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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 barges higher after CPI, with consumer goods, miners leading Stocks in London barged higher in the aftermath of an unanticipated rise in UK inflation, with consumer-sector and mining equities prominent at the top end of the blue-chip ladder.
The FTSE 100 closed up 0.91% to 7,522.03, and the FTSE 250 ended 0.63% higher at 19,875.89. This was as the Euro Stoxx 50, Dax and Cac 40 eased, while Wall St was mixed in its morning session.
"While the FTSE 100 has continued to clock up record highs this afternoon, the same cannot be said of the S&P 500 and Dow Jones," said IG chief market analyst Chris Beauchamp.
"Both indices seem stuck in limbo, unable to move higher."
Jasper Lawler, senior market analyst at London Capital Group, observed that the FTSE 100 reached a new milestone today when it hit 7500 for the first time.
"Investors seem to be feeling confident about the outlook for Britain under what is expected to be the biggest Conservative party majority since Margaret Thatcher," he said.
Michael Hewson, chief market analyst at CMC Markets UK, said the apparent indecision that appeared prevalent around the 7450 area yesterday was conspicuous by its absence today.
He cited Vodafone's rise on its full-year results as notable, and also consumer goods companies Reckitt Benckiser and Unilever.
Against this fabric, the UK consumer-price index (CPI) rose to 2.7% on the year in April, which was above March's 2.3% and forecasts for 2.6%. Bank of England's target was 2%.
Core CPI advanced 0.5% month-on-month and 2.4% year-on-year, up from 1.8% the month before and above forecasts as retailers hiked prices to account for sterling's depreciation since the UK voted for Brexit.
Connor Campbell, financial analyst at SpreadEx said in previous months CPI's hitting it highest level since autumn 2013 would have caused a bit of a headache for the UK index.
"However, the Bank of England appears reluctant to combat rising prices with a rate hike; combine that with the alarming squeeze on real wages and the pound has little reason for cheer, something that only works in the FTSE's favour," he said.
The pound was buffeted lower on the CPI data, but was on the march higher late this afternoon.
Taking a closer look at the FTSE 100, it was consumer-sector and mining companies doing well.
Of the former, Kingfisher, Diageo, British American Tobacco and Next all performed positively, while among miners it was Rio Tinto, Fresnillo and Antofagasta doing well.
Vodafone rallied as it posted a €6.1bn loss for the year to the end of March, mostly on the back of a €3.7bn writedown of its Indian unit. Investors welcomed its EBITDA guidance for full-year 2018 of €14bn-€14.5bn, versus consensus expectations of €13.8bn.
easyJet flew lower after reporting a larger than expected headline loss before tax of £212m, which included around a £45m impact from Easter not falling in the first half and a negative net currency impact of £82m.
Business support group DDC was on the back foot as it said full year pre-tax profits rose 23.7% to £268.2m on the back of a 17% rise in revenue to £12.2bn, while CYBG fell as its first-half underlying pre-tax profit of £123m missed consensus expectations of £131m. |
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| Market Movers
FTSE 100 (UKX) 7,522.03 0.91%
FTSE 250 (MCX) 19,875.89 0.63%
techMARK (TASX) 3,614.70 0.66%
FTSE 100 - Risers
Vodafone Group (VOD) 219.45p 3.96%
Fresnillo (FRES) 1,563.00p 2.90%
Rio Tinto (RIO) 3,100.50p 2.68%
Kingfisher (KGF) 358.20p 2.64%
BT Group (BT.A) 309.85p 2.09%
Reckitt Benckiser Group (RB.) 7,516.00p 2.08%
British American Tobacco (BATS) 5,505.00p 2.06%
Diageo (DGE) 2,328.00p 2.02%
Antofagasta (ANTO) 807.00p 1.96%
Convatec Group (CTEC) 301.20p 1.79%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,324.00p -8.50%
easyJet (EZJ) 1,215.00p -7.25%
Micro Focus International (MCRO) 2,424.00p -3.04%
Severn Trent (SVT) 2,393.00p -1.48%
United Utilities Group (UU.) 1,011.00p -1.46%
DCC (DCC) 7,270.00p -1.29%
TUI AG Reg Shs (DI) (TUI) 1,119.00p -1.24%
Pearson (PSON) 687.50p -1.08%
Direct Line Insurance Group (DLG) 347.70p -0.86%
Intu Properties (INTU) 273.50p -0.76%
FTSE 250 - Risers
Kaz Minerals (KAZ) 493.40p 6.66%
Ocado Group (OCDO) 280.90p 6.16%
Hill & Smith Holdings (HILS) 1,388.00p 5.31%
Countryside Properties (CSP) 291.90p 5.04%
Ascential (ASCL) 354.00p 4.70%
Dechra Pharmaceuticals (DPH) 1,849.00p 3.88%
Acacia Mining (ACA) 426.20p 3.88%
Cobham (COB) 136.90p 3.71%
NMC Health (NMC) 2,159.00p 3.55%
Senior (SNR) 223.80p 2.71%
FTSE 250 - Fallers
BTG (BTG) 673.00p -6.79%
CYBG (CYBG) 280.60p -3.27%
Ted Baker (TED) 2,512.00p -2.82%
Wizz Air Holdings (WIZZ) 1,892.00p -2.62%
Crest Nicholson Holdings (CRST) 620.00p -2.59%
Henderson Group (HGG) 237.50p -2.46%
Aberdeen Asset Management (ADN) 294.30p -1.54%
Man Group (EMG) 159.20p -1.24%
Phoenix Group Holdings (DI) (PHNX) 748.50p -1.12% |
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| | US Market Report | | US open: Retailers continue to drag amid backdrop of weaker dollar Retailers' shares are weighing on US stock benchmarks again, while accusations that the president might have shared confidential information with visiting Russian diplomats takes its toll on the dollar.
As of 1606 BST the Dow Jones Industrials was down by 0.07% to 20,967.66 and the S&P 500 by 0.12% to 2,399.47, although the Nasdaq Composite was eking out a small gain of 0.04% to trade at 6,151.95.
Overnight, The Washington Post reported Donald Trump had breached the trust of one of its allies by revealing information regarding a possible Isis plot to target airliners by using laptop computers.
On Monday evening, Trump had received Russian foreign policy czar Sergei Lavrov and the country's ambassador in the US in the Oval Office.
The report was quickly denied by national security adviser HR McMaster, who said no sources nor the methods used to gather the intelligence had been discussed.
Earlier on Tuesday, Senate majority leader Mitch McConnell told a reporter he'd prefer "less drama" from the White House.
Some market commentary attributed the 0.7% drop in the US dollar index towards a six-month low of 98.22 to the furore raging around Monday night's events in the Oval Office.
IG analyst Chris Beauchamp said: "US markets have remained determinedly resilient in the face of the scandals emerging from Washington, but with a fresh crisis emerging overnight regarding intelligence revelations, you do have to wonder how long stocks can maintain their equanimity. The real catalyst would be a sign that Republican lawmakers are becoming fed up with the turbulent president; until this happens the Trump bandwagon will continue to rumble along in its entertaining yet disturbing fashion."
Ecomomic data was somewhat mixed on Tuesday, with figures from the Federal Reserve showing that increased auto output and steady growth in mining sending US industrial production higher by 1.0% month-on-month in April, dwarfing forecasts for a rise of 0.4%.
Housing starts and permits on the other hand undershot economists' forecasts for the same month, but analysts put the weak data down to the impact from weather-related factors and a shift in the timing of Easter.
On the corporate front, Dick's Sporting Goods was down by 12.53% after reporting that first quarter like-for-like sales grew by 2.4% (consensus: 3.5%).
From a sector standpoint, the biggest losses were to be seen in the following industrial groups: Clothing and Accessories (-1.82%), Footwear (-1.80%) and Retail REITs (-1.44%).
Stock in another retailer, TJX Cos. was also on the backfoot after the company posted sales of $7.78bn for the latest three-month stretch, undershooting analysts' forecasts calling for $7.88bn.
Ford Motor was also moving lower on the back of reports that it is planning to cut 10% of its global workforce in order to bolster profits. |
| | Market Analysis 12/05/2017 Today’s highlights: Indices low while oil and gold show gains - Wall Street closes lower: All three major indices finished in the red at the end of yesterday’s trading day. Macy’s earnings report missed predictions, causing its stock to tank 17%.
- Boeing stock drops following 737 problem: Aviation powerhouse Boeing saw its stock price drop yesterday, after announcing it is suspending flights for its 737 Max model due to an engine problem. While prices recovered after the announcement, they fell slightly again after-hours.
- Asia seen lower: Indices in Asia were trading lower this morning, with the ASX 200 and Nikkei losing 0.87% and 0.57% respectively.
- Volatility expected for US Dollar today: CPI and Retail reports will be released at 12:30 GMT today. These reports..
Read More... |
| | Broker Tips | | Broker tips: Severn Trent, United Utilities, Countryside Properties, Lloyds Deutsche Bank downgraded its recommendation on shares of United Utilities and Severn Trent ahead of the 2019 price review.
Despite further increases in the share prices of UK water stocks year-to-date, on the back of a decade-long bull run, that review would come incerasingly into focus towards the end of 2017, the broker said.
Its analysts downgraded their view on United Utilities and Severn from 'buy' to 'hold', but left Pennon at a 'buy'.
However, they raised their targets on the former of those two from 1,000p and 2,300p to 1,050p and 2,450p, respectively.
Shares in United and Severn, Deutsche Bank said, also appeared to be at 'fair value'.
As for Pennon, there might still be scope for the Exeter-based company to reassure on the outlook for Viridor.
Key in terms of the upcoming review would be the new political backdrop, with the focus for the 2020-25 review expected to be on affordability.
Berenberg initiated coverage of Countryside Properties at a 'buy' ahead of an expected announcement by management to ramp up the business.
The key to its investment thesis was that the homebuilder already had the landbank, pipeline and capital in place for a larger business.
Its partnership arm, which worked with local authorities to regenerate public land, was set to benefit from the growing need for social housing.
It was also likely to be "far less cyclical" than 'normal' housebuilding, Berenberg said, sporting a "sustainable" return on capital employed of 50%.
ROCE in Partnerships was 70% in 2016.
"Management is currently reviewing its five-year targets, and we expect a significant increase in ambition."
Countryside also enjoyed a comfortable funding position, with net cash and a £300m bank facility with which to cover peak net debt of about £130m and its growth trajectory, Deutsche Bank said.
Analysts at Investec reiterated their 'buy' stance on shares of Lloyds ahead of the state's expected full exit from the lender later in the week.
Despite the fact that the shares had treaded water since Antonio Horta Osorio took the helm in November 2010, due to the drag from £17.4bn of PPI provisions over that same time span, "its outlook is set fair", the broker's Ian Gordon said.
Gordon reiterated his view that Lloyds was a 'no-growth' bank, but with net negative exceptionals continuing to fall by the wayside, from £6.5bn in 2015 to £3.6bn in 2016 and £1.9bn in 2017, its returns and ability to pay dividends were set to recover sharply.
The analyst also reaffirmed his view that other analysts were being "much too pessimistic" on Lloyds's net interest margins, impairments and dividends per share. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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