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Apr 16, 2018

Evening Euro Markets Bulletin

 
ADVFN III Evening Euro Markets Bulletin
Daily world financial news Monday, 16 April 2018 21:28:59
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London close: Stocks fall back as pound gains altitude
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London stocks finished lower on Monday, weighed down by the stronger pound as traders pushed it higher ahead of the start of negotiations with Brussels this week on the UK's post-Brexit trade relationship with the European Union.

Also weighing on shares was a dip in crude oil futures after the US, UK and France's opted for a limited and targeted missile attack on Syrian chemical weapons facilities at the weekend, although Whitbread and Shire were bright spots.

The FTSE 100 finished lower by 0.91%or 66.36 points to 7,198.20, while the pound was up 0.31% versus the euro at 1.1581 and 0.66% higher against the dollar at 1.43330. A stronger pound tends to dent the top-flight index, as around 70% of its constituents derive most of their earnings from overseas.

Over the weekend, the US, France and Britain launched more than 100 missiles targeting facilities in Syria, a significant number of which Syria claims to have shot down, in what was called a "one time shot" by the Pentagon.

The limited nature of the oepration saw energy stocks leak lower as oil prices fell back after last week's big gains, with Brent crude down 1.24% to $71.69 a barrel and West Texas Intermediate 1.31% lower at $66.52. Shares of heavyweight BP were down 1.6% while Shell was 0.72% lower.

Joshua Mahony, market analyst at IG, said: "The strike on Syrian chemical locations over the weekend marks the end of the recent standoff which saw oil prices hit a three-year high in anticipation of a greater Western presence in the Syrian conflict. Market realisation that this attack largely draws the line under the issue has brought about a sharp decline in oil prices in early trade."

The pound was climbing as Brexit related news has returned to the UK headlines, with UK and EU officials return to the negotiating table this week to start drawing out the terms of the post Brexit trade relationship.

Sterling is currently the best performing G10 currency in the year to date, noted Rabobank strategist Jane Foley.

"The agreement on the Brexit transition deal combined with expectations that the BoE is set to hike rates again in May have both been supportive for the currency in recent months," she said, though acknowledging that there are clear caveats to this optimistic outlook, including signs that the UK economy has lost momentum and potential hurdles in Brexit trade talks.

Meanwhile, the high street was in focus after figures from the British Retail Consortium revealed that footfall declined by 6% in March compared with the same month last year, as shoppers were deterred by the bad weather.

In individual company news, advertising giant WPP fell on news that Sir Martin Sorrell has stepped down as chief executive officer with immediate effect, with chairman Roberto Quarta becoming executive chairman until the appointment of a new CEO. Sorrell, whose exit follows an internal investigation into allegations pf personal misconduct, will be treated as having retired from the company, meaning he will be entitled to up to 1.65m shares under long-term award plans dependent on WPP's performance.

Vedanta Resources dropped as it announced the appointment of AngloGold Ashanti boss Srinivasan Venkatakrishnan as its new chief executive officer.

Polymetal International lost ground after reaching an agreement with the Russian Copper Company for an all-share exchange of its Tarutin property in Russia, for 85% of RCC's East Tarutin property in Kazakhstan.

Software company Sage Group was weaker after its profit warning on Friday, as Citi maintained its' buy' rating on the stock but cuts its overall organic revenue growth forecast for FY18-20 by around one percentage points per year and trimmed its operating margin estimates to reflect the lower top line.

On the upside, Premier Inn and Costa owner Whitbread surged as Elliott Advisers became its biggest shareholder, with reports the activist investor is piling pressure on the company to break up the business and spin off its Costa Coffee arm.

Shire, for whom the boss of Japanese drug maker Takeda is reportedly readying a £35bn bid, was in the black after agreeing to sell its oncology business to Servier for $2.4bn in cash.

Smurfit Kappa gained following a Sunday Times report that some of its largest investors have started to pressure the company to negotiate with International Paper if it comes back with another takeover bid of more than €40 per share.

Specialty chemicals group Johnson Matthey was higher after announcing the appointment of Patrick Thomas as chairman, succeeding Tim Stevenson. Thomas has been CEO and chairman of the board at polymers business Covestro since 2015.

Galliford Try slipped after confirming it had raised £144.2m as 91.5% of its discounted rights issue of new shares was accepted b shareholders, backing management's plans to invest in growth.

In broker note action, Barclays was upgraded to 'buy' at Jefferies, while Tesco was raised to 'hold' at Societe Generale. Kaz Minerals and Vedanta Resources were cut to 'neutral' from 'buy' at Goldman Sachs.


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Market Status
 
 
change pct
-0.22%
 
cur price
7,248.41
 
change
-16.15
 
 
change pct
+0.03%
 
cur price
19,845.02
 
change
+6.48
 
 
change pct
+0.20%
 
cur price
3,374.10
 
change
+6.83

Top 10 FTSE 100 Risers

# NameChange PctChangeCur Price
1Whitbread Plc+6.20%+244.004,179.00
2Smurfit Kappa Group+1.74%+52.003,034.00
3Rolls-Royce Holdings+1.66%+14.40881.20
4Hammerson Plc+1.55%+7.35480.35
5Paddy Power Betfair+1.26%+90.007,210.00
6International Consolidated Airlines Group +1.15%+7.00616.00
7Scottish Mortgage Investment Trust+0.85%+3.80451.40
8BAE Systems+0.84%+5.00599.00
9Easyjet Plc+0.84%+13.501,624.50
10DCC Plc+0.83%+55.006,710.00

Top 10 FTSE 100 Fallers

# NameChange PctChangeCur Price
1Sage Group-2.53%-15.60601.40
2WPP Plc-1.85%-22.001,166.00
3British Petroleum-1.38%-6.95497.35
4Fresnillo plc-1.29%-16.501,267.50
5HSBC Holdings-1.11%-7.60677.60
6Rentokil Initial-1.07%-3.00276.50
7Associated British Foods-0.92%-24.002,596.00
8Scottish & Southern Energy-0.84%-11.001,300.00
9Imperial Brands-0.83%-20.502,442.50
10Standard Chartered-0.76%-5.60727.90

Daily cryptocurrency Tracker 16.4.18: Cryptos stay stable over the weekend

After having a strong finish last week, the crypto market remained steady over the weekend, as all the top 10 cryptos maintained their price levels. Despite showing small losses...

Read More..


Crypto Currencies
#1 Bitcoin (BTC)
change
-2.80%
mktcap
137.76B
volume
73325.09T
price
8,103.60
#2 Ethereum (ETH)
change
-2.35%
mktcap
50.83B
volume
19762.05T
price
514.60
#3 Ripple (XRP)
change
-2.54%
mktcap
25.85B
volume
9747.35T
price
0.66
#4 Bitcoin Cash / BCC (BCH)
change
-1.47%
mktcap
13B
volume
4831.18T
price
763.95
#5 Litecoin (LTC)
change
-2.73%
mktcap
7.17B
volume
8520.46T
price
127.90

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US open: Positive start on the Street as investors brush off geopolitical concerns

US trading started on a positive note on Wall Street on Monday as investors turned their attention to corporate earnings, putting geopolitical concerns to one side after the US-led airstrikes in Syria over the weekend.

At 1500 BST, the Dow Jones Industrial Average and S&P 500 had moved ahead 0.58% and 0.41%, respectively, while the Nasdaq had picked-up 0.14%.

Over the weekend, the US, France and Britain launched more than 100 missiles targeting facilities linked to Syria's chemical weapons programme, in what was called a "one time shot" by the Pentagon - at least for now.

Oanda analyst Craig Erlam said: "It was feared that a Western response could trigger an escalation in the region, further damaging relations with Russia in the process due to its backing of the Assad regime. Instead, an apparent one-off limited strike by the three countries on chemical weapons sites in an attempt to prevent further attacks in the future has not yet stoked such fears and instead, investors appear relatively at ease.

"Of course, we'll find out in the coming days just what the response to the strikes will be, assuming there will be any. For now, investors appear at ease with the situation and as long as no further escalation occurs, attention may now switch to other matters such as first-quarter earnings season which got underway late last week."

Earnings will be in focus again after JPMorgan, Wells Fargo and Citigroup failed to impress last week with their numbers, however, Bank of America had picked up 0.34% to $29.82 after posting record net income for the first quarter.

Elsewhere, US-listed shares of Shire, for which the boss of Japanese drugmaker Takeda is reportedly readying a £35bn bid, collected 0.87% in early trading after it said it had agreed to sell its oncology business to Servier for $2.4bn in cash.

Gaming and Leisure Properties climbed 3.83% after Icahn Enterprises announced that its majority-owned Tropicana Entertainment had agreed to purchase GLP's real estate for $1.85 billion.

Icahn also said it would merge its gaming and hotel business into Eldorado Resorts, up 14.85% itself.

Navistar rose 5.5% after Volkswagen said it was mulling over the idea of increasing its stake in the company to more than 17%.

NewLink Genetics dropped 13.76% after confirming it would not proceed as planned with a late-stage trial of its indoximod drug for advanced melanoma and WPP dropped 6.47% after its chief executive resigned after allegations of personal misconduct led to a probe being launched into the firm.

Netflix is also due to release its latest earnings report after the close.

There was also a fair bit of news due out on the data front,

US retail sales reportedly grew for the first time this year as a better than expected rebound in March giving slight reassurance that a slowdown witnessed at the start of the year was an anomaly.

Headline sales grew 0.6% month-on-month to $494.6bn in March, bouncing back from a 0.1% in February, the first month of growth since November which ended a three-month slide, the longest such slump in three years.

Elsewhere, the New York Federal Reserve's Empire State Manufacturing index fell to 15.8 in April from 22.5 in March, nearly three whole index points below consensus estimates.

Lastly, Builders' confidence in the market for new single-family homes maintained its high levels as the National Association of Home Builders' housing market index dipped to 69 in April from 70 in March.

"Strong demand for housing is keeping builders optimistic about future market conditions," NAHB chairman Randy Noel said.

"However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs placed on Canadian lumber and other imported products are pushing up prices and hurting housing affordability," Noel added.

In addition, investors will be eyeing a speech by Atlanta Fed President Raphael Bostic at the Shoals Chamber of Commerce in Florence, Alabama and an appearance by Dallas Fed President Robert Kaplan at the International Economic Forum of the Americas' World Strategic Forum in Florida.

Any headlines from the White House will also be watched after former FBI director James Comey said in an interview with ABC News over the weekend that Donald Trump was "morally unfit" to be president.


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Monday broker round-up

Rentokil: Deutsche Bank downgrades to hold with a target price of 310p.

Sage: Citigroup reiterates buy.

Ti Fluid Systems: Citigroup reiterates neutral.

Shire: Shore Capital Markets reiterates buy with a target price of 3,607p.

WPP: Shore Capital Markets reiterates hold with a target price of 1,188p.

Starcom: Northland Capital Markets reiterates corporate with a target price of 37p.

Whitbread: Numis reiterates hold with a target price of 4,300p.

Countryside Properties: Numis reiterates add with a target price of 410p.

Close Brothers: Canaccord reiterates buy with a target price of 1,700p.

Kainos: Canaccord reiterates buy with a target price of 362p.

Charles Stanley: Canaccord reiterates buy with a target price of 420p.

AG Barr: Berenberg reiterates hold with a target price of 575p.

London Stock Exchange: Deutsche Bank reiterates hold.

Virgin Money: Barclays reiterates overweight with a target price of 360p

 

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