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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 higher, led by Barclays UK stocks ended slightly higher on Friday as well-received corporate results from Barclays offset a slump in commodity producers.
Barclays topped the FTSE 100 risers list after the bank reported a better-than-expected drop in first half pre-tax profits. The market noted that core operations in the UK returned a profit.
The report led other financials higher including Standard Life, Royal Bank of Scotland, Legal & General, Schroders and Prudential.
International Consolidated Airlines also flew higher as it reported a rise in first half operating profits and revenue despite the impact of terrorist attacks and strikes.
On the downside, a drop in oil prices weighed on Royal Dutch Shell and BHP Billiton with Brent crude down 1.6% to $42.01 per barrel and West Texas Intermediate down 0.34% to $41.00 per barrel in afternoon trade.
Pearson led the fallers after half year sales at the educational publisher declined further than expected.
On the macro-economic front, data showed the US economy grew much less than expected in the second quarter.
US gross domestic product grew at an annual rate of 1.2% compared to 0.8% growth in the first quarter and expectations for a 2.6% increase, according to preliminary data released by the Commerce Department. First-quarter growth was revised down from a previous estimate of 1.1%.
Personal consumption rose at a rate of 4.2% in the second quarter, while spending on services was up 3%.
The Commerce Department also released annual revisions, which showed the economy grew 2.6% in 2015 from the year before. This was the biggest yearly gain since 2006.
Dennis de Jong, managing director at UFX.com, said: "Memories of the US economy being shaken by China's meltdown and rock bottom oil prices seem a long time ago now, but today's GDP numbers show the world's largest economy is facing a new set of challenges in sluggish growth and weak spending.
"Regaining momentum in the wake of an unsettled European market will be the next challenge for Janet Yellen and Co. If the US economy can get back on track and prove to be resilient in the face of Brexit then Yellen may just think it's time for another interest rate hike come Autumn."
Meanwhile, consumer sentiment in the US deteriorated a touch more than expected in July amid concerns about the UK's vote to leave the European Union. The University of Michigan's final reading of the consumer sentiment index fell to 90.0 from 93.5 in June and 93.1 in July last year. Economists had been expecting a decline to 90.5.
In the eurozone, economic growth slowed in the second quarter as expected. According to a preliminary flash estimate by Eurostat, eurozone gross domestic product grew 0.3% in the second quarter compared to 0.6% growth the previous quarter, in line with consensus estimates.
Eurostat also revealed in its flash estimate for July that inflation in the eurozone came in higher than expected. Inflation hit 0.2% in July, marking its highest level since the end of last year and up from 0.1% in June. Economists had pencilled in a 0.1% increase.
The eurozone unemployment rate was unchanged in June at 10.1%, Eurostat said, in line with economists' expectations. It remained at the lowest rate recorded in the bloc since July 2011.
In Japan, the central bank kept interest rates steady on Friday but said it would increase its purchases of exchange-traded funds to an annual pace of Y6trn from Y3.3trn. The Bank of Japan also doubled the size of a lending programme for local companies to $24bn.
The announcement came as official data showed Japan remained in deflation in June. The consumer price index fell 0.4% year-on-year in June, flat on the previous month and in line with expectations.
Core CPI, which strips out fresh food, worsened to a 0.5% year-on-year decline from a 0.4% contraction in May. Economists had predicted it would remain unchanged.
Looking ahead to next week, the Bank of England's policy decision on Thursday will be in focus with many analysts expecting the central bank to cut interest rates. The BoE also releases its August Inflation Report. |
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| Market Movers
FTSE 100 (UKX) 6,724.39 0.05%
FTSE 250 (MCX) 17,282.15 0.17%
techMARK (TASX) 3,474.88 0.15%
FTSE 100 - Risers
Barclays (BARC) 155.45p 6.11%
Paddy Power Betfair (PPB) 8,835.00p 4.00%
Standard Life (SL.) 302.90p 3.66%
Schroders (SDR) 2,618.00p 3.44%
Capita (CPI) 960.00p 2.67%
Legal & General Group (LGEN) 205.90p 2.64%
easyJet (EZJ) 1,042.00p 2.46%
TUI AG Reg Shs (DI) (TUI) 984.50p 2.29%
Prudential (PRU) 1,337.00p 2.26%
SABMiller (SAB) 4,420.00p 2.22%
FTSE 100 - Fallers
Pearson (PSON) 883.50p -8.92%
Rolls-Royce Holdings (RR.) 792.50p -4.63%
Royal Dutch Shell 'B' (RDSB) 2,002.00p -2.41%
Informa (INF) 714.00p -2.12%
Royal Dutch Shell 'A' (RDSA) 1,944.00p -2.04%
BHP Billiton (BLT) 944.70p -1.70%
SSE (SSE) 1,516.00p -1.62%
National Grid (NG.) 1,083.50p -1.59%
Intertek Group (ITRK) 3,625.00p -1.49%
Anglo American (AAL) 830.50p -1.44%
FTSE 250 - Risers
Indivior (INDV) 295.30p 8.37%
Kaz Minerals (KAZ) 159.00p 7.36%
Restaurant Group (RTN) 354.70p 5.85%
UBM (UBM) 671.50p 5.70%
International Personal Finance (IPF) 268.00p 5.64%
Shawbrook Group (SHAW) 188.60p 5.13%
Vesuvius (VSVS) 369.20p 4.35%
Wizz Air Holdings (WIZZ) 1,549.00p 3.82%
Henderson Group (HGG) 231.00p 3.63%
IMI (IMI) 1,070.00p 3.38%
FTSE 250 - Fallers
Essentra (ESNT) 485.00p -22.59%
Laird (LRD) 293.30p -11.66%
Countrywide (CWD) 248.00p -5.78%
Acacia Mining (ACA) 559.50p -4.77%
Berendsen (BRSN) 1,275.00p -4.64%
Countryside Properties (CSP) 226.80p -4.26%
Debenhams (DEB) 56.05p -3.78%
Rank Group (RNK) 222.50p -3.22%
Pets at Home Group (PETS) 243.90p -2.71%
Cranswick (CWK) 2,345.00p -2.49% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks edge higher as investors wade through earnings European stocks edged higher on Friday as investors mulled over a disappointing policy announcement from the Bank of Japan, a deluge of earnings and a series of data points.
The benchmark Stoxx Europe 600 index was last up 0.67% at 341.75, Germany's DAX was 0.55% higher at 10,331.71 and France's CAC 40 was 0.43% firmer at 4,439.44.
At the same time, oil prices were mixed, with West Texas Intermediate up 0.39% at $41.30 a barrel and Brent crude losing 0.83% at $42.35.
The BoJ kept interest rates steady at -0.1% on Friday but said it would increase its purchases of exchange-traded funds to an annual pace of JPY 6trn from JPY 3.3trn. It also doubled the size of a lending programme for local companies to $24bn.
IG's Joshua Mahony said: "The fact that the BoJ undershot market expectations should come as no surprise given the lessons learnt from both the BoE and ECB meetings this month. The BoJ has used every weapon bar the helicopter and there is going to come a time when the BoJ takes stock to consider whether their policies are even making a difference."
The Stoxx 600 banks index was last up 2.14% as market participants braced for the results of stress tests on 51 banks later on Friday night from the European Banking Authority.
Meanwhile, corporate news kept investors busy on Friday. BBVA was on the front foot by 3.94% after it reported a 58% jump in second-quarter profit that beat expectations.
Kering was 6.19% higher after the French luxury goods company's first-half earnings surpassed estimates, while Groupe Casino reversed earlier gains to lose 4% as the supermarket operator said first-half net profit rose to €2.58bn from €79m the year before.
Steel maker ArcelorMittal rallied by 5.6% as it posted better-than-expected second-quarter numbers and reaffirmed its outlook for 2016.
Eni was just above the waterline, up 0.07% after the Italian oil and gas company said it swung to a loss in the second quarter.
Safran fell 5.37% as it first-half results disappointed, while pharmaceutical group Sanofi was also in the red after saying sales and profit declined in the second quarter.
Barclays was 5.49% higher. Although the bank posted a drop in first-half profit, the results were better than expected.
Consumer goods group Reckitt Benckiser was 2.08% in the red after it reported a drop in first-half pre-tax profit but a rise in revenue, as it reaffirmed its full-year net revenue target at the lower end of its guidance range.
Pearson was also on the back foot by 9.9% after the education company's first-half sales and revenue missed consensus estimates.
British Airways and Iberia parent International Consolidated Airlines flew 1.96% lower after cutting its 2016 profit outlook.
Investors also digested a raft of economic releases from Eurostat.
According to a preliminary flash estimate, eurozone gross domestic product grew 0.3% in the second quarter compared to 0.6% growth the previous quarter, in line with consensus forecasts.
On the year, GDP was up 1.6%, also in line with expectations and compared to 1.7% growth the previous growth.
The eurozone unemployment rate was unchanged in June from May at 10.1%, remaining at the lowest rate recorded in the bloc since July 2011. On the year, it was down from 11% in June 2015.
Elsewhere, inflation in the eurozone came in higher than expected for July, according to a flash estimate, hitting 0.2% - its highest level since the end of last year - and up from 0.1% in June. Economists had pencilled in a 0.1% increase.
Prices were led higher by food, alcohol and tobacco, which increased 1.4%, while services prices rose 1.2%. Energy prices dropped 6.6% following a 6.4% decline the month before. |
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| | US Market Report | | US open: Stocks mostly lower after GDP misses forecasts US stocks were mostly lower on Friday as official data showed the nation's economy grew much less than expected in the second quarter.
The Dow Jones Industrial Average fell 0.29%, the S&P 500 dropped 0.07% while the Nasdaq increased 0.1% at 1537 BST.
US gross domestic product grew at an annual rate of 1.2% compared to 0.8% growth in the first quarter and expectations for a 2.6% increase, according to preliminary data released by the Commerce Department. First-quarter growth was revised down from a previous estimate of 1.1%.
Personal consumption rose at a rate of 4.2% in the second quarter, while spending on services was up 3%.
The Commerce Department also released annual revisions, which showed the economy grew 2.6% in 2015 from the year before. This was the biggest yearly gain since 2006.
Dennis de Jong, managing director at UFX.com, said: "Memories of the US economy being shaken by China's meltdown and rock bottom oil prices seem a long time ago now, but today's GDP numbers show the world's largest economy is facing a new set of challenges in sluggish growth and weak spending.
"Regaining momentum in the wake of an unsettled European market will be the next challenge for Janet Yellen and Co. If the US economy can get back on track and prove to be resilient in the face of Brexit then Yellen may just think it's time for another interest rate hike come Autumn."
Capital Economics said the data makes a September interest-rate hike much less likely.
Meanwhile, consumer sentiment in the US deteriorated a touch more than expected in July amid concerns about the UK's vote to leave the European Union. The University of Michigan's final reading of the consumer sentiment index fell to 90.0 from 93.5 in June and 93.1 in July last year. Economists had been expecting a decline to 90.5.
The Chicago purchasing managers' index rose to 55.8 in July from 56.8 in June, beating forecast for a reading of 54 and above the 50 level that separates expansion from contraction.
In corporate news, Cigna Corp slumped as it slashed its guidance for the year and posted worse-than-expected second quarter earnings.
Xerox gained after it reported quarterly profit that beat forecasts as it cut costs.
UPS edged lower as it reported in line second quarter earnings.
Exxon Mobil Corp dropped as the oil producer's second quarter profit trailed estimates.
Amazon was higher after its second-quarter earnings late on Thursday beat expectations.
Alphabet was also in the black after Google's earnings late on Thursday surpassed estimates. |
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| | Broker Tips | | Broker tips: Acacia Mining, Foxtons, Weir Group Acacia Mining was under the cosh on Friday after Canaccord Genuity cut its rating on the stock to 'sell' from 'hold' but lifted the target to 505p from 495p.
Canaccord said the miner has performed well since reporting disappointing 2015 results, particularly in the second quarter.
The company now expects gold production at or above the upper end of its 750-780,000 ounce (oz) guidance range, and All-in Sustaining Costs (AISC) at the lower end of its $960-980/oz range. Canaccord expects 794,000oz and $944/oz.
The broker has also upgraded its 2016 EBITDA estimate from $351m to $419m and earnings per share forecast from 35c to 41c.
Canaccord noted recent reports that have suggested that Barrick Gold Corp was looking to sell its stake in Acacia. But the broker believes Acacia is "too expensive" given a challenging market for gold miners.
"With a share price of almost 600p, and an upwardly revised target of only 505p, and with little prospect of a near-term sale of Barrick's 63.9% stake in our view, we downgrade our recommendation from 'hold' to 'sell'. We like what the company has achieved so far this year, but believe that it is more than in the share price already."
Foxtons shares were under pressure on Friday as Numis cut is full year earnings forecast after the real estate giant reported 42% drop in first half profit.
Pre-tax profit fell to £10.5m in the six months to the end of June from £18.1m the same period a year earlier. Revenue dropped to £68.8m from £71.1m. Adjusted earnings before interest, tax, depreciation and amortisation was £13.1m, down from last year's £20.5m.
Foxtons blamed the uncertainty leading up to the European Union referendum on 23 June and the slowdown in sales following higher stamp duty charges on second homes and buy-to-let properties from 1 April.
"Uncertainty surrounding the EU referendum led to slow residential property markets in London during the first half of the year," said chief executive Nic Budden.
"Although we achieved a Q1 revenue record due to a surge in property sales transactions in March ahead of the introduction of the stamp duty premium for buy to let properties and second homes, Q2 experienced a sharp contraction and we believe that the overall level of property sales transactions made in London during the first half of the year is substantially down on last year."
Numis said Foxtons first half results are in line with the update given at the end of June. The broker now expects full year EBITDA of £27.4m, compared to a previous forecast of £30m.
However, Numis issued an 'add' rating from a previous 'suspended' and reiterated a target of 145p, saying Foxtons is in a good position to weather a slowdown in the London property market.
"Whilst it is difficult to predict the future trends in the London housing market, Foxtons remains highly cash generative and we believe it will benefit when London sales volumes do recover from the current low levels," Numis said.
It added: "We have set our target based on a 6% yield for 2016, which should benefit from cost cutting and lower cap-ex and we believe the shares can move meaningfully higher once uncertainty lifts and volumes recover."
Weir Group's shares fell on Friday as Canaccord Genuity cut its rating on the stock to 'sell' from 'hold' and lowered the target to 1,250p from 1,325p.
The downgrade came as the engineering giant announced that chief executive Keith Cochane is stepping down and reported a drop in first half pre-tax profit.
Cochrane, who leaves the company after 10 years on the board, will be replaced by group finance director Jon Stanton on 1 October 2016.
The firm posted a 25% fall in pre-tax profit to £82m in the six month to 30 June 2016 on a reported and constant currency basis. Revenue declined 12% on a reported basis and dipped 13% at constant currency to £866m as weak oil prices hurt the Oil & Gas business. Earnings per share was down at a reported 23% to 29.6p.
"The departure was perhaps the most significant event of otherwise very solid 1H results, with Weir reporting a c.20% drop in earnings (around 9% ahead of consensus) on lower-than-expected losses in the Oil & Gas operations and better-than-expected earnings in the larger Minerals division," said Canaccord analyst Alex Brooks.
"Importantly, management is realistic on the outlook, eschewing any increase in the guidance for this year, despite better-than-expected 1H results."
The analyst said Weir has had an impressive run over the past six months and stands to benefit from a weaker pound, like other UK exporters. Brooks said it is also "impressive" that the company has managed to hold losses in its Oil & Gas operations to such a low level and that the the Minerals division has a robust market position that "even in a softer end market will likely deliver decent results". |
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