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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 down as UK wage growth disappoints London stocks were down by the close on Wednesday as the recent gains in the pound's evaporated on the back of wage data that remained stagnant in spite of seemingly good news from a fall in the unemployment rate.
The FTSE 100 was down 0.28% to 7,379.70 as the pound gained 0.1% against the euro to 1.1113, easing back from a six-week high, and fell 0.51% versus the dollar at 1.3216%, down from its one-year high or 1.3315.
Over in Europe, markets looked a bit more upbeat with the DAX up 0.23% to 12,553.57, the CAC 40 0.16% higher to 5,217.59 and the IBEX 35 also in the red at 10,390.90.
The pound had shot higher the previous day after data showed inflation spiking to a six-year high in August, raising expectations that the Bank of England will lift rates sooner rather than later. However, disappointing wage data released earlier prompted doubts about a rate hike.
Neil Wilson, senior market analyst at ETX Capital, said: "So is that no hike this year? Sterling gave up the $1.33 handle to trade at $1.3270 after some weaker-than-expected wage growth added to fears about an income squeeze following yesterday's inflation rise. High inflation, low wage growth - this is the conundrum for the Bank of England. At present it doesn't look supportive of a hike, but markets need to be ready for a hawkish hold."
Figures from the Office for National Statistics showed UK earnings growth continues to lag well below inflation despite the unemployment rate falling to a new record low.
Average weekly earnings growth remained at 2.1% for the three months to the end of July, falling short of the expected 2.2%. For the single month of July, earnings growth dropped to just 1.4% from 2.8%.
Excluding bonuses, average earnings were also up 2.1% compared to the same period last year versus the 2.2% consensus forecast.
This disappointing wage data came despite the UK ILO unemployment rate falling to 4.3% from 4.4%, where it had been forecast to stay and which is further below the Bank of England's estimate of the equilibrium rate.
There was an 181,000 improvement in employment in the three months to July compared to the three months to April.
In more timely data, jobless claims fell 2.8K in August, which was more than expected, with a claimant count rate of 2.3% last month, the same as in July.
On the corporate front, housebuilder Galliford Try led the fallers despite reporting full-year pre-tax profit at the top end of its expected range.
Tesco was hit by a downgrade to 'underperform' at Exane BNP Paribas, ITV was lower after being cut to 'underperform' at Macquarie, and Esure was under the cosh after UBS downgraded the stock to 'sell' from 'neutral'.
Infrastructure and construction company Balfour Beatty was slightly higher after selling Blackpool Airport for £4.25m, while Just Group edged lower despite reporting 39% growth in its adjusted operating profit for the first half.
Halfords was in the black after it poached fellow retailer Dixons Carphone's software boss, Graham Stapleton, to take up the chief executive role vacated by the soon-to-depart Jill McDonald.
Dunelm rallied as it said the new financial year had started well, even though full-year profits dropped to towards the lower end of expectations.
Budget airline EasyJet flew higher after it announced it will now let customers book long-haul flights with other carriers through its website. |
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| Market Movers
FTSE 100 (UKX) 7,379.70 -0.28%
FTSE 250 (MCX) 19,589.97 -0.39%
techMARK (TASX) 3,458.93 -0.29%
FTSE 100 - Risers
Provident Financial (PFG) 846.00p 1.68%
Micro Focus International (MCRO) 2,428.00p 1.25%
Barratt Developments (BDEV) 603.00p 1.17%
Experian (EXPN) 1,533.00p 0.79%
Royal Dutch Shell 'A' (RDSA) 2,152.00p 0.77%
BP (BP.) 452.35p 0.77%
Convatec Group (CTEC) 269.40p 0.67%
easyJet (EZJ) 1,202.00p 0.67%
Royal Dutch Shell 'B' (RDSB) 2,192.00p 0.64%
BT Group (BT.A) 285.05p 0.64%
FTSE 100 - Fallers
Antofagasta (ANTO) 969.00p -3.87%
Fresnillo (FRES) 1,513.00p -3.63%
Anglo American (AAL) 1,349.00p -3.19%
Johnson Matthey (JMAT) 2,833.00p -2.58%
Glencore (GLEN) 363.60p -2.39%
Croda International (CRDA) 3,777.00p -2.15%
BHP Billiton (BLT) 1,408.50p -2.05%
Mediclinic International (MDC) 734.50p -1.87%
Tesco (TSCO) 181.65p -1.84%
Rio Tinto (RIO) 3,624.50p -1.79%
FTSE 250 - Risers
Dunelm Group (DNLM) 661.50p 8.35%
IP Group (IPO) 124.90p 4.17%
TBC Bank Group (TBCG) 1,636.00p 3.34%
Euromoney Institutional Investor (ERM) 1,157.00p 2.82%
Go-Ahead Group (GOG) 1,585.00p 2.59%
Entertainment One Limited (ETO) 254.10p 2.54%
Vectura Group (VEC) 102.50p 2.19%
Cairn Energy (CNE) 181.00p 2.14%
Clarkson (CKN) 2,784.00p 1.90%
Sophos Group (SOPH) 575.00p 1.77%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 768.50p -5.76%
Hochschild Mining (HOC) 259.20p -4.57%
Travis Perkins (TPK) 1,421.00p -3.86%
Dechra Pharmaceuticals (DPH) 2,048.00p -3.76%
Millennium & Copthorne Hotels (MLC) 437.50p -3.63%
Greencore Group (GNC) 197.00p -3.48%
Vedanta Resources (VED) 832.50p -3.37%
Fisher (James) & Sons (FSJ) 1,504.00p -3.10%
Centamin (DI) (CEY) 148.20p -3.07% |
| | Market Analysis 13/09/2017 Today’s highlights: Wall Street at all-time high - Wall Street closes at all-time high: As fears regarding North Korea and hurricane Irma subside, the bull run in the US continued yesterday. The Dow Jones, S&P 500 and Nasdaq all closed at an all-time high.
- Asia seen higher: Leading indices in the East, such as the Nikkei, were trading in the green this morning – some reaching levels not seen in 10 years. In contrast, the China50 index registered small losses.
Read More... |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks end flat A call from the head of the European Union for further integration between the bloc's members and for trade negotiations to be expanded to include Australia and New Zealand provoked little reaction on Wednesday, likely as such details of his speech were already known.
Delivering his State of the European Union address on Wednesday morning, Jean Claude Juncker also called for the creation of a euro area finance minister and of a European Monetary Fund, both widely considered to be key concessions from Germany to France in exchange for reforms in the area's second-biggest economy.
Against that backdrop, by the closing bell the benchmark Stoxx 600 was off by 0.02% or 0.08 points at 381.34, alongside a gain of 0.23% or 28.80 points for the German Dax to 12,553.57 while Milan's FTSE Mibtel was flat at 22,233.00.
Meanwhile, investors were digesting much weaker than expected UK wage data for July and 'dovish' remarks from Reserve Bank of Australia governing board member Ian Harper overnight, as they attempted to calibrate at which stage the global monetary policy was at.
Speaking to Bloomberg, Harper said economic growth wasn't strong enough to justify an interest rate increase - even as the Aussie dollar strengthened.
Those fresh references came as investors perused the latest readings on inflation in the single currency bloc.
Also in the background, there was keen interest on the news-flow surrounding the possibility of tax reforms in the States, with strategists at Citi and Bank of America-Merrill Lynch having recently identified it as a key factor affecting the outlook for government bond yields in the US.
Overnight, US Treasury Secretary Steve Mnuchin indicated at a conference hosted by CNBC and Institutional Investor that he expected tax reforms to be in place before the current year was out and that they might be made retroactive to 1 January.
Linked to all of the above - particularly for the extremely short-term trading outlook - would be employment data due out later in the morning in the UK amd producer price figures Stateside (with US CPI data due on Thursday).
Geopolitical news was also in focus on Wednesday, after Mnuchin told assistants at the same event that his country would respond if China did not abide by the sanctions which had been approved the day before against North Korea.
For its part, according to North Korea's KCNA news agency, "the DPRK will redouble the efforts to increase its strength to safeguard the country's sovereignty and right to existence and to preserve peace and security of the region by establishing the practical equilibrium with the US."
Back in all things Eurozone, German consumer price inflation advanced at a 1.8% year-on-year pace last month, in-line with a preliminary reading released on 30 August, according to the Ministry of Finance.
So-called 'core' inflation on the other hand did dip from 1.7% in July to 1.6% for August, although analysts at Pantheon Macroeconomics pointed out that lead indicators were signalling a rise over the next six to 12 months.
Meanwhile, August's increase in the cost of living in Spain was confirmed by the country's statistics office at 2.0% year-on-year for the harmonised CPI.
In parallel, Eurostat reported that the rate of growth in euro area employment ticked lower in the second quarter of 2017 from 0.5% for the first three months of the year to 0.4%.
Also according to Eurostat, Eurozone industrial production was 3.2% ahead year-on-year in July (consensus: 3.3%) after a reading of 2.8% for June.
The Porsche and Piech families, which combined owned Germany's Volkswagen, reportedly voiced opposition against selling any of the company's assets.
On a related note, in France PSA Group's boss reportedly said the fate of 800 staff at Opel's engine testing facility were at the mercy of European policymakers due to the regulatory push in favour of electric vehicles. |
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| | US Market Report | | US open: Wall Street trades flat despite gains for bank shares Wall Street was flat as investors took a breather after pushing the S & P 500 to a fresh record high during the previous session, amid a tad of renewed speculation in markets regarding the risk of new provocations from Pyongyang following the latest round of sanction from the UN Security Council.
At 1732 BST, the Dow Jones Industrial Average was edging higher by 0.04% or 10.15 points at 22,128.38, alongside a dip of 0.02% to 2,495.89 for the S&P 500 while the Nasdaq Composite was lower by 0.05% or 3.22 points to 6,451.50.
Banks on the other hand were on the advance, with the widely-followed KBW sector gauge rising 1.64% to 93.51 points, reflecting the recent rise in government bond yields and renewed talk on Capitol Hill regarding the prospect for tax reforms before the year was out.
Overnight, US Treasury Secretary Steve Mnuchin indicated at a conference hosted by CNBC and Institutional Investor that he expected tax reforms to be in place before the current year was out and that they might be made retroactive to 1 January.
Oanda analyst Craig Erlam said: "It would appear that a running start to the week and fresh record highs in the S&P 500 has proven a little much for some traders, with profit taking seen ahead of Wednesday's open.
"Naturally there is still plenty of underlying geopolitical risk in the markets at the moment, even if acts of provocation have decreased and become less hostile, and this is likely to put a cap on risk rallies for now. The longer this period of calm continues, the more relaxed investors will become which will be better for riskier assets, while safe havens will continue to experience unwinding."
On the economic front, producer price data for August showing a 0.2% rise on the month left economists a little bit divided on the outlook for price pressures.
For her part, Blerina Uruci told clients: "We expect pipeline price pressures to remain moderate, reflecting the fact that the headwind from imported inflation and global commodity prices has abated in recent months."
In corporate news, Apple was softer after the unveiling of the tech giant's latest phone, the iPhone X on Tuesday prompted a mixed reaction and the company said it won't be delivered until November.
Elsewhere, Centene rallied after the company said late on Tuesday that it has signed an agreement whereby Fidelis Care will become its health plan in the state of New York.
Nordstrom was also in the spotlight after a report that it is taking steps to go private, while SeaDrill traded on the front foot after saying late on Tuesday that it has filed for bankruptcy protection and agreed a restructuring plan with its lenders. |
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