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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: Big Oil, miners drag on Footsie London's Footsie sagged following disappointing quarterly earnings from US aluminium giant Alcoa and as crude oil futures retreated after climbing to a one-year high during the previous session.
Retailers put in the best performance on the back of figures from the British Retail Consortium showing unexpectedly strong like-for-like sales for the sector during the month of September, while Big Oil and miners dragged.
The FTSE 100 dropped by 0.38% or 26.62 points to 7,070.88, but only after having first set a fresh intraday record at 7,128.03.
On a light day for economic data, all eyes were on central bank speakers and the gyrations of the pound on foreign exchange markets.
In testimony to the Treasury Select Committee, the Monetary Policy Committee's newest member, Michael Saunders, said the Bank of England could "look through" the impact that Sterling's fall might have on prices, even if it lasted for many years.
His remarks helped to staunch the bleeding in fixed income markets, sending yields on the benchmark 10-year Gilt lower by four basis points to 0.98%.
Saunders also said further weakness in Sterling would not surprise him and the pound duly obliged, retreating 1.14% to 1.2220.
Speaking overnight, the president of the US Federal Reserve bank of Chicago, Charles Evans, said progress on meeting the central bank's inflation target had been "unsatisfactory", which might indicate that a December rate hike is not quite yet a done deal.
However, traders instead appeared to focus on his remarks that "one move isn't that big of a deal either way", sending yields on US government debt higher.
Evans's remarks were made ahead of the release of the minutes of the Fed's last policy meeting and speeches from two other Fed speakers scheduled for the following session - including one from well-known policy 'hawk' Esther George.
UK data emerged from the British Retail Consortium on Tuesday, which showed like-for-like retail sales grew by 0.4% month-on-month in September, after a fall of 0.9% in August (consensus: -0.3%).
Yet economists at Pantheon Macroeconomics appeared unimpressed, telling clients that: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars. Indeed, sterling's further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."
The economic calendar was otherwise quite sparse.
Oil futures declined after the International Energy Agency observed in its October Oil Market Report that Saudi Arabia may need to cut production more in order to offset higher output from Iraq, Libya and Iran.
Clothing retailers put in strong performance
In corporate news, profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter.
The interim dividend was held flat as the company revealed the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".
Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.
In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.
With these bullish reports allied to the BRC data and cooler weather, Next topped the FTSE 100 leaderboard.
Mid-caps dominated the news, with plastics group Victrex reporting an improved second half, but full year sales still shrank due to consumer electronics weakness that is expected to persist.
Retirement housebuilder McCarthy & Stone was higher on the back of improved trading in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years. |
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| Market Movers
FTSE 100 (UKX) 7,070.88 -0.38%
FTSE 250 (MCX) 18,073.20 0.52%
techMARK (TASX) 3,571.76 -0.14%
FTSE 100 - Risers
Next (NXT) 4,712.00p 3.93%
International Consolidated Airlines Group SA (CDI) (IAG) 376.10p 3.69%
Marks & Spencer Group (MKS) 332.00p 3.27%
Travis Perkins (TPK) 1,475.00p 3.22%
Whitbread (WTB) 3,887.00p 3.16%
easyJet (EZJ) 900.50p 2.86%
Taylor Wimpey (TW.) 147.70p 2.71%
Burberry Group (BRBY) 1,516.00p 2.50%
ITV (ITV) 177.70p 2.42%
Lloyds Banking Group (LLOY) 53.64p 2.41%
FTSE 100 - Fallers
Old Mutual (OML) 197.50p -5.64%
Glencore (GLEN) 221.90p -2.68%
Capita (CPI) 584.00p -2.42%
Fresnillo (FRES) 1,647.00p -2.26%
BHP Billiton (BLT) 1,239.00p -2.21%
Mediclinic International (MDC) 898.00p -2.18%
Rio Tinto (RIO) 2,679.50p -1.94%
Shire Plc (SHP) 5,220.00p -1.93%
Centrica (CNA) 212.20p -1.76%
Legal & General Group (LGEN) 214.50p -1.65%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 205.00p 16.54%
Sports Direct International (SPD) 293.50p 8.50%
Victrex plc (VCT) 1,753.00p 8.08%
McCarthy & Stone (MCS) 173.30p 6.32%
Allied Minds (ALM) 369.30p 5.39%
Pagegroup (PAGE) 366.50p 5.07%
Ted Baker (TED) 2,530.00p 4.76%
Millennium & Copthorne Hotels (MLC) 450.10p 4.43%
Riverstone Energy Limited (RSE) 1,200.00p 4.35%
Domino's Pizza Group (DOM) 372.70p 3.64%
FTSE 250 - Fallers
Hochschild Mining (HOC) 253.60p -5.09%
Centamin (DI) (CEY) 148.20p -4.63%
Tullow Oil (TLW) 269.00p -4.07%
Acacia Mining (ACA) 459.10p -3.53%
Meggitt (MGGT) 457.70p -2.49%
Vedanta Resources (VED) 642.00p -2.43%
Laird (LRD) 316.00p -1.86%
Greencore Group (GNC) 303.10p -1.78%
CYBG (CYBG) 259.40p -1.74% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | London close: Big Oil, miners drag on Footsie London's Footsie sagged following disappointing quarterly earnings from US aluminium giant Alcoa and as crude oil futures retreated after climbing to a one-year high during the previous session.
Retailers put in the best performance on the back of figures from the British Retail Consortium showing unexpectedly strong like-for-like sales for the sector during the month of September, while Big Oil and miners dragged.
The FTSE 100 dropped by 0.38% or 26.62 points to 7,070.88, but only after having first set a fresh intraday record at 7,128.03.
On a light day for economic data, all eyes were on central bank speakers and the gyrations of the pound on foreign exchange markets.
In testimony to the Treasury Select Committee, the Monetary Policy Committee's newest member, Michael Saunders, said the Bank of England could "look through" the impact that Sterling's fall might have on prices, even if it lasted for many years.
His remarks helped to staunch the bleeding in fixed income markets, sending yields on the benchmark 10-year Gilt lower by four basis points to 0.98%.
Saunders also said further weakness in Sterling would not surprise him and the pound duly obliged, retreating 1.14% to 1.2220.
Speaking overnight, the president of the US Federal Reserve bank of Chicago, Charles Evans, said progress on meeting the central bank's inflation target had been "unsatisfactory", which might indicate that a December rate hike is not quite yet a done deal.
However, traders instead appeared to focus on his remarks that "one move isn't that big of a deal either way", sending yields on US government debt higher.
Evans's remarks were made ahead of the release of the minutes of the Fed's last policy meeting and speeches from two other Fed speakers scheduled for the following session - including one from well-known policy 'hawk' Esther George.
UK data emerged from the British Retail Consortium on Tuesday, which showed like-for-like retail sales grew by 0.4% month-on-month in September, after a fall of 0.9% in August (consensus: -0.3%).
Yet economists at Pantheon Macroeconomics appeared unimpressed, telling clients that: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars. Indeed, sterling's further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."
The economic calendar was otherwise quite sparse.
Oil futures declined after the International Energy Agency observed in its October Oil Market Report that Saudi Arabia may need to cut production more in order to offset higher output from Iraq, Libya and Iran.
Clothing retailers put in strong performance
In corporate news, profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter.
The interim dividend was held flat as the company revealed the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".
Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.
In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.
With these bullish reports allied to the BRC data and cooler weather, Next topped the FTSE 100 leaderboard.
Mid-caps dominated the news, with plastics group Victrex reporting an improved second half, but full year sales still shrank due to consumer electronics weakness that is expected to persist.
Retirement housebuilder McCarthy & Stone was higher on the back of improved trading in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years.
Market Movers
FTSE 100 (UKX) 7,070.88 -0.38%
FTSE 250 (MCX) 18,073.20 0.52%
techMARK (TASX) 3,571.76 -0.14%
FTSE 100 - Risers
Next (NXT) 4,712.00p 3.93%
International Consolidated Airlines Group SA (CDI) (IAG) 376.10p 3.69%
Marks & Spencer Group (MKS) 332.00p 3.27%
Travis Perkins (TPK) 1,475.00p 3.22%
Whitbread (WTB) 3,887.00p 3.16%
easyJet (EZJ) 900.50p 2.86%
Taylor Wimpey (TW.) 147.70p 2.71%
Burberry Group (BRBY) 1,516.00p 2.50%
ITV (ITV) 177.70p 2.42%
Lloyds Banking Group (LLOY) 53.64p 2.41%
FTSE 100 - Fallers
Old Mutual (OML) 197.50p -5.64%
Glencore (GLEN) 221.90p -2.68%
Capita (CPI) 584.00p -2.42%
Fresnillo (FRES) 1,647.00p -2.26%
BHP Billiton (BLT) 1,239.00p -2.21%
Mediclinic International (MDC) 898.00p -2.18%
Rio Tinto (RIO) 2,679.50p -1.94%
Shire Plc (SHP) 5,220.00p -1.93%
Centrica (CNA) 212.20p -1.76%
Legal & General Group (LGEN) 214.50p -1.65%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 205.00p 16.54%
Sports Direct International (SPD) 293.50p 8.50%
Victrex plc (VCT) 1,753.00p 8.08%
McCarthy & Stone (MCS) 173.30p 6.32%
Allied Minds (ALM) 369.30p 5.39%
Pagegroup (PAGE) 366.50p 5.07%
Ted Baker (TED) 2,530.00p 4.76%
Millennium & Copthorne Hotels (MLC) 450.10p 4.43%
Riverstone Energy Limited (RSE) 1,200.00p 4.35%
Domino's Pizza Group (DOM) 372.70p 3.64%
FTSE 250 - Fallers
Hochschild Mining (HOC) 253.60p -5.09%
Centamin (DI) (CEY) 148.20p -4.63%
Tullow Oil (TLW) 269.00p -4.07%
Acacia Mining (ACA) 459.10p -3.53%
Meggitt (MGGT) 457.70p -2.49%
Vedanta Resources (VED) 642.00p -2.43%
Laird (LRD) 316.00p -1.86%
Greencore Group (GNC) 303.10p -1.78%
CYBG (CYBG) 259.40p -1.74% |
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| | US Market Report | | US open: Fedspeak hits shares Wall Street's main stock market averages fell back in the wake of the latest dose of Fedspeak and following disappointing results from aluminum maker Alcoa.
Speaking in Sydney, Chicago Fed president Charles Evans said progress on inflation had been unsatisfactory thus far.
Nevertheless, and on the subject of the next potential interest rate hike, he added that "one move isn't that big of a deal either way".
That was enough to send US Treasuries lower and spark selling in the equity space, pushing the yield on the benchmark up by three basis points to 1.75%.
Evans's remarks were made ahead of the release of the minutes of the Fed's last policy meeting and speeches from two more Fed speakers scheduled for the following session.
In turn, as of 1618 BST, the Dow Jones Industrial Average was off 0.87% to 18,160.57, the S&P 500 down 1.02% at 2,141.69 and the Nasdaq Composite was losing 1.11% %.
Jamieson Blake, retail sales manager at ADS Securities London, said: "It's a relatively quiet day ahead in terms of economic data for US markets, although by all accounts the key release today will be Alcoa's earnings update, nominally kicking off the quarter's reporting season.
"As it stands, Wall Street is eyeing a slightly softer start with continued appreciation of the greenback making dollar denominated assets look generally expensive. This earnings season sits squarely on top of the closing phase of the US Presidential election, so any notable bias in the fortunes of corporates could end up tipping the balance in either direction. Alcoa is just the starting point here but it seems inevitable that this strand of news will provide another layer of volatility for markets in the coming weeks."
Meanwhile, oil prices were weaker after racking up strong gains in the previous session when Russian President Vladimir Putin told an energy congress in Turkey that the nation was ready to join OPEC in a proposed curb on production. West Texas Intermediate was down 1.4% at $50.65 a barrel and Brent crude was off 1.6% to $52.28.
In currency markets, the dollar continued to gain ground, with the pound down 1.24% to $1.2208 as leaked Treasury documents suggested that leaving the single market could cost the UK £66bn a year in lost taxes.
On the corporate front, Twitter shares rose following a Reuters report on Monday that Salesforce is still mulling a bid for the company. |
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| | Broker Tips | | Broker tips: Jupiter Fund, McCarthy & Stone, miners Jupiter Fund Management got a boost on Tuesday as Barclays upgraded the stock to 'overweight' from 'equalweight' and lifted the price target to 525p from 420p to reflect a sector re-rating and earnings per share upgrades.
The bank said Jupiter had "remarkably resilient" net inflows in the first half of 2016. It said that despite having the strongest weighting to equities within its assets under management mix at 80% - and around 25% AUM invested in European equities - most of its net inflows have been from the Dynamic/Strategic Bond range.
"These are benefitting from trends of UK investors' preference for bonds and hunt for yield," Barclays said.
"Overall, Jupiter's high-quality fund range and dividend income appeal (around 6% yield) stands out amongst peers in our opinion, but valuation at about 15x 2017 PE is at a discount to sector average of around 16x, which seems unjustified given superior flow momentum."
The upgrade came as Barclays took a look at the broader European asset managers, reiterating its 'underweight' rating on both Aberdeen Asset Management and Ashmore, with new price targets of 300p from 270p and 325p from 270p, respectively.
The bank kept Schroders at 'equalweight' and lifted the price target to 3,030p from 2,850p.
UBS downgraded BHP Billiton to 'neutral' from 'buy' as it took a look at the mining sector, lifting the price target to 1,300p from 1,200p, saying the risk/reward was now balanced after a strong recovery in the share price.
It noted the shares are up 63% year-to-date, outperforming Rio Tinto by 28%.
"In our opinion, the risk/reward is more balanced as we expect iron ore and coal prices to fall back over the next 3-6 months, and oil prices to be stable," the bank said.
UBS said it still believes BHP is well positioned to generate robust free cash flow in a challenging price environment, with well-invested assets supported by a relatively attractive mix and savings from the new streamlined structure.
The bank also downgraded South32 to 'neutral' from 'buy' on the near-term price outlook, but upped the price target to 155p from 130p.
Again, it said the risk/reward is now more balanced following a share price rise of 194% year-to-date.
"The risk/reward is more balanced as we expect coal and manganese prices to fall back over the next three to six months with spot FCF yield to fall from around 15% currently to around 10% on the UBS price deck."
In addition, it said the stronger rand was becoming a meaningful headwind.
UBS upgraded Anglo American to 'neutral' from 'sell' and lifted the price target to 950p from 740p saying strong FCF and deleveraging reduces the risk of asset disposals at bottom of the cycle prices.
Canaccord Genuity initiated coverage of McCarthy & Stone at 'buy' with a 185p price target, noting it is the dominant market leader with a strong brand in the private retirement housing market.
"We have a generally positive view of the UK house-building sector and believe that McCarthy & Stone offers an investment opportunity in a very attractive niche within the sector."
The brokerage highlighted the group's clear strategy of delivering strong organic growth supported by a positive demographic backdrop. It said the medium-term demand outlook is favourable for the McCarthy to meet its strategic objectives, with an industry shortfall of supply that it is well positioned to help address in coming years.
"The balance sheet is relatively strong with minimal financial risk. While a more challenging macro backdrop over the coming twelve months may delay reaching its FY 2019 targets, we do expect the group to deliver good growth, returns and value over the medium term as it benefits from its strong position in a market with a very attractive long-term outlook."
Canaccord said that following the re-rating of the shares, they now offer good medium-term value. It noted the shares now sit at discount to the IPO price of 180p and sector average valuation. | | |
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