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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: Stocks close lower as oil prices waver The FTSE closed slightly lower on Friday as the rally in oil prices snapped and a key survey showed an unexpected fall in US consumer confidence.
Oil prices wavered late in the session after earlier gains, with West Texas Intermediate falling 0.05% to $40.18 per barrel and Brent crude rising 0.57% to $41.78 per barrel.
Prices have risen more than 50% from 12-year lows reached in December after Organization of the Petroleum Exporting Countries (OPEC) floated the idea of a production freeze.
In economic data, the University of Michigan's consumer sentiment index unexpectedly fell in March, to a reading of 90.0 from 91.7 in February and versus expectations of 92.2.
Capital Economics said the decline in the consumer sentiment index "illustrates that higher gasoline prices more than offset the positive impact to sentiment from the rebound in stock markets".
Meanwhile, Federal Reserve Bank of New York President William Dudley said the financial system is "much more resilient" following the 2008 crisis, but "more work still lies ahead" to prevent another one from happening. Dudley said there were limits to the supervision of banks in averting another crash and urged policymakers to find ways to better educate the industry about the role of supervisors.
Elsewhere, the European Central Bank's chief economist Peter Praet said further cuts to interest rates are possible if the central bank's recently announced barrage of measures fail to boost the economy.
"We have not reached the physical lower bound. If new negative shocks should worsen the outlook or if financing conditions should not adjust in the direction and to the extent that is necessary to boost the economy and inflation, a rate reduction remains in our armoury," he told Italian newspaper La Repubblica.
German producer prices fell more than expected in February, according to the latest data from Destatis. Producer prices dropped 0.5% from January, which was steeper than the 0.2% decline pencilled in by economists, as energy prices slid 9.4% on the month. On the year, producer prices were down 3%, missing expectations for a 2.6% drop.
On the company front, shares in Sports Direct surged, with traders attributing the push higher to short-covering ahead of the stock's demotion to the FTSE 250 next week.
The retailer has been under the cosh since late last year, when it was hit by a damning report in the Guardian about its treatment of staff and pay, while a profit warning in January caused the shares to tank.
Smiths Group got a boost after RBC Capital Markets upgraded the stock to 'outperform' from 'sector perform' and lifted the price target to 1,225p from 1,050p saying it expects the recent outperformance to continue.
Going the other way, Berkeley Group was in the red despite saying it expected current year results to be at the top end of expectations, after absorbing approximately £25m of accelerated operating expenses. Fellow housebuilders Persimmon, Barratt Developments and Taylor Wimpey also declined.
"With the sector looking so fully valued versus its position just a couple of years ago, we should get used to this share price reaction - the easy days for the sector are now well behind it," said Chris Beauchamp, senior market analyst at IG.
Restaurant and pub operator Mitchells & Butlers was up after having its 'buy' rating reiterated by analysts at Deutsche Bank.
Real estate investment trust Hansteen Holdings was under pressure in afternoon trading, after it emerged its joint chief executives were planning to sell a combined 1.9% stake in the firm. |
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| Market Movers
FTSE 100 (UKX) 6,189.64 -0.19%
FTSE 250 (MCX) 16,908.93 0.36%
techMARK (TASX) 3,073.67 -0.18%
FTSE 100 - Risers
Standard Chartered (STAN) 492.10p 7.20%
Sports Direct International (SPD) 425.10p 5.88%
GKN (GKN) 293.10p 3.86%
Shire Plc (SHP) 3,691.00p 3.45%
TUI AG Reg Shs (DI) (TUI) 1,025.00p 3.33%
Whitbread (WTB) 3,932.00p 3.09%
Smiths Group (SMIN) 1,106.00p 2.79%
Anglo American (AAL) 555.40p 2.68%
International Consolidated Airlines Group SA (CDI) (IAG) 565.00p 2.54%
Ashtead Group (AHT) 876.00p 2.46%
FTSE 100 - Fallers
Mondi (MNDI) 1,317.00p -4.91%
Antofagasta (ANTO) 516.50p -3.91%
Sainsbury (J) (SBRY) 271.30p -3.62%
Hikma Pharmaceuticals (HIK) 1,828.00p -2.82%
Berkeley Group Holdings (The) (BKG) 3,185.00p -2.21%
Randgold Resources Ltd. (RRS) 6,510.00p -2.18%
Royal Dutch Shell 'B' (RDSB) 1,707.50p -1.78%
BAE Systems (BA.) 497.10p -1.76%
Persimmon (PSN) 2,076.00p -1.75%
Fresnillo (FRES) 990.50p -1.64%
FTSE 250 - Risers
Clarkson (CKN) 2,321.00p 10.00%
Enterprise Inns (ETI) 82.80p 7.18%
Renishaw (RSW) 2,024.00p 5.53%
International Personal Finance (IPF) 301.10p 5.13%
Mitchells & Butlers (MAB) 279.50p 5.00%
BGEO Group (BGEO) 2,021.00p 4.55%
Grafton Group Units (GFTU) 733.00p 4.42%
Allied Minds (ALM) 415.30p 4.09%
PayPoint (PAY) 765.00p 4.08%
Pendragon (PDG) 37.00p 3.90%
FTSE 250 - Fallers
Home Retail Group (HOME) 163.20p -9.93%
Melrose Industries (MRO) 338.60p -5.07%
Centamin (DI) (CEY) 92.55p -5.03%
Halma (HLMA) 854.50p -4.15%
Bellway (BWY) 2,442.00p -3.13%
NCC Group (NCC) 246.20p -3.11%
Dunelm Group (DNLM) 941.00p -2.69%
Wood Group (John) (WG.) 636.50p -2.30%
Cable & Wireless Communications (CWC) 74.10p -2.18%
P2P Global Investments (P2P) 900.00p -2.12% |
| | Award-winning ISA investing with The Share Centre | | We’re proud to have won ‘Self-select ISA provider of the year’ at the 2015 ADVFN Awards, due to our outstanding customer service, fixed account fees and dealing commission from £7.50 per deal.
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Week of information ends with stocks higher European stocks nudged higher on Friday, struggling for direction following recent gains at the end of a week full of decisions, announcements and data releases.
At close, the benchmark Stoxx Europe 600 index was up 0.23% and France's CAC 40 was up 0.38%, while Germany's DAX was 0.59% higher.
Oil prices were mixed as Europe markets closed, though were still looking at solid weekly gains. Brent crude was up 0.53% to $41.75 a barrel and West Texas Intermediate was 0.3% lower at $40.08.
A recovering dollar helped to lift exporters as the weekend approached. A strong euro put a dent in exporters on Thursday, after the dollar slid off the back of the Fed's dovish outlook on rates on Wednesday.
Investors digested comments from the European Central Bank's chief economist, who said in an interview published on Friday that the bank could cut interest rates again if the Eurozone economy does not pick up.
Peter Praet told Italian newspaper La Repubblica that rates had not reached their lower limit yet.
"As other central banks have demonstrated, we have not reached the physical lower boundary," he said.
Mike van Dulken, head of research at Accendo Markets, said this week's central bank meetings have resulted "in gloomy views aplenty fuelling optimism of lower - even negative - rates for longer".
This week saw the Bank of Japan downgrade its assessment of the country's economy, while the Federal Reserve scaled back its prediction to two rates hikes this year from four in December and the Bank of England cautioned that the EU referendum might affect inflation.
In corporate news, housebuilder Berkeley Group was in the red. Although the company said it expects full year results to be at the top end of expectations, it also said it saw a 4% drop in forward reservations in the three months to the end of February and questioned the government's response to the housing crisis.
Shares in Italian insurer Generali slipped after its fourth quarter net profit missed analysts' expectations.
On the upside, Telecom Italia pushed slightly higher despite saying it swung to a net loss in 2015.
Data released by Destatis earlier showed German producer prices fell more than expected in February. Producer prices dropped 0.5% from January, which was steeper than the 0.2% decline pencilled by economists, as energy prices slid 9.4% on the month.
On the year, producer prices were down 3%, missing expectations for a 2.6% drop.
Dennis de Jong, managing director at UFX.com, said: "With the price of goods continuing to decline, German finance minister Wolfgang Schäuble will be concerned about what implications this will have on inflation within his European powerhouse. |
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| | US Market Report | | US open: Stocks lifted by rally in oil prices US stocks were lifted on Friday by a jump in oil prices on expectations of a production freeze by major exporters to address the supply glut.
The Dow Jones Industrial Average increased 0.51%, S&P 500 climbed 0.32% and Nasdaq gained 0.16% at 1432 GMT.
Oil prices gained with West Texas Intermediate crude up 1.0% to $40.62 a barrel and Brent crude 1.2% higher at $42.12 at 1505 GMT.
Prices have risen more than 50% from 12-year lows reached in December after Organization of the Petroleum Exporting Countries (OPEC) floated the idea of a production freeze.
In economic data, the University of Michigan's consumer sentiment index unexpectedly fell in March, to a reading of 90.0 from 91.7 in February and versus expectations of 92.2.
The index for current economic conditions came in at 105.6, down from 106.8 in February but up from March 2015's reading of 105.0.
Capital Economics said the decline in the consumer sentiment index "illustrates that higher gasoline prices more than offset the positive impact to sentiment from the rebound in stock markets".
Meanwhile, Federal Reserve Bank of New York President William Dudley said the financial system is "much more resilient" following the 2008 crisis, but "more work still lies ahead" to prevent another one from happening.
Dudley said there were limits to the supervision of banks in averting another crash and urged policymakers to find ways to better educate the industry about the role of supervisors.
"In the wake of the crisis, considerable attention has been devoted to the role that supervisors-including those here at the New York Fed-played in this meltdown," he said at the Supervision Conference in Manhattan.
"But much of this discussion has taken place without a broad understanding of what supervisors actually do-the scope, breadth and limits of their activities and authorities."
In corporate news, Software maker Adobe Systems Inc rallied after it reported better-than-expected quarterly results late on Thursday.
Tiffany & Co was also in the black after its fiscal fourth-quarter earnings exceeded analysts' expectations.
Wynn Resorts edged higher after Deutsche Bank lifted its price target on the stock.
On the downside, clothing retailer Aeropostale tanked following weaker-than-expected fourth-quarter numbers on Thursday and after the company said it was considering selling itself.
In currencies, the US dollar was recovering following losses in the wake of the Federal Reserve's dovish stance on Wednesday.
The greenback was 0.19% higher versus the euro, down 0.07% against the pound and flat versus the yen.
Morgan Stanley said there was more short-term dollar weakness to come, however.
"The dovish Fed - discouraging USD bulls - has led to a de-positioning move supporting the once shunned currencies. GBP, AUD and many emerging market currencies fall into this category. In this respect, the falling USD has the characteristics of a pain trade that seems to have further to run," the bank said. |
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| | Broker Tips | | Broker tips: EnQuest, Debenhams, Smiths Group Oil producer EnQuest's shares rose on Friday as Canaccord Genuity said the company is "one of the most attractive plays in the sector".
EnQuest on Thursday reported a drop in full year earnings before interest, tax, depreciation and amortisation (EBITDA) to $465m from $581m in 2014, beatings expectations of $408.
The decline came as it was forced to write down $626m on the value of some of its assets due to the recent slump in oil prices.
However, EnQuest said it expects to benefit on a change in UK legislation giving oilfield operators tax relief on decommissioning costs when they sell an asset will speed up such deals in the North Sea.
EnQuest also said it would cut costs this year to address the impact of lower oil prices on revenue. The company expects operating costs to fall to $25-27 per barrel this year, down from $29.7 per barrel in 2015.
"The organic direction of travel for the company is impressive and clearly it is doing a very good job of addressing all the issues within its grasp," said Canaccord analyst Charlie Sharp.
"As a highly geared stock, it is also benefiting from the recent oil price strength. For those willing to ride this positive oil price direction, we believe Enquest is one of the most attractive plays in the sector."
However, Sharp warned on the current scale and near-term direction of net debt and its impact on equity value.
Canaccord also urged caution on production delivery uncertainties regarding EnQuest's North Sea Kraken development.
The broker maintained its 'hold' rating but raised its target to 20p from 16p.
Investec downgraded Debenhams to 'sell' from 'hold' and trimmed the price target to 67p from 70p amid expectations of little profit over the medium term.
The brokerage said new chief executive does not change the fact there are structural challenges at the company.
"With cost pressures, a less flexible business model and online shift, it is difficult to see how sustainable growth can be injected into an undifferentiated business," it said.
Investec said that while Debenhams has self-help opportunities - space optimisation, operating efficiencies and mark down - these are likely to be offset by material wage inflation and margin reinvestment back into differentiating the offer.
The brokerage said the stock's valuation reflects a declining profit trend for 10 years and is not demanding, but a re-rating seems unlikely.
"We believe the next CEO needs to invest margin in re-establishing the 'Designers' brand credentials and differentiating own-bought.
"We are also concerned that growth is mainly coming from concessions (limited operational gearing) & beauty (low margin). This may not offset the in-store negative operational gearing from online shift."
Smiths Group got a boost after RBC Capital Markets upgraded the stock to 'outperform' from 'sector perform' and lifted the price target to 1,225p from 1,050p saying it expects the recent outperformance to continue.
The Canadian bank forecasts 9% growth in earnings per share in full year 2017, driven by a resumption in organic sales growth and currency, with a weaker pound.
"We believe the share's current 14% PE discount versus UK peers will close over time and note the attractive 4% yield," it said, adding that the yield should be covered by cash flow following the recent pension funding exercise.
RBC highlighted three key risks to its positive stance: a further downturn at John Crane, a stronger pound and a poorly-received acquisition.
"At 1,069p however we consider the risk/reward appealing," it said.
The bank also said fears over the John Crane division were overdone. |
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