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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: Stocks dip ahead of MPC meeting, rates in focus London stocks ended lower as the pound gained ground after data on mortgages and consumer credit added to the chances of a rate hike this week with analyst comment also weighing on shares of housebuilders in particular. The FTSE 100 lost 0.23% to 7,487.81 as the pound rose 0.54% against the dollar to 1.3205 and by 0.37% versus the euro to 1.1352. Money and credit figures from the Bank of England showed levels of consumer lending remained little changed last month, with no dramatic news to derail a likely nudge higher to interest rates later this week. Mortgage approvals for house purchases dipped to 66,232 in September from 67,232 amid tepid housing demand at present, but was slightly more than the consensus forecast of 66,000. There was a £1.6bn annual rise in consumer credit in September following a £1.8bn increase in August, with the annual growth rate remaining broadly unchanged since June, at around 10%. Growth in net unsecured credit in the third quarter, at £4.6bn, was down slightly on the £4.7bn rise in the second, which economists suggested meant unsecured credit financed 1.5% of households' purchases in both quarters. September's money and credit figures provides another reason to think that the economy should be able to hold onto a decent amount of momentum in the near term, said economists at Capital Economics. "With credit growth only dipping from 10.0% to 9.9% y/y in September, the latest figures will do little to assuage policymakers concerns about financial stability risks. As a result, annual growth in overall bank lending to the real economy held steady at 3.9% in September. "As a result, there doesn't appear to be anything in these figures that would prevent the MPC from raising interest rates on 'Super Thursday'," they said. Meanwhile, UK economic sentiment improved in October thanks to a recovery in confidence in the services and construction sectors. The European Commission's economic sentiment indicator for Britain increased to 110.7 from 109.2 the month before. Also weighing on sentiment perhaps, on Monday strategists at JP Morgan reiterated their 'underweight' stance on UK stocks pointing out multiple possible headwinds, including the potential for rate hikes from Bank. JP Morgan also expressed caution about housing stocks, telling clients that typically they do well going into the first rate hike but afterwards falter. Investors were also keeping an eye on developments in Spain after Madrid stripped Catalonia of its autonomy on Friday and removed Catalan leader Carles Puigdemont from office. On the corporate front, housebuilders Bellway, Berkeley, Persimmon, Redrow and Taylor Wimpey were also hit by downgrades from Barclays ahead of the UK Budget, with the sector also suffering on the back of expectations of a rate hike by the Bank of England. Ahead of the Autumn Budget and with the sector up by 46% year-to-date, Barclays believed that "expectations may have run ahead of themselves." HSBC was on the back foot after it released a mixed set of results. Led by its "pivot to Asia", the bank said it continued to grow revenues across its three main businesses in the third quarter but increased investment and bonuses kept underlying profits flat. Business information and events group Euromoney Institutional Investor fell after saying it sold Adhesion Group, and its 74% stake in World Bulk Wine Exhibition, to French exhibitions company Comexposium Holding. On the upside, budget airline easyJet flew higher as it swooped to acquire part of the collapsed Air Berlin's operations in Berlin's Tegel airport for €40m, while Glencore nudged up after upgrading its full-year marketing guidance, as it said production of some of its commodities fell in the third quarter. Millennium & Copthorne edged higher as it reported a jump in third-quarter pre-tax profit, helped along by solid growth in New York, while Genus racked up impressive gains as N+1 Singer upped the stock to 'buy' from 'hold' and lifted the target to 2,485p from 1,844p. B&Q owner Kingfisher rallied after Goldman Sachs upped the stock to 'buy', while Drax was boosted by an upgrade to 'equalweight' at Morgan Stanley. |
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| | Market Movers FTSE 100 (UKX) 7,487.81 -0.23%
FTSE 250 (MCX) 20,213.25 0.33%
techMARK (TASX) 3,529.69 0.66% FTSE 100 - Risers Fresnillo (FRES) 1,337.00p 2.69%
Shire Plc (SHP) 3,694.50p 2.64%
Kingfisher (KGF) 316.60p 2.03%
easyJet (EZJ) 1,298.00p 1.96%
International Consolidated Airlines Group SA (CDI) (IAG) 635.00p 1.84%
Randgold Resources Ltd. (RRS) 7,530.00p 1.62%
Informa (INF) 696.50p 1.53%
Next (NXT) 4,949.00p 1.37%
Smurfit Kappa Group (SKG) 2,272.00p 1.34%
ITV (ITV) 165.70p 1.04% FTSE 100 - Fallers British American Tobacco (BATS) 4,917.00p -2.09%
Mondi (MNDI) 1,829.00p -1.98%
Johnson Matthey (JMAT) 3,323.00p -1.98%
Tesco (TSCO) 181.90p -1.94%
Carnival (CCL) 4,994.00p -1.79%
Convatec Group (CTEC) 196.20p -1.70%
Standard Life Aberdeen (SLA) 431.50p -1.69%
HSBC Holdings (HSBA) 737.00p -1.51%
Berkeley Group Holdings (The) (BKG) 3,754.00p -1.39%
National Grid (NG.) 904.80p -1.33% FTSE 250 - Risers Genus (GNS) 2,430.00p 8.72%
Tullow Oil (TLW) 185.80p 4.38%
Indivior (INDV) 345.30p 4.01%
Hochschild Mining (HOC) 229.20p 3.43%
Morgan Advanced Materials (MGAM) 315.10p 3.37%
Vectura Group (VEC) 101.20p 3.27%
IG Group Holdings (IGG) 658.50p 2.57%
Stobart Group Ltd. (STOB) 284.10p 2.56%
Royal Mail (RMG) 389.70p 2.53%
Man Group (EMG) 194.20p 2.32% FTSE 250 - Fallers Vesuvius (VSVS) 590.00p -2.32%
Greencore Group (GNC) 193.80p -2.27%
Galliford Try (GFRD) 1,219.00p -1.69%
Just Group (JUST) 151.40p -1.69%
Dixons Carphone (DC.) 174.70p -1.58%
Pets at Home Group (PETS) 180.70p -1.42%
RPC Group (RPC) 958.00p -1.39%
Worldwide Healthcare Trust (WWH) 2,544.00p -1.36%
P2P Global Investments (P2P) 780.00p -1.33% |
| | The Top 10 Stocks for Q4 | | Our latest quarterly stocks report analyses the top and bottom 10 FTSE 100 performers of 2017 so far and looks at our Top Ten Stock Picks for Q4 including City broker consensus and their average target price for each stock. Losses can exceed deposits Download the report here |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Spanish stocks leap back, government bond yields drop European stocks finished the session only a tad higher despite the record highs hit by some of the major US stockmarket gauges on Friday, although Spanish stocks outperformed by a wide margin. By the closing bell, the benchmark Stoxx 600 was little changed, edging higher by 0.12% or 0.48 points to 393.91, alongside a 0.09% or 12.03 point rise for the Dax to 13,229.57. Out on the periphery on the other hand, the Ibex 35 jumped 2.44% or 248.50 points to 10,446.0 even after the central government sacked several of the leaders of the nationalist parliament, after triggering Article 155 of the constitution, and dissolved the assembly. Spanish sovereign debt also began the week on the front foot, with the yield on the benchmark 10-year note plummeting by nine basis points to 1.50%. At the weekend, according to the local Catalan authorities hundreds of thousands of protesters marched in Barcelona against the parliament's decision of 27 October to issue a unilateral declaration of independence. The organisers put the figure closer to approximately 1.0m. To take note of, a poll conducted by Metroscopia between 23 and 26 October, for Spanish daily El Mundo, revealed that if elections were to be held now then the main nationalist parties in the regional assembly would lose their majority. Confirming earlier reports, it emerged that former Catalan president Carles Puigdemont and five of his closest advisers had fled to Belgium. Commenting on the situation in Spain, Kathleen Brooks, research director at City Index said: "Spanish markets are in recovery mode at the start of this week. Although this is a fluid situation there are a few things that are keeping the markets calm, which is why EUR/USD is back above 1.16 and the Ibex is the best performer in European equity markets, it is up some 1.5% today. "This is largely in response to the peaceful transferral of power to Madrid from the Catalan authorities over the weekend. So far, the streets also seem to be free of violent protest, suggesting that the prospect of an election in December has eased investors' and secessionists' minds for the time being." For his part, Marc de-Muizon at Deutsche Bank pointed out how Spain had one of the largest negative net international investment positions, making it potentially more vulnerable to capital flight. Meanwhile, and on the economic front, the European Commission's economic sentiment index jumped by 0.9 points for September to hit 114.0 - its highest mark since January 2001. Elsewhere, INE reported that Spanish gross domestic product expanded at a quarter-on-quarter pace of 0.8%, as expected. In parallel, according to the German Ministry of Finance, in real terms retail sales turnover increased at a 4.1% clip year-on-year (consensus: 3.0%). On the corporate front, Novartis announced the purchase of France's Advanced Accelerator Applications for $3.9bn in cash. In other M&A news, Akzo Nobel reportedly confirmed it was in talks about a possible tie-up with Axalta. |
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| | US Market Report | | US open: Stocks take breather ahead of busy week US stocks are taking a breather after a barrage of quarterly earnings from various technology heavyweights propelled the S&P 500 and Nasdaq-100 to fresh record closes on Friday. Investors were also eyeing an interest rate decision from the Federal Reserve on Wednesday and the release of the monthly non-farm payrolls report at the end of the week. The announcement of the White House's pick to take the reins at the Federal Reserve was also expected, on Thursday. Ahead of those developments, as of 1637 BST the Dow Jones Industrial Average was off by 0.34% or 78.89 points at 23,355.30, with the S&P 500 retreating by 0.37% or 9.43 points alongside while the Nasdaq Composite was giving back a fraction of the prior session's gains, slipping 0.16% to 6,690.28. That was alongside a three basis point fall in the yield on the benchmark 10-year US Treasury note to 2.37%. Oanda analyst Craig Erlam said: "With the Federal Reserve, Bank of Japan and Bank of England all holding monetary policy meetings this week, there'll undoubtedly be a strong focus on central banks. When it comes to the Fed though, it may not be the interest rate decision itself that attracts the most attention, rather President Donald Trump's announcement on who will succeed Janet Yellen as Chair from February, with the incumbent still in the race." In corporate news, shares of homebuilder CalAtlantic rocketed after agreeing a merger with fellow peer Lennar Corp, in a deal worth around $9.3bn. Elsewhere, Wal-Mart was a touch lower in pre-market trade as it said that the chief of its UK Asda chain, Sean Clarke, would be stepping down at the end of the year and was to be succeeded by Roger Burnley. Also on the M&A front, on Monday it emerged that Dynegy would merge with Vista Energy, while Axalta Coating Systems was likely to be in focus after Dutch Dulux maker Akzo Nobel confirmed that the two were in discussions about a merger. From a sector standpoint, the weakest areas of the market were: Drug Retailers (-4.88%), Travel and Tourism (-4.43%) and ires (-4.42%). As far as fresh economic data was concerned, the Commerce Department reported that personal consumption expenditures rose by 1.0% month-on-month in September (consensus: 0.8%), while income growth met forecasts with growth of 0.4%. To take note of, a key gauge of price pressures contained in that same report, the PCE price deflator, rose to a 1.6% clip in year-on-year terms, falling slightly short of the 1.7% rise economists had anticipated. Significantly, Monday's personal income and spending report also revealed a sharp drop in the savings rate from August's level of 3.6% to 3.1%. |
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| | Broker Tips | | Broker tips: Provident Financial, Hunting, RSA Insurance Berenberg hiked its target for Provident Financial on Tuesday but stuck to a 'hold' recommendation on the shares, warning clients that it was impossible to anticipate the conclusion of the regulator's investigation into the door-step lender. "We do not think it is possible to usefully forecast the conclusion of the FCA investigation, and it is this variable that will be the key driver of the stock price over the medium term, in our view. We therefore retain our Hold recommendation," analysts Donald Tait and Robert Chantry said in a research note sent to clients. Furthermore, the broker explained how "the FCA has stated publically its commitment to helping potentially vulnerable borrowers and we think this may have further ramifications for earnings and returns." The potential for increased regulatory capital requirements as a result of the investigation into Provident's repayment option plan was still a worry as well, potentially curtailing its ability to pay any redress fine. On a more a positive note, the broker did expect the company home credit unit to recover, albeit not to the same size as before. Analysts at Canaccord Genuity raised their target for Hunting's shares following the company's third quarter trading update. The Canadian broker said it expected the "strong" levels of activity seen over the prior month to extend into October, adding that business was especially strong at the the oilfield services group's Titan unit. Hence, Canaccord bumped up its full-year 2017 earnings per share estimate from a loss of -$0.03 to a profit of $0.01, with similar-sized upwards revisions made to its estimates for 2018 and 2019. As a result, its target for the shares rose from 450p to 520p. "Outside the guns business, activity in other US onshore drilling focussed businesses (Hunting Specialty) is also reporting strong results. Notably, there is also some strength in the rest of the business, albeit that demand is primarily for US activity [...] We continue to believe that the recovery in the oil industry is taking hold, and current oil prices suggest that there is likely more to go for," analyst Alex Brooks said in a research note sent to clients. RSA Insurance got a boost on Tuesday as JPMorgan Cazenove upgraded the stock to 'overweight' from 'neutral' as it took a look at the UK non-life sector. The bank said its clear top pick in the sector is overweight-rated Direct Line, closely followed by RSA and then Hastings. It noted that RSA has underperformed in recent months, meaning the valuation is now attractive. "We believe the pricing backdrop in commercial lines may improve following recent natural catastrophe events, and with additional capital return likely to commence from FY18E, RSA's income credentials could be meaningfully improved." With relatively less upside to its valuations, the bank downgraded Admiral to 'neutral' from 'overweight' and Esure to 'underweight' from 'neutral'. It said Admiral's slower growth in the first half was due to a temporary competitive disadvantage and although this will be removed in January, it nevertheless could continue to weigh on growth in the second half. "With no obvious catalysts on the horizon, and only modest upside to our valuation, we move to neutral." | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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