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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 fall as ECB leaves policy unchanged London stocks finished lower on Thursday as traders weighed worse-than-expected UK retail sales data and the European Central Bank's policy announcement.
UK retail sales dropped 1.3% in March compared with February, which was much steeper than the 0.1% forecast by economists, the Office for National Statistics said.
On the year, retail sales were up 2.7%, missing expectations for a 4.4% increase.
"Any number of factors could be to blame, from bad weather to poor employment figures, along with the reality that wage growth remains stagnant," said Dennis de Jong, managing director at UFX.com.
"Consumers may also be nervous about an uncertain Brexit outcome, ensuring they keep a tight hold on their wallets. Mark Carney and his BoE colleagues will be hopeful that the pending arrival of summer will prompt the masses to hit the high street, and drive those numbers back up."
ECB leaves policy unchanged
The European Central Bank left its policy unchanged on Thursday, as expected by economists, a month after introducing a comprehensive package of new measures.
The ECB held interest rates at 0.0%, the deposit facility rate at -0.40% and the marginal lending facility rate at 0.25%. The Governing Council also kept the asset purchase programme at €80bn per month.
In a press conference following the announcement, President Mario Draghi was forced to defend low interest rates as reporters questioned him about criticism from German officials.
German Finance Minister Wolfgang Schaeuble has said low interest rates for a long period of time was "not reasonable" and that the central bank's measures were causing "extraordinary problems" for Europe's biggest economy. Schaeuble said Germans were concerned that low interest rates were hurting savers' finances and pensioners' plans.
Draghi responded to the claims by saying the ECB has a mandate to pursue price stability for the whole of the Eurozone not only for Germany.
"While the lack of any additional goodies from the ECB's table led to some initial disappointment in markets, this was swiftly countered by a realisation that his comments continue to reinforce the idea that the central bank is in no rush whatsoever to abandon its loose policy stance, whatever the Germans might want," IG senior analyst Chris Beauchamp said.
US data
The number of Americans filing for unemployment benefits unexpectedly fell last week, to the lowest level since November 1973, according to data from the Labor Department.
US initial jobless claims fell by 6,000 to 247,000 from the previous week's unrevised level of 253,000, versus expectations for a rise 263,000.
The latest report from the Federal Reserve Bank of Philadelphia showed manufacturing conditions in the region deteriorated a lot more than expected in April.
The diffusion index for current activity tumbled to -1.6 from 12.4 in March, versus economists' expectations for a slip to 8.9.
The Federal Reserve Bank of Chicago revealed economic activity slowed in March. The national economy activity index fell from -0.44 in February to a reading of -0.38 last month.
Meanwhile, oil prices declined as senior energy official Mehdi Hosseini from Iran's Petroleum Ministry said on Thursday that Iran won't consider a production freeze until it reaches its pre-sanctions level of output of 4.2m barrels a day.
Brent crude fell 1.5% to $45.12 per barrel and West Texas Intermediate dipped 1.3% to $43.60 per barrel at 1653 BST.
Companies
Sky's shares fell after the broadcaster reported a slowdown in the number of new TV customers in the three months to the end of March.
Equipment rental group Ashtead advanced after saying it has performed well in the fourth quarter, and was expecting full-year results to be towards the top end of current analyst expectations.
Acacia Mining jumped after it reported better first-quarter gold production than forecast and a 24% rise in earnings before interest tax, depreciation and amortisation to $66m that almost hit targets thanks to an increase in revenue and lower cash costs.
Pets at Home rallied after a year-end trading statement showed like-for-like sales growth increased in the fourth quarter, with profits for the full year expected to meet forecasts.
Anglo American dropped as it reiterated its full-year production guidance and reported lower first-quarter output for diamonds, iron ore and export coal, but higher output in platinum and nickel. |
| | 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) 6,381.44 -0.45%
FTSE 250 (MCX) 16,979.44 -0.23%
techMARK (TASX) 3,153.29 -0.22%
FTSE 100 - Risers
Ashtead Group (AHT) 892.00p 3.78%
Shire Plc (SHP) 4,317.00p 3.06%
Taylor Wimpey (TW.) 176.80p 1.90%
Tesco (TSCO) 185.40p 1.87%
HSBC Holdings (HSBA) 473.05p 1.64%
Royal Bank of Scotland Group (RBS) 253.60p 1.64%
Lloyds Banking Group (LLOY) 68.70p 1.39%
Johnson Matthey (JMAT) 2,939.00p 1.38%
BP (BP.) 368.55p 1.35%
Royal Dutch Shell 'B' (RDSB) 1,843.50p 1.29%
FTSE 100 - Fallers
Anglo American (AAL) 747.30p -5.64%
Sky (SKY) 985.00p -4.18%
Sage Group (SGE) 604.50p -3.67%
National Grid (NG.) 969.70p -3.13%
Associated British Foods (ABF) 3,227.00p -3.09%
Antofagasta (ANTO) 485.00p -3.00%
Capita (CPI) 1,018.00p -2.96%
Mondi (MNDI) 1,316.00p -2.73%
Informa (INF) 666.00p -2.70%
Relx plc (REL) 1,262.00p -2.62%
FTSE 250 - Risers
Senior (SNR) 237.00p 6.14%
Acacia Mining (ACA) 336.70p 5.38%
Rotork (ROR) 187.20p 5.17%
Zoopla Property Group (WI) (ZPLA) 291.30p 4.30%
Smiths Group (SMIN) 1,154.00p 4.15%
IP Group (IPO) 178.90p 3.89%
Cairn Energy (CNE) 212.00p 3.47%
Pets at Home Group (PETS) 247.60p 3.30%
Virgin Money Holdings (UK) (VM.) 352.30p 3.25%
Genus (GNS) 1,598.00p 2.70%
FTSE 250 - Fallers
NMC Health (NMC) 1,062.00p -3.54%
Hansteen Holdings (HSTN) 102.30p -3.49%
Ted Baker (TED) 2,279.00p -3.43%
Spire Healthcare Group (SPI) 328.00p -3.30%
Auto Trader Group (AUTO) 366.20p -3.30%
Pendragon (PDG) 34.14p -3.04%
Greggs (GRG) 1,046.00p -2.61%
Allied Minds (ALM) 400.00p -2.56%
Moneysupermarket.com Group (MONY) 314.20p -2.54% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Shares mixed, despite gains in banks European stocks clambered back from their intra-day lows as the European Central Bank left the door open to further easing if necessary, amid a retreat in oil prices.
The benchmark DJ Stoxx 600 index closed 0.33% lower at 349.59 and France's CAC 40 dipped 0.20% to 4,582.83 but Germany's DAX was 0.14% firmer at 10,435.73.
ECB president Mario Draghi said the monetary authority stood ready to ease policy further should the outlook worsen, although he expected inflation to pick up in the back half of the year.
That promise sent the DJ Stoxx 600's gauge of bank stocks up by 1.44% to 155.91, helping to offset profit-taking in another subindex for the shares of Basic Resource (-1.87%) companies.
"European Economics Update 1 21st Apr. 2016 While the subsequent appreciation of the euro exchange rate suggests that markets had hoped for slightly firmer hints of imminent action, the President has left the door open to further support in
"But the Bank is running out of options that it deems palatable. And with little or no support from fiscal policy, its measures are unlikely to generate strong growth or a meaningful and sustained rise in inflation," Jennifer McKeown, senior european economist at Capital Economics, said in a research report sent to clients.
Meanwhile, oil prices were slightly lower, having gained earlier after the International Energy Agency said this year would see the biggest drop in non-OPEC production in a generation.
West Texas Intermediate was down by 0.75% to $43.87 while Brent crude was off by 1.059% at $45.32.
On the corporate front, shares in beleaguered German car maker Volkswagen rallied after Reuters cited sources as saying that VW and US officials had reached a framework deal under which the car maker would offer to buy back almost 500,000 diesel cars that used software to cheat US emission rules.
On the downside, French spirit maker Pernod Ricard slumped after posting a 3% decline in third-quarter sales.
Swedish mobile telecom equipment maker Ericsson was firmly in the red after its first-quarter sales and operating profit missed analysts' expectations.
London-listed broadcaster Sky was under the cosh after it said customer growth slowed in the third quarter. |
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| | US Market Report | | US open: Stocks nudge lower as investors digest mixed earnings and data US stocks were a touch weaker on Thursday as investors sifted through mixed economic and corporate releases, amid softer oil prices.
At 1510 BST, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq were all 0.2% lower.
In Europe, the main indices were also in the red after the European Central Bank left interest rates and monetary policy unchanged, as widely expected, with chief Mario Draghi reiterating his commitment to using all the instruments available to get inflation back to target.
Oil prices were weaker in choppy trade, with West Texas Intermediate down 1.5% to $43.50 a barrel and Brent crude down 1.4% to $45. 17.
On the corporate front, Qualcomm shares were lower after the chipmaker's profit forecast missed expectations, while toy manufacturer Mattel tumbled after saying losses widened in the first quarter.
Verizon Communications fell into the red after its quarterly earnings matched expectations, but revenue disappointed.
On the upside, American Express was in the black after its first-quarter numbers beat analysts' expectations.
Sports clothing retailer Under Armour was sharply higher after it reported solid growth in quarterly profit and revenue.
General Motors rallied after it said first-quarter net income more than doubled compared with the previous year, while Biogen Inc rose after posting better-than-expected first-quarter profit.
Economic news was also mixed.
The latest report from the Federal Reserve Bank of Philadelphia showed manufacturing conditions in the region deteriorated a lot more than expected in April.
The diffusion index for current activity tumbled to -1.6 from 12.4 in March, versus economists' expectations for a slip to 8.9.
March had marked the first positive reading following six consecutive negative readings.
The index for current new orders fell to zero from 15.7, while the index for current shipments declined even more sharply, to -10.8 from 22.1.
Data from the Labor Department was a lot more encouraging, however, showing the number of Americans filing for unemployment benefits unexpectedly fell last week, to the lowest level since November 1973.
US initial jobless claims fell by 6,000 to 247,000 from the previous week's unrevised level of 253,000, versus expectations for a rise 263,000.
The four-week moving average of new claims was 260,500, down 4,500 from the previous week's unrevised 265,000.
Pantheon Macroeconomics said: "This number is as spectacular as the Philly Fed was awful, but unfortunately it's about as plausible, too. The Labor Dept says no special factors affect this week's numbers, but the early Easter, in our view, continues to distort the seasonal adjustments. |
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| | Broker Tips | | Broker tips: Zoopla, Victrex, Sky Barclays downgraded Zoopla to 'equalweight' from 'overweight' but lifted the price target to 295p from 270p, saying the valuation on the core property services business is up with events.
The bank said it still sees an attractive long-term story, but another near-term share price lift requires overly-optimistic assumptions on synergies - which are a full year 2017 story, not a near-term driver - or OnTheMarket crumbling quickly, which is not the base case.
Barclays said Zoopla's trading update was evidence of the positive trends currently driving uSwitch, while the acquisition of Property Software Group highlights management's "exciting long term vision".
However, with uSwitch upgrades now in the numbers, the near-term focus returns to Property Services, which is still the key driver.
"Here we have cut underlying numbers and we anticipate both 1H and FY16 results to show only low single digit average revenue per agent growth, a reminder of the lack of pricing power for a battling no.2."
Barclays reckoned the most likely outcome for Zoopla in full year 2017 is another year of very little ARPA growth and only a modest recovery in agents.
As a result, the valuation of around 17x 2017E earnings before interest, taxes, depreciation and amortisation on the core Property Services business is up with events.
Berenberg downgraded Victrex to 'hold' from 'buy' and cut the price target to 1,620 from 1,800 citing a lack of earnings catalysts from consumer electronics capacity.
In addition, the bank pointed to the introduction of new PEEK (polyether etherketone) capacity by Solvay. It noted that Solvay is Victrex's largest competitor in PEEK, adding that by the end of 2016, it will complete a widely known capacity expansion from 1,000 to 2,500 tonnes.
Berenberg said that following analysis of the potential uses of PEEK within consumer electronics, it concluded that its widespread adoption of PEEK for use in smartphones beyond lower-volume specialities, such as films for speaker diaphragms, if it does occur, may favour Solvay.
"Solvay's ability to offer cheaper alloys of PEEK with other polymers from its portfolio could give it a significant advantage on cost. While we understand Victrex is working on using other, potentially cheaper, PEEK composites, the underlying issue is that the mechanical advantages of Victrex's 'Type 1' PEEK are arguably less relevant for electronics than other segments, such as aerospace."
The bank cut its earnings per share estimates for 2016 and 2017 by 6.4% and 2.2%, respectively, to reflect a drop in expected consumer electronics volumes and a more subdued outlook for Victrex's oil and gas business.
Numis reiterated an 'add' rating and target of 1,250p for Sky after the broadcaster reported its quarterly interims.
Sky said in the nine months to the end of March revenue rose 5% to £8.7bn, while operating profit rose 12% to £1.14bn.
Sky chief executive, Jeremy Darroch, said it had been a strong quarter, with the company passing a "major milestone" of 40 million products in the UK and Ireland. He said there had been pleasing response to the premium Sky Q box ahead of first installations in the current quarter.
However, the company said it won 177,000 new customers in the three months to March, 160,000 fewer than the previous quarter.
Nevertheless, Numis said: "Net product growth of 177,000 was ahead of consensus 162,000 with a notable performance in Italy and encouraging early response to the premium SkyQ product. |
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