| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks recover as oil prices waver after Doha meeting The FTSE 100 ended higher on Monday, recovering from earlier declines as crude oil futures bounced back from the steep losses seen at the start of trading.
Oil prices were under pressure throughout most of the session after members and non-members of the Organization of the Petroleum Exporting Countries failed to come to an agreement to freeze oil production at a meeting in Doha on Sunday.
The talks fell apart after Saudi Arabia reiterated that it would not cap output unless Iran agreed to do the same. Iran, which did not attend the negotiations, has been reluctant to come to such an agreement since it has recently been relieved of sanctions.
"This string of events almost suggests that the major players in the cartel had no real intention of curbing production, but simply exploited the explosive levels of volatility to manufacture speculative boosts in prices based on false expectations," said FXTM research analyst Lukman Otunuga.
In more uplifting news, Kuwait's crude production dropped more than half on Sunday as thousands of its oil industry employees began an open-ended strike over government plans to cut wages. The nation's output was 1.1 million barrels a day, down from the usual 3 million it produces.
"Since we had not factored in any significant effect from a production freeze accord in our recent oil price forecast, the failed Doha talks do not alter our outlook for the oil price. We still look for the price of Brent crude to average $46/bl in Q4 16 and $52/bl in 2017 on the back of a lower USD, stronger global economic activity and a decline in non-OPEC oil output," Jans Naervig Pedersen, Senior Analyst at Danske Bank, said in a note sent to clients.
At 1656 BST Brent crude rebounded 0.32% to $43.24 per barrel and West Texas Intermediate dropped 0.64% to $40.10 per barrel, having traded lower by about 6% at the start of the session.
Meanwhile, the Treasury has warned in an analysis that the UK economy would be 6% smaller by 2030 if Britons voted to leave the EU. Chancellor George Osborne added that this would be the equivalent of £4,300 per household. The country is due to vote on "in/out" referendum on June 23.
He said the poorest households would be hit hardest.
"They are the people whose incomes would go down, whose house prices would fall, whose job prospects would weaken, they are the people who always suffer when the country takes an economic wrong turn," he told the BBC.
In macroeconomic data, asking prices for homes in England in Wales reached a record high of £307,033 in April, up 1.3% month-on-month, Rightmove revealed.
US homebuilders' confidence held steady in April. The National Association of Home Builders/Wells Fargo builder sentiment index was unchanged at 58, missing forecasts for a reading of 59.
On the corporate front, travel and leisure shares rallied as Berenberg said the sell off after terror attacks in Tunisia, Egypt, Turkey, Paris and Brussels had been overdone and Britons would not be dissuaded from taking an overseas break this summer. TUI, easyJet, Carnival and Intercontinental Hotels all rose on the news.
Centrica slipped on news domestic customer numbers fell 1.5% in the first three months of the year as households switched to other providers.
Insurer Lancashire Holdings was higher after Citigroup upgraded the stock to 'buy' from 'neutral'.
Centamin was in the black despite a downgrade to 'neutral' from 'buy' by Citigroup, as Numis lifted its price target on the stock 110p from 100p.
Beazley was on the back foot, with Lloyd's of London insurers under pressure after the earthquake in Japan. Peel Hunt said the Lloyd's insurers are likely to be exposed to commercial and industrial losses following a major earthquake in the southern Japanese island of Kyushu on 16 April. |
| | 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) 6,353.90 0.16%
FTSE 250 (MCX) 16,889.75 -0.12%
techMARK (TASX) 3,171.99 -0.09%
FTSE 100 - Risers
BT Group (BT.A) 454.90p 2.45%
TUI AG Reg Shs (DI) (TUI) 1,066.00p 2.40%
Anglo American (AAL) 694.50p 2.39%
Reckitt Benckiser Group (RB.) 6,868.00p 1.97%
BHP Billiton (BLT) 916.40p 1.82%
Sainsbury (J) (SBRY) 290.00p 1.79%
Rio Tinto (RIO) 2,268.50p 1.70%
Glencore (GLEN) 158.05p 1.54%
DCC (DCC) 6,285.00p 1.45%
InterContinental Hotels Group (IHG) 2,900.00p 1.36%
FTSE 100 - Fallers
ARM Holdings (ARM) 955.00p -3.54%
Antofagasta (ANTO) 458.10p -2.74%
Centrica (CNA) 234.60p -1.55%
Carnival (CCL) 3,680.00p -1.55%
Aviva (AV.) 435.40p -1.23%
Dixons Carphone (DC.) 408.40p -1.19%
Provident Financial (PFG) 3,050.00p -1.17%
Paddy Power Betfair (PPB) 9,530.00p -1.09%
Intu Properties (INTU) 293.30p -1.08%
Hammerson (HMSO) 579.50p -1.02%
FTSE 250 - Risers
Lancashire Holdings Limited (LRE) 552.00p 3.56%
BGEO Group (BGEO) 2,123.00p 3.06%
McCarthy & Stone (MCS) 256.70p 2.23%
Rank Group (RNK) 253.00p 2.22%
Tullett Prebon (TLPR) 342.00p 2.03%
Dignity (DTY) 2,514.00p 1.74%
JRP Group (JRP) 132.70p 1.69%
Riverstone Energy Limited (RSE) 815.00p 1.62%
Woodford Patient Capital Trust (WPCT) 99.15p 1.59%
Marshalls (MSLH) 340.30p 1.58%
FTSE 250 - Fallers
St. Modwen Properties (SMP) 313.10p -3.48%
Jimmy Choo (CHOO) 126.00p -3.45%
Beazley (BEZ) 320.00p -2.91%
OneSavings Bank (OSB) 288.40p -2.34%
Diploma (DPLM) 745.50p -2.17%
Ashmore Group (ASHM) 293.40p -2.13%
Galliford Try (GFRD) 1,285.00p -2.06%
SSP Group (SSPG) 293.30p -2.04%
Supergroup (SGP) 1,302.00p -1.96% |
| | Award winning Barclays Stockbrokers Investment ISA | | Use your ISA allowance by 5 April 2016. You don't have to make investment choices straight away - as long as you have the cash in place, that’s enough to secure the tax benefits of this year’s allowances.
The value of investments can fall, tax rules may change and their effects depend on individual circumstances.
Find out more about a Barclays Stockbrokers Investment ISA  |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks track bounce in oil futures, end higher European stocks closed firmly in the black in a volatile day of trading as crude oil futures climbed back from early losses, possibly on the back of reports of possible disruptions to supplies from Kuwait as a result of a strike among public sector workers on Sunday.
Hence, investors continued to mull over Sunday's meeting of oil producers in Doha, which did not result in the production freeze many had been expecting, but were unexpectedly also left to digest the news out from Kuwait.
The benchmark DJ Stoxx Europe 600 index was higher by 0.41% to 344.20, while Germany's DAX advanced 0.68% to 10,120.31 and France's CAC 40 up by 0.26% to 4,506.84.
As of 17:12BST West Texas Intermediate was down 1.31% to $39.84 a barrel while Brent crude was off by 0.30% at $42.96, having earlier sported losses of up to 6%.
In parallel, the Stoxx 600 Oil&Gas sub-index ended the day down by just 0.20% at 269.69 points, having hit an intra-day low of 259.36.
"While the oil price may be sharply lower (again), it has pared its knee-jerk losses and traders appear to be coming round to the understanding that although no deal came out of the weekend's Doha oil production freeze meeting, we shouldn't really have expected anything given the strong stances by Iran ('not while we ramp up post sanctions') and Saudi Arabia (not without Iran)," said Mike van Dulken, head of research at Accendo Markets.
"Investors are also reviving some of last week's risk appetite that came about from solid China data, US banks' Q1 results not being as bad as expected and some soft US data bolstering the US Fed's 'gently does it' message on policy normalisation."
Sunday's meeting of oil producers in Doha, Qatar, failed to result in the production freeze deal market participants had been hoping for.
Ahead of the summit, investors had been expecting the oil producers, which include Saudi Arabia and non-OPEC Russia, to agree to cap production at January levels after Russia, Saudi, Qatar and Venezuela said in February that they would if other producers joined them.
However, Iran - which had already made it clear it would not freeze or cut production until it recovered a market share similar to what it had before sanctions were imposed - did not send a representative to the meeting.
Saudi Arabia, meanwhile, insisted it would not freeze production if Iran did not participate.
In corporate news, energy supplier Centrica was on the back foot after it said it had lost another 1.5% of its home energy accounts in the first quarter and plans to cut around 3,000 jobs this year.
Spain's Caixabank was 2.99% weaker after it launched a second full takeover bid for Portugal's BPI, that followed a failed attempt in 2015.
Chip designer ARM Holdings was under the cosh amid reports Apple - one of its biggest customers - will continue its reduced production of iPhones due to sluggish sales. At the same time, a downgrade to 'hold' from 'buy' from Jefferies weighed on the stock.
On the upside, Reckitt Benckiser was a little higher after reporting a rise in first-quarter revenues and affirming its full-year forecasts. |
| | Find out how you can earn up to 16% rental returns p.a. | | Invest today - 14-16% p.a. Paid monthly. Amazing low entry level investment from only $25K Request a brochure - CLICK HERE. |
| | US Market Report | | US open: Stocks rise as investors shrug off fall in oil prices US stocks rose on Monday as investors seemed unfazed by a decline in oil prices after global producers failed to reach an agreement to freeze output.
At 1526 BST, the Dow Jones Industrial Average rose 0.29%, the S&P 500 increased 0.31% and the Nasdaq gained 0.32%.
Members and non-members of the Organization of the Petroleum Exporting Countries held talks in Doha on Sunday but did not come to an agreement to curb oil production which the market had been expecting.
The talks fell apart after Saudi Arabia reiterated that it would not cap output unless Iran agreed to do the same. Iran, which did not attend the negotiations, has been reluctant to come to such an agreement since it has recently been relieved of sanctions.
"This string of events almost suggests that the major players in the cartel had no real intention of curbing production, but simply exploited the explosive levels of volatility to manufacture speculative boosts in prices based on false expectations," said FXTM research analyst Lukman Otunuga.
"Sentiment remains bearish towards oil, and with market participants losing hope in the ability of OPEC to work together in battling the excessive oversupply in the markets; bearish investors have been provided a platform to install another round of selling. "
In more uplifting news, Kuwait's crude production dropped more than half on Sunday as thousands of its oil industry employees began an open-ended strike over government plans to cut wages. The nation's output was 1.1 million barrels a day, down from the usual 3 million it produces.
West Texas Intermediate crude fell 2.9% to $39.20 per barrel and Brent dropped 2.5% to $42.04 per barrel at 1532 BST.
In macroeconomic data, US homebuilders' confidence held steady in April. The National Association of Home Builders/Wells Fargo builder sentiment index was unchanged at 58, missing forecasts for a reading of 59.
On the corporate front, Morgan Stanley reported a 54% plunge in first quarter net profits as low oil prices hit the bank's trading business.
Netflix and IBM are due to report after the close.
Yahoo's shares edged lower as the deadline for preliminary bids for the company looms. |
| | Plus500 | | Get a £20 SIGNUP BONUS for online trading at Plus500! No deposit required!
Start Trading Now. Click here |
| | Broker Tips | | Broker tips: Centamin, TUI, RBS Numis reiterated an 'add' rating on Centamin and raised the target to 110p from 100p after the miner reported a jump in first quarter production
Centamin earlier this month reported a 6.4% increase in gold production at its flagship Sukari gold mine in Egypt to 125,268 ounces in the three months to end of March.
"We believe that the company is well positioned to continue to optimize Sukari whilst developing its West African exploration portfolio supported by solid free cash flow generation and an ungeared balance sheet with $199m (£140m) of cash as of the end of 2015," Numis said in a note to investors.
Numis expected the group would reach production of 470,000 ounces in 2016 at $900 per ounce, in line with guidance.
The company was due to report its first quarter financials on 11 May and Numis was predicting revenues of $147m, earnings before interest and tax of $29m and earnings per share of $0.03.
Tour operators Thomas Cook and TUI were on the front foot as Berenberg upgraded its recommendations on both stocks.
The bank said it was retaining a cautious view about the tour operators industry, which it reckoned will need to continue to extract efficiencies to stay competitive with the associated one-off restructuring costs.
"However, following the escalation in geo-political risks recently, we feel that the underperformance is overdone as we still expect the European consumer to go on holiday."
The bank lifted Thomas Cook to 'hold' from 'sell' and nudged up the price target to 105p from 100p.
It said the shares have underperformed the market by 24% over the past 12 months and 22% year-to-date due to a mix of structural challenges and currency.
"While we believe that the structural challenges remain fierce, we have seen a positive currency swing, which in our view will mitigate further downside risk this year. When this is added to the prospect of some financial restructuring over the next 12 months and the reintroduction of a dividend, we are upgrading our recommendation."
It upgraded TUI AG to 'buy' from 'hold' and lifted the price target to 1,300p from 1,275p.
Berenberg pointed out that TUI has underperformed the market by 5.2% and the leisure sector by 13% over the last 12 months as concerns over the geopolitical situation have worsened.
While it continues to believe that the tour operator business model is challenged, it said the steps taken by TUI to offset the geo-political issues should be supportive on the basis that consumers will still go on holiday.
"When we link this to the Hotels and Cruises businesses within TUI, we believe that the shares will see a renaissance through 2016."
Markets were underestimating the ability of RBS to return capital to shareholders and deliver "significant" earnings per share accretion, UBS said.
Investors had grown tired of restructuring stories, and RBS had missed earnings estimates, delayed dividends and was struggling to turn around its corporate and institutional banking division, UBS explained.
"Still, though near-term trading will likely be subdued and legacy issues remain outstanding, we see a real opportunity here," UBS analyst Jason Napier said in a research report sent to clients.
The lender had a market capitalisation of £27bn and £9bn in excess capital and litigation reserves at the time of writing, Napier pointed out.
Run-off and restructuring should see that rise to £13bn, "without allowing for organic capital generation", he added.
So while further legacy charges - the timing of which was anyone's guess - should be expected, "that surplus capital will remain, underwriting significant dividends and buybacks, delivering significant EPS accretion in a stock which few own, we think."
Furthermore, there was a "pretty attractive" core bank hidden inside, UBS said, pointing out how well over 80.0% of the capital was deployed in non-CIB business.
Napier stuck to his 'buy' recommendation on RBS stock, which was trading on 1.06 times adjusted earnings per share for 2017 (10 times 2017 EPS if the drag from run-off was excluded).
He did however cut his target from 340p to 310p. |
| | Award winning Barclays Stockbrokers Investment ISA | | Use your ISA allowance by 5 April 2016. You don't have to make investment choices straight away - as long as you have the cash in place, that’s enough to secure the tax benefits of this year’s allowances.
The value of investments can fall, tax rules may change and their effects depend on individual circumstances.
Find out more about a Barclays Stockbrokers Investment ISA | | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment