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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: Osborne to give economy fiscal boost Stocks in London moved higher at the start of trading, with investors taking their cue from a positive session in Asia, although with US markets due to remain closed in observance of the 4 July holiday trading was expected to be subdued.
As of 08:27 BST the FTSE 100 was gaining 20.77 points or 0.23% to 6,599.39, while the Shanghai Stock Exchange´s Composite Index finished the session with gains of 1.91% to 2,988.60.
Also moving markets, Osborne told the Financial Times he would cut the corporation tax rate to below 15% from the current 20%, which would make it the lowest of any major economy. The chancellor also said Britain was facing a "very challenging time" and called on the Bank of England to do what it can to avoid "a contraction of credit in the economy".
Michael Hewson, chief market analyst at CMC Markets, said; "With US markets closed today for the 4th July Independence Day holiday European markets may well be quieter than usual, though they will be no less driven by the expectations of lower for longer interest rates in light of the events of recent days.
"The main focus this week away from Brexit concerns given that the triggering of article 50 seems some way off is likely to be on the latest US economic data towards the end of the week, the latest FOMC minutes and the latest US payrolls report, given the shocker of a report we saw in May."
Stocks got a boost at the end of last week after Bank of England governor Mark Carney said the central bank was likely to cut interest rates over the summer.
On the macroeconomic front on Monday, UK construction PMI for June is at 0930 BST. Hewson expects to see a decline to 50.6 from 51.2 mainly on the back of pre-Brexit uncertainty. "The recent weakness in this sector in recent months could also account for why investors sold off the housebuilders so aggressively in the wake of last month's Brexit vote," he said.
In corporate news, HSBC confirmed the completion of the sale of its Brazil business on Monday, after announcing on 8 June that it had received all necessary regulatory approvals for the transaction. The bank had put HSBC Brazil on the market as part of its efforts to streamline the global business, accepting an offer from Banco Bradesco. "The sale of HSBC Brazil represents a significant step in HSBC's stated goal to optimise its global network and reduce complexity," the board said in the announcement. HSBC previously confirmed the deal was worth $5.2bn in an all-cash transaction.
Capita announced the appointment of Ian Powell as a non-executive director and chairman designate on Monday, taking effect from 1 September. The FTSE 100 firm said Powell would officially succeed Martin Bolland as non-executive chairman on 1 January 2017. Until the end of June, Ian Powell was chairman and senior partner of PricewaterhouseCoopers UK.
Conditions in the offshore industry remain depressed, reflecting global economic uncertainty, which will see profits for 2016 come in "materially lower" than in the full-year 2015, Clarkson said in a trading update. However, overall transaction volumes within the broking division continued to grow, albeit alongside declining activity in the financial division. The shipbroker referenced the sharp fall seen in the Baltic Dry Index to all-time lows during the first quarter of the year.
Property investment company Kennedy Wilson Europe said it has achieved a major milestone at its Baggot Plaza, Dublin project, reaching practical completion and handing the building over to the governor and company of the Bank of Ireland. The FTSE 250 firm entered into an agreement for lease with the Bank of Ireland in May 2015, for a 25-year lease of the entire building at a headline rent of €47.50 per square foot. |
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| | UK Event Calendar | | Monday 04 July
INTERIMS
RM
INTERIM DIVIDEND PAYMENT DATE
Lakehouse, Mitchells & Butlers, Renew Holdings
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (US) (15:00)
Producer Price Index (EU) (10:00)
FINALS
Oneview Group
AGMS
LGO Energy
TRADING ANNOUNCEMENTS
Kier Group
UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)
FINAL DIVIDEND PAYMENT DATE
Amec Foster Wheeler, Beximco Pharmaceuticals Ltd. GDR (Reg S), HSS Hire Group , International Consolidated Airlines Group SA (CDI), Learning Technologies Group , Nasstar, Pacific Assets Trust, Scottish Mortgage Inv Trust, Synthomer, Tandem Group, WPP
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed; Italian banks tumble European stocks were little changed early on Monday as investors continued to mull over the implications of Britain's decision to leave the European Union, with trade expected to be quieter than usual as US markets will be closed for Independence Day.
At 0900 BST, the benchmark Stoxx Europe 600 index and Germany's DAX were both down 0.1%, while France's CAC 40 was 0.2% weaker.
At the same time, oil prices nudged higher. West Texas Intermediate was up 0.3% at $49.13 a barrel and Brent crude was also 0.3% firmer, at $50.48.
Markets received a boost at the end of last week after Bank of England governor Mark Carney said interest rates were likely to be cut over the summer.
Mike van Dulken, head of research at Accendo Markets, said the theme this week was almost certainly going to remain about the continued fallout from Brexit as market participants continue to digest and re-price for the new financial, economic and political landscape.
"Any more hints from central banks about stimulus could also help keep the ball in the air, helping markets shrug off the Brexit impact and push on with their recoveries."
Chancellor George Osborne told the Financial Times that he plans to cut corporation tax to ensure businesses keep investing in the UK after it opted to leave the European Union.
He said he would cut the tax rate to below 15% from the current 20%, which would make it the lowest of any major economy.
Osborne said the move was part of his new five-point plan to build a "super-competitive economy" with low tax rates and said it was important for "Britain to "get on with it" show investors it was still "open for business".
In terms of sector, the Stoxx 600 basic resources index was up 2% as metals prices rose, with London-listed Fresnillo surging 8% as silver prices broke through $21 an ounce.
On the downside, however, Italian banking stocks were under the cosh. Banca Monte dei Paschi di Siena took a beating following a report in daily La Repubblica that the European Central Bank has written to the lender asking for a new three-year business plan that would require it to reduce non-performing loans to an adequate level.
Italy's FTSE MIB significantly underperformed its peers, down 1%.
Prime Minister Matteo Renzi said on Monday that Italy has no plans to defy EU rules by pumping billions of euros of public money into its banks, denying a report in the Financial Times.
Elsewhere, beleaguered German car maker Volkswagen was in the red after chief executive Matthias Muller rejected compensation calls for European customers in the wake of the emissions scandal.
Deutsche Boerse and London Stock Exchange were in focus as the latter was set to hold a general meeting for shareholders to vote on their recommended all-share merger. |
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| | US Market Report | | US close: Stocks end higher ahead of long weekend US stocks finished higher on Friday ahead of the Fourth of July long weekend as investors set Brexit worries aside and weighed a batch of economic data.
The Dow Jones Industrial Average rose 0.10%, the S&P 500 increased 0.19% and Nasdaq climbed 0.41%.
Oil prices were also higher with West Texas Intermediate crude up 1.7% to $49.17 per barrel and Brent up 1.7% to $50.58 per barrel at 2058 BST.
In economic data, the seasonally adjusted final Markit US manufacturing purchasing managers' index (PMI) registered 51.3 in June, up from 50.7 in May as manufacturers indicated a slight rebound in production volumes during June, helped by the fastest rise in new work since March. June's final reading marked a downward revision from a previous estimate of 51.4 but was better than the 51.2 that analysts had been expecting.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.2 in June from 51.3 the month before. Analysts had pencilled in no change to the reading.
"Manufacturing data has been showing steady improvement for some time in the US, and today's promising numbers indicate that trend is set to continue," said Dennis de Jong, managing director t UFX.com.
"Janet Yellen and Co. will have obvious concerns about the potential impact of Brexit on US interests across all sectors, not least a strengthening dollar that will make manufactured goods more expensive for foreign buyers. However, with North American trade partners Canada and Mexico the main recipients of US exports, it may only be ripples that are felt from the earthquake that is gripping Europe at present."
US construction spending fell 0.8% in May after a downwardly revised 2.0% drop in April, the Commerce Department said, missing forecasts for a 0.7% increase.
Elsewhere, China's official manufacturing PMI fell slightly to 50.0 in June from 50.1 in May, as expected. Caixin's manufacturing PMI decreased to 48.6 in June from 49.2 the previous month, missing forecasts for a reading of 49.2.
In Japan, deflation eased in May with the consumer price index down 0.4% year-on-year compared to a 0.3% fall the previous month. Analysts had expected it to worsen to a 0.5% decline.
Japanese household spending shrank by 1.1% year-on-year in May, as expected.
The unemployment rate was unchanged at 3.2% in April, the Ministry of Internal Affairs and Communications said, also as expected.
In corporate news, Tesla Motors recovered from earlier falls after it emerged that US safety regulators would be investigating 25,000 Tesla S cars following an autopilot feature that was claimed to have caused a fatality.
Harley-Davidson jumped amid reports that private-equity firm Kohlberg Kravis Roberts is considering takeover of the group.
Hersheys slumped after it rejected a bid from rival Mondelez.
Hewlett-Packard edged higher as the company won $3bn in damages from Oracle in a court battle. HP claimed that Oracle backed out of a deal to support HP servers that used the Itanium line of chips from Intel Corp. Oracle said it would appeal the ruling.
Micron Technology declined after reporting a quarterly loss and announcing about 2,400 job cuts.
In currency markets, the dollar rose 0.24% against the pound but fell 0.64% against the yen and dropped 0.29% versus the euro.
S&P 500 - Risers
Harley-Davidson Inc. (HOG) $53.59 +18.30%
Endo International Plc (ENDP) $16.96 +8.79%
United States Steel Corp. (X) $18.28 +8.42%
Transocean Ltd. (RIG) $12.75 +7.23%
Chesapeake Energy Corp. (CHK) $4.57 +6.89%
Netflix Inc. (NFLX) $96.62 +5.62%
Marathon Oil Corp. (MRO) $15.69 +4.50%
Diamond Offshore Drilling Inc. (DO) $25.40 +4.40%
Marathon Petroleum Corporation (MPC) $39.31 +3.57%
American Airlines Group (AAL) $29.27 +3.41%
S&P 500 - Fallers
Micron Technology Inc. (MU) $12.45 -9.52%
Hershey Foods Corp. (HSY) $112.06 -4.86%
Williams Companies Inc. (WMB) $20.58 -4.85%
Avery Dennison Corp. (AVY) $72.65 -2.81%
Humana Inc. (HUM) $175.55 -2.41%
Chipotle Mexican Grill Inc. (CMG) $393.65 -2.26%
Extra Space Storage (EXR) $90.61 -2.09%
Monsanto Co. (MON) $101.30 -2.04%
Bank Of New York Mellon Corp. (BK) $38.08 -1.99%
Sl Green Realty Corp. (SLG) $104.35 -1.99%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $129.59 +1.49%
Pfizer Inc. (PFE) $35.58 +1.04%
Caterpillar Inc. (CAT) $76.39 +0.77%
Verizon Communications Inc. (VZ) $56.22 +0.67%
Nike Inc. (NKE) $55.56 +0.65%
Visa Inc. (V) $74.61 +0.59%
Merck & Co. Inc. (MRK) $57.94 +0.57%
International Business Machines Corp. (IBM) $152.47 +0.45%
Apple Inc. (AAPL) $95.96 +0.38%
Cisco Systems Inc. (CSCO) $28.78 +0.33%
Dow Jones I.A - Fallers
JP Morgan Chase & Co. (JPM) $61.33 -1.31%
Chevron Corp. (CVX) $104.17 -0.63%
E.I. du Pont de Nemours and Co. (DD) $64.40 -0.62%
Coca-Cola Co. (KO) $45.10 -0.51%
Unitedhealth Group Inc. (UNH) $140.75 -0.32%
Wal-Mart Stores Inc. (WMT) $72.81 -0.29%
Travelers Company Inc. (TRV) $118.85 -0.16%
Boeing Co. (BA) $129.68 -0.15%
Intel Corp. (INTC) $32.77 -0.10%
American Express Co. (AXP) $60.72 -0.06%
Nasdaq 100 - Risers
Endo International Plc (ENDP) $16.96 +8.79%
Netflix Inc. (NFLX) $96.62 +5.62%
Biomarin Pharmaceutical Inc. (BMRN) $81.35 +4.56%
American Airlines Group (AAL) $29.27 +3.41%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $40.94 +2.75%
Regeneron Pharmaceuticals Inc. (REGN) $358.51 +2.66%
Liberty Global plc Series A (LBTYA) $29.74 +2.32%
Celgene Corp. (CELG) $100.64 +2.04%
Whole Foods Market Inc. (WFM) $32.67 +2.03%
Fastenal Co. (FAST) $45.27 +1.98%
Nasdaq 100 - Fallers
Micron Technology Inc. (MU) $12.45 -9.52%
Western Digital Corp. (WDC) $46.46 -1.69%
Seagate Technology Plc (STX) $24.00 -1.48%
Lam Research Corp. (LRCX) $82.97 -1.30%
NetApp Inc. (NTAP) $24.29 -1.22%
Skyworks Solutions Inc. (SWKS) $62.58 -1.11%
QUALCOMM Inc. (QCOM) $53.02 -1.03%
KLA-Tencor Corp. (KLAC) $72.63 -0.85%
Akamai Technologies Inc. (AKAM) $55.47 -0.82% |
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| | Newspaper Round Up | | Monday newspaper round-up: Robots, corporation tax, pensions, private equity Britain's decision to leave the EU will force companies that rely on migrant labour to rethink their business models, if it leads to restrictions on low-skilled immigration. For some, robots may be the most likely replacement, according to a report by the Resolution Foundation think-tank. Almost one third of the workforce in food manufacturing are EU migrants. More than a fifth of domestic personnel are from the EU, and more than one in eight workers in sectors ranging from agriculture to warehousing and textiles manufacturing. - Financial Times
George Osborne is planning to slash corporation tax to less than 15 per cent in an effort to woo business deterred from investing in a post-Brexit Britain as part of his new five-point plan to galvanise the economy. While the chancellor did not backtrack on his warning that leaving the EU could push the country into recession, he told the Financial Times: "We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt." - Financial Times
The Pension Regulator should be given new powers to block company deals so that employees and pensioners are better protected in the wake of events such asthe collapse of BHS, the former chair of the Pension Protection Fund has said. Lady Judge, who stepped down last month, said the regulator was not equipped to deal with situations such as that at BHS, sold by Sir Philip Green to Dominic Chappell for £1 last year and now left with an estimated £571m pensions black hole. - Guardian
The weakness in the pound will absorb some of the shock of the Brexit vote as it weighs on domestic business spending in the next few months, according to the Confederation of British Industry (CBI). The business group said the boost to exporters, whose goods will become relatively cheaper after the decline in sterling, could provide politicians some breathing space to ensure long-term global trade links are maintained. - Telegraph
Britain's private equity industry group has set out a post-Brexit plan including access to the single market and accepting freedom of movement, as data shows that funds have held off high-value deals in the lead-up to the referendum. British buy-out firms invested £6bn in the first half of the year, down from £9bn in the previous six months to December, as investors were less likely to strike mega-deals, according to Imperial College London's Centre for Management Buy-Out Research. - Telegraph
Billions of pounds of European funding for UK clean energy projects including offshore wind farms as well as universities and other big infrastructure schemes have been jeopardised by Britain's vote to quit the EU. Britain is a 16 per cent shareholder in the European Investment Bank (EIB), which in the past decade has lent more than £42 billion at super-cheap rates to wind farms, hospitals, railways, social housing and a string of other projects. - The Times
London Stock Exchange shareholders are expected to nod through a £20.3 billion merger with Deutsche Börse today. The deal between the exchanges may be modified in the wake of British voters' decision last month to leave the European Union, but those close to the deal have insisted that the parties remain undeterred by the result of the referendum. - The Times | | |
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