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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 little changed following May speech London stocks finished a touch lower on Wednesday, giving up modest gains from earlier in the session as the pound rallied following a better-than-expected reading on the UK services sector, but moves were muted after a speech by Prime Minister Theresa May.
The FTSE 100 was down 0.01% to 7,467.58, while the pound was up 0.21% against the dollar at 1.3270.
A survey released earlier showed activity in the UK services sector unexpectedly improved in September but new business growth fell to a 13-month low.
The Markit/CIPS services purchasing managers' business activity index rose to 53.6 from an 11-month low of 53.2 in August, beating expectations for it to remain unchanged.
A reading above 50 indicates expansion, while a reading below signals contraction.
Survey respondents highlighted healthy labour market conditions and resilient consumer spending, but there were also reports that worries about the business outlook had acted as a growth headwind. In addition, service providers noted subdued business-to-business sales and delayed decision-making on large projects due to Brexit-related uncertainty, while operating expenses jumped.
New business volumes expanded at the slowest pace since August 2016 and optimism about year-ahead growth prospects remained close to its weakest level since
the end of 2011.
Chris Williamson, chief business economist at IHS Markit, said the manufacturing, construction and services surveys released this week portray an economy struggling with sluggish growth and rising prices.
Market participants were digesting speeches by Theresa May, ahead of others from European Central Bank chief Mario Draghi and Federal Reserve Chair Janet Yellen later in the day.
Speaking to the Conservative party conference, the Prime Minister promised more council homes and a cap on energy prices.
On Draghi and Yellen, analyst Craig Erlam at Oanda said: "It will be interesting to get the views of the two central bank heads today and traders will likely be paying very close attention to what they have to say regarding meetings later this year.
"With the Fed currently indicating that one more rate hike is likely and the ECB giving the impression that a further asset purchase reduction will happen, traders are naturally curious about whether these views are changing in light of recent data. As it is, traders have only recently become convinced that we'll see another Fed rate hike this year and the possibility of more next year is only just being priced in."
In corporate news, Tesco reversed earlier gains - which saw the stock push up to near six-month highs - as it reinstated its dividend after a three-year hiatus with a 1p half-year payout as sales rose more than City forecasts and profits soared.
The results were positive but do nothing to hide what are "worryingly pedestrian" UK growth numbers in the second quarter of just 0.4% for transactions and 0.3% for volumes, with slowing like-for-like sales, said analyst Mike van Dulken at Accendo Markets."Lots of positives, granted, but work still to do."
Royal Mail fell after its staff voted in favour of strike action in a row over pensions and pay, while Balfour Beatty was lower after being awarded a $260m contract to build the River Landing Shops and Residences project in Miami for real-estate investment trust H&R REIT and Urbanx Company, in association with real estate developer Matthews Southwest.
Ultra Electronics declined as it announced the award of a $16.2m modification to a previously-awarded cost-plus-fixed-fee contract by the US Department of the Navy, extending its services providing solutions to cyber-secure Navy critical infrastructure.
Centrica and SSE were under the as Theresa May used her speech to announce new details on government energy policy.
Shares in 888 Holdings fell after Sinitus sold its entire stake in the online gambling group via an accelerated bookbuild, while OneSavings Bank was under the cosh after funds managed by private investment firm JC Flowers sold 20m shares in the challenger bank, or an 8% stake.
Tile specialist Topps Tiles tanked after it warned that full-year profit will be at the lower end of the current range of market expectations as market conditions "remain challenging" despite a moderate improvement in the group's final quarter.
In broker note action, Greene King and Marston's were hit by downgrade to 'sell' and 'hold', respectively, at Berenberg, but Wetherspoon was lifted by an upgrade to 'hold' from the same outfit. Meanwhile, Shaftesbury was weaker as HSBC cut its stance on the stock to 'reduce' and Tullow gushed lower as Jefferies cut the stock to 'underperform'.
Bodycote was boosted by an initiation at 'overweight' by Barclays. |
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| Market Movers
FTSE 100 (UKX) 7,467.58 -0.01%
FTSE 250 (MCX) 20,029.42 -0.03%
techMARK (TASX) 3,521.62 0.06%
FTSE 100 - Risers
WPP (WPP) 1,403.00p 2.86%
Anglo American (AAL) 1,430.00p 2.36%
Mondi (MNDI) 2,119.00p 2.07%
Ferguson (FERG) 5,150.00p 1.78%
Glencore (GLEN) 359.40p 1.64%
Coca-Cola HBC AG (CDI) (CCH) 2,558.00p 1.47%
Kingfisher (KGF) 306.10p 1.46%
GKN (GKN) 354.00p 1.37%
TUI AG Reg Shs (DI) (TUI) 1,298.00p 1.25%
Paddy Power Betfair (PPB) 7,540.00p 1.21%
FTSE 100 - Fallers
Centrica (CNA) 179.30p -6.08%
Tesco (TSCO) 183.95p -3.21%
SSE (SSE) 1,367.00p -3.19%
Sainsbury (J) (SBRY) 241.60p -2.38%
Standard Life Aberdeen (SLA) 425.10p -2.03%
Morrison (Wm) Supermarkets (MRW) 231.90p -1.99%
easyJet (EZJ) 1,278.00p -1.46%
Next (NXT) 5,245.00p -1.41%
Aviva (AV.) 498.90p -1.31%
International Consolidated Airlines Group SA (CDI) (IAG) 615.50p -1.12%
FTSE 250 - Risers
Kaz Minerals (KAZ) 821.00p 4.59%
Bodycote (BOY) 962.50p 4.51%
Coats Group (COA) 83.20p 3.94%
Daejan Holdings (DJAN) 6,055.00p 3.50%
Wetherspoon (J.D.) (JDW) 1,276.00p 3.49%
UDG Healthcare Public Limited Company (UDG) 892.50p 2.65%
FDM Group (Holdings) (FDM) 1,010.00p 2.43%
Hochschild Mining (HOC) 232.90p 2.42%
Senior (SNR) 284.50p 1.93%
Vectura Group (VEC) 107.90p 1.79%
FTSE 250 - Fallers
Provident Financial (PFG) 849.50p -6.03%
888 Holdings (888) 243.80p -5.87%
OneSavings Bank (OSB) 374.70p -5.76%
Pets at Home Group (PETS) 212.60p -3.14%
Drax Group (DRX) 301.30p -2.78%
Royal Mail (RMG) 374.20p -2.60%
McCarthy & Stone (MCS) 150.00p -2.53%
Shaftesbury (SHB) 984.50p -2.52%
Auto Trader Group (AUTO) 379.60p -2.52% |
| | 
Top of the stocks Number of Deals Bought Number of Deals Sold |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Spanish stocks clobbered Stocks on the other side of the Channel traded lower for the most part, with the heaviest selling to be seen among Spanish issues ahead of a speech by Catalan president Carles Puigdemont scheduled for later in the day.
Nevertheless, according to one well-known analyst from the City, the selling in Spanish shares followed a speech by King Philip VI overnight criticising "certain" Catalan officials for showing a reiterated, deliberate and conscious disregard for the Law.
At the closing bell, the benchmark Stoxx 600 was down by 0.08% or 0.32 points at 390.40, while the German Dax was in fact higher by 0.53% or 67.87 points at 12,970.52.
Shares on the periphery on the other hand were getting knocked down, with the Cac-40 down 0.29% or 15.46 points to 5,351.84, alongside drops of 1.44% and 2.85% in Italy's FTSE Mibtel and Spain's Ibex 35 to 22,456.38 and 9,964.90, respectively.
Stock in Catalan lenders Caixabank and Banco Sabadell were again in investors' sights, retreating by 5.51% and 5.69%.
In parallel, the yield on the benchmark 10-year Spanish government note was lower by six basis points to 1.78% - albeit off an intraday high of 1.79%.
"To the citizens of Catalonia - all of them - I want to reiterate how for decades now we have lived in a democratic state whose constitutional framework provides channels through which anyone can defend his or her ideas. Because as we know, without respect for the rule of law it would be impossible to live in peace and democratically, be it Catalonia or in the rest of Spain nor anywhere else. Within a democratic and constitutional Spain there is space for dialogue for all citizens," Philip VI said in a televised address on Tuesday evening.
Acting as a backdrop, the president of Spain's Catalan region was scheduled to give a speech at 2000 BST. The news came amid local reports citing officials from the CuP party, a member of the governing coalition in Catalonia, who said Puigdemont would make a formal declaration of independence on 9 October.
Meanwhile, on the economic front, IHS Markit's final reading on its composite Eurozone purchasing managers' index printed at 56.7 for September versus 55.7 in August, in-line with a preliminary estimate. |
| | US Market Report | | US open: Stocks trade flat ahead of Yellen speech Stocks on Wall Street are taking a breather following a record run and ahead of a speech from the head of the US Federal Reserve scheduled for later in the session.
At 1528 BST, the Dow Jones Industrial Average was edging higher by 0.03% or 5.83 points to 22,647.50, but the S&P 500 was off by 0.06% or 1.62 points at 2,533.76, while the Nasdaq Composite was lower by 0.19% or 12.61 points to 6,519.11.
Oanda analyst Craig Erlam said: "After kicking off the week with two record closes, US indices are currently seen opening marginally lower as we prepare for speeches from Federal Reserve Chair Janet Yellen and ECB President Mario Draghi.
"While the two central banks are in very different phases of the tightening cycle, both heads are facing very similar problems in that there is a strong desire within the banks to become less accommodative before the end of the year but the data is making life difficult. Inflation in particular is a massive headache for many central banks around the world, with the normal models proving ineffective in determining when it will return to target."
To take note of, while Yellen was set to speak at 2015 BST, European Central Bank chief Mario Draghi was due to take to the podium at 1815 BST.
On the economic front, Wednesday's data releases came in firmly ahead of economists' forecasts.
In economic news, the ISM institute's service sector purchasing managers' index rose from a reading of 55.3 for August to 59.8 in September (consensus: 55.1).
Ahead of Friday's non-farm jobs report, private consultancy ADP reported that US private payrolls rose by 135,000 in September (consensus: 138,000), as hurricanes Harvey and Irma began to impact the US Gulf of Mexico. Nevertheless, some economists warned the impact from the storms wouldn't be fully apparent until October.
Meanwhile, in the corporate space, electric car maker Tesla rose after Nomura initiated coverage of the stock at 'buy'.
Office Depot was in focus as well after saying late on Tuesday that it was cutting its 2017 profit guidance and announcing the acquisition of CompuCom for $1bn.
Amazon.com was also in the spotlight as the EU antitrust regulator ordered the company to repay $293m in back taxes after saying it had been given an unfair tax advantage.
Verizon Communications was flat despite announcing late on Tuesday that every Yahoo account was hit in a 2013 hack.
PepsiCo stock was also little changed, despite its third-quarter earnings beat, while Mylan surged after it got approval from the Food and Drug Administration for a drug for multiple sclerosis. |
| | Broker Tips | | Tullow Oil: Jefferies downgrades to Underperform with a target price of 155p. William Hill: Berenberg upgrades to Hold with a target price of 260p.
Greene King: Berenberg downgrades to Sell with a target price of 450p.
Bodycote: Barclays initiates coverage at Overweight with a target price of 1025p.
JD Wetherspoon: Berenberg upgrades to Hold with a target price of 1150p.
Marston's: Berenberg downgrades to Hold with a target price of 120p.
Stock Spirits: JPMorgan upgrades to Overweight with a target price of 290p.
Shaftesbury: HSBC downgrades to Reduce with a target price of 856p.
Intu Properties: Deutsche Bank upgrades to Hold with a target price of 220p.
Electrocomponents: Credit Suisse reiterates Underperform with a target price of 520p. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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