BREAKING NEWS Thursday, February 28, 2013
BREAKING NEWS Thursday, February 28, 2013
|London Market Report|
Stocks gain as US economic data impresses
techMARK 2,328.03 +0.02%
FTSE 100 6,360.81 +0.55%
FTSE 250 13,704.02 +0.58%
An upwards revision to US economic growth estimates prompted an afternoon rally in London, with markets extending gains after some dovish comments from central bankers in the US and Europe.
Concerns about a recession in the States proved premature, as the initial estimate of a 0.1% contraction in US fourth-quarter gross domestic product (GDP) was revised higher to 0.1% growth.
Markets were also given a boost by US jobless claims which came in lower than expected and a better-than-forecast reading of manufacturing activity in Chicago.
Traders have more or less shrugged off the so-called 'sequester', the $85bn of automatic budget cuts that come into effect in the US tomorrow. The White House is said to be engaging in a "construction discussion" with congressional leaders about how to avert the cuts, but no major breakthrough is expected.
Stocks gain as central banks back stimulus
Speaking to Senate's Banking Committee on Capitol Hill over the last two days, US Federal Reserve Chairman Ben Bernanke defended the Fed's asset purchase programme, saying that it was necessary until the job market improves substantially. He allayed fears that the central bank could start to scale down quantitative easing measures.
His dovish comments were echoed by Mario Draghi, the President of the European Central Bank (ECB), who said that the ECB would not tighten monetary policy with inflation expected to stay well below the 2.0% target near term. He said that policy makers are "far" from exiting stimulus measures.
Meanwhile, speculation about an ECB rate cut ramped up today after Eurozone CPI inflation fell to the ECB’s target of 2.0% in January.
Markets across Europe reacted by pushing firmly into positive territory in the morning session, though sentiment is still fragile in the wake of the inconclusive Italian elections at the weekend, which saw anti-austerity parties secure a surprising portion of the vote.
FTSE 100: IAG flying high; Kazakhmys plummets
British Airways owner IAG soared as its operating loss of €107m for 2012 was better than the company's guidance in November of €120m.
Copper giant Kazakhmys was heading the other day, dropping nearly 9.0% after saying that it would be slashing its dividend for 2012 to reflect falling profits. The company also said that its CFO would step down in May, when its Chairman is also due to retire.
Other mining stocks were also lower as metals prices slipped: ENRC, Randgold, Antofagasta and Anglo American were registering steep losses.
UK lender RBS slumped nearly 7.0% despite core operating profits coming in ahead of expectations. CEO Stephen Hester said that there was "important work still to do" as the the bank continued to be hit by fines from mis-selling products and rate-rigging scandals.
Utilities group National Grid was a high riser after agreeing to all of the UK RIIO price-control arrangements with regulator Ofgem, which it hopes will deliver further shareholder value.
Media stocks were performing well today: Reed Elsevier gained after reporting a rise in revenues for 2012; ITV was lifted by a ratings upgrade from Westhouse Securities; while WPP rose ahead of its full-year results tomorrow.
Meanwhile, outsourcing firm Capita fell despite reporting a solid 14% increase in revenue in 2012,while underlying operating profit gained 10%.
FTSE 250: Howden Joinery and National Express jump in morning trade
Howden Joinery beefed up annual earnings and underlined its confidence in future trading with a six-fold increase in its full-year dividend. Howden, whose products are predominantly sold to small local builders for installation in public and private housing, said group revenue rose to £887.1m from £853.8m in 2011.
Tranpsort group National Express was also a high riser after cheering investors with news of cost savings and an increased total dividend for 2012.
UK-based telecommunications company Spirent Communications plunged after the company reported flat 2012 revenues and a fall in pre-tax profits.
|AIM/Small Cap Report|
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 239.20p +7.89%
ITV (ITV) 124.20p +4.37%
GKN (GKN) 273.00p +3.33%
Standard Life (SL.) 352.50p +3.10%
Whitbread (WTB) 2,523.00p +2.81%
Hargreaves Lansdown (HL.) 867.00p +2.12%
WPP (WPP) 1,054.00p +2.03%
Diageo (DGE) 1,980.00p +1.80%
Resolution Ltd. (RSL) 261.20p +1.75%
Land Securities Group (LAND) 829.50p +1.72%
FTSE 100 - Fallers
Kazakhmys (KAZ) 619.00p -8.57%
Royal Bank of Scotland Group (RBS) 323.90p -6.60%
Capita (CPI) 823.50p -2.89%
Petrofac Ltd. (PFC) 1,454.00p -2.87%
Randgold Resources Ltd. (RRS) 5,485.00p -2.58%
Eurasian Natural Resources Corp. (ENRC) 338.40p -2.48%
Antofagasta (ANTO) 1,093.00p -1.97%
Shire Plc (SHP) 2,065.00p -1.76%
Anglo American (AAL) 1,922.00p -1.56%
Polymetal International (POLY) 999.00p -1.38%
FTSE 250 - Risers
National Express Group (NEX) 220.00p +12.65%
Howden Joinery Group (HWDN) 214.00p +12.39%
COLT Group SA (COLT) 130.10p +5.34%
Capital & Counties Properties (CAPC) 265.10p +5.03%
BBA Aviation (BBA) 255.30p +3.91%
Derwent London (DLN) 2,203.00p +3.48%
Domino's Pizza Group (DOM) 537.00p +3.47%
Lonmin (LMI) 357.00p +3.42%
Henderson Group (HGG) 158.80p +3.18%
Ocado Group (OCDO) 131.40p +2.98%
FTSE 250 - Fallers
Spirent Communications (SPT) 153.50p -7.42%
Ferrexpo (FXPO) 227.70p -5.36%
Kier Group (KIE) 1,287.00p -4.38%
KCOM Group (KCOM) 76.45p -3.29%
Man Group (EMG) 100.30p -2.62%
Centamin (DI) (CEY) 53.70p -2.36%
Chemring Group (CHG) 277.00p -1.98%
African Barrick Gold (ABG) 262.80p -1.94%
Petropavlovsk (POG) 301.80p -1.76%
Pace (PIC) 233.20p -1.73%
|Europe Market Report|
European Markets Climbed As Central Bankers Defend Stimulus
The European markets finished in positive territory Thursday, despite the lingering uncertainty created by the Italian election. The reason for the positive mood among investors was comments made by ECB President Mario Draghi, who indicated that monetary stimulus would be continued. U.S. Federal Reserve Chairman Ben Bernanke also continued to defend the central bank's loose monetary policy during his second day of testimony before Congress on Wednesday.
European Central Bank President Mario Draghi indicated that the central bank is in no hurry to exit stimulus as he anticipates inflation to come significantly below the bank's target this year, giving room for maintaining an accommodative monetary stance.
ECB policymakers are "far" from considering an exit from the current accommodative stance, Draghi said during a speech at the Catholic Academy of Bavaria on Wednesday. He said the central bank forecasts next year's inflation to be significantly below the 2 percent target.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.94 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.10 percent.
The DAX of Germany climbed by 0.86 percent and the CAC 40 of France advanced by 0.85 percent. The FTSE 100 of the U.K. rose by 0.68 percent and the SMI of Switzerland gained 1.45 percent.
In Frankfurt, Bayer increased by 3.41 percent after annual sales reached a record high. RWE was upgraded at Morgan Stanley to "Overweight" from "Equal weight" and gained 2.12 percent.
Societe Generale downgraded Salzgitter to ''Hold'' from ''Buy.'' The stock declined by 1.67 percent. Deutsche Telekom finished unchanged after reporting financial results.
Hochtief dropped by 7.20 percent. The construction company reported a profit for the year and announced plans to sell some businesses to return the company to a sustainable growth trajectory.
In Paris, Essilor International climbed by 5.94 percent. The company reported a higher annual profit Veolia Environnement, which reported an annual profit, rose by 1.31 percent.
In London, International Consolidated Airlines surged by 7.89 percent, after reporting financial results. ITV advanced by 4.37 percent. Investec upgraded the stock to ''Hold'' from ''Sell.''
Reed Elsevier gained 1.43 percent, following its full year report. Kazakhmys, which named a new finance chief, decreased by 8.57 percent.
Royal Bank of Scotland fell by 6.60 percent, after reporting a hefty quarterly loss.
Petrofac dropped by 2.87 percent, after Societe Generale downgraded its rating to "Hold" from "Buy." Shire declined by 1.76 percent, after Nomura downgraded its rating to "Neutral" from "Buy."
|US Market Report|
Stocks Showing A Lack Of Direction On Mixed Economic Data
Stocks are turning in a relatively lackluster performance in mid-day trading on Thursday after failing to sustain an early move to the upside. The markets are seeing some consolidation following two straight days of strong gains.
The major averages have been bouncing back and forth across the unchanged line and are currently posting slim gains. The Dow is up 13.63 points or 0.1 percent at 14,089.00, the Nasdaq is up 7.64 points or 0.2 percent at 3,169.90 and the S&P 500 is up 2.59 points or 0.2 percent at 1,518.58.
The choppy trading on Wall Street comes on the heels of the release of a mixed batch of U.S. economic data, with traders weighing weaker than expected GDP data against upbeat reports on jobless claims and Chicago-area business activity.
While the Commerce Department released a report showing that fourth quarter GDP was revised to show economic growth compared to the previously reported contraction, the pace of growth fell well short of economist estimates.
The report said fourth quarter GDP was upwardly revised to show a 0.1 percent increase compared to the previously reported 0.1 percent drop. However, economists had been expecting the revised report to show 0.5 percent growth.
Meanwhile, the Labor Department released a separate report showing that initial jobless claims dropped to 344,000 in the week ended February 23rd, a decrease of 22,000 from the previous week's revised figure of 366,000.
Economists had expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.
A separate report from the Institute for Supply Management - Chicago showed that Chicago-area business activity unexpectedly increased at a faster rate in the month of February.
The report said the Chicago business barometer rose to 56.8 in February from 55.6 in January, with a reading above 50 indicating an increase in business activity. The increase came as a surprise to economists, who had expected the barometer to edge down to 55.0.
Uncertainty about the impact of the automatic government spending cuts due to take effect on Friday is also contributing to the choppy trading.
While President Barack Obama is scheduled to meet with Congressional leaders from both parties on Friday, the so-called sequester is widely expected to take effect.
Unless Congress acts, approximately $85 billion in automatic cuts to both defense and domestic spending are due to go into effect on March 1st.
Most of the major sectors are showing only modest moves in mid-day trading, contributing to the lack of direction being shown by the broader markets.
Gold stocks are seeing considerable weakness, however, as a decrease by the price of the precious metal is weighing on the sector. With gold for April delivery falling $15.40 to $1,580.30 an ounce, the NYSE Arca Gold Bugs Index is down by 1.6 percent.
Networking and housing stocks are also seeing some weakness on the day, while modest strength is visible among biotechnology and railroad stocks.
In overseas trading, stock markets across the Asia-Pacific region saw considerable strength during trading on Thursday. Japan's Nikkei 225 Index surged up by 2.7 percent, while Hong Kong's Hang Seng Index jumped by 2 percent.
In the bond market, treasuries continue to see modest strength after ending the previous session in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 1.891 percent.
|Friday preview for UK Event Calendar|
Lloyds Banking Group releases its annual results Friday – a day after the Royal Bank of Scotland (RBS) unveiled a loss in its 2012 financial statement.
Investec analysts have warned investors to steer well clear as it expects the company to report an underlying profit before tax of £2.4bn for 2012 which translates to an attributable loss of £1.8bn.
The broker retained a ‘sell’ rating for the bank’s stocks and issued a target price of 46p.
"Despite a return to modest profitability in 2013 estimate, we then expect tangible net asset value to fall to 55p. Lloyds already trades on 1.0x 2013 estimated tangible net assets value which cannot be justified by our return on equity forecasts of 2.0% in 2013, 6.0% in 2014 and 8.0% in 2015," the company said.
The results come after the Financial Services Authority fined Lloyds Banking Group £4.3m for delaying payment protection insurance (PPI) compensation to up to 140,000 customers.
Firms owned by LBG - Lloyds TSB Bank,Lloyds TSB Scotland and Bank of Scotland – were penalised by the financial regulator over failings in their systems and controls.
Lloyds also recently announced plans to slash a further 940 jobs, bringing the total of redundancies to 31,000 since its takeover of banking and insurance company HBOS in 2009. The move is part of the bank's strategy to turn business around.
The banks' results arrive after RBS revealed it lost £5.2bn for 2012, compared to a deficit of £1.19bn in 2011, blaming fines for LIBOR rigging and mis-selling of payment protection insurance.
INTERIM DIVIDEND PAYMENT DATE
Latchways, Mattioli Woods
QUARTERLY PAYMENT DATE
JPMorgan Claverhouse Inv Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
Non-Farm Payrolls (US) (13:30)
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
U. of Michigan Confidence (US) (15:00)
Unemployment Rate (EU) (10:00)
Baillie Gifford Shin Nippon, Victoria Oil & Gas
BBA Aviation, Berendsen, Fiberweb, Hammerson, Laird, Lloyds Banking Group, Old Mutual, Rentokil Initial, Rightmove, Taylor Wimpey, William Hill, WPP
Investors In Global Real Estate Ltd
CQS Diversified Fund Ltd Ord NPV £, Sage Group
UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
Gooch & Housego, Noble Investments (UK)