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Showing posts with label ADVFN III Evening Euro Markets Bulletin February 13. Show all posts
Showing posts with label ADVFN III Evening Euro Markets Bulletin February 13. Show all posts

Feb 13, 2013

ADVFN III Evening Euro Markets Bulletin February 13, 2013.

ADVFN III Evening Euro Markets Bulletin
Daily world financial news Wednesday, 13 February 2013

London Market Report
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Footsie hits new five-year high

    Market Movers
    techMARK 2,315.39 +0.59%
    FTSE 100 6,359.11 +0.33%
    FTSE 250 13,602.99 +0.94%
After a subdued start, London’s FTSE 100 index finished with decent gains on Wednesday to set a new five-year high with analysts putting the strong performance down to the weaker pound.

Sterling slumped today - down 0.82% against the dollar at 1,5534 – after the Bank of England said that inflation would likely stay above its 2.0% target until early 2016.

In its three-monthly inflation report, Governor Sir Mervyn King admitted that output has been broadly flat for the last two years, he said the underlying picture is "more encouraging".

"The UK economy is set for recovery, that is not to say that the road ahead will be smooth. It hasn’t been a normal recession and it won’t be normal recovery," he said. However, he said that gross domestic product (GDP) growth is "likely to remain below its pre-crisis level until 2015".

Senior market analyst Michael Hewson from CMC Markets said today that the FTSE 100 today hit its highest levels since early 2008.

“These recent gains have no doubt been helped by the current weakness in sterling as investors start to look at the UK index through the same lens as the weak yen, strong NIKKEI trade, helped by the number of companies in the UK index who generate the majority of their earnings in US dollars,” he said.
FTSE 100: Tullow and CRH surge in afternoon trade
Oil and gas group Tullow rose strongly today after posting a four per cent rise in annual pre-tax profits on the back for strong sales and output. Pre-tax profits in 2012 totalled 1.11bn dollars, ahead of analysts' expectations.

Irish building materials group CRH was one of the best performers after President Barack Obama called for more investment in US infrastructure. Boosting the stock further was the news that Irish industrial production rose 8.5% in December, compared with the 0.7% increase across the Eurozone. Furthermore, CRH notified the market that asset management giant BlackRock had increased its stake in the firm to over 5.0% in a transaction over a year ago, buying up 7.0m shares.

Mining groups were performing well too, with ENRC, EVRAZ, Xstrata, Fresnillo and Rio Tinto making decent gains.

Consumer products giant Reckitt Benckiser managed to narrowly beat consensus expectations with its 2012 results, as a strong performance in the Health & Hygiene division - responsible for brands such as Durex, Gaviscon and Dettol – helped drive growth.

Among the worst performers were Sage Group, AstraZeneca, Shell and BP which were all lower after going ex-dividend.

Carnival shares also took a hit on reports of serious problems on one of its cruise liners, which is now being slowly dragged to Alabama after losing power following a small on-board fire.
FTSE 250: Bumi announces agreement with Bakries
Bumi plc shares rose after it announced that it has signed an agreement that will allow Indonesia’s Bakrie Group to divest its interest in the coal miner. Bakrie will cancel its indirect 23.8% stake in exchange for Bumi plc’s 10.3% holding in Asia’s biggest thermal coal exporter PT Bumi Resources.

Data centre operator Telecity gained after seeing adjusted EBITDA rise 22% in 2012 and saying it enters 2013 with a strong recurring revenue base.

African Barrick Gold's shares plunged after saying it was working to reduce costs following a drop in annual net profits. The gold miner reported net profits of $48.2m for 2012 – down from $284.7m the year before.

Oil and gas firm SOCO was also a heavy faller despite reporting a whopping 170% increase in production in 2012. Stocks slumped as investors compared this to the 400% growth seen during the first three quarters of the year.

AIM/Small Cap Report
FTSE 100 - Risers
Tullow Oil (TLW) 1,260.00p +6.78%
CRH (CRH) 1,420.00p +4.72%
Wolseley (WOS) 3,084.00p +3.28%
Amec (AMEC) 1,124.00p +3.02%
Eurasian Natural Resources Corp. (ENRC) 409.60p +2.99%
Rexam (REX) 468.60p +2.67%
Glencore International (GLEN) 394.45p +2.60%
Admiral Group (ADM) 1,277.00p +2.49%
Xstrata (XTA) 1,183.50p +2.47%
Vedanta Resources (VED) 1,296.00p +2.45%

FTSE 100 - Fallers
Sage Group (SGE) 333.30p -2.88%
AstraZeneca (AZN) 2,950.00p -2.27%
Carnival (CCL) 2,575.00p -2.02%
BP (BP.) 453.60p -1.40%
Royal Dutch Shell 'B' (RDSB) 2,186.00p -1.31%
Morrison (Wm) Supermarkets (MRW) 259.80p -1.07%
Vodafone Group (VOD) 171.65p -1.07%
Royal Dutch Shell 'A' (RDSA) 2,140.50p -0.99%
IMI (IMI) 1,179.00p -0.84%
Aviva (AV.) 364.70p -0.76%

FTSE 250 - Risers
Bumi (BUMI) 444.80p +10.10%
Fidessa Group (FDSA) 1,800.00p +8.76%
Telecity Group (TCY) 893.50p +8.30%
Ferrexpo (FXPO) 290.20p +5.14%
New World Resources A Shares (NWR) 304.80p +5.10%
Galliford Try (GFRD) 892.00p +4.57%
Synthomer (SYNT) 210.00p +4.12%
Tullett Prebon (TLPR) 301.50p +3.97%
RPS Group (RPS) 240.80p +3.93%
Domino Printing Sciences (DNO) 684.00p +3.79%

FTSE 250 - Fallers
African Barrick Gold (ABG) 302.00p -11.44%
Britvic (BVIC) 420.00p -8.70%
Barr (A.G.) (BAG) 515.50p -7.12%
Soco International (SIA) 380.80p -3.96%
Ocado Group (OCDO) 132.30p -3.50%
UK Commercial Property Trust (UKCM) 68.90p -2.82%
Workspace Group (WKP) 337.00p -2.29%
Computacenter (CCC) 495.50p -2.27%
Big Yellow Group (BYG) 371.50p -1.98%
Dunelm Group (DNLM) 773.00p -1.90%

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European Markets Climbed On Economic Data

The European markets finished in positive territory on Wednesday. Investors were encouraged by the slower pace of decline in Eurozone industrial production and by retail sales data from the United States. Some better than expected earnings data also provided a boost to investor sentiment.

The Bank of England lifted its inflation forecast despite subdued real pay growth, citing the weakness in sterling and higher tuition fees. Further, the bank expressed readiness to provide more stimulus if needed to underpin recovery that is set to be slow.

Inflation is likely to increase further and stay above the 2 percent target for the next two years, the bank said in its quarterly Inflation Report published on Wednesday.

Nonetheless, it is forecast to fall back to the target thereafter. In two years time, inflation is seen at around 2.3 percent compared to the 1.8 percent projected in November.

The Confederation of British Industry (CBI) on Wednesday lowered its growth forecast for the economy this year and said that the weak economic developments abroad, particularly in Eurozone, are expected to restrict growth in exports and business investment.

The CBI is forecasting GDP growth of 1 percent in 2013, slightly below its previous forecast of 1.4 percent. This reflects the weaker-than-expected growth rate in the fourth quarter of 2012.

The group expects the quarter-on-quarter growth to be marginally positive at 0.3 percent in the first quarter of the year, and stay between 0.3-0.4 percent for the rest of 2013.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.23 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.08 percent.

The DAX of Germany climbed by 0.67 percent and the CAC 40 of France advanced by 0.32 percent. The FTSE 100 of the U.K. rose by 0.29 percent and the SMI of Switzerland gained 0.74 percent.

In Frankfurt, Hochtief surged by 6.67 percent. The builder's Australian unit Leighton Holdings returned to profitability following a couple of disastrous years of losses.

In Paris, Societe Generale dropped by 3.57 percent, after the lender reported a loss for the fourth quarter compared to a profit last year, weighed down by one-off charges. Total climbed by 0.38 percent, following its fourth quarter earnings report.

In London, Rio Tinto increased by 2.37 percent. The mining giant announced it will continue operating Gove alumina refinery as the gas to Gove project progresses.

Vodafone declined by 1.07 percent. There were rumors that the Company is considering an acquisition of Kabel Deutschland. Kabel Deutschland surged by 9.01 percent in Germany.

Tullow Oil gained 6.69 percent, after announcing test results from wells in Kenya. Reckitt Benckiser Group rose by 1.51 percent, after increasing its dividend by 11 percent. Petrofac climbed by 2.03 percent, after UBS upgraded the stock to "Buy.

US Market Report
Stocks Extend Lackluster Performance In Mid-Day Trading

Stocks have wavered over the course of the trading day on Wednesday, as traders express uncertainty about the near-term outlook for the markets. An unimpressive retail sales report has contributed to the choppy trading on Wall Street.

The major averages have moved to the downside in recent trading and are currently mixed. While the Nasdaq is up 1.02 points or less than a tenth of a percent at 3,187.51, the Dow is down 60.63 points or 0.4 percent at 13,958.07 and the S&P 500 is down 1.32 points or 0.1 percent at 1,518.11.

The lackluster performance by stocks comes on the heels of the release of the Commerce Department's closely watched monthly retail sales report.

The report showed that retail sales edged up by just 0.1 percent in January, although economists noted that it could have been worse in light of the recent increase in payroll taxes.

A separate report from the Labor Department showed that import prices rebounded by less than expected in January, while export prices rose in line with estimates.

Traders are also digesting President Barack Obama's State of the Union address from last night, although it remains to be seen how much progress the president can make on his policy goals in light of the recent gridlock in Washington.

Obama called for an increase in the minimum wage as well as a boost to investment in infrastructure. The president also continued to push his proposals on immigration, gun control, and climate change.

Sector News

Most of the major sectors continue to show only modest moves in mid-day trading, contributing to the lackluster performance by the broader markets.

Nonetheless, notable weakness has emerged among gold stocks, as reflected by the 1.2 percent loss being posted by the NYSE Arca Gold Bugs Index. Coeur d'Alene Mines (CDE) is posting a steep loss after announcing an offer to acquire Orko Silver Corp. for $383 million.

Networking and telecom stocks are also seeing some weakness on the day, although selling pressure remains relatively subdued.

On the other hand, some strength is also visible among tobacco stocks, with Lorillard (LO) posting a standout gain after the cigarette maker reported better than expected fourth quarter results and raised its dividend. healthcare provider and airline stocks have also moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Australia's All Ordinaries Index advanced by 0.9 percent, while South Korea's KOSPI Index surged up by 1.6 percent. However, Japan's Nikkei 225 Index bucked the uptrend and fell by 1 percent.

In the bond market, treasuries have climbed off their worst levels of the day but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.2 basis points at 2.004 percent.

Thursday preview
Mining heavyweight Rio Tinto will on Thursday reveal its first set of full-year earnings since Sam Walsh took the helm as Chief Executive Officer.

Analysts at JP Morgan expect the group to report 2012 underlying earnings of $48.9bn along with further details on its recently announced cost cutting target of circa $3.0bn.

“We expect saving to be exceeded in future years [we model $4.4bn of cuts off the calendar year 2015 cost base with circa 75% from the iron ore and aluminium divisions],” the broker said.

A full year dividend of $1.525 and a final of $0.80 were anticipated by the broker for the year, with no significant rebasing of the dividend until Feb 2014.

JP expects the Iron Ore division to generate 85% ($8.85bn) of the 2012 product group earnings and forecasts cash expenditure of $14.5bn, higher than the company’s guidance of $13.6bn due to timing and currency impacts.

“We do not expect any further project approvals and therefore no change to the calendar year 2014 capital expenditure guidance of circa $13bn,” it said.

“The company should reiterate its +15% average returns across its major growth projects.”

Ahead of the results, Rio said it would continue operating its Gove alumina refinery in Australia’s Northern Territory after the government offered 10 years' worth of its domestic gas supply.

The company had warned it would have to mothball the refinery, operated by Rio Tinto subsidiary Pacific Aluminium, if it could not secure a cheap gas supply to run its energy-intensive operations at Gove, east of Darwin.

In other news, Rio was said to have proposed initial terms on a $4.0bn project financing for the Oyu Tolgoi copper-gold mine in Mongolia as it tussles with the government over profits.

ECB Report (EU) (09:00)
Gross Domestic Product (GER) (07:00)

Amec, Coca-Cola HBC S.A., Electric Word, Hrvatske Telekom D.D GDR (Reg S), Morgan Crucible Co, Rio Tinto, Rolls-Royce Holdings, Shire Plc

Henderson Diversified Income Ltd.

Halma, Helical Bar, Norcros

Bajaj Hindusthan Ltd. GDR (Reg S), Noble Investments (UK)

BlackRock New Energy Inv Trust, Euromoney Institutional Investor

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