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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 indifferent as investors look ahead to BoE, UK inflation London stocks produced a largely indifferent but marginally higher Monday performance after centrist Emmanuel Macron nabbed France's presidency over the weekend, with traders already looking ahead to UK interest rate and inflation news.
Pro-EU former investment banker Macron defeated far-right rival Marine Le Pen with 66.1% of the vote to 33.9%.
FTSE blue-chip gains were led by retailers ahead of industry data on Tuesday, and also real estate and utility companies. Miners were sold as copper and iron ore prices fell.
Investors are looking ahead to a raft of economic news out this week, with the Bank of England's interest rate decision and latest inflation report due on Thursday.
For today, the FTSE 100 closed up 0.05% to 7,300.86 , while the FTSE 250 closed up 0.15% to 19,729.66. Wall St had opened mostly lower, a theme also seen in Europe with the Cac 40 and Dax down.
"Markets have struggled to do anything in particular this afternoon, with a general air of indifference descending," said IG chief market analyst Chris Beauchamp.
"On the face of it, Macron's victory should provide a tonic for risk appetite, but it was so widely anticipated that the impact has been almost negligible."
"Now the focus turns to falling commodity prices, and the question of whether the recent bounce in economic data gives the European Central Bank cause to reduce its QE programme."
Jasper Lawler, senior market analyst at London Capital Group, said the FTSE 100 had bucked the trend in Europe with modest gains.
"Now that the French election has ended as expected, international investors are taking a second look at stocks in the UK ahead of the general election."
Michael Hewson, chief market analyst at CMC Markets UK, said the market's reaction to Macron's victory had definitely been a case of buy the rumour and sell the news.
"While the sense of relief is palpable amongst European leaders, markets have moved on and shifted their focus to the likelihood that the new French President will be able to enact his reform programme," said Hewson.
In London, utilities' trotted higher, helped by Centrica. It reiterated it would meet 2017 targets despite less energy use in the milder British winter and heading into what looks like a period of more hostile government policy.
Hewson continued that the FTSE 100 had shrugged off some weaker than expected China trade data, which had seen the basic resource sector remain on the back foot.
"Another slide in iron ore prices has weighed on this sector, hitting their lowest levels since October last year, sending Antofagasta, Glencore and Anglo American to the bottom of the FTSE 100," said Hewson.
Looking more closely at some stocks, Premier Foods rallied after renewing its strategic partnership with Mondelez International to produce and market Cadbury-branded cake and ambient dessert products.
Construction and engineering group Costain ticked up after saying current trading was in line with expectations and that it looks forward to reporting on further progress in 2017.
Numis Corp was trading lower as the broker reported a 38% decline in pre-tax profit for the half year and announced that its founder Oliver Hemsley will step down with immediate effect. |
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| Market Movers
FTSE 100 (UKX) 7,300.86 0.05%
FTSE 250 (MCX) 19,729.66 0.15%
techMARK (TASX) 3,533.01 -0.32%
FTSE 100 - Risers
Intu Properties (INTU) 275.50p 2.15%
Paddy Power Betfair (PPB) 8,250.00p 2.10%
easyJet (EZJ) 1,286.00p 2.06%
Centrica (CNA) 202.40p 1.86%
Next (NXT) 4,312.00p 1.84%
Provident Financial (PFG) 3,252.00p 1.82%
SSE (SSE) 1,449.00p 1.76%
Land Securities Group (LAND) 1,129.00p 1.71%
Sainsbury (J) (SBRY) 269.50p 1.70%
Kingfisher (KGF) 342.70p 1.57%
FTSE 100 - Fallers
Anglo American (AAL) 1,009.50p -2.04%
Antofagasta (ANTO) 753.50p -2.02%
Smiths Group (SMIN) 1,652.00p -1.90%
Convatec Group (CTEC) 290.50p -1.86%
Mondi (MNDI) 2,008.00p -1.76%
CRH (CRH) 2,872.00p -1.64%
Pearson (PSON) 727.50p -1.62%
Glencore (GLEN) 284.45p -1.59%
Rio Tinto (RIO) 2,935.00p -1.48%
Shire Plc (SHP) 4,585.00p -1.47%
FTSE 250 - Risers
Restaurant Group (RTN) 347.10p 5.79%
Thomas Cook Group (TCG) 96.90p 3.21%
CLS Holdings (CLI) 200.00p 3.04%
Redefine International (RDI) 38.05p 2.87%
UBM (UBM) 718.00p 2.64%
Stagecoach Group (SGC) 214.90p 2.53%
Allied Minds (ALM) 153.50p 2.40%
Mitchells & Butlers (MAB) 273.50p 2.32%
Wizz Air Holdings (WIZZ) 1,841.00p 2.28%
Go-Ahead Group (GOG) 1,843.00p 2.28%
FTSE 250 - Fallers
BBA Aviation (BBA) 299.10p -4.68%
TalkTalk Telecom Group (TALK) 183.50p -4.12%
Vedanta Resources (VED) 602.50p -3.98%
Just Eat (JE.) 556.50p -3.64%
Kaz Minerals (KAZ) 430.50p -3.39%
NMC Health (NMC) 2,073.00p -3.13%
Evraz (EVR) 201.00p -2.85%
UDG Healthcare Public Limited Company (UDG) 740.00p -2.70%
Centamin (DI) (CEY) 153.30p -2.60% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks, euro down as traders sell Macron news European stocks finished the day slightly lower as investors who bought the rumour now sold the fact on confirmation that centrist Emmanuel Macron had won France's presidential election over the weekend.
At the close, the Stoxx 600 was 0.13% lower at 394.04, the Cac-40 had fallen 0.91% to 5382.95 and the Dax was off by 0.18% at 12,694.55.
The euro was down by 0.66% to 1.0925 against the US dollar, with the latest CFTC data published on 5 May revealing another large reduction in 'short' positions against the single currency to their lowest since May 2014.
The yield differential between French and German 10-year sovereign bonds was unchanged at 43 basis points, having earlier fallen to 41.
Centrist-reformist Macron won 66.1% of the ballots, amid a voter turnout of 74.6%, which was largely as expected.
Some analysts, while positive, stressed that it was the June parliamentary elections that would decide if Macron had a clear mandate to move forward with his policy proposals.
"Today's result is a strong victory for President-elect Macron, coming at the upper end what the latest polls had predicted, which nonetheless consistently pointed towards a decent (20pp) gap in the run-up to the second round. It is an important step in ascertaining the policy direction for France, but is not sufficient to gain a complete picture, given the lack of clarity on the outcome of the forthcoming parliamentary elections (11-18 June)," said Francois Cabau and Philippe Gudin at Barclays Research.
The proportion of blank votes cast in the French elections hit a record 9%, twice as many as in 2002, when Jacques Chirac faced off against Jean Marie Le Pen.
BofA eyes premature exit by ECB
Economists at Bank of America-Merrill Lynch bumped up their growth forecasts for the euro area this year, from 1.5% to 1.7%.
Yet a slight slowdown is seen in 2018, back to 1.5%, with inflation even set to stray even further from the European Central Bank's target amid political challenges in France, Italy and Spain.
Consumer prices as measured by CPI were still seen rising by 1.6% and 1.3% in 2017 and 2018, respectively, assuming a price of oil at $53 a barrel. Lower oil price assumptions might see CPI print at 1.0% next year, they said.
Significantly, they pencilled in a one-off hike in the ECB's interest rate on deposits and the end of quantitative easing at the end of 2018, but cautioned clients that such a move would be "premature".
Manufacturing orders in Germany grew by 1.0% month-on-month in March (consensus: 0.7%), driven by a 4.8% surge in export orders, especially from other euro area economies and for capital and consumer goods.
Dutch chemicals manufacturer Akzo Nobel rejected a third takeover attempt from US rival PPG Industries, saying the mooted price tag of $27bn undervalued the company.
Also in the news, analysts at HSBC downgraded Germany's E.On to 'reduce' from 'hold', trimming their target from €6.70 to €6.50. They also upgraded their view on Air-France KLM to 'buy'.
India's Royal Enfield was approached by investment bank Evercore to sound out its potential interest in buying Volkswagen's Ducati, according to The Times of India. |
| | Market Analysis 08/05/2017 Today’s highlights: Gains seen around the world - Asia lifted by French elections: Several indices in Asia were showing gains this morning, led by Japan’s Nikkei, which leapt more than 2.3%.
- Bitcoin continues to show gains: After nearly hitting the $1,590 mark on Friday, the cryptocurrency showed slight losses. However, the overall positive trend continues and Bitcoin might be racing towards its next milestone of $1,600.
- Gold prices recover: After falling some 3% last week, gold was back in demand this morning, as investors saw the current price of the safe-haven asset as a good entry point for investment.
- Oil prices leap on production-cut extension talks: The black gold rose by more than 1.2% this morning....
Read More... |
| | US Market Report | | US open: Stocks slightly lower on Fedspeak Stocks on Wall Street are drifting lower after having jumped out of the starting gate with investors focusing on remarks from various US central bank officials and amid profit-taking following a win for French centrist-reformist presidential candidate Emmanuel Macron at the weekend.
At 1603 BST, the Dow Jones Industrial Average was off by 0.05% to 20,995.50, while the S&P 500 was down 0.12% at 2,396.29 and the Nasdaq Composite was declining 0.15% to 6,091.54.
Speaking on Monday morning, Federal Reserve bank of St.Louis president James Bullard said interest rates in the US where were they needed to be.
But his opposite number at the Cleveland Fed, Loretta Mester, said the Fed needs to remain "very vigilant" against the risk of 'falling behind'.
On Friday, the San Francisco Fed's John Williams said he still believed one or two more interest rate hikes were needed in 2017.
Commenting on the market action, Michael Hewson, chief market analyst at CMC Markets UK said: "Despite initially opening at another record high today, US markets slipped back as investors took a rather relaxed view to the weekend confirmation of an Emmanuel Macron win to the French Presidency.
"All in all the focus is now shifting back to the timing of the next Federal Reserve policy move after Friday's payrolls numbers. While St. Louis Fed President James Bullard adopted a rather dovish tone in his remarks Cleveland Fed President Loretta Mester, a renowned hawk remained confident in the ability of the US economy to absorb a tighter monetary policy."
Over the weekend, pro-European Macron defeated far-right rival Marine Le Pen with 66.1% of the vote to 33.9% but traders reacted in a classic 'buy the rumpour, sell the news fashion".
In corporate news, Sinclair Broadcast Group shot higher after news broke that it had launched a takeover of Tribune Media for nearly $4bn.
Shares of Coach were also trading on the frontfoot after announcing it was to acquire Kate Spade for $2.4bn.
Elsewhere, PPG Industries was lower after Dulux owner AkzoNobel said it rejected a third unsolicited takeover offer from its US rival, saying it undervalued the company. |
| | Broker Tips | | Broker tips: Pearson, BBA Aviation Deutsche Bank is sounding a somewhat cautious note on the outlook for Pearson until the company provides greater detail on its cost-cutting plans.
On 5 May, the education publisher announced it was targeting a greater-than-expected £300.0m run-rate of cost savings by 2020, but provided no specifics regarding the phasing of the costs cuts and savings or to what extent they would hit the company's sales.
Uncertainty about the latter meant it was difficult to estimate to what extent the cost cuts would offset earnings dilution from asset disposals, such as it K12 courseware, its stake in PRH or its GEDU and Wall Street English units, the broker said.
So, with "limited visibility on savings, disposals and trading" analyst Chris Collett opted to stick with his 'Hold' recommendation and 600.0p target.
BBA Aviation has been downgraded to 'neutral' from 'buy' by Citigroup, with the US bank highlighting recent turbulence in foreign currency markets and a 66% jump in the share price over the past twelve months as reasons to chart a lower flight-path for the stock.
The company released a trading update for the first four months of fiscal year 2017 on Friday, with revenue soaring 19% during the period.
BBA's numbers were boosted by the performance from its Signature Flight Support section.
Organic revenues at the Signature fixed-base operation unit grew 3% with strong "drop through" continuing to demonstrate market outperformance, BBA said in the update. | | | | To advertise in the Euro Markets Bulletin please contact [email protected] |
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