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Mar 14, 2018

Evening Euro Markets Bulletin

 
ADVFN III Evening Euro Markets Bulletin
Daily world financial news Wednesday, 14 March 2018 19:38:11
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London close: Stocks end lower as US equities retreat; Prudential bucks trend
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London stocks reversed earlier gains to close lower on Wednesday as US equities retreated on the back of weak retail sales and growing political uncertainty, although a strong showing from Prudential and heavily-weighted miners kept losses to a minimum.

The FTSE 100 closed down 0.1% to 7,132.69, while the pound was up 0.1% against the euro at 1.1285 and flat versus the dollar at 1.3958.

Stocks had been marching higher until equities on Wall Street turned lower following the release of disappointing retail sales figures. According to data from the US Census Bureau, retail sales were down 0.1% month-on-month in February versus expectations of a 0.3% increase, marking the third consecutive month of decline. Excluding autos, retail sales were up 0.2%, but this was short of consensus forecasts for a 0.4% increase, with a mixed performance across subsectors.

Market analysts also suggested that the move lower across the pond was down to ongoing jitters about the chaos of Donald Trump's White House, following the sacking of Secretary of State Rex Tillerson on Tuesday, which came just days after the departure of Trump's chief economic adviser Gary Cohn.

In UK corporate news, Morrisons dropped even as it announced a special dividend on top of the supermarket group's annual payout after another year of sales and profits growth.

Ocado was weaker as Walmart revealed that it is expanding its online grocery delivery service from six US metro areas to more than 100 in total by the end of the year, while Cathedral City maker Dairy Crest was hit by a note from Peel Hunt.

Chris Beauchamp at IG said: "Ocado had been riding high of late thanks to hopes of a deal in the US but it looks like this has been dashed as the US giant Walmart looks to expand its offering directly, rather than using the UK firm as a partner.

"Short positions got cleaned out months ago when the first international deals came through, but some of the cynicism is returning, with shorters adding to their bearish position on the stock."

InterContinental Hotels fell after saying it has agreed to buy a majority stake in Regent Hotels and Resorts for $39m in cash, with the right to acquire the remaining 49% interest in a phased manner from 2026.

Overall losses were kept to a minimum, however, thanks in part to solid gains from life insurer Prudential, as investors welcomed its plans to split off its UK and Europe business and a rise in annual profit driven by surging sales at its Asian business.

Heavily-weighted miners also lent support, with Anglo American, Antofagasta and BHP Billiton all higher after better-than-expected industrial production out of China lifted metals prices and following upgrades at Goldman Sachs.

Funeral and funeral-related services provider Dignity surged following its full-year numbers as it reassured investors after a profit warning in January, with Panmure Gordon saying there could be "substantial" consensus upgrades on the horizon.

Infrastructure group Balfour Beatty was on the front foot after reporting a big rise in annual profit while Hikma Pharmaceuticals advanced after its full-year adjusted operating profit and earnings beat expectations.

Cairn Energy was also in the black a day after its results, as Morgan Stanley reiterated its 'overweight' stance on the stock following the material selloff post the earnings presentation.


Market Update
 
 
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cur price
7,144.89
 
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19,838.57
 
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-24.66
 
 
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cur price
3,328.63
 
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-10.55

Top 10 FTSE 100 Risers

#   Name Change Pct Change Cur Price
1 Prudential (LSE:PRU) +5.94% +108.50 1,934.00
2 Anglo American (LSE:AAL) +3.28% +56.80 1,788.40
3 Antofagasta Plc (LSE:ANTO) +3.17% +29.00 943.60
4 Glencore (LSE:GLEN) +1.96% +7.40 384.10
5 GKN Plc (LSE:GKN) +1.86% +8.00 438.00
6 British American Tobacco (LSE:BATS) +1.72% +71.50 4,237.50
7 London Stock Exchange (LSE:LSE) +1.59% +62.00 3,967.00
8 Paddy Power Betfair (LSE:PPB) +1.50% +115.00 7,795.00
9 United Utilities (LSE:UU.) +1.45% +10.00 701.60
10 Babcock International Group (LSE:BAB) +1.42% +9.40 672.40

Top 10 FTSE 100 Fallers

#   Name Change Pct Change Cur Price
1 Morrison (LSE:MRW) -4.73% -10.70 215.60
2 Convatec (LSE:CTEC) -2.13% -4.30 197.70
3 Old Mutual (LSE:OML) -1.84% -4.70 251.00
4 British Petroleum (LSE:BP.) -1.79% -8.50 465.50
5 Kingfisher Plc (LSE:KGF) -1.67% -5.90 348.20
6 Mediclinic International plc (LSE:MDC) -1.61% -9.80 599.40
7 Standard Chartered (LSE:STAN) -1.56% -12.10 764.90
8 Sainsbury (LSE:SBRY) -1.20% -2.90 238.70
9 Barclays (LSE:BARC) -1.00% -2.10 207.60
10 Royal Dutch Shell A (LSE:RDSA) -0.92% -20.50 2,212.00

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Europe close: Stocks drift lower despite dovish ECB
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Stocks on the Continent finished lower, despite 'dovish' remarks from the head of the European Central Bank on the outlook for monetary policy, weighed down by a dip on Wall Street shortly after the start of trading on Wall Street.

Speaking at The ECB and Its Watchers conference on Wednesday morning, ECB chief Mario Draghi said rate-setters needed to be patient, persistent and prudent, adding that risks and uncertainties to the outlook remained.

As of the closing bell, the benchmark Stoxx 600 was lower by 0.15% or 0.55 points at 374.94, alongside a 0.18% or 9.43 point dip on the Cac-40 to 5,233.56, although Germany's Dax was up by 0.14% or 16.71 points to 12,237.74.

In parallel, euro/dollar was dipping 0.17% to 1.2373, weighed down in part by figures showing that US final demand prices advanced by 2.8% year-on-year in February, with Barclays Research saying the data pointed to "stable price pressures in the pipeline".

Nevertheless, figures showing a third consecutive fall in monthly retail sales volumes were weighing on stockmarkets in the States.

On the other hand, earlier in the day China's National Bureau of Statistics reported a 7.2% year-on-year increase in the country's idnustrial output over the first two months of 2018 (consensus: 6.2%).

That appeared to offset the drag overnight from Tuesday's news that US Secretary of State Rex Tillerson had been sacked by the White House.

On that note, one City-based analyst was pointing out to clients a report in the NY Times according to which more personnel changes were expected in the White House over the coming week.

Speaking of the US administration, on Wednesday morning European Council president Donald Tusk urged the US president to "make trade not war".

"We are not happy either [...] That is the reason why a few years ago we started trade negotiations with the U.S. We should go back to these talks now."

In regional economic news, Eurostat Industrial production data in the euro area for January printed well below forecasts, coming in at down by 1.0% month-on-month (consensus: -0.4%), amid a 6.6% drop in output of energy and a 1.4% fall in that of durable consumer goods.

Spanish retail sales grew at a 2.5% year-on-year clip in January, INE said, just as expected.

Company-wise, Adidas was in the spotlight after the announcement that it would buy back as many as €3.0bn-worth of shares by 2021 sent shares sharply higher.

In other news, Italy's Atlantia agreed to step out of its bid for Spain's Abertis, leaving the field open for Madrid-based ACS, allowing the firm to remain Spanish albeit with Rome-based Atlantia gaining control afterwards.

The transaction would also allow the two to avoid a costly bidding war.


US open: Stocks slip on retail sales data, special election polls

Wall Street is moving lower following the release of data revealing a third consecutive month of falling retail sales, with some investors also carefully watching the special election to the US House of Representatives in the state of Pennsylvania.

At 1616 GMT, the Dow Jones Industrials Average was trading 1.07% or 266.64 point lower to 24,736.33 points, alongside a 0.50% or 13.83 point drop for the S&P 500 to 2,752.19 and a 0.21% or 15.19 point dip on the Nasdaq Composite to 7,947.50.

According to the Department of Commerce, US retail sales volumes shrank by 0.1% month-on-month in February (consensus: 0.3%).

In response to those figures, the yield on the benchmark 10-year US Treasury note was retreating by four basis points to 2.81%.

Acting as a backdrop, markets were keeping tabs on polls ahead of the special election to the US House of Representatives in the state of Pennsylvania, next Tuesday, which were showing the Republican and Democratic candidates running neck-to-neck.

Some observers were looking to the result as a bellwether ahead of the mid-term elections in the fall, with some arguing that a Democratic win might weigh on investor sentiment.

Stocks had ended in the red on Tuesday as investors mulled over news that President Trump had sacked US Secretary of State Rex Tillerson and replaced with him CIA director Mike Pompeo. The sacking came just days after Gary Cohn’s departure, sparking concerns that Trump has lost two key figures when it comes to economic and foreign policy.

Adding to jitters, as analysts at Deutsche Bank pointed out to clients, a report in the NY Times from the day before had suggested that further personnel changes might be on the cards over the coming week in the top ranks of the US administration.

In corporate news, shares of Signet Jewellers were plummeting following the release of its fourth-quarter earnings.

Elsewhere, Walmart revealed that it was expanding its online grocery delivery service from six US metro areas to more than 100 in total by the end of the year.

Also on Wednesday, Broadcom said it has withdrawn and terminated its offer to buy Qualcomm after President Trump blocked it on the grounds of national security.

"Although we are disappointed with this outcome, Broadcom will comply with the order," it said.


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Cryptocurrencies Report
#1 Bitcoin (BTC)
change
-9.12%
mktcap
261.46B
volume
129994.3T
price
8,340.50
#2 Ethereum (ETH)
change
-10.27%
mktcap
110.5B
volume
21347.57T
price
618.00
#3 Ripple (XRP)
change
-9.61%
mktcap
99.59B
volume
4662.42T
price
0.70
#4 Bitcoin Cash / BCC (BCH)
change
-8.60%
mktcap
41.41B
volume
12226.84T
price
960.20
#5 Cardano (ADA)
change
-8.92%
mktcap
24.18B
volume
2987.61T
price
0.20

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Wednesday broker round-up

The Restaurant Group plcBerenberg reiterates sell with a target price of 220p.

Tyman plcBerenberg reiterates buy with a target price of 375p.

Cairn energy plcDeutsche Bank reiterates hold with a target price of 230p.

InmarsatRBC Capital Markets reiterates outperform with a target price of 725p.

Ashtead GroupJP Morgan reiterates overweight with a target price of 2,500p.

Non-Standard FinanceJP Morgan reiterates overweight with a target price of 86p.

Ascential plcCitigroup reiterates buy with a target price of 475p.

Antofagasta plcCitigroup reiterates buy.

Morgan Advanced MaterialCitigroup reiterates neutral with a target price of 345p.

McCarthy & StoneBarclays reiterates underweight with a target price of 136p.

Dart Group plcCanaccord reiterates buy with a target price of 923p.

MarshallsCanaccord reiterates hold with a target price of 475p.

Zotefoams plcCanaccord reiterates buy with a target price of 570p

SIG plcBerenberg reiterates hold with a target price of 15p.

Burford Capital ltdBerenberg reiterates buy with a target price of 1,310p.

John Menzies plc: Berenberg reiterates buy with a target price of 800p.

 

 

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