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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: FTSE gains on financials as US consumer inflation surprises London stocks ended Wednesday higher as investors considered news that UK's jobless rate held steady at end-2016, with forecast-busting US inflation numbers helping boost global markets led north by financials.
The FTSE 100 ended the session up 0.47% or 33.85 points at 7,302.41, sitting just below its record closing high. The FTSE 250 closed up 0.21% at 18,827.05, yet another all-time closing high.
FTSE 350 indices for banks, life insurance, construction & materials, pharmaceuticals & biotechnology and fixed-line telecommunications were prominent risers, all up more than 1%.
"Another day in the green for the FTSE, as the global equity boom continues to push onwards irrespective of anything coming from the economic calendar," said IG market analyst Josh Mahony.
"It has been a busy day which has seen UK inflation, alongside US inflation and retail sales do little to stand in the way of this stock market rally train," Mahony added in a statement.
Office for National Statistics said while the UK's headline jobless rate held at 4.8%, as expected, the country's wage growth surprisingly slowed in December as the labour market slightly improved.
Spreadex's Connor Campbell said the overall mixed nature of the jobs report meant the morning's trading trends were not significantly disrupted.
This afternoon, the US consumer-price index (CPI) sped past forecasts in January, with a key measure of 'core' inflation coming in significantly ahead of market views.
This after US Federal Reserve chair Janet Yellen on Tuesday issued a surprisingly hawkish tone in testimony before a Senate committee. The market has interpreted Yellen's words as indicative of a possible US rate hike in March, although that was by no means a certainty.
Wall St thus plotted a positive course in early deals, while this side of the Atlantic the Euro Stoxx 50, DAX and CAC 40 all enjoyed moderate gains.
"The best performing (European) sector has been banks and financials which are leading the gainers on the back of yesterday's hawkish interpretation of Fed Chief Janet Yellen's comments," said Michael Hewson, chief market analyst at CMC Markets UK.
In the UK, this translated to lenders Standard Chartered, Royal Bank of Scotland, Barclays, Lloyds and HSBC all rising 1% or more, with insurers Old Mutual, Legal & General and Prudential similarly ahead.
London Capital Group senior market analyst Jasper Lawler noted a similar theme to Hewson, and said that Brexit fears had so far been proven unfounded, noting that Europe faced its own election risk.
"The UK-focused FTSE 250 has been one of biggest beneficiaries," Lawler added in a statement.
He believed UK PM Theresa May's "transparent" approach to Brexit had seen the pound stabilise and investors rotate out of multinational shares and back into more UK-focused companies. |
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| Market Movers
FTSE 100 (UKX) 7,302.41 0.47%
FTSE 250 (MCX) 18,827.20 0.21%
techMARK (TASX) 3,357.67 0.45%
FTSE 100 - Risers
Ashtead Group (AHT) 1,708.00p 2.52%
Standard Chartered (STAN) 817.90p 2.39%
Royal Bank of Scotland Group (RBS) 246.00p 2.07%
BHP Billiton (BLT) 1,420.00p 2.01%
Barclays (BARC) 239.25p 1.70%
Lloyds Banking Group (LLOY) 67.47p 1.47%
Old Mutual (OML) 216.80p 1.45%
Intertek Group (ITRK) 3,534.00p 1.35%
BT Group (BT.A) 309.70p 1.29%
AstraZeneca (AZN) 4,684.00p 1.25%
FTSE 100 - Fallers
TUI AG Reg Shs (DI) (TUI) 1,130.00p -7.22%
Capita (CPI) 507.50p -3.70%
Next (NXT) 3,847.00p -2.68%
Dixons Carphone (DC.) 304.80p -2.62%
Marks & Spencer Group (MKS) 330.60p -1.75%
Antofagasta (ANTO) 866.00p -1.48%
Paddy Power Betfair (PPB) 8,430.00p -1.40%
Informa (INF) 656.00p -1.06%
Rolls-Royce Holdings (RR.) 704.50p -0.84%
Micro Focus International (MCRO) 2,200.00p -0.81%
FTSE 250 - Risers
Acacia Mining (ACA) 519.50p 3.49%
OneSavings Bank (OSB) 364.50p 3.23%
Senior (SNR) 197.50p 3.08%
Hunting (HTG) 587.00p 2.98%
Millennium & Copthorne Hotels (MLC) 433.20p 2.74%
NewRiver REIT (NRR) 331.70p 2.66%
Ibstock (IBST) 195.90p 2.62%
Entertainment One Limited (ETO) 252.00p 2.44%
Elementis (ELM) 309.80p 2.38%
BGEO Group (BGEO) 3,157.00p 2.23%
FTSE 250 - Fallers
Ladbrokes Coral Group (LCL) 121.80p -3.18%
William Hill (WMH) 264.30p -2.83%
Carillion (CLLN) 218.00p -2.29%
Aberdeen Asset Management (ADN) 262.40p -2.20%
Tullow Oil (TLW) 268.10p -2.19%
B&M European Value Retail S.A. (DI) (BME) 296.20p -2.02%
Ferrexpo (FXPO) 172.90p -1.54%
Pets at Home Group (PETS) 181.40p -1.52%
Lancashire Holdings Limited (LRE) 680.00p -1.45%
RPC Group (RPC) 922.50p -1.44% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks move higher on US data Equities on the Continent benefited from better than expected US retail sales data for the month January, albeit alongside firmer price pressures.
Against that backdrop, by the close of trading the benchmark pan-European Stoxx 600 was higher by 0.34% to 371.47 and the Dax by 0.19% at 11,793.93 as the Cac-40 edged higher by 0.59% to 4,924.86.
Also noteworthy, in remarks to the House Financial Services Committee Fed chair Janet Yellen reiterated her stance that more interest rate increases will be appropriate, should the economy meet the central bank's outlook for gradually rising inflation and tighter labour markets.
Her statements were largely unchanged from those made during the previous session to US senators.
Commenting on those remarks, Jim Reid at Deutsche Bank said: "The possibility of a March move was left open but at the same time that wasn't particularly surprising and in any case there was no great guidance on timing of the next hike."
On the other hand, Michael Hewson, chief analyst at CMC Markets UK, was of the following opinion: "The best performing sector has been banks and financials which are leading the gainers on the back of yesterday's hawkish interpretation of Fed Chief Janet Yellen's comments to the Senate Banking Committee on the timing of a potential Fed rate rise, as Royal Bank of Scotland, Barclays and Lloyds Banking Group hit their highest levels since the June Brexit vote."
While mostly "quite dull", the comments on rates did get traders did get excited, said analyst Craig Erlam at Oanda.
In economic news, consumer prices in Spain, the euro area´s fourth largest economy, retreated at a 1.0% month-on-month clip in January (consensus: 0.9%), which led to a dip in the year-on-year rate from 3.0% to 2.9%.
The euro area's trade surplus increased in December from €22.7bn to €24.5bn (consensus: €22.5bn).
Stateside, total US retail sales grew by 0.4% month-on-month in January (consensus: 0.1%). In parallel, consumer prices rose at a 0.6% month-on-month clip in January (consensus: 0.3%).
Banks powered ahead in early trading, with the Stoxx 600 gauge of lenders' shares tacking on 1.42% to 178.42.
Boosting shares in that sector, ABN Amro reported fourth quarter net income of €333m, beating analysts' forecasts.
Credit Agricole also delivered better than expected numbers, with a write-down of its French retail arm failing to dent the bank's bottom line by as much as feared. |
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| | US Market Report | | US open: Shares boosted by economic data The main US stockmarket benchmarks edged higher at the start of trading on the back of generally better than expected economic data.
As of 1521 GMT, the Dow Jones Industrial Average was trading higher by 0.12% or 24.09 points to 20,528.31, the S&P 500 was off by 0.03% or 0.66 points at 2,336.89 and the Nasdaq Composite was ahead by 0.05% or 3.32 points to 5,785.91.
West Texas Intermediate crude oil futures were drifting lower by 0.09% to $53.15 a barrel and Brent crude off 0.23% at $55.78.
In parallel, traders were keeping an eye on US Fed chair Janet Yellen's testimony before the US House of Representatives Financial Services committee, although she was not expected to diverge from remarks the previous day before the Senate.
Aside from Yellen's speech, total US retail sales volumes grew more by a stronger than expected 0.4% over the month (consensus: 0.1%).
The Empire State Fed's regional manufacturing sector gauge also rose past forecasts in February to a level of 18.7, which was well ahead of the prior month's reading of 6.5 (consensus: 7.0).
Industrial production on the other hand declined by 0.3% over the month in January (consensus: 0.1%).
In parallel, the degree of capacity utilisation ran at 75.3% in January (consensus: 75.6%), down from 75.5% in the month before.
On the corporate front, US drinks and snacks maker PepsiCo was boosted by its shift in focus towards so-called "guilt free" products, after it surpassed analysts' expectations in its quarterly financial report.
The company posted earnings per share of $1.20 during the fourth quarter, excluding special items, just higher than the $1.16 forecast by experts.
Elsewhere, Fortress Investment Group was on traders' screen as well after Japan's SoftBank agreed to buy the asset manager for $3.3bn. |
| | Broker Tips | | Broker tips: Acacia Mining, Hunting, Ashtead Gold miner Acacia Mining had its share price target lifted in a bullish note from Jefferies on Wednesday morning.
Jefferies reiterated its 'buy' rating and status as the investment bank's top pick in the sector, and lifted its target to 575p from 550p as the once-chronic underperformer continues to deliver operational and financial improvements under new management.
2017 guidance for higher production and lower costs was "robust", analysts felt, and despite the strong recent run in the shares, the valuation is "not stretched", with its enterprise value 4.9 times EBITDA versus the sector's 7.9x.
Hunting shares got a lift as Goldman Sachs reiterated its 'buy' rating on the stock and added it to its Conviction List, upping its price target to 734.3p from 666.7p.
GS noted that this year to date, the stock is down 11% versus its Europe sector coverage and said the underperformance is a buying opportunity.
The bank said it is positive on the company's US exposure, adding that within its European oil services coverage, Hunting has the highest exposure there, and as such should benefit from improving volumes from the second half onwards.
Ashtead got a boost on Wednesday as Bank of America-Merrill Lynch upped its price target on the stock to 2,000p from 1,620p and reiterated its 'buy' rating.
The bank said Ashtead remains an attractive long-term investment opportunity, offering around 20% earnings per share compound annual growth rate for an attractive price-to-earnings rating of 12.6x to April 2018. | | | | To advertise in the Euro Markets Bulletin please contact [email protected] |
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