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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 end lower as ECB leaves policy unchanged London stocks finished flat on Thursday as the European Central Bank left policy measures unchanged and said it had not discussed extending or ending its asset purchase programme.
The FTSE 100 closed up 0.07% to 7,026.90p.
The ECB's Governing Council decided to maintain its asset purchase programme at €80bn per month until March 2017, as expected by analysts.
The central bank voted to leave interest rates at 0%, the marginal lending facility at 0.25% and the deposit facility at -0.40%, which was also anticipated.
At a press conference following the policy announcement, Draghi said policymakers left the question of its QE programme off the table in their discussions.
However, Draghi hinted that policymakers may extend the programme beyond March later in the year. He said the ECB is currently re-examining the design of the QE programme and would take a decision at the 8 December meeting.
"With both the QE extension and QE taper topics being left to December, perhaps the most telling comments came when Draghi went off script to speculate that he felt an abrupt end to asset purchases was very unlikely," said IG market analyst Joshua Mahony.
"With just four months of QE left to run and no taper process in place, it seems that March 2017 will not be the final month of asset purchases. Mario Draghi would have been happier to put out a sign on the front door saying 'come back in December'."
In the UK, data for September from the Office for National Statistics showed retail sales were flat compared to August, an improvement from the 0.3% fall a month ago but short of a 0.2% rise expected by economists.
The headline year-on-year growth figure showed a 4.0% increase, down from the 6.2% revised gain for the previous month and short of the consensus forecast of 4.4%.
For the third quarter as a whole, retail sales rose 1.88%, which was the best quarter since the end of 2014.
Economist Howard Archer at IHS Markit said quarterly growth fuelled the belief that the consumer played a leading role in the apparent resilience of the economy following June's Brexit vote, but saw conflicting forces at play in the disappointing September numbers.
He said the flat retail sales "could be a sign that consumers are starting to rein in their spending as inflation rises", but accepted the effect of warm weather on demand for autumn clothing and higher clothing prices.
Another report showed UK construction workloads lifted slightly in the third quarter, though growth in London was depressed by Brexit uncertainty.
The Royal Institution of Chartered Surveyors (RICS) quarterly construction market survey found a balance of 19% of surveyors reported an increase in current construction workloads in the quarter, up from 17% in the preceding period.
In the US, initial jobless claims rose by 13,000 to a seasonally adjusted 260,000 in the week ended 15 October. Economists had forecast 250,000 claims.
Meanwhile, oil prices retreated on a stronger dollar and profit taking after a strong rally in the previous session when data from the US Energy Information Administration showed a surprise drawdown in crude inventories last week and Saudi Arabia said countries outside OPEC would be willing to join the cartels plan to cut production.
Brent crude dropped 2.4% to $51.43 per barrel and West Texas Intermediate declined 2.08% to $50.76 per barrel at 1644 BST.
On the company front, airline stocks were given a boost on a positive read-across from a surprise full-year profit target rise by Lufthansa. International Consolidated Airlines and easyJet rallied.
Banking stocks were higher as data showed UK gross mortgage lending reached its highest point in September since before the financial crisis hit in 2007.
CML estimated that gross mortgage lending reached £20.5bn in September this year, the highest it has been since September 2007. Compared to September 2015 the figure is 2% higher but compared to the previous month it is 7% lower.
Shares in Barclays, Lloyds Banking Group and Royal Bank of Scotland gained.
Smiths Group and BAE Systems were under the cosh as the FTSE 100-listed companies went ex-dividend.
Sky declined as it unveiled more details of its mobile service, saying it will shortly start registering interest from customers.
Shares in rival broadcaster ITV also dropped on worries about weaker advertising markets. |
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| Market Movers
FTSE 100 (UKX) 7,026.90 0.07%
FTSE 250 (MCX) 17,945.05 -0.53%
techMARK (TASX) 3,488.72 -1.09%
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 186.10p 3.39%
Barclays (BARC) 182.75p 3.02%
Standard Chartered (STAN) 699.20p 2.03%
International Consolidated Airlines Group SA (CDI) (IAG) 400.90p 1.98%
Land Securities Group (LAND) 1,020.00p 1.90%
Ashtead Group (AHT) 1,343.00p 1.59%
Associated British Foods (ABF) 2,528.00p 1.53%
Legal & General Group (LGEN) 210.90p 1.35%
Centrica (CNA) 219.00p 1.30%
Lloyds Banking Group (LLOY) 55.56p 1.26%
FTSE 100 - Fallers
Sky (SKY) 823.50p -3.80%
ITV (ITV) 173.10p -3.73%
WPP (WPP) 1,755.00p -3.57%
Smiths Group (SMIN) 1,434.00p -3.11%
Taylor Wimpey (TW.) 146.80p -2.46%
BAE Systems (BA.) 541.00p -2.26%
Worldpay Group (WI) (WPG) 281.70p -2.26%
Barratt Developments (BDEV) 483.40p -2.05%
Tesco (TSCO) 210.60p -1.98%
Antofagasta (ANTO) 512.50p -1.63%
FTSE 250 - Risers
International Personal Finance (IPF) 300.00p 11.36%
Softcat (SCT) 330.90p 7.96%
Laird (LRD) 168.60p 6.44%
Virgin Money Holdings (UK) (VM.) 326.40p 4.62%
Homeserve (HSV) 624.50p 3.57%
Fidelity China Special Situations (FCSS) 194.00p 2.92%
OneSavings Bank (OSB) 280.10p 2.08%
Allied Minds (ALM) 351.70p 1.91%
Thomas Cook Group (TCG) 68.75p 1.70%
Rathbone Brothers (RAT) 1,794.00p 1.64%
FTSE 250 - Fallers
NCC Group (NCC) 223.00p -35.49%
Keller Group (KLR) 644.50p -27.22%
Senior (SNR) 176.90p -13.37%
Aggreko (AGK) 858.00p -8.72%
Card Factory (CARD) 270.10p -5.92%
Bodycote (BOY) 605.00p -5.39%
IMI (IMI) 1,028.00p -4.28%
Sophos Group (SOPH) 230.50p -4.04%
Hill & Smith Holdings (HILS) 1,114.00p -3.88%
Marshalls (MSLH) 271.20p -3.76% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks buoyed by hopes of more ECB QE European stocks finished the session with moderate gains after European Central Bank chief Mario Draghi hinted at a possible extension of quantitative easing.
The benchmark Stoxx Europe 600 index edged higher by 0.19%, Germany's DAX was up 0.52% and France's CAC 40 was 0.44% stronger.
Speaking after the ECB's policy meeting, Draghi said that an "abrupt ending" to QE was "unlikely"
Commenting on Draghi's remarks, Philippe Gudin and Antonio Garcia Pascual at Barclays Research said: "we believe that members have a preference to wait until December, when they will have updated macroeconomic projections and the conclusions of relevant committees working on QE implementation.
"Based on today's remarks by President Draghi, we continue to believe the ECB will eventually extend the asset purchase programme by 6-9 months, and announce the relaxation of some technical parameters of QE at its December meeting. The pace of future asset purchases may, however, not be decided at the same time, and could be announced only at the March meeting, depending on economic information available at that time."
Meanwhile, oil prices retreated following a strong rally in the previous session after data from the US Energy Information Administration showed a surprise 5.2m drawdown in crude inventories to 468.7m barrels last week and amid growing expectations of an OPEC-led production cut.
West Texas Intermediate was down 1.85% to $50.89 a barrel and Brent crude was off 2.1% at $51.60.
By the closing bell, euro/dollar was down 0.36% to $1.0934.
In corporate news, Deutsche Lufthansa flew higher after upping its profit target for the year on the back of better-than-expected business bookings.
Switzerland's Roche nudged up a touch as it reported a 3% rise in third-quarter sales and confirmed its outlook for 2016.
London Stock Exchange ticked up after it reported a rise in income and revenue for the three months to the end of September.
Rio Tinto drifted lower after lowering its iron ore shipment guidance slightly after it fell 5% the third quarter, reduced by port and rail maintenance.
Swiss food and drinks group Nestle fell after cutting its outlook for the year amid declining food prices.
French advertising agency Publicis lost ground as its third-quarter sales growth missed analysts' expectations.
Anglo-Swiss miner Glencore slipped after announcing plans to sell its rail coal haulage business in the New South Wales Hunter Valley for $1.14bn to Genesee & Wyoming Australia. |
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| | US Market Report | | US open: Stocks mixed after slew of varied corporate results US futures were mixed on Thursday following a slew of corporate results from American Airlines, BNY Mellon, Dunkin' Donuts, Walgreen Boots Alliance and Verizon Communications as markets largely ignored the final presidential debate.
At 1515 BST, the Dow Jones Industrial Average was up 0.13% to 18,226.97 points, but the S&P 500 fell 0.01% to 2,144.10 points and the Nasdaq declined 0.08% to 5,242.24 points.
Oil prices retreated after a strong rally on Wednesday after data from the Energy Information Administration showed an unexpected 5.2m drawdown in crude inventories to 468.7m barrels last week and due to an anticipated OPEC-led production cut.
West Texas Intermediate was down 1.94% to $50.83 a barrel and Brent crude declined 2.11% at $51.58 at 1437 BST.
American Airlines' third quarter earnings fell 56% to $737m from a year earlier as revenue decreased 1% but costs rose 5%, but the airline beat analysts' expectations.
Shares in drugstore giant Walgreens Boots Alliance rose 4.04% after posting a mixed fourth quarter as adjusted earnings topped estimates but revenue fell unexpectedly, while it pushed back its proposed merger with Right Aid.
Adjusted earnings per share came to $1.07, exceeding estimates of $0.99. Revenue was $28.64bn, up from $28.52bn last year, but below forecasts of $29.11bn.
The company had net earnings of $1.03bn, or $0.95 a share, up from $26m or $0.02 a share.
The Bank of New York Mellon Corp's shares rose 4.01% after it reported better-than-expected quarterly profit as it rose 18.8% due to lower costs and a rise in net interest revenue.
The bank said net income attributable to shareholders rose to $974m, or $0.90 per share, from $820m, or $0.74 last year.
Whereas shares in Dunkin' Donuts fell 2.71% as it reported mixed third-quarter results with earnings slightly topping expectations while sales dipped but store sales exceeded estimates. Revenue fell 1.3% to $207.1, the first fall in nearly four years, due to the company selling restaurants.
Verizon communication's shares fell 2.12% as it reported third quarter adjusted earnings of $1.01 per share, beating expectations of $0.99 however, revenue fell 6.7% from last year to $30.94bn with analyst expectations of $31.07bn.
Results from Microsoft and PayPal are expected later on in the day.
Meanwhile, data from the Labor Department revealed that unemployment benefits claims rose last week after spending weeks at a four-decade low.
Jobless claims increased by 13,000 to a seasonally adjusted 260,000 for the week ended 15 October, above the 250,000 consensus.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "We think the recent run of very low claims numbers was due largely to favorable seasonals, an echo of the crash of 2008 and perhaps Hurricane Katrina in 2005. We thought it would take another week to begin to unwind but claims have mean-reverted, almost, this week." |
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| | Broker Tips | | Broker tips: Aggreko, Homeserve Homeserve rallied as Barclays upped the stock to 'overweight' from 'underweight' and boosted the price target by a whopping 170% to 695p after visiting the company's UK and US operations in the last couple of months.
Following the visits, the bank has reassessed its long-standing concerns about the sustainability of the UK profit stabilisation; the lack of US profits 13 years after the business was established; and whether the UK mistakes of 2007-11 were being repeated in the US in a bid to chase customer growth.
As far as the UK business is concerned, it said the product range is now more focused, with enhanced cover for those products that remain, compliance and risk controls are embedded at all levels of the business and customer service is prioritised ahead of volume selling.
Following the visit to the US, Barclays was reassured that many of the changes seen in the UK since 2011 have been replicated across the pond, reducing the regulatory risk in this fast-growing business.
"In short, we found a UK business that had changed beyond recognition compared with our last visit and a US business that post the acquisition of USP looks to be very well positioned to finally deliver meaningful profit progress."
Barclays reckoned that over the next three years, the UK division will deliver low single-digit profit growth and the international operations will deliver three-year earnings before interest, taxes and amortisation compound annual growth rate of 25%. Overall, this drives a three-year earnings per share CAGR of 15%.
In addition, it expects to see improving cash generation after several years of significant systems investment.
Aggreko slumped on Thursday as Credit Suisse downgraded its stance on the temporary power provider to 'underperform' from 'neutral' and slashed the price target to 740p from 1,065p amid increasing competition risks.
The bank said the downgrade reflects material cuts to its medium-term earnings per share estimates and expected returns profile of the group.
"Significant FX tailwinds support 2016E and 2017E EPS, masking assumed pricing pressure in the Argentina rebid process, but our 2018E EPS fall by 15% as we factor in the impact of significant fleet growth from the privately-owned global number 2 player."
CS said that Karpowership (KPS), a subsidiary of Karadeniz Holding, could displace Aggreko as the global number 1.
It noted that KPS expects to end 2016 with a fleet around 60% the size of Aggreko's Utility Power Solutions fleet and on the bank's analysis, has a current fleet and fleet under construction equivalent to 128% of AGK's historically highest return division.
In addition, it pointed out that KPS is pioneering floating liquefied natural gas storage and regasification power plants and water desalination ships. | | |
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