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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 finishes flat as bookies tussle, builders subside London stocks finished broadly flat on Friday, very modestly in the red on the day but making a small gain over the week, with traders keeping an eye on Black Friday deals, which included an apparent M&A tussle among bookmakers. The FTSE 100 closed down 7.6 points at 7,409.64, while the pound was down 0.5% against the euro at 1.1173 and 0.2% firmer versus the dollar at 1.3334. "With the exception of the FTSE 100 European equity markets have had a positive session," said analyst David Madden at CMC Markets. "Optimism in the eurozone is high as Germany revealed a very strong reading on IFO business confidence survey. This report came one after Germany and France posted impressive services and manufacturing figures. The strength of the single currency hasn't hurt the Continental stock exchanges. "The Social Democrats in Germany are to meet with Angela Merkel's Christian Democratic Union (CDU) on Thursday to discuss the possibility of forming a government. The Social Democrats haven't fared in the past for deals with the CDU, so there is no guarantee a deal will be struck, but the potential for a positive political outcome is boosting Germany stocks." Retailers were in focus in the UK and US as Black Friday sales kicked off, with Next on the back foot as it took part in the event for the first time, despite CEO Simon Wolfson having previously said it "doesn't make sense to get involved". IG analyst Joshua Mahony said: "Today sees UK shoppers spending an expected £8m as Black Friday sales fever grips the nation a month before Christmas. With the retail sector struggling, the increasingly discount driven shopping in recent years have provided yet another hit to the high street, with the big names such as Amazon leading the race to the bottom on prices. While billions will be spent in the UK today, UK consumer confidence has hit the lowest level since the EU referendum, paving the way for what could be a disappointing holiday season for retailers. A consumer confidence index compiled by the Centre for Economics and Business Research and YouGov slipped to 106.6 in November, dropping sharply from 109.3 the month before. The survey found the largest monthly decline in optimism since the July 2016, with declines in all eight measures that make up the index. William Hill was on the back foot after confirming it is in "very preliminary" talks with Australia's Crown Resorts about a possible merger of their local online businesses. However, Paddy Power Betfair jumped to the top of the FTSE 100 leader board following a Reuters report that it has held talks to explore a possible tie-up with the CrownBet unit. Anglo-German tour operator Tui was top of the London leaderboard, boosted by the German bullishness. Housebuilders Persimmon, Barratt Developments and Taylor Wimpey led the decline as analysts and investors mulled the Budget. Rio Tinto slipped after it said that it and China's Sinosteel Corporation have agreed to extend their Channar Mining joint venture. The third extension of the joint venture would see an additional 10 million tonnes of iron ore delivered into the venture from Western Australia. Residential landlord Grainger nudged lower after announcing the acquisition of a stabilised portfolio of three blocks in Manchester, comprising 192 private rented sector homes, for £26m. Beleaguered doorstep lender Provident Financial retreated as it said that executive chairman Manjit Wolstenholme has died. Malcolm Le May, senior independent director, has been appointed interim executive chairman with immediate effect. James Fisher slumped as it reported a rise in revenue for the 10 months to the end of October but warned that the full-year contribution from its offshore oil division will be lower than last year. Whitbread was weaker after AlphaValue cut the stock to 'reduce' and UBM was down after a downgrade to 'hold' by Liberum, which upgraded rival Informa in its place. Experian also gained following an upgrade at Exane BNP Paribas. Data released by UK Finance earlier showed mortgage approvals fell more than expected in October and credit card lending also decreased. The number of new home loans approved declined to 40,488 from 41,576 in September, missing expectations for a smaller drop to 40,900 and hitting their lowest level since September last year. Approvals were a little weaker than the monthly average of 41,447 over the previous six months and 3% lower than in October 2016 However, remortgaging approvals rose to 34,036 from 30,499, well up on the monthly average of 27,163 over the last six months and 36% higher than in October last year. Credit card lending slowed to 5.1% last month from 5.5% in September. |
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| | Market Movers FTSE 100 (UKX) 7,413.24 -0.05%
FTSE 250 (MCX) 19,957.93 -0.24%
techMARK (TASX) 3,468.72 -0.31% FTSE 100 - Risers Paddy Power Betfair (PPB) 8,835.00p 3.51%
TUI AG Reg Shs (DI) (TUI) 1,359.50p 2.06%
3i Group (III) 931.50p 1.91%
Experian (EXPN) 1,581.00p 1.87%
Informa (INF) 761.00p 1.26%
Fresnillo (FRES) 1,364.00p 1.04%
Smurfit Kappa Group (SKG) 2,374.00p 1.02%
Hargreaves Lansdown (HL.) 1,621.00p 1.00%
Merlin Entertainments (MERL) 361.70p 0.98%
Reckitt Benckiser Group (RB.) 6,475.00p 0.86% FTSE 100 - Fallers Persimmon (PSN) 2,550.00p -3.81%
Barratt Developments (BDEV) 603.50p -2.82%
Taylor Wimpey (TW.) 192.00p -2.49%
Babcock International Group (BAB) 667.25p -2.23%
Next (NXT) 4,317.00p -1.55%
WPP (WPP) 1,255.00p -1.49%
Bunzl (BNZL) 2,138.00p -1.34%
Severn Trent (SVT) 2,108.00p -1.31%
Berkeley Group Holdings (The) (BKG) 3,682.00p -1.29%
ITV (ITV) 150.55p -1.21% FTSE 250 - Risers Thomas Cook Group (TCG) 116.20p 4.31%
Mitchells & Butlers (MAB) 250.90p 4.11%
Countryside Properties (CSP) 358.50p 3.22%
esure Group (ESUR) 252.34p 2.16%
Big Yellow Group (BYG) 839.00p 2.01%
888 Holdings (888) 258.90p 1.81%
Kaz Minerals (KAZ) 840.00p 1.69%
Restaurant Group (RTN) 293.60p 1.59%
Hill & Smith Holdings (HILS) 1,335.00p 1.52%
Tullow Oil (TLW) 176.70p 1.38% FTSE 250 - Fallers Telecom Plus (TEP) 1,194.00p -3.40%
Renishaw (RSW) 5,382.50p -3.11%
Capita (CPI) 467.00p -2.99%
Cairn Energy (CNE) 214.40p -2.85%
Serco Group (SRP) 93.85p -2.75%
Brown (N.) Group (BWNG) 267.20p -2.66%
Crest Nicholson Holdings (CRST) 503.50p -2.61%
Mitie Group (MTO) 202.60p -2.50%
Provident Financial (PFG) 887.00p -2.42% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Gains in single currency cap upside on Dax Stocks on the Continent finished off their best levels of the day as the euro approached a two-month high after Germany's SPD said it was open to talks with Angela Merkel's CDU/CSU. Speaking to DPA after eight hour long talks that stretched into the early hours of Friday, SDP Secretary General Hubertus Heil said his party would not reject talks if the country's president decided that was the best path to follow. By the closing bell, the benchmark Stoxx 600 was dipping by 0.13% or 0.49 points to 386.63, alongside a 0.39% or 51.29 point advance on the German Dax to 13,059.84 and a gain of 0.08% or 18.53 points to 22,416.31 for the FTSE Mibtel. A greater than one per cent move in the Dax earlier in the day was capped by technical resistance towards the 13,167 point area. A rise in the euro-dollar exchange rate to a roughly two-month high at 1.1930 also put a damper on things. Nevertheless, following their worst vote results at the September elections, the SPD was wary of voters tying it too close to the CDU in their minds, said analysts at Rabobank. "The SPD's willingness to formally prop up a CDU-CSU government is also likely notably constrained by the fact that such a step would leave the far-right Alternative fur Deutschland (AfD) as the largest opposition group (a status that German establishment politicians would certainly not wish to confer on this party). "Overall, then, the hurdle to forming another grand coalition appears high albeit likely not insurmountable," analysts at the Dutch broker said. On the economic front, confidence among Germany's businessmen was buoyant in November, with the IFO institute's sentiment gauge hitting a fresh record high of 117.5 points, thanks to improved expectations. By sectors, sentiment among manufacturing and wholesaling was strongest, while that in construction and retailing in fact retreated. "The German economy is on track for a boom. The latest figures indicate economic growth of 0.7 percent in the fourth quarter, pointing to growth of 2.3 percent for 2017 as a whole," IFO president Clemens Fuest said in a statement. Meanwhile, in Italy, ISTAT reported a 3.9% drop in the contry's industrial orders in September. Later in the day, INSEE was set to release its latest tally for jobseekers during the month of October at 1700 GMT. Shares in Spain's Banco Santander advanced following an upgrade out of Goldman Sachs from 'hold' to 'buy'. According to the broker, Santander was the best option among its peers for investors hoping to avoid the fall-out from any political uncertainty in Catalonia. However, Goldman also recommended clients purchase 'call' options on CaixaBank, the largest Catalan lender, as a less-risky away of maintaining exposure to any potential upside. Elsewehere, Altice, the telecommunications and cable group, was aiming to raise as much as €3bn in funding via the sale of its business in the Dominican Republic, two sources close the matter told Reuters on Thursday. |
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| | US Market Report | | US open: S&P 500 hits fresh high as dollar drops to two-month lows The S&P 500 and Nasdaq Composite are holding near fresh all-time highs hit at the start of the session amid a weak dollar. Nevertheless, trading volumes were exceptionally light thus far, with trading volumes on the S&P 500 running at roughly 55% their average level over the past 30 days, according to Bloomberg data. At 1637 GMT, the Dow Jones Industrial Average was 0.22% or 51.04 points higher to 23,577.70, alongside a gain of 0.23% or 6.05 point on the S&P 500 to 2,603.25 while the Nasdaq Composite was ahead by 0.27% or 18.78 points at 6,885.89. Pacing gains in the equity space were: Pipelines (0.99%), Electronic office equipment (0.96%) and Home construction (0.73%). In parallel, the US dollar spot index was 0.54% lower to 92.715, near its lowest level in two months amid indications that Germany's main political parties might be able to thrash out a stable government. With most traders away from their desks during the holiday shortened session the spotlight was set to be on the flow of reports gauging client traffic at retailers on Black Friday, which is widely considered to be a bellwether for trading over the remainder of the holiday period. Oanda analyst Craig Erlam said: "US investors return briefly from the Thanksgiving bank holiday on Friday, although the session is likely to be very quiet given the early market close and the lack of events on the calendar. "In the past, this has been a very quiet day and I don't expect this to be any different. We have a few pieces of data being released - flash services, manufacturing and composite PMIs - but under the circumstances I'm not expecting much from them. Equity markets are poised to open marginally higher and not far from record highs but I think people's minds will already be on next week." For her part, London Capital Group analyst Ipek Ozkardeskaya said that nearly 70% of Americans were expected to go online or hit the shops over the weekend. "The pre-sales data indicate a better performance compared to last year; early numbers point at a solid 18% year-on-year increase in November sales so far. US households' holiday spending could increase as much as 4% compared with last year, according to Bloomberg news." The economic calendar was exceedingly sparse on Friday, with only IHS Markit's manufacturing purchasing managers' index out earlier. In the event, the PMI retreated to a reading of 54.6 for November (consensus: 55.0), down from a print of 55.2 in October. |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
| | Broker Tips | | Broker tips: Mothercare, Ophir Energy, Informa Analysts at Canaccord cut their 2018 pre-tax profit forecast for Mothercare by 43% on Friday to £12.0m, reassessing their estimate for losses from its UK business from £500,000 to £7.8m. In parallel, Canaccord dropped Mothercare's target from 103p to 47p and reiterated its 'sell' rating on the retailer. To take note of, the Canadian broker's PBT estimate for the firm was also reduced, by 36%. Critically, the analysts adjusted their projections for Mothercare's like-for-like sales, anticipating a 4% drop in the second half of 2018 and flat gross margins. At the company's international unit, Canaccord reduced its full-year EBIT forecast from £36m to £33m driven by weakness in its Saudi business unit, which had accounted for "the bulk of the pressure" on sales and operating profits. "Our DCF-based price target falls from 103p to 47p. High operational gearing and balance sheet risk makes this no place to be in a difficult consumer environment. Maintain Sell," the broker said.
Credit Suisse believes the market has become too pessimistic on Ophir Energy's ability to reach a financing deal with its potential Chinese investors in order to progress on Fortuna.
With a delay in Ophir's first-investment-decision already priced-in and following 10% underperformance in the shares quarter-to-date, Credit Suisse said it now saw an "attractive" risk-reward trade-off in the shares; hence its decision to upgrade its recommendation for the same from 'neutral' to 'outperform'. According to the Swiss broker's analysts, market pricing was currently implying only a 50% chance of success. "With an offtake agreement already in place, securing project financing may help to further de-risk the project to 90% we carry in our NAV," Credit Suisse added. Furthermore, the broker hailed the company's decision to search for alternate project financing options in parallel to its talks with those Chinese investors. Ophir was set to update the market in December and was aiming to wrap-up the necessary talks on project financing by mid-month with a view to taking FID in the first quarter of 2018. Nonetheless, missing that schedule was a near-term risk which might potentially push-out FID and negatively impact management's credibility, the broker said. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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