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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 rally on poll results, but some analysts unconvinced Stocks in London finished near their best levels of the day, alongside the largest one-session gain for the pound since 2008, as polls showing the 'Remain' campaign was in the lead wrong-footed some investors.
The FTSE 100 finished 182.91 points or 3.04% higher at 6,204.00, led higher by gains in financials such as Hargreaves Lansdown and Lloyds together with housebuilders, including Taylor Wimpey and Barratt Developments.
Against the US dollar, the pound was gaining 2.19% to 1.4676. In parallel, front month Brent crude futures gained 2.48% to $50.42 per barrel on the ICE. The yield on the benchmark 10-year Gilt closed nine basis points higher to 1.236%.
Over the weekend, a Survation poll in the Daily Mail revealed that support for the 'Remain' campaign was in the lead at 45.0% versus 52.0% for 'Leave', while two YouGov polls - one for ITV's Good Morning Britain and one for the Sunday Times - both showed Remain in front.
In addition, a ComRes poll for the Sunday Mirror revealed the percentage of people saying they'd be relieved if the UK stayed in the EU rose to 45% after the murder of MP Jox Cox, from 35% before.
Paddy Power said that, by 1430 BST on Monday, Remain was trading at odds that implied an 80% chance, thanks to more than 10 five-figure bets over the weekend, with more than 70% of the total money the bookmaker has taken being for Remain so far.
However, some in the City have suggested heavy betting money indicating a strong Remain win are "wishful thinking".
Schoders multi-manager head Marcus Brookes pointed out that, as polling data suggests City workers overwhelmingly support Remain, "it might be they found the evidence that supported their own view - known as confirmation bias - choosing the betting exchange view over the polls. Recent data seems to suggest that the polling data might prove to be a better guide this time."
BT Group, TalkTalk jump
"With growing mobile data usage, we see mobile as an essential utility," UBS analyst Polo Tang said in a research note sent to clients. In case of 'Bremain', Tang expected a rebound in the likes of Sky, BT and TalkTalk. Those UK-centric three names had already underperformed going into the EU referendum (although they were relatively resilient operationally in the last downturn), he said.
Heavily indebted North Sea oil producer EnQuest has denied media reports that it is in talks with the UK Oil and Gas Authority (OAG) about contingency plans. The government body fears insolvencies at Enquest and mid-cap peer Premier Oil, the Sunday Telegraph reported, and is mulling plans "to guard against a North Sea bankruptcy crisis" as the pair are "wracked with debt following the oil market rout and now stand at the mercy of their lenders".
Gemfields, a British supplier of responsibly sourced coloured gemstones, reported record total revenues of $44.3m at a recent auction of rough rubies in Singapore as the increasing quality of Mozambique gems attracts growing demand.
Shares in biopharmaceutical development company Circassia Pharmaceuticals plummeted on Monday morning, after it announced disappointing top-line results from its investigational cat allergy immunotherapy phase III study.
Hammerson said it has exchanged contracts and completed the sale of Thurrock Shopping Park, Essex, to TH Real Estate for £93m. The sale price represents a net initial yield of 5.3% and is moderately below the book value as at 31 December 2015, Hammerson said.
Late-stage drug trials by GlaxoSmithKline on its treatment for chronic obstructive pulmonary disease (COPD) have proved successful. The Phase III clinical testing by GSK and project partner Innoviva delivered data that is likely to support European regulatory submission by the end of 2016.
FTSE 250 precision instruments maker Spectris has completed the acquisition of the software and associated assets of privately-held software solutions company Capstone Technology Corp for $22.5m. Capstone comprises two key software platforms: the MACS software suite providing engineering services and software for advanced process control optimisation and dataPARC, which is a data historian, visualisation and analytics software suite for operational decision support. |
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| Market Movers
FTSE 100 (UKX) 6,204.00 3.04%
FTSE 250 (MCX) 16,953.19 3.23%
techMARK (TASX) 3,052.33 2.91%
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 1,328.00p 8.06%
Lloyds Banking Group (LLOY) 70.00p 7.61%
Royal Bank of Scotland Group (RBS) 237.70p 7.02%
Taylor Wimpey (TW.) 188.00p 6.82%
Barclays (BARC) 176.85p 6.70%
Barratt Developments (BDEV) 567.00p 6.68%
St James's Place (STJ) 878.00p 6.55%
Dixons Carphone (DC.) 420.60p 6.16%
Sainsbury (J) (SBRY) 245.70p 6.09%
International Consolidated Airlines Group SA (CDI) (IAG) 507.00p 6.00%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 6,515.00p -1.44%
Rexam (REX) 626.50p -0.48%
Fresnillo (FRES) 1,224.00p -0.24%
Carnival (CCL) 3,427.00p 0.73%
SABMiller (SAB) 4,293.00p 0.88%
Shire Plc (SHP) 4,010.00p 1.37%
HSBC Holdings (HSBA) 437.35p 1.43%
AstraZeneca (AZN) 3,848.00p 1.45%
Unilever (ULVR) 3,116.50p 1.55%
BP (BP.) 378.95p 1.55%
FTSE 250 - Risers
Shawbrook Group (SHAW) 275.80p 14.92%
Evraz (EVR) 123.00p 12.74%
Thomas Cook Group (TCG) 68.95p 8.33%
Aldermore Group (ALD) 206.00p 7.85%
Paragon Group Of Companies (PAG) 297.00p 7.80%
Redrow (RDW) 406.10p 7.66%
NCC Group (NCC) 268.70p 7.48%
National Express Group (NEX) 314.50p 7.37%
JD Sports Fashion (JD.) 1,329.00p 7.26%
Bovis Homes Group (BVS) 995.50p 7.22%
FTSE 250 - Fallers
Circassia Pharmaceuticals (CIR) 87.20p -67.74%
IP Group (IPO) 161.70p -3.46%
Centamin (DI) (CEY) 110.30p -0.81%
AO World (AO.) 155.80p -0.32%
BH Macro Ltd. GBP Shares (BHMG) 1,945.00p -0.10%
Fidelity China Special Situations (FCSS) 135.80p -0.07%
UK Commercial Property Trust (UKCM) 76.85p -0.07%
Spire Healthcare Group (SPI) 346.90p -0.03%
Millennium & Copthorne Hotels (MLC) 430.00p -0.00%
Vectura Group (VEC) 157.00p -0.00% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Banks power ahead European stocks racked up stellar gains on Monday, with banks in the lead as the latest EU referendum polls revealed a shift in support.
The benchmark DJ Stoxx Europe 600 index rose by 3.69% or 12.01 points to 337,79, while the Dax notched up a gain of 3.43% to 9,962.02 and France's CAC 40 was up 3.3% to 4,340.76.
Banks were the standout gainers, with the Stoxx 600 sub-index for the sector up 4.61%.
At the same time, oil prices advanced, with West Texas Intermediate up 2.34% at $49.13 a barrel and Brent crude also up 2.21%, at $50.28.
Rebecca O'Keeffe, head of investment at Interactive Investor, said: "A significant shift in sentiment has seen global equity markets rally strongly as investors position their portfolios for a Remain vote. Investors who had been bracing themselves for the possibility of a vote to leave the EU had moved a substantial amount of money out of equities over the past two weeks, with many investors sitting on more cash than usual. With new polls suggesting a marked shift towards Remain, a wave of money is now entering the market, as investors view current index levels as oversold.
"However, the UK is not over the line yet, so although the odds of an exit vote have diminished dramatically, the possibility of further volatility and a shift back towards a more uncertain outcome over the coming days could see markets adversely react. For this morning though, investors are seeing financial and property companies lead the way higher as the market shrugs off its fears."
A Survation poll in the Daily Mail revealed that support for the Remain campaign was in the lead, while two Yougov polls - one for ITV's Good Morning Britain and one for the Sunday Times - both showed Remain in front.
In addition, a ComRes poll for the Sunday Mirror revealed the percentage of people saying they'd be relieved if the UK stayed in the EU rose to 45% after the murder of MP Jox Cox, from 35% before.
Meanwhile, an opinion survey conducted for the Observer between Tuesday and Friday showed an even split but of the 10% undecided, 36% said they were leaning towards Remain.
The polls lifted the pound, which surged against the US dollar, hitting its highest level in two weeks. Sterling closed up 2.32% at $1.4695.
"We still see Bremain as the most likely outcome, even though we would not bet the house on it," said Societe Generale. "This scenario would see further gains in cable - our initial target at 1.4750 looks easy following the overnight rally, 1.50 in the cards."
In corporate news, UniCredit pushed higher after Italian newspaper Il Fatto Quotidiano reported that the bank was likely to appoint former government minister Corrado Passera as its next chief executive officer.
Spain's Banco Bilbao Vizcaya Argentaria gained on reports it instigated a new strategic plan in March that was not announced to the market.
Shares in beleaguered German car maker Volkswagen jumped following a report it will submit its $10bn plan to fix emissions-cheating cars or get them off US roads this month.
Bayer was also a high riser after a report it is in talks with investment banks about strategic alternatives for its radiology supplies business.
GlaxoSmithKline was on the front foot after late-stage drug trials on its treatment for chronic obstructive pulmonary disease proved successful.
Hammerson was also in the black after saying it has exchanged contracts and completed the sale of Thurrock Shopping Park to TH Real Estate for £93m.
On the data front, figures from Eurostat showed construction output in the Eurozone dropped by 0.2% month-on-month in April, following a fall of 0.7% in February and a slide of 1.0% in March.
Building construction was weakest, shrinking by 0.4% versus March, while output from civil engineering bounced back 0.9% after a 1.7% drop in the month before.
Among the Eurozone's largest economies, output was 1.7% lower in Germany and off by 2.4% in Spain.
Data released earlier by Destatis showed German producer prices rose a little more than expected in May.
Prices were up 0.4% from April versus expectations of a 0.3% increase. On the year, however, producer prices were 2.7% weaker. Still, this was better than the 2.9% drop expected by economists. |
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| | US Market Report | | US open: Stocks open with healthy gains as Brexit concerns ease US stocks opened firmly in the black on Monday, with the Dow up more than 200 points as the most recent polls suggested voters in the UK were leaning towards a vote to remain in the European Union at Thursday's referendum.
At 1455 BST, the Dow Jones Industrial Average and the Nasdaq were both up 1.3%, while the S&P 500 was 1.2% higher.
At the same time, oil prices advanced, with West Texas Intermediate up 1.5% at $48.68 a barrel and Brent crude up 1.4%, at $49.86.
The positive mood was underpinned by signs the Remain campaign was gaining ground in the UK. A Survation poll in the Daily Mail revealed that support for the Remain campaign was in the lead, while two Yougov polls - one for ITV's Good Morning Britain and one for the Sunday Times - both showed Remain in front.
In addition, a ComRes poll for the Sunday Mirror revealed the percentage of people saying they'd be relieved if the UK stayed in the EU rose to 45% after the murder of MP Jox Cox, from 35% before.
Meanwhile, an opinion survey conducted for the Observer between Tuesday and Friday showed an even split but of the 10% undecided, 36% said they were leaning towards Remain.
With just a few days until the referendum takes place, CMC Markets analyst Jasper Lawler said it was "important not to get Brexit tunnel vision".
"Central banks still matter. A very dovish shift from the Federal Reserve's James Bullard, who on Friday said the Fed may only raise rates once before 2018, has contributed to a drop in the US dollar, adding to sterling strength. Fed Chair Janet Yellen testifies on monetary policy before the Senate Banking Committee on Tuesday."
Meanwhile, Societe Generale pointed out that while market participants may be distracted by Brexit, celebrating what looks for the moment to be a more likely vote for the status quo, when the fog actually clears all the same problems will still be there.
"Whatever the outcome of the Brexit vote this week investors will still be facing the prospect of negative rates and negative yields on a huge range of bonds, massive corporate leverage with worryingly rising delinquencies and of course expensive equity markets and falling profits," the bank said.
"To that extent these political events are a distraction from the main event, weak global economic growth and perverse asset markets."
In currency markets, the dollar slid against the pound, which surged to its highest level in two weeks on the referendum polls.
Monex Europe said: "Today's improvement in risk appetite is weighing on the US dollar, which is down today versus most of the G10 currencies. This week's trading will be dominated by developments in Europe, although on Wednesday the Federal Reserve's chair Janet Yellen is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, which could trigger significant USD volatility."
On the corporate front, Walt Disney shares pushed up 1.7% after its Pixar Animation Studio set a box-office weekend record for animated film Finding Dory.
Elsewhere, health insurers Anthem and Cigna were in focus following a Wall Street Journal report saying US antitrust regulators are concerned about their $48bn merger. |
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| | Broker Tips | | Broker tips: Asos, Cobham, Inmarsat RBC Capital Markets reiterated its 'outperform' stance and 4,500p price target on online fashion retailer ASOS, saying the recent share price weakness was a buying opportunity.
The broker noted the shares have dropped more than 10% over the last month, most likely on concerns over Amazon's push into fashion and uncertainty ahead of the EU referendum.
"We think the Amazon threat is overstated and believe that ASOS's trading remains strong, particularly in the UK where we expect further market share gains," RBC said.
In addition, it said the market underestimates the growth opportunity in the US where proposition enhancements are already visible. It expects underlying US revenue growth to accelerate next year as recent improvements made to the US customer proposition begin to yield top-line upside.
Aerospace and defence group Cobham got a boost on Monday as Bank of America-Merrill Lynch upgraded the stock to ' buy' from 'neutral' noting the balance sheet was reset and the valuation is attractive for a defence asset.
BofA ML pointed out that Cobham has completed a rights issue of around £500m, bringing the leverage to a much healthier 1.9x net debt EBITDA by year end FY16, putting the bank's previous concerns about leverage to rest.
It argued that commercial growth remains a concern but said Cobham has a well-positioned defence portfolio, and it expects modest organic improvements in both the US and non US defence exposures.
Citigroup upgraded Inmarsat to 'buy' from 'neutral' saying it was oversold and Brexit resistent, and lifted the price target to 900p from 880p due to the new GBP/USD exchange rate.
The bank noted Inmarsat has fallen 34% in sterling over the last six months.
"We believe this is overdone and was partly, at least, due to the compounding of having its principal market (Maritime) going into a severe recession just as Inmarsat commenced its product migration to GlobalXpress (GX), coinciding with management deciding to advance the capex cycle for its next generation of satellites." | | |
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