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| | London midday: Stocks dip as pound gains on services data; May speech eyed |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London stocks were trading down a touch by midday on Wednesday, giving up modest earlier gains as the pound rallied following a better-than-expected reading on the UK services sector, but moves were muted ahead of a speech by Prime Minister Theresa May.
The FTSE 100 was down 0.1% to 7,462.11, while the pound was up 0.4% against the dollar at 1.3285.
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 eyeing speeches by Theresa May, European Central Bank President Mario Draghi and Federal Reserve Chair Janet Yellen.
Speaking to the Conservative party conference, the Prime Minister is expected to tell her colleagues that it's time for Brexit infighting to end and unveil plans for a significant expansion in council housing.
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 Beattywas 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 cosh amid reports that Theresa May will use her speech to announce new details on government energy policy, with the changes expected to be negative.
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, Shaftesburywas 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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| | Barclays Vs Lloyds - Which is a better Buy? | | Barclays and Lloyds are two of the UK’s most popular stocks.
But which is the better buy?
In this Complimentary Guide we explain in plain English what’s really going on at these key British Banks.
Find out:
Are Lloyds shares set to rocket?
Why Barclays has a ‘secret weapon’ that could unlock serious value
How do they compare in value and safety?
What you’re about to find out may surprise you…
Click here for your Complimentary Guide |
| | Market Movers
FTSE 100 (UKX) 7,462.11 -0.08%
FTSE 250 (MCX) 19,998.66 -0.18%
techMARK (TASX) 3,520.89 0.04%
FTSE 100 - Risers
Anglo American (AAL) 1,418.00p 1.50%
Coca-Cola HBC AG (CDI) (CCH) 2,556.00p 1.39%
Randgold Resources Ltd. (RRS) 7,465.00p 1.36%
Intertek Group (ITRK) 5,140.00p 1.28%
GKN (GKN) 353.40p 1.20%
TUI AG Reg Shs (DI) (TUI) 1,297.00p 1.17%
Mondi (MNDI) 2,098.00p 1.06%
Associated British Foods (ABF) 3,300.00p 1.04%
Mediclinic International (MDC) 653.00p 1.01%
Pearson (PSON) 612.50p 0.91%
FTSE 100 - Fallers
Centrica (CNA) 181.10p -5.13%
Tesco (TSCO) 184.05p -3.16%
SSE (SSE) 1,379.00p -2.34%
Standard Life Aberdeen (SLA) 424.50p -2.17%
Sainsbury (J) (SBRY) 242.50p -2.02%
Morrison (Wm) Supermarkets (MRW) 233.00p -1.52%
easyJet (EZJ) 1,279.00p -1.39%
Direct Line Insurance Group (DLG) 353.80p -1.20%
Schroders (SDR) 3,381.00p -1.17%
Royal Dutch Shell 'B' (RDSB) 2,321.00p -1.02%
FTSE 250 - Risers
Wetherspoon (J.D.) (JDW) 1,286.00p 4.30%
Bodycote (BOY) 954.00p 3.58%
Kaz Minerals (KAZ) 811.00p 3.31%
Daejan Holdings (DJAN) 6,000.00p 2.56%
Coats Group (COA) 81.80p 2.19%
Evraz (EVR) 326.80p 2.06%
Hays (HAS) 194.80p 1.99%
Wizz Air Holdings (WIZZ) 3,142.00p 1.88%
UDG Healthcare Public Limited Company (UDG) 885.50p 1.84%
Fidelity China Special Situations (FCSS) 230.80p 1.58%
FTSE 250 - Fallers
Provident Financial (PFG) 857.50p -5.14%
888 Holdings (888) 247.30p -4.52%
OneSavings Bank (OSB) 379.70p -4.50%
Tullow Oil (TLW) 179.60p -3.54%
Marston's (MARS) 105.20p -3.13%
Greene King (GNK) 532.00p -3.10%
Royal Mail (RMG) 373.00p -2.92%
Booker Group (BOK) 202.50p -2.74%
IP Group (IPO) 140.90p -2.69%
Equiniti Group (EQN) 293.10p -2.69% |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
| | Asia report: Markets finish mixed as India stands pat on rates |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Markets in Asia finished mixed on Wednesday, with a number of markets still closed for public holidays, after Wall Street put in a solid showing in its Tuesday session overnight. In Japan, the Nikkei 225 was up 0.06% at 20,626.66, as the yen strengthened 0.33% against the dollar, last trading at JPY 112.48. On Tokyo’s corporate front, Fast Retailing finished down 0.79% after racing above the waterline in early trading. The Uniqlo fast fashion owner’s initial gains were the result of reports that same-store sales at the brand’s domestic outlets were up 6.3% year-on-year in September. Shares in screen maker Japan Display surged almost 24% by the end of the session, after the Nikkei reported that the company was planning to begin production of small OLED panels - intended for smartphones - from 2019. The Nikkei added that the company’s affiliate JOLED was also planning to produce medium and large OLED panels - intended for televisions and industrial applications - on a similar timeframe. Japan Display was also said to be investigating the possibility of splitting its smartphone panel investment away from the main firm. Markets in mainland China remained closed for a public holiday, as did those in South Korea, keeping regional volumes lower. Hong Kong’s traders were back on the floor, with the Hang Seng Index posting a 0.73% gain to close at 28,379.18. Shares in China-based electric vehicle maker BYD Company raced ahead 7.71%. Many investors focussed their attention on India during the session, with that country’s central bank standing pat on interest rates at 6% late in the east Asian day, though it did lower its 2018 growth projections. “There is pressure on the committee to ease rates, given that the repo rate is at 6 percent versus below 4 percent CPI inflation,” noted DBS Bank economist Radhika Rao before the decision was released. “The RBI is, however, unlikely to react this week as besides a gradual rise in inflation, significant changes in the macro backdrop also need to be assessed further.” Oil prices were lower during Asian trading, with Brent crude last down 0.41% at $55.77 per barrel and West Texas Intermediate losing 0.4% to $50.22. In Australia, the S&P/ASX 200 was down 0.87% at 5,652.06, with the hefty financials subindex losing 0.71% and the energy sector off 1.09%. The major banks were mostly lower, with Australia and New Zealand Banking Group down 2.11%, National Australia Bank off 1.21% and Westpac Banking Corporation losing 0.87%. Commonwealth Bank of Australia went against the grain and added 0.32% by end-of-play in Sydney. Across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.2% to 7,949.69, led higher by infant food and dairy exporter A2 Milk, which added 5% to reach a fresh record price. The company was prominent in the local market after it - along with competitor Synlait - had their brands and recipes registered by China’s rigorous food import safety scheme. Synlait’s shares were down 1.5% on Wednesday. Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.38% at AUD 1.2715 and the Kiwi advancing 0.29% to NZD 1.3927. |
| | US close: Wall Street sets new records on Powell, autos, airlines | | US stocks continued their strong start to the month, setting yet another record close after comments from a Fed governor and a boost for auto manufacturers from strong sales data. All main Wall Street indices were higher, with the Dow Jones adding 84 points or 0.37% to close at 22,641.67, while the S&P 500 finished almost 5.5 points higher at 2,534.58, and the Nasdaq was up 15 points to 6,531.71.
Federal Reserve governor Jerome Powell, one of those recently interviewed by Donald Trump to potentially replace Janet Yellen as chair of the US central bank, made a strong bid to get into the President's good books as he gave a speech about reducing the regulatory burden and said increasing the country's rate of growth was his top priority.
Speaking in Washington ahead of a Q&A session organised by Reuters, Powell said he was confident regulators could reach an agreement to move to a "significantly less burdensome" version of the Volcker Rule, which was put in place in the aftermath of the financial crisis.
Later, when asked what keeps him awake at night, he said: "The biggest challenge we face as a country is to do what we can to sustain the sustainable growth rate of the U.S. economy-just another percentage point over time would make dramatic differences in lives over time, in dramatic differences in political dialogue and so many dimensions," Powell said in response to.
"I think we need to be doing those things that support higher growth - stronger workforce, higher productivity, balanced regulation."
General Motors and Ford stock stepped up a gear after strong vehicle sales data than was expected, thought to be helped by consumers replacing damaged cars after hurricanes Harvey and Irma.
There were 1.52m vehicles sold in September, a 6.1% increase compared with a year earlier, Autodata said.
The three largest manufacturers, General Motors, Ford and Toyota, enjoyed strong months with sales gaining 11.8%,14.9% and 8.9%, respectively, as pickup trucks and sport-utility vehicles remained strong but passenger car sales continued to struggle.
Airline stocks were stronger after Delta Air Lines predicted a 2% revenue improvement for the third quarter. With analysts saying the forecast eased worries about the profit hit from canceled flights due to the storms, there was also a lift given to rivals American Airlines and United Continental.
Ford Motor Company announced plans to cut $10bn of costs, reduce investment in non-electric cars, and reallocate cash towards SUVs and trucks rather than cars.
Dow Jones - Risers
Verizon Communications Inc. (VZ) $49.85 0.99%
American Express Co. (AXP) $91.43 0.98%
Wal-Mart Stores Inc. (WMT) $79.22 0.98%
General Electric Co. (GE) $24.80 0.94%
Walt Disney Co. (DIS) $100.79 0.93%
Intel Corp. (INTC) $39.38 0.87%
Coca-Cola Co. (KO) $45.20 0.87%
3M Co. (MMM) $214.58 0.85%
Home Depot Inc. (HD) $165.17 0.70%
Johnson & Johnson (JNJ) $132.10 0.67%
Dow Jones - Fallers
Nike Inc. (NKE) $51.47 -0.77%
Microsoft Corp. (MSFT) $74.26 -0.47%
Merck & Co. Inc. (MRK) $64.38 -0.28%
Boeing Co. (BA) $255.35 -0.21%
McDonald's Corp. (MCD) $156.86 -0.06%
E.I. du Pont de Nemours and Co. (DD) $83.93 -0.00%
International Business Machines Corp. (IBM) $146.78 0.08%
United Technologies Corp. (UTX) $117.68 0.11%
Visa Inc. (V) $105.59 0.14%
Exxon Mobil Corp. (XOM) $81.76 0.16%
S&P 500 - Risers
Delta Airlines Inc. (DAL) $51.25 6.62%
United Continental Holdings Inc. (UAL) $64.14 6.14%
American Airlines Group (AAL) $50.51 5.82%
Lennar Corp. Class A (LEN) $55.48 4.79%
Southwest Airlines Co. (LUV) $58.51 4.50%
CenturyLink Inc. (CTL) $20.18 4.45%
Sherwin-Williams Co. (SHW) $374.37 4.16%
Paychex Inc. (PAYX) $61.99 3.64%
Frontier Communications Co. (FTR) $12.60 3.53%
Kroger Co. (KR) $20.56 3.01%
S&P 500 - Fallers
F5 Networks Inc. (FFIV) $117.82 -4.77%
Hanesbrands Inc. (HBI) $23.85 -4.48%
Endo International Plc (ENDP) $8.71 -4.18%
Urban Outfitters Inc. (URBN) $23.11 -3.67%
Mallinckrodt Plc Ordinary Shares (MNK) $37.59 -3.29%
Helmerich & Payne Inc. (HP) $50.02 -2.42%
Csra Inc. (CSRA) $31.97 -2.17%
ConocoPhillips (COP) $49.24 -2.13%
Coach Inc. (COH) $39.83 -2.07%
Range Resources Corp. (RRC) $20.00 -2.06% |
| | Wednesday newspaper round-up: Betting shops, Royal Mail, Uber, Tesco | | Only a fifth of households can afford to buy the average new home in the south-east of England, according to research, which said affordable properties in the region should cost no more than £250,000. Savills, the property firm, said the housebuilding industry was on track to deliver the government's target of 1m new homes by 2020 - but there remained an annual shortfall of 104,000 homes in the areas with the highest demand, London and the south-east. - Guardian Betting shop staff are not properly trained to spot problem gamblers and are even encouraging customers to chase losses or adopt useless strategies, according to a report described as a "wake-up call" to the industry. Fresh concerns about gambling firms' efforts to tackling addiction came as the government prepares to unveil a review that could overhaul regulation of fixed-odds betting terminals (FOBTs) and advertising by the industry. - Guardian
Royal Mail is to suffer its first strike since privatisation, expected on Black Friday and the day after, after workers voted in favour of industrial action over a dispute linked to pensions, pay and jobs. The threat of industrial action at one of the busiest times of the year drew a counter-threat from Royal Mail. It claimed the Communication Workers Union had no legal right to strike as soon as Black Friday because of an agreement signed in 2013. - Telegraph
Transport for London has said it will take Uber several weeks to win back its trust after a "constructive" meeting between the company's new chief executive and senior officials. Dara Khosrowshahi, who took over Uber's top job last month, flew to London for an urgent, high-level meeting to address the capital's concerns regarding its ride-hailing service. - Telegraph
Two Tesco employees resigned amid concerns about accounting practices at the retailer, the trial of three former executives was told yesterday. The resignations were disclosed on the third day of the trial of Christopher Bush, John Scouler and Carl Rogberg. Each is facing one charge of fraud and one of false accounting. - The Times
Four years of falling shop prices are coming to an end as inflation begins to make its way back into supermarkets and the high street, according to the British Retail Consortium. Overall shop prices fell by 0.1 per cent in September, the shallowest level of deflation in four years, with prices "teetering on the edge of inflation". - The Times
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