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Showing posts with label ADVFN III Evening Euro Markets Bulletin -November 14. Show all posts
Showing posts with label ADVFN III Evening Euro Markets Bulletin -November 14. Show all posts

Nov 14, 2012

ADVFN III Evening Euro Markets Bulletin -November 14, 2012-.


ADVFN III Evening Euro Markets Bulletin  
Daily world financial news

Wednesday, 14 November 2012

London Market Report
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Footsie drops over one per cent after Rehn comments

Market Movers
techMARK 2,048.86 -0.65%
FTSE 100 5,722.01 -1.11%
FTSE 250 11,718.65 -0.67%
The Footsie lost nearly one per cent on Wednesday as risk appetite waned after comments from Olli Rehn on Spain and concerns about the global economy brought out the bears.

Rehn, the European Commissioner for Economic and Monetary Affairs, quashed speculation this afternoon that Spain was near to a bailout request, saying that the country has taken “effective action” to cut its budget deficit for this year and the next, though 2014’s targets could be a stretch.

Financial trader Shavaz Dhalla said: “Global headline shares continued to tread with caution today as investors remained confused as to what is actually being done to solve the Eurozone debt crisis as well as the US’s impending fiscal cliff. Furthermore, worse-than-expected monthly retail sales from the US also added to the concern that the global economic recovery has probably stalled.”

Meanwhile, some mixed economic data closer to home and remarks from the Bank of England (BoE) did their bit to add to the selling pressure.

Claims for unemployment benefits in the UK increased by 10,100 in October, disappointing the consensus of analysts who were expected no change. This was the largest increase in over a year. Nevertheless, it was revealed today that the UK jobless rate declined to 7.8% in the third quarter, below the consensus estimate of a flat 7.9% reading.

The BoE has reduced its 2013 UK growth forecast to about 1% in its quarterly inflation report. The report said there was "a greater risk that the UK economy may be in a period of persistent low growth”, with problems in the Eurozone and the rest of world continuing to have an impact at home. The Bank also said inflation should fall towards the government's 2% target in the second half of 2013, later than previously thought.
FTSE 100: EVRAZ leads resource stocks lower
Evraz, the steel, mining and vanadium group, was the top faller of the day after proposing that a covenant be removed relating to $577m of outstanding guaranteed notes due 2015. Evraz is seeking to remove a covenant requiring the company to maintain the net leverage ratio at or below a specified level. The statement from the company stressed that it is not actually in breach of this covenant or any of the others, but the market still took fright at the news.

Mining peers Randgold, ENRC, Vedanta and Kazakhmys were also registering heavy losses, as were oil stocks Shell, Tullow and BG Group. Shell announced this morning that it has raised its stake in the North Sea Schiehallion field, at the same time as selling its interest in the Seal are in Canada. Even Tullow Oil, which said this morning it is on track to hit its full-year production targets, was subdued, trading broadly flat by midday.

Engineering consultancy AMEC gained after saying it was trading in line with expectations despite ongoing economic uncertainty. The firm said mining activity was slowing, but conventional oil and gas activity remained strong, particularly in the North Sea and Gulf of Mexico.

Shares in British Gas owner Centrica rose as the shares recovered from serious declines the previous day when it was forced to deny claims it had a hand in the manipulation of wholesale gas prices.

Energy supplier SSE was in demand after posting a 38% jump in profits in the first half as it immediately moved to offset a media storm over its hike in household bills last month. The firm pushed up its dividend 5% to 25.2p as earnings per share leapt 40.6% to 35.3p.

Supermarket group Sainsbury was falling despite reporting a better-than-expected underlying half-year profit before tax in the first half. Jefferies highlighted that like-for-like momentum is likely to moderate in the second half. The broker, keeping its ‘hold’ rating for the stock, said that the shares are likely to de-rate from here given that the valuation (11.5 times 2013 earnings) ‘looks stretched’. Retail peer Marks & Spencer was also lower after going ex-dividend.

AIM/Small Cap Report

FTSE 250: Talvivaara rebounds after leak stopped

Nickel miner Talvivaara surged, recovering after recent falls, after saying that the leakage of the gypsum pond at the Sotkamo mine, which started two week ago, has now been stopped. However, the company said that it was re-assessing its fourth-quarter production target after a temporary plant shutdown.

Inter-dealer broker ICAP dropped after headline pre-tax profit dropped 26% in the first half and revenue fell 14%. Bank recapitalisation and deleveraging, uncertainty over regulatory reform and even the London Olympics were cited by boss Michael Spencer as reasons for the decreases.

Soft drink peers Britvic and AG Barr were higher after agreeing on a merger. Assuming the tie-up goes through, Britvic shareholders will end up controlling 63% of the combined company and AG Barr shareholders 37%. The new entity will be called Barr Britvic Soft Drinks.

FTSE 100 - Risers
Centrica (CNA) 318.30p +2.41%
Amec (AMEC) 1,056.00p +2.23%
Bunzl (BNZL) 1,043.00p +1.26%
SSE (SSE) 1,400.00p +1.23%
Serco Group (SRP) 551.00p +1.10%
Severn Trent (SVT) 1,545.00p +1.05%
United Utilities Group (UU.) 653.00p +0.85%
Pennon Group (PNN) 670.00p +0.68%
Prudential (PRU) 871.00p +0.64%
Capita (CPI) 726.50p +0.62%

FTSE 100 - Fallers
Evraz (EVR) 217.40p -7.01%
Randgold Resources Ltd. (RRS) 6,575.00p -5.12%
Eurasian Natural Resources Corp. (ENRC) 276.20p -4.63%
Burberry Group (BRBY) 1,180.00p -4.14%
Kazakhmys (KAZ) 661.00p -3.22%
Royal Dutch Shell 'B' (RDSB) 2,164.00p -2.81%
Royal Dutch Shell 'A' (RDSA) 2,100.00p -2.78%
BG Group (BG.) 1,014.50p -2.73%
Vedanta Resources (VED) 1,062.00p -2.57%
Anglo American (AAL) 1,725.00p -2.54%

FTSE 250 - Risers
Talvivaara Mining Company (TALV) 105.00p +25.90%
Britvic (BVIC) 387.00p +5.08%
Barr (A.G.) (BAG) 450.80p +4.30%
Fidessa Group (FDSA) 1,318.00p +3.37%
Telecity Group (TCY) 850.00p +3.03%
SIG (SHI) 105.30p +2.63%
Computacenter (CCC) 350.00p +2.49%
Dairy Crest Group (DCG) 350.80p +2.30%
De La Rue (DLAR) 1,024.00p +1.79%
Cobham (COB) 193.50p +1.79%

FTSE 250 - Fallers
ICAP (IAP) 281.40p -9.20%
Pace (PIC) 184.70p -5.28%
TalkTalk Telecom Group (TALK) 210.00p -4.98%
Dechra Pharmaceuticals (DPH) 571.00p -3.71%
International Personal Finance (IPF) 346.00p -3.62%
Kenmare Resources (KMR) 35.05p -3.55%
Dialight (DIA) 1,051.00p -3.49%
Ferrexpo (FXPO) 200.20p -3.42%
IG Group Holdings (IGG) 426.90p -3.33%
Home Retail Group (HOME) 110.00p -3.25%

Europe Market Report
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European Markets Fell Amid Weak Economic Data & Protests

The European markets weakened on Wednesday, after anti-austerity protests broke out across Europe. Labor unions organized coordinated walkouts in Greece, Spain, Portugal and Italy. Some weak economic numbers also raised concerns, like the larger than expected decline in Eurozone industrial output and the unexpected jump in British jobless claims.

The impending fiscal cliff in the U.S. continued to weigh on investor sentiment. President Obama is expected to meet with Congressional leaders at the end of the week to begin discussions to avoid the cliff.

Greek Finance Minister Giannis Stournaras and Labor Minister Giannis Vroutsis told the European Parliament's Economic Affairs and Employment Committees on Tuesday that it is up to the EU to come forward with the next aid tranche.

There were many distortions in the Greek finance and labor markets that had to be tackled, but Greece has taken all the necessary measures, they noted.

Meanwhile, the Greek economy contracted at a faster pace in the third quarter, signaling a further deepening of the ongoing recession, as the downturn in economic activity intensified amid the unresolved debt crisis, preliminary data from the Hellenic Statistical Authority showed Friday.

Gross domestic product, on an unadjusted basis and at constant prices, fell 7.2 percent year-on-year in the third quarter, after falling 6.3 percent in the second quarter. The economy has contracted for the seventeenth consecutive quarter.

The Bank of England forecast for contraction by the British economy and sluggish growth in the near term has opened the door for more quantitative easing. On the inflation front, the central bank does not expect inflation to fall back until the second half of 2013.

In its quarterly Inflation Report published on Wednesday, the BoE trimmed its growth forecast but lifted its inflation outlook on the recent out turn of higher inflation and the spike in energy charges.

At the press conference, BoE Governor Mervyn King warned that the economy faces an "unappealing mix of a weak recovery and high inflation."

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.65 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.00 percent.

The DAX of Germany dropped by 0.94 percent and the CAC 40 of France fell by 0.89 percent. The FTSE 100 of the U.K. decreased by 0.76 percent and the SMI of Switzerland finished down by 0.68 percent.

In Frankfurt, Infineon Technologies climbed by 6.10 percent. The company's fourth-quarter earnings exceeded expectations.

RWE rose by 0.26 percent. The utility now sees slightly higher full-year EBITDA as it is now slightly more confident than it was three months ago.

Peer EON, which reported third-quarter results on Tuesday, declined by 3.01 percent. Several analysts reduced their ratings on the utility.

K+S fell by 2.55 percent. The specialty chemicals company also reported financial results on Tuesday.

In Paris, Vivendi advanced by 5.0 percent. The media and telecommunications company reported a sharply higher third-quarter profit late Tuesday.

Veolia Environnement rose by 1.01 percent, after Societe Generale initiated coverage on the stock with a "Buy" rating.

In London, ICAP declined by 9.20 percent. The company reported a sharp decline in profit for the first half, as margins dropped due to reduction in revenue from voice broking as well as a decline in electronic volumes.

Ryanair Holdings lost 6.52 percent, after Citigroup downgraded the stock to "Neutral" from "Buy.''

Evraz declined by 6.33 percent and Eurasian Natural Resources fell by 4.23 percent. Glencore lost 1.29 percent and Xstrata decreased by 1.40 percent.

S&P Equity raised Vodafone to "Buy" from "Hold.'' The stock finished lower by 0.98 percent.

Sainsbury fell by 2.42 percent, after reporting first-half results. Kingfisher and Burberry closed lower by 2.04 percent and 3.98 percent respectively.

Britvic climbed by 5.21 percent, after entering into a merger agreement with A.G. Barr.

Eurozone industrial output dipped by a seasonally adjusted 2.5 percent in September from a month ago, Eurostat reported Wednesday. Economists had forecast a 2 percent fall after rising 0.9 percent in August.

On a yearly basis, overall production was down 2.3 percent in September, bigger than the 1.3 percent drop logged in August. The annual decline also exceeded a 2.2 percent drop forecast by economists.

France's EU harmonized inflation slowed from the previous month in October, and matched economists' expectations, data released by statistical office Insee showed Wednesday.

The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2.1 percent year-on-year in October, after growing 2.2 percent in September. The latest figure matched economists' expectations.

The number of persons claiming jobless allowance in the UK increased unexpectedly in October, while the unemployment rate fell to its lowest level in more than a year in the three months through September, the latest figures from the Office for National Statistics showed Wednesday.

US Market Report
Abercrombie & Fitch defies weaker trend

Market movers
Dow Jones: -64 at 12,692
S&P 500: -3 at 1,371
NASDAQ Composite: -8 at 2,876
US equities have opened lower after US retail sales fell in October by slightly more than analysts expected, though there were extenuating circumstances in the form of Hurricane Sandy.

Retail sales fell by 0.3% in October (+3.8% year-on-year) to $411.6bn. The market consensus was expecting a 0.2% decline. Retail sales for September were revised higher to 1.3% (5.4% year-on-year) from the previously reported 1.1%.

Of more concern to investors is the shadow of the so-called fiscal cliff, updates on which are likely to preoccupy markets for most of the rest of the year.

President Obama is set to hold talks with luminaries from both his own party and the opposition party on moves to avert the compulsory spending cuts and tax increases that would kick in were Congress unable to agree on a budget before the end of the year.

On the corporate front, networking equipment firm Cisco has given a boost to the whole sector with better than expected fiscal first quarter figures. Juniper Networks and F5 Networks are both pulled along on Cisco's coat-tails.

Trendy high priced Clothing seller Abercrombie & Fitch soared after raising profit guidance for the year on back of better than expected third quarter figures.

US Treasuries are holding steady with yields on the 10-year Treasuries little changed.  On the futures market, West Texas Intermediate is trading at $85.83 a barrel, up 45 cents on the day.

S&P 500 - Risers
Abercrombie & Fitch Co. (ANF) $40.12 +28.67%
Cisco Systems Inc. (CSCO) $17.88 +6.08%
F5 Networks Inc. (FFIV) $89.95 +3.94%
JDS Uniphase Corp. (JDSU) $11.27 +2.97%
NetApp Inc. (NTAP) $27.08 +2.85%
Xilinx Inc. (XLNX) $34.10 +2.77%
Jabil Circuit Inc. (JBL) $17.44 +2.77%
Staples Inc. (SPLS) $11.55 +2.62%
Juniper Networks Inc. (JNPR) $17.77 +2.42%
Whirlpool Corp. (WHR) $99.01 +2.12%

S&P 500 - Fallers
Advanced Micro Devices Inc. (AMD) $2.00 -4.55%
Pitney Bowes Inc. (PBI) $11.16 -4.37%
Murphy Oil Corp. (MUR) $55.13 -3.67%
Mosaic Company (MOS) $49.20 -3.05%
Sealed Air Corp. (SEE) $16.72 -2.79%
First Solar Inc. (FSLR) $23.74 -2.70%
E*TRADE Financial Corp. (ETFC) $7.80 -2.56%
Seagate Technology Plc (STX) $27.25 -2.44%
PulteGroup Inc. (PHM) $15.80 -2.29%
NYSE Euronext Inc. (NYX) $22.75 -2.28%

Dow Jones I.A - Risers
Cisco Systems Inc. (CSCO) $17.88 +6.08%
McDonald's Corp. (MCD) $85.23 +0.70%
Travelers Company Inc. (TRV) $68.68 +0.66%
Hewlett-Packard Co. (HPQ) $13.22 +0.61%
Verizon Communications Inc. (VZ) $42.66 +0.28%
AT&T Inc. (T) $33.98 +0.09%
Microsoft Corp. (MSFT) $27.11 +0.08%
International Business Machines Corp. (IBM) $188.41 +0.05%

Dow Jones I.A - Fallers
Home Depot Inc. (HD) $62.26 -1.77%
Boeing Co. (BA) $72.21 -1.57%
Chevron Corp. (CVX) $103.67 -1.53%
Bank of America Corp. (BAC) $9.20 -1.39%
United Technologies Corp. (UTX) $76.16 -1.09%
General Electric Co. (GE) $20.45 -1.09%
Walt Disney Co. (DIS) $47.45 -1.06%
Mondelez International Inc. (MDLZ) $25.47 -1.05%
Caterpillar Inc. (CAT) $82.66 -0.72%
JP Morgan Chase & Co. (JPM) $39.76 -0.69%

Nasdaq 100 - Risers
Cisco Systems Inc. (CSCO) $17.88 +6.08%
F5 Networks Inc. (FFIV) $89.95 +3.94%
NetApp Inc. (NTAP) $27.08 +2.85%
Xilinx Inc. (XLNX) $34.10 +2.77%
Staples Inc. (SPLS) $11.55 +2.62%
Dell Inc. (DELL) $9.60 +2.07%
Green Mountain Coffee Roasters Inc. (GMCR) $24.99 +1.92%
Broadcom Corp. (BRCM) $31.00 +1.84%
Celgene Corp. (CELG) $75.44 +1.40%
Gilead Sciences Inc. (GILD) $73.39 +0.96%

Nasdaq 100 - Fallers
Baidu Inc. (BIDU) $94.93 -3.72%
Randgold Resources Ltd. Ads (GOLD) $105.33 -2.63%
Seagate Technology Plc (STX) $27.25 -2.44%
Sirius Satellite Radio Inc. (SIRI) $2.74 -1.79%
eBay Inc. (EBAY) $46.93 -1.70%
Alexion Pharmaceuticals Inc. (ALXN) $89.85 -1.66%
Stericycle Inc. (SRCL) $90.92 -1.53%
Fastenal Co. (FAST) $40.78 -1.49%
Ross Stores Inc. (ROST) $55.75 -1.47%
Monster Beverage Corp (MNST) $45.71 -1.47%

Broker tips
Vodafone, AMEC, Johnson Matthey
UBS has reiterated its 'buy' recommendation for telecoms firm Vodafone in spite of some disappointing second-quarter trends in Europe, as it remains upbeat about the Verizon Wireless (VZW) contribution to the group.

"Again cuts to European forecasts are offset by a rise in the associate contribution of VZW. Including the US, VOD top line and cash flow grow. The VZW dividend is significant in our view, we believe that payments may now come more often and prove larger than expected; VZW has shown it will pay out excess cash".

" We keep income dividend forecasts, but see a positive scenario where dividends could prove more frequent and larger than consensus forecasts."

Investec still recommends to 'buy' shares in engineering consultancy AMEC despite some headwinds this year, after the company's third-quarter trading statement confirmed that growth is continuing in line with expectations.

However, the broker said: "The stock currently trades on a sector average rating (11 times FY13E earnings) and c4% forecast dividend yield, but we see better EPS growth elsewhere in the sector."

Credit Suisse has retained its 'neutral' rating for speciality chemicals group Johnson Matthey, saying that while the outlook is negative, it is already priced in.

Credit Suisse said: "We believe today’s share price could represent an attractive entry point for long-term investors, who are not risk averse. However we see macro weakness holding back performance over the next year."

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