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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 mining stocks slump London stocks lost their steam on Monday as mining stocks dragged the FTSE 100 to finish lower.
Mining stocks led the declines, including Anglo American, Glencore and Rio Tinto, as a turmoil in iron ore prices spread to other commodities.
At the same time, oil prices reversed earlier gains amid a government shake-up in Saudi Arabia. Saudi Arabia's veteran oil minister Ali al-Naimi will be replaced by Saudi Aramco chief executive Khalid al-Falih.
Oil was rising earlier on Monday, underpinned by the supply outages due to wildfires in the Canadian province of Alberta and strong Chinese crude import data, which showed a 7.6% increase in April on the year.
At 1614 BST, Brent crude fell 2.1% to $44.40 per barrel and West Texas Intermediate dropped 1.3% to $44.07 per barrel.
Greek reforms
Jeroen Dijsselbloem, head of the Eurogroup of finance ministers, said he hopes a deal to unlock further aid to Greece can be agreed by the end of the month after the nation announced progress on reforms.
Dijsselbloem said Eurogroup talks in Brussels on Monday would be "a first discussion" and is targeting a deal to be finalised by 24 May.
Greece's parliament on early Monday passed a package of pension and tax reforms to appease the country's lenders to unlock further bailout cash. The measures will aim to attain savings to meet an agreed 3.5% budget surplus target before interest payments in 2018.
Economic data
German factory orders rose 1.7% year-on-year in March, beating estimates for a 0.1% and following a 0.7% increase a month earlier, according to Destatis.
Eurozone investor confidence rose more than expected in May but remained subdued, according to a report by Sentix on Monday. The investor sentiment index climbed to 6.2 in May from 5.7 in April, beating forecasts of 6.0. However, it remains well below levels recorded last year.
In the UK, house prices fell 0.8% in April compared to a month ago, more than the 0.3% drop expected by analysts and after a 2.6% jump in March, Halifax said. The decline follows the introduction of extra stamp duty for second home owners and buy-to-let investors on 1 April and comes amid uncertainty leading up to the 23 June European Union referendum.
Company news
Greggs gained after reporting a 5.7% rise in like-for-like sales in the first 18 weeks of 2016, despite the tepid conditions on British high streets.
Smith & Nephew jumped after Jefferies upgraded the artificial knee and hip maker to 'buy' from 'hold' and lifted the price target to 1,375p from 1,044p.
EasyJet soared after RBC Capital Markets upgraded the airline to 'outperform' from 'underperform' and lifted the price target to 1,500p from 1,450p. Fellow travel firm TUI also rallied ahead of its half year results on Wednesday.
Security firm G4S climbed after saying it has made a positive start to the year despite a challenging backdrop, with no new impairments.
Interserve was in the red as Berenberg cut its target to 520p from 645p after the company highlighted contractual issues in a trading update.
Oil stocks Royal Dutch Shell and BP dropped on the slide in crude prices. |
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| Market Movers
FTSE 100 (UKX) 6,111.96 -0.22%
FTSE 250 (MCX) 16,676.20 0.16%
techMARK (TASX) 3,064.30 1.06%
FTSE 100 - Risers
AstraZeneca (AZN) 3,945.00p 3.86%
easyJet (EZJ) 1,470.00p 3.81%
TUI AG Reg Shs (DI) (TUI) 1,036.00p 3.60%
Whitbread (WTB) 3,906.00p 2.74%
Berkeley Group Holdings (The) (BKG) 2,984.00p 2.61%
Smith & Nephew (SN.) 1,164.00p 2.46%
Capita (CPI) 1,024.00p 2.40%
Carnival (CCL) 3,531.00p 2.29%
Paddy Power Betfair (PPB) 9,085.00p 2.25%
Sage Group (SGE) 593.00p 2.07%
FTSE 100 - Fallers
Anglo American (AAL) 558.70p -13.97%
Glencore (GLEN) 132.10p -9.27%
Rio Tinto (RIO) 1,963.50p -7.97%
BHP Billiton (BLT) 791.20p -6.33%
Fresnillo (FRES) 1,036.00p -6.07%
Antofagasta (ANTO) 416.40p -5.69%
Standard Chartered (STAN) 478.15p -4.07%
Randgold Resources Ltd. (RRS) 5,940.00p -3.65%
Royal Dutch Shell 'B' (RDSB) 1,714.00p -2.70%
BP (BP.) 352.10p -2.41%
FTSE 250 - Risers
CLS Holdings (CLI) 1,589.00p 5.30%
G4S (GFS) 193.60p 5.05%
Spire Healthcare Group (SPI) 340.00p 4.97%
Hastings Group Holdings (HSTG) 183.00p 3.51%
TalkTalk Telecom Group (TALK) 265.40p 3.27%
Clarkson (CKN) 2,268.00p 3.14%
Greggs (GRG) 1,101.00p 3.09%
Tate & Lyle (TATE) 611.50p 2.95%
Redrow (RDW) 384.60p 2.45%
Polypipe Group (PLP) 288.60p 2.27%
FTSE 250 - Fallers
Evraz (EVR) 117.00p -10.48%
Kaz Minerals (KAZ) 150.60p -10.20%
Centamin (DI) (CEY) 109.60p -9.79%
Vedanta Resources (VED) 353.30p -8.76%
Interserve (IRV) 308.80p -6.23%
Tullow Oil (TLW) 232.20p -5.30%
Ophir Energy (OPHR) 64.80p -4.99%
Allied Minds (ALM) 336.90p -4.88%
Acacia Mining (ACA) 313.40p -4.63%
Amec Foster Wheeler (AMFW) 446.50p -4.21% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks finish on mixed note as oil futures retreat European stocks finished on a mixed note on Monday, amid disappointing Chinese trade data and a fall in oil prices.
The benchmark DJ Stoxx Europe 600 index was up 0.47% to 333.22, Germany's DAX was 1.12% or 110.54 points higher at 9,980.49 and France's CAC 40 was 0.50% firmer.
Oil prices were in the red despite the wildfires which continued to rage in the Canadian province of Alberta. Strong Chinese crude import data also helped to underpin the tone for oil earlier in the session after data showed imports rose 7.6% in April on the year.
Investors also mulled news at the weekend that Saudi Arabia's veteran oil minister Ali al-Naimi will be replaced by Saudi Aramco chief executive Khalid al-Falih.
West Texas Intermediate was down 2.64% to $43.51 a barrel and Brent crude was off 3.63% lower at $43.78.
"Despite relatively poor Chinese trade data, European equities have started the week higher amid expectation that Friday's weak US employment numbers will force the Federal Reserve to delay any prospective rate rises," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
"This reaction is a return to the 'bad news is good news' perspective that dominated market sentiment previously, but the key question is whether lower rates for longer is a catalyst for driving equities higher, or simply an excuse for markets to try and justify current levels. Without sustained global growth and profitability, the danger is that markets will continue to drift lower, as seen over the past two weeks."
Data out of China over the weekend showed imports and exports fell more than expected in April. Exports dropped 1.8% on the year versus expectations for a flat reading, while imports tumbled 10.9% from the previous year, which was a much steeper fall than the 4% expected.
Corporate news was thin on the ground.
Chemicals distributor Brenntag slumped after posting a 27% decline in first-quarter net profit that missed analysts' estimates.
In London, security firm G4S rallied after saying it has made a positive start to the year despite a challenging backdrop, with no new impairments. Back in March, shares in the company tumbled after it posted a fall in full-year profit and revenue on the back of restructuring costs and write-downs on onerous contracts relating to asylum seekers.
Also on Monday, investors were keeping an eye on proceedings at the Eurogroup meeting of finance ministers, where Greece's progress on reforms was set to be evaluated.
"The thorniest issue appears to be the contingency measures worth 2% of GDP requested by the IMF," said UniCredit.
On Sunday, the Greek parliament voted to overhaul pensions and lift taxes to help unlock bailout funds.
On the data front, a report by Sentix showed Eurozone investor confidence rose more than expected in May but remained subdued.
The investor sentiment index climbed to 6.2 in May from 5.7 in April, beating forecasts of 6.0. However, it remains well below levels recorded last year.
The index had reached double digits in February 2015 after the European Central Bank announced its quantitative easing programme, but returned to single digits in January of this year amid concerns about the health of the Eurozone's economy and prolonged low inflation. |
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| | US Market Report | | US open: Stocks rise as traders shrug off oil price decline US stocks gained on Monday as investors shrugged off a decline in oil prices and worse-than-expected Chinese trade data.
At 1513 BST, the Dow Jones Industrial Average rose 0.06%, the S&P 500 increased 0.26% and the Nasdaq climbed 0.23%.
In contrast oil prices reversed an earlier rally amid a government shake-up in Saudi Arabia. Saudi Arabia's veteran oil minister Ali al-Naimi will be replaced by Saudi Aramco chief executive Khalid al-Falih.
Oil was rising earlier on Monday, underpinned by the wildfires in the Canadian province of Alberta and strong Chinese crude import data, which showed a 7.6% increase in April on the year.
West Texas Intermediate crude fell 1.2% to $44.12 per barrel and Brent declined 1.7% to $44.58 per barrel at 1514 BST.
Meanwhile, data out of China over the weekend showed imports and exports fell more than expected in April. Exports dropped 1.8% on the year versus expectations for a flat reading, while imports tumbled 10.9% from the previous year, which was a much steeper fall than the 4% expected.
Stateside, there are no macroeconomic releases due with traders continuing to mull Friday's disappointing non-farm payrolls report.
Stocks on Wall Street finished in the black on Friday after the non-farm payrolls report showed the US added fewer jobs than expected in April, sparking hopes the Federal Reserve won't hike rates anytime soon. Payrolls rose by 160,000 versus expectations for a 200,000 gain.
"Probability for a rate hike at the June FOMC had been at 32% prior to Friday's jobs numbers but has subsequently dropped to just 19%, however the wage growth could be the shining light that keeps a move in rates solidly on the table in the run up to the Fed meeting on June 15, after Janet Yellen removed her fears about the global market effect on the US economy," said James Hughes, chief market analyst at GKFX.
On the corporate front, Tyson Foods advanced after the meat supplier raised its full year profit forecast due to strong consumer demand.
Sotheby's was in the red after reporting a first quarter loss as auction revenue fell.
Krispy Kreme Doughnuts surged after agreeing to buy Kenco coffee owner, JAB Holding, for $1.35bn. |
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| | Broker Tips | | Broker tips: EasyJet, Restaurant Group, Tullow Oil RBC Capital Markets upgraded EasyJet to 'outperform' from 'underperform' and lifted the price target to 1,500p from 1,450p.
It said the drop in the shares - which are down 16% versus the FTSE 100 year-to-date - is a good entry point.
"We now see a window opening in easyJet shares for more farsighted investors to exploit," RBC said.
Following the share price decline, the bank now sees 12-13% total return potential. RBC upped the price target as it sees a growing probability the company will move to tackle its cost inflation problems.
In addition, RBC said balance sheet capital efficiency changes were also possible in future, but with easyJet's marginal cost of debt there is modest short-term upside from these.
"As sell-side consensus estimates start to fall, we see recent price target cuts signaling the start of capitulation on the shares as enhancing the coming opportunity to buy, even if the short-term investors might need to stomach adverse EPS momentum and a risk to summer profit outlook."
More broadly, RBC said that in the short - term, its concerns about oversupply in the airline segment remain.
UBS downgraded Restaurant Group to 'neutral' from 'buy' and slashed the price target to 305p from 780p saying near-term uncertainty outweighs the long-term potential.
The bank said Restaurant Group's profit warning at the end of April highlighted a deteriorating like-for-like sales trend, with a 2.7% drop for the 17 weeks to 24 April indicating a LFL decline of 4.4% for the last seven weeks.
"Management appear yet to have a clear explanation for the weakness, let alone a solution. As a result, we are cautious on the near term potential for a LFL turnaround. Whilst there is some valuation support at these levels, we downgrade from buy to neutral to reflect the lack of visibility, pending details of the strategic review."
UBS said the drop in LFL growth looks to be the result of a tougher consumer backdrop, increased competition driven by strong supply growth and brand positioning.
"The group have launched a strategic review of the business, however, we don't expect any detail until August, and see limited scope for solutions that will meaningfully change the underlying trends in 2016."
The Swiss bank now expects 2016 pre-tax profit of £74.9m versus guidance of £74-80m.
BMO Capital Markets upgraded Tullow Oil to 'outperform' from 'market perform' and lifted the target to 310p from 200p.
"The oil exploration and production industry is a risky asset class, however Tullow Oil has shown itself capable to adapt to the lower oil price environment, as well as adapting to a better understanding of the capital allocation and development risks presented by its exploration success in Africa."
BMO said the recent share price performance has eroded some of the near-term upside.
It argued that by farming down exposure to both oil projects in East Africa, which are now being pursued as two independent ventures, Tullow can achieve carry to first oil and more than $500m of surplus cash that can be used to de-lever the balance sheet.
In addition, BMO said the delivery of first oil at the TEN project in Ghana, which is expected in July or August, may further unlock the company's ability to return to value creative exploration over the next 12-18 months. |
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