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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 open: Stocks fall as Fed and BoJ leave policy unchanged UK equities declined on Thursday as the Federal Reserve and the Bank of Japan left policy unchanged.
The Fed left interest rates unchanged at 0.25% to 0.50%, as expected, while Chair Janet Yellen struck a fairly dovish note and conceded the upcoming UK referendum was a factor in the decision.
"The Fed is running into some credibility issues," said CMC Markets' Jasper Lawler.
"The wash of hawkish talk from Fed members throughout May has been shown to be inappropriate in the context of the last payrolls report. The June meeting has seen the Fed, again, have to step back. Whilst the median dot plot estimate remains for two rate hikes this year, the shift of five members to just projecting just one, is a dovish development. FOMC participants also lowered their rate hike projections by 30 bp to a median 1.6% by the end of 2017."
The Bank of Japan maintained interest rates at negative 0.1% and decided against additional stimulus, sending the yen to a two-year high.
The attention now turns to the Bank of England which releases its policy decision at 1200 BST. Analysts expect no change to interest rates or the asset purchase programme amid uncertainty surrounding the 23 June referendum European Union referendum, stubbornly low inflation, a slowing economy and weak wage growth.
"The FTSE could well see its losses intensify as the day goes on with the Bank of England set to stoke those Brexit-fearing fires later this morning with a firmer warning against leaving the EU (the central bank is also expected to unsurprisingly keep interest rates on hold)," said Connor Campbell, financial analyst at Spreadex.
"Mark Carney faced a lot of criticism last time he expressed an opinion on the referendum, so expect an apoplectic reaction from Vote Leave (and perhaps another fall from the pound) as Thursday continues."
UK retail sales will also be in focus at 0930 BST along with eurozone inflation at 1000 BST and US inflation at 1330 BST.
Meanwhile, oil prices continued to fall on Brexit fears and global supply glut worries with Brent crude down 1.5% to $48.24 per barrel and West Texas Intermediate down 1.4% to $47.31 per barrel at 0857 BST.
In company news, Mulberry Group rose after reporting a jump in full year profit as total revenue and retail sales grew.
Design, engineering and project management consultancy WS Atkins advanced after it reported a 6% rise in revenue in its final results on Thursday, to £1.86bn.
N Brown rallied after the clothing retailer said it was confident of hitting full year targets.
Safestore edged higher after the storage firm said early trading in the second half had been encouraging and it was confident that the business would deliver a strong performance for the year as a whole. |
| Market Movers
FTSE 100 (UKX) 5,933.75 -0.55%
FTSE 250 (MCX) 16,176.06 -0.75%
techMARK (TASX) 2,955.44 -0.56%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,845.00p 3.56%
Fresnillo (FRES) 1,241.00p 2.39%
BP (BP.) 362.60p 0.86%
Berkeley Group Holdings (The) (BKG) 2,976.00p 0.74%
Glencore (GLEN) 137.20p 0.51%
Inmarsat (ISAT) 691.00p 0.22%
SABMiller (SAB) 4,277.50p 0.20%
National Grid (NG.) 959.80p 0.01%
BT Group (BT.A) 400.40p -0.00%
Taylor Wimpey (TW.) 170.60p -0.06%
FTSE 100 - Fallers
3i Group (III) 506.50p -3.06%
Severn Trent (SVT) 2,133.00p -2.65%
Barclays (BARC) 157.50p -2.14%
Prudential (PRU) 1,181.00p -1.75%
Ashtead Group (AHT) 981.00p -1.70%
Mediclinic International (MDC) 870.50p -1.69%
Hargreaves Lansdown (HL.) 1,186.00p -1.66%
easyJet (EZJ) 1,383.00p -1.64%
International Consolidated Airlines Group SA (CDI) (IAG) 467.70p -1.56%
Dixons Carphone (DC.) 390.70p -1.46%
FTSE 250 - Risers
Centamin (DI) (CEY) 117.50p 6.62%
Brown (N.) Group (BWNG) 227.00p 5.88%
Atkins (WS) (ATK) 1,244.00p 3.41%
Jimmy Choo (CHOO) 111.50p 2.11%
Acacia Mining (ACA) 347.60p 1.73%
Euromoney Institutional Investor (ERM) 962.50p 1.32%
Polymetal International (POLY) 869.50p 0.99%
Ocado Group (OCDO) 224.70p 0.90%
Safestore Holdings (SAFE) 345.10p 0.82%
Henderson Group (HGG) 239.00p 0.80%
FTSE 250 - Fallers
Restaurant Group (RTN) 322.30p -5.73%
Indivior (INDV) 218.00p -4.13%
Thomas Cook Group (TCG) 60.35p -3.52%
William Hill (WMH) 284.30p -3.07%
Intermediate Capital Group (ICP) 574.50p -2.96%
Amec Foster Wheeler (AMFW) 406.40p -2.87%
Templeton Emerging Markets Inv Trust (TEM) 452.70p -2.79%
Electrocomponents (ECM) 258.40p -2.71%
DFS Furniture (DFS) 280.60p -2.60% |
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| | UK Event Calendar | | Thursday 16 June
INTERIMS
CareTech Holding, Safestore Holdings
INTERIM DIVIDEND PAYMENT DATE
Aberdeen Asset Management
INTERIM EX-DIVIDEND DATE
Alternative Networks, Majedie Investments, Scottish Inv Trust, Watkin Jones
QUARTERLY EX-DIVIDEND DATE
Real Estate Credit Investments PCC Ltd Pref Shs , TwentyFour Select Monthly Income Fund Limited
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Current Account (US) (13:30)
Philadelphia Fed Index (US) (13:30)
GMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
FINALS
Atkins (WS), Charles Stanley Group, Consort Medical, Darty, Purplebricks Group, Redcentric
SPECIAL EX-DIVIDEND PAYMENT DATE
Northern 3 VCT, Safestyle UK
EGMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
AGMS
Blinkx, Blur Group , Constellation Healthcare Technologies, Inc (DI/REG S), Evraz, Himalayan Fund NV, Nokia OYJ, Puricore, Serabi Gold
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
BoE Interest Rate Minutes (12:00)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Taptica International (DI)
FINAL EX-DIVIDEND DATE
3i Group, Alliance Pharma, Amati Vct 2, Big Yellow Group, Electrocomponents, First Derivatives, Harvey Nash Group, Indivior, Intermediate Capital Group, London & Associated Properties, Maven Income & Growth VCT, Mears Group, Mediclinic International , New Century AIM VCT 2, Northern 3 VCT, ProVen Growth & Income VCT, ProVen VCT, Restaurant Group, S&U, Safestyle UK , Scisys, Severn Trent, Sirius Real Estate Ltd., Stobart Group Ltd., Telford Homes, Templeton Emerging Markets Inv Trust, Value and Income Trust, Vianet Group
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks in the red as Fed, BoJ stand pat European stocks fell in early trade, taking their cue from downbeat sessions in the US and Asia after the Federal Reserve and the Bank of Japan stood pat on policy, with concerns about Brexit still weighing on investors' minds.
At 0900 BST, the benchmark Stoxx Europe 600 index was down 1%, Germany's DAX was off 0.8% and France's CAC 40 was 0.6% lower.
At the same time, oil prices were in the red. West Texas Intermediate was down 1.5% to $47.31 a barrel while Brent crude was 1.4% weaker at $48.24.
On Wednesday, the US Federal Reserve left interest rates unchanged at 0.25% to 0.50%, as widely expected, with Chair Janet Yellen conceding that the upcoming UK referendum had been a factor in the decision. The central bank downgraded its economic growth forecasts and the projections of policy members showed a majority still wanted two rate hikes this year, but six of them now expect only one compared to one member in March.
Goldman Sachs said: "The statement and Summary of Economic Projections were more dovish than expected in several respects. First, the number of participants anticipating only one rate increase this year rose to six from just one in March-more than we had expected. Second, funds rate projections for 2017 and 2018 declined more than we expected: the median estimate for 2017 fell by 25bp to 1.6%, and for 2018 by 63bp to 2.4%.
"Third, the statement expressed slightly more concern about developments in inflation expectations, noting that market-based measures 'declined' (instead of 'remained low'), and that only 'most' survey-based measures were little changed. Lastly, Kansas City Fed President Esther George voted in favour of holding policy rates unchanged-another indication of a more cautious mood about the committee."
Investors were also digesting the latest policy announcement from the Bank of Japan, which left its key interest rate at -0.1% and held off from providing more stimulus, keeping its annual target for expanding the monetary base at Y80trn. The Nikkei slumped on the news, while the yen breached Y104 to the dollar.
With the Fed and the BoJ out of the way, investors will be looking to the Bank of England rate announcement at 1200 BST. Although no change to interest rates or the asset purchase programme is expected, market participants will likely be keen to see whether the upcoming referendum was considered in the decision-making.
On the corporate front, UBS and Credit Suisse were under the cosh amid concerns about capital requirements after the Swiss National Bank said they were likely to need to raise an extra CHF10bn to meet new leverage requirements.
Still to come on the macroeconomic calendar, US CPI, the Philadelphia Fed survey and initial jobless claims are at 1330 BST while the NAHB housing market index is at 1500 BST. |
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| | US Market Report | | US close: Wall Street little moved by less hawkish Fed Wall Street's main equity indices finished the session in the red despite the considerably less-hawkish policy stance announced by the US central bank on Wednesday.
The Dow Jones Industrials Average slipped into the red following the Fed's policy announcement, losing 0.20% or 34.65 points to finish the session at 17,640.17, while the S&P 500 lost 0.18% or 3.82 points to close at 2,071.50 and the Nasdaq Composite erased 0.18% or 8.62 points to 4,834.93.
As had been widely anticipated, the Federal Reserve kept all its main policy settings unchanged.
However, in their Summary of Economic Projections Fed board members and regional Fed chiefs said they now expected the Fed funds rate to end 2018 at just 2.4%, well down from their March projection of 3.0%.
Forecasts for economic growth on the other hand were little changed.
Similarly, six Fed officials now saw just one more interest rate hike as appropriate in the remainder of 2016, versus just one who believed so in March.
All told, the new projections from the Fed's own officials marked a significant reduction in the gap between their own expectations and those derived from financial markets, although markets may be holding out for even more of the same.
"In other words, the Fed has become even more 'gradual' in its hiking plans beyond this year. All'n all it seems that the Employment Report for May has dealt a serious blow to the Fed's confidence in the ability of the US economy to maintain momentum in face of global headwinds. Hence a shallower rate path is needed," Rabobank's Philip Marey said in a research note sent to clients.
Ahead of the policy announcement, data from the Fed showed industrial production shrank 0.4% month-on-month in May after a revised 0.6% increase in April. The decline was in line with economists' expectations.
Manufacturing fell 0.4% in May driven by a sharp 4.2% decline in output of autos and auto parts. Analysts had expected a 0.1% fall last month compared to a 0.2% gain.
The Labor Department said US producer prices rose 0.4% in May against expectations for a 0.3% gain as an increase in fuel costs pushed wholesale inflation higher.
Oil prices have rebounded in the past few months.
However, oil prices were sitting lower on Thursday on worries about the global supply glut, especially given signs of recovering Canadian oil exports.
West Texas Intermediate crude oil futures retreated 2.06% to finish the session at $47.49 per barrel on the NYMEX.
That was despite weekly EIA inventory data showing a moderate drawdown in US crude oil inventories of 900,000 barrels, but alongside a large 2.6m barrel drop in gasoline inventories.
Elsewhere, China's banks extended 985.5bn yuan in new yuan loans in May, exceeding analysts' expectations of 750bn yuan and well above the previous month's levels of 555.6bn yuan.
The move came as the central bank has pledged to keep policy accommodative to support the slowing economy.
In corporate news, shares in restaurant chain operator Bob Evans Farms were sharply lower after its financial forecasts missed analysts' expectations.
Jabil Circuit was due to report third-quarter earnings after the closing bell.
S&P 500 - Risers
United States Steel Corp. (X) $17.64 +7.96%
Freeport-McMoRan Inc (FCX) $11.00 +7.74%
Alcoa Inc. (AA) $9.45 +3.85%
Ralph Lauren Corp (RL) $94.56 +3.50%
PVH Corp. (PVH) $97.38 +3.18%
Newmont Mining Corp. (NEM) $36.24 +3.10%
Host Hotels & Resorts Inc. (HST) $15.98 +2.83%
Williams Companies Inc. (WMB) $21.77 +2.79%
Mead Johnson Nutrition Co. (MJN) $84.85 +2.72%
Hewlett Packard Enterprise (HPE) $18.80 +2.68%
S&P 500 - Fallers
Perrigo Company plc (PRGO) $98.19 -9.19%
Whole Foods Market Inc. (WFM) $30.92 -4.92%
Edwards Lifesciences Corp. (EW) $97.85 -3.07%
Transocean Ltd. (RIG) $10.88 -2.33%
Allergan plc (AGN) $239.14 -2.03%
NRG Energy Inc. (NRG) $13.95 -1.97%
Csra Inc. (CSRA) $23.17 -1.86%
Endo International Plc (ENDP) $16.82 -1.81%
Cerner Corp. (CERN) $54.51 -1.78%
SCANA Corp. (SCG) $71.02 -1.70%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $126.53 +1.03%
American Express Co. (AXP) $61.42 +0.57%
General Electric Co. (GE) $30.59 +0.49%
Nike Inc. (NKE) $54.31 +0.35%
Caterpillar Inc. (CAT) $75.07 +0.28%
Wal-Mart Stores Inc. (WMT) $71.12 +0.24%
3M Co. (MMM) $167.80 +0.11%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $31.61 -1.65%
Cisco Systems Inc. (CSCO) $28.65 -1.07%
Travelers Company Inc. (TRV) $111.81 -0.66%
United Technologies Corp. (UTX) $100.54 -0.64%
Chevron Corp. (CVX) $100.63 -0.64%
Johnson & Johnson (JNJ) $116.41 -0.61%
Pfizer Inc. (PFE) $34.79 -0.57%
Visa Inc. (V) $78.17 -0.51%
Procter & Gamble Co. (PG) $82.95 -0.48%
Unitedhealth Group Inc. (UNH) $137.26 -0.44%
Nasdaq 100 - Risers
Biomarin Pharmaceutical Inc. (BMRN) $84.01 +3.65%
Viacom Inc. Class B (VIAB) $42.20 +2.40%
Autodesk Inc. (ADSK) $56.61 +1.62%
Liberty Global plc Series A (LBTYA) $35.35 +1.55%
Liberty Global plc Series C (LBTYK) $34.50 +1.50%
Mattel Inc. (MAT) $31.56 +1.48%
Tesla Motors Inc (TSLA) $217.70 +1.27%
Symantec Corp. (SYMC) $19.00 +1.23%
Akamai Technologies Inc. (AKAM) $53.27 +1.16%
Dollar Tree Inc (DLTR) $91.05 +1.11%
Nasdaq 100 - Fallers
Whole Foods Market Inc. (WFM) $30.92 -4.92%
JD.com, Inc. (JD) $20.17 -3.49%
Ctrip.Com International Ltd. Ads (CTRP) $39.25 -2.14%
Endo International Plc (ENDP) $16.82 -1.81%
Cerner Corp. (CERN) $54.51 -1.78%
Intel Corp. (INTC) $31.61 -1.65%
T-Mobile Us, Inc. (TMUS) $41.66 -1.63%
Cognizant Technology Solutions Corp. (CTSH) $59.63 -1.60%
Nxp Semiconductors Nv (NXPI) $85.99 -1.58%
Walgreens Boots Alliance, Inc. (WBA) $83.21 -1.34% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Brexit, BHS, PPI The chiefs of some of Britain's biggest employers have threatened legal action against the official EU Leave campaign, after it included their corporate logos in a taxpayer-funded referendum leaflet implying that they supported Brexit. Top executives of General Electric, Unilever and Airbus wrote to Vote Leave claiming that it had misused public funds and used the logos "for propaganda purposes" when, in fact, they supported Britain's EU membership. - Financial Times
Heathrow has sought to pressure the Government into giving a controversial third runway the go-ahead by warning that ministers' much-heralded "Northern Powerhouse" idea is "at risk" if the airport if not expanded. The airport claimed that the North of England is losing £710m in import and export trade every year because the London hub is full, which is forcing long-haul fliers to and from UK regional airports to travel to via hubs abroad instead of Heathrow. - Telegraph
The UK's biotech sector is in fine fettle, having raised a record amount of capital last year, but the Government should do more to support growth and investment to ensure Britain becomes a global hub for the life sciences industry, according to a report. British biotechnology companies raised a record £489m in venture capital in 2015, up from £323m in 2014 and accounting for more than a third of the European total. - Telegraph
Marks & Spencer has been criticised for cutting the pay of approximately 10% of its shop-floor workers by removing premiums for working Sundays and antisocial hours and trimming back bank holiday payments. The retailer plans to increase basic pay for its 69,000 shop-floor workers by 15% from next April to £8.50 an hour but has offset the cost of doing so by cutting special pay rates. - Guardian
The biggest revelation was that Sir Philip Green can talk for six hours without swearing. Few would have suspected that. He could not, however, do so while being polite. The Topshop billionaire was determined to throw jabs at as many members of the committees as possible. MPs were variously told not to stare, to put on their glasses, to stop bullying him (as if) and to rephrase questions. Iain Wright, chairman of the business select committee, was right: Green is remarkably thin-skinned. - Guardian
The Financial Conduct Authority has caved in to banks over payment protection insurance compensation by backing their call for a two-year deadline for new claims, against the view of its own experts. The shift - revealed in internal documents - is the latest example of the FCA softening its stance with banks and comes after a public row this year over its decision to scrap a review of banks' conduct. - The Times
Big companies with large pension deficits have paid dividends to shareholders in the past two years that would have plugged black holes in their retirement schemes. Analysis shows that 54 FTSE 100 companies that have funding deficits in their staff pension schemes paid out a total of £48 billion in dividends a year for the past two years. This compares with a deficit in their pension schemes that collectively stands at £52 billion. - The Times | | |
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