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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London open: FTSE 100 at four-month low as ARM and BP fall - ARM, BP, Ocado fall as annual results disappoint
- FTSE 100 at lowest since mid-October
- Wall Street suffers worst drop since June 2013
techMARK 2,735.92 -1.12%
FTSE 100 6,422.52 -0.67%
FTSE 250 15,450.97 -0.69%
UK stocks fell to their lowest levels in nearly four months on Tuesday morning as concerns about slowing global economic growth and disappointing corporate results weighed heavily on sentiment.
ARM Holdings, BP and Ocado were among the worst performers early on in London as investors reacted to their full-year figures.
The FTSE 100 was trading 0.7% lower at 6,423 this morning; it has not closed below this level since October 9th, when it finished at 6,337.91.
The downwards pressure followed steep falls overnight on Wall Street with the S&P 500 and Dow Jones Industrial Average ending with their worst losses since June 2013.
The indices declined 2.1% and 2.3%, respectively, after data yesterday showed that manufacturing activity in the States slowed considerably in January due to the severe winter weather across many regions.
Plummeting temperatures were also to blame for sharp drops in car sales reported by many of the nation's big auto companies yesterday.
Market sentiment has been fragile over recent weeks due to heightened fears concerning emerging-market volatility, the withdrawal of stimulus by the Federal Reserve, a slowdown in growth in China and weakness in corporate earnings.
However, Market Analyst Craig Erlam from Alpari said "these are simply being used as an excuse for investors to allow for the significant correction that many investors have been calling for, for a number of months now".
Traders will also be showing nerves ahead of a key policy meeting at the European Central Bank later on Thursday and the all-important US jobs report due Friday.
ARM, BP and Ocado provide a drag
Chip designer ARM Holdings dropped sharply despite meeting expectations with its fourth-quarter results, which saw adjusted profits rise 19% as strong licence sales offset slower growth in royalties. Profits, however, fell 79% when including an exceptional charge.
Oil major BP was lower after it reported a weaker bottom line for the fourth quarter, leading to a steep drop in underlying profits for 2013. The company also warned that underlying production in 2014 would be lower than last year.
Annual losses at online grocery group Ocado widened significantly last year despite decent top-line growth as costs and expenses soared. Shares were also down this morning after the news that the group's co-founder and current Commercial Director, Jason Gissing, is to retire.
Morrison, which last year signed a 25-year agreement with Ocado to develop its own online shopping service, was trading lower in sympathy.
BG Group was flat despite increasing fourth-quarter revenue and other operating income by 16% as it partly offset declines in Egypt and lower activity in the US by new developments coming onstream.
TalkTalk gained this morning after third-quarter revenue rose 5.1% as the telecoms company secured new TV and mobile phone customers. |
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| | UK Event Calendar | | Tuesday February 04
INTERIMS
Alumasc Group, Kofax Limited (DI)
INTERIM DIVIDEND PAYMENT DATE
Anglo Pacific Group, Johnson Matthey, Workspace Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (US) (15:00)
Goods Orders (US) (15:00)
Producer Price Index (EU) (10:00)
Australia policy rate announcement
Speech President President Richmond Fed
Speech President Chicago Fed
Q2
Kofax Limited (DI)
Q4
ARM Holdings, BG Group, BP
FINALS
ARM Holdings, BG Group, BP, Low & Bonar, Ocado Group, St. Modwen Properties
IMSS
Electrocomponents, TalkTalk Telecom Group , UDG Healthcare Public Limited Company, Victrex
AGMS
Dewhurst, Dewhurst (Non-Voting), Numis Corporation, UDG Healthcare Public Limited Company, Victrex
UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)
FINAL DIVIDEND PAYMENT DATE
Schroder Asia Pacific Fund, Spirit Pub Company
|
| FTSE 100 - Risers
Sainsbury (J) (SBRY) 354.10p +2.49%
Aberdeen Asset Management (ADN) 380.50p +1.01%
Associated British Foods (ABF) 2,709.00p +0.86%
Anglo American (AAL) 1,405.00p +0.57%
Prudential (PRU) 1,209.00p +0.42%
Standard Chartered (STAN) 1,230.50p +0.24%
HSBC Holdings (HSBA) 622.80p +0.21%
SSE (SSE) 1,333.00p +0.08%
FTSE 100 - Fallers
ARM Holdings (ARM) 891.50p -4.14%
Ashtead Group (AHT) 763.50p -2.86%
Melrose Industries (MRO) 294.80p -2.61%
International Consolidated Airlines Group SA (CDI) (IAG) 405.20p -2.22%
Randgold Resources Ltd. (RRS) 4,366.00p -2.00%
GKN (GKN) 385.30p -1.98%
BAE Systems (BA.) 416.40p -1.75%
CRH (CRH) 1,538.00p -1.73%
ITV (ITV) 192.10p -1.64%
Meggitt (MGGT) 505.50p -1.46%
FTSE 250 - Risers
Premier Oil (PMO) 278.40p +3.84%
Victrex (VCT) 1,810.00p +2.61%
BBA Aviation (BBA) 320.60p +2.43%
Alent (ALNT) 311.90p +1.50%
TalkTalk Telecom Group (TALK) 314.10p +1.22%
Berendsen (BRSN) 919.00p +0.60%
Partnership Assurance Group (PA.) 317.80p +0.60%
Phoenix Group Holdings (DI) (PHNX) 734.00p +0.55%
Fidessa Group (FDSA) 2,289.00p +0.39%
Entertainment One Limited (ETO) 311.00p +0.32%
FTSE 250 - Fallers
Electrocomponents (ECM) 252.00p -5.01%
Interserve (IRV) 576.50p -4.55%
African Barrick Gold (ABG) 222.90p -3.38%
Imagination Technologies Group (IMG) 164.60p -3.35%
Ocado Group (OCDO) 506.00p -3.34%
Carphone Warehouse Group (CPW) 285.10p -2.86%
Centamin (DI) (CEY) 44.87p -2.75%
Supergroup (SGP) 1,450.00p -2.62%
Dixons Retail (DXNS) 42.04p -2.41% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Slowdown in US, China manufacturing drags stocks lower - Slowdown in US and Chinese manufacturing
- US factory orders to be released
- Fed officials to speak
FTSE 100: -0.70%
DAX: -0.94%
CAC 40: -0.51%
FTSE MIB: -0.06%
IBEX 35: -0.61%
Stoxx 600: -0.74%
European stocks dipped as a slowdown in Chinese and US manufacturing activity raised concerns about global growth yesterday.
The purchasing managers' index (PMI) for manufacturing in China dropped to 50.5 in January from 51 a month earlier, in line with market expectations. A reading above 50 signals expansion.
In the US, the Institute for Supply Management's manufacturing PMI for January came in at 51.3, following a reading of 57 a month before. Economists had pencilled in a reading of 56.
Manufacturing also eased in the UK with the PMI falling to 56.7 last month from 57.2 in December, missing the 57.3 consensus forecast.
"We're looking at another negative start to the European session on Tuesday, following another sell-off in the US on Monday in response to some weaker than expected manufacturing data, which prompted a similar reaction in Asian stocks over night," Craig Erlam, Market Analyst at Alpari, pointed out.
"To be honest, the response to the manufacturing data on Monday was a little over the top, which just highlights the risk averse approach from investors right now."
The Eurozone's manufacturing PMI, on the other hand, rose to 54 in January from 53.9 the prior month, beating analysts' predictions of 53.9.
Turning to today's agenda, investors will focus on the release of a report on US factory orders which is expected to show a 1.8% fall in December, compared to a 1.8% rise the previous month.
Federal Reserve officials Charles Evans and Jeffrey Lacker will speak later, potentially offering some clues on the US central bank's next policy move after announcing a second round of stimulus tapering of $10bn to $65bn.
ARM Holdings, BG Group
ARM Holdings tumbled after the chipmaker reported a drop in fourth quarter profit, reflecting an impairment charge.
BG Group edged lower after the UK natural gas producer posted a quarterly loss as Egyptian exports were disrupted and costs rose.
UBS and Munich Re advanced after they both posted quarterly earnings that beat analysts' expectations.
Vestas Wind Systems declined after saying it seeks to raise capital.
The euro fell 0.13% to $1.3507.
Brent crude futures slipped $0.142 to $105.890 per barrel, according to data from the ICE. |
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| | US Market Report | | US close: Markets suffer worst drop in seven months after manufacturing data - ISM manufacturing index sinks to eight-month low in January
- Car sales hit by winter weather
- Jacob Lew warns about debt ceiling
- Chinese services PMI falls to six-month low
Dow Jones: -2.08%
Nasdaq: -2.61%
S&P 500: -2.28%
US markets suffered steep losses on Monday due to ongoing concerns about a slowdown in China and worse-than-expected manufacturing data closer to home.
Meanwhile, there were renewed worries about the debt ceiling after Treasury Secretary Jacob Lew warned that the federal debt limit could be breached by the end of the month. The previous agreement in October saw the ceiling suspended through to February 7th.
Both the S&P 500 and Dow Jones Industrial Average registered their worst declines since June 2013, with the Dow reporting its seventh triple-digit loss of the year so far.
The Institute for Supply Management's (ISM) index measuring activity within the manufacturing sector fell to an eight-month low of 51.3 in January from 56.5 in December, led by a sharp pull back in a gauge for new orders.
While the index remained in positive territory - any reading above 50 signals an expansion in activity - analysts were looking for a figure of around 56.
However, analysts at Capital Economics said that the unexpected plunge "appears to have more to do with the unseasonably severe winter weather, than a major slowdown in both domestic and overseas activities".
The weather was also to blame for sharp declines in car sales in January, reported by the nation's biggest manufacturers.
"Maybe markets need to temper their expectations for this week's ADP and non-farm payrolls numbers and decide whether the current weakness is seasonal as a result of the bad weather or whether it's a harbinger of further weakness to come," said Chief Market Analyst Michael Hewson from CMC Markets.
In other news, China's official non-manufacturing purchasing managers' index (PMI) fell from 54.6 to a six-month low of 53.4 in January. This follows an unexpected contraction in the manufacturing sector revealed by the HSBC/Markit PMI last week.
Weak automobile sales reported, winter weather also cited as a factor
Sales of automobiles dropped by 12% at General Motors during the month of January, far more than analysts had pencilled in, causing shares to end lower. Sales at rivals Ford and Toyota dropped by 7.5% and 7.2% respectively.
AT&T fell after unveiling new prices for some its users, marking an escalation in the price war among wireless carriers.
Telecoms company Sprint declined following a report that its Chief Executive and the head of its parent company SoftBank Corp will meet US regulators. SoftBank is in talks to resolve hurdles surrounding a potential deal combining T-Mobile US with Sprint.
Herbalife advanced after the vitamin maker said it will offer $1bn in convertible senior notes and use some of the money to repurchase common shares.
Food distributor Sysco reported second-quarter net earnings per share of 40 cents on sales of $11.2bn, with the latter coming in below the consensus forecast of $11.35bn.
S&P 500 - Risers
Carmax Inc. (KMX) $45.76 +1.44%
Pfizer Inc. (PFE) $30.60 +0.66%
Time Warner Cable Inc. (TWC) $134.01 +0.56%
Apple Inc. (AAPL) $501.53 +0.19%
Rowan Companies plc (RDC) $31.39 +0.06%
Edison International (EIX) $48.19 +0.06%
Zoetis Inc (ZTS) $30.37 +0.03%
Southern Co. (SO) $41.25 +0.02%
O'Reilly Automotive Inc. (ORLY) $131.00 +0.02%
S&P 500 - Fallers
ONEOK Inc. (OKE) $57.92 -15.43%
Robert Half International Inc. (RHI) $39.17 -6.25%
Janus Capital Group Inc. (JNS) $10.37 -5.64%
Frontier Communications Co. (FTR) $4.42 -5.60%
Genuine Parts Co. (GPC) $77.75 -5.47%
Legg Mason Inc. (LM) $40.09 -5.34%
Kansas City Southern (KSU) $100.25 -5.06%
Allegheny Technologies Inc. (ATI) $29.86 -5.03%
Whirlpool Corp. (WHR) $126.69 -4.96%
E*TRADE Financial Corp. (ETFC) $19.04 -4.90%
Dow Jones I.A - Risers
Pfizer Inc. (PFE) $30.60 +0.66%
Dow Jones I.A - Fallers
AT&T Inc. (T) $31.95 -4.11%
Walt Disney Co. (DIS) $69.99 -3.61%
Microsoft Corp. (MSFT) $36.48 -3.59%
United Technologies Corp. (UTX) $110.16 -3.39%
Verizon Communications Inc. (VZ) $46.41 -3.35%
3M Co. (MMM) $123.90 -3.35%
General Electric Co. (GE) $24.35 -3.10%
Wal-Mart Stores Inc. (WMT) $72.66 -2.70%
Nike Inc. (NKE) $70.88 -2.70%
Goldman Sachs Group Inc. (GS) $159.82 -2.62%
Nasdaq 100 - Risers
Apple Inc. (AAPL) $501.53 +0.19%
O'Reilly Automotive Inc. (ORLY) $131.00 +0.02%
Nasdaq 100 - Fallers
Nxp Semiconductors Nv (NXPI) $45.82 -5.23%
Mattel Inc. (MAT) $36.05 -4.73%
Tractor Supply Company (TSCO) $63.42 -4.65%
TripAdvisor Inc. (TRIP) $73.91 -4.25%
Henry Schein Inc. (HSIC) $110.21 -4.07%
Google Inc. (GOOG) $1,133.43 -4.03%
Viacom Inc. Class B (VIAB) $78.80 -4.02%
Biogen Idec Inc. (BIIB) $300.39 -3.92%
Mylan Inc. (MYL) $43.65 -3.88%
Baidu Inc. (BIDU) $150.52 -3.82% |
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| | Newspaper Round Up | | Tuesday newspaper round-up: US debt ceiling, Autonomy, Barclays... US Treasury Secretary Jacob Lew warned Monday that the US is on course to hit its so-called debt ceiling, the limit to which it can legally borrow, by the end of the month. He called on Congress to raise it immediately to prevent the issue from harming the economic recovery, adding that the government would start defaulting on its debt "very soon" if it failed to act. - Daily Telegraph
Hewlett-Packard's long-running investigation into claims of accounting irregularities by the former management team of Autonomy, the British software company it bought for more than £7.1bn, has concluded that the firm's main UK trading company made 80% less profits and 54% less revenues than originally stated. - The Guardian
The Chief Executive of Barclays has moved to avert a row over banking rewards by revealing that he is waiving one of his bonuses for the second year running. Antony Jenkins, who was in line for a payout of up to £2.7m, said that it would not be right to take it in light of the large amounts Barclays paid during the year for past conduct failures. - The Times
Foreign shareholders are attempting to cash in on their controlling interest in Lenta, with a London listing forecast to value Russia's second biggest hypermarket group at up to £3.5bn. Investors, led by TPG, the US private equity group with just under 50% of the equity, are hoping to raise around $1bn (£625m) from selling part of their shareholding. Others in line to benefit are the European Bank for Reconstruction and Development (21.5%) and Moscow-based VTB Capital (11.7%). - Daily Telegraph
The public could be offered the chance to buy shares in Lloyds Banking Group as early as next month after the taxpayer-backed lender said it was in the advanced stages of preparing a prospectus for a retail offer. In a surprise update ahead of the release of its full-year results next week, Lloyds said preparatory work on "certain documents required for a possible future sale of shares" was well under way, leading to speculation a retail offer could come in March or April. - Daily Telegraph
Germany ruled out a second haircut for the creditors of Greece yesterday as its Finance Minister said that a third bailout of the stricken Southern European economy would be limited to no more than €20bn. Greece could still have "residual financing needs" this summer even after taking all the austerity measures it has so far promised, Wolfgang Schäuble said on [Monday]. - The Times | | |
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