 953.00p 4.15%
Aberdeen Asset Management (ADN) 246.50p 4.01%
BT Group (BT.A) 484.85p 4.00%
Unilever (ULVR) 3,085.00p 3.99%
ARM Holdings (ARM) 989.50p 3.78%
CRH (CRH) 1,854.00p 3.75%
FTSE 100 - Fallers
Antofagasta (ANTO) 378.00p -1.56%
Glencore (GLEN) 89.48p -1.07%
BHP Billiton (BLT) 676.40p -0.47%
GKN (GKN) 277.50p -0.29%
Anglo American (AAL) 276.20p 0.11%
Babcock International Group (BAB) 913.00p 0.22%
SABMiller (SAB) 4,182.50p 0.30%
Ashtead Group (AHT) 894.50p 0.51%
BG Group (BG.) 1,051.50p 0.72%
Royal Bank of Scotland Group (RBS) 252.70p 0.80%
FTSE 250 - Risers
NMC Health (NMC) 960.00p 7.44%
Jimmy Choo (CHOO) 139.00p 6.92%
Evraz (EVR) 62.70p 6.54%
Tullett Prebon (TLPR) 335.10p 6.35%
Smith (DS) (SMDS) 364.70p 6.30%
Dairy Crest Group (DCG) 652.00p 6.28%
Rightmove (RMV) 3,983.00p 5.90%
Kier Group (KIE) 1,333.00p 5.71%
Acacia Mining (ACA) 206.20p 5.53%
Laird (LRD) 355.00p 5.22%
FTSE 250 - Fallers
Home Retail Group (HOME) 137.70p -3.37%
Rathbone Brothers (RAT) 2,237.00p -2.53%
Circassia Pharmaceuticals (CIR) 292.60p -2.47%
Pendragon (PDG) 39.61p -2.00%
Indivior (INDV) 151.60p -2.00%
Dunelm Group (DNLM) 874.50p -1.69%
Worldwide Healthcare Trust (WWH) 1,681.00p -1.64%
Entertainment One Limited (ETO) 150.50p -1.63%
OneSavings Bank (OSB) 306.80p -1.51%
CLS Holdings (CLI) 1,616.00p -1.16% |
| | The Shrine | | Financial whizz Jim Evans’ search for an ancient Japanese treasure leads to a shrine protected by ingenious and deadly devices. Buy this exciting new thriller by Clem Chambers. |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks higher after Japanese rate-setters make move European stocks finished the session comfortably higher and at their best levels of the day after the Bank of Japan's surprise decision to adopt negative interest rates, as it looks to drive inflation to 2%, and amid 'mixed' data both in the Eurozone and the US.
The benchmark DJ Stoxx Europe 600 index gained 2.20%, Germany's DAX was up 1.64% and France's CAC 40 was 2.19% higher.
Rate-setters in Japan said they would apply a negative 0.1% interest rate on the excess reserves financial institutions place at the bank with effect from 16 February.
The bank voted by five to four in favour of the decision, which it attributed to declining oil prices and the slowdown in China. Some analysts were taken by surprise by the 'timing' of the move but many had been anticipating just such a decision in the first half of 2016.
"There is an increasing risk that an improvement in the business confidence of Japanese firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation might be negatively affected."
The BoJ added that it would cut interest rates further into negative territory if that was deemed necessary.
Oil prices were modestly higher on this side of the Pond by the close of play on Friday, with prompt-month Brent crude oil futures 0.4% lower at $33.09.
In corporate news, Sky was on the front foot after its first half revenues met market expectations and the broadcaster announced the appointment of James Murdoch as chairman.
British Land was also in the black after it signed another tenant to the London 'Cheesegrater'.
Spanish wind turbine maker Gamesa Corp Tecnologica rocketed following a report that Siemens was interested in bidding for the company.
Shares in French outdoor advertising company JCDecaux rallied after its well-received fourth quarter numbers.
Banca Monte dei Paschi di Siena was higher after the bank's chief executive told an Italian newspaper a tie-up with UBI Banca might make sense.
On the downside, Yara was weaker after the fertiliser producer's fourth-quarter results missed analysts' expectations.
On the macroeconomic front, flash figures from Eurostat showed inflation in the Eurozone picked up in January.
Core inflation - excluding items such as energy and food - increased to 1% from 0.9% the previous month, compared with expectations for 0.9%.
However, Barclays' Fabio Fois told clients that: "we think that the mini inflation recovery that has been unfolding since October is likely to come to an end as non-core prices are likely to weigh on headline inflation, possibly until the end of H1."
Credit extended to the private sector in the Eurozone dipped sharply in December, led by loans to non-financial corporations.
Here again, Fois had a unique take on the data, saying that: "The reported decline in the annual growth rate of NFC loans should not be taken as an indication that the already modest euro area investment recovery is at risk. |
| | Learn how the experts trade FOREX - FREE London Course | | Join us at the The FX Method in London, January 15th 2016 - A one day intensive trading course for both advanced traders and beginners. Learn a unique approach to combining Trading Systems and Strategies to gain an important Trading Edge. Register for your FREE Ticket |
| | US Market Report | | US stocks gained on Friday after the Bank of Japan's surprise decision to introduce negative interests for the first time.
At 1431 GMT, the Dow Jones Industrial Average increased 0.48%, the Nasdaq rose 1.00% and the S&P 500 climbed 0.35%.
The Bank of Japan decided to introduce a negative interest rate of -0.1% for new commercial banks' current account deposits. It means the banks will be charged by the BoJ for some deposits and hopefully encourage them to use reserves to lend to businesses.
The central bank said the rate could be extended further into negative territory in future.
"We stress that there is indeed an overarching risk the BoJ will be forced to cut deeper into the negative to avert the deflation threat stemming not least from oil and is set to stay lower for longer," according to Danske Bank.
Stimulus measures, low interest rates and the government of Shinzo Abe's 'Abenomics' recovery strategy have so far failed to push inflation towards the BoJ's 2% target.
In the US, investors seemed to shrug off data showing a worse-than-expected slowdown in gross domestic product in the fourth quarter. US growth eased to an annualised rate of 0.7% from 2% in the third quarter, preliminary data from the Commerce Department revealed.
Dennis de Jong, managing director at UFX.com, said: "The outlook was pretty bright for the Federal Reserve when it raised interest rates for the first time in nearly a decade in December. It's most definitely gloomier now.
"GDP often goes through peaks and troughs, so it would be alarmist to suggest today's data is the start of something more serious. That said, it pushes another rate hike in March into the very unlikely bracket."
Meanwhile, oil prices were sitting higher on hopes OPEC and Russia might reach a deal on cutting production to address the supply glut.
West Texas Intermediate rose 1.7% to $34.48 per barrel and Brent crude gained 1.7% to $33.82 per barrel at 1435 GMT.
On the macroeconomic front, the Chicago Purchasing Managers' index rose to 55.6 in January from 42.9 the previous month.
The data, released by the Institute for Supply Management, comfortably beat economists' expectations for a reading of 45.3 and marked the highest pace of growth in a year.
In company news, Amazon's shares declined after the online marketplace reported its largest quarterly profit ever, but still fell short of analysts' expectations.
Microsoft jumped after it reported second quarter revenue of $23.8bn, above estimates.
Visa shares edged higher after the credit card company reported first quarter earnings of $1.7bn late on Thursday.
Rival MasterCard slumped despite reporting an 11.1% increase in quarterly profit as purchase volumes rose.
The dollar was up against all the major currencies, rising 0.70% against the pound, 0.84% against the euro and 2.12% against the yen. |
| | Pick up an eBook for trading tips and improved knowledge! | | Knowledge is power when trading, and 24option’s eBook is a great resource for you to refer to again and again as you go along. Gain advice on how to create a trading strategy and choose your trades.
Access your eBook today Your capital is at risk. |
| | Broker Tips | | Broker tips: Lonmin, FirstGroup, Sky After a poor share price performance, HSBC has upgraded Lonmin from 'hold' to 'buy' but has cut its target from 135p to 76p.
The company's first quarter production report out on Thursday was mixed, according to the investment bank.
"Safety stoppages impeded production momentum at the key Generation 2 shafts, but the processing division performed well, drawing down ore and concentrate inventory in the period. Although mined platinum volumes of 158koz were 16% lower y-o-y, refined volumes climbed 23% to 171koz."
HSBC said it has updated its valuation to reflect weaker platinum pricing from its Metals Quarterly report out earlier in January.
"We maintain our 33% discount to our DCF for Lonmin (at a 7.5% real discount rate ) to account for valuation risk given high gearing to key driver assumptions. We cut our target to 76p from 135p. As this implies upside of 32%, we upgrade to 'buy' from 'hold'."
RBC Capital Markets cut FirstGroup to 'underperform' from 'sector perform' and downgraded the price target to 85p from 110p following the company's profit warning on Thursday.
It noted the group delivered another profit miss for full year 2015/16 from its third quarter update, adding that the warning has put the confidence building process back by at least 12-18 months.
"We now find reduced investor confidence that these goals will be met (even with helpful working day effects in School Bus), and thus that cash can be generated and dividend restored," the Canadian bank said.
It pointed out that FirstGroup maintained its stance that the now extremely challenging profit margin growth goals can still be met, and that Q3 trading was a 'knock' rather than outlook-changing event.
"In our view, either the company needs to see relatively better demand, and/or a more benign labour cost outlook than its peers to meet this," said RBC.
The bank said that while the shares look cheap on price-to-earnings, the increasing risk to earnings has prompted the rating downgrade.
At 1000 GMT, FirstGroup shares were down 0.4% to 89.70p, having tumbled in the previous session after the transport operator cut operating profit guidance for the current financial year.
Sky's 'add' rating and target of 1,250p were kept unchanged by Numis after the broadcaster reported strong first half revenue growth.
The company said in its interim results on Friday that statutory revenue for the six months to 31 December jumped 5% to £5.72bn from £5.44bn. It was driven by signing up 337,000 new customers in the second quarter - the company's highest UK and Ireland growth in 10 years - and sold 1.1m extra paid-for products.
Operating profit for the period rose 12% to £747m, and the company declared a dividend of 12.6p per share.
Earnings per share gained 10% to 29.7p, ahead of Numis expectations of 28.4p. Adjusted pre-tax profit also beat the broker's estimates of £620m at £649m.
"Looking forward, the group continues to push innovation including the SkyQ top-end box in the UK and product roll-out to Germany and Italy," according to Numis analyst Paul Richard.
"We retain our pre-tax profit/earnings per share forecasts of £1,340m/62p for June 2016, £1,345m/62p for 2017 (flat due to higher Premier League costs) and £1,560m/72p for 2018 (driven by Sky Europe synergies)." | | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment