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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: Shares track gains on Wall Street, end higher Stocks in London finished slightly higher, despite a sharp drop in crude oil futures, as investors focused on a positive start to US trading which saw Wall Street´s main equity gauges set fresh record highs shortly after the opening bell.
The top flight index rose 0.17% or 11.55 points to 6,840.75, while front month Brent futures lost 3.4% to $47.39 per barrel on the ICE after Saudi Arabia said it would not attend a 28 November technical meeting between OPEC and non-member nations.
Focusing on first reaching a deal among OPEC members would be a more effective approach, Saudi said in an official letter, Reuters reported.
Nonetheless, some analysts were continuing to carefully monitor risks across the Channel.
"The divergence between US markets and the rest of Europe continues to widen, with the risks to Europe's markets being no better illustrated by this morning's news that Italian bank Monte dei Paschi saw shareholders approve the latest plans to raise €5bn of extra share capital.
"[...] Italian finance minister Padoan was at pains to reassure investors that his recapitalisation would work, which is never a good omen. The fact that he needed to say it is a warning all by itself to steer well clear. Markets would seem to agree driving the share price sharply lower," CMC Markets´ chief market analyst Michael Hewson said.
Mixed data in the UK
The UK economy expanded at a quarter-on-quarter pace of 0.5% over the three months to September despite household expenditures having run slightly below some economists´ forecasts at 0.6% (Barclays: 0.8%), albeit with a quicker pace of fixed investment of 1.1% (Barclays: -0.5%), acting as an offset.
"Putting everything together, we now expect GDP to edge 0.7% next year (0.5% previously) and 1.5% in 2018 (unchanged). This remains overall cautious and in the lower range of the consensus (1.1% for next year +/- a standard deviation of 0.6pp) as we continue to believe that the actual triggering of Article 50 and the subsequent drop in sentiment will deliver some negativity in the first half of next year," Barclays Research said in a research report sent to clients.
Retail sales in the UK grew at the fastest pace in over a year in the 12 months to November, according to the latest quarterly Distributive Trades Survey from the Confederation of British Industry.
The retail sales balance rose to +26%, its strongest level since September last year, ahead of expectations for an unchanged reading of +21%.
Meanwhile, and on the political front in Europe, French presidential candidates François Fillon and Alain Juppé went head to head in a television debate on Thursday night, with the former seen as the winner ahead of a vote on Sunday which will decide who will be the French right candidate in next year's election.
European M&A bolsters big pharma
In corporate news, AstraZeneca was a high-riser following news of Johnson&Johnson´s $17bn (£13.65bn) takeover approach for Europe´s largest biotech firm, Swiss-listed Actelion.
Pennon continued to deliver a good performance in the first half of its financial year at both its water and waste businesses, with costs savings and self-help initiatives falling straight to the bottom line.
Revenues declined 0.5% to £685.5m despite which profits before tax jumped 19.9% to £128.1m, with the latter driven by costs savings at South West Water and growth at Viridor by its ERFs and self-help measures at its recycling arm. Earnings per share were up by 1.7% to 23.6p.
Lloyds on the other hand was moving lower as investors took some profits ahead of the Bank of England´s annual stress tests of the UK banking sector.
BHP Billiton and its Brazilian joint venture partner Vale said they have approved $181m to fund remediation and compensation programs at the Samarco iron ore project after a dam burst in a year ago.
The two companies will extend a £230m line of credit to Samarco. The funding will be offset against a $1.2bn provision made in June.
"Funds will be released to Samarco only as required and subject to the achievement of key milestones," BHP said.
"The short-term facility allows BHP Billiton Brasil to preserve the value of its investment as options for restart continue to be assessed." |
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| Market Movers
FTSE 100 (UKX) 6,840.75 0.17%
FTSE 250 (MCX) 17,603.42 0.07%
techMARK (TASX) 3,303.17 0.27%
FTSE 100 - Risers
Sky (SKY) 787.00p 3.89%
AstraZeneca (AZN) 4,301.50p 2.17%
Unilever (ULVR) 3,173.00p 1.70%
National Grid (NG.) 923.40p 1.48%
Mediclinic International (MDC) 733.50p 1.17%
GlaxoSmithKline (GSK) 1,540.50p 1.15%
British American Tobacco (BATS) 4,421.00p 1.12%
Smith & Nephew (SN.) 1,117.00p 1.09%
Experian (EXPN) 1,477.00p 1.03%
Diageo (DGE) 2,013.50p 0.95%
FTSE 100 - Fallers
Standard Life (SL.) 345.80p -2.21%
Glencore (GLEN) 283.30p -1.84%
DCC (DCC) 6,100.00p -1.61%
Lloyds Banking Group (LLOY) 58.77p -1.52%
Anglo American (AAL) 1,235.50p -1.48%
Persimmon (PSN) 1,707.00p -1.39%
Paddy Power Betfair (PPB) 8,605.00p -1.32%
Barratt Developments (BDEV) 468.90p -1.12%
Rolls-Royce Holdings (RR.) 666.00p -0.97%
Fresnillo (FRES) 1,232.00p -0.96%
FTSE 250 - Risers
UDG Healthcare Public Limited Company (UDG) 648.50p 5.53%
Paragon Group Of Companies (PAG) 363.40p 5.17%
Countrywide (CWD) 178.00p 5.01%
Allied Minds (ALM) 369.40p 4.42%
Laird (LRD) 151.00p 3.64%
Ocado Group (OCDO) 274.80p 3.30%
Ibstock (IBST) 185.10p 3.01%
RPC Group (RPC) 1,016.00p 2.99%
IP Group (IPO) 149.20p 2.93%
Safestore Holdings (SAFE) 355.50p 2.48%
FTSE 250 - Fallers
Grafton Group Units (GFTU) 556.00p -2.97%
Amec Foster Wheeler (AMFW) 409.70p -2.73%
Petra Diamonds Ltd.(DI) (PDL) 157.90p -2.71%
Hunting (HTG) 520.50p -2.62%
Petrofac Ltd. (PFC) 782.00p -2.31%
Mitchells & Butlers (MAB) 240.60p -2.23%
Tullow Oil (TLW) 272.70p -2.01%
Evraz (EVR) 255.00p -1.92%
Aggreko (AGK) 793.50p -1.67%
Serco Group (SRP) 135.60p -1.60% |
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| | US Market Report | | US open: Stocks rise after Thanksgiving as Black Friday gets underway US stocks were in the green as markets reopened for a half day following the Thanksgiving break on Thursday.
The Dow Jones Industrial Average jumped 0.31% to 19,142.35 points, the S&P 500 leapt 0.23% to 2,209.79 points, and the Nasdaq rose 0.15% to 5,3388.72 points at 1504 GMT.
Connor Campbell, financial analyst at Spreadex, said: "Weighed down by turkey, US investors couldn't really bring much to the table this Friday, bar another smashed ceiling for the Dow Jones.
"The Dow now sits just under 19,150, a fresh record high that marks a 1,200 point rise since the day the election results were announced. In, and of itself, that is astonishing, the fact it comes following the biggest political shock in decades and before a near certain rate hike from the Federal Reserve is something else entirely. "
In commodity markets, gold on Comex declined by 0.29% to $1,185.90 per troy ounce at 1457 GMT.
Oil prices were on the back foot as uncertainty grows in the run-up to the 30 November OPEC meeting where the cartel is expected to agree on a production cut.
Brent crude was down 1.38% to $48.33 per barrel and West Texas Intermediate fell 1.28% to $47.40 at 1445 GMT.
In currency markets, the dollar slipped 0.33% against the yen to 112.96 and 0.5% against the euro to 0.9428, but climbed 0.16% against sterling to 0.8044.
On the data front, October wholesale inventories were estimated at an end-of-month seasonally adjusted level of $586.9bn, which was down 0.4% from September and fell 0.5% from October 2015. Analysts had expected a 0.3% rise.
Markit's services purchasing managers' index slipped to 54.7 in November from 54.8 October. A reading above 50 indicates an expansion.
As Black Friday got underway, shares in Amazon, Alibaba and Walmart jumped as half of sales are expected to occur online. |
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| | Broker Tips | | Broker tips: AstraZeneca, Daily Mail, Domino's Liberum upgraded AstraZeneca to 'buy' from 'hold'.
The brokerage had harboured concerns about the risks to the company's global Phase 3 study of durvalumab, MYSTIC, earnings weakness and bid speculation unwinding.
However, with the stock down around 20% and at low not seen since late 2013 in US dollar terms, Liberum it "can't ignore that the risk/reward going into a rich of catalysts is now strongly to the upside".
"We believe the current valuation is effectively assuming zero from the high potential immune-oncology programme," Liberum said.
The brokerage reckons the shares are worth up to 6,000-6,400p in the of durva-treme success in the key Phase 3 studies reporting through 2017. If they fail, there would likely be short - term downside, but there is fundamental value in the 4,500p range.
Even without durva-treme, Liberum thinks earnings growth of around 9% per year between 2017 and 2021 is achievable.
"If lower risk Tagrisso and Lynparza come through, 12% is more likely. We think this level of growth more than justifies upside to the current share price and is supportive of a range around £45-48/share (7-14% upside) ex-durva-treme."
Liberum has a 5,200p price target on the stock.
Barclays downgraded Daily Mail & General Trust to 'underweight' from 'equalweight' and cut the price target to 705p from 715p.
The bank said it sum-of-the-parts valuation points to clear downside versus the current shares and that the stock is overvalued when looking at free cash flow yield.
Barclays noted that since the start of the year, the shares have outperformed the FTSE All Share by 4%.
"We see the potential for downgrades and a derating, given that on calendar 2017 free cash flow yield DMGT trades at 5.3%, notably more expensive than WPP, Informa and UBM (all 7-8%)."
The bank said the stock was being underpinned by hope that the new CEO will announce a dramatic change to the portfolio.
"But we do not expect change of the scale required to excite the market," it said.
Barclays said the next catalyst will be the full-year 2016 results in December, where it expects the outlook for FY17 to drive consensus downgrades.
The bank also highlighted cyclical concerns such as the accelerating decline in UK print newspaper advertising.
Analysts at Canaccord Genuity lifted their recommendation on Domino´s Pizza from 'hold' to 'buy' after the company reassured them at its Investor Day 'that it can continue to deliver', although the menu was changing.
The company now aims to double the number of its stores in its territories over the next decade, but will continue to return surplus cash to shareholders via a progressive dividend policy, supported by a share buy-back programme.
That follows a sharp slowdown in the rate of growth of the company´s like-for-like sales for the third quarter from 14.9% one year ago to just 3.9%.
Hence, Domino´s has shifted towards expanding its footprint and now believes it can double the number of its establishments over the next decade, to roughly 2,000, excluding Germany, with the bulk of that coming from the UK and London in particular. |
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