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| | London close: Stocks end up as investors mull ECB announcement, Trump tariffs |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | Equity indices in London rose on Thursday alongside their European peers as European Central Bank chief Mario Draghi signalled that the central bank’s exit from quantitative easing would be gradual. The FTSE 100 closed up 0.6% to 7,203.24, while the pound was down 0.6% versus the dollar at 1.3818 and 0.3% firmer versus the euro at 1.1224. The European Central Bank kept all its main policy settings unchanged and reiterated that its programme of asset purchases may run past September, if needed, contrary to some analysts' expectations. However, the ECB omitted the reference to the possibility that it might increase the size or duration of its APP if "the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation”. The euro fell 0.7% against the dollar and yen, and was down around 0.5% against all other major currencies. Joshua Mahony, market analyst at IG, said. "While the ECB decided to remove their reference to potential further QE increases, the focus has instead been centred on today’s inflation downgrade with CPI expected to remain below target for years to come. Once again Draghi has managed to retain a dovish theme despite a marginally hawkish shift in tone, with the governor taking with one hand and giving in return." Investors were also keeping an eye on developments across the pond as the White House delayed the signing of proposed tariffs on steel and aluminium imports in order to have more time to prepare the legal documents, according to Bloomberg, which cited a person familiar with planning within the Oval Office. UK house price data was also in focus as the latest RICS residential survey showed the balance of UK surveyors reporting that prices have risen over the last three months fell to zero in February from +8 in January, below the consensus +7. The new buyer enquiries balance fell to -16, from -11 in January, remaining below zero for the 11th consecutive month. "The downturn in housing market activity accelerated in February, indicating that the stimulus to demand from the Chancellor’s stamp duty reforms has been outweighed by the prospect of further increases in interest rates," said economist Samuel Tombs at Pantheon Macroeconomics. He noted that new buyer demand has not fallen for such a protracted period since the 2008/09 financial crisis. In corporate news, Aviva was down despite a bullish full year report. Earnings per share grew 7% and the dividend 18% and the life insurer upgraded its growth targets to aim above 5% EPS growth from 2018, with 55-60% to be paid out in dividends. Retailer Next was in the red on news that it’s facing a demand for up to £30m in back pay from thousands of mostly female shop-floor employees as it emerged that they were being paid an average of £2 an hour less than male warehouse workers. More broadly, the retail sector was in focus as department store chain John Lewis revealed a 77% drop in annual profits amid subdued consumer demand and margin pressure. G4S fell even though the security company reported a 6.5% rise in underlying annual profit and that the outlook for its business was good. Shares in estate agency Countrywide ended down but well off earlier lows as it said it swung to a loss in 2017, scrapped its dividend and sounded a cautious note on its outlook. AA was under the cosh on news that former boss Bob Mackenzie is suing the roadside assistance company and insurer for up to £220m, claiming he was victimised while he suffered from stress. Software developer Alfa Financial Software Holdings took a beating as it warned that growth in the current year will be slower due to a weaker dollar. Persimmon was among the top fallers as it was one of the band of stocks going ex-dividend, also including BHP, CRH, Land Securities, Standard Chartered and Thomas Cook. On the upside, Domino's Pizza UK & Ireland scooted higher as sales increased 15% but profits only by 10%. UK sales in the first eight weeks of 2018 were said to have got off to a strong start. Euromoney Institutional Investor advanced after completing the acquisition of research outfit Extel from WeConvene. Defence contractor Ultra Electronics surged, with traders attributing the move higher to its ongoing buyback. Primark owner Associated British Foods was lifted by an upgrade to ‘buy’ at Goldman Sachs while Britvic rallied as Morgan Stanleybumped it up to 'overweight' after a material pull-back in the shares lately. Weir gained on the back of an initiation at ‘buy’ by Liberum. Outside the FTSE 350, Interserve surged more than 40%, exerting a deep squeeze on one of the most shorted stocks on the London Stock Exchange, on renewed chatter about a rescue by Punch Taverns founder Alan McIntosh. He was reported over the weekend as having hoovering up the embattled outsourcer's debt. Market Movers FTSE 100 (UKX) 7,203.24 0.63%
FTSE 250 (MCX) 19,968.01 0.98%
techMARK (TASX) 3,390.50 1.39% FTSE 100 - Risers Mediclinic International (MDC) 607.00p 4.94%
NMC Health (NMC) 3,362.00p 2.69%
Diageo (DGE) 2,441.00p 2.54%
Unilever (ULVR) 3,880.00p 2.42%
Coca-Cola HBC AG (CDI) (CCH) 2,516.00p 2.32%
Reckitt Benckiser Group (RB.) 5,752.00p 2.28%
SEGRO (SGRO) 605.20p 2.23%
Ferguson (FERG) 5,334.00p 2.03%
Carnival (CCL) 4,743.00p 2.00%
Compass Group (CPG) 1,544.50p 1.98% FTSE 100 - Fallers Persimmon (PSN) 2,548.00p -3.59%
Evraz (EVR) 439.50p -3.43%
Marks & Spencer Group (MKS) 278.60p -3.26%
Anglo American (AAL) 1,707.40p -2.93%
BHP Billiton (BLT) 1,406.60p -2.56%
Next (NXT) 4,721.00p -2.46%
G4S (GFS) 258.30p -2.16%
Rio Tinto (RIO) 3,693.00p -1.27%
Glencore (GLEN) 363.30p -1.10%
Sainsbury (J) (SBRY) 241.80p -0.86% FTSE 250 - Risers Ultra Electronics Holdings (ULE) 1,458.50p 8.44%
Britvic (BVIC) 725.00p 6.30%
Capita (CPI) 169.00p 6.19%
Euromoney Institutional Investor (ERM) 1,296.00p 5.71%
Merlin Entertainments (MERL) 375.40p 5.51%
Vectura Group (VEC) 77.75p 5.07%
Cineworld Group (CINE) 236.80p 4.87%
Sophos Group (SOPH) 517.50p 4.42%
Senior (SNR) 298.40p 4.19%
Mitie Group (MTO) 165.00p 3.84% FTSE 250 - Fallers Alfa Financial Software Holdings (ALFA) 391.00p -18.20%
AA (AA.) 79.96p -6.33%
Ferrexpo (FXPO) 302.00p -4.46%
CLS Holdings (CLI) 234.50p -4.09%
John Laing Group (JLG) 263.60p -3.87%
Jupiter Fund Management (JUP) 499.60p -3.78%
Card Factory (CARD) 202.60p -1.65%
Vedanta Resources (VED) 731.20p -1.64%
Fisher (James) & Sons (FSJ) 1,624.00p -1.58%
Barr (A.G.) (BAG) 630.00p -1.56% |
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| | Europe close: Stocks boosted by more dovish than expected ECB |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | Stocks finished the session higher, boosted by weakness in the single currency after European Central Bank chief Mario Draghi sounded a more dovish note than expected. In the background, investors were scrutinising all the headlines related to the recent increase in global trade frictions and each sides' response. Against that backdrop, by the closing bell the benchmark Stoxx 600 was 1.05% or 3.91 points higher at 376.62, alongside a 1.28% or 66.27 point rise on the Cac-40 to 5,254.10 and a gain of 1.21% or 271.29 points for the FTSE Mibtel to 22,744.76. The European Central Bank dropped its so-called 'easing bias' on Thursday, dropping the reference in its policy statement to the possibility of increasing the pace of bond purchases if necessary. However, it continued to hold out the possibility of continuing to buy back bonds beyond September. "We confirm that our net asset purchases, at the current monthly pace of €30 billion, are intended to run until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim," Draghi reiterated in the introductory statement to his press conference. Commenting on the ECB's decision, Olivier Rakau at Oxford Macroeconomics told clients: "However, that hawkish baby-step was accompanied by a barrage of dovishness from Mario Draghi that is meant to prevent financial markets from a premature tightening of monetary conditions. "Yet, the ECB president's rhetoric was also a stark reminder that significant uncertainties remain regarding the inflation outlook that could yet derail or delay further normalisation steps. We expect the ECB to retain a very cautious and incremental approach to policy normalisation." Significantly, and contrary to expectations on the day before, the US was no longer expected to formally announce its steel tariffs on Thursday. In fact, overnight the US administration reportedly said it might exempt some countries from the new tariffs - based on national security considerations - even as Chinese officials hinted that they might hit back in response to any protectionist moves. To take note of nonetheles, in recent days some observers had highlighted the US government's decision to invoke national security as the reason for its moves to shield its steel and aluminium manufacturers, because under WTO rules that could potentially offer policymakers a fair bit of discretionality or be a backdoor route for the US to exit the WTO. The latest batch of economic data out of the euro area on Thursday was mixed. On the upside, the French central bank's industrial sentiment index for February edged higher to a reading of 105.0 (consensus: 104.7). Further East, Elstat reported that unemployment in Greece dipped from a 21.0% rate for November to 20.8% in December. Meanwhile, in Germany, the Ministry of Finance reported that manufacturing orders shrank at a 3.9% month-on-month pace in January (consensus: -1.6%). However, according to Claus Vistesen at Pantheon Macroeconomics, the drop was almost entirely due to negative so-called 'base effects' given how one year ago new orders had plummeted by 6.7%. On the corporate front, Airbus was in focus after confirming during the previous session that it was to slash production rates on its A380 superjumbo and A400M military cargo aircraft, which might result in as many as 3,700 job losses across the organisation. |
| | US open: Wall Street opens firmer, signing of new tariffs delayed | Trading on Wall Street opened in the green on Thursday, amid reports that the White House might yet tinker with its final proposals on tariffs. According to Bloomberg, who cited a person familiar with planning within the Oval office, the signing of the proposed tariffs was delayed in order to have more time to prepare the legal documents. At 1520 GMT, the Dow Jones Industrial Average was up 0.33%, while the S&P 500 and Nasdaq gained 0.26% and 0.29%, respectively after stocks on Wall Street pared losses into the close on Wednesday on reports that Canada and Mexico could get exemptions from the tariffs on steel and aluminium imports David Morrison, chief market strategist at GKFX, said: "US stock index futures shrugged off early weakness and pushed into positive territory a few hours ahead of the open. Investors continue to play down concerns over Trump’s proposed tariffs and consequent fears of an escalation into an outright trade war. This is despite the resignation of Gary Cohn, Trump’s chief economic advisor, who was widely considered to be Wall Street’s man at the White House." Earlier, European Central Bank president Mario Draghi took shots at Donald Trump's tariffs on US imports of steel and aluminium that triggered fears of a trade war, even as the ECB boss announced that the monetary authority was taking steps towards ending its crisis-era stimulus measures on Thursday, abandoning an explicit commitment to purchase more bonds and expand its quantitative easing programme - if necessary. Draghi said that while the initial impact of the tariffs was "not going to be big", he noted that "unilateral decisions are dangerous", and voiced his concerns regarding the White House's chosen direction in terms of international economic relations. "If you put tariffs against your allies you wonder who your enemies are," Draghi said. Investors have been on edge since Trump announced last week that he was planning a 25% tariff on steel imports and a 10% tariff on aluminium, prompting fears of a trade war. On Wednesday, European Commission trade chief Cecilia Malmstrom said she had prepared a provisional list of all the US products that would see higher tariffs in Europe if Trump goes ahead with his plans.This includes duties on US bourbon, peanut butter, cranberries and orange juice. Malmstrom also said that the EU would be taking the case before the World Trade Organisation. On the corporate front, shares in pharmacy benefits manager Express Scripts picked up 11.71% after it agreed to be bought by health insurer Cigna in a cash and stock deal valued at around $67bn, which includes the assumption of approximately $15bn in Express debt. Cigna shares, however, were 9.33% weaker. Burlington Stores surged 7.03% after its fourth-quarter earnings topped expectations, while Costco actually dropped 4.57% after the retailer posted higher-than-forecast quarterly revenues late on Wednesday. Kroger fell back 11.55% after beating sales estimates and reporting in line with market expectations and American Eagle Outfittersdropped 10.06% despite beating same-store estimates. In economic data, initial jobless claims rose by 21,000 to 231,000 in the seven days ended 3 March, reaching their highest level in a month-and-a-half just one week after dropping to the lowest level since 1969. Analysts had predicted unemployment claims to come in at 220,000, although as analysts explained, seasonal quirks have historically seen numbers spike in February. |
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| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Plus One Coin (PLUS1) | 380,175 | 0.024368 | -4.11% |  | | 2 |  | Bitcoin (BTC) | 160,995,301,866 | 9,425 | -4.77% |  | | 3 |  | Ethereum (ETH) | 70,124,131,388 | 709.4 | -5.35% |  | | 4 |  | Ripple (XRP) | 33,156,976,747 | 0.82645 | -2.88% |  | | 5 |  | Bitcoin Cash / BCC (BCH) | 17,845,824,590 | 1,044.37 | -3.93% |  | | 6 |  | Litecoin (LTC) | 9,963,955,323 | 178.53 | -3.81% |  | |
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| | Broker tips: UBM, Premier Oil, Britvic | Berenberg upgraded business-to-business event organiser UBMfrom 'sell' to 'hold' on Thursday and upped its target price from 675p to 930p as risks to the fashion industry, the firm's largest sector, seemed "less relevant now". Berenberg upgraded business-to-business event organiser UBM from 'sell' to 'hold' on Thursday and upped its target price from 675p to 930p as risks to the fashion industry, the firm's largest sector, seemed "less relevant" following Informa's bid for the company. Instead, Informa was now taking on the risk to UBM's revenues and margins, the German broker said. "Our current DCF valuation is c670p – if we took the £60m of synergies Informa is targeting by 2020, and applied its 14x 2019 P/E to the after-tax contribution from them this would add another c170p to our DCF – still below the Informa offer, which is c930p," Berenberg said. "We therefore firmly believe that UBM shareholders should and will approve the bid," they said. As a backdrop, Berenberg explained that investors had spent much of 2017 focusing on the underlying risks to UBM's business, particularly in fashion sector, but shares had rebounded in late 2017 as revenue trends in areas like jewellery improved, delivering headline results for the year ended 31 December "modestly above the original consensus". Berenberg also noted UBM management's comments about "unusually high" levels of event launch activity, that helped boost its growth throughout 2017, but were not likely to recur in the current trading period, and that "some pruning is likely to continue", and that in terms of margins, the recent upward trajectory seen on that front "may not be easy to continue or even maintain" as management flagged the benefits from FX tailwinds and shifting costs to biennials throughout the year as major leg-ups, both of which were set reverse in 2018. Premier Oil gushed higher on Thursday as RBC Capital Marketsupped its stance on the stock to ‘outperform’ from ‘sector perform’ following recent weakness and the company's full-year results, keeping the price target at 100p. The bank said Premier’s FY17 results underlined the progress made by the business last year, refinancing and delivering first oil from the Catcher field. "Premier remains one of our preferred deleveraging stocks and following recent share price weakness we are upgrading to outperform ahead of material debt repayment H2/18 as production ramps up from Catcher and capex tapers." RBC said that based on the current oil price of around $65 a barrel, FY18 guidance on production and capex, it expects net debt to reach around $2.25bn by YE18, with the net debt/EBITDA multiple moving below 2.5x, which is well within 3x covenants. It also said that following the accelerated conversion of the convertible bonds, the company is likely to achieve compliance even at the $55/bbl average for 2018. In addition to deleveraging, Premier has drilling catalysts, with appraisal drilling starting on the 400-800 million barrels Zama discovery as early as the second quarter of this year, depending on the rig contracting strategy. Meanwhile, four wells are planned over the coming 12/18 months on both blocks. Analysts at Morgan Stanley upgraded their recommendation for shares of Britvic on Thursday from ‘hold’ to ‘buy’, explaining that the shares' current level provided an "attractive" entry point, given the outlook for several of the company's main financial metrics over the medium-term, including a projected quadrupling of its free cash flows. In their research note, they revised their target price for Britvic up to 870p from their prior 680p estimate, telling clients Britvic was set to produce a minimum 15% return at the operating level, courtesy of the completion of its three-year "business capability programme" (BCP) that was set to end in 2018. Morgan Stanley forecast "modest margin expansion" - of over 170 basis points at the EBIT level to reach 14.6%, over fiscal years 2017-2020 - driven by operating leverage in the underlying business and the group’s international business breaking even. One potential pitfall was seen as the UK sugar tax, set to be imposed from April, which 28% of Britvic’s GB portfolio will be exposed to but the analysts believed the impact upon Britvic would be "muted". The analysts justified that assessment by explaining that there was a more developed low/no sugar market in the UK than compared to other key markets where a sugar market had been implemented. "The upcoming "sugar tax" has been an overhang for Britvic's GB division. However, a well-developed low/no sugar offering (Pepsi Max) and Britvic's overweight position in the on-trade segment give us comfort that the impact will only be relatively minor. Given the characteristics of Britvic in FY19 and beyond we feel that the market should now look beyond the uncertainty around the sugar tax." | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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