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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 open: Investors play it safe ahead of ECB Stocks were hugging the flatline after having started higher as traders pulled in their horns ahead of a much awaited policy announcement from the European Central Bank.
Equities were initially buoyed by a fresh record high overnight on Wall Street for the Dow Jones Transportation average, which triggered a sharp move to the upside in several of the other main stockmarket gauges, such as the S&P 500.
Against that backdrop, as of 0850 GMT the FTSE 100 was 7.20 points or 0.10% higher at 6,909.43.
Traders were watching to see if the UK´s top flight index was able to overcome resistance around the 6,940 point mark before jumping in.
"Extension of December's bounce to 4.4% and the clearing of 2-month falling highs resistance bodes well for continuation of this Santa Rally towards October's 7130 all-time highs. Bulls likely need to see overnight highs of 6940 overcome before jumping in. Bears are watchful of any signs that 6900 and yesterday's 6890 break-out are being troubled," Accendo Markets's Michael van Dulken said.
To take note of, the situation surrounding Italian banks was still very much on investors radars and was one potential risk to watch out for.
Reports on Thursday morning indicated that troubled lender Banca Monte dei Paschi di Siena had asked regulators for more time to complete its recapitalisation, meaning it might be forced into a public bail-in otherwise.
In parallel, also overnight ratings agency Moody´s lowered its outlook on Italy´s long-term debt from 'stable' to 'negative', referencing reduced prospects for structural and economic reforms after the constitutional referendum, among other factors.
Indeed, later in the day Governing Council members at the European Central Bank were expected to announce between a six to nine-month extension in their monthly asset purchase programme at the current pace of €80bn a month.
Just as important however, investors would be keen to know its thinking on recent events in Italy and what steps it would support in restoring the health of that country´s financial sector.
The ECB was also set to release its most recent short-term economic forecasts, with its projections for inflation and expectations for the exchange rate likely to be key talking points.
Acting as a backdrop, Chinese exports grew 0.1% year-on-year in November following a drop of 7.5% in October, outpacing forecasts for a drop of 5.0%.
"The pick-up reflects a strengthening in global demand, with recent business surveys suggesting that the global economy is on track to end the year on a strong note. The improvement appears to be broad based, with Chinese exports to the US, EU and other emerging markets all increasing," said Julian Evans-Pritchard, China economist at Capital Economics.
Capita lets go of deadweight
Dogged by weak growth and high debts, Capita has proposed offloading the majority of its Asset Services division and a small number of other 'non-core' businesses in order to focus fully on business process outsourcing. The FTSE 100 company, whose shares have been in freefall since a profit warning in September, also cut its full year guidance for underlying profit before tax to be at least £515m down from its previously lowered range of £535-555m, and said the headwinds affecting the business are expected to produce a similar trading performance in the full-year 2017.
Utility company National Grid is to sell a 61% stake in its gas distribution business to a consortium of investors for about £3.6bn and return £4bn to shareholders. It will retain a 39% minority stake in the new holding company for the business and receive £1.8bn from additional debt financing.
Germany-based travel and tourism provider TUI delivered its full-year results to 30 September on Thursday, with a 12.5% increase in underlying EBITA including Travelopia to €1bn, or 14.5% for continuing operations to €1.03bn. Turnover was down slightly, dipping 1.9% to €17.19bn, though it improved 1.4% at constant currencies. The FTSE 100 firm's board said it expects to deliver at least 10% growth in underlying EBITA in 2016/17, and extended its previous guidance of at least 10% underlying EBITA CAGR to 2018/19. |
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| Market Movers
FTSE 100 (UKX) 6,907.05 0.07%
FTSE 250 (MCX) 17,670.49 0.26%
techMARK (TASX) 3,238.81 0.27%
FTSE 100 - Risers
WPP (WPP) 1,684.00p 2.25%
Schroders (SDR) 2,948.00p 2.08%
Sky (SKY) 786.00p 1.68%
London Stock Exchange Group (LSE) 2,730.00p 1.60%
Intertek Group (ITRK) 3,255.00p 1.50%
Hargreaves Lansdown (HL.) 1,227.00p 1.40%
AstraZeneca (AZN) 4,062.00p 1.37%
Severn Trent (SVT) 2,114.00p 1.34%
Hammerson (HMSO) 549.50p 1.29%
International Consolidated Airlines Group SA (CDI) (IAG) 440.30p 1.29%
FTSE 100 - Fallers
Capita (CPI) 513.50p -8.95%
Randgold Resources Ltd. (RRS) 5,840.00p -1.85%
Royal Mail (RMG) 464.40p -1.82%
Anglo American (AAL) 1,231.00p -1.68%
Standard Chartered (STAN) 673.90p -1.58%
Mondi (MNDI) 1,617.00p -1.22%
HSBC Holdings (HSBA) 672.60p -1.03%
Whitbread (WTB) 3,474.00p -1.03%
Antofagasta (ANTO) 733.00p -1.01%
Fresnillo (FRES) 1,164.00p -0.77%
FTSE 250 - Risers
Berendsen (BRSN) 814.00p 5.10%
AO World (AO.) 182.20p 4.11%
Aggreko (AGK) 860.50p 3.99%
Smith (DS) (SMDS) 411.50p 3.91%
Henderson Group (HGG) 238.40p 2.94%
IP Group (IPO) 154.70p 2.72%
PayPoint (PAY) 969.00p 2.65%
Halfords Group (HFD) 368.00p 2.56%
Allied Minds (ALM) 399.70p 2.43%
Intermediate Capital Group (ICP) 691.50p 2.37%
FTSE 250 - Fallers
Ladbrokes Coral Group (LCL) 115.40p -9.21%
William Hill (WMH) 284.80p -8.57%
Sports Direct International (SPD) 297.70p -5.46%
Mitie Group (MTO) 206.40p -4.22%
Ocado Group (OCDO) 266.10p -4.18%
DFS Furniture (DFS) 225.00p -3.31%
IG Group Holdings (IGG) 499.20p -2.69%
Aberdeen Asset Management (ADN) 269.50p -2.39%
Drax Group (DRX) 302.20p -2.07% |
| | UK Event Calendar | | Thursday December 08
INTERIMS
Polar Capital Holdings
INTERIM DIVIDEND PAYMENT DATE
London Security, Rotala
INTERIM EX-DIVIDEND DATE
3i Group, Aquila Services Group, Babcock International Group, Big Yellow Group, Clipper Logistics , Cranswick, D4T4 Solutions, De La Rue, Hogg Robinson Group, Homeserve, ICAP, IG Design Group, Investec, Kainos Group , Montanaro European Smaller Companies Trust, Next, Palace Capital , Phaunos Timber Fund Ltd., Royal Mail, Telford Homes, VP, Wincanton
QUARTERLY EX-DIVIDEND DATE
F&C Commercial Property Trust Ltd., Raven Russia Ltd 6.5% Red Cnv Pref Shs NPV
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
Initial Jobless Claims (US) (13:30)
GMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
FINALS
Alternative Networks, CareTech Holding, Private & Commercial Finance Group, Servoca, TUI AG Reg Shs (DI)
SPECIAL EX-DIVIDEND DATE
Netcall, Trans-Siberian Gold
EGMS
Dolphin Capital Investors Ltd, Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)
AGMS
AB Dynamics, Aberdeen Latin American Income Fund Ltd , Billing Services Group Ltd., Green Reit, Gulf Keystone Petroleum Ltd.(DI), MJ Gleeson , Plexus Holdings, Softcat
FINAL DIVIDEND PAYMENT DATE
Craneware
FINAL EX-DIVIDEND DATE
Aberdeen Asset Management, Aeci 5 1/2% Prf, Britvic, Daily Mail and General Trust A (Non.V), Debenhams, DFS Furniture, K3 Business Technology Group, Netcall, Northamber, Pan African Resources, Scottish Oriental Smaller Companies Trust, Waterman Group
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise ahead of ECB policy announcement European stocks gained on Thursday as investors looked forward to a widely expected extension to the European Central Bank's quantitative easing programme.
At 0842 GMT Germany's DAX rose 0.55% to 11,042.11 points, France's CAC 40 increased 0.23% to 4,705.49 points, Italy's FTSE MIB edged up 0.04% to 18,133.42 points and Spain's IBEX gained 0.54% to 9,010.50 points.
At the same time, oil prices rose as traders continued to mull over OPEC's production cut and official data on Wednesday showing a drop in weekly US crude inventories. Brent crude climbed 0.09% to $53.04 per barrel and West Texas Intermediate edged up 0.04% to $49.79 per barrel.
Gains in equities were driven by the expectation that the ECB will at 1245 GMT announce an extension to its asset purchase programme amid political uncertainty and inflationary pressures. The consensus forecast is for a six month extension to QE, while all key rates are anticipated to remain unchanged.
"The big question, however, is whether this prolonged purchasing power remains at €80 billion a month, or whether it is cut to €60 billion; an added complication is that the former figure could signal a six month extension, while the latter may take place over a slightly lengthier nine months," said Connor Campbell, financial analyst at Spreadex.
"The markets may not be happy to see any kind of 'tapering', especially if it isn't compensated for by a longer than forecast expansion, so there could well be fireworks as the meeting's details are released."
Meanwhile, market participants were keeping an eye on Italy's banking sector amid reports of possible state bailout of troubled Monte dei Paschi di Siena. The lender has reportedly asked the ECB for an extension to its €5bn rescue plan until January 20, from a previous year-end deadline. The deal was thrown into doubt after Italy's Prime Minister Matteo Renzi resigned following his defeat in a referendum at the weekend.
"The decision by the board of Monte dei Paschi last night to ask for an extension until mid-January from the ECB to pull together the €5bn for a privately funded capital injection would appear to suggest that any bailout this weekend if it were to happen is unlikely to be a voluntary one, and could be one that has the politically toxic consequences of bailing in retail bondholders," said Michael Hewson, chief market analyst at CMC Markets.
"In asking for this extension it would appear that Italian officials have decided given the lack of volatility in the aftermath of last weekend's vote, that they have the luxury of a little more time, despite the resignation of Mr Renzi. The risk is they could be misreading the reasons for why the markets appear unconcerned, given yesterday's chatter that a bailout could be coming as soon as this weekend."
Elsewhere, trade data showed Chinese exports rose 0.1% in dollar terms in November, surprising analysts who had expected a 5% decline. Imports gained 6.7%, compared to estimates for a 1.9% drop. The trade surplus narrowed to $44.61bn from $49.06bn, missing forecasts of $46.90bn.
In corporate news, Unicredit's shares were under the cosh as Poland's largest insurance company PZU SA and a Polish government vehicle agreed to buy a combined 32.8% stake in the lender.
Dutch mail delivery company PostNL NV plunged rejecting a revised takeover from Belgian postal service Bpost SA. |
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| | Newspaper Round Up | | Thursday newspaper round-up: Brexit vote, RICS, advert ban, HMRC MPs voted by a majority of 373 in favour of a Labour motion calling on the government to set out its Brexit plan and activate article 50 before the end of March next year. In the face of a potential revolt from some Tory MPs, Theresa May on Tuesday decided to accept a Labour motion calling for ministers to reveal their thinking before acting to leave the European Union. - Guardian
Britain's housing market remains sluggish with a record low level of homes for sale as buyers and sellers alike are put off by stamp duty and uncertainty caused by the EU referendum. The Royal Institution of Chartered Surveyors (Rics) reported that there was a small increase in the number of buyer inquiries in November, but the supply of homes on the market remained flat. It is the ninth consecutive month with no increase in the amount of new properties for sale. - Telegraph
Junk food adverts aimed at children are to be banned online, in print and in the cinema in the UK after a detailed consultation on the damage they do by encouraging children to eat fattening and unhealthy food. The CAP said it was bringing other media in line with the rules on TV advertising. "Childhood obesity is a serious and complex issue and one that we're determined to play our part in tackling," said its chairman, James Best. - Guardian
Britain's housing crisis will get much worse in the coming years unless building levels increase rapidly, according to Dame Kate Barker, an influential economist and former Bank of England policymaker. The UK has been building too few homes for years, forcing young people to live with their parents for longer, and pulling vacant homes back into use, she told the Treasury Select Committee on Wednesday. - Telegraph
Britain's top tax inspector has called on the chancellor, Philip Hammond, to review the tax rules for super-rich football stars who are avoiding tax by siphoning earnings from Premier League games into image rights companies based in offshore tax havens. Jon Thompson, chief executive of HMRC, told a committee of MPs that offshore image rights payments were now "the most significant risk in football". - Guardian
US politicians have grilled chief executives of the communications giants AT&T and Time Warner about whether their plans for one of the year's biggest mergers would end up harming customers. Republicans and Democrats questioned whether the merger will give AT&T the incentive to harm rival distributors of content that compete with its DirecTV business as well as entertainment producers that compete with Time Warner, which owns HBO and CNN. - Telegraph
The Government tried to "parachute" a vocal advocate of Channel 4 privatisation onto the broadcaster's board, it has emerged, as part of a battle over its future that has triggered a row over diversity in television and political interference. The Department of Culture, Media and Sport put forward David Elstein, the Daily Telegraph reported, who is a former chief executive of Channel 5, late in a long-running search for four new non-executive directors. - Telegraph
Goldman Sachs has cut its target valuation for CMC Markets to almost half the level at which it floated this year after the City watchdog announced a crackdown on spread betters. The American bank offloaded almost £27 million of shares in CMC when the company was listed in London in February at 240p a share. As well as owning a stake in CMC, Goldman also advised the company on its initial public offering. - The Times |
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