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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: Miners lead equities higher London stocks finished higher on Tuesday, led by mining shares as metal prices rose.
The FTSE 100 closed up 0.45% to 7,017.654 points.
Anglo American was one of the biggest risers on the FTSE 100 after the group reiterated its full year guidance and reported an increase in third quarter production of diamond, nickel and iron ore.
Glencore racked up strong gains, hitting a 15-month high after it emerged the company had agreed a much-improved coal deal with an important Japanese buyer.
Sector peers Rio Tinto and Antofagasta rallied on the back of a rise in copper, silver and gold prices.
Going the other way, GKN shares declined after it posted slower growth and lower trading margins for the nine months to the end of September.
Whitbread slumped as the company reported an increase in first half profits at its Premier Inn hotels arm but a dip in profits from Costa coffee shops.
Intu Properties was on the back foot as it cautioned that new rental incomes might grow more slowly in 2017.
On the macroeconomic front, Bank of England Governor Mark Carney said the drop in the value of the pound had been "fairly substantial" as he addressed the House of Lords on Tuesday.
Carney said the BoE would take the currency moves into account when setting policy but reiterated that the central bank did not target a particular level of sterling.
He blamed uncertainty surrounding the Brexit vote for the weaker pound.
"Sterling starts to really move as it becomes clearer the timing of the Article 50 triggering, and the market's perception - and I really underscore it's the market's perception - of what the potential relationship will be between the United Kingdom and Europe," Carney said.
Ahead of Carney's speech, Chancellor Philp Hammond said that he wanted to prioritise the country's financial service sector in the government's Brexit negotiations. He also said he could not imagine rejecting the BoE's bond buying programme, which sent the pound lower against the dollar in afternoon trade.
The pound dropped 0.66% to $1.2157 at 1639 BST.
In other UK news, the government approved a third runway for Heathrow. The decision ends a long-running dispute over whether to expand at Heathrow or Gatwick.
Elsewhere, a report from the Ifo Institute showed German business confidence rose to the highest level in more than two years in October. Ifo's business climate index climbed to 110.5 from 109.5 in September, beating expectations of 109.6.
In the US, the Conference Board's consumer confidence index dropped to 98.6 in October from 103.5 in September, worse than forecasts of 101. The reading for September was revised down from a previous 104.1.
Meanwhile, oil prices wavered on doubts of a deal to curb production being reached at next month's OPEC meeting. Iraq signalled over the weekend that it would not take part in an agreement to limit output while Russia is now also reportedly in opposition to the proposal.
Brent crude fell 1.2% to $50.85 per barrel and West Texas Intermediate declined 0.97% to $50.03 per barrel at 1651 BST. |
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| Market Movers
FTSE 100 (UKX) 7,017.64 0.45%
FTSE 250 (MCX) 17,801.85 -0.33%
techMARK (TASX) 3,429.43 -0.12%
FTSE 100 - Risers
Anglo American (AAL) 1,114.00p 4.55%
Rio Tinto (RIO) 2,796.00p 4.50%
Glencore (GLEN) 246.15p 3.60%
Randgold Resources Ltd. (RRS) 7,200.00p 3.08%
BHP Billiton (BLT) 1,261.00p 3.02%
Antofagasta (ANTO) 540.50p 2.95%
BT Group (BT.A) 387.70p 2.65%
Royal Bank of Scotland Group (RBS) 192.30p 2.29%
Fresnillo (FRES) 1,643.00p 1.86%
BP (BP.) 495.15p 1.68%
FTSE 100 - Fallers
Whitbread (WTB) 3,699.00p -3.75%
Travis Perkins (TPK) 1,346.00p -3.30%
GKN (GKN) 313.90p -2.88%
Pearson (PSON) 746.50p -1.97%
Next (NXT) 4,720.00p -1.81%
Intu Properties (INTU) 286.20p -1.72%
TUI AG Reg Shs (DI) (TUI) 1,029.00p -1.53%
Capita (CPI) 606.50p -1.46%
Associated British Foods (ABF) 2,440.00p -1.41%
Barratt Developments (BDEV) 469.00p -1.39%
FTSE 250 - Risers
Kaz Minerals (KAZ) 280.70p 5.57%
Cobham (COB) 145.90p 4.44%
Phoenix Group Holdings (DI) (PHNX) 755.50p 3.90%
Vedanta Resources (VED) 705.00p 3.45%
National Express Group (NEX) 367.00p 3.23%
Evraz (EVR) 213.30p 2.99%
Acacia Mining (ACA) 540.50p 2.95%
OneSavings Bank (OSB) 292.00p 2.35%
Petra Diamonds Ltd.(DI) (PDL) 150.50p 1.90%
Inmarsat (ISAT) 695.00p 1.83%
FTSE 250 - Fallers
Countrywide (CWD) 185.30p -8.27%
Laird (LRD) 157.50p -5.97%
Howden Joinery Group (HWDN) 381.00p -4.39%
AO World (AO.) 166.50p -4.37%
Mitchells & Butlers (MAB) 271.70p -3.86%
Dairy Crest Group (DCG) 605.00p -3.74%
Aldermore Group (ALD) 169.50p -3.58%
GVC Holdings (GVC) 679.50p -3.41%
Shawbrook Group (SHAW) 235.70p -3.12%
Savills (SVS) 701.00p -2.77% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end flat to lower as oil prices reverse course European stocks ended flat to slightly lower on Tuesday, unable to hold on to earlier gains as oil prices reversed course.
The benchmark Stoxx Europe 600 index ended down 0.4%, France's CAC 40 fell 0.3% and Germany's DAX closed flat.
Oil prices gave back earlier gains to trade lower amid fears members of the Organization of the Petroleum Exporting Countries could walk away from next's month's meeting with no agreement following reports Russia and Iraq might not take part in the proposed production cut. West Texas Intermediate was down 1.2% at $49.94 a barrel and Brent crude was off 1.4% at $50.74.
Earlier in the day, stocks had been trading a little higher, underpinned by an upbeat reading on German business confidence and strength in the basic resources sector, which gained on the back of firmer copper prices.
The Ifo Institute's business climate index rose to 110.5 from 109.5 in September, reaching its highest level since April 2014 and beating expectations for a small drop.
The assessment of current conditions edged up to 115.0 from 114.7 and the forward-looking expectations index increased to a two-year high of 106.1 from 104.5.
Pantheon Macroeconomics said: "These are strong data, and suggest that the German economy started Q4 on a very strong note. Indeed, if we continue to see these numbers, it would suggest that GDP growth is accelerating."
On the corporate front, Italian banks were a drag as shares in Banca Monte dei Paschi di Siena and UniCredit were suspended from trading after the former announced plans to cut 2,600 jobs, close 500 branches and sell bad debt. Both stocks ended in the red.
Switzerland's Novartis slipped back despite reporting an increase in third-quarter net income, while aerospace and automotive engineering group GKN was also in the red after it posted slower growth and lower trading margins for the nine months to the end of September.
Whitbread also declined. The company sprinkled a 5% dividend hike on a strong set of interim results, but investors overlooked acceleration at the Premier Inn hotels arm to focus on a dip in profits from Costa coffee shops.
On the upside, Randstad was a high riser after the Dutch recruiter posted a 9% jump in third-quarter adjusted earnings before interest, taxes and amortisation, beating analysts' expectations.
Air Liquide advanced after saying third-quarter revenue was up 24%, boosted by its acquisition of Airgas Inc, while Orange rose after reporting an increase in third-quarter international sales.
Asset manager St James's Place rallied after reporting a 21% rise in gross inflows for the latest three-month stretch to reach £2.8bn, with the political uncertainty after the referendum not having had any distinguishable impact on its day-to-day business. |
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| | US Market Report | | US open: Stocks mixed in run up to Apple's Q4 earnings US equities were mixed on Tuesday as a deluge of earnings were posted and traders awaited Apple's fourth quarter results after the markets close.
At 1528 BST, the Dow Jones Industrial Average was up 0.01% to 18,225.63 points whereas the S&P 500 fell 0.11% to 2,148.97 points and the Nasdaq declined 0.16% to 5,301.39 points.
Oil prices retreated, as Brent crude dropped 0.48% to $51.21 a barrel and West Texas Intermediate was down 0.318% to $50.36 at 1515 BST.
"All eyes will be on Apple when it will announce its quarterly performance", Naeem Aslam, chief market analyst atThinkMarkets, said. "Tim Cook has promised that services such as iTunes and other similar lines of business will start to make a meaningful figure for the firm's revenue.
"The biggest flop in phone launch history - Samsung Note 7- represented some real opportunities for Apple and the question is: does Apple have what it takes to break these loyal customers, not their phones only, but also the ecosystem? We are certainly not there yet and given the new secret investment projects the firm has taken on, we think the future is great."
Pharmaceutical giant Merck's shares were up 1.65% as the company reported better-than-expected third quarter revenue due to an increase of vaccine and cancer drug sales.
Sales rose 5% to $10.54bn compared to last year, which was above analysts' expectations of $10.18bn.
Car maker General Motors' third quarter earnings also beat expectations as revenue edged up 10% to $42.83bn, a quarterly record and higher than the $39.3bn anticipated by analysts. Its shares were down 3.34%.
Shares Procter & Gamble climbed 4.33% after the consumer goods behemoth maintained the trend as it posted better than anticipated first quarter earnings, helped by strong demand for home care goods.
Sales were largely flat at $16.52bn, but the company beat expectations of $16.49bn.
Meanwhile, consumer confidence fell to 98.6 in October from 103.5 in September. The index was forecast to drop to 101.
Paul Sirani, chief market analyst at Xtrade, said: "Consumer confidence rose in September to its highest level in nine years, but that positivity has proven short-lived for Federal Reserve Chair Janet Yellen following a worse than expected October reading.
"Although the US economy is performing well on the whole, Yellen has been singled out for criticism by presidential candidate Donald Trump, who claims she is keeping interest rates low for political reasons. And it seems highly unlikely that she will pull the trigger before the presidential race in November, with a December rise more likely."
The S&P/Case-Shiller home price index rose by 5.3% for the year ended in August, an increase from 5% in July.
The 20-city composite index increased to 5.1% year-over-year, up from 5% in July and the 10 city composite index also rose 4.3%, up 4.1 from the prior month.
The Fed's Dennis Lockhart is due to speak at 1820 BST and he is possibly the last speaker to comment before a blackout next week, although he is a non-voting member of the committee until 2018. |
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| | Broker Tips | | Broker tips: Howden Joinery Group, Segro, Countrywide Howden Joinery Group shares dropped on Tuesday as Berenberg lowered its recommendation on the stock to 'hold' from 'buy' and cut the target to 450p from 550p.
Berenberg said the supplier of kitchens and joinery products is seemingly one of the most exposed companies in its UK mid-cap coverage to an economic slowdown in the UK.
In its kitchens business, Howden sells one-off, big-ticket items for which demand is driven by consumer confidence, disposable income and a desire to invest in housing stock.
Recent data on UK repair, maintenance and improvement (RMI) peers has been subdued and sharp foreign exchange movements have been creating headwinds on gross margins. Berenberg said these issues are raising general anxiety about Howden.
Shares have fallen 22% in the year to date in reaction to the headwinds. Berenberg said the third quarter update due at the start of November will be key.
"Our view is that Howden is a well run, high return on capital employed company with a very solid balance sheet and a strong competitive position," Berenberg said.
"However, acknowledging the near-term pressure on like-for-like growth and FX headwinds, we cut our numbers 3-11% over the 2016-18 period and downgrade our rating to 'hold'."
Berenberg believes the RMI market may remain subdued given ongoing Brexit uncertainty and rising inflation putting pressure on real disposable incomes.
While the broker expects Howden to continue to take market share, it has reduced its LFL growth forecasts to 5%/4%/3% for fiscal years 2016/17/18 respectively.
Continued sterling weakness is affecting the company as one third of its cost of goods sold are traded in euros and dollars. At the first half results on 21 July, the group reported a £20m increase in COGS but said it managed to offset some of the impact through price rises.
"Clearly, FX rates have worsened since then, leading us to cut our 2017E gross margin estimate to 62%," Berenberg said.
"Furthermore, each 0.5% gross margin hit (all else being equal) has a c3% effect on PBT, resulting in our earnings forecasts falling considerably."
Berenberg concluded that it thinks there will be a time to revisit Howden but it needs to see more visibility on the UK consumer outlook before regaining confidence.
Segro got a boost on Tuesday as Barclays lifted the stock to 'overweight' from 'equalweight' and upped the price target to 520p from 450p, saying the company was the largest and most liquid way to play the logistics investment theme.
Barclays noted that the structural challenges facing retail landlords have been well documented for many years now, adding that the advent of e-tailing has changed consumption habits and will continue to do so.
"Despite the challenges facing retail there are equal opportunities for logistics landlords. Adjusting supply chains to service not just stores but also customers directly will require considerable changes to the real estate infrastructure of the sector, moving it away from its historically low barrier/low growth reputation. Logistics portfolios that are well positioned to service the new demand should deliver strong growth for many years to come, in our opinion."
It said Segro's "good quality, well located portfolio is well positioned to benefit".
With around 40% of the portfolio located in greater London - including Heathrow and Park Royal campuses - Barclays reckons the group is well placed to serve the growing need for urban logistics.
In addition, it said that having recently replenished the land bank through several purchases, Segro is well positioned to deliver "excellent development returns" as it helps supply the required real estate solutions to these changing supply chains.
Barclays said that as illustrated by the recent equity raise, Segro has good access to capital and will be well placed to grow along with the sector.
"With private developers still struggling to get debt finance, we believe Segro is in a strong position."
Countrywide was under the cosh on Tuesday as Jefferies downgraded the stock to 'hold' from 'buy' and slashed the price target to 180p from 300p.
The bank cut its calendar year 2016 earnings per share estimate by 24% and its estimate for 2017 by 31% on the back of weak housing transaction data from the Land Registry, weak mortgage approval data and its view that Countrywide will scale back its expansion for as long as stamp duty levels and Brexit uncertainties temper activity in the UK housing market.
The Land Registry published data for June last week that showed transactions in England were down 32% year-on-year and 54% in inner London. In the year to 30 June, housing transactions were down 5% in England and 16% in inner London.
Jefferies argued that the last two stamp duty changes have disrupted the UK housing market, slowing the upper end and causing to unusual behaviour in the buy-to-let market.
"What should have been a period of short-term pain, while price expectations adjust, is still slowly playing out. We also believe that the creation of a two-tier stamp duty market acts as a brake on transaction levels. When we add 'Brexit uncertainty' into the mix, potential homebuyers have more reason to play a waiting game with respect to house purchases, and falling transaction levels are a key driver of our estimate cuts today. | | |
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