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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: Equities led lower by mining stocks UK equities fell on Tuesday with mining stocks leading the decline as oil prices continued to slide.
Oil prices dropped as the Organization of the Petroleum Exporting Countries said that global demand in 2016 for its crude would be less than previously thought and that supply would likely be higher than expected this year.
At 1609 GMT, Brent crude was down 2.6% to $38.51 per barrel and West Texas Intermediate shed 2.9% to $36.12 per barrel.
Investors also digested mixed US economic data in afternoon trade.
US retail sales fell 0.1% month-on-month to $447.3bn in February, the first drop since September, the Commerce Department revealed. The decrease was not as bad as the 0.2% consensus forecast, however. On an annual basis sales were up 2.9%.
But January's sales data was revised markedly down to a 0.4% fall, having been initially published as a 0.2% rise.
Economists said this added another reason for the Federal Reserve to hold off from raising interest rates. The Fed announces its policy decision on Wednesday and is widely expected to keep measures unchanged.
Earlier, the Bank of Japan decided to stand pat on interest rates despite worsening conditions in the world's third largest economy. The central bank also downgraded its view of the economy and inflation expectations.
The Bank of England is also widely expected to keep policy unchanged when it announces its latest measures on Thursday.
On a positive note for markets, business conditions in the New York region improved more than expected in March, according to a survey from the New York Fed. The Empire State manufacturing index rose to a reading of 0.6 from -16.6 in February, marking the first positive reading since July last year and beating expectations of -10.
Another report from National Association of Home Builders showed home-builder sentiment held steady in March. An index of builder confidence in the market for new single-family homes remained at the seasonally adjusted level of 58 in March, missing forecasts of 59.
Meanwhile, the ratio of business inventories to sales was 1.40 in January, marginally higher than 1.39 in December and 1.36 it was 12 months ago, the Commerce Department said, signalling that companies are failing to sell what they have produced.
In the Eurozone, Eurostat revealed euro-area employment rose 0.3% in the fourth quarter compared to the previous three months. Compared to the same quarter a year ago, employment increased 1.2% in the euro-area.
In company news, shares in Antofagasta slid after the miner revealed earnings before interest, tax, depreciation and amortisation plunged 58% to $890.7m due mainly to lower copper prices. The company also cancelled its final dividend.
Anglo American also sat lower after its chief executive Mark Cutifani shelled out for 40,000 shares at £5.51 each to underpin the struggling company. It came after Anglo American published its annual report on Monday, which showed the miner falling to a record $5.5bn pre-tax loss for 2015, with Cutifani's pay package also sinking.
Royal Bank of Scotland rallied after Goldman Sachs upped the stock to 'buy' from 'neutral' and added it to its Conviction List. The Financial Times also reported that the lender is axing 448 investment banking jobs as part of a radical restructuring and is planning to transfer millions of pounds of pension-related costs on to employees.
Legal & General declined after reporting a capital position below some analysts' expectations in its full year results.
Wood Group dropped after Canaccord Genuity cut its stance on the stock to 'sell' from 'hold', saying the stock was overvalued following the recent outperformance. |
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| Market Movers
FTSE 100 (UKX) 6,142.96 -0.51%
FTSE 250 (MCX) 16,640.69 -0.31%
techMARK (TASX) 3,088.99 -0.21%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,433.00p 1.78%
RSA Insurance Group (RSA) 458.80p 1.57%
Royal Bank of Scotland Group (RBS) 234.80p 1.56%
Unilever (ULVR) 3,148.00p 1.21%
WPP (WPP) 1,592.00p 1.08%
Relx plc (REL) 1,268.00p 1.04%
Mondi (MNDI) 1,358.00p 0.97%
Sage Group (SGE) 601.50p 0.92%
ITV (ITV) 241.30p 0.88%
Randgold Resources Ltd. (RRS) 6,250.00p 0.81%
FTSE 100 - Fallers
Anglo American (AAL) 488.10p -10.69%
BHP Billiton (BLT) 762.10p -6.63%
Legal & General Group (LGEN) 228.10p -6.36%
Glencore (GLEN) 140.85p -4.77%
Antofagasta (ANTO) 513.50p -4.47%
Rio Tinto (RIO) 1,919.50p -4.10%
Standard Chartered (STAN) 464.00p -4.04%
Burberry Group (BRBY) 1,360.00p -2.72%
Aberdeen Asset Management (ADN) 281.70p -2.59%
InterContinental Hotels Group (IHG) 2,783.00p -2.35%
FTSE 250 - Risers
Moneysupermarket.com Group (MONY) 344.20p 5.13%
Hastings Group Holdings (HSTG) 168.00p 4.02%
Supergroup (SGP) 1,425.00p 3.64%
OneSavings Bank (OSB) 254.80p 3.62%
Aldermore Group (ALD) 219.00p 3.40%
St. Modwen Properties (SMP) 323.00p 3.13%
Poundland Group (PLND) 165.80p 3.05%
IP Group (IPO) 179.20p 2.99%
Redrow (RDW) 403.40p 2.93%
Shawbrook Group (SHAW) 292.00p 2.71%
FTSE 250 - Fallers
Tullow Oil (TLW) 192.50p -10.92%
BGEO Group (BGEO) 1,824.00p -7.03%
Evraz (EVR) 86.15p -6.97%
Vedanta Resources (VED) 305.70p -6.94%
Mediclinic International (MDC) 856.00p -5.88%
Allied Minds (ALM) 353.00p -5.79%
Wood Group (John) (WG.) 616.50p -5.30%
Ophir Energy (OPHR) 81.60p -4.78%
Balfour Beatty (BBY) 249.50p -3.74%
Vectura Group (VEC) 147.00p -3.54% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks close lower as fresh US data arrives European stocks closed in the red on Tuesday as investors sifted through US consumer sales and manufacturing data, while basic resources were under the cosh.
At close, the benchmark Stoxx Europe 600 index was down 1.09%, France's CAC 40 was off 0.75% and Germany's DAX was down 0.56%.
Basic resources were among the worst performers as copper prices slid, with the Stoxx 600 index for the sector down 4.82%.
At the same time, oil prices were weaker, with West Texas Intermediate down 2.96 to $36.11 a barrel and Brent crude 2.6% lower at $38.53 after OPEC warned on Monday that supply would likely be higher than expected this year.
US retail sales dropped albeit less than expected in February and January's data was revised down into negative territory, the Commerce Department revealed. Sales fell 0.1% month-on-month to $447.3bn in February, the first drop since September. The decline was not as bad as the 0.2% consensus forecast, however. On an annual basis sales were up 2.9%.
But January's sales data was revised markedly down to a 0.4% fall, having been initially published as a 0.2% rise.
Economists said this added another reason for the Federal Reserve to hold off from raising interest rates. The Fed announces its policy decision on Wednesday and is widely expected to keep measures unchanged.
"A weaker than previously thought retail sales trend so far this year puts further pressure on US policymakers to hold off hiking interest rates," said economist Chris Williamson at Markit.
Morgan Stanley now expects the US central bank to delay its next rate hike until the December meeting, which is a big departure from its previous expectation of three hikes this year.
Earlier the Bank of Japan decided to stand pat on interest rates despite worsening conditions in the world's third largest economy. The central bank also downgraded its view of the economy and inflation expectations.
"Although it was broadly expected that the central bank remains on standby following the souring mood from the negative interest rate cut on the 29th, the ongoing global woes which have exposed Japan to downside risk have left the central bank under immense pressure to take action," said FXTM research analyst Lukman Otunuga.
In corporate news, Legal & General was weaker despite reporting a 14% rise in full year operating profit and lifting its full year dividend.
Antofagasta fell sharply after posting a 58% drop in full year earnings and cancelling its final dividend.
Elsewhere, Swedish retailer Hennes & Mauritz was in the red after its February sales figures failed to impress.
Beleaguered German car maker Volkswagen was also under pressure after institutional investors from around the world sued the company for €3.3bn over the emissions cheating scandal.
On the upside, French telecoms operator SFR gained after it said core operating profit rose 20% in 2015 to €3.86bn.
Data released earlier by Eurostat showed Eurozone employment rose 0.3% in the fourth quarter compared to the previous three months. Compared to the same quarter a year ago, employment increased 1.2% in the euro-area. |
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| | US Market Report | | US open: Stocks slide as oil prices decline, US retail sales fall US stocks were on the back foot on Tuesday as oil prices slid and data revealed a decline in US retail sales in February.
The Dow Jones Industrial Average was down 0.17%, while the S&P 500 shed 0.54% and the Nasdaq lost 0.60% by 1454 GMT.
Oil prices declined as the Organization of the Petroleum Exporting Countries said that global demand in 2016 for its crude would be less than previously thought and that supply would likely be higher than expected this year.
At 1454 GMT West Texas Intermediate crude dipped 2.11% to $36.41 per barrel and Brent slipped 1.5% to $38.92 per barrel.
US retail sales dropped albeit less than expected in February and January's data was revised down into negative territory, the Commerce Department revealed. Sales fell 0.1% month-on-month to $447.3bn in February, the first drop since September. The decline was not as bad as the 0.2% consensus forecast, however. On an annual basis sales were up 2.9%.
But January's sales data was revised markedly down to a 0.4% fall, having been initially published as a 0.2% rise.
Economists said this added another reason for the Federal Reserve to hold off from raising interest rates. The Fed announces its policy decision on Wednesday and is widely expected to keep measures unchanged.
"A weaker than previously thought retail sales trend so far this year puts further pressure on US policymakers to hold off hiking interest rates," said economist Chris Williamson at Markit.
Earlier the Bank of Japan decided to stand pat on interest rates despite worsening conditions in the world's third largest economy. The central bank also downgraded its view of the economy and inflation expectations.
"Although it was broadly expected that the central bank remains on standby following the souring mood from the negative interest rate cut on the 29th, the ongoing global woes which have exposed Japan to downside risk have left the central bank under immense pressure to take action," said FXTM research analyst Lukman Otunuga.
On a positive note for markets, business conditions in the New York region improved more than expected in March, according to a survey from the New York Fed.
The Empire State manufacturing index rose to a reading of 0.6 from -16.6 in February, marking the first positive reading since July last year and beating expectations of -10.
Another report from National Association of Home Builders showed home-builder sentiment held steady in March. An index of builder confidence in the market for new single-family homes remained at the seasonally adjusted level of 58 in March, missing forecasts of 59.
Meanwhile, the ratio of business inventories to sales was 1.40 in January, marginally higher than 1.39 in December and 1.36 it was 12 months ago, the Commerce Department said, signalling that companies are failing to sell what they have produced.
On the corporate front, Valeant Pharmaceuticals shares tumbled after its fourth quarter results missed analysts' expectations and the company downgraded its revenue forecast for 2016.
Avon Products declined after it announced on Monday that it would cut around 2,500 jobs and move its corporate headquarters to the UK. |
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| | Broker Tips | | Broker tips: Mears Group, Wood Group, RBS Mears Group's shares rose slightly as Investec said the company's full year results were "solid enough" and in line with expectations.
Investec retained its 'hold' rating and left its target at 440p after the service provider for the social housing and care sectors reported a 12% fall in annual profit before tax to £36.8m.
The acquisition of the loss-making Care at Home business from Care UK in May 2015 cut into profits but was anticipated.
The business nevertheless made healthy revenues, helping the care division to achieve an 18% increase in revenue to £146m despite a reduction in margins.
Social housing revenue climbed 3% to £735.1m, driven by a positive contribution from the acquisition of Omega in October 2014.
Group revenue rose 5% to £881.1m and the dividend was raised 10% to 11p.
"Full year results are broadly in line with our expectations, with Housing posting a good performance (particularly within the Housing Management business) and Care again proving a challenge," said Investec analyst Andrew Gibb.
"The group will have to contend with the additional financial pressure on the National Living Wage in 2016, although initial reactions from clients have been 'encouraging'. Key to this story is the recovery in growth in Housing and the level of new (contract) wins during the year (£900m) suggests this is emerging."
Wood Group shares slumped on Tuesday after Canaccord Genuity cut its stance on the stock to 'sell' from 'hold', saying the stock was overvalued following the recent outperformance.
It said the company's full year results were broadly in line with existing consensus and although the group did not provide any formal guidance, the outlook for this year remains reasonably positive, with earnings likely to be down no more than 25% despite the major industry downturn.
The brokerage said it was surprised to see the dividend lifted as much as 10%.
"On the current trajectory, payout will reach 53% (on adjusted diluted EPS) this year. After many years of above-sector dividend growth we think this source of performance is now exhausted," it said.
Canaccord upped its price target on the stock to 575p from 550p to reflect the broader sector rally but said the current share price does not fairly reflect Wood Group's relative merits.
It pointed out that while the majority of Wood Group's US activity is in operations and maintenance, and a growing chunk is outside upstream oil & gas entirely, the group still has a much greater exposure to US rig counts than its UK listed peers, with the exception of Hunting.
"In this context we find it surprising that the stock has been so resilient year-to-date, as US rig counts have been uniformly negative, reaching post-1940s lows in the past two weeks and looking likely to plumb fresh depths."
In addition, Canaccord said its recent visits to Aberdeen confirm the very poor outlook for the UK North Sea. Although Wood Group's international upstream activities offer some short-term resilience, there is less certainty in the medium-term.
Royal Bank of Scotland got a boost as Goldman Sachs upped the stock to 'buy' from 'neutral' and added it to its Conviction List.
The upgrade was premised on three key points.
Goldman said RBS's valuation now screens as attractive. The shares have de-rated and are trading at a 50% discount to Lloyds on a trailing price to tangible book value ratio.
It also said the bank was well positioned to substantially expand its market shares in the attractive domestic mortgage market as its large share in current accounts offers a strong funding advantage.
Finally, GS said the over 70% cut in its investment banking risk-weighted assets will over time free up capital and help RBS improve underlying returns, narrowing the gap versus Lloyds.
Goldman said it prefers RBS over Lloyds Banking Group, which it rates at 'neutral', on valuation grounds and net interest income trends.
GS said that following analysis of the two banks' funding structures, it founds RBS has a funding advantage, paying on average around 40 basis points less for deposits.
"This advantage appears structural, driven by RBS's larger share of current accounts (18% market share versus only 8% in mortgages). We believe this underpins RBS's aggressive growth ambitions in UK mortgages."
GS said key risks to its view on RBS relate to litigation, regulatory changes, execution risk in disposing of Williams & Glyn, the UK's upcoming referendum on the EU and higher-than-expected exit losses in running down legacy IB assets. |
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