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| | London close: Stocks higher at quarter-end, buoyed by deal news |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Deal news helped London's top flight index finish higher on Wednesday, after a technology-led selloff on Wall Street during the previous session sparked early losses. By the end of trading, the FTSE 100 was up 0.64% to 7,044.74, while the pound was edging higher by 0.14% against the euro to 1.1430 bnut off by 0.34% versus the dollar at 1.4112. The FTSE 250 on the other hand ended 0.17% lower at 19,356.59, although it too was well off its lows of the session. Trading in the States had gotten off to a wobbly start amid sharp falls in shares of Amazon.com and Tesla, as investors continued to book profits on the already heavily-sold technology space. Nevertheless, overall Wall Street's main indices were holding their ground ahead of the end of the first quarter. Shares tend to find a bid towards the end of each quarter as fund managers go about 'window-dressing' their results. Commenting on the recent sell-off in the US tech sector, analysts at UniCredit said that in reality the underlying cause was "extremely stretched valuation metrics that have generated a sizeable misalignment with fundamentals, mostly for the big technology stocks. "With sector price to earnings and price to book ratios trading significantly above their long-term averages, it should not come as a surprise that some negative news would precipitate a sell-off. We see this continuing, either with US tech stocks underperforming a rising equity market or weakening materially if risk aversion remains high. In the last few weeks we have recommended a rotation towards defensive sectors, which are more attractive at this stage in the cycle and are more insulated in the event that trade conflicts escalate." On the UK data front, the latest survey from the CBI showed that retailers sustained a fall in sales over a snow-affected February. The reported sales balance fell to -8 in March, from +8 in February, well below the consensus forecast for a +7 gain. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Heavy snow in late February and early March is largely to blame for the big drop in the reported sales balance in March. The survey was conducted during the period of bad weather and up to March 14, so it won't have captured any catch-up spending that might have occurred in late March. Nonetheless, the underlying trend in real sales looks weak too." On the corporate front, M&A news injected some life into proceedings, with Shire shares sharply higher after Japanese rival Takeda Pharmaceutical said it was considering a buyout of the company. Diploma, the life sciences, seals and controls supplier, was on the front foot after reporting "robust" trading in the first half of the year, as sales growth has slowed slightly in the second quarter. Outside of the FTSE 350, DFS Furniture racked up strong gains as it posted an expected drop in half-year profit and revenue but struck a confident tone on its outlook, bucking the downcast retail trend of late. Paddy Power Betfair was on the back foot after saying it has recruited Jonathan Hill from Saga to be the bookmaker's next chief financial officer. Hill, who will stay at the over-50s company until September, has been Saga's CFO since 2015. Miners were dented as the swing in the dollar hurt metals prices, with Antofagasta, Glencore, BHP, Anglo American and Rio Tinto among the big fallers. Ahead of the acceptance deadline for the deal on Thursday, turnaround specialist Melrose Industries set out details of binding commitments for its proposed hostile takeover of GKN and launched a final effort to assert its credentials as a company committed to the wider UK economy. Shares in both companies were lower. Insurer Aviva traded lower but finished off its worst levels of the session as the Financial Conduct Authority said it was considering whether to launch a formal investigation into its decision to ditch plans to cancel its preference shares. Primark owner Associated British Foods gained as it was upgraded to 'overweight' at Morgan Stanley. Luxury fashion brand Burberry was in the black as Goldman Sachs lifted it to 'buy' and added the stock to its conviction list, while G4S rallied after an upgrade to 'hold' at HSBC. Hunting retreated after a downgrade to 'neutral' by Macquarie. |
| | Market Status | Top 10 FTSE 100 RisersTop 10 FTSE 100 Fallers |
| | Daily cryptocurrency Tracker 27.3.18: Bitcoin dips below $8,000 The bearish trend in the cryptocurrency market continued over the past 24 hours, as 47 of the top 50 cryptos registered losses. Of the top 10 cryptos, NEO suffered the heaviest losses, declining more than 14%. Other cryptos, such as Ethereum, Litecoin and Stellar also registered double-digit losses. At the time of writing, Bitcoin was seen more than 6.5% lower, trading below the $8,000 mark. Read More... |
| | Europe close: Defensives pace quarter-end rally |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks on the Continent finished well off their lows of the session, with a big bounce in Utility stocks helping to offset the drag from losses in Technology and Basic Resources. To take note of, indices probably also benefited from quarter-end window-dressing by fund managers. Against that backdrop, by the closing bell the benchmark Stoxx 600 was 0.46% or 1.69 points higher at 369.26, alongside a fall of 0.25% or 30.12 points to 11,940.71 for the German Dax but an advance of 0.29% or 14.70 points on the Cac-40 to 5,130.44. Pacing Wednesday's rally, the Stoxx 600 Utilities gauge jumped 3.24% to end at 284.64. The pan-European benchmark's Technology subindex on the other hand saw the day out from near its worst levels of the session, having retreated 1.79% to 427.43. A gauge of Basic Resources companies fared worse, retreating 1.90% to 442.77. In parallel, the yield on the German 10-year bund was flat at 0.50%, but euro/dollar slipped towards the end of trading, losing 0.49% to 1.2346. Commenting on the outlook for tech stocks, Michael Hewson at CMC Markets UK said: "With the increasing focus on what is going with respect to how Facebook has managed its users personal data, it must surely be only a matter of time before attention turns to the rest of the tech sector, and how companies like Alphabet, Twitter, Microsoft and Apple to name a few, manage their own users personal data. "If lawmakers do turn their attention to the rest of the sector, which seems likely, then it is hard not to see how other tech companies will escape scrutiny on how they use this user data, raising the prospect that we could uncover other practices that invite scrutiny." For their part, analyst at UniCredit Research were of a somewhat similar view to Hewson. "With sector P/E and P/B ratios trading significantly above their long-term averages, it should not come as a surprise that some negative news would precipitate a sell-off," they said to clients. "We see this continuing, either with US tech stocks underperforming a rising equity market or weakening materially if risk aversion remains high. In the last few weeks we have recommended a rotation towards defensive sectors, which are more attractive at this stage in the cycle and are more insulated in the event that trade conflicts escalate." Economic news from the Continent was mildly supportive on Wednesday, with consultancy GfK's German consumer climate index printing at 10.9 for April (consensus: 10.7), which was two tenths of a point higher than in the prior month. Meanwhile, in France, INSEE reported that its consumer confidence index for March was unchanged at 100. Further South, Spanish retail sales increased at a 0.1% month-on-month pace in February, for a year-on-year rate of gain of 1.9%, according to INE. On the corporate side of things, stock in BMW was being dragged down by a Bloomberg report that EU competition authorities were seeking information on the manufacturer's tax deals with Luxembourg. Also in Germany, Handelsblatt reported that ex-Deutsche Telekom head Rene Obermann was in the lead to takeover at the helm of Airbus's board of directors. |
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| | US open: Amazon.com, Tesla hit by selling | | Stocks are down again, although losses outside of the technology arena are contained for the moment. As of 1527 BST, the Dow Jones Industrials is edging lower by 0.10% or 24.45 points to 23,833.26, alongside a fall of 0.40% or 10.48 points to 2,602.14 for the S&P 500, while the Nasdaq Composite is declining 1.04% or 73.15 points to 6,933.08. Weighing on the tech-heavy Nasdaq were shares in Amazon.com, following a report from Axios stating that US president Donald Trump is "obsessed" about Amazon, whose chief Jeff Bezos is also the owner of The Washington Post. Yet analysts at Stifel reportedly stuck by their previous recommendation to 'buy' Amazon, telling clients "we already know president Trump doesn't like Amazon." From a sector standpoint, and with the S&P 500 hovering not too far from its 200-day moving average, which many technical analysts consider an important level of 'support', defensives were clearly in greater demand on Wednesday. As a group, Tobacco was higher by 2.18%, alongside gains in interest-rate sensitive areas of the market such as Fixed line telecommunications (1.67%) and Telecommunications (1.51%). Earlier, analysts at UniCredit had pointed to the recent stream of negative news as the trigger for the sell-off in the US tech sector, but said that in reality the underlying cause was "extremely stretched valuation metrics that have generated a sizeable misalignment with fundamentals, mostly for the big technology stocks. "With sector price to earnings and price to book ratios trading significantly above their long-term averages, it should not come as a surprise that some negative news would precipitate a sell-off. We see this continuing, either with US tech stocks underperforming a rising equity market or weakening materially if risk aversion remains high. In the last few weeks we have recommended a rotation towards defensive sectors, which are more attractive at this stage in the cycle and are more insulated in the event that trade conflicts escalate." Economic data released on Wednesday generally came in on the strong side of things, with the Commerce Department revising its previous estimate for fourth quarter gross domestic product higher by four tenths of a percentage point to 2.9%. Significantly as well, in parallel Commerce announced that America's trade shortfall in goods with the rest of the world undershot forecasts in February, printing at $75.4bn (consensus: $78.3bn). Pending home sales also surprised positively, with NAR reporting that its index tracking activity in the sector jumped by 3.1% month-on-month in February (consensus: 2.0%). To take note of, the US Treasury was set to auction $29bn in seven-year notes and $15bn in 1 year and 10 month FRNs later in the session. Back in the corporate patch, Tesla was also under selling pressure, with some market commentary pointing out the question marks in the market around a recent fatal car crash involving one of its Model X vehicles. Walgreens shares on the other hand were up a tad after posting a 12% jump in quarterly sales and lifting its guidance, while Blackberry surged after the company's fourth-quarter profit and sales beat analysts' expectations. In deal news, Plantronics said it will buy video conferencing gear maker Polycom for $2bn, while US-listed shares of Shire rallied after Japanese rival Takeda Pharmaceutical said it was considering a buyout of the company. |
| | Market Status | Nasdaq 100 Risers Nasdaq 100 Fallers |
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| | Wednesday broker round-up | | Burberry: Goldman Sachs upgrades to buy with a target price of 2,395p. GlaxoSmithKline: Berenberg reiterates buy with a target price of 1,780p IG Design Group plc: Berenberg reiterates buy with a target price of 500p. Legal & General: Deutsche Bank reiterates hold. Aviva plc: RBC Capital Markets reiterates outperform with a target price of 540p. Anglo American: UBS reiterates neutral with a target price of 1,650p. Ferguson: Numis reiterates add with a target price of 6,150p. NCC Group: Shore Capital Markets reiterates buy. Hilton Food Group: Shore Capital Markets reiterates buy. RWS: Shore Capital Markets reiterates hold. Anglo Pacific Group: Canaccord reiterates buy with a target price of 195p. Atalaya Mining Group: Canaccord reiterates buy with a target price of 290p. Genel Energy plc: Canaccord reiterates speculative buy with a target price of 210p. Petropavlovsk: Canaccord reiterates speculative buy with a target price of 12p. G4S: HSBC reiterates reduce. ITV: Kepler Cheuvreux reiterates hold with a target price of 165p. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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