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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 open: FTSE flat ahead of FOMC interest rate decision The FTSE 100 was flat on Wednesday as investors braced for the Federal Reserve's interest rate announcement.
The Federal Open Market Committee is expected to keep interest rates unchanged at 0.50% amid worries about risks stemming from the slowdown in emerging economies and falls in oil prices.
With no surprises anticipated, all eyes will be on the accompanying statement for clues on the timing of the next interest rates hike.
Last month the Fed decided to raise rates by 25 basis points, marking the first increase in almost a decade.
"Since the previous meeting in December the economic landscape has changed drastically with stock markets, oil prices and global growth forecasts all following a negative trajectory, while economic data from the States have been lacklustre," said FXTM research analyst Lukman Otunuga.
"Fundamentally these factors should dim the prospects of future rate hikes but with ongoing discussions suggesting that the Fed made a mistake by raising US rates in the first place, it seems likely that the minutes may adopt a hawkish bias similar to December in an attempt to retain credibility and prevent further disruption in the financial markets."
Meanwhile, oil prices reversed gains registered in Tuesday's afternoon session. Brent crude fell 1.5% to $31.33 per barrel and West Texas Intermediate dropped 2.5% to $30.68 per barrel.
"The impact of Brent Crude's latest tumble (with the black stuff around one dollar above the $30 per barrel threshold it has been dancing around for the past couple of weeks) and the subsequent declines seen in the oil and mining sectors is the most immediate drag on the UK index this Wednesday," said Connor Campbell, financial analyst at Spreadex.
In economic data, a report from Nationwide showed house prices rose 4.4% year-on-year in January compared to 4.5% in December. Analysts had pencilled in a 4.7% increase for this month.
Still to come, the British Bankers' Association publishes its report on loans for house purchases at 0930 GMT, the Mortgage Bankers Association releases its weekly US mortgage applications figures at 1200 GMT, while data on US new home sales is due at 1500 GMT and a report on US crude oil inventories will be released at 1530 GMT.
Among corporate stocks Royal Bank of Scotland declined after the bank confirmed it will make a loss for 2015 and said it will set aside £500m of PPI provisions, $2.2bn (£1.5bn) for US residential mortgage-backed securities probes, and £4.2bn into its pension fund.
Rio Tinto was in the red as it agreed to sell its Mount Pleasant thermal coal project in Australia for an initial $83m rising to $224m (£156m) plus future royalties.
Antofagasta slid as it reported a 10.6% drop in copper production for the full year to 630,300 tonnes, due to lower output at Los Pelambres and Centinela.
The Sage Group rallied after reporting a 6.6% rise in revenue for the three months to 31 December, driven by strong software subscription sales. |
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| Market Movers
FTSE 100 (UKX) 5,917.23 0.10%
FTSE 250 (MCX) 16,222.90 0.27%
techMARK (TASX) 3,132.75 0.36%
FTSE 100 - Risers
Sage Group (SGE) 597.50p 5.29%
Aberdeen Asset Management (ADN) 241.00p 3.52%
Glencore (GLEN) 89.32p 2.55%
Fresnillo (FRES) 711.50p 2.45%
Whitbread (WTB) 3,952.00p 1.57%
Travis Perkins (TPK) 1,816.00p 1.40%
Wolseley (WOS) 3,457.00p 1.35%
Compass Group (CPG) 1,141.00p 1.33%
Schroders (SDR) 2,683.00p 1.25%
easyJet (EZJ) 1,598.00p 1.20%
FTSE 100 - Fallers
Capita (CPI) 1,139.00p -2.40%
Antofagasta (ANTO) 369.60p -2.22%
ARM Holdings (ARM) 997.00p -1.77%
Shire Plc (SHP) 4,050.00p -1.77%
Royal Bank of Scotland Group (RBS) 257.80p -1.19%
Barclays (BARC) 181.25p -0.96%
BHP Billiton (BLT) 659.40p -0.92%
Lloyds Banking Group (LLOY) 64.28p -0.70%
Kingfisher (KGF) 315.60p -0.57%
Royal Dutch Shell 'A' (RDSA) 1,414.50p -0.56%
FTSE 250 - Risers
Acacia Mining (ACA) 196.10p 3.76%
Paragon Group Of Companies (PAG) 324.90p 3.70%
Ocado Group (OCDO) 270.70p 3.20%
DFS Furniture (DFS) 324.20p 2.92%
Ophir Energy (OPHR) 91.60p 2.58%
Cineworld Group (CINE) 494.00p 2.55%
esure Group (ESUR) 242.50p 2.19%
ICAP (IAP) 459.60p 2.13%
Mitchells & Butlers (MAB) 294.00p 2.08%
Amec Foster Wheeler (AMFW) 388.60p 1.99%
FTSE 250 - Fallers
Just Eat (JE.) 393.00p -6.54%
Evraz (EVR) 61.60p -5.08%
Tritax Big Box Reit (BBOX) 128.70p -2.20%
Euromoney Institutional Investor (ERM) 875.50p -2.18%
Wizz Air Holdings (WIZZ) 1,823.00p -2.04%
Barr (A.G.) (BAG) 515.50p -1.53%
Inchcape (INCH) 722.50p -1.43%
Tullow Oil (TLW) 153.70p -1.41%
Marshalls (MSLH) 297.10p -1.30% |
| | UK Event Calendar | | Wednesday 27 January
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
FOMC Interest Rate (US) (19:00)
GFK Consumer Confidence (GER) (07:00)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
Q3
Wizz Air Holdings
FINALS
Ediston Property Investment Company, Staffline Group
EGMS
Fondul Proprietatea S.A. GDR (Reg S), Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
AGMS
Alternative Networks, Britvic, Henderson Alternative Strategies Trust , Invesco Perpetual Enhanced Income Limited, John Lewis of Hungerford, JPMorgan Indian Investment Trust, Octopus VCT 3, Octopus VCT 4, Patisserie Holdings , Polar Capital Global Healthcare Growth & Income Trust, Renew Holdings, WH Smith
TRADING ANNOUNCEMENTS
Aberdeen Asset Management, Antofagasta, Britvic, Ebiquity
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
FINAL DIVIDEND PAYMENT DATE
Diploma, Majedie Investments |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed as investors look to Fed announcement European stocks were little changed in early trade, with investors seemingly reluctant to make any big bets either way ahead of the Federal Reserve's rate announcement.
At 0850 GMT, the benchmark Stoxx Europe 600 index was down 0.1%, Germany's DAX was off 0.2% and France's CAC 40 was 0.1% higher.
"European markets are broadly unchanged ahead of the Fed decision tonight. With China remaining unstable, Apple forecasting falling growth in iPhone sales, oil prices fragile and European banks confirming further provisions there appears little to entice investors," said Rebecca O'Keeffe, head of investment at Interactive Investor.
"However, despite the three pivotal areas of concern, China, the Fed and oil, dominating market sentiment, the dramatic turnaround in European equity markets yesterday and the prospect that global central banks will provide underlying support for markets is giving some glimmer of hope for investors. The extensive fears that have plagued markets so far this year appear to be diminishing."
Oil prices were on the slide again, with West Texas Intermediate down 3.2% at $30.45 and Brent crude down 2.5% at $31.02.
In corporate news, Sage rallied in London after it posted a jump in organic revenue for the first quarter.
Royal Bank of Scotland was on the back foot after the bank announced a large clean-up in the fourth quarter, including £500m of PPI provisions, $2.2bn for US residential mortgage-backed securities probes and £4.2bn for its pension fund.
Rio Tinto nudged a touch lower after saying it has agreed to sell its Mount Pleasant thermal coal project in Australia for an initial $83m rising to $224m (£156m) plus future royalties.
Shares in drug maker Novartis were under pressure after its fourth quarter earnings missed analysts' expectations.
BASF was also in the red after the chemicals maker posted weaker-than-expected full year profits.
Data released earlier showed German consumer confidence looked set to steady in February.
Market research group GfK's forward-looking consumer sentiment indicator was flat in February compared with the previous month at 9.4, a touch ahead of economists' expectations for a nudge down to 9.3.
"Despite a number of risks, including the threat of terrorist attacks and the refugee crisis, consumers still believe that the German economy will continue to grow modestly in the next few months," GfK said.
All eyes will be on the Fed later. Although no change to interest rates is expected, investors will be looking to the statement for any further clues. |
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| | US Market Report | | US close: Stocks close higher as oil prices recover US stocks closed higher on Tuesday as investors weighed a recovery in oil prices and mixed US data.
The Dow Jones Industrial Average rose 1.78%, the Nasdaq increased 1.09% and the S&P 500 gained 1.41%.
Oil prices moved back above $30 per barrel after falling below that level earlier in the session. West Texas Intermediate rose 2.7% to $31.20 per barrel and Brent crude rose 3.2% to $31.01 at 2147 GMT.
"Oil traders have taken Monday's drop as an opportunity to cover shorts and buy into a possible interim bottom following the massive two-day surge last week," said Jasper Lawler, market analyst at CMC Markets.
Meanwhile, OPEC and Russian oil industrial officials on Monday signalled the possibility of joint action to tackle the supply cut.
"Any joint action seems unlikely since US shale producers would just use the resulting higher prices as an opportunity to ramp up their own again," Lawler said.
In economic data, the Conference Board revealed that US consumer confidence rose in January. The consumer confidence index increased to 98.1 from 96.3 in December, beating consensus forecasts for a reading of 96.5. House prices in the US rose in November compared to the same month last year, according to the S&P/Case-Shiller National Home Price Index.
The S&P/Case-Shiller 20-City Composite index was up 5.8% on the year compared with a 5.5% increase in October. This beat economists' expectations for a 5.7% gain and marked the best reading since July 2014.
On the downside of data, Markit's flash US service purchasing managers' business index slipped to 53.7 in January from 54.3 in December. This signalled the slowest expansion of service sector output since December 2014 and fell short of economists' expectations for a reading of 54. Nevertheless, it was above the 50 level that signals an expansion in sector activity.
Elsewhere, the Shanghai Composite Index fell 6.4% to 2,749.79 at the close, dragging down the rest of Asian stocks, amid worries that capital outflows will accelerate as the economy slows and the yuan devalues. The falls came despite the People's Bank of China flooding the system with cash to keep borrowing costs in check ahead of the Lunar Holiday.
Looking ahead, the market is eagerly awaiting the Federal Reserve's latest interest rate decision on Wednesday.
The Fed is expected to keep interest rates unchanged at 0.50% amid concerns about China's flagging economy and a slump in oil prices. While no surprises are expected, the focus will be on the press statement released alongside the policy announcement for any clues on when the Fed will next raise interest rates.
Last month the Fed decided to lift interest rates by 25 basis points as the labour market improved and the economy recovered. It marked the first rate hike in nearly a decade.
"However, since then economic data have suggested that the first Fed rate hike of the cycle came in the midst of one of the weakest quarters in terms of US GDP growth since the middle of 2009," Rabobank said.
"On top of that global headwinds in the form of concerns about growth in China and emerging market have not faded." The analyst expects the Fed will hike rates twice this year.
In company news, shares in Johnson & Johnson advanced as the company reported an increase in fourth quarter earnings.
Shares in Procter & Gamble were up after it reported earnings that were better than expectations, boosted by an increase in organic sales.
Freeport-McMoRan rallied after the mining and metals giant reported a better-than-forecast loss in the fourth quarter.
Apple said that that it expects revenue in the first three months of the year will be $50bn to $53bn, the first quarterly drop since 2003 and below analysts' estimates for $55.5bn.
The dollar fell 0.70% against the pound and dropped 0.12% against the euro but rose 0.16% against the yen.
S&P 500 - Risers
United States Steel Corp. (X) $7.77 +12.28%
Williams Companies Inc. (WMB) $20.42 +11.52%
Range Resources Corp. (RRC) $27.38 +11.44%
Coach Inc. (COH) $33.33 +9.82%
CONSOL Energy Inc. (CNX) $6.25 +9.27%
EQT Corp. (EQT) $61.26 +8.85%
Southwestern Energy Co. (SWN) $8.60 +8.45%
Chesapeake Energy Corp. (CHK) $3.19 +8.14%
Devon Energy Corp. (DVN) $24.56 +7.86%
NRG Energy Inc. (NRG) $9.67 +7.68%
S&P 500 - Fallers
Huntington Bancshares Inc. (HBAN) $8.05 -8.52%
Waters Corp. (WAT) $122.55 -3.97%
Harley-Davidson Inc. (HOG) $38.55 -3.84%
Intuitive Surgical Inc. (ISRG) $545.24 -2.33%
FLIR Systems Inc. (FLIR) $29.51 -2.19%
Regeneron Pharmaceuticals Inc. (REGN) $463.56 -2.02%
Costco Wholesale Corp. (COST) $148.50 -1.51%
Baxalta Incorporated (BXLT) $41.05 -1.37%
Netflix Inc. (NFLX) $97.83 -1.30%
Alexion Pharmaceuticals Inc. (ALXN) $152.64 -1.23%
Dow Jones I.A - Risers
3M Co. (MMM) $144.78 +5.24%
Johnson & Johnson (JNJ) $101.18 +4.96%
Chevron Corp. (CVX) $84.12 +3.99%
Exxon Mobil Corp. (XOM) $76.70 +3.68%
Boeing Co. (BA) $128.01 +3.23%
Verizon Communications Inc. (VZ) $48.25 +2.59%
JP Morgan Chase & Co. (JPM) $57.08 +2.55%
Procter & Gamble Co. (PG) $78.81 +2.55%
Cisco Systems Inc. (CSCO) $23.72 +2.37%
Goldman Sachs Group Inc. (GS) $154.45 +2.20%
Dow Jones I.A - Fallers
Coca-Cola Co. (KO) $42.08 -0.19%
Nasdaq 100 - Risers
Western Digital Corp. (WDC) $45.34 +6.76%
Seagate Technology Plc (STX) $27.74 +5.08%
Discovery Communications Inc. Class C (DISCK) $27.12 +4.63%
Discovery Communications Inc. Class A (DISCA) $27.42 +4.46%
Viacom Inc. Class B (VIAB) $43.86 +4.35%
PACCAR Inc. (PCAR) $47.55 +4.03%
Vimpelcom Ltd Ads (VIP) $3.12 +4.00%
Wynn Resorts Ltd. (WYNN) $63.41 +3.95%
NetApp Inc. (NTAP) $22.03 +3.82%
Sandisk Corp. (SNDK) $64.09 +3.81%
Nasdaq 100 - Fallers
Incyte Corp. (INCY) $76.04 -2.90%
Intuitive Surgical Inc. (ISRG) $545.24 -2.33%
Regeneron Pharmaceuticals Inc. (REGN) $463.56 -2.02%
Costco Wholesale Corp. (COST) $148.50 -1.51%
Tesla Motors Inc (TSLA) $193.56 -1.44%
Netflix Inc. (NFLX) $97.83 -1.30%
Alexion Pharmaceuticals Inc. (ALXN) $152.64 -1.23%
Nxp Semiconductors Nv (NXPI) $71.66 -0.99%
Illumina Inc. (ILMN) $172.90 -0.91% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Sainsbury, Facebook, Santander, EDF J Sainsbury is close to securing the support of its largest investor for a renewed bid for Home Retail Group as pressure mounts ahead of a looming takeover deadline. The Times understands that the Qatar Investment Authority, which owns 25 per cent of Sainsbury's, has indicated that it could support the grocer if it makes a renewed offer of more than £1 billion for the owner of Argos. - The Times
Facebook is resisting attempts by Britain's tax authorities to reclaim back-taxes, a stance likely to heighten public anger over aggressive avoidance by US technology giants. Although it is not known how much Facebook has set aside, the world's leading social media site is being audited by HM Revenue & Customs over taxes that may have fallen due between 2010 and 2014. - Financial Times
The cost of compensating UK customers for mis-selling payment protection insurance and a rise in Brazilian bad debts caused Spain's Santander to miss analyst expectations with only a 2.6 per cent rise in annual profits. Spain's largest bank said on Wednesday that it had put aside an extra £450m (€600m) provision to cover an expected increase in claims over the next two years from British customers who were allegedly mis-sold PPI policies. - Financial Times
Chinese state media has stepped up a salvo of biting commentaries againstGeorge Soros and other currency traders as the yuan comes under pressure, with the billionaire investor accused of "declaring war" on the unit. At the annual World Economic Forum in Davos last week, Soros told Bloomberg TV that the world's second-largest economy - where growth has already slowed to a 25-year low according to official figures - was heading for more troubles. - Guardian
Former employees of collapsed yacht builder Fairline Boats are "queuing at the gates" for jobs under its new Russian owners but only 100 positions will be available, according to its managing director. Alexander Volov and Igor Glyanenko, low-profile UK-based businessmen with a background in media, have bought Fairline's assets in a deal understood to be worth £4m. - Guardian
EDF has delayed its final investment decision on the Hinkley Point new nuclear plant yet again, amid claims it is still struggling to finalise funding for the £18bn project. The French energy giant had been scheduled to take the long-awaited decision at a board meeting on January 27, but is now thought unlikely to do so until its annual results on February 16 at the earliest. - Telegraph
The European Commission mishandled government bail-outs in the wake of the financial crisis, imposing harsher conditions on member states as contagion spread across the continent, the EU's Court of Auditors has found. In the first major assessment of the Commission's role in "Troika" of international creditors, the ECA said Brussels was unprepared for Europe's spiralling debt crisis as it failed to spot dangerous deficit levels in member states. - Telegraph | | |
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