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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: Equities slightly higher on stimulus hopes London stocks opened higher on Friday, underpinned by expectations of fresh stimulus from the Bank of England and possibly from the European Central Bank.
The FTSE 100 was trading almost flat at 6,505.65, up by just 0.02%, despite a backdrop of positive trading overnight on Wall Street and in the Asia Pacific region.
The mood was supported by BoE governor Mark Carney, who on Thursday hinted at the prospect of further interest rate cuts over the summer.
Furthermore, after the close of trading in London on Thursday, Bloomberg reported that some ECB officials supported broadening their programme of quantitiave easing to include more debt from the likes of Italy and Spain.
CMC Markets' Michael Hewson said: "While a rate cut probably won't come in July given the governor's assertion that the MPC would assess situation at the July 14 meeting, further measures could well get implemented at the August meeting when the bank sets out its latest inflation report, along with revised growth forecasts where we are quite likely to see the 2016 forecast lowered sharply from the current 2%."
"Yesterday we saw Q1 GDP confirmed at 0.4% and with Q2 likely to struggle to grow at all, its highly questionable that we would have got anywhere near 2%, whichever way last week's vote went."
Expectations of further policy easing from the BoE and ECB helped compensate some downbeat data published during Asian trading hours.
The Caixin manufacturing purchasing managers' index, a private gauge of factory activity, dropped for the third month in a row to 48.6 in June from 49.2 in May, missing expectations for it to remain unchanged. A reading below 50 indicates contraction.
China's official manufacturing PMI fell to 50.0 in June from 50.1 the previous month, in line with expectations.
Capital Economics said: "The manufacturing PMIs continue to disappoint. But given the recent resilience of the service sector and signs of strength in construction, we still aren't overly concerned about the near-term outlook for China's economy."
The Shanghai Stock Exchange´s Composite index finished the day up by 0.11% to 2,932.823.
Meanwhile, in Japan, core consumer prices declined for a third consecutive month in May, by 0.4%, while household spending was 1.1% weaker versus a year ago. In parallel, the Bank of Japan´s index of corporate confidence fell from +22 in March to +19 in June.
Still to come, UK manufacturing PMI is at 0930 BST. In the US, Markit manufacturing PMI is at 1445 BST, while ISM manufacturing is at 1500 BST, along with construction spending.
Some Deutsche Boerse owners undecided on LSE tie-up
In corporate news, LSE shareholders continued to support a tie-up with German peer Deutsche Boerse, but some of the latter´s main investors remained undecided about whether to tender their shares, according to the Wall Street Journal.
Shareholders representing comfortably more than 75% of the LSE´s ownership had told their proxy advisers to vote in favour of the merger at the special shareholder meeting scheduled for 4 July. However, several large shareholders in Deutsche Boerse told the newspaper they remained undecided regarding whether to tender their shares.
BHP Billiton's plans to settle claims over the 2015 Samarco mine disaster suffered a major blow on Friday when a Brazilian court reinstated a AUD$8bn public civil claim.
BHP and joint-venture partner Vale agreed a $3bn settlement in March, however Brazil's Superior Court issued an interim order suspending the ratification and reinstated the public civil claim for clean-up costs and damages against Samarco, Vale and BHP.
"BHP Billiton Brasil intends to appeal the decision of the Superior Court of Justice," BHP said in a statement.
Synthomer completed the acquisition of rival Hexion Performance Adhesives & Coatings for a total cash consideration of $226m, funded via existing cash resources and the utilisation of additional credit facilities.
Hexion´s China business, which accounts for about 1.0% of the parent company´s sales, would be subject to a deferred completion, which was expected for the third quarter of 2016. Ahead of its full-year numbers the polymer manufacturer said its outlook, in constant currency, remained unchanged and in-line with the Board´s expectations.
Pharmaceutical giant AstraZeneca announced on Friday it has entered into agreements to support its strategic focus on three main therapy areas - respiratory, inflammation and autoimmunity; cardiovascular and metabolic disease; and oncology. |
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| | UK Event Calendar | | Friday 01 July
INTERIM DIVIDEND PAYMENT DATE
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INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (18:00)
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Unemployment Rate (EU) (10:00)
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks edge higher on stimulus hopes European stocks edged higher in early trade, underpinned by expectations of further central bank stimulus.
At 0835 BST, the benchmark Stoxx Europe 600 index was up 0.3%, Germany's DAX was 0.5% firmer and France's CAC 40 was up 0.4%.
In London, the FTSE 100 was 0.2% higher while the more domestically-focused FTSE 250 was 0.1% lower.
At the same time, oil prices made small gains. West Texas Intermediate was up 0.2% at $48.44 a barrel and Brent crude was 0.3% higher at $49.84.
The mood was supported by comments from Bank of England governor Mark Carney, who on Thursday hinted at the prospect of further interest rate cuts over the summer following the UK's decision to leave the European Union.
"The Committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report," Carney said.
"In August, we will also discuss further the range of instruments at our disposal."
Mike van Dulken, head of research at Accendo Markets, said: "While markets like the idea of more stimulus from any major central bank, they especially like the idea that a weak GBP sterling keeps the USD strong and thus fends off the Fed from a rate rise for a good while longer."
Investors in Europe also digested data out of China on Friday that showed the manufacturing sector weakened in June, but the services sector improved.
The Caixin manufacturing purchasing managers' index, a private gauge of factory activity, dropped for the third month in a row to 48.6 in June from 49.2 in May, missing expectations for it to remain unchanged. A reading below 50 indicates contraction.
China's official manufacturing PMI fell to 50.0 in June from 50.1 the previous month, in line with expectations.
Meanwhile, data from the National Bureau of Statistics showed China's official non-manufacturing PMI, which covers services such as retail and real estate, improved to 53.7 from 53.1 in May.
Capital Economics said: "The manufacturing PMIs continue to disappoint. But given the recent resilience of the service sector and signs of strength in construction, we still aren't overly concerned about the near-term outlook for China's economy."
In corporate news, AstraZeneca was a little lower after saying it has entered into agreements to support its strategic focus on three main therapy areas - respiratory, inflammation and autoimmunity; cardiovascular and metabolic disease; and oncology.
BHP Billiton pushed higher despite saying that its plans to settle claims over the 2015 Samarco mine disaster had suffered a major blow after a Brazilian court reinstated a AUD$8bn public civil claim.
Still to come, investors will eye eurozone manufacturing PMI at 0900 BST and the Eurozone unemployment rate at 1000 BST. |
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| | US Market Report | | US close: Post-Brexit recovery continues for third session US stocks closed higher on Thursday - the final day of the quarter - as the post-Brexit recovery completed its third straight day.
The Dow Jones Industrial Average notched up gains of 1.33% to 17,929.99, with General Electric leading and Visa the only loser.
A rise of 1.36% to 2,098.86 was recorded on the S&P 500, while the Nasdaq closed up 1.33% at 4,842.67.
Energy managed a leap of 10% for the quarter as the best-performing sector, with the only negative sectors being information technology and consumer discretionary.
During the session the Dow managed to reach a point where it had recovered 80% of its post-Brexit losses.
It lost more than 870 points in the two sessions following the UK's shock vote to leave the European Union last week.
"I think it's a continuation of trying to sort out what Brexit means and what's important to investors," said Bruce McCain, chief investment strategist at Key Private Bank.
"Whether they decide it means nothing. We're going to have to wait and see."
St Louis Federal Reserve president James Bullard spoke in London during the day, and repeated the new monetary policy framework which now includes a single rate hike for the foreseeable future.
On the data front, weekly jobless claims were posted at 268,000 - slightly above the anticipated 267,000.
The Chicago PMI reading for June was well above May's 49.3 reading at 56.8.
Just two banks failed the Federal Reserve's stress test, it was announced, as the central bank approved the capital plans for 31 others.
Deutsche Bank and Banco Santander were the miss the mark.
Among the leaders in consumer staples was confectioner Hershey, which was propelled 16.8% by talks of a possible takeover bid from Cadbury owner Mondelez.
The board of Hershey unanimously rejected the Mondelez offer late during the session, however.
On the Nasdaq, the tech giants dominated both ends for the quarter, with Amazon having the most positive impact and Apple dragging the chain.
Film studio Lions Gate made a major acquisition announcement, saying it will buy Starz for $4.4bn cash and stock.
S&P 500 - Risers
Hershey Foods Corp. (HSY) $117.79 +21.26%
Paychex Inc. (PAYX) $59.50 +5.99%
Campbell Soup Co. (CPB) $66.53 +5.91%
Mondelez International Inc. (MDLZ) $45.48 +5.84%
United States Steel Corp. (X) $16.86 +5.57%
Kellogg Co. (K) $81.65 +5.26%
General Mills Inc. (GIS) $71.32 +5.10%
Huntington Bancshares Inc. (HBAN) $8.94 +5.05%
Waters Corp. (WAT) $140.65 +4.46%
Textron Inc. (TXT) $36.56 +4.37%
S&P 500 - Fallers
Hanesbrands Inc. (HBI) $25.13 -4.45%
Mastercard Inc. (MA) $88.06 -4.42%
Tractor Supply Company (TSCO) $91.18 -4.19%
Darden Restaurants Inc. (DRI) $63.34 -3.97%
Southwestern Energy Co. (SWN) $12.58 -3.45%
Visa Inc. (V) $74.17 -3.35%
Chesapeake Energy Corp. (CHK) $4.28 -3.17%
Endo International Plc (ENDP) $15.59 -2.13%
Humana Inc. (HUM) $179.88 -2.05%
Range Resources Corp. (RRC) $43.14 -1.93%
Dow Jones I.A - Risers
General Electric Co. (GE) $31.48 +3.04%
Intel Corp. (INTC) $32.80 +2.72%
Boeing Co. (BA) $129.87 +2.27%
International Business Machines Corp. (IBM) $151.78 +2.24%
Caterpillar Inc. (CAT) $75.81 +2.13%
Goldman Sachs Group Inc. (GS) $148.58 +2.12%
3M Co. (MMM) $175.12 +2.10%
United Technologies Corp. (UTX) $102.55 +2.07%
Coca-Cola Co. (KO) $45.33 +2.00%
Travelers Company Inc. (TRV) $119.04 +1.91%
Dow Jones I.A - Fallers
Visa Inc. (V) $74.17 -3.35%
Nasdaq 100 - Risers
Paychex Inc. (PAYX) $59.50 +5.99%
Mondelez International Inc. (MDLZ) $45.48 +5.84%
Micron Technology Inc. (MU) $13.76 +4.32%
Activision Blizzard Inc. (ATVI) $39.63 +4.23%
JD.com, Inc. (JD) $21.23 +4.12%
Western Digital Corp. (WDC) $47.26 +3.64%
Discovery Communications Inc. Class A (DISCA) $25.23 +3.49%
Discovery Communications Inc. Class C (DISCK) $23.85 +3.34%
Automatic Data Processing Inc. (ADP) $91.87 +3.07%
Kraft Heinz Co. (KHC) $88.48 +2.76%
Nasdaq 100 - Fallers
Tractor Supply Company (TSCO) $91.18 -4.19%
Endo International Plc (ENDP) $15.59 -2.13%
Liberty Global plc Series C (LBTYK) $28.65 -1.85%
Liberty Global plc Series A (LBTYA) $29.06 -1.76%
O'Reilly Automotive Inc. (ORLY) $271.10 -0.94%
Biomarin Pharmaceutical Inc. (BMRN) $77.80 -0.73%
Citrix Systems Inc. (CTXS) $80.09 -0.67%
T-Mobile Us, Inc. (TMUS) $43.27 -0.41%
Dollar Tree Inc (DLTR) $94.24 -0.19% |
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| | Newspaper Round Up | | Friday newspaper round-up: BoE, BHS, Heathrow The governor of the Bank of England sent bond yields to fresh record lows and the pound sliding after he signalled more quantitative easing and indicated interest rates would be cut to cushion the economy from the impact of Brexit. The prospect of lower interest rates, already at historical lows, and a return of the Bank of England's bond-buying programme to stimulate the economy sparked a sell-off of sterling but lifted shares. In London yesterday the pound dropped 1.5% against the dollar to $1.324, a cent above the 31-year low that it hit in the immediate aftermath of the referendum. - The Times
The administrators of BHS have agreed to sell its international and online operations to a Qatari buyer in the first disposal of the failed retailer's assets. Al Mana, a group based in Doha that operates some of BHS's overseas stores under a franchise deal, has bought more than 70 shops and the website. - The Times
The Government has come under fierce attack from leading business figures after it delayed a decision on airport expansion amid the Brexit turmoil, dealing a blow to Heathrow's chances of building its long sought-after £17.6bn third runway. Adam Marshall, the acting director general of the British Chambers of Commerce, accused ministers of "a cop out" after Patrick McLoughlin, the transport secretary, said it would be "at least October" before an announcement is made about where to build more runway capacity in the south east. - The Daily Telegraph
Europe's banking sector is braced for chaos, with Italian giants desperate for a bailout and Germany's biggest lender deemed a threat to the world economy. In Italy, politicians begged the European Union for permission to bail out troubled lenders sitting on more than £300bn of bad loans. Meanwhile, Portugal - long feared to be a future flashpoint in the eurozone crisis - has been urged to double down on austerity measures in the uncertain times ahead. - The Daily Mail
A split has emerged at the top of the Labour party in Scotland after deputy leader Alex Rowley pledged his support for Jeremy Corbyn as UK leader. It came just days after Scottish leader Kezia Dugdale joined the chorus of calls for the left-winger to go, insisting she could not lead the party in Scotland without the support of her MSPs. - The Scotsman | | |
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