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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: FTSE finishes on front foot The FTSE rang off a choppy week on a positive note, bouncing back 3.1% on the day as bargain hunters snapped up mining stocks and lifted the index away from the previous day's three-year lows.
The blue chip index stood at 5,706.33 by the closing bell, just above where it ended Monday's session, with the mid-caps of the FTSE 250 dawdling towards a 1.8% gain to 15,458.22.
London sentiment was helped by a positive opening to the US session ahead of a three-day weekend, with short covering and bank stocks lifting prices after JPMorgan Chase chief Jamie Dimon spent a year's pay, or $27m, buying back shares of the banking giant.
After a precipitous falls in previous sessions, European banking sector was also on the front foot thanks to good results from Commerzbank and the announcement of debt buyback by Deutsche Bank.
In London, Standard Chartered was boosted by Investec upgrading its shares to 'buy' from 'hold', with the stock trading at a fresh 21st century low of 387p. The brokerage said it was little surprise StanChart has been almost the worst performing UK bank year-to-date, given the way 2016 has played out so far.
German GDP numbers also hit their target 0.3% growth mark, with CPI inflation also in line at 0.5%.
Resources companies were boosted by a bounce in oil prices. The catalyst for this rise being attribued to short covering ahead of the long weekend in the US and overnight rumours that the OPEC cartel was ready to discuss a production cut.
As for macro data, UK construction output rose in line with expectations in December, according to data from the Office for National Statistics.
Output in the construction industry was estimated to have increased 1.5% compared with November - in line with expectations - as a 2.6% rise in all new work was offset by repair and maintenance, which slipped 0.5%.
Construction output in the fourth quarter dropped more than expected, however, down 0.4% after a 1.7% decline in the third quarter.
In the US, retail sales rose more than expected in January, according to data from the Commerce Department.
Sales were up 0.2% on the month, driven by a large increase in non-store sales, beating economists' expectations of a 0.1% increase and in line with the upwardly-revised 0.2% rise in December.
On the corporate front, Rolls-Royce was among the top of the risers after it halved its final dividend, but maintained its 2016 outlook and posted slightly better than expected underlying full year profits.
Anglo American surged past with a 18% rise thanks to the rise in metal prices compounded by rumours of possible buyer interest in its Brazilian mines.
BT Group was a faller after UBS downgraded it to 'sell' from 'neutral' with an unchanged 430p price target, saying the risk/reward profile was unattractive. The bank said risks from increasing competition have been underestimated. "Our estimates are broadly in line with consensus and assume a continuation of the current benign competitive environment. However, should competition intensify we see downside to 305p." |
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| | Market Movers
FTSE 100 (UKX) 5,706.33 3.06%
FTSE 250 (MCX) 15,458.22 1.84%
techMARK (TASX) 2,918.45 1.53%
FTSE 100 - Risers
Anglo American (AAL) 371.60p 17.61%
Rolls-Royce Holdings (RR.) 606.00p 14.34%
Glencore (GLEN) 98.34p 12.16%
Antofagasta (ANTO) 433.20p 11.22%
Standard Chartered (STAN) 426.85p 10.40%
BHP Billiton (BLT) 697.00p 9.92%
Rio Tinto (RIO) 1,849.50p 8.48%
Provident Financial (PFG) 3,019.00p 7.48%
Royal Bank of Scotland Group (RBS) 240.10p 7.43%
BP (BP.) 331.70p 6.91%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 1,845.00p -1.60%
Tesco (TSCO) 177.00p -1.45%
Imperial Brands (IMB) 3,553.50p -0.95%
BT Group (BT.A) 448.25p -0.49%
TUI AG Reg Shs (DI) (TUI) 1,008.00p -0.10%
Sky (SKY) 977.00p 0.10%
Randgold Resources Ltd. (RRS) 6,140.00p 0.16%
Hammerson (HMSO) 536.50p 0.19%
SABMiller (SAB) 4,148.00p 0.36%
British Land Company (BLND) 653.50p 0.38%
FTSE 250 - Risers
Tullow Oil (TLW) 165.90p 12.55%
Vedanta Resources (VED) 230.00p 10.10%
Amec Foster Wheeler (AMFW) 363.10p 8.78%
Weir Group (WEIR) 854.00p 7.90%
Evraz (EVR) 69.70p 7.81%
Pendragon (PDG) 36.07p 7.19%
Investec (INVP) 430.20p 6.83%
BBA Aviation (BBA) 165.90p 6.41%
Meggitt (MGGT) 370.30p 6.10%
Cairn Energy (CNE) 148.90p 6.05%
FTSE 250 - Fallers
Henderson Group (HGG) 215.20p -6.07%
Allied Minds (ALM) 300.00p -2.91%
Just Retirement Group (JRG) 121.70p -2.64%
Lookers (LOOK) 147.70p -2.51%
Poundland Group (PLND) 148.90p -2.36%
Atkins (WS) (ATK) 1,159.00p -2.36%
Assura (AGR) 54.40p -1.98%
AO World (AO.) 159.90p -1.90%
Supergroup (SGP) 1,306.00p -1.73%
Pets at Home Group (PETS) 238.30p -1.65% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Oil shares and banks lead gains European equities racked up healthy gains on Friday, rebounding from heavy losses in the previous session as investors cheered results from the likes of Commerzbank and Rolls-Royce.
The benchmark Stoxx Europe 600 index was up 2.91%, Germany's DAX was higher by 2.45% and France's CAC 40 was up by another 2.52%.
"Traders are thinking enough is enough and let's bag some bargains and this is despite the fact that we had a heavy selloff over in Asia," said Naeem Aslam, chief market analyst at AvaTrade.
However, Aslam cautioned that it was too early to tell whether the downward spiral for global equity markets was coming to an end. "The bounce which we may experience may not last for long, as investors are apprehensive about the banking sector due to the low interest rate environment and feeble growth."
Oil prices were firmer, boosted by comments from Saudi Arabia's energy minister, which fuelled hopes of a coordinated production cut by OPEC members.
West Texas Intermediate was up 9.43% at $28.92 a barrel while Brent crude was 7.96% higher at $32.65, helping to push the Stoxx 600 oil and gas index up 6.21%. Short-covering ahead of the long-weekend Stateside may also have played a role.
Despite Friday's gains, crude oil futures were still on track for a weekly loss.
On the corporate front, shares in German lender Commerzbank surged 15% on Friday as it swung back to a profit in the fourth quarter and announced a dividend. The Stoxx 600 banks index added 5.35%.
Later in the session, Deutsche Bank announced it would repurchase about €5.4bn (£4.2bn) worth of its own debt denominated in euros and US dollars.
News that JP Morgan boss Jamie Dimon had picked up $26m-worth of stock in the lender also helped to boost sentiment in the sector across the Atlantic.
Aerospace and defence group Rolls-Royce rocketed 17% in London despite halving its dividend, as it maintained its 2016 outlook and posted slightly better than expected underlying full-year profits.
Renault reversed earlier gains to trade lower after reporting a 44% jump in annual profit that beat analysts' expectations.
Also on Friday, investors were digesting some mixed Eurozone data.
According to a flash estimate from Eurostat, Eurozone GDP grew 0.3% in the fourth quarter, in line with the previous quarter and economists' forecasts.
Compared with the same quarter of 2014, seasonally-adjusted GDP rose by 1.5%, also in line with expectations and a touch weaker than the 1.6% growth registered in the third quarter. For 2015 as a whole, GDP was up 1.5%.
"Despite an ever-increasing flood of external risks, today's EU GDP figures show that the region continues to grow steadily," said Dennis de Jong, managing director at UFX.com.
"Low oil prices and favourable financing conditions have provided optimism for business in the EU, in what seems like a persistent grapple with the global economy.
Industrial output figures were a lot gloomier, however, showing an unexpected decline in December as energy dragged.
Output was down 1% compared with a 0.5% drop in November and much weaker than the 0.3% increase forecast by economists.
Compared with December 2014, industrial production fell 1.3%, versus economists' expectations for a 0.9% increase.
US data on retail sales for January edged past economists' forecasts, rising by 0.2% month-on-month versus the 0.1% gain anticipated on Wall Street, despite which Barclays left its first quarter US GDP tracking-estimate unchanged at 2.5%. |
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| | US Market Report | | US open: JP Morgan leads bank sector higher The main US market averages were sporting a solid advance and hopefully on track to break a five-day losing streak as bank shares bounced back and crude oil futures snapped higher in volatile trading.
As of 15:56GMT the Dow Jones Industrials was up by 166.25 points or 1.06% to 15,826.43, alongside a 0.97% advance for the S&P 500 to 1,847.19.
Data out at the start of the session appeared to point to solid spending by households going forward, with their sentiment holding up as the recent drop in oil prices offset volatility in capital markets.
The KBW bank index was notching up gains of 2.78% to 58.08 after news broke that JP Morgan Chase chief executive Jamie Dimon purchased 500,000 shares in the lender for $26m on Thursday, sending the share price up 7% in pre-market trade.
The NYSE Arca Biotech gauge was 0.95% higher to 2,667.53.
Nonetheless, the best performing industrial groups were: full line insurance (5.58%), industrial metals (4.41%), followed by banks (4.36%).
Retail sales volumes Stateside advanced 0.2% month-on-month in January (consensus: 0.1%), thanks to a boost from non-store sales.
"This morning's release supports our expectation that consumption growth will rebound in Q1. [...] On net, we begin our tracking of Q1 GDP growth at 2.5%, with our estimate of real consumption growth in line with our published forecast at 3.0%," Barclays's Jesse Hurwitz said in a research report sent to clients.
Consumer sentiment more or less held up at the start of February according to a preliminary reading on the University of Michigan's confidence gauge, dipping from 92.0 in January to 90.7 (consensus: 92.3).
"Note the expectations index remains consistent with solid 3% growth in real consumption. We expect little change in the sentiment numbers next month too, with the latest drop in stocks likely to be offset by a 12%-plus collapse in gas prices in February compared to January," said Ian Sheperdson, chief economist at Pantheon Macroeconomics.
Another red Friday in Asia
Elsewhere, Asian markets sank on Friday, as investors continued their week-long run for cover and offloaded their riskier assets.
Investors were still turning to safe havens, in particular gold, government bonds, and the ever-popular yen. The currency had enjoyed a surge in recent days as its popularity increased, which was bad news for large firms in the island nation as the price of exports has jumped.
"There's obviously a series of worries out there, perhaps the biggest of which is that - aside from China - central banks are pushing around the end of a piece of string and then enter negative interest rates," Salt Funds Management managing director Matthew Goodson told New Zealand's National Business Review on the state of the region.
"What we're seeing in this current sell-off is a loss of faith in risk markets and central banks, and their ability to keep bailing markets out. You've driven risk-free rates even lower, but the risk premium investors demand has gone up."
European equities racked up healthy gains on Friday, rebounding from heavy losses in the previous session as investors cheered results from the likes of Commerzbank and Rolls-Royce. |
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| | Broker Tips | | Broker tips: Tullow Oil, BT Group, StanChart Tullow Oil has been downgraded from 'outperform' to 'neutral' by Exane BNP Paribas, as it signalled the challenges for the oil exploration and production sector are "worse than we thought".
"A weakening demand environment, US shale's continued resilience and conventional supply growth through Q4 has caused the supply-demand balance to worsen," the investment bank said in a note on Friday.
It said OPEC isn't willing to play ball, so US shale must step up.
However, it did say there are some positives in the sector.
"At USD35/bbl US shale will start to accelerate the supply response in H2.
"Prices should respond from current levels but will remain capped by the deflationary effects across the value chain, we think."
UBS downgraded BT Group to 'sell' from 'neutral' with an unchanged 430p price target, saying the risk/reward profile was unattractive.
The bank said risks from increasing competition have been underestimated.
"Our estimates are broadly in line with consensus and assume a continuation of the current benign competitive environment. However, should competition intensify we see downside to 305p."
UBS said it sees a risk of increasing competition that could lead to long-term EBITDA for BT being £1.25bn per annum lower on a downside scenario.
Investec upgraded Standard Chartered to 'buy' from 'hold', with the stock trading at a fresh 21st century low of 387p.
The brokerage said it was little surprise StanChart has been almost the worst performing UK bank year-to-date, given the way 2016 has played out so far.
Investec said StanChart's path back to "normalised" returns remains long and deeply uncertain.
"Aside from its disproportionate ($43.2bn) commodities-related exposure, with adverse implications for revenues and impairments, the blow-out in CDS spreads and yields for AT1 securities has implications for its intended $4bn of further AT1 issuance."
The brokerage prefers Aldermore and Virgin Money, both of which it rates at 'buy'.
Investec cut its price target on the stock to 460p from 550p and pointed out that its forecasts for 2015 numbers remain below consensus by a considerable margin. | | |
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