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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: Stocks gain as FOMC keeps rates unchanged UK stocks advanced on Thursday after the US Federal Reserve decided to keep interest rates unchanged and struck a more cautious note on its outlook for the global economy.
The Federal Open Market Committee voted unanimously to maintain rates at 0.50%, as expected by analysts, amid concerns on a global economic slowdown.
In the Fed's accompanying statement, it said it was closely monitoring global economic and financial developments, providing little indication on when it might next raise rates.
"Inflation is expected to remain low in the near term," The Fed said.
Yet the Fed said it expects the economy to continue to grow "at a moderate pace", supported by a strong labour market.
"Although the Fed decided to be mindful in the statement by reiterating a similar language to December in an attempt to mitigate further turmoil in the financial markets, critical changes highlighting slowing economic growth and low inflation levels have made the idea a US rate increase in March difficult to imagine," said FXTM research analyst Lukman Otunuga.
Last month, the Fed raised benchmark interest rates by 25 basis points to 0.50%, marking the first hike in nearly a decade.
The attention now turns to UK gross domestic product figures at 0930 GMT which are expected to show the economy slowed in the fourth quarter. Analysts expect GDP grew 1.9% in the fourth quarter compared to a year ago, easing back from the 2.1% increase recorded in the third quarter. However, on a quarter-on-quarter comparison, GDP is projected to rise 0.5% in the final three months of the year, up from 0.4% in quarter three.
Thursday's economic calendar also including the release of reports on German inflation at 1300 GMT, US initial jobless claims at 1330 GMT, US durable goods orders at 1330 GMT and US pending home sales at 1500 GMT.
Meanwhile, oil prices continued to sway from ups and downs. At 0903 GMT Brent crude was up 0.6% to $33.30 per barrel and West Texas Intermediate grew 0.3% to $32.41per barrel.
The pick-up in oil prices gave stocks in the industry a boost including Royal Dutch Shell, Tullow Oil and Petrofac.
Among other corporate stocks, Diageo's shares fell after the drinks company posted a drop in revenue in the first half.
FirstGroup tumbled after the transport operator lowered its operating profit guidance for the current financial year amid a challenging trading environment.
Mitchells & Butlers gained after the pub company reported strong Christmas and New Year sales limited the damage to its sales figures for the nine weeks to 23 January. |
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| Market Movers
FTSE 100 (UKX) 6,001.71 0.19%
FTSE 250 (MCX) 16,297.34 0.10%
techMARK (TASX) 3,141.90 -0.38%
FTSE 100 - Risers
Anglo American (AAL) 268.00p 5.62%
Glencore (GLEN) 94.11p 2.26%
Standard Chartered (STAN) 481.65p 2.19%
Antofagasta (ANTO) 383.50p 2.16%
Royal Dutch Shell 'A' (RDSA) 1,489.00p 1.78%
Royal Dutch Shell 'B' (RDSB) 1,487.00p 1.71%
Old Mutual (OML) 162.40p 1.69%
HSBC Holdings (HSBA) 487.65p 1.57%
Fresnillo (FRES) 717.50p 1.56%
Randgold Resources Ltd. (RRS) 4,880.00p 1.35%
FTSE 100 - Fallers
Ashtead Group (AHT) 900.50p -6.68%
Centrica (CNA) 204.30p -2.76%
Shire Plc (SHP) 3,976.00p -1.83%
Carnival (CCL) 3,559.00p -1.58%
Hikma Pharmaceuticals (HIK) 1,963.00p -1.55%
easyJet (EZJ) 1,550.00p -1.46%
Aberdeen Asset Management (ADN) 236.80p -1.33%
Vodafone Group (VOD) 220.55p -1.19%
International Consolidated Airlines Group SA (CDI) (IAG) 546.00p -1.18%
Intertek Group (ITRK) 2,732.00p -1.12%
FTSE 250 - Risers
Tullow Oil (TLW) 159.70p 4.45%
Allied Minds (ALM) 298.00p 3.87%
Vedanta Resources (VED) 221.10p 3.61%
Wood Group (John) (WG.) 619.50p 2.82%
Acacia Mining (ACA) 199.20p 2.63%
Drax Group (DRX) 240.40p 2.47%
Mitchells & Butlers (MAB) 290.20p 2.40%
Petrofac Ltd. (PFC) 766.00p 2.13%
Fidessa Group (FDSA) 1,920.00p 1.86%
Kier Group (KIE) 1,239.00p 1.81%
FTSE 250 - Fallers
Melrose Industries (MRO) 283.30p -85.30%
FirstGroup (FGP) 97.25p -4.94%
Renishaw (RSW) 1,709.00p -4.20%
PayPoint (PAY) 800.00p -3.61%
Riverstone Energy Limited (RSE) 728.00p -2.93%
Go-Ahead Group (GOG) 2,450.00p -2.93%
TalkTalk Telecom Group (TALK) 212.40p -1.62%
Rathbone Brothers (RAT) 2,319.00p -1.57%
Pennon Group (PNN) 875.00p -1.46% |
| | UK Event Calendar | | Thursday 28 January
INTERIMS
Diageo, Renishaw
INTERIM DIVIDEND PAYMENT DATE
Dairy Crest Group
INTERIM EX-DIVIDEND DATE
Blue Capital Global Reinsurance Fund Ltd (DI), NCC Group, Pennon Group, red24
QUARTERLY EX-DIVIDEND DATE
City of London Inv Trust, Merchants Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Durable Goods Orders (US) (13:30)
Durable Goods Orders (US) (13:32)
Initial Jobless Claims (US) (13:30)
Pending Homes Sales (US) (15:00)
GMS
ADVFN, BG Group, Downing Two VCT 'C' Shs, Investment Company
FINALS
Aukett Swanke Group
IMSS
Euromoney Institutional Investor
SPECIAL EX-DIVIDEND PAYMENT DATE
Independent Inv Trust, Octopus Eclipse VCT 1
AGMS
Arria NLG, Edinburgh Worldwide Inv Trust, Equatorial Palm Oil, Euromoney Institutional Investor, Henderson European Focus Trust, ITE Group, Lonmin, Mitchells & Butlers, Schroder Asia Pacific Fund, Topps Tiles
TRADING ANNOUNCEMENTS
Anglo American, Daily Mail and General Trust A (Non.V), FirstGroup, Kaz Minerals , Lonmin, RPC Group
UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
Index of Services (09:30)
FINAL EX-DIVIDEND DATE
Blackrock Frontiers Investment Trust, Cardiff Property, Chrysalis VCT, Fenner, Renew Holdings, RWS Holdings, Titon Holdings, Tracsis, Unicorn AIM VCT , XLMedia |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks waver as investors mull over Fed statement European stocks wavered in early trade as investors digested the Federal Reserve's latest statement, which left the door open to a rate hike in March.
At 0850 GMT, the benchmark Stoxx Europe 600 index and Germany's DAX were both down 0.1%, while France's CAC 40 was up 0.3%.
Stocks on Wall Street ended a choppy session in the red on Wednesday after the Federal Reserve stood pad on interest rates, as widely expected, noting the recent turmoil in financial markets and saying it would be "closely monitoring" global economic and financial developments.
The Fed removed a previous reference to the risks of the economic outlook being balanced from its statement and that it was "reasonably confident" about the 2% medium-term inflation target. Instead, the US central bank said it would be keeping an eye on how the economy and financial markets could impact the outlook.
Other than that, however, the US central bank seemed committed to its plan of gradual interest rate hikes as long as job growth stays strong.
"The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate," it said.
"The Fed statement acknowledged the obvious downside risks to growth and the turmoil in asset markets, but the nuances did not go as far as to alter perceptions of the course of interest rates this year," Societe Generale said in a note.
In corporate news, Deutsche Bank edged lower after posting its first annual loss since 2008, in line with its statement last week.
Hennes & Mauritz was under pressure after the retailer's fourth quarter earnings missed analysts' expectations.
In London, drinks giant Diageo slipped into the red after its interim results. The company reported a slight rise in first half pre-tax profit despite a drop in revenue, as organic sales grew more than expected.
Pharmaceuticals group AstraZeneca was a touch weaker despite announcing that one of its cancer therapies reached a new milestone.
Elsewhere, Swiss drug maker Roche was under the cosh after its full year earnings fell short of estimates.
Oil prices were fairly steady early on Thursday, having racked up solid gains in the previous session after Russia said it might cooperate with Saudi Arabia and other OPEC countries to control global oversupply. West Texas Intermediate was flat at $32.29 and Brent crude was up 0.4% at $33.22.
Still to come on the data front, Eurozone consumer confidence is at 1000 GMT. |
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| | US Market Report | | US close: Stocks drop after Fed rate decisions, Apple and Boeing weigh US stocks finished the session comfortably lower, with traders piling on the pressure following a non-committal policy statement from the US Federal Reserve as losses in shares of Apple weighed on all three of the main US market gauges.
The Dow Jones Industrial Average fell 1.38% or 223 points to 15,944, alongside declines of 1.08% and 2.18% for the S&P 500 and Nasdaq Composite, respectively.
While the Federal Open Market Committee kept the range for the Fed funds rate unchanged at between 0.25% and 0.50%, investors appeared to react poorly to the prospect that short-term interest rates might still be headed higher when the Fed next met in March.
Since the last policy decision on 15 December, oil prices had taken another tumble and the IMF had downgraded global growth forecasts while concerns about the knock-on effect of the slowdown in emerging economies escalated.
"The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook," the Federal Open Market Committee said in a statement.
Meanwhile, oil prices moved higher amid contradictory reports that Saudi Arabia and Russia might have held contacts that could lead to cuts in oil output by the world´s largest producers.
Front month West Texas Intermediate crude oil futures advanced 2.21% to $32.16 per barrel and those for Brent crude by another 3.46% to $32.94 per barrel.
Saudi Arabia approached the Russian Federation about possible oil output cuts within the framework of the Organisation for Petroleum Exporting Countries, Transneft chief Nikolai Tokarev said on Wednesday, according to a report from TASS.
Elsewhere, China once again dominated the day in Asia, with its main index closing down slightly after having recovered from some serious losses early in the session. Wednesday was the second day of losses for Shanghai, which lost a sizeable 6.4% on Tuesday as investors were worried that capital outflows from the mainland were increasing during the country's slowdown.
In company news, Apple shares slumped after the technology giant said late on Tuesday that iPhone sales grew at the slowest pace since its first model and that revenue will fall at its steepest rate in 15 years.
Boeing also plunged after the aircraft manufacturer issued a full-year guidance of $8.45 to $8.65 per share that was below expectations.
From a sector standpoint, the worst performance was seen in the following industrial groups: Computer hardware (-5.52%), Travel&tourism (-5.52%) and Aerospace (-4.01%).
The Chicago Board of Exchange´s volatility index - which many in the markets called Wall Street´s 'fear gauge' - ended the day up by just 2.71% to 23.11.
Yields on benchmark 10-year US Treasury notes - typically considered to be most closely linked with long-term inflation expectations - edged higher by one basis point to 1.99%, while those on the more policy-sensitive two-year note slipped by one basis point to 0.83%.
S&P 500 - Risers
Freeport-McMoRan Inc (FCX) $4.65 +10.71%
CONSOL Energy Inc. (CNX) $6.72 +7.52%
Hess Corp. (HES) $36.85 +5.86%
Biogen Inc (BIIB) $273.26 +5.15%
Newmont Mining Corp. (NEM) $19.44 +5.08%
Capital One Financial Corp. (COF) $63.30 +4.84%
Cimarex Energy Co (XEC) $84.52 +3.87%
Noble Energy Inc. (NBL) $29.87 +3.86%
Marathon Oil Corp. (MRO) $8.75 +3.55%
CA Inc. (CA) $27.73 +3.28%
S&P 500 - Fallers
Total System Services Inc. (TSS) $39.22 -14.74%
United States Steel Corp. (X) $6.67 -14.16%
Textron Inc. (TXT) $32.69 -13.36%
Boeing Co. (BA) $116.58 -8.93%
State Street Corp. (STT) $51.91 -7.19%
Qorvo, Inc. (QRVO) $37.02 -6.89%
Netflix Inc. (NFLX) $91.15 -6.83%
Welltower Inc (HCN) $61.60 -6.67%
Apple Inc. (AAPL) $93.42 -6.57%
Regeneron Pharmaceuticals Inc. (REGN) $434.16 -6.34%
Dow Jones I.A - Risers
Verizon Communications Inc. (VZ) $49.03 +1.62%
Johnson & Johnson (JNJ) $102.16 +0.97%
3M Co. (MMM) $145.55 +0.53%
McDonald's Corp. (MCD) $120.87 +0.37%
United Technologies Corp. (UTX) $85.81 +0.19%
Travelers Company Inc. (TRV) $103.31 +0.06%
Coca-Cola Co. (KO) $42.09 +0.02%
Dow Jones I.A - Fallers
Boeing Co. (BA) $116.58 -8.93%
Apple Inc. (AAPL) $93.42 -6.57%
E.I. du Pont de Nemours and Co. (DD) $51.46 -3.74%
Nike Inc. (NKE) $59.58 -2.50%
Merck & Co. Inc. (MRK) $50.37 -2.10%
Walt Disney Co. (DIS) $94.32 -2.03%
Exxon Mobil Corp. (XOM) $75.29 -1.84%
Microsoft Corp. (MSFT) $51.22 -1.82%
Unitedhealth Group Inc. (UNH) $112.33 -1.43% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Google, oil, privatisation, Drax Google and Apple have fought back in the row over the big tech groups' tax regimes, saying they are being unfairly targeted as the public backlash over the controversy escalates. Google on Wednesday defended its £130m settlement with British tax authorities for the first time in a letter to the Financial Times, arguing that it was complying with British law. Separately, Apple said it should pay nothing over Brussels' investigation into its alleged sweetheart tax deals in Ireland. - Financial Times
Officials from the International Monetary Fund and the World Bank are heading to Azerbaijan to discuss a possible $4bn emergency loan package in what risks becoming the first of a series of bailouts stemming from the tumbling oil price. The Baku visit, which follows a currency crisis triggered by the collapse in crude, comes amid concern at the two global institutions over emerging market producers from central Asia to Latin America. - Financial Times
The government has been accused of shortchanging the taxpayer by "selling the family silver at a record pace" after new analysis showed a record £26.4bn raised last year through privatisation. A final 30% state holding in Royal Mail, 11bn shares in Lloyds Bank and a stake in Eurostar were among the assets sold by ministers in a bid to pay down debt and balance the books. - Guardian
Energy giant SSE is to cut its household gas prices by 5.3pc - but not until after Easter. The company, formerly known as Scottish and Southern, is the second "Big Six" energy supplier to announce a gas price cut this year in the wake of plunging wholesale prices. - Telegraph
UK policymakers must fundamentally rethink the way they fight crises as central banks run out of ammunition to deal with the next downturn, a think-tank has warned. The Resolution Foundation said slashing interest rates during the next crash would be less potent than in 2008 because rates are likely to be well below pre-crisis averages in five years time. - Telegraph
The trial of six brokers accused of rigging Libor ended in defeat for the Serious Fraud Office yesterday when a jury cleared five of the men. Colin Goodman and Danny Wilkinson, two former Icap workers, James Gilmour and Terry Farr, former employees of RP Martin, and Noel Cryan, a former Tullett Prebon broker, were freed after being found not guilty of involvement in manipulating Japanese yen borrowing rates. - The Times
Britain's biggest power producer mounted a legal challenge against the government yesterday, as it fights back after the scrapping of a lucrative tax exemption by the chancellor last year. Shares in Drax, the North Yorkshire power station, which is switching from burning coal to wood pellets, plunged by a third on July 8 last year, when George Osborne announced plans to cut an exemption from the climate change levy for generators of renewable electricity. - The Times | | |
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