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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: Equities lower as mining stocks weigh A slump in mining stocks weighed on UK equities on Monday as commodity prices declined.
Fresnillo, Randgold Resources and Anglo American dominated the list of fallers on the FTSE 100, dragged lower by a slump in metal prices. On the Comex, silver plunged 2.16%, gold dropped 0.25% and copper dipped 1.06%.
Oil prices were also under the cosh on news that Iraq - OPEC's second-biggest oil producer - will boost its oil exports by 5%. A stronger dollar and a jump in the Baker Hughes US oil-rig count also weighed on prices. Meanwhile, investors are losing hope that a deal on stabilising the market will be made at next month's unofficial OPEC meeting.
Meanwhile, investors continued to digest hawkish remarks from several Federal Reserve officials last week and awaited comments from Fed chair Janet Yellen at the central bank's annual conference on Friday in Jackson Hole, Wyoming.
Added to the above, Fed Vice Chairman Stanley Fischer on Sunday gave an upbeat assessment of the US economy, which was seen to suggest an interest rate hike was possible this year.
The attention now turns to Yellen, with the market hoping for clues on the timing of the next interest rate increase.
Oanda's Craig Erlam said Yellen's speech would be a great opportunity to send a clear and concise message to investors.
"The markets currently have March priced in for the next rate hike and if Yellen is seriously determined to move earlier, she must take advantage of Friday's opportunity to drive that message home," he said.
Elsewhere, Bank of Japan Governor Haruhiko Kuroda said he would not rule out another interest rate cut if needed.
In an interview with the Sankei Shimbun newspaper, published Saturday, Kuroda said, "Based on our comprehensive assessment, there is a fair amount of possibility that we will conduct additional measures without hesitation, if necessary."
Analysts expect he will expand further on monetary policy at a speech on Tuesday at the BoJ's Fintech Conference.
On the corporate front, housebuilders rallied after a report from Countrywide predicted UK house prices will fall by 1% next year on Brexit uncertainty but will recover with a 2% increase in 2018. The declines were, however, nowhere near Chancellor George Osborne's forecasts in May for a 10-18% fall in house prices by 2018 in the event the UK voted to leave the EU.
Taylor Wimpey, Barratt Developments and Berkeley Group were among the top risers on the FTSE 100.
Persimmon was also in the black ahead of its half year results on Tuesday, with analysts expecting the housebuilder to shrug off the impact of the EU referendum with a surge in profits. Deutsche Bank expects Persimmon to report a 26% increase in earnings before interest and tax for the first half.
Travis Perkins was on the front foot as Canaccord Genuity trimmed its price target on the stock but reiterated its 'buy' rating, saying it sees the stock as "structurally attractive over the medium term and see value under the scenario of a relatively mild recession".
Debenhams gained as news emerged that its Irish business has been saved after the High Court approved a restructuring programme that will safeguard 1,330 jobs and will mean its Irish subsidiary will exit examinership.
Going the other way, BHP Billiton, BP, Royal Dutch Shell and Cairn Energy fell on the drop in oil prices.
Miner and steel producer Evraz edged lower as analysts at Shore Capital wondered if investment company Yellow Dragon - which is meant to be teaming up with Bushveld Minerals (BMN) to buy Evraz's Vametco - had got "cold feet or money troubles" after selling its entire 50m holding of BMN shares earlier this month. |
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| Market Movers
FTSE 100 (UKX) 6,828.54 -0.44%
FTSE 250 (MCX) 17,872.08 -0.01%
techMARK (TASX) 3,510.33 -0.08%
FTSE 100 - Risers
Taylor Wimpey (TW.) 158.70p 3.52%
Barratt Developments (BDEV) 463.50p 2.84%
Persimmon (PSN) 1,794.00p 2.63%
Berkeley Group Holdings (The) (BKG) 2,550.00p 2.53%
Capita (CPI) 1,037.00p 2.07%
Provident Financial (PFG) 2,916.00p 1.89%
Dixons Carphone (DC.) 375.90p 1.76%
Travis Perkins (TPK) 1,583.00p 1.67%
International Consolidated Airlines Group SA (CDI) (IAG) 390.10p 1.35%
Intu Properties (INTU) 312.70p 1.20%
FTSE 100 - Fallers
Fresnillo (FRES) 1,825.00p -5.88%
Anglo American (AAL) 835.00p -4.02%
Randgold Resources Ltd. (RRS) 8,020.00p -3.95%
Antofagasta (ANTO) 545.00p -3.45%
Rio Tinto (RIO) 2,379.50p -2.72%
Glencore (GLEN) 184.35p -2.23%
BHP Billiton (BLT) 1,033.00p -1.90%
Royal Dutch Shell 'B' (RDSB) 1,974.00p -1.79%
DCC (DCC) 7,040.00p -1.54%
BP (BP.) 427.90p -1.48%
FTSE 250 - Risers
Debenhams (DEB) 62.30p 4.09%
Crest Nicholson Holdings (CRST) 455.80p 3.66%
Redrow (RDW) 357.00p 3.63%
Ted Baker (TED) 2,584.00p 3.32%
Galliford Try (GFRD) 1,081.00p 3.25%
William Hill (WMH) 325.00p 3.21%
Bellway (BWY) 2,223.00p 3.16%
Greencore Group (GNC) 353.10p 3.16%
Countryside Properties (CSP) 242.00p 3.07%
Ocado Group (OCDO) 288.60p 3.03%
FTSE 250 - Fallers
Acacia Mining (ACA) 567.50p -5.02%
Hochschild Mining (HOC) 298.70p -4.66%
Evraz (EVR) 143.60p -4.46%
Cairn Energy (CNE) 194.80p -3.94%
Centamin (DI) (CEY) 170.50p -3.78%
Vedanta Resources (VED) 531.00p -3.45%
Diploma (DPLM) 859.00p -2.77%
Kaz Minerals (KAZ) 189.90p -2.57%
Vesuvius (VSVS) 369.00p -2.41%
Polymetal International (POLY) 1,155.00p -2.37% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Miners, oil drag benchmarks lower European stocks wavered on Monday as investors eyed the US Federal Reserve's Jackson Hole meeting later in the week in the hope that it might provide further clues on the timing of an interest rate hike.
The benchmark Stoxx Europe 600 index edged higher by 0.09% or 0.29 points to close at 340.43, Germany's DAX was lost 0.47% and France's CAC 40 was 0.24% weaker.
At the same time, oil prices retreated on news that Iraq - OPEC's second-biggest oil producer - will boost its oil exports by 5%. A jump in the US oil-rig count, reported on 19 August, also weighed on prices. West Texas Intermediate was down 3.1% at $47.64 a barrel and Brent crude was 3.1% lower at $49.35.
Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said: "Equities are range bound on low volumes and little data, as investors once again turn their attention to the US Federal Reserve's Jackson Hole meeting this week. Global central bank policy remains the key driver of equity markets, with the Federal Reserve the largest potential catalyst for market momentum and direction.
"Stanley Fischer's hawkish comments over the weekend have nudged the dollar higher and highlighted (yet again) the differences in opinion and potential policy divide between Federal Reserve members. This makes Janet Yellen's speech on Friday even more significant as a potential signal of whether the Fed might move as soon as its upcoming September meeting."
Federal Reserve vice chairman Fischer said in a speech at the Aspen Institute in Colorado that the US economy was close to meeting the bank's targets for inflation and employment.
"Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes," he said.
Corporate news was thin on the ground, but Syngenta surged after the US-based Committee on Foreign Investment in the US cleared ChemChina's takeover of the agrochemical company.
French outsourcer Teleperformance rose sharply after announcing the acquisition of translation services company LanguageLine Solutions in a $1.52bn deal.
Irish building materials group Kingspan also racked up healthy gains after reporting a jump in first-half profit and sales thanks to acquisitions and strong insulated panels sales. |
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| | US Market Report | | US open: Stocks mostly lower ahead of Yellen's Jackson Hole speech US stocks were mostly lower on Monday as investors weighed hawkish remarks from Federal Reserve policymakers ahead of a speech by chair Janet Yellen later this week.
At 1518 BST the Dow Jones Industrial Average fell 0.09% to 18,539.97 points, the S&P 500 decreased 0.04% to 2,182.96 points while the Nasdaq rose 0.15%.
Oil prices were under pressure as on news that Iraq - OPEC's second-biggest oil producer - will boost its oil exports by 5%. A stronger dollar and a jump in the Baker Hughes US oil-rig count also weighed on prices.
West Texas Intermediate crude fell 2.6% to $47.85 per barrel and Brent crude slid 2.8% to $49.48 per barrel at 1521 BST.
Joshua Mahony, market analyst at IG, said: "Much of the week will likely be gearing up for the main event, which comes in the form of the annual Jackson Hole meeting, hosted by the Kansas Fed. Crucially, Friday will see Janet Yellen take the same stand upon which Ben Bernanke announced quantitative easing back in 2012, with markets hoping for another game changing nugget on Friday.
"The recent deterioration in the greenback means that many are looking for a dollar bounce back, which coupled with the speculation of Friday's meeting, means that dollar volatility is likely to be heightened this week."
Oanda's Craig Erlam said Yellen's speech would be a great opportunity to send a clear and concise message to investors.
"The markets currently have March priced in for the next rate hike and if Yellen is seriously determined to move earlier, she must take advantage of Friday's opportunity to drive that message home," he said.
Her speech follows hawkish comments from several Federal Reserve officials last week. Most recent, Fed Vice Chairman Stanley Fischer on Sunday gave an upbeat assessment of the US economy, which was seen to suggest an interest rate hike was possible this year. His statement pushed the dollar higher.
Elsewhere, Bank of Japan Governor Haruhiko Kuroda said he would not rule out another interest rate cut if needed.
In an interview with the Sankei Shimbun newspaper, published Saturday, Kuroda said, "Based on our comprehensive assessment, there is a fair amount of possibility that we will conduct additional measures without hesitation, if necessary."
Analysts expect he will expand further on monetary policy at a speech on Tuesday at the BoJ's Fintech Conference. |
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| | Broker Tips | | Broker tips: William Hill, Bodycote, KAZ Minerals Barclays reinstated coverage of William Hill at 'overweight', raising the price target by 3% to 340p.
It said the stock is cheap and there are potential catalysts in the second half such as announcements around cost savings in retail and online and hopefully news on a new chief executive officer.
"That said, we continue to prefer Paddy Power Betfair given its superior growth, strong balance sheet and strategic optionality," the bank said.
Barclays noted that William Hill expects full-year earnings before interest, tax, depreciation and amortisation to be at the top end of guidance of £260m to £280m and said it now forecasts £275m versus a previous estimate of £265m.
The bank said there is still a lot to do to turn around the online division and although it has been encouraged by the early progress under the new leadership of Crispin Nieboer, it is still early days.
At the third-quarter results, Barclays is hoping for more detail on cost savings from the reorganisation of the retail division, news of cost efficiencies in the online division and news regarding a new CEO.
"We think all three issues may be a positive catalyst in H2, albeit we think some of the cost savings will be reinvested for growth."
JPMorgan Cazenove upgraded Bodycote to 'neutral' from 'underweight' and lifted the price target to 605p from 565p, saying its UW thesis on the stock has largely played out.
The bank said its UW rating was primarily based on end-market headwinds not being reflected in expectations, below-consensus earnings estimates, a rating that did not reflect a challenging outlook and risks to earnings, and inflated expectations on the likely progression of margins and therefore earnings.
It was also worried the stock was a consensus long on both the buy and sell sides.
JPM pointed out that the weaker financial performance has led the stock to underperform its UK capital goods stocks coverage by 13% in the past year.
The share price performance and de-rating also point to an unwind of the consensus long positioning, on the buy-side at least, JPM said.
"Our estimates are no longer meaningfully below 2016 Bloomberg consensus EPS, end markets and the margins expectations better reflect the outlook, and the shares have reached a level we see capturing the ongoing risks in what remains a weak backdrop."
"With the headwinds of inflated expectations and a premium rating removed, we reassess the investment case of the greater margin resilience and an improved cash flow (and resulting balance sheet optionality) and upgrade the stock."
UBS upgraded KAZ Minerals to 'buy' from 'neutral' and lifted the price target to 270p from 150p saying it is now delivering on growth.
In addition, it said it likes the group's strong growth profile, and execution risk at Bozshakol and Aktogay has decreased materially.
"A site visit in Q4-16 should also bolster market confidence on Aktogay, and execution should be smoother given the similarity to Bozshakol.
"With shares trading at 0.5x net present value, we think the risk reward is attractive, and we upgrade to buy."
The bank said reduced execution risk and a stable copper price increase the probability that KAZ can raise the liquidity it needs to complete Aktogay, adding that significant progress is likely to be made by the end of the year.
"China Development Bank has provided 91% of KAZ's current debt facilities, at a rate of about 6%. Removing the remaining liquidity risk should be a positive catalyst."
Last week, KAZ reported a rise in first-half earnings and said its new Bozshakol project is on track for commercial output in the second half.
For the six months to the end of June, the copper miner said core profit rose to $115m from $88m in the same period last year. Pre-tax profit surged to $91m fro $2m last year. | | |
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