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| | London close: Stocks shrug off another strong US inflation print |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | London equities on Thursday, underpinned by strength in the mining sector and an impressive showing from stocks with exposure to South Africa, as investors appeared to shrug off yet another higher than expected print on US inflation. The FTSE 100 was up 0.29% or 20.84 points to 7,234.81, while the pound up 0.14% against the euro at 1.1261 and 0.29% firmer versus the dollar at 1.4057. Following higher than expected US consumer price inflation a day earlier, IG analyst Joshua Mahony said markets were quickly settling back into their routine of steady gains as "the earthquake moment" prompted by the US CPI reading passes. Indeed, on Thursday they shrugged off another higher-than-expected print on US prices, the Bureau of Labour Statisticsreporting that so-called final demand producer prices rose at a 2.7% pace year-on-year in January (consensus: 2.5%). "The FTSE has enjoyed another relatively stable session, as the gradual recovery continues to take shape. While last week saw US volatility spike off the back of higher inflation expectations, we are seeing that volatility calm down considerably this week. With US stocks higher despite yesterday's rise in US CPI and today's PPI increase, there is clearly a reduced sensitivity in markets, with the yesterday’s initial stock sell-off subsequently turning into gains. "That disregard for rising inflation could provide us with a clue that the recent episode is nearing an end, with the weakness seen in the latter park of today’s session unlikely to damage the bullish story being built over recent days," Mahony said. Old Mutual, Anglo American and Mondi, which have listings on the London Stock Exchange and the Johannesburg Securities Exchange, were up following Jacob Zuma's resignation as president of South Africa. Analyst Neil Wilson at ETX Capital said investors were breathing a sigh of relief after nine years of scandal. "Growth has stagnated badly under Zuma and there is hope that this will usher in a period of greater political stability and maybe some economic reforms that can get the drivers of growth going again. "Ramaphosa is seen as good for business and will tackle corruption and mismanagement. Not that he won’t face challenges of course - there are deep economic and social problems and the ANC remains pretty divided. But whatever happens under the new president, I think markets and business assume it won’t be anything like as bad as Zuma." Heavily-weighted miners put in a solid performance as commodity prices firmed on the back of a weaker dollar, with Rio Tinto, Glencore and BHP Billiton all up. AstraZeneca was also firmer after it and Merck & Co announced that the US Food and Drug Administration has granted Orphan Drug Designation (ODD) for selumetinib, a MEK 1/2 inhibitor, for the treatment of neurofibromatosis type 1 (NF1). GKN reversed earlier losses to trade higher after its chairman said the hostile bid from turnaround specialist Melrose Industries is "low price and high risk" and undervalues the group. Medical equipment maker ConvaTec rallied as it reported better-than-forecast 2017 organic revenue growth of 2.3% to £1.76bn, while Bodycote surged after an upgrade to 'overweight' at JPMorgan. On the downside, Standard Life Aberdeen was under the cosh as it said it was making an impairment charge of around £40m after Lloyds Bank announced it was withdrawing funds controlled by its Scottish Widows investment arm. Elsewhere, RELX Group, the information and analytics formerly known as Reed Elsevier, was on the back foot despite lifting its final dividend 10%, pledging to repeat its £700m share buyback in 2018 and proposing to merge its UK and Dutch parent companies in a further simplification of its corporate structure. Analysts said it was likely being dumped along with other high dividend stocks. Insurer Lancashire Holdings suffered heavy losses after saying it swung to a bigger-than-expected full-year loss as natural catastrophes took their toll, while Indivior was under pressure after it swung to a loss in the fourth quarter despite a rise in revenue. AstraZeneca, Unilever, BP, Royal Dutch Shell and PZ Cussons were lower as their shares went ex-dividend. Market Movers FTSE 100 (UKX) 7,234.81 0.29%
FTSE 250 (MCX) 19,574.76 0.65%
techMARK (TASX) 3,293.73 1.01% FTSE 100 - Risers Fresnillo (FRES) 1,391.00p 4.63%
BAE Systems (BA.) 591.80p 3.39%
Johnson Matthey (JMAT) 3,206.00p 3.29%
Old Mutual (OML) 246.70p 3.05%
Mondi (MNDI) 1,840.50p 2.74%
CRH (CRH) 2,489.00p 2.55%
Just Eat (JE.) 883.20p 2.53%
Rio Tinto (RIO) 4,125.50p 2.47%
Rolls-Royce Holdings (RR.) 840.20p 2.39%
Smiths Group (SMIN) 1,579.00p 2.23% FTSE 100 - Fallers Standard Life Aberdeen (SLA) 358.41p -7.93%
AstraZeneca (AZN) 4,713.50p -2.41%
DCC (DCC) 6,680.00p -1.76%
Severn Trent (SVT) 1,702.00p -1.62%
United Utilities Group (UU.) 659.00p -1.52%
Royal Dutch Shell 'B' (RDSB) 2,285.00p -1.49%
Royal Dutch Shell 'A' (RDSA) 2,255.50p -1.14%
BP (BP.) 469.75p -1.08%
Centrica (CNA) 126.40p -0.78%
TUI AG Reg Shs (DI) (TUI) 1,525.00p -0.71% FTSE 250 - Risers Galliford Try (GFRD) 860.00p 7.50%
Convatec Group (CTEC) 212.20p 7.36%
Sophos Group (SOPH) 516.00p 4.58%
Bodycote (BOY) 927.50p 4.51%
Aggreko (AGK) 787.40p 3.82%
Hochschild Mining (HOC) 237.00p 3.81%
Cobham (COB) 123.40p 3.61%
SSP Group (SSPG) 633.50p 3.34%
Spectris (SXS) 2,623.00p 3.23%
Capital & Counties Properties (CAPC) 282.20p 3.14% FTSE 250 - Fallers Lancashire Holdings Limited (LRE) 595.50p -8.94%
Indivior (INDV) 375.30p -7.31%
IP Group (IPO) 110.40p -6.12%
Brown (N.) Group (BWNG) 193.00p -6.04%
TalkTalk Telecom Group (TALK) 101.60p -4.69%
Capita (CPI) 181.35p -4.30%
Provident Financial (PFG) 691.80p -3.14%
Barr (A.G.) (BAG) 624.00p -3.11%
Intermediate Capital Group (ICP) 1,005.00p -2.99%
RHI Magnesita N.V. (DI) (RHIM) 4,220.00p -2.31% |
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| | Europe close: Stocks finish off one-week highs |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | European stocks ended the session higher despite another stronger than expected reading on US inflation, in the former of the latest producer price data. By the close of trading, the pan-European Stoxx 600 index was up by 0.53% or 1.98 points to 376.51, alongside an advance of 1.11% or 57.26 points to 5,222.52 for the Cac-40 and a gain of 0.28% or 61.89 points to 22,495.64 on the FTSE Mibtel. Frankfurt's Dax on the other hand lagged behind, edging barely 0.06% higher at 12,346.17. As on Wednesday, the strong reading on US producer prices may have been offset by a weaker-than-forecast print on a key activity indicator, namely on industrial manufacturing production. Linked to the above, the degree of capacity utilisation in US industry came in at 77.5% for January, five tenths of a percentage point less than in the month before. Shortly before the closing bell, David Madden at CMC Markets UK said: "European are looking to finish lower on the day as mid-morning gains have been handed back. The FTSE 100, DAX and CAC 40 reached one week highs earlier today, but since then investors have been locking in their profits and now the FTSE 100 and DAX are in the red. "The mood remains optimistic despite the small bit of selling we has seen lately. It would appears that we are slowly recovering from the major declines of last week." In corporate news, Airbus shares lead the risers with a gain of more than 10% as the company beat profit and earnings expectations. Other earnings results also boosted the market. Medical equipment maker ConvaTec rallied as it reported better-than-forecast 2017 organic revenue growth of 2.3% to £1.76bn. Old Mutual advanced as Renaissance Capital lifted the stock to 'buy'. French pharmaceutical firm Ipsen was up on strong results, while compatriot Schneider Electric shares were also higher after the company reported a record net profit in 2017, driven by accelerating sales and increases in productivity as well as efficiency. Standard Life Aberdeen was under the cosh as it said it was making an impairment charge of around £40m after Lloyds Bank announced it was withdrawing £109bn in funds controlled by its Scottish Widows investment arm. Nestle shares were lower after the food company reported last year’s organic growth was the weakest since 1996. AstraZeneca fell after it and Merck & Co announced that the US Food and Drug Administration has granted Orphan Drug Designation (ODD) for selumetinib, a MEK 1/2 inhibitor, for the treatment of neurofibromatosis type 1 (NF1). The stock also went ex-dividend on Thursday. |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
| | Market Analysis 12/02/2018 Today’s highlights: Global markets seen higher - Wall Street gains continue: The Dow Jones, Nasdaq and S&P 500 all showed impressive gains yesterday. Both the Dow and S&P 500 have now erased all of their losses for 2018 and are positive for the year. The Nasdaq rose more than 1.8%, boosted by gains seen in big tech companies, such as Netflix, Amazon and Facebook.
- Asia seen higher: Following Wall Street’s lead, markets in the East were also trading higher this morning, as the Nikkei showed impressive gains of more than 1.2%. Markets in China are closed today, due to the celebration of the new lunar year.
- Volatility expected for USD: The Producer Price Index report is due in the US at 13:30 GMT, potentially impacting the greenback.
Read More... |
| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Bitcoin (BTC) | 171,270,071,033 | 10,068 | +6.48% |  | | 2 |  | Ethereum (ETH) | 91,541,806,267 | 926.32 | +0.72% |  | | 3 |  | Ripple (XRP) | 45,306,863,643 | 1.11 | -1.2% |  | | 4 |  | Bitcoin Cash / BCC (BCH) | 23,551,961,460 | 1,373.9 | +1.39% |  | | 5 |  | Litecoin (LTC) | 12,240,881,050 | 218 | +2.75% |  | | 6 |  | Cardano (ADA) | 10,595,927,042 | 0.386001 | -1.78% |  | |
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| | US open: Wall Street wobbles as more inflation data digested | US stocks opened higher on Thursday but were unsteady on their feed, meaning a fifth day of gains was not assured as investors eyed higher-than-expected inflation print from a day earlier and mixed jobs and producer prices data. At 1500 GMT, the Dow Jones Industrial Average opened more than 200 points higher but wobbled after an hour or so, with the S&P 500 and Nasdaq making similar moves. The previous day's inflation data was still on traders' minds, as the consumer price index for January showed a 2.1% gain that was above economists' expectations for a fall to 1.9%, but the Dow's initial jump back wasn't held onto after strong producer prices data emerged on Thursday. US PPI accelerated to 0.4% in January from -0.1 the prior month, the Labour Department said, thanks to strong gains seen in the cost of gasoline and health care, hinting that inflation pressures were building up after staying flat throughout December. Connor Campbell, financial analyst at SpreadEx, said the core reading smashed forecasts, doubling estimates to arrive at 0.4%. "Those hawkish numbers appear to have been enough to temper investors’ early enthusiasm, undermining the market’s recently displayed resilience." After a couple of very volatile weeks in which US indices fell more than 10% from their record highs, Craig Erlam at Oanda, said market appeared to be "starting to regain some of their composure", though volatility has remained quite elevated in recent sessions. "We are slowly returning to more normal levels and are far from what we were experiencing last week. It would currently appear that last week’s plunge was just a sharp correction in an otherwise bullish market, although it may be too soon to say that with any real confidence," Erlam added. In other data, initial US jobless claims increased by 7,000 to 230,000 for the week ended 10 February and the monthly average of claims rose by 3,500 to 228,500, after touching a 45-year low last week. The number of people already collecting unemployment benefits expanded by 15,000 to 1.94 million, however, this figure was still markedly down from the 2.4 million people receiving benefits in the same week a year earlier. Also the Federal Reserve Bank of Philadelphia reported an unexpectedly faster rate of growth was reported in regional manufacturing activity in the month of February. The Philly Fed index for current manufacturing activity climbed to 25.8 in February from the 22.2 seen in January, despite economists projecting the index to drop to 21.1. The surprise increase by the headline index was partially due to a strong growth in new orders which surged up to 24.5 in February from the 10.1 posted back in January. Looking at the housing market, demand for new single-family homes held steady as the National Association of Home Builders' housing market index was flat at 72 for February. Calculated by the results of a monthly survey conducted by the NAHB for more than 30 years, the NAHB/Wells Fargo housing market index revealed that the current single-family home sales index had dipped to 78 from 79, while the sales expectations index for the next six months rose to 80 from 78 and the traffic of prospective buyers index remained at 54. "Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth," NAHB Chairman Randy Noel said. "However, they need to manage supply-side construction hurdles, such as shortages of labour and lots and building material price increases." In currency markets, the dollar was down versus the pound, the euro and the yen. Jameel Ahmad, global head of currency strategy and market research at FXTM, said, "In reference towards why traders are becoming encouraged to resume selling the dollar, it is likely linked to more clarification being provided following the EU GDP release this week, that showed the distance between economic recovery in the United States and other developed economies has continued to narrow." "The United States is basically not on a pedestal of its own anymore when it comes to conversations of stronger economic growth and increased interest rates. This provides an opportunity for traders to price in yield into currencies elsewhere," he concluded. In corporate news, technology group Cisco Systems gained 3.83% early on after it reported its first rise in quarterly revenue in more than two years on Wednesday and struck an upbeat note on profit for the current quarter. TripAdvisor moved ahead 8.52% after the online travel company's quarterly earnings late on Wednesday beat expectations and Avon Products picked up 7.05% as its fourth-quarter profit came in ahead of analysts' expectations, but sales fell a little short, while e-commerce company Shopify dropped off 1.74% despite posting a 71% jump in fourth-quarter revenue. |
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| | Broker tips: Shire, Bodycote, Indivior | Analysts at both Credit Suisse and Deutsche Bank dropped their target prices for Shire after the biotech group said its sales would grow in mid-single figures and profits would rise at a more glacial pace. Credit Suisse kept its 'outperform' rating on Shire but dropped its target price to 4,000p from 4,500p, saying that its enthusiasm for the group came from the view that its immune system franchise, of which it was adding a stronger global commercial focus, and its move to use its current strong cash flow to pay down debt. The Swiss bank's analysts noted that the target price reduction was purely based on the 3% cut in their 2018 earnings per share projections for Shire. Over at Deutsche, which also dropped its target price to 4,500p from 5,000p, Shire's EPS forecast was cut 5%, citing lower margins due to start-up costs and lower capacity utilisation at its Covington manufacturing facility as its reasoning. "We remain buyers of the shares given a continued valuation disconnect but are cognizant that there remain limited catalysts in the near-term," analysts wrote. Bodycote, which provides heat treatment services and specialist thermal processes, was boosted on Thursday as JPMorgan Cazenove upped the stock to 'overweight' from 'neutral' and bumped up the price target to 960p from 850p. The bank noted the shares are off around 12% from recent highs and said the pullback is a buying opportunity. Other reasons why the stock is an opportunity include the consensus upgrades to come with the 6 March results, an attractive near-term relative and absolute valuation and a potential special dividend with the March numbers. "We believe consensus is underestimating the impact of the broad-based pick-up in demand and the potential for Bodycote to overshoot underlying market development as customers restock," it said. JPM upped its 2017/18/19 earnings per share forecasts b 2%/7%/10%, putting its forecasts 1%/7%/9% ahead of Bloomberg consensus. Jefferies, RBC Capital Markets and Numis reiterated their positive recommendations on Indivior as the opioid addiction drug maker's shares slipped on the back of final results on Thursday. Sales, mostly from the Suboxone opioid addiction film, grew 3% to £1.09bn in 2017, in line with management's previous guidance, noted Numis, driven by 2% growth in the US, and 7% outside America "as the opioid crisis spreads". Indivior's directors guided to another year of top- and bottom-line growth in 2018, with net revenue of $1.13-1.17bn and net income of $290-320m, excluding exceptional items and at constant FX and assuming no launch of a generic film rival and "modest" expectations for Sublocade in its first year. Consensus had 2018 revenues of $1,08bn and EPS of circa 32 cents, implying upgrades are likely. The guidance for 2018 "looks well ahead of market expectations and could imply >10% upgrades from consensus", wrote the Numis analysts. "We await more details on costs (lower legals?) in FY18, which appear to be slightly lower than we had forecast, but otherwise happy with our top of the range numbers with the company more bullish than we normally expect at this time of the year." RBC Capital Markets, which stayed with its 'outperform' and 540p price target, said the results have missed its EPS expectations 3.8% due to higher costs, but the 2018 guidance was seen a positive, "in line with our estimates and meaningfully ahead of consensus", and while investor sentiment might focus on the higher DoJ provision, "the company can afford this." | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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