| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Banks, financials and property fly amid BoE rate-cut chatter UK shares flew north with Associated British Foods leading blue chips on a chipper update and chased by a peloton of banking, financial and property stocks on rising expectations of a Bank of England rate-cut next week.
"Today marks the first day since the (non-binding Brexit) referendum result (on 23 June) that has truly seen risk appetite return," said Joshua Mahony, market analyst at IG.
"Not only have we seen sweeping stock market gains, but recent targets such as sterling has gained at the expense of havens such as gold and the Japanese yen," he said.
Some of the London gains were helped by the US Federal Reserve Open Market Committee's minutes last night, which suggested it was unlikely to hike rates any time soon. All eyes are now looking to tomorrow's US non-farm payrolls data.
The market liked forecast-beating UK industrial and manufacturing data for May this morning, while eurozone indices rose, apparently unhindered by the European Central Bank expressing concerns about Brexit's economic fallout for the single-currency bloc.
At about 16:55 BST, FTSE 100 was up 1.26% to 6,545.23 and FTSE 250 was up 1.66% to 15,930.49.
"The FTSE 100 (was) once again outperforming due to a rebound in some of the bigger fallers over the past few days," said Michael Hewson, chief market analyst at CMC Markets UK, pointing to the trinity of sectors dominating the top end of the blue-chip ladder.
He also noted continued outperformance from the basic resources sector.
"Markets like the idea of lower rates for longer," said Mike van Dulken at Accendo Markets.
Trading in overnight swaps and recent hints by BoE governor Mark Carney that rates might be cut this summer have led to widespread market chatter that the scrutinised central bank might slash its benchmark rate as early as next week.
"Today, the pendulum has swung back to cautious optimism, but this is likely a pause in an ongoing rout in the share prices," said IG analyst Chris Beauchamp.
"With property funds continuing to shutter (redemptions), investors are likely to continue to pull money from both banks and REITs on concerns that the UK is entering a property slump."
Among today's biggest blue-chip risers were banks behind Royal Bank of Scotland, Lloyds and Barclays, with commercial property guided by titans Land Securities and British Land.
House builders, hitherto under pressure for days, were led by Taylor Wimpey, Persimmon and Barratt Developments. Halifax's house-price index today indicated slowing underlying growth in the sector.
Meantime, US rates-sensitive utilities clocked out lower today, as did Randgold Resources and Fresnillo as other miners appreciated managed gains. Oil majors were off the pace, but nonetheless ahead.
At 1630 BST, gold was down 0.69% to $1357.60 an ounce. West Texas Intermediate was down 1.6% to $46.67 a barrel, while Brent was off 1.52% to $48.06 a barrel. Same time, sterling was up 0.04% to fetch $1.2936 and up 0.37% to buy €1.1693.
In company news, Associated British Foods flew higher after it said the significant weakness in the pound after last week's Brexit vote had improved the outlook for the current financial year and it no longer expect a decline in adjusted earnings per share for the group.
Marks & Spencer shares ripped lower as it reported a huge drop in first-quarter clothing sales as new chief executive Steve Rowe's recovery plan for general merchandise took hold, though group sales were up 1.3% and he remained confident in his full-year guidance.
Hospitality group Whitbread has exchanged agreements with Legal & General for the sale and leaseback of its 389-room 'Hub by Premier Inn' hotel in Kings Cross, due to open in 2017, in exchange for a 25 year lease agreement.
High-street retailer Sports Direct dashed north in in spite of reporting a "disappointing" year, with retail revenue excluding Irish chain Heatons improving by just 0.6%. Overall, its reported pre-tax gained 15.4% at £361.8m.
Egyptian gold miner Centamin dived as it said second-quarter output from its Sukari operation increased 12% to 140,306 ounces on the previous quarter and 30% year-on-year. |
| | UK Investor Network Presents...Download FREE Investor reports on Commodity and Property! | | See the latest offers, reports and analysis available from the investment world...
|
| Market Movers
FTSE 100 (UKX) 6,545.23 1.26%
FTSE 250 (MCX) 15,930.49 1.66%
techMARK (TASX) 3,240.46 1.03%
FTSE 100 - Risers
Associated British Foods (ABF) 2,796.00p 9.52%
Provident Financial (PFG) 2,412.00p 8.16%
Royal Bank of Scotland Group (RBS) 158.60p 6.51%
Dixons Carphone (DC.) 298.00p 5.82%
Schroders (SDR) 2,325.00p 5.63%
Taylor Wimpey (TW.) 122.10p 5.35%
Barratt Developments (BDEV) 348.70p 4.84%
Lloyds Banking Group (LLOY) 49.70p 4.52%
London Stock Exchange Group (LSE) 2,519.00p 4.39%
Land Securities Group (LAND) 962.50p 4.34%
FTSE 100 - Fallers
Fresnillo (FRES) 1,916.00p -4.58%
Randgold Resources Ltd. (RRS) 9,280.00p -4.48%
Severn Trent (SVT) 2,451.00p -1.09%
United Utilities Group (UU.) 1,021.00p -1.07%
National Grid (NG.) 1,105.00p -0.94%
Mondi (MNDI) 1,359.00p -0.73%
Burberry Group (BRBY) 1,161.00p -0.68%
Pearson (PSON) 948.00p -0.68%
Tesco (TSCO) 160.80p -0.50%
Mediclinic International (MDC) 1,101.00p -0.45%
FTSE 250 - Risers
Aldermore Group (ALD) 115.30p 10.02%
Thomas Cook Group (TCG) 59.75p 9.33%
International Personal Finance (IPF) 283.70p 8.86%
Intermediate Capital Group (ICP) 485.90p 7.12%
Euromoney Institutional Investor (ERM) 957.50p 7.10%
Rightmove (RMV) 3,390.00p 6.84%
NCC Group (NCC) 278.80p 6.45%
Redrow (RDW) 293.20p 6.39%
CMC Markets (CMCX) 281.70p 6.34%
Zoopla Property Group (WI) (ZPLA) 255.10p 5.89%
FTSE 250 - Fallers
Hochschild Mining (HOC) 204.70p -11.19%
Centamin (DI) (CEY) 158.10p -4.64%
TalkTalk Telecom Group (TALK) 208.00p -4.19%
Pennon Group (PNN) 899.50p -3.54%
McCarthy & Stone (MCS) 140.30p -3.24%
Telecom Plus (TEP) 1,006.00p -2.80%
Galliford Try (GFRD) 785.50p -2.66%
AO World (AO.) 138.10p -2.33%
Ibstock (IBST) 113.70p -1.81% |
| | Join the UK`s hottest investment niche & discover great returns! | | Earn 6.37% up to 7.52% p.a paid to your bank account monthly! Limited availability - Offer ends on 31.6.16 Click Here |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks finish higher on hopes of further ECB QE Stocks in the euro-area finished higher on Thursday as the European Central Bank's June meeting minutes showed policymakers were ready to provide more stimulus measures to the economy if needed.
Germany's DAX rose 0.49%, France's CAC 40 increased 0.80%, Italy's FTSE MIB grew 0.08% and Spain's IBEX 35 climbed 1.12% at the close.
The ECB warned at its last meeting that a vote by Britain to leave the EU would have a significant impact on eurozone growth, according the minutes of the 1-2 June meeting. The ECB reiterated that it would use all the tools under its mandate to boost the stagnant recovery and lift prolonged low inflation.
Many economists expect the ECB will expand its quantitative easing programme after the Bank of England suggested it was likely to cut interest rates to address the fallout from Brexit. The BoE is expected to cut interest rates at next Thursday's policy announcement.
"We see (the ECB) upping the monthly pace of its asset purchases (from €80bn to €90bn or €100bn) and perhaps also cutting the deposit rate slightly further into negative territory as soon as its next meeting on 21st July," said Jennifer McKeown, senior European economist at Capital Economics.
In economic data, German industrial production fell the most in 21 months in May amid a global economic slowdown and political uncertainty in Europe. Production fell 1.3% from the previous month when it increased a revised 0.5%, the Economy Ministry said. Economists had pencilled in zero growth. Year-on-year industrial production dropped 0.4%, compared to expectations for a 1.5% increase and the previous month's 0.8% rise.
UK industrial production data for May was also better than expected. Output rose 1.4% in May compared with the same month last year, according to initial estimates from the Office for National Statistics, slowing from the revised 2.2% growth in April 2016 but ahead of forecasts for a steeper slowdown to 0.5%. On the month, industrial production fell 0.5% but was ahead of forecasts for a 1.0% fall.
UK manufacturing production increased 1.7% year-on-year but fell 0.5% month-on-month in May, beating forecasts for a 0.6% rise and a 1.2% decline respectively.
In the US, the ADP said private sector employers added 172,000 jobs last month, beating forecasts for a 160,000 increase. May's employment gains were revised down to 168,000 from 173,000.
The report comes ahead of Friday's non-farm payrolls report, which the Federal Reserve has been monitoring closely as it considers its policy measures.
The minutes of the Fed's 14-15 June policy meeting on Wednesday revealed a weak May jobs report played a part on the central bank's decision to keep policy unchanged.
In commodities, oil prices reversed earlier gains as the US Energy Information Administration reported that domestic crude supplies declined by 2.2 million barrels for the week ended 1 July, which was weaker than the American Petroleum Institute's 6.7 million declines in barrels last week.
Brent crude fell 1.9% to $47.87 per barrel and West Texas Intermediate dropped 1.9% to $46.53 per barrel at 1647 BST.
On the company front, asset managers Aberdeen Asset Management and Henderson rebounded. Aberdeen had cut the value of its UK property fund by 17% while Henderson said it had temporarily suspended trading in its UK commercial property fund.
Marks & Spencer was in the red after reporting a like-for-like drop in clothing and home sales in the 13 weeks to 2 July while food sales fell 0.9%.
Danone shares jumped after saying it will acquire WhiteWave Foods in a deal that values the US organic foods producer at $12.5bn.
Banco Popolare fell after Exane BNP Paribas cut its price target for the stock. |
| | Learn how to become an Angel Investor from leading Angels | | Business Agent, Bond Dickinson and Angels Den would like to invite you to attend our ‘Become an Angel’ lunchtime masterclass. The Become an Angel masterclass is designed to provide Angels with valuable information in order to allow them to make informed and educated decisions when it comes to investing. It also allows Angel Investors to network with other Angels and thought leaders in the market. This class will cover the basics of investing by highlighting what to look for in businesses and identifying the best practices for making investments. Click Here to Register |
| | US Market Report | | US open: Better-than-expected jobless claims send markets higher US markets opened slightly higher on Thursday despite continuing Brexit jitters, as better-than-expected jobs data helped to ease sentiment.
After the opening bell, the Dow Jones Industrial Average added 0.17%, the S&P 500 was up 0.21% and the Nasdaq gained 0.33%.
Oil prices continued to recover after the American Petroleum Institute said on late Wednesday crude supplies fell 6.7 million barrels for the week ended 1 July, easing concerns about the global crude glut.
West Texas Intermediate gained 1.41% to $48.11 per barrel and Brent crude rose 1.37% to $49.48.
The closely-watched Energy Information Administration report is due at 1600 BST.
Attention before markets opened was on jobs data, with the ADP private payrolls report coming in at a gain of 172,000 jobs in June.
That was ahead of expectations for a gain of 160,000 jobs, but still down from May's 173,000.
US initial jobless claims data came in at a seasonally-adjusted 254,000 for the week to 2 July, with well below the forecast for 267,000 and a sizeable drop from 268,000 in the prior week as well.
The data comes ahead of the non-farm payrolls report on Friday, which the Fed has been monitoring closely to gauge the health of the labour market as it considers its policy measures.
Traders also continued to digest Wednesday's Federal Reserve minutes of the 14-15 June policy meeting, which was seen to suggest an interest rate hike is a long way off.
The minutes showed most policymakers agreed to keep interest rates to a range between 0.25% and 0.5% following a weak May jobs report and due to uncertainty leading up to Britain's 23 June European Union referendum.
"The Brexit vote alone is likely to deter them from raising rates until at least the end of the year as they wait to see what the knock on effects will be, both from an economic and financial markets perspective," said Craig Erlam, senior market analyst at Oanda.
On the corporate front, snack and beverage maker PepsiCo reported adjusted second-quarter profit of $1.25 per share, which was five cents above estimates, with revenue also exceeding expectations.
Hard drive manufacturer Western Digital raised its guidance for the fourth quarter, which ended on July 1, and revealed the appointment of Mark Long as executive vice president of finance, becoming chief financial officer on 1 September.
Anti-virus software producer AVG Technologies is to be gobbled up by Dutch competitor Avast Software for $1.3bn in cash. |
| | Open Trading Account | | Thinking about trading binary options? Test out a free $10,000 Demo account with iq option. Click Here to start trading |
| | Broker Tips | | Broker tips: Rightmove, Anglo American, AB Foods Morgan Stanley cut its forecasts and price share targets by varying degrees for internet players Rightmove, Auto Trader and Zoopla, but saw a higher price for Just Eat.
UK internet stocks are still benefitting from structural growth, the bank said in a note to clients, also offering high margins and cash returns.
"Macroeconomic impacts frequently accelerate online transitions and our marketplaces still offer good value to their underlying industries with the take-rate of revenue at circa 6% for estate agents, 8% for used car dealers and 13% for takeaway restaurants," Morgan Stanley's analysts wrote.
They added that they we are "not calling the bottom" of this market.
"Uncertainty is high and if macro forecasts are worse than feared, stocks could derate further. In the 2008 downturn, US, UK and Australian internet stocks indiscriminantly fell below 10xEV/EBITDA."
For car reseller group Auto Trader there was a 2% cut to 2017 expected earnings and a trimming of the target to 460p from 490p.
Auto Trader's 'overweight' rating was reiterated and it is the top pick for the subsector as the company's top line is well protected by subscription-based revenue, with the business offering room to cut costs and the shares supported by cash returns.
"Historically, a free cash flow (FCF) yield above 5% has been an attractive entry point for online classifieds and Auto Trader now trades on 5.5%," the analysts said.
Estate agency marketplace Rightmove's earnings were downgraded 8% and its price target cut to 4,200p from 4,500p, though peer Zoopla's earnings estimates for 2017 were lifted 3% but the PT trimmed to 300p from 310p.
Rightmove was still rated 'overweight' and Zoopla at 'equalweight'.
"Operationally, we see Zoopla as most at risk given its weaker competitive position," the analysts said.
For fast food specialist Just Eat, on which an 'underweight' rating was retained on structural concerns, there was no changes to forecasts but its PT was lifted to 375p from 360p.
Anglo American shares rose on Thursday as Canaccord Genuity raised its target to 620p from 480p, citing lower debt and a weaker pound against the dollar.
However, Canaccord said it believes the stock is currently overvalued and reiterated a 'sell' rating.
"We like the extensive restructuring proposed by Anglo American (AAL) early this year. The core divisions are formed around solid assets, with good mine life duration and decent returns," the broker said.
"We think that as AAL sells assets, simplifies its structure and decreases its breadth of commodity exposure, it could potentially raise its risk profile should sector dynamics shift unexpectedly."
Anglo has targeted between $3bn to $4bn in asset sales in 2016, including Coal divestments as well as the $1.5bn sale of Niobium and Potash expected to close in H2 2016.
Canaccord added that while debt and maturities have been a focus in the past year, it believes Anglo will be able to meet its maturities through 2018 and still maintain $4bn of cash on the balance sheet.
"In contrast to being overly concerned about debt, we now consider debt paydown to be the biggest valuation driver into 2017, and view reaching net debt of $10bn or below in 2017 as significant valuation support."
Associated British Food's rating was raised to 'add' from 'hold' by Numis on Thursday after the company said the weaker pound had improved the outlook for the current financial year.
The owner of Primark said it no longer expected a decline in adjusted earnings per share for the full year as it was set to benefit from a "significantly" weaker pound after last week's Brexit vote.
The company said the foreign exchange rates would have both a positive and negative effect on profit. "There would be an adverse transactional effect on the profit margin on Primark's UK sales, currently half of its turnover, a favourable transactional effect on British Sugar's margins and a translation benefit on group profits earned outside the UK, which last year were some 50% of the total," AB Foods said in a trading statement for the 40 weeks to 18 June.
Numis said while the upgraded outlook on full year EPS was a plus, Primark's margins would come under pressure due to drop in the value of the pound. The broker cut its target to 3016p from 3145p to reflect the impact on Primark.
"We had previously assumed a 30 basis points (bps) year-on-year earnings before interest and tax margin decline for Primark next full year from existing transactional foreign exchange negatives and now assume an extra 150 bps impact so the margin is 10.0% versus an estimated 11.8% this full year," Numis said.
"We also assume a modest like-for-like negative for sales this full year for Primark to allow for the adverse March and April weather effect publicised by H&M etc (ABF's first half was for the 24 weeks to 27/2/16 with the like-for-like off by sub 1% in the first half)."
Numis said its profit-before-tax expectations for 2016 to 2018 have changed from a previous £1.09bn, £1.20bn and £1.31bn, respectively, to £1.12bn, 1.20bn and £1.29bn. | | |
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