Evening Euro Markets Bulletin

ADVFN III Evening Euro Markets Bulletin Daily world financial news Wednesday, 07 February 2018 22:11:26 Monitor Quote Charts News CFD's Compare Brokers Free BB   Looking for early access to investment opportunities? Make your own informed investment decisions. Get the right tools and information at Master Investor Show 2018. Register for free today London Market Report FTSE 100 Euronext Dax perf CAC 40 Please click on the images to view our interactive charts London close: Relief rally buoys stocks Shares in London finished near their best levels of the session on Wednesday, amid 'bargain hunting' following the previous day's heavy losses, as further gains on Wall Street helping to steady traders' frayed nerves. The FTSE 100 added 1.93% or 138.02 points to 7,279.42, having ended Tuesday's session at around eight-month lows after what analysts said was a "technical correction" in US stocks, likely sparked by concerns that rising inflation might force the Federal Reserve to hike rates more than expected this year. But Wednesday's trading was underpinned by a more solid performance in the US as shares extended their recovery from the sharp falls seen on Monday. Nevertheless, traders remained cautious. Fiona Cincotta, senior market analyst at City Index, said: "Whilst we don’t expect this sell-off to continue for an extended period of time, given that the fundamentals remain strong and unchanged, it is difficult to call the bottom and judge whether stocks have fallen sufficiently for investors to see value once again." In currency markets, sterling was higher by 0.3% against the euro at 1.1301 but 0.53% lower against the dollar at 1.3873 ahead of Super Thursday, which sees the release of the Bank of England's quarterly Inflation Report, minutes from the latest meeting and a rate announcement. Cincotta pointed out that there has been very little in the way of positive UK data recently, with cracks once again appearing in the Conservative party as it tries to establish what the UK relationship with the EU should look like post Brexit. "These are not favourable conditions for the pound, however, GBP/USD has held up reasonably well given the challenges it is facing. With no high impacting data from the UK or the UK this afternoon, investors will start to position themselves for the Bank of England’s Super Thursday releases." On the data front, the latest survey from lender Halifax showed UK house prices unexpectedly declined in January. Prices fell 0.6% over the month following a 0.8% drop in December, missing expectations for a 0.2% increase. Meanwhile, prices in the three months to January were up 2.2% compared to the same quarter a year earlier, slowing down from a 2.7% rise in December and marking the slowest rate since July last year. Economists had been expecting a 2.4% increase. Housebuilders racked up healthy gains despite the disappointing data, boosted by good results from Redrow, which rose after posting record interim profit and revenue as completions increased amid "robust" demand. Taylor Wimpey, Persimmon and Hammerson were higher. Imperial Brands edged up after cautioning that first-half revenues will be hit by new tobacco laws in the UK and an adverse sales mix abroad but said it was "significantly stepping up" its activities in vaping and e-cigarettes. Corrugated packaging company Smurfit Kappa on the other hand dipped after saying that earnings rose 10% in the fourth quarter as strong growth in Europe offset reduced earnings in the Americas while mining giant Rio Tinto rose as it declared a record full-year dividend, posted a 69% jump in profit and announced an additional $1bn share buyback. Severn Trent advanced as the water company reiterated its full-year earnings expectations and said it is still on track to earn at least £50m in outperformance payments. Residential property group Grainger also gained after saying it had a "positive" start to the financial year, with good demand for rental homes and strong rental growth, ahead of last year, while Tullow Oil rallied after it reported its first annual profit in three years thanks in part to rising oil prices. Tesco was also on the up, despite news that thousands of mainly female shop workers are launching legal action to claim back up to £4bn in back pay, saying they earned as much as £3 less an hour than male workers. Precious metals miners Fresnillo, Hochschild and Acacia were under pressure as gold prices dropped. Johnson Matthey advanced as the speciality chemicals group said that it will recognise a charge of £50m after settling a lawsuit, but also announced that changes to the US tax system would have a positive impact on the group. Sales, marketing and support services group DCC was also higher after management announced that operating profit for the period to 31 December was in line with expectations and ahead of the prior year, and announced the acquisition of US-based Elite, a provider of contract manufacturing and related services to the healthcare and dietary supplements market. In broker note action, Rentokil Initial was boosted by an upgrade to 'outperform' at Credit Suisse, while Sanne and UDGHealthcare were hit by downgrades from Liberum. Market Movers FTSE 100 (UKX) 7,279.42 1.93% FTSE 250 (MCX) 19,691.65 2.23% techMARK (TASX) 3,291.74 2.30% FTSE 100 - Risers Scottish Mortgage Inv Trust (SMT) 450.00p 6.58% Old Mutual (OML) 234.80p 5.43% 3i Group (III) 935.60p 4.47% ITV (ITV) 167.45p 4.20% Prudential (PRU) 1,835.50p 3.58% GlaxoSmithKline (GSK) 1,285.40p 3.43% London Stock Exchange Group (LSE) 4,043.00p 3.35% Schroders (SDR) 3,555.00p 3.01% Severn Trent (SVT) 1,870.50p 3.00% Centrica (CNA) 127.80p 2.98% FTSE 100 - Fallers Randgold Resources Ltd. (RRS) 6,214.00p -3.78% Fresnillo (FRES) 1,249.50p -2.76% Antofagasta (ANTO) 899.40p -1.45% Smurfit Kappa Group (SKG) 2,444.00p -0.24% Marks & Spencer Group (MKS) 288.60p -0.17% Anglo American (AAL) 1,635.00p 0.01% Glencore (GLEN) 378.10p 0.01% Micro Focus International (MCRO) 2,055.00p 0.15% Sky (SKY) 1,049.00p 0.38% International Consolidated Airlines Group SA (CDI) (IAG) 621.20p 0.55% FTSE 250 - Risers Investec (INVP) 615.20p 10.09% TalkTalk Telecom Group (TALK) 119.70p 6.31% Stobart Group Ltd. (STOB) 241.00p 6.17% UDG Healthcare Public Limited Company (UDG) 787.50p 5.93% Convatec Group (CTEC) 202.00p 5.76% Coats Group (COA) 77.50p 5.44% Redrow (RDW) 625.50p 5.39% BGEO Group (BGEO) 3,522.00p 5.39% Sirius Minerals (SXX) 23.14p 5.37% JD Sports Fashion (JD.) 365.60p 5.24% FTSE 250 - Fallers Sanne Group (SNN) 658.00p -4.91% Vectura Group (VEC) 80.70p -3.93% Cineworld Group (CINE) 223.20p -3.79% Ferrexpo (FXPO) 277.50p -2.77% Acacia Mining (ACA) 172.00p -2.49% Hochschild Mining (HOC) 214.80p -2.41% Petrofac Ltd. (PFC) 455.90p -2.38% Polymetal International (POLY) 757.80p -2.32% Dignity (DTY) 748.50p -1.32% John Laing Group (JLG) 262.00p -1.06% Leeds City Centre Apartments Invest in the UK’s number 1 property hotspot Priced from just £124,995  Fully managed, 6.5% NET yields Only 33 Units available, Expected to sell out within weeks Find Out More Top of the stocks Number of Deals Bought Place EPIC Equity name % 1 CPI Capita plc 4.84 2 SMT Scottish Mortgage Investment Trust 2.07 3 RDSB Royal Dutch Shell Plc B Shares 1.35 4 LLOY Lloyds Banking Group plc 1.33 5 SXX Sirius Minerals plc 1.16 6 Amazon.com Inc. 1.16 7 IQE IQE plc 1.13 8 VOD Vodafone Group plc 1.11 9 BP. BP Plc 0.97 10 GSK GlaxoSmithKline plc 0.92 Number of Deals Sold Place EPIC Equity name % 1 LLOY Lloyds Banking Group plc 1.66 2 CPI Capita plc 1.48 3 IQE IQE plc 1.30 4 RMG Royal Mail PLC 1.22 5 XBT Provider AB 1.07 6 XBT Provider AB 0.97 7 GSK GlaxoSmithKline plc 0.96 8 SMT Scottish Mortgage Investment Trust 0.91 9 SXX Sirius Minerals plc 0.82 10 RDSB Royal Dutch Shell Plc B Shares 0.80 Looking for early access to investment opportunities? Make your own informed investment decisions. Get the right tools and information at Master Investor Show 2018. Register for free today Cryptocurrencies Report Top Cryptocurrencies # Name Market Cap($) Price(%) Change Price Graph(3m) 1 Bitcoin (BTC) 138,633,733,594 8,068 +4.97% 2 Ethereum (ETH) 80,732,370,367 815.14 +3.33% 3 Ripple (XRP) 30,254,026,445 0.75622 -0.22% 4 Bitcoin Cash / BCC (BCH) 17,119,544,700 1,003.1 +3.77% 5 Cardano (ADA) 9,393,014,677 0.358012 -0.83% 6 Litecoin (LTC) 8,356,166,892 146.99 +3.38% Share Tips for 2018 The Share Centre’s investment research analyst Ian Forrest, comments on five equities, an investment trust as well as an ETF that our expert research team think could flourish in 2018.  Read more. Capital at risk. US Market Report US open: Stocks make tentative gains, Fedspeak in focus Wall Street is adding to the previous day's recovery in shares, although traders were still somewhat wary, while officials at the Federal Reserve appeared to be taking a 'hands-off' approach to the recent sell-off. Significantly, before the market open the head of the New York Fed, William Dudley, told an audience he did not believe the recent rout in stocks had implications for the wider economy, or "not yet". Indeed, he described it as a "healthy" shake-out. Against that backdrop, as of 1550 GMT the Dow Jones Industrials was tacking on 1.18% or 293.98 points to 25,200.61, alongside a rise of 0.89% or 24.13 points to 2,719.22 for the S&P 500 and a gain of 0.56% or 39.38 points to 7,155.09 in the Nasdaq Composite. In parallel, the yield on the benchmark 10-year US Treasury note was edging higher by one basis points to 2.79%. From a sector standpoint, the best performing industry groups were: Non-ferrous metals (6.18%), Specialty finance (5.56%) and Railroads (4.38%). "While we can’t tell what will happen next, the current course of events has mirrored previous market selloffs – brief panic, steady recovery and then a return to the longer-term rally. It is, after all, a bull market," said Chris Beauchamp at IG. On a more cautious note, Neil Wilson, senior market analyst at ETX Capital, noted that the US 10-year yield remains close to 2.8%, while the VIX is still elevated at around 30, suggesting that the relative calm of the last 18 months has ended and we are now in store for more gyrations in equity markets. "Certainly there is a risk that yesterday’s rally is a fake out before another selloff," he said. On Tuesday, all three of the major indices managed to end in the black after a late rally, recovering from huge losses on Monday, when the Dow tanked 1,175 points in what appeared to be a technical correction, likely sparked by concerns that rising inflation might force the Federal Reserve to hike rates more than expected this year. As an aside, in a research note sent to clients Andrew Garthwaite at Credit Suisse told clients that the critical level of wage growth in the US for markets, from 3.25% to 3.50%, had not yet been reached. In January, US average hourly earnings advanced at a 2.9% clip year-on-year. In corporate news, Snapchat parent Snap Inc was rocketing after the social networking platform posted better-than-expected quarterly earnings on Tuesday evening. Wynn Resorts was also higher after Steve Wynn resigned from his roles as chief executive and chairman late on Tuesday following allegations last month of sexual misconduct. Shraes of Walt Disney were also wanted after its fourth-quarter earnings beat analysts' expectations, while stock in Michael Kors found a bid after the fashion brand's fiscal third-quarter earnings topped expectations and it lifted its full-year outlook. Toy-maker Hasbro was also on the up despite posting a surprise drop in quarterly revenue. Going the other way, health insurer Humana could was actively trading after its fourth-quarter profit surpassed expectations but revenues fell short. Still to come, earnings were due from electric car maker Tesla after the closing bell. Atlantic Advisory - Share Tips of the Year 2018 Download Our Latest Report Here Losses can exceed deposits Broker Tips Broker tips: BP, UDG, Spectris Analysts at Citi lifted their target price on shares of BP by 6% to 510p, while reiterating their 'neutral' recommendation on the shares, highlighting the "soft signals" of a rise in the dividend emanating from the company. The latter, they said, should come as some comfort for shareholders following 14 straight quarters with an unchanged payout. The drivers of their higher discounted cash flow-based target price were the company's updated guidance on tax, costs and depreciation from the day before. Citi also stated that Over the medium-term, the outfit's cash returns, at 4.2%, should catch-up with those of its peers. "Cash returns (CROCI) of 4.2% still lag peers by 170 bps, but delivery on forward plans should see BP catch up by 2020," they explained. "The debate, if there is one on BP, is as the business improves to a point of generating post-dividend free cash flow, does that money go back to shareholders? Forward capex guidance looks to embed a lot of sustained efficiency." Expectations for UDG Healthcare's earnings in 2018 and 2019 are too gloomy, Liberum said as the broker upgraded the healthcare industry service provider to ‘buy’. The FTSE 250 company’s guidance is for organic revenue growth of 0-3% in 2018 and analysts’ consensus is at the bottom of the range, but UDG will do better, Liberum analyst Graham Doyle wrote in a note. He upped his rating from ‘hold’ and maintained a price target of 884p a share. In further evidence of market pessimism, UDG shares have lost more than a fifth of their value since November and the percentage of analysts with a ‘buy’ rating has dropped from 90% to 40% in the past year, Doyle said. Now is the time to take advantage of an “attractive entry point” for the shares, he said. Doyle wrote: “Consensus earnings expectations are too pessimistic, lying at the bottom-end of a 2018 guidance range (implying zero organic growth) that we expect management to beat. With UDG set to enter another upgrade cycle and [with] the shares off 22% from their November peak, we upgrade to ‘buy’.” Analysts are also underestimating UDG’s potential performance in 2019 after 18 months of underperformance. Organic growth will be 4% in 2018 and 13% in 2019 when UDG will regain its “darling status” with investors, he said. UDG has the financial strength to make acquisitions that would add to earnings, he added. A lacklustre share price performance in 2017 for precision instruments supplier Spectris, while partly driven by a lack of earnings growth relative to the sector, was mainly due to the sluggish organic growth seen from the firm early in the year, however, with growth picking up throughout the second half of the year, analysts at JPMorgan Cazenove tapped the group as a solid candidate to have ended the year on a positive note. JPMorgan upped its rating on Spectris to 'overweight' from its previous 'neutral' stance, saying the benefits of cost-cutting exercises, an organic growth of at least 2.5% and boosts afforded to the group by way of acquisitions throughout the year, should help improve operating profit by around 25% between 2017 and 2019. Spectris was forecast to post flat operating profits for the year, despite further revenue growth, but come twelve months later, JP Morgan estimated operating profits to move ahead no less than 14% and predicted and operating profit growth of 12% in 2019. The analysts said, "Over the past 18 months, Spectris has completed five acquisitions, the most significant of which were Millbrook and Concept Life Science which deliver testing services to the auto and pharma industries, respectively. We expect the annual number of new model launches by the auto industry in Europe to rise by almost 50% between 2017 and 2020." "Overall, we expect this to trigger a re-rating of the group. With the shares trading at a discount to the sector and with 16% upside potential our revised Dec-18 price target of 2,900p (was 2,800p)," they concluded. With growth picking up throughout the second half of the year, analysts at JPMorgan Cazenove tapped Spectris as a solid candidate to have ended the year on a positive note and forecast stronger profit growth going forward, which led the analysts to raise their recommendation for the shares from 'neutral' to 'overweight'. JPMorgan said the benefits of cost-cutting, organic growth of at least 2.5% and boosts from acquisitions throughout the year should help improve operating profit by around 25% between 2017 and 2019. Spectris was forecast to post flat operating profits for the year, despite further revenue growth, but come twelve months later, JP Morgan estimated operating profits to move ahead no less than 14% and predicted operating profit growth of 12% in 2019. The analysts said, "Over the past 18 months, Spectris has completed five acquisitions, the most significant of which were Millbrook and Concept Life Science which deliver testing services to the auto and pharma industries, respectively. We expect the annual number of new model launches by the auto industry in Europe to rise by almost 50% between 2017 and 2020." "Overall, we expect this to trigger a re-rating of the group. With the shares trading at a discount to the sector and with 16% upside potential our revised Dec-18 price target of 2,900p (was 2,800p)," they concluded. Following the financial crisis, high street banks have funded fewer SME housebuilders Alternative finance providers are stepping in to fill this void, offering investors high margins and attractive returns. One of these lenders, Clearwell Capital is currently fundraising with a 3-year secured bond paying 10% per annum. Click here to find out more. 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