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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 closes higher as mining stocks rise The FTSE closed in positive territory on Monday, boosted by a rally in mining stocks despite weak Chinese data and a decline in oil prices.
China's industrial output growth slowed to 5.4% year-on-year between January and February, missing analysts' estimates of 5.6% after an increase of 5.9% the prior month.
Retail sales growth in China also cooled to 10.2% on an annual basis during the period, falling short of forecasts for a 10.8% rise after a 11.1% gain the previous month.
In contrast, the country's fixed-asset investment growth accelerated to 10.2% year-on-year, beating forecasts of 9.5% and compared with 10% the prior period.
Meanwhile, oil prices slumped even as OPEC soothed concerns about an oversupplied market by saying crude production fell in February. The Organization of the Petroleum Exporting Countries' output fell about 175,000 barrels a day last month to 32.28 million barrels on lower output from Iraq, Nigeria and the United Arab Emirates, the cartel said in its monthly market report.
Iran's confirmation that it intends to up production, saw Brent crude drop 3.0% to $39.21 per barrel by 1619 GMT, with West Texas Intermediate sliding 4.4% to $36.86 per barrel.
In a busy week for central banks, the Bank of Japan has started its two-day policy meeting with an announcement on its latest measures due on Tuesday.
There was also strong data from Japan on Monday, revealing core machine orders rose 15% January from a month earlier, compared to December's 4.2% increase and analysts' estimates of 1.9%.
The Federal Reserve and the Bank of England are also due to announce their policy decisions on Wednesday and Thursday, respectively.
The UK Budget on Wednesday is also set to be in focus.
On the corporate front, Anglo American was a standout riser after news its boss Mark Cutifani took home a smaller pay cheque in 2015. Fellow miner Glencore was also topping the FTSE on the back of a copper price bounce, traders said.
Insurers were the biggest fallers, including Aviva, Admiral Group and Standard Life, ahead of the UK Budget which is expected to reveal another increase in insurance premium tax.
Admiral was also dragged lower by downgrades from Bank of America Merrill Lynch and HSBC.
NMC Health advanced as it reported a 46.7% jump in underlying full year profits of $150.3m on the back of a 36.8% rise in revenue to $880.9m. |
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| Market Movers
FTSE 100 (UKX) 6,171.56 0.52%
FTSE 250 (MCX) 16,690.25 0.57%
techMARK (TASX) 3,096.42 0.53%
FTSE 100 - Risers
Aberdeen Asset Management (ADN) 289.20p 6.99%
Anglo American (AAL) 546.50p 5.99%
InterContinental Hotels Group (IHG) 2,850.00p 4.55%
Glencore (GLEN) 147.90p 4.38%
Berkeley Group Holdings (The) (BKG) 3,100.00p 4.10%
Old Mutual (OML) 189.00p 3.85%
Ashtead Group (AHT) 815.00p 3.82%
Whitbread (WTB) 3,937.00p 3.69%
Standard Chartered (STAN) 483.55p 3.37%
Taylor Wimpey (TW.) 182.90p 2.93%
FTSE 100 - Fallers
Provident Financial (PFG) 3,000.00p -3.04%
Aviva (AV.) 482.20p -2.66%
Randgold Resources Ltd. (RRS) 6,200.00p -1.98%
Admiral Group (ADM) 1,879.00p -1.88%
Barclays (BARC) 163.25p -1.66%
Centrica (CNA) 227.50p -1.00%
Prudential (PRU) 1,346.00p -0.92%
BP (BP.) 345.45p -0.85%
Rolls-Royce Holdings (RR.) 681.50p -0.66%
Standard Life (SL.) 362.10p -0.63%
FTSE 250 - Risers
NMC Health (NMC) 959.50p 5.56%
St. Modwen Properties (SMP) 313.20p 5.42%
Renishaw (RSW) 1,856.00p 5.10%
Tullow Oil (TLW) 216.10p 4.85%
Savills (SVS) 736.00p 4.32%
Ashmore Group (ASHM) 276.30p 4.26%
Countrywide (CWD) 367.30p 4.23%
Evraz (EVR) 92.60p 4.04%
Lancashire Holdings Limited (LRE) 556.50p 3.73%
Brown (N.) Group (BWNG) 361.50p 3.40%
FTSE 250 - Fallers
Stagecoach Group (SGC) 258.90p -5.30%
Ladbrokes (LAD) 114.60p -5.29%
Acacia Mining (ACA) 255.60p -3.77%
AO World (AO.) 175.10p -2.72%
William Hill (WMH) 369.30p -2.46%
Vedanta Resources (VED) 328.50p -2.03%
Mediclinic International (MDC) 907.50p -1.89%
SIG (SHI) 139.50p -1.83%
Paddy Power Betfair (PPB) 9,155.00p -1.61%
Amec Foster Wheeler (AMFW) 489.00p -1.61% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end session higher ahead of central bank meetings European stocks were higher for the most part on Monday, with miners lending support as investors looked ahead to a week packed full of central bank meetings.
The benchmark Stoxx Europe 600 index finished higher by 0.71% at 344.66, France's CAC 40 was 0.31% firmer and Germany's DAX gained 1.62%. Milan's FSTE Mibtel was the outlier, drifting down by 0.03% to 18,981.77.
At the same time, oil prices were in the red. West Texas Intermediate was down 3.55% at $37.18 a barrel while Brent crude was 2.07% lower at $39.59.
"European equities are continuing on from where they left off last week, trending higher at the start of a critical week for markets, with central banks yet again taking centre stage," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
"Investors will be hoping the Bank of Japan will continue supporting the market and that the Federal Reserve will at least refrain from making any decisions that might jeopardise sentiment. Amid conflicting views among FOMC members as to the strength of the US economy and the outlook for inflation, the prospect of further divergence in policy from Janet Yellen relative to other global central banks could potentially undermine the current stock market rally."
Although Monday looks set to be a fairly quiet session, the rest of the week will be busier, with rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England due on Tuesday, Wednesday and Thursday, respectively.
Basic resources put in a solid performance, with the Stoxx 600 up 1.67% to hit 271.33 points despite mixed Chinese data; analysts attributed weakness in the latest industrial production and retail sales figures out over the weekend to seasonal and statistical effects.
Industrial production and retail sales figures were both soft, but 2016 fixed-asset growth beat market expectations while data showed investment in China's property sector improved.
Corporate news was thin on the ground on Monday.
Banca Monte dei Paschi di Siena surged after newspaper La Repubblica said Prime Minister Matteo Renzi had asked Italian state lender Cassa Depositi e Prestiti and Intesa Sanpaolo to consider a potential acquisition of the bank.
London-listed energy group SSE edged higher after announcing the sales of its 49.9% stake in Clyde wind farm for £355m.
On the downside, French defence and security firm Safran slumped after confirming it was selling its Morpho Detection business and saying it was reviewing strategic options for its identity and security activities.
Admiral Group was under pressure following downgrades by HSBC and Bank of America Merrill Lynch.
Data released by Eurostat earlier showed a surge in Eurozone industrial production in January.
Production rose 2.1% in January from December, beating expectations of a 1.7% increase. On the year, production was up 2.8% versus economists' expectations of 1.6%.
Still, Capital Economics expressed doubt that the sharp rise in January was the beginning of a prolonged upturn.
"The boost to domestic demand from falling energy prices probably has little further to run - we expect oil prices to rise this year. And the impact of the euro's previous falls on external demand appears to have faded. Indeed, the industrial surveys have weakened this year and the manufacturing PMI is now at a level consistent with annual industrial growth of around just 1%. |
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| | US Market Report | | US open: Stocks fall ahead of FOMC rate decision US stocks fell on Monday as oil prices plunged and investors awaited the Federal Reserve's latest policy announcement.
At 1430 GMT, the Dow Jones Industrial Average fell 0.16%, S&P 500 shed 0.36% and the Nasdaq dropped 0.12%.
Oil prices declined as Iran's oil minister reportedly said the country will not join a production freeze until its own output rises to 4 million barrels a day.
West Texas Intermediate tumbled 4.2% to $36.93 per barrel and Brent crude slipped 3.5% to $39.06 per barrel at 1430 GMT.
Although Monday looks set to be a fairly quiet session, the rest of the week will be busy, with rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England due on Tuesday, Wednesday and Thursday, respectively.
The Fed is widely expected to stand pat on interest rates this week.
In December, the US central bank lifted interest rates for the first time in nearly a decade, but recent volatility in financial markets has meant that market participants have scaled back their expectations for more rate hikes this year.
"In recent weeks we have seen some encouraging data for the US economy that are likely to have bolstered the Fed's confidence. At the same time, not all the doves are convinced and they would like to see more evidence of inflation moving back toward the 2% target," said Rabobank.
"This suggests that we should not expect a Fed rate hike this week, but we may see a consensus forming by the June meeting. We stick to our call of two hikes this year, most likely one in June and another in December. Note that markets are now pricing in one hike this year, in June."
In corporate news, shares in Starwood Hotels & Resorts Worldwide surged after it said it had received an unsolicited buyout bid from a consortium of companies for $76 per share in cash.
The company, which agreed a merger with Marriott International back in November, said it has received a waiver from Marriott enabling it to engage in talks with and provide diligence information to the consortium.
Chipotle Mexican Grill gained after a securities filing late on Friday showed the company's bosses' pay will now be linked to share price performance.
Blackstone Group slid following news over the weekend that the private equity fund is selling a portfolio of US luxury hotels to the owner of New York's Waldorf Astoria. |
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| | Broker Tips | | Broker tips: Fever-Tree, Admiral, ITV Investec reiterated its 'buy' rating and target of 740p for Fever-Tree on Monday after the carbonated drinks maker reported a jump in full year profit.
In the year to the end of December, pre-tax profit rose to £16.8m compared with £2.5m the previous year as revenue grew 71% to £59.3m.
Adjusted earnings before interest, taxes, depreciation and amortisation were up 82% to £18.2m and the company declared a final dividend of 2.3p per share, taking the total dividend to 2.08p from 0.30p in 2014.
Chief executive officer Tim Warrill said growth was strong across all four main geographical regions. He added the group has had an encouraging start to 2016 and look forward to the future with confidence.
"A strong year for Fever-Tree, with the leading UK performance cemented by some good off-trade success but also growing on-trade penetration," said Investec analyst Nicola Mallard.
"Europe and the US also showed strong growth. However, there remain ample opportunities for further penetration gains in all geographies and in both on- and off-trade channels."
Investec made no change to forecasts for 2016 and 2017 earnings. The analyst said there was a degree of positive momentum from annualising some of last year's positive events such its launch of mini cans.
"However, the group also secured some good promotional slots in the period which it cannot count on repeating," Mallard said.
"We think the group can deliver underlying growth of c£10-12m per annum. Growth over and above this will be determined by sizeable wins in the off-trade, although these are less predictable. Hence, we will update forecasts as and when necessary if the group is successful in adding a number of these."
Insurer Admiral was under the cosh on Monday following downgrades from HSBC and .
Bank of America Merrill Lynch downgraded Admiral to 'underperform' from 'neutral' as it took a look at the UK non-life insurance sector.
It said Admiral's valuation has reached levels the bank genuinely struggles to justify, now trading at 18.1x forward earnings.
"We look at Admiral's valuation in a number of different ways - relative to peers, relative to history, analysing the various different earnings streams - and all of them suggest to us the stock is overvalued," said BofA Merrill.
The bank highlighted that its decision to downgrade does not reflect a negative view on the quality of the company.
"Indeed, it is consistent with our ratings on other high quality businesses which we think are overvalued, e.g. Hiscox."
Merrill maintained its 'buy' rating on RSA Insurance, saying the level of its conviction in the recommendation is higher after the company's full year update.
"We see an even better trajectory on underlying earnings than we had expected, a better solvency ratio, and we think the market has yet to reward the company with an upward rerating."
The bank kept its 'neutral' rating on Direct Line Group, saying the stock's multiple was broadly fair, the cost-cutting story is well advanced and capital returns this year are likely to be lower than previously expected.
Still, it said the yield remains attractive at 7% near term. "Of the UK non-life companies we cover, it would be our preferred pick for defensive yield."
HSBC downgraded Admiral to 'hold' from 'buy' following the strong share price performance and amid limited upside.
It pointed out that Admiral shares are up 14% year-to-date and have outperformed the FTSE 100 and DJ Stoxx insurance index by 18% and 29% respectively.
Still, it said the fundamentals of the business remain strong, with an attractive total dividend yield of 7% and a strong capital position.
The bank lifted its price target on Admiral to 1,930p from 1,748p.
ITV shares look cheap compared to those of sector peers, said Morgan Stanley as it predicted a better advertising outlook than recent data had suggested.
Along with its full year results, ITV said it was seeing flat advertising in the first quarter and that April was weak at minus-5%.
Monitoring feedback from the ad industry since the results, Morgan Stanley said media buyers saw ITV spot net advertising revenue (NAR) rising roughly 2% in the first quarter and were surprised at ITV's negative NAR figure for April.
Media buyers remained confident on 3.5%-4% NAR growth for the year, with some signs of numbers being edged up to over 4% on expectations of a strong May-July and a firm H2.
"Media buyers report that advertisers are considering Brexit in the context of consumer confidence but no impact on the ad market is being felt."
Morgan Stanley analysts themselves forecast just 2.5% NAR growth for ITV in 2016, despite the hunch that ITV management are confident of 3-4% growth as well.
At the results, chief executive Adam Crozier stated that the FTSE 100 broadcaster had good visibility across the year and that it saw no underlying change to ad industry views on likely TV ad growth from the start of the year.
With ITV shares ending last week just above 234p, they are trading for just under 10 times 2016 EBITDA and at a price-earnings ratio of 13 times, with 9% earnings per share growth forecast through to 2018.
Germany's ProSieben delivers 12% EPS growth in the same period but is on a p/e of 18 times, while RTL is pencilled in for 4% EPS growth and is on 15 times. |
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