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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: Stocks fall as pound strengthens and investors await FOMC minutes The FTSE 100 closed in the red as investors awaited the latest Federal Reserve meeting minutes and as the pound recovered.
London's top tier index dropped 0.66% to 7,024.01 points while the pound rose 0.59% versus the dollar to $1.2195.
Sterling regained ground after May caved into pressure to allow Tory MPs to vote for a Labour motion calling for greater scrutiny of her proposals in Britain's exit from the European Union. However, she ruled out letting parliament vote on whether to trigger Article 50, the formal Brexit procedure.
May has said she will invoke Article 50 by the end of March.
"Investors haven't appreciated operating in the dark over the UK's Brexit terms," said Jasper Lawler at CMC Markets. "The prospect of a bit more transparency from Theresa May could mark the beginning of more stable trading in the pound."
Bank of England official John Cunliffe also tried to soothe worries about Brexit by saying it is "highly unlikely" that major financial institutions will move to European cities once Britain leaves the EU.
Speaking at the House of Lord's EU Affairs Sub-Committee on Wednesday, the Deputy Governor for Financial Stability also warned that government negotiations in trying to keep passporting rights will be a difficult progress.
Elsewhere, investors are looking ahead to the Federal Reserve's minutes on its 20-21 September meeting when policymakers decided against an interest rate hike increase but said they expected at least one hike by the end of the year. The market will be closely scrutinising the minutes for clues on the timing on the next rate rise. The minutes will be published at 1900 BST.
Oanda's Craig Erlam said: "Three of the 10 voting FOMC members dissented at the last meeting, all of whom are permanent voters, which would strongly suggest that a majority is not far away, not with a number of other policy makers appearing to lean that way, including chair Yellen herself.
"The minutes today could offer good insight into just how close others are to voting for a hike, what it is they want to see before doing so and just how many voters are currently on the fence. We tend to have quite a good idea of all this from the large number of appearances we now get from Fed officials, but more information is always welcome and could spark some volatility in the markets."
In company news, EasyJet flew higher after the budget airline priced the issue of €500m bonds maturing in October 2023 at a coupon of 1.125%. Cantor Fitzgerald said the low coupon rate was attractive.
International Airlines Group also rallied on the rebound in the pound and as a rescue plan for Monarch with its biggest shareholder lifted sentiment in the sector.
Lloyds Banking Group declined after confirming plans to axe 1,230 jobs as it looks to cut costs and improve shareholder returns as part of its three-year strategy.
Peers RBS and Standard Chartered were also on the back foot.
Investors lost their appetite for Domino's Pizza after the company reported a slowdown in growth at its UK operations, although it did confirm it is on track to meet full-year expectations.
Recruiter PageGroup gained after Kepler Cheuvreux lifted the stock to 'hold' from 'reduce'.
On the commodities front, oil prices fell with Brent crude down 1.1% to $51.83 per barrel and West Texas Intermediate down 1.4% to $50.07 per barrel. |
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| Market Movers
FTSE 100 (UKX) 7,024.01 -0.66%
FTSE 250 (MCX) 17,956.28 -0.65%
techMARK (TASX) 3,535.77 -1.01%
FTSE 100 - Risers
Glencore (GLEN) 236.20p 6.44%
Direct Line Insurance Group (DLG) 362.60p 3.30%
Aviva (AV.) 455.70p 1.90%
Centrica (CNA) 215.50p 1.56%
Capita (CPI) 591.50p 1.28%
Legal & General Group (LGEN) 217.00p 1.07%
Rio Tinto (RIO) 2,707.50p 1.04%
Anglo American (AAL) 1,041.50p 1.02%
International Consolidated Airlines Group SA (CDI) (IAG) 379.40p 0.88%
Standard Life (SL.) 348.90p 0.87%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 143.70p -2.71%
Rolls-Royce Holdings (RR.) 754.00p -2.65%
Dixons Carphone (DC.) 333.30p -2.54%
Smith & Nephew (SN.) 1,215.00p -2.33%
Royal Bank of Scotland Group (RBS) 176.90p -2.27%
Whitbread (WTB) 3,800.00p -2.24%
Barclays (BARC) 168.55p -2.23%
Hargreaves Lansdown (HL.) 1,232.00p -2.22%
Standard Chartered (STAN) 654.30p -2.15%
Persimmon (PSN) 1,691.00p -2.14%
FTSE 250 - Risers
Evraz (EVR) 216.70p 3.68%
Mitie Group (MTO) 206.40p 3.30%
Pagegroup (PAGE) 379.90p 3.26%
Booker Group (BOK) 175.60p 2.21%
Electrocomponents (ECM) 371.20p 1.98%
Countryside Properties (CSP) 235.10p 1.86%
Kaz Minerals (KAZ) 260.40p 1.68%
Cairn Energy (CNE) 210.50p 1.45%
Vedanta Resources (VED) 651.00p 1.40%
CYBG (CYBG) 262.90p 1.35%
FTSE 250 - Fallers
Domino's Pizza Group (DOM) 353.50p -5.15%
Sports Direct International (SPD) 279.70p -4.70%
IP Group (IPO) 152.20p -4.70%
Polypipe Group (PLP) 270.60p -3.39%
Britvic (BVIC) 571.00p -3.14%
Pets at Home Group (PETS) 220.00p -3.04%
Sophos Group (SOPH) 252.80p -2.73%
Just Eat (JE.) 548.50p -2.66%
Countrywide (CWD) 202.10p -2.65% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks little changed ahead of Fed minutes European stocks wavered in a tight range on Wednesday but closed near their lows of the session as bond prices retreated while investors waited for the release of the latest Federal Reserve minutes later in the day, with Ericsson under the cosh after a profit warning.
The benchmark Stoxx Europe 600 slipped 0.47%, Germany's DAX was down 0.51% and France's CAC 40 was 0.44% lower.
In currency markets, the pound was up 0.87% versus the dollar at $1.2228 on news that Prime Minister Theresa May has agreed to a debate about her plans for taking the UK out of the European Union, raising hopes that this would help curb her push for a hard Brexit.
Spreadex's Connor Campbell said: "It's not a formal vote on the issue, but it's better than nothing, and has momentarily put to bed the fears of a hard exit from the EU, allowing sterling a chance to recapture some lost ground. Of course the pound is barely above $1.22 and €1.10, so it's hardly a champagne-worthy rise. Nevertheless those traders that have been desperately fishing about for sterling's bottom may be breathing a sigh of relief this morning."
Oil prices were fairly steady, with West Texas Intermediate slipping 1.44% to end at $50.07 a barrel and Brent crude off 1.11% to $51.83.
On the corporate front, shares in Swedish telecom equipment firm Ericsson got slammed after it warned on profit, saying third-quarter earnings will be "significantly lower" than expected amid falling sales in its core mobile-network equipment business. Peer Nokia also fell sharply.
In London, miner Fresnillo slipped back after a quarterly production report, while shares in Premier Foods tanked after it warned that first-half trading profit was likely to be slightly below the previous year and posted a drop in second-quarter sales due to warmer weather.
Lloyds was under pressure after the bank revealed plans to axe 1,230 jobs as it looks to cut costs and improve shareholder returns as part of its three-year strategy.
On the upside, chemical maker BASF advanced after it reported a smaller-than-expected drop in quarterly profit, while E.ON and RWE edged up following a report the German government has reached an agreement with the utility industry on nuclear decommissioning.
On the macroeconomic calendar, figures from Eurostat showed eurozone industrial production rebounded surprisingly strongly in August.
Industrial production among euro area countries bounced back by 1.6% from the previous month, beating forecasts for a 1.1% rise following the 1.1% decline in July.
In the wider European Union, production was up 1.4%.
Compared to last year, Eurozone industrial production was up 1.8%, ahead of expectations for a 1.5% improvement.
Eurostat said the increase in euro area was due to production of durable consumer goods rising by 4.3%, capital goods by 3.5%, energy by 3.3% and intermediate goods by 1.4%, while production of non-durable consumer goods fell by 0.6%.
The latest FOMC minutes are at 1900 BST. Societe Generale said they could reveal the extent of the discord at the Fed.
"There were three dissenters but also three officials who now see no rate hike this year versus none who took that stance in June. So it will be important to gauge how far apart officials are. |
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| | US Market Report | | US open: Stocks mixed ahead of FOMC meeting minutes US stocks were mixed as investors awaited the Federal Reserve's September meeting minutes for clues on the timing on the next interest rate hike.
At 1600 BST the Dow Jones Industrial Average rose 0.1% to 18,130.04 points, the S&P 500 increased 0.07% to 2,138.26 points while the Nasdaq dropped 0.10% to 5,241.17 points.
At the same time oil prices fell with West Texas Intermediate crude down 1.4% to $50.05 per barrel and Brent crude down 1.2% to $51.78 per barrel.
Traders are looking ahead to the Fed's minutes of the 20-21 September policy meeting when policymakers decided to keep interest rates unchanged but said they expected at least one hike later this year. The minutes will be published at 1900 BST.
Oanda's Craig Erlam said: "Three of the 10 voting FOMC members dissented at the last meeting, all of whom are permanent voters, which would strongly suggest that a majority is not far away, not with a number of other policy makers appearing to lean that way, including chair Yellen herself.
"The minutes today could offer good insight into just how close others are to voting for a hike, what it is they want to see before doing so and just how many voters are currently on the fence. We tend to have quite a good idea of all this from the large number of appearances we now get from Fed officials, but more information is always welcome and could spark some volatility in the markets."
Societe Generale said that overall, the risks were biased towards the hawkish side, keeping the door open for a December rate hike.
Ahead of the minutes, New York Fed President Bill Dudley said since US inflation remains low and economic expansion could last at least five years, the Fed can be "gentle" in removing monetary stimulus.
"We're at a point where the economic expansion has plenty of room to run," he said.
"Inflation is a little below our target, rather than above our target, so I think we can be quite gentle as we go in terms of gradually removing monetary policy accommodation,"
Meanwhile, Alcoa shares slipped after kicking off the third quarter earnings season with weaker-than-expected numbers.
Amazon.com nudged just a touch higher after announcing plans on Tuesday to introduce convenience stores |
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| | Broker Tips | | Shire: Goldman Sachs keeps at buy with a target price of 6300p. Page Group: HSBC reiterates hold, 385p target.
McCarthy & Stone: UBS keeps at sell with a 150p target.
Arrow Global: Macquarie reiterates outperform with a 335p target.
Electrocomponents: Citigroup keeps at neutral with a 375p target.
Vodafone: Goldman Sachs keeps at neutral with a target price of 275p.
Pearson: Deutsche Bank reiterates sell with a target price of 770p.
ITV: UBS stays at neutral with a 170p target.
Anglo American: Macquarie reiterates neutral with a target of 815p.
Sky: UBS maintains buy with a 1310p target.
Ted Baker: Jefferies keeps at buy with a 2820p target.
Burberry: UBS reiterates buy with a 1800p target. | | |
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