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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: UK stocks subdued on US Thanksgiving as resources in focus UK stocks were in cautious form all day Thursday, with global markets generally subdued as traders in the US put their feet up for a Thanksgiving break.
The FTSE 100 closed up 0.17% to 6,829.20. The FTSE 250 ended the session down 0.18% to 17,590.62.
On the blue-chip upside, several mining and pharma stocks featured, while to the downside the story was written around US rates-sensitive utilities, banks and property.
Oil majors were broadly flat, with investors looking to OPEC's meeting on 30 November in Vienna with a hope the cartel will introduce a production cap. This saw crude trade sideways.
At about 16:28 GMT, West Texas Intermediate was up 0.06% to $47.99 a barrel, while Brent was up 0.02% to $48.96 a barrel.
Jasper Lawler, market analyst at CMC Markets, said the thinner trading volumes on Thanksgiving meant there was minimal movement across European stock markets.
"UK equities under-performed those in mainland Europe, which were slightly higher as German GDP data fell in the third quarter in line with expectations," he said.
Lawler added that there were some some signs European institutions were waking up to rising populism in their midst.
"The ECB used its Financial Stability Review to issue a warning on increasing political uncertainty," he said, noting the FTSE 100 was stuttering around the 6800 level.
Meantime, lawmakers in the European Parliament have voted to adopt a non-binding motion to freeze Turkey's accession to the EU, after a government crackdown on dissent following the failed coup in the country earlier this year.
Chris Beauchamp, chief market analyst at IG, opined that the FTSE was in a holding pattern throughout Thursday, this due to the absence of cue from the US.
"Strength in metals prices has once again done wonders for the mining sector, with copper having staged a remarkable rebound from an equally remarkable selloff earlier in November," he said.
"The entire afternoon has had a sense of children playing about without adult supervision, with this especially clear in currency markets."
In corporate news, Legal & General firmed on the sale of its Netherlands business to London-listed pensions firm Chesnara for €160m.
Water company Severn Trent rose as it posted a 10.8% jump in interim profits before interest and tax to £299.4m.
Rio Tinto nudged up after chief executive Jean-Sebastien Jacques said the mining giant can boost cash flow by $5m over the next five years by a new "productivity drive".
Shares in Domino's Pizza advanced after it increased its long-term target for expanding its UK store presence and reiterated its guidance for 2016 pre-tax profit.
Pub-operator Marston's advanced as it said pre-tax profit and revenue for the year to 1 October grew.
On the downside, Countrywide tumbled as it issued its second profit warning this year, saying core earnings for 2016 would take a hit as a result of the UK's vote to quit the EU. The stock fell sharply Wednesday after the Autumn Statement clampdown on estate agent lettings fees.
Pets at Home fell despite reporting a rise in first-half pre-tax profit and revenues and lifting its interim dividend.
HSS Hire was sharply lower as it said it now expects earnings before interest, taxes and amortisation for the year to be above the prior year but below market views. |
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| Market Movers
FTSE 100 (UKX) 6,829.20 0.17%
FTSE 250 (MCX) 17,590.62 -0.18%
techMARK (TASX) 3,294.36 0.52%
FTSE 100 - Risers
Direct Line Insurance Group (DLG) 358.30p 2.84%
Antofagasta (ANTO) 720.00p 2.57%
Ashtead Group (AHT) 1,496.00p 2.47%
CRH (CRH) 2,706.00p 2.15%
InterContinental Hotels Group (IHG) 3,308.00p 1.78%
Merlin Entertainments (MERL) 437.90p 1.77%
Anglo American (AAL) 1,254.00p 1.33%
Intertek Group (ITRK) 3,221.00p 1.29%
Polymetal International (POLY) 750.50p 1.28%
3i Group (III) 674.00p 1.28%
FTSE 100 - Fallers
National Grid (NG.) 909.90p -2.34%
easyJet (EZJ) 1,022.00p -2.29%
International Consolidated Airlines Group SA (CDI) (IAG) 440.50p -2.24%
DCC (DCC) 6,200.00p -1.98%
Travis Perkins (TPK) 1,401.00p -1.62%
Babcock International Group (BAB) 943.50p -1.31%
Johnson Matthey (JMAT) 3,185.00p -1.21%
Mediclinic International (MDC) 724.00p -1.16%
Severn Trent (SVT) 2,209.00p -1.07%
Persimmon (PSN) 1,729.00p -0.97%
FTSE 250 - Risers
Domino's Pizza Group (DOM) 340.50p 3.21%
Cobham (COB) 168.00p 3.19%
Mitie Group (MTO) 207.90p 3.18%
Marshalls (MSLH) 298.00p 2.87%
Thomas Cook Group (TCG) 80.90p 2.41%
Tullett Prebon (TLPR) 430.00p 2.14%
ICAP (IAP) 490.50p 2.02%
Daejan Holdings (DJAN) 5,850.00p 1.83%
Halma (HLMA) 973.50p 1.78%
Big Yellow Group (BYG) 665.00p 1.76%
FTSE 250 - Fallers
Countrywide (CWD) 169.50p -12.58%
UDG Healthcare Public Limited Company (UDG) 614.50p -6.68%
Paragon Group Of Companies (PAG) 346.50p -6.48%
Pets at Home Group (PETS) 222.70p -4.71%
Euromoney Institutional Investor (ERM) 1,014.00p -4.38%
TalkTalk Telecom Group (TALK) 155.40p -4.07%
Evraz (EVR) 259.60p -4.06%
Mitchells & Butlers (MAB) 246.10p -3.98%
Restaurant Group (RTN) 343.60p -3.94% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks edge higher on thin trading volumes European stocks edged higher amid lower than usual volumes as traders stateside took a break for Thanksgiving.
The benchmark Stoxx Europe 600 index was up 0.31%, Germany's DAX rose 0.25% and France's CAC 40 gained 0.29% and 0.17%.
"The DAX and CAC soon found themselves flat, lacking any real reason to budge following the confirmation of Germany's dismal Q3 growth earlier in the day," said Spreadex analyst Connor Campbell.
German business confidence was fairly steady in November, according to a widely-followed survey. The Ifo Institute's business climate index nudged down to 110.4 from 110.5 in October, just a touch below expectations for it to remain unchanged.
"The German economy seems to be unfazed by the election of Donald Trump as U.S. president," said Ifo President Clemens Fuest.
That followed a report showing that German GDP growth slowed to a 0.2% quarter-on-quarter clip in the third quarter, after rising by 0.4% over the previous three months.
Consumer confidence in the euro area´s largest economy on the other hand ticked higher, with GfK predicting an improvement to 9.8 in its index for December (consensus: 9.7).
Meanwhile, economic growth in Spain slowed as expected in the third quarter with growth at 0.7% according to the country's national statistics institute.
Across the pond, US markets were closed for Thanksgiving and equity trading hours would be shortened on Friday.
"The usual Thanksgiving calm has descended across markets, as European investors reconcile themselves to a day of low volumes and quiet trading," said IG chief market analyst Chris Beauchamp.
Oil prices edged down as investors continued to look to next week's OPEC meeting in the hope that a production cut will be agreed.
West Texas Intermediate was off 0.2% to at $47.88 a barrel and Brent by 0.22% to $48.84 a barrel.
In corporate news, Remy Cointreau was on the front foot after reporting a jump in profit for the six months to the end of September.
Legal & General pushed up after announcing the sale of its Netherlands business to London-listed pensions firm Chesnara for €160m.
Rio Tinto nudged up after chief executive Jean-Sébastien Jacques said the mining giant can boost cash flow by $5m over the next five years by a new "productivity drive".
Insurer Direct Line was a high riser after Morgan Stanley upped the stock to 'overweight' from 'equalweight'.
Shares in Domino's Pizza were looking tasty after it increased its long-term target for expanding its UK store presence and reiterated its guidance for 2016 pre-tdax profit.
On the downside, Thyssenkrupp fell after it posted a 4% drop in full-year profit amid a challenging steel market.
Countrywide tumbled as it issued its second profit warning this year, saying core earnings for 2016 would take a hit as a result of the UK's vote to leave the European Union. The stock had already fallen sharply on Wednesday after Chancellor Philip Hammond unveiled a clampdown on estate agent lettings fees. |
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| | Broker Tips | | Broker tips: Thomas Cook, Direct Line, Paragon Barclays upgraded Thomas Cook to 'overweight' from 'equalweight' and upped the price target to 90p from 75p following the company's full-year results on Wednesday.
It said the absence of any earnings per share downgrades, the re-introduction of the dividend and proactive actions to improve Condor profits suggest Thomas Cook may have reached an inflection point.
The bank has been cautious on the stock for two and a half years but noted that margins and cash have improves, with the full-year 2016 results reassuring, while the valuation is attractive.
Barclays said the results were a bit stronger than expected, with a beat in terms of underlying earnings before interest, which came in at £308m versus company consensus of £296m and the bank's estimate of £297m.
Barclays said that now that the dividend has been reintroduced, there is scope to materially up the payout ratio over the coming years.
The bank pointed out that there are a number of risks to its 'overweight' rating. It highlighted low earnings visibility, with heightened geopolitical risks, intense competition, seasonal cash flow and low margins. In addition, it said UK volumes could soften given sterling weakness and Brexit concerns.
"Risks are elevated. However, TCG could surprise with resilient margins in FY17."
Direct Line got a boost on Thursday as Morgan Stanley upgraded the stock to 'overweight' from 'equalweight' and lifted the price target to 465p from 414p.
The bank said the company's shift towards more own brands business and away from partnership business should lead to higher return on equity, greater customer retention and higher-quality earnings.
MS said that as commission costs decline and retention improves, the acquisition costs over the customer lifetime are lower, driving margins higher. It notes expected return on equity to rise from 16% in 2016 to 17.2% in 2019.
In addition, it highlighted Direct Line's ongoing development and integration of IT infrastructure and said this was a key differentiating factor from other European insurers.
"Year to date, Direct Line has significantly underperformed listed peers, but we believe there is scope for dividend growth to follow the improvement in earnings, with continued special dividends and a gradual rise in the payout ratio over our forecast period.
"We also see earnings from prior year development declining relative to current year earnings, making reserve release sustainability less of a debate."
Bank of America Merrill Lynch downgraded Paragon Group to 'underperform' from 'neutral' on valuation grounds.
It noted the shares are up 5% year to date and 20% above their pre-Brexit levels, with Paragon the best-performing UK specialist lender in its coverage.
The bank increased its price target to 360p from 350p. It said the execution of the move is going "extremely well" as Paragon transitions to a retail funded, diversified banking group, but that the transition is not cost free and "substantial uncertainties" within the environment remain.
"While we fully endorse Paragon's strategic initiatives, as the business mix becomes inherently riskier, and the environment more uncertain, we think there is a limit to where higher leverage can drive a higher equity rating."
Since the 2008 financial crisis the company has opened other retail funding channels and launched a bank to provide it with new funding opportunities, but this brings increased regulatory scrutiny, Merrill said. |
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