| London open: Italy concession lifts stocks, Tesco and Aston Martin in reverse | | | | | London stocks started on the front foot on Wednesday amid reports that Italy's government might make some concessions on its budget plans and in spite of falls for Tesco and market debutant Aston Martin. The FTSE 100 climbed 18 points or 0.2% to 7,492.48. Sterling was offering no support, climbing 0.2% to back above $1.30 and flat against the euro at 1.1233. Shares around Europe were boosted as the Italian coalition government blinked first in its potential debt stand-off with Brussels. Officials in Rome will offer to reduce the country's budget deficit as a proportion of gross domestic product in 2020 and 2021, to 2.2% and 2.0%, respectively, but hold the line on next year's expected shortfall of 2.4%, according to a report in Italian daily Corriere della Sera. Overnight, the Dow Jones Industrials had notched-up a fresh record high, even as the tech-heavy Nasdaq Composite and the small-cap focused Russell 2000 dipped. Commenting on the news out of Italy, Jasper Lawler, market analysts at London Capital Group, said: "Italy's already high debt pile would increase significantly under Italy’s original budget intentions. However, plans going forward to bring the deficit under control and avoid another debt crisis has boosted risk appetite across the globe. "This is by no means the end of this tale, which is why the FTSE MIB is looking to a slower start that its European peers and gains in the euro could be capped. However, the odds of a happy ending have improved. Brussels still need to approve Italy’s budget plans by the middle of the month, so we could still see some jitters until the ink has dried on that approval." Back in the UK, traders were waiting on a reading on UK services sector activity in September at 0930 BST from IHS Markit. They were also expectant ahead of the final day of the Conservative Party annual conference, with all eyes on Theresa May's speech and her continuing efforts to win DUP support for her Irish border "backstop" plans. It was a similar story overseas, with services PMIs scheduled for release in the euro area, at 0900 BST, and in the US, at 1500 BST. Traders will also be keeping an eye out for eurozone services data at 0900 BST and an expected for rebound in eurozone retail sales for August at 1000 BST. This afternoon, US ADP employment data at 1315 BST will be watched closely. However, market analyst Mike Van Dulken at Accendo Markets said while it may regain some of the lost ground in August, recent divergence from the official jobs report means hints about what to expect from Friday’s non-farm payrolls "may be limited". Tesco shares were moving lower despite the supermarket colossus reporting a 42% increase in first-half profits as sales accelerated in the second quarter. Like-for-like sales increased 2.2% but while profit before tax and exceptionals roared up to £806m thanks to the March acquisition of Booker, this was short of the £811m that the City expected. Elsewhere, Aston Martin shares skidded lower as they began trading after an initial public offer that value the luxury car market at £4.3bn. The shares were priced at 1,900p in the IPO but were quickly shifted into a lower gear, falling 4% to 1,833p in early trading. Leading the risers was Vodafone as its Italian arm snapped up 5G service airwaves for €2.4bn (£2.14bn) in an auction run by the Italian government. The auction raised €6.bn in total for the Italian treasury. Schroders was up on the back of a Financial Times report that it is poised to win the £109bn mandate from Lloyds Banking Group to manage the Scottish Widows assets that were withdrawn from Standard Life Aberdeen back in February. Euromoney Institutional Investor was little moved as it agreed to sell its Mining Indaba business, which operates the world's largest annual mining investment conference, for £30.1m to ITE Group. For the year ended 30 September 2017, Mining Indaba reported an adjusted operating profit of £2.5m. Great Portland Estates was down a little after it exchanged contracts to sell 55 Wells Street, W1 to an unnamed overseas investor for a headline sale price of £65.46m. | | | | | Exclusive IPO Opportunity Disruptive cyber-crime prevention technology that will revolutionise the anti-virus market as we know it! Huge potential gains. Click here to find out more | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor | 
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| | | Europe open: Shares start higher on hopes of Rome-Brussels rapprochement | | | | | Stocks on the Continent are mostly higher in early trading, buoyed by reports of a somewhat more conciliatory tone from officials in Rome in their ongoing face-off with Brussels over their medium-term budget plans. Overnight, Italian daily, Corriere della Sera, reported that officials in Rome will offer to reduce the country's budget deficit as a proportion of gross domestic product in 2020 and 2021, to 2.2% and 2.0%, respectively, but hold the line on next year's expected shortfall of 2.4%. Nevertheless, and as analysts at UniCredit Research pointed out: "The situation remains fluid and mood can make sudden U-turns, depending on a rather unpredictable news flow." Against that backdrop, as of 0857 BST, gains in lenders' shares had pushed Milan's FTSE Mibtel up by 0.68% or 139.04 points to 20,699.97. In parallel, the yield on the benchmark 10-year Italian government note was retreating by 11 basis points to 3.34%. Meanwhile, the Stoxx 600 was edging higher by 0.24% or 0.90 points to 382.84, alongside an advance of 0.29% or 15.68 points to 5,483.57 for the French Cac-40. Germany's Dax on the other hand was down by 0.42% or 51.45 points at 12,287.58, dragged down by sharp falls in shares of Lufthansa and Siemens. Holger Schmieding at Berenberg was scathing in his criticism of the Italian government, telling clients: "With their borderline fiscal plans, Italy's radical leaders have put themselves at the mercy of bond vigilantes, rating agencies and their European peers. "Italy's budget plans are seriously misguided but probably not scary enough to trigger a genuine debt crisis now. Noisy muddling through remains our base case. Still, careless talk by top leaders in Rome keeps a tail risk alive that Italy could cross the border and fall into a serious crisis soon." Elsewhere on the economic front, IHS Markit confirmed a September print of 54.7 for its euro area services sector Purchasing Managers' Index. However, the preliminary reading on its composite PMI for last month, which includes manufacturing, was revised down from 54.2 to 54.1, versus an August number of 54.5. Commenting on the figures, IHS Markit, Chris Williamson, said: "The most worrying signs come from exports. "Trade flows have more or less stalled, which represents a marked contrast to the record rate of export growth seen at the end of last year. While service sector growth remained resilient in September, it would be unusual for this to be sustained in the absence of improved manufacturing growth." In corporate news, an upgrade out of Kepler Chevreux triggered a short-covering rally in shares of French technology consultant Altran. Going the other way, shares of Norway's Norsk Hydro were left reeling after the outfit announced that it would shutter all production at its Alunorte alumina refinery in Brazil. | | | eToro Daily Update 03/10/2018 | | | | Today’s highlights: Bitcoin dips below $6,500 - Crypto slowdown continues: The cryptocurrency market was seen lower over the past 24 hours, as 8 of the top 10 crypto coins registered losses. At the time of writing, Bitcoin was down more than 1.8%, dipping below the $6,500 mark. Of the top 10 cryptocurrencies, XRP registered the largest losses, falling more than 8%.
- Asia seen lower: The new record set by the Dow Jones failed to lift markets in the East, as both the Nikkei and Hang Seng indices registered losses this morning. Markets in China are closed today in observance of a national holiday.
Read More.. | | | US close: Dow hits new high but tech weighs on Nasdaq | | | | | Wall Street had a mixed Tuesday as the Dow Jones index notched up another record high after the North American trade deal but its peers could not keep up the pace. The Dow Jones Industrial Average added 122.73 points, or 0.5%, to 26,773.94. The S&P 500 was just the wrong side of flat, down 1.16 points to 2923.43, while the Nasdaq Composite fell 37.75 points, or 0.5%, to 7999.55 due to a drag from FAANG stocks. The dollar gained against the pound and the euro, hitting three- and six-week highs, respectively. "It seems we can rely on the US markets to bail out souring global risk sentiment again and again," said market analyst Stephen Innes at Oanda. "But the question should be, how long can we expect this to continue." He said the Dow's record high fed off investors optimism around global trade as the North American trade deal removes at least one massive tariff related risk from the global financial market. "I wouldn’t' go as far as saying the markets are any less worried about China trade issues, however, but investors are breathing on a big sigh of relief that a significant barrier to global free trade has fallen. And indeed, just as significantly it allows the US administration to now focus exclusively on its escalating economic dispute with China." Elsewhere, tensions with China remain elevated, with US Navy officials accused China's military of "unsafe and unprofessional" behaviour around one of the reefs occupied by the Asian giant in the South China Sea. In other news, the yield on the benchmark 10-year US Treasury note was dipping by two basis points to 3.06%, helped by safe-haven flows linked to the ongoing budget squabble between Brussels and Rome. Oil prices remained supportive to the resources sector, with WTI Crude remaining over $75 a barrel. In corporate news, the financial sector took early losses as worries about Italian banks seeped across the Atlantic after a senior member of the coalition government said most of the country’s economic problems would be resolved if it readopted a national currency. “That is really a blip, it definitely doesn’t bleed through to the US financial infrastructure,” said analysts at Kenny's. Also helping were comments from Federal Reserve Governor Randal Quarles, who said banks with more than $250bn in assets could see regulatory relief as part of an ongoing regulatory review. Quarles, the central bank's vice chair for supervision of financial institutions, told members of the Senate, that banks with more than $250bn but not posing a threat to the system are part of a review into how post-financial crisis regulations should be tailored to fit the current climate. Elsewhere, tech stocks provided a weight on the Nasdaq. Online retailer Amazon dipped 0.72% after it announced plans to raise its minimum wage for US and UK workers in London to $15.0 and £10.5 an hour, respectively. For British workers outside out of London, it would go up to £9.50. But Facebook provided a weight on the tech sector as investors continued to recoil after the social media giant revealed its worst security breach at the end of last week. Intel, however, provided a boost for the Dow as the company's stock continued to bounce back and closed above a key level, the 50-day moving average, for the first time since 15 June, when its CEO resigned. PepsiCo lost 2.01% in early trade despite topping analysts' estimates for its third quarter, reporting earnings per share, excluding one-off charges, and of $1.59 (consensus: $1.57) and $16.49bn (consensus: $16.37bn), respectively. Separately, search engine Elastic NV raised the price range for its planned listing to between $33 and $35 per share, versus a prior range for between $26 to $29. | | | | | Invest in the revolutionary combustion technology that’s reducing emissions and cutting costs – with 400% Projected ROI by year 3 Find Out More | | | Wednesday newspaper round-up: Italy, inflation, Unilever, Funding Circle | | | | | Theresa May is under pressure to set out a timetable for her departure after Cabinet ministers said it was now a question of “when, not if” she stands down as Prime Minister. Discussions have begun about when Mrs May should be ousted if she refuses to leave Number 10 before the next general election. - Telegraph The Italian deputy prime minister, Matteo Salvini, has threatened to sue Jean-Claude Juncker for damages, accusing the EU president of pushing up Rome’s cost of borrowing by likening Italy to Greece. Salvini, who is also Italy’s interior minister and leader of the far-right League party, was speaking after Juncker’s comments helped send the yield on Italian benchmark bonds to a four-and-a-half year high of 3.4%, while shares in Italian banks plunged. - Guardian Shop prices are creeping up again as retailers cut back on the discounting that has been a major feature of the high street in recent years. Food prices last month rose 1.9pc year-on-year while the fall in the cost of other goods slowed to a drop of 0.9pc. - Telegraph London’s attempt to become a magnet for new technology companies has suffered a setback as shares in one of the capital’s homegrown “unicorns” lost nearly a fifth of their value before their official market debut today. Shares in the peer-to-peer lender Funding Circle dropped more than 20 per cent at points yesterday during conditional dealing as investors appeared to bail out of the stock days after it completed a £1.5 billion flotation. - The Times The trade association for investment management firms has said it is “deeply troubled” by the prospect of some Unilever retail investors being disenfranchised over the company’s plans to relocate to the Netherlands. The Personal Investment Management and Financial Advice Association (Pimfa) said it had raised concerns with the government, the Financial Conduct Authority and the London Stock Exchange over individual shareholders potentially not being able to vote on October 26 on the proposals. - The Times Nearly a tenth of Unilever’s shareholders have publicly committed to voting against the company’s plan to scrap its Anglo-Dutch structure. Columbia Threadneedle, a top 20 shareholder, is the latest investor to join a roster of big City names that have come out against the move. - Telegraph New York state tax authorities are investigating after the New York Timesreported that Donald Trump engaged in “dubious tax schemes during the 1990s, including instances of outright fraud”, as he and his siblings took control of a real estate empire built by Fred C Trump, the president’s late father. “The tax department is reviewing the allegations in the NYT article and is vigorously pursuing all appropriate avenues of investigation,” the state taxation authority said. - Guardian The Serious Fraud Office has suffered a setback after admitting defeat in its attempt to force a British mining company to hand over documents that it believed could reveal alleged financial wrongdoing within the business. A month on from a Court of Appeal ruling overturning a judgment that forced Eurasian Natural Resources Corporation (ENRC) to disclose documents prepared on its behalf by lawyers and forensic accountants, the SFO has said that it will not be pursuing the matter further. - The Times Unpaid household work, such as looking after children, doing laundry and cooking, is worth £1.24tn per year - more than the value of the UK’s retail and manufacturing output combined, according to official figures. The Office for National Statistics (ONS) released data for 2015 and 2016 on Tuesday estimating the value of the unpaid work undertaken by households, which also included caring for adults at home and driving to work. It said the value had grown every year from 2005 to 2016. - Guardian | |
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