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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 ends lower as oil prices and UK retail sales fall The FTSE 100 closed lower on Thursday as a drop in oil prices weighed on sentiment and as official data revealed UK retail sales fell in March.
Further somewhat hawkish comments from a top US central bank official added to the downbeat mood.
By the end of trading, the Footsie was 92.63 points or 1.49% lower at 6,106.48 points.
Oil prices were under pressure after the Energy Information Administration on Wednesday reported US crude stocks rose by 9.4m barrels to 532.5m barrels in the week ended 18 March. Analysts had forecast an increase of 2.5m barrels.
Brent crude dipped 0.44% to $40.29 per barrel and West Texas Intermediate declined 0.93% to $39.42 per barrel at 1624 GMT.
In economic data, UK retail sales dropped 0.4% month-on-month in February as cold weather delayed the purchases of spring and summer attire, the Office for National Statistics revealed. Analysts had forecast a 1.0% decrease in February, after rising the most in more than two years in January.
"Shoppers tend to be tight-fisted after the January sales, but deeper concerns surrounding a possible Brexit might be making them think twice before spending," said Dennis de Jong, managing director at UFX.com.
However, compared to the same month a year ago retail sales jumped 3.8% in February, surpassing estimates for a 3.5% gain, as low inflation and an increase in employment supported consumer spending.
Across the Atlantic, the Commerce Department said US durable goods orders fell 2.8% on the previous month, slightly better than the consensus estimate for a 3% decrease and down from the revised increase of 4.2% the month before.
Markit's purchasing managers' index on US manufacturing rose to 51.4 in March from 51.3 in February, missing expectations for a reading of 51.5 but above the 50 level that separates an expansion from a contraction.
The Labor Department revealed US initial jobless claims rose by 6,000 to 265,000, versus economists' expectations for an increase to 268,000.
St Louis Federal Reserve President James Bullard said on Thursday another US interest rate "may not be far off" as the labour market had improved since December.
Bullard, who voted to support the Fed's decision in March to keep interest rates unchanged, said: "As it turns out, the decision to pause seems to have put more weight on the global and U.S. growth downgrade," he said in prepared remarks.
As always, additional rate increases would be conditional on the economy evolving as expected, he explained.
His remarks echoed those made since 18 March by at least three other Fed presidents.
Among corporate stocks, Kingfisher Group rallied after its stock had its 'buy' rating reaffirmed by Jefferies Group on Thursday following the company's annual results a day earlier.
Next slumped after the clothing retailer warned in its full-year results that the year ahead could be the toughest since 2008, with new guidance that included the possibility that profits could decline as much as 4.5%.
Building materials group CRH gained following reports Northroad Capital Management reduced its position in the firm by 5.6% during the fourth quarter. Speculation was also still mounting over whether CRH would make a bid for LafargeHolcim's Indian assets, rumoured to be up for sale.
Standard Chartered was down significantly as oil fell, and the Australia and New Zealand Banking Group warned the plunging resource prices were pushing up bad debts. It said provisions for bad debts would be more than expected at around AUD 900m as losses widened at miners and resource companies.
Renishaw plunged after the engineering company issued a profit warning due to a downturn in Asia.
Outsourcer Mitie declined on Thursday after it warned that full year revenues will be below the current range of market expectations. |
| | Which way will the major markets be heading in 2016? | | Click here to Download the FREE 2016 Market Mover Report |
| Market Movers
FTSE 100 (UKX) 6,117.07 -1.32%
FTSE 250 (MCX) 16,691.02 -1.03%
techMARK (TASX) 3,084.01 -0.90%
FTSE 100 - Risers
Paddy Power Betfair (PPB) 9,300.00p 0.59%
Capita (CPI) 1,034.00p 0.58%
CRH (CRH) 1,949.00p 0.57%
Kingfisher (KGF) 373.30p 0.57%
London Stock Exchange Group (LSE) 2,832.00p 0.43%
Rolls-Royce Holdings (RR.) 680.50p 0.22%
TUI AG Reg Shs (DI) (TUI) 988.50p 0.10%
SSE (SSE) 1,460.00p -0.00%
Carnival (CCL) 3,520.00p -0.06%
Compass Group (CPG) 1,214.00p -0.08%
FTSE 100 - Fallers
Next (NXT) 5,655.00p -15.09%
Standard Chartered (STAN) 440.60p -7.75%
Associated British Foods (ABF) 3,273.00p -5.35%
Prudential (PRU) 1,275.50p -5.24%
Marks & Spencer Group (MKS) 392.50p -4.92%
Anglo American (AAL) 501.60p -4.18%
Ashtead Group (AHT) 825.00p -4.13%
Tesco (TSCO) 190.35p -3.64%
Aviva (AV.) 455.60p -3.56%
Legal & General Group (LGEN) 231.20p -3.34%
FTSE 250 - Risers
Vesuvius (VSVS) 331.40p 4.05%
Vectura Group (VEC) 164.30p 3.86%
Euromoney Institutional Investor (ERM) 909.00p 3.71%
Ocado Group (OCDO) 310.70p 3.19%
Fidessa Group (FDSA) 2,404.00p 2.96%
Diploma (DPLM) 747.00p 2.33%
Riverstone Energy Limited (RSE) 816.00p 2.19%
Evraz (EVR) 90.90p 2.02%
Circassia Pharmaceuticals (CIR) 265.40p 2.00%
Allied Minds (ALM) 461.50p 1.76%
FTSE 250 - Fallers
Renishaw (RSW) 1,880.00p -8.25%
Mitie Group (MTO) 245.60p -7.11%
Kaz Minerals (KAZ) 165.50p -6.76%
Countrywide (CWD) 364.00p -6.09%
Aberdeen Asset Management (ADN) 254.30p -5.95%
Brown (N.) Group (BWNG) 321.00p -5.62%
Tullow Oil (TLW) 200.00p -5.26%
Big Yellow Group (BYG) 773.00p -4.27%
SEGRO (SGRO) 400.20p -3.98% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks move lower ahead of holiday break European equity markets fell into the red ahead of the Easter holidays, with basic resources and energy stocks under the cosh as metals and oil prices declined.
The benchmark DJ Stoxx Europe 600 finished 1.46% lower to 335.10, Germany's DAX surrendered 1.71% to end at 9,851.35 and France's CAC 40 was off 2.13%.
At the same time, oil prices continued to slide after a report from the US Department of Energy showed crude stockpiles rose by 9.4m barrels in the previous week - a much bigger increase than analysts had expected.
West Texas Intermediate was down 0.658% to $39.53 a barrel while Brent crude was 0.297% weaker at $40.35.
The Stoxx 600 oil and gas index fell 2.78 points or 1.05% to 261.29, while the sub-index for basic resources was down 1.48% or 3.93 points at 261.80 as metals prices dropped and that for banks by -2.04% to 146.69.
"The culprits are not difficult to find - a rising US dollar and weaker oil prices. The former continues to benefit from Fed policymaker comments that seem to suggest the dovish view of the recent FOMC meeting was not perhaps the correct one," said Chris Beauchamp, senior market analyst at IG.
"Oil markets meanwhile seem to have rediscovered the massive supply overhang that, for various reasons, did not seem to matter over the past five weeks. Dovish central banks and rising oil prices have been the twin struts on which this rally is built - if these are falling apart then the new quarter may not begin well for stock markets."
Although last week's statement from the Federal Reserve was dovish, Fed officials have since expressed a much more bullish tone.
On Wednesday, St Louis Fed President James Bullard added to comments from other Fed officials as he pointed to the possibility of at least two rate hikes this year, with the first potentially next month.
The dollar got a boost from these comments, in turn weighing on basic resources as a strong greenback makes dollar-denominated commodities more expensive for buyers holding other currencies.
Corporate news was thin on the ground ahead of the Easter break.
In London, clothing retailer Next tumbled after it said full year profits were at the upper end of expectations but warned the year ahead could be the toughest since 2008.
Elsewhere, the Italian banking sector was on the back foot after Banco Popolare and Banca Popolare di Milano agreed to merge on Wednesday.
Acting as a backdrop, US capital investment in durable goods fell back into decline in February, after a spike in January, according to data from the Commerce Department.
Durable goods orders fell 2.8% on the previous month, slightly better than the -3.0% consensus estimate, although it was much worse than the downwardly revised increase of 4.20% for the month before.
The number of Americans filing for unemployment benefits rose a little last week, according to the Labor Department.
US initial jobless claims rose by 6,000 to 265,000, versus economists' expectations for an increase to 268,000. |
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| | US Market Report | | US open: Stocks decline as oil prices edge lower US stocks were under pressure on Thursday as oil prices tumbled and as US economic data came in mixed.
At 1456 GMT, the Dow Jones Industrial Average fell 0.36%, the S&P 500 slid 0.41% and the Nasdaq dropped 0.12%.
Oil prices dropped after a report from the US Department of Energy showed crude stockpiles rose by 9.4m barrels in the previous week - a much larger increase than the 2.5 million barrels analysts had expected.
West Texas Intermediate crude slipped 2.7% to $38.72 per barrel and Brent dipped 1.9% to $39.68 per barrel at 1502 GMT.
In economic data, the Commerce Department said US durable goods orders fell 2.8% on the previous month, slightly better than the consensus estimate for a 3% decrease and down from the revised increase of 4.2% the month before.
Markit's purchasing managers' index on US manufacturing rose to 51.4 in March from 51.3 in February, missing expectations for a reading of 51.5 but above the 50 level that separates an expansion from a contraction.
The Labor Department revealed US initial jobless claims rose by 6,000 to 265,000, versus economists' expectations for an increase to 268,000.
St Louis Federal Reserve President James Bullard said on Thursday another US interest rate "may not be far off" as the labour market had improved since December. Bullard, who voted to support the Fed's decision in March to keep interest rates unchanged, said: "As it turns out, the decision to pause seems to have put more weight on the global and U.S. growth downgrade," he said in prepared remarks."
The dollar pushed higher following the comments as market participants readjusted their rate-hike expectations.
At 1508 GMT the dollar rose 0.19% versus the euro and increased 0.20% but fell 0.08% against the pound.
In corporate news, Yahoo's shares declined following a report that hedge fund Starboard Value LP was looking to remove the entire board of the company.
Signet Jewelers gained after reporting a 19% increase in quarterly profit that surpassed expectations. |
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| | Broker Tips | | Broker tips: Kingfisher, Mitie, gold stocks Societe Generale upgraded B&Q owner Kingfisher to 'hold' from 'sell' and lifted the price target to 359p from 333p following the company's results on Wednesday.
The bank said some early signs of recovery in the French home improvement market, together with a weaker reporting currency (UK pound), make Kingfisher's profit forecasts look better supported over the year ahead than they have been for a while.
"The UK trading outlook remains solid for the short - term, although we will be on the alert for any post-April stamp duty change impact on the UK housing market as well as the 'Brexit' risk," it said.
SocGen noted its earnings per share estimates have barely changed since November last year.
It said the weaker pound, above-the-line restructuring costs and a better-than-expected divisional profit outcome for the year to January 2016 have had a net neutral impact.
"As a collection of mostly mature operating companies in mainly ex-growth markets, Kingfisher has little choice but to seek product and operating synergies in order to enhance the margin.
"The aim of offering customers better-designed, more inspirational and lower priced product could be the single most beneficial outcome of the five-year 'ONE Kingfisher' plan, if it is achieved."
However, SocGen said execution risks remain high and five years is a long time to wait for the full £500m P&L benefit.
Mitie Group's 'buy' rating was reiterated by Canaccord Genuity despite the company warning that full year revenues will be below the current range of market expectations of £2.35bn.
The outsourcing firm said it has experienced revenue shortfalls in the second half of the year as some work has been delayed or cancelled due to increased economic pressures and uncertainty.
Still, Mitie has been managing its cost based and focusing on maintaining margins while continuing to invest for the long term, so profits will be in line with consensus forecasts of between £125m to £133m.
Canaccord said the stock "remains at discount to sector peers having been hindered by several years of weak earnings momentum".
"A more cautious tone through full year 2017 may allow for a period of more steady delivery against expectations and the opportunity for the shares to re-rate."
The broker cut its target to 300p from 320p. It also said its forecasts for 2016 results were in line with the Mitie's statement, resulting in an EPS reduction of 3%. Canaccord also moved expectations for 2017 earnings down by 8% to reflect the "likelihood of lower organic growth".
"Whilst the space continues to present attractive opportunities, organic growth has been under some pressure in the latest reporting season and contracts continue to require a greater working capital commitment," Canaccord added.
Goldman Sachs downgraded Gold Fields and Fresnillo as it took a look at gold producers, but kept its positive stance on AngloGold and Centamin, saying fully-covered dividends and sound balance sheets were a rarity in the mining sector.
It cut South Africa's Gold Fields to 'sell' from 'neutral' saying the valuation was stretched following the recent rally in the shares.
It said that with South Deep potentially continuing to underperform and Australian mines nearing the end of life, Gold Fields is likely to need either significant capex to sustain the Australian mines or an acquisition - both of which could depress investor returns.
It cut London-listed Fresnillo to 'sell' from 'buy' to reflect the disappointing grade at the Fresnillo mine and the stock's significant premium to both peers and its historical average.
"The Fresnillo mine continues to underperform on grade due to vein narrowing faster, natural decline in grade, and delay in infrastructure installation. Although the company is taking measures to counter the decline we see risks skewed to the downside."
The bank kept its 'buy' rating on AngloGold andCentamin, although it removed the latter from its Conviction List after the recent rally.
It said the market under-appreciates Centamin's low cost position and its ability to generate cash and potentially ramp up investor returns.
"Although we see limited imminent catalysts for the stock, we believe it still has another leg to move up as the market underappreciates its capacity to generate FCF from its low-cost asset, Sukari, and thus increase shareholder returns."
Goldman was bullish on the sector in general. It noted gold has been one of the best performing commodities year-to-date in a risk-off market and given tightening financial conditions in the US, which have led market participants to scale back their rate hike expectations.
GS said gold stocks have already been through the pain of capex/cost cuts and balance sheet restructuring, whereas for industrials, the process is just beginning. |
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