| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks close higher as investors weigh earnings, await Fed decision UK stocks closed higher on Tuesday as traders weighed a deluge of earnings and awaited the Federal Reserve's interest rate decision.
Standard Chartered was a standout riser as it reported an improvement in impairment losses on bad loans in the first quarter to $471m from $476m in the same period last year. Investors seemed to overlook a 59% drop in first quarter profit amid depressed commodity prices, volatility in Chinese markets and weak emerging market sentiment.
BP also gained despite posting a pre-tax loss of $865m in the first quarter, compared to a $2.2bn profit in the first quarter of 2015, as it kept its dividend unchanged at 10 cents.
Whitbread rallied after reporting a rise in full year underlying pre-tax profit and revenue, supported by growth at its Premier Inn and Costa brands.
Cobham slumped after the aerospace and defence group proposed a £500m rights issue in the second quarter of the year as it reported a big drop in first-quarter trading profit.
Meanwhile, housebuilders rallied as the pound strengthened against the dollar and as data showed a jump in gross mortgage borrowing in March. Persimmon, Taylor Wimpey and Barratt Developments were among the risers.
The British Banker's Association said gross mortgage borrowing came to £17.1bn in March, up 64% compared to year ago and 29.5% compared to February. BBA said the rise was driven by the purchase of buy-to-let properties and second homes ahead of higher stamp duty charges on 1 April.
Howard Archer, chief UK and European economist at IHS Global Insight, said he sees the housing market slowing following the introduction of extra stamp duty and due to uncertainty ahead of Britain's European Union referendum on 23 June.
However, he still sees housing market activity holding up "reasonably well" as buyer interest is supported by high employment and low interest rates.
"Consequently, while house price growth may ease back from current levels, we still expect house prices to rise by around 6% over 2016 - with support coming from a relative shortage of properties as well as decent buyer interest," he said.
In a downbeat note for retail sector, Austin Reed has become the second iconic British name to go into administration this week. The news comes a day after fellow high street retailer BHS announced it was going into administration, putting 11,000 jobs at risk.
In commodities, oil prices rebounded from declines in the previous session as the US dollar weakened. Brent crude rose 2.7% to $45.73 per barrel and West Texas Intermediate climbed 2.9% to $43.94 per barrel at 1657 BST.
In the US, new orders for durable goods rose 0.8% in March to $230.7bn, according to the Commerce Department, missing expectations of a 1.8% increase.
House prices in the US rose a touch less than expected in February, according to the S&P/Case-Shiller National Home Price Index. The S&P/Case-Shiller 20-City Composite was up 5.4% on the year, down from 5.7% the previous month and missing expectations of a 5.5% increase.
US services activity picked up in April, according to a flash estimate by Markit. The purchasing managers' index rose to 52.1 in April from 51.3 in March, beating forecasts of 52.0. A reading above 50 signals an expansion in the sector while a level below that indicates a contraction.
US consumer confidence fell in April as optimism on the outlook for business conditions and the labour market weakened, according to the Conference Board. The sentiment index fell to 94.2 this month from 96.1 in March, below estimates for a reading of 96.0.
Investors are now looking ahead to the Fed's interest rate decision after the close on Wednesday. The central bank is widely expected to stand pat on interest rates on Wednesday. Market participants will be scrutinising the accompanying statement for any clues on future policy.
Bank of America Merrill Lynch reckons the Fed will likely hike rates again this summer, potentially in June if the global market selloff ahead of the Brexit vote in the UK is limited. Otherwise, it still sees a good case for the next hike in July. |
| | 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) 6,284.52 0.38%
FTSE 250 (MCX) 16,950.02 -0.09%
techMARK (TASX) 3,083.11 -1.07%
FTSE 100 - Risers
Standard Chartered (STAN) 571.70p 9.82%
Paddy Power Betfair (PPB) 8,765.00p 4.66%
BP (BP.) 375.90p 4.32%
Lloyds Banking Group (LLOY) 70.00p 3.57%
Intu Properties (INTU) 305.70p 2.96%
Berkeley Group Holdings (The) (BKG) 3,065.00p 2.89%
Taylor Wimpey (TW.) 184.20p 2.79%
Land Securities Group (LAND) 1,125.00p 2.74%
Whitbread (WTB) 3,969.00p 2.64%
Persimmon (PSN) 1,967.00p 2.50%
FTSE 100 - Fallers
AstraZeneca (AZN) 4,003.00p -1.98%
Glencore (GLEN) 151.95p -1.97%
Inmarsat (ISAT) 928.50p -1.90%
Burberry Group (BRBY) 1,212.00p -1.78%
Anglo American (AAL) 667.20p -1.75%
Shire Plc (SHP) 4,191.00p -1.34%
Relx plc (REL) 1,229.00p -1.29%
Unilever (ULVR) 3,147.50p -1.24%
Kingfisher (KGF) 360.90p -1.23%
BAE Systems (BA.) 484.20p -1.16%
FTSE 250 - Risers
Drax Group (DRX) 323.40p 5.00%
AO World (AO.) 186.30p 4.96%
Entertainment One Limited (ETO) 195.00p 4.84%
Capital & Counties Properties (CAPC) 354.10p 4.12%
Workspace Group (WKP) 847.00p 3.67%
Crest Nicholson Holdings (CRST) 516.00p 3.47%
St. Modwen Properties (SMP) 313.50p 3.29%
Grainger (GRI) 222.70p 3.29%
Millennium & Copthorne Hotels (MLC) 462.30p 3.19%
TalkTalk Telecom Group (TALK) 261.20p 3.12%
FTSE 250 - Fallers
Cobham (COB) 177.60p -17.47%
Aberdeen Asset Management (ADN) 295.00p -4.62%
Centamin (DI) (CEY) 101.20p -4.26%
Paysafe Group (PAYS) 370.00p -4.12%
Greggs (GRG) 1,040.00p -3.17%
Indivior (INDV) 165.60p -3.04%
Brown (N.) Group (BWNG) 262.70p -2.74%
Hikma Pharmaceuticals (HIK) 2,245.00p -2.65%
Weir Group (WEIR) 1,157.00p -2.53% |
| | Download the 2016 Buy-To-Let Property Guide | | Discover the UK's top high-yielding buy-to-let destinations & learn the best practices of investing in property from the experts. Download it for free now, click here. |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed ahead of central bank meetings European stocks were mixed on Tuesday as oil prices recovered and investors sifted through a deluge of corporate news at the start of the Fed's two-day policy meeting.
The benchmark DJ Stoxx Europe 600 index edged higher by 0.18% to 347.31, but Germany's DAX was off by 0.34% at 10,259.59 and France's CAC 40 declined 0.28% to 4,533.18.
Oil prices were higher, underpinned by a weaker US dollar. West Texas Intermediate was 3.4% firmer at $44.12 a barrel and Brent crude gained 3.01% to $45.86 per barrel.
Corporate news aided sentiment in stockmarkets as investors looked ahead to rate announcements from the Federal Reserve and Bank of Japan on Wednesday and Thursday, respectively.
"It's impossible to imagine the Federal Reserve will announce an interest rate hike at the end of its two-day get-together tomorrow, but what about June? Any hint from Fed chair Janet Yellen as to future central bank policy will move markets," said Lee Wild, head of equity strategy at Interactive Investor.
"Conversely, in Japan, investors are demanding action to tackle a lifeless economy on Thursday, and widening the policy of negative interest rates is seen as a must. Fail to act and a sharp sell-off there looks inevitable."
BP was a high riser after the oil giant's underlying first-quarter earnings beat analysts' expectations.
Safran was also in the black after the French aerospace supplier reported a 7.8% increase in first-quarter revenue.
Bayer edged up after the German drug maker said underlying core earnings rose nearly 16% in the first quarter, while French telecoms group Orange advanced after saying revenue grew 3.5% in the first quarter.
Nokia was higher after agreeing to buy digital health firm Withings for €150m.
Standard Chartered surged after its first-quarter update. Although it posted a 59% drop in profit amid depressed commodity prices, volatility in Chinese markets and weak emerging market sentiment, investors welcomed signs the bank was beginning to turn things around as loan impairments dropped.
British American Tobacco drifted lower even after reporting a jump in first-quarter revenue.
Nonetheless, the company cautioned that currency impacts could hit full-year profit.
On the downside, Air Liquide dropped as it posted a drop in first-quarter sales but reaffirmed its profit target for the year, while Salzgitter fell after it reported a fall in first-quarter earnings and revenue. |
| | 7 Secret Trading Strategies | | This FREE guide will help you take advantage of the market,
no matter what the conditions! Download Your Copy Now |
| | US Market Report | | US open: Stocks gain as traders weigh earnings, await FOMC rate decision US stocks gained on Tuesday as traders sifted through another barrage of corporate earnings and awaited the Federal Reserve's interest rate decision.
The Dow Jones Industrial Average rose 0.13%, the S&P 500 climbed 0.15% and the Nasdaq increased 0.13% at 1437 BST.
Procter & Gamble advanced after posting quarterly earnings that surpassed expectations.
Post-it maker 3M edged lower despite reporting first quarter profit that beat analysts' projections.
DuPont climbed after its first quarter earnings topped forecasts and the company raised its outlook.
Chocolate giant Hershey Co. slumped as it reported first quarter revenue that missed forecasts and provided a downbeat 2016 earnings outlook.
Reynolds American slid as it reported first quarter sales that fell short of analysts' estimates.
Apple is due to report its earnings after the closing bell.
Away from earnings, the Fed is widely expected to stand pat on interest rates on Wednesday. Market participants will be scrutinising the accompanying statement for any clues on future policy.
Bank of America Merrill Lynch reckons the Fed will likely hike rates again this summer, potentially in June if the global market selloff ahead of the Brexit vote in the UK is limited. Otherwise, it still sees a good case for the next hike in July.
"Either way, we believe the Fed will have to start preparing the markets for a possible rate hike at an upcoming meeting this summer. With no press conference or forecast update at the April Federal Open Market Committee (FOMC) meeting, focus will be on the statement language.
"The FOMC will likely acknowledge the weak data to start the year, but contrast with expectations for continued gradual progress toward full employment and the inflation target. The Committee may note global risks have dissipated slightly, or that the disinflationary effects of the US dollar or commodity prices have started to ease. Some signal of this type could help to modestly lift the market's assessment of rate hike likelihood. More explicit language or guidance would be more powerful, but also a low-probability outcome."
On the macroeconomic calendar, new orders for US durable goods rose 0.8% in March to $230.7bn, according to the Commerce Department, missing expectations of a 1.8% increase.
The rise was underpinned by a surge in defence spending, and followed on from a revised 3.1% drop in February.
House prices in the US rose a touch less than expected in February, according to the S&P/Case-Shiller National Home Price Index.
The S&P/Case-Shiller 20-City Composite was up 5.4% on the year, down from 5.7% the previous month and missing expectations of a 5.5% increase.
US services activity picked up in April, according to a flash estimate by Markit. The purchasing managers' index rose to 52.1 in April from 51.3 in March, beating forecasts of 52.0. A reading above 50 signals an expansion in the sector while a level below that indicates a contraction.
US consumer confidence fell in April as optimism on the outlook for business conditions and the labour market weakened, according to the Conference Board. The sentiment index fell to 94.2 this month from 96.1 in March, below estimates for a reading of 96.0.
Meanwhile, oil prices regained strength as the dollar weakened.
West Texas Intermediate crude rose 1.4% to $43.28 per barrel and Brent crude climbed 1.5% to $45.16 per barrel at 1459 BST. |
| | Get your FREE copy of Shares magazine Are you getting a market-beating performance from your money? The experts at Shares can help. Try a free issue today. |
| | Broker Tips | | Broker tips: Whitbread, Paddy Power Betfair, TUI Numis reiterated a 'hold' rating and target of 4,000p for Whitbread on Tuesday, saying it expects "lack-lustre" earnings growth in the near term.
The owner of Costa and Premier Inn reported its full year results on Tuesday, revealing a 12% increase in total revenue to £2.91bn and an 11.9% gain in underlying profit before tax to £546.3m. Numis had forecast pre-tax profit of £548.7m.
The company's Premier Inn brand saw total sales growth of 12.9% and like-for-like growth of 4.2%, while coffee chain Costa saw total sales improve 15.9% and UK like-for-likes grow 2.9%. The dividend was raised by 10% to 90.35p.
Chief executive Alison Brittain said Whitbread was planning to develop its network and brand strength amid rising competition, rapid technological advancements, changing cost structures and growing customer expectations.
Whitbread repeated its target to reach around 85,000 UK hotel rooms and £2.5bn system sales in Costa by 2020.
"Management acknowledges the need to invest across both brands in a number of common areas: teams, IT infrastructure, digital and productivity and efficiency," said Numis analyst Wyn Ellis.
"We believe that this, in combination with a more competitive market environment, will result in relatively lack-lustre earnings growth in the near term."
Numis kept its forecasts for full year 2017 pre-tax profit growth of 5.5% growth.
Whitbread said it has had a good start to the year with Premier Inn growing share in a flat market and is confident looking ahead.
Ellis concluded: "High enough for now, in our view: the 'refreshed' management team needs to prove itself in a changing world."
Paddy Power Betfair got a boost on Tuesday as Morgan Stanley lifted its stance on the shares to 'overweight' from 'equalweight', saying the stock's drop of over 20% in the last two months made for a compelling entry point.
"We are not changing forecasts, but see upside risks given signs of accelerating cost cutting and strong industry growth," the bank said.
MS said there four new developments other than valuation giving it confidence in the growth profile.
It said the company seems to be on track to exceed its £50m synergy target, with delivery quicker than its three-year target.
In addition, it highlighted strong industry growth rates. The bank said peer William Hill's surprise profit warning was related to changes in regulations for player activity and anti-money laundering.
"This heightened market concerns of a slowdown in growth in the key UK online gambling market. Subsequent upbeat reports from Ladbrokes, GVCand Skybet suggest that William Hill's issues are more company specific."
Morgan Stanley also pointed to Betfair's s horse-racing exchange in New Jersey, which launches on 10 May.
It said this will be the first fixed-odds product for US horseracing, adding that it sees significant long-term scope for growth as more states legalise, and a long-term option on sports betting regulation.
Finally, the bank said net debt of £63m as of 8tMarch leaves PPB on track to beat its year-end forecast of net cash of £42m.
MS has a 10,000p price target on the stock.
TUI was making the most of the bumper UK summer holiday booking season, but the same could not be said of rival Thomas Cook, JP Morgan said.
A 20.2% surge in UK holiday bookings during the month of February took fiscal year-to-date growth for the sector to 9.6%, with no signs of any deceleration ahead despite the fact that companies were heading into less favourable period for currency comparables.
However, only TUI, whose summer 2016 bookings were running 9% ahead appeared to be "fully capturing this opportunity", the broker said in a research note sent to clients.
Analysts led by Jaafar Mestari on the other hand expected rival Thomas Cook to continue to suffer from stronger competition in the lower price points - from the likes of Dart - and less favourable hedging (at prices that were 7% higher than those for TUI).
The UK represented nearly 40% of group earnings before interest and taxes for both TUI and Thomas Cook, they explained.
Indeed, in th ecsae of TUI spot booings were already running sufficiently high enough for the company to reach the broker´s estimates for fiscal year 2016.
However, an unexpected €36m currency headwind from the translation of UK profits led Jaafar and his team to lower their target on the shares from 1,315p to 1,200p, even while upgrading their recommendation from 'neutral' to 'overweight'.
Shares of Thomas Cook were downgraded to from 'overweight' to 'neutral' and the target lowered from 170p to 100p. |
| | 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