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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 dragged lower by miners UK equities fell on Monday as mining and oil producers slumped after declines in metal and crude prices.
Anglo American, BHP Billiton, Glencore and Rio Tinto were among the biggest fallers on the FTSE 100 after metal prices decreased.
Oil giants BP and Royal Dutch Shell were also in the red after crude prices edged lower as investors booked profits following recent gains. Brent crude slid 0.26% to $44.99 per barrel and West Texas Intermediate dipped 0.90% to $43.34 per barrel at 1620 BST.
Standard Chartered was another stock under pressure as Citi said it expected the bank to report a weak quarter on Tuesday due to market volatility, which could affect the company's fee and trading income.
Meanwhile, news that retailer BHS has filed for administration sparked concerns about the state of the UK high street. The news came after negotiations with Sports Direct to sell some of BHS's 164 stores collapsed over the weekend.
On the upside, Ted Baker gained after Jefferies upgraded the luxury fashion retailer to 'buy' from 'hold'.
Ashtead rallied after Bank of America Merrill Lynch upped its stance on the stock to 'buy' from 'underperform' and boosted the target to 1,100p from 800p, pointing to an improved outlook for the company's markets.
Imperial Brands, formerly known as Imperial Tobacco, was a high riser as Goldman Sachs upgraded the stock to 'buy' from 'neutral' following recent underperformance.
In economic data, the latest CBI industrial trends figures showed its headline total orders balance for April improved from -14 to -11, beating consensus of -15.
"This may be a sign that sterling's marked overall weakening in recent months is starting to feed through to support foreign demand," said Howard Archer, chief European and UK economist at IHS Global Insight.
"The hope for UK manufacturers is clearly that they will increasingly be helped by the substantial overall weakening of the pound so far in 2016 and also by still low oil and commodity prices that maintain their ability to price competitively."
Elsewhere, German business confidence unexpectedly fell in April, according to IFO's latest survey. The sentiment index dropped to 106.6 this month from 106.7 in March, missing forecasts for a reading of 107.1.
US new home sales unexpectedly fell in March, marking the third month in a row of declines, according to official data. Figures released by the Commerce Department showed new home sales dropped 1.5% to an annual rate of 511,000 from an upwardly-revised 519,000. Economists had been expecting a pace of 520,000.
US traders are eagerly awaiting the Federal Reserve's interest rate decision on Wednesday. The Fed is widely expected to keep rates unchanged but the market will be looking for clues on the central bank's next policy move. |
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| Market Movers
FTSE 100 (UKX) 6,258.70 -0.82%
FTSE 250 (MCX) 16,964.45 0.55%
techMARK (TASX) 3,117.45 -0.11%
FTSE 100 - Risers
Imperial Brands (IMB) 3,687.50p 3.25%
ITV (ITV) 232.60p 2.65%
Berkeley Group Holdings (The) (BKG) 2,970.00p 2.63%
Ashtead Group (AHT) 912.50p 2.53%
British Land Company (BLND) 702.00p 2.48%
Dixons Carphone (DC.) 429.50p 2.14%
Taylor Wimpey (TW.) 179.20p 2.11%
Intu Properties (INTU) 296.30p 2.00%
Smith & Nephew (SN.) 1,144.00p 1.87%
Land Securities Group (LAND) 1,094.00p 1.86%
FTSE 100 - Fallers
Anglo American (AAL) 678.40p -7.42%
Standard Chartered (STAN) 520.60p -6.40%
BHP Billiton (BLT) 930.30p -5.80%
Glencore (GLEN) 154.90p -4.26%
Rio Tinto (RIO) 2,237.00p -4.18%
Randgold Resources Ltd. (RRS) 6,305.00p -3.59%
Royal Dutch Shell 'B' (RDSB) 1,763.50p -3.45%
Royal Dutch Shell 'A' (RDSA) 1,760.00p -2.98%
Pearson (PSON) 808.50p -2.30%
BP (BP.) 359.95p -2.27%
FTSE 250 - Risers
CLS Holdings (CLI) 1,672.00p 8.29%
Euromoney Institutional Investor (ERM) 977.00p 7.36%
Ted Baker (TED) 2,571.00p 6.42%
Workspace Group (WKP) 812.00p 4.71%
Countrywide (CWD) 364.40p 4.50%
Morgan Advanced Materials (MGAM) 233.50p 4.24%
Crest Nicholson Holdings (CRST) 497.10p 4.10%
Capital & Counties Properties (CAPC) 339.90p 4.04%
Shawbrook Group (SHAW) 280.60p 3.93%
Greggs (GRG) 1,074.00p 3.57%
FTSE 250 - Fallers
Vedanta Resources (VED) 409.70p -4.03%
Aggreko (AGK) 1,071.00p -3.77%
Wood Group (John) (WG.) 610.00p -3.71%
Kaz Minerals (KAZ) 183.20p -2.91%
Weir Group (WEIR) 1,187.00p -2.14%
Investec (INVP) 529.00p -2.13%
Acacia Mining (ACA) 323.80p -2.03%
Centamin (DI) (CEY) 105.70p -1.95%
Amec Foster Wheeler (AMFW) 485.00p -1.92%
Hastings Group Holdings (HSTG) 174.40p -1.91% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks edge lower as oil, confidence declines European stocks edged lower at close on Monday as oil prices retreated and investors digested a weaker-than-expected reading on German business confidence.
The benchmark Stoxx Europe 600 closed down 0.53%, Germany's DAX was 0.76% weaker and France's CAC 40 was 0.52% lower.
At the same time, oil prices lost even more ground heading into US trading, with Brent crude down 0.24% at $45.00 per barrel and West Texas Intermediate down 0.81% at $43.38.
The Stoxx 600 oil and gas index was down 1.36% while the sub-index for basic resources was 3.7% weaker as metals prices declined.
The mood was dampened by the earlier data from Munich-based research institute Ifo, which showed German business confidence unexpectedly deteriorated in April.
Ifo's business climate index printed at 106.6 compared to 106.7 in March and expectations for a reading of 107.
Meanwhile, the current assessment index came in at 113.2 from 113.8 the month before, versus estimates of an unchanged reading.
The expectations index nudged up to 100.4 from 100.0 but was a touch shy of forecasts of 100.8.
Capital Economics said the data added to signs of a slowdown.
"While expectations edged up in April, the current conditions index weakened. And it is somewhat disappointing that sentiment has failed to recover fully from the falls seen at the start of the year, which at the time were widely put down to temporary fears about the global economy."
Disappointing US home sales data also cooled things, with sales of new single-family homes unexpectedly falling in March, marking the third month in a row of official declines.
Figures released by the Commerce Department showed new home sales dropped 1.5% to an annual rate of 511,000 from an upwardly-revised 519,000. Economists had been expecting a pace of 520,000.
Compared to the same month a year ago, sales were 5.4% higher. Meanwhile, the median price of a new home was $288,000, down 3.1% from February.
Investors were also looking ahead to rate announcements from the Federal Reserve and the Bank of Japan on Wednesday and Thursday, respectively.
With the Fed widely expected to stand pat this time, eyes will be on the BoJ amid speculation it might extend its negative rate policy by adopting a policy of negative rates on loans.
On the corporate front, shares in France's EDF were sharply lower after it announced late on Friday that a capital increase had been approved. On Monday chief executive Jean-Bernard Levy told a French radio station the company would have to press ahead with the nuclear-reactor project at Hinkley Point if it wants to continue to have nuclear power in France.
Philips shares were also under the cosh after the company said its first-quarter profits took a hit from tax charges on the back of its separation of the lighting business.
In London, Imperial Brands - formerly known as Imperial Tobacco - was the standout gainer as Goldman Sachs upgraded the stock to 'buy' from 'neutral' following recent underperformance. |
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| | US Market Report | | US open: Stocks fall as investors await Fed interest rate decision US stocks dropped on Monday as oil prices wavered and investors acted cautious ahead of the Federal Reserve's interest rate decision.
The Dow Jones Industrial Average fell 0.65%, the S&P 500 shed 0.52% and the Nasdaq lost 0.37% at 1514 BST.
Oil prices were mixed after declines earlier in the session, with West Texas Intermediate crude down 0.32% to $43.59 per barrel and Brent up 0.33% to $45.26 per barrel.
Saudi Arabia has approved economic reforms aimed at moving the country away from its dependence on oil profits. The plan includes selling shares in state-owned Aramco to create a sovereign wealth fund. Oil accounts for nearly 80% of Saudi's revenue but the slide in prices over the past year has hit the nation's economy.
Meanwhile, the Fed is widely expected to keep interest rates unchanged on Wednesday but traders will be looking for clues on the central bank's next policy action.
"We could be in for another rocky week in the markets with particular focus back on the central banks as we get the latest monetary policy decisions from the Federal Reserve and Bank of Japan, the latter of which is expected to announce new stimulus measures," said Oanda's Craig Erlam.
He expects two rates hike from the Fed this year. "What the markets are looking for though is an idea of when we can expect them, with the June and December meetings looking the most likely."
Societe Generale said: "It feels very much like it did back in October 2015, when the Fed started to hint at the possibility of rate hikes at the December meeting, but with one key difference - the probability of rate hikes priced in the fed funds market then was significantly higher than what is currently priced in the market.
"Back in October, the market was pricing in a probability of three hikes in 2016, and now we are pricing in just one hike by end-2017."
The Bank of Japan is also due to make a policy announcement on Thursday.
In corporate news, shares in Xerox plunged after the company reported a 85% drop in first quarter profit, reflecting higher restructuring charges. The group also issued downbeat guidance for the current quarter and lowered its bottom line outlook for the year.
KKR & Co. slumped after posting a first quarter loss that was worse than analysts' had anticipated.
Express Scripts Holdings is also due to report earnings after the market closes.
Halliburton was scheduled to post first quarter interims but has delayed its release until next month.
Technology giant Apple is slated to release its results on Tuesday.
In economic data, US new home sales unexpectedly fell in March, marking the third month in a row of declines. Figures released by the Commerce Department showed new home sales dropped 1.5% to an annual rate of 511,000 from an upwardly-revised 519,000. Economists had been expecting a pace of 520,000. |
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| | Broker Tips | | Broker tips: Imperial Brands, StanChart, Acacia Mining Imperial Brands, formerly known as Imperial Tobacco, was a high riser on Monday as Goldman Sachs upgraded the stock to 'buy' from 'neutral' following recent underperformance.
It noted the shares are down 8% over the past month versus its European staples coverage and the broader market.
"Our 'buy' thesis is predicated on the company's highly cash-generative business model (we forecast over £13bn of free cash flow generation over the next 5 years, equivalent to 39% of its current market cap), attractive average EPS growth (7% pa) and dividend yield (c.5% pa) in CY17-18E," the bank said.
Goldman said upcoming catalysts include the first half results on 4 May and the Investor Day on 8 June.
The bank said consensus forecasts are not adequately reflecting the mix benefits from the inclusion of the US assets and the mix effect on operating margins due to lower sales in Iraq and Syria.
"In addition, based on average year-to-date and current FX spot rates, we estimate a 1.5% positive contribution to FY17 tobacco operating profits."
GS added that while no change to management's long-term guidance is expected at the Investor Day, an update on strategy - particularly on the US and brand optimisation programmes - could boost sentiment.
Goldman kept its 3,950p price target on the stock.
StanChart's first-half fee and trading income probably took a hit from market volatility while the deleveraging of its liquidation portfolio likely weighed on net interest margins, Citi said.
The broker estimated the lender would report a pre-tax loss of -$533m for the first six months of its financial year, with revenues down by 21% but up by 7% versus the previous half.
However, a return to profitability for the full-year was on the cards, Citi estimated, bumping up its estimate for earnings per share at the Asia-focused lender in 2016 to 5.5 cents, from a loss.
Citi's estimates for 2017 and 2018 EPS on the other hand were lowered by 14% and 5%, respectively, "mainly due to a slower recovery in revenues and higher investment-related expenses. This is partially offset by a lower CoR."
Even so, automatically rolling forward its valuation methodology by one year meant the target rose from 465p to 570p.
Numis on Monday reduced Acacia Mining's rating to 'add' from 'buy' following the recent rally in shares.
The broker, however, raised its target to 400p from 310p as it upgraded its forecasts for gold prices for 2016 and 2017.
"The main driver of this is an increase in our 2016 gold price assumption from US$1,106 per ounce (oz) to US$1245/oz and our 2017 gold price forecast from US$1,200/oz to US$1,250/oz," said Numis analyst Jonathan Guy.
Acacia Mining last Thursday reported first quarter production of 190,210 oz at cash costs of $693/oz, better than consensus forecasts for 179,000oz, at $734/oz.
The group posted a 24% rise in earnings before interest tax, depreciation and amortisation to $66m thanks to an increase in revenue and lower cash costs.
Numis said the performance was boosted by a marked improvement at the Bulyanhulu gold mine, with production of 78,400 oz supported by an 18% increase in grade.
"Whilst Acacia remains a preferred name as the potential at Buly is unlocked we pull back our recommendation from 'buy' to an 'add' following the recent rally." |
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