| | ADVFN III | Evening Euro Markets Bulletin | | | Daily world financial news | Supplied by advfn.com | | | | | | Thursday 26 Jan 2012 17:22:08 | | | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Post-Fed mining surge lifts Footsie up 1.3%
Market Movers
techMARK 1,971.24 +0.71%
FTSE 100 5,795.20 +1.26%
FTSE 250 10,908.82 +1.49% Stocks finish near day's best levels.
- Miners surge as Fed pledges low rates.
- IIF willing to accept coupon rate of below 4%
With gold prices jumping to a six-week high on the back of last night’s statement by the US Federal Reserve, miners dominated the risers on London’s FTSE 100, which closed up 72 points at 5,795, slightly off its intraday high of 5,806 (reached in late afternoon trade).
The Fed, which had previously said it would maintain the federal funds rate between 0% and 0.25% until mid-2013, announced yesterday that it intends to leave them as they are until late 2014. According to the Federal Open Market Committee (FOMC), "economic conditions - including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."
While the move fuelled a strong showing by US stocks last night, some noted that the decision reflected the central bank's concerns over economic growth: one economist from RBC Capital Markets (Tom Porcelli) was quoted as saying that "this drives home one important fact, the Fed is scared."
Meanwhile, talks in Greece are ongoing. The head of Institute of International Finance (IIF), Charles Dallara, is to meet with Greek Prime Minister Lucas Papademos in Athens again today to discuss a debt-swap deal. According to Greek newspaper Ethnos, the IIF is now willing to accept a coupon rate for new Greek bonds of 3.75%, despite earlier demands of a rate no less than 4%.
Elsewhere in the Eurozone, in a move which some are describing as the most significant since the country was frozen out of international debt markets last year, the Irish National Treasury Management Agency (NTMA) yesterday offered to swap investors’ holdings in the country’s short-term debt. Some observers seem to believe that the move may benefit from the ECB’s long-term refinancing operations.
MINERS JUMP AS FED PLEDGES LOW RATES
With the Fed pledging to keep rates low, the dollar dived against the euro, sending dollar-denominated commodities prices higher. As such, the miners were in demand iin London with Vedanta Resources, Polymetal International and Kazakhmys leading the way.
The big news of the day on the corporate front was concerning Polymetal International. Although now off its best levels of the day, up 4.77% (after previously rising over 9%), there has been rumours that Russian peer Polyus Gold and Polymetal’s billionaire owners are considering merging the Russian gold miners to create the world’s ninth-biggest producer of the metal.
Kazakhstan-based copper miner Kazakhmys rose after saying that it met all of its major production targets in 2011 and expects to maintain similar levels of copper output in 2012. Sector peer Anglo American was also higher after it said iron ore production in the final quarter of 2011 increased by 5% from a year earlier to 12.4m tonnes.
The banks were putting on a good show too with Lloyds, RBS and Barclays making gains. There was speculation today that US investment bank Jefferies is close to buying the RBS’s corporate broking arm Hoare Govett.
FTSE 250 MOVERS: PETROPAVLOVSK, HOCHSCHILD SURGE
Russian gold miner Petropavlovsk jumped over 11% after it saw production over the whole of 2011 up by almost a quarter from 2010's levels. Sector Hochschild Mining wasn’t far behind after the Americas-focused precious metals miner held a presentation to analyst and investors in London, in which it underlined its prospects for the coming years.
Budget airline easyJet jumped 10% after it reported a 16.7% increase in revenue for the quarter ended 31 December 2011, helped by higher seat prices and the absence of disruptive winter weather.
The worst performer was financial software provider Misys after it swung to a pre-tax loss of £3.6m in the first half, down from a profit of £18.8m the year before. "Misys has had a tough first half and left itself too much to do in H2. We anticipate downgrades today of around 10%," according to Peel Hunt analyst Paul Morland. |
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| | FTSE 100 - Risers
Vedanta Resources (VED) 1,252.00p +8.68%
Polymetal International (POLY) 1,152.00p +7.76%
Kazakhmys (KAZ) 1,194.00p +7.28%
Lloyds Banking Group (LLOY) 32.83p +6.14%
Randgold Resources Ltd. (RRS) 7,170.00p +5.05%
Rio Tinto (RIO) 3,893.00p +4.89%
International Consolidated Airlines Group SA (IAG) 180.00p +4.83%
Xstrata (XTA) 1,129.50p +4.68%
Fresnillo (FRES) 1,817.00p +4.25%
Wolseley (WOS) 2,274.00p +4.07%
FTSE 100 - Fallers
Carnival (CCL) 1,901.00p -2.16%
Sage Group (SGE) 301.20p -1.31%
Morrison (Wm) Supermarkets (MRW) 292.10p -1.22%
Hargreaves Lansdown (HL.) 419.30p -0.62%
Imperial Tobacco Group (IMT) 2,253.00p -0.44%
SSE (SSE) 1,220.00p -0.33%
Vodafone Group (VOD) 174.00p -0.32%
Capita (CPI) 642.50p -0.31%
Pearson (PSON) 1,177.00p -0.25%
Essar Energy (ESSR) 135.70p -0.22%
FTSE 250 - Risers
Petropavlovsk (POG) 772.00p +10.84%
easyJet (EZJ) 445.50p +10.33%
Hochschild Mining (HOC) 515.00p +9.41%
Domino Printing Sciences (DNO) 618.50p +8.51%
Kesa Electricals (KESA) 71.35p +7.45%
Ferrexpo (FXPO) 351.10p +6.36%
PZ Cussons (PZC) 303.10p +6.35%
Lonmin (LMI) 1,109.00p +6.33%
AZ Electronic Materials SA (DI) (AZEM) 298.00p +6.31%
Mondi (MNDI) 533.00p +6.18%
FTSE 250 - Fallers
Misys (MSY) 305.30p -6.21%
PayPoint (PAY) 558.50p -4.53%
Carpetright (CPR) 607.00p -3.34%
Exillon Energy (EXI) 258.50p -2.08%
Mitie Group (MTO) 265.50p -1.85%
Homeserve (HSV) 293.60p -1.77%
Paragon Group Of Companies (PAG) 179.90p -1.42%
Filtrona PLC (FLTR) 381.00p -1.32%
Go-Ahead Group (GOG) 1,245.00p -1.27%
Telecom Plus (TEP) 654.50p -1.21% |
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| | European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | European Stocks Rebound On Fed Rate Outlook
European stocks stormed back to the upside after seeing modest losses earlier in the week, bolstered by the Federal Reserve's signal that it will keep interest rates low through 2014.
The German DAX Index rose 1.82 percent and the U.K.'s FTSE 100 Index gained 1.22 percent, respectively, while the French CAC 40 Index rose 1.53 percent. The Swiss Market Index was up a more modest 0.28 percent.
The Euro Stoxx 50 Index, which is a compilation of 50 major blue chip stocks in the euro area, gained 1.62 percent, while the Stoxx Europe 50, which also includes key U.K. stocks, added 0.76 percent.
Greek newspaper Ethnos reported that private lenders will voluntarily agree to a coupon rate of 3.75 percent on Greek bonds in a debt swap.
Banking shares surged on the news, led by an 18 percent jump in shares of National Bank of Greek and strong outings from Credit Agricole and Commerzbank.
Italian banks were also up sharply after a successful bond auction in Rome.
Mining stocks were in demand on hopes for the global economy and a weaker U.S. dollar. Rio Tinto added 4.6 percent, while Kazakhmys jumped 7 percent.
Nokia was rising after it posted fourth quarter non-IFRS earnings of 6-euro cents per share and net sales of 10 billion euros.
France's Technip said it has been awarded a contract worth about 110 million Australian dollars by Daewoo Shipbuilding and Marine Engineering for the detailed design of Chevron's Wheatstone offshore gas processing platform. The stock rose 0.9 percent.
U.K.'s Anglo American rose 3 percent after it said its iron ore production rose 5 percent in the fourth quarter, while its copper production was up 12 percent.
Low cost carrier easyJet is climbing close to 9 percent after it said its first quarter revenues climbed 16.7 percent.
On the flip side, Logitech International SA reported a 15 percent year-over-year decline in profits. The stock fell 12 percent.
At EADS, Tom Enders will take over the role of CEO when Louis Gallois steps down. Shares were down 0.8 percent. |
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| | US Market Report | | Stocks Give Back Ground On Disappointing Housing Data
After moving mostly higher in early trading on Thursday, stocks have turned mixed over the course of the morning. The major averages have all pulled back well off their highs for the session, although the Dow has managed to remain in positive territory.
While a positive reaction to yesterday's monetary policy announcement from the Federal Reserve and upbeat durable goods orders data contributed to the early strength on Wall Street, disappointing housing data has generated some selling pressure since then.
The report from the Commerce Department showed that new home sales unexpectedly decreased in the month of December.
Financial stocks have shown a notable move to the downside on the day, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index falling by 1.7 percent and 1.5 percent, respectively.
The disappointing housing data has also contributed to notable weakness among housing stocks, which have come under pressure along with health insurance and natural gas stocks.
On the other hand, significant strength remains visible among airline, trucking, and gold stocks. The continued strength in the gold sector comes amid a notable increase by the price of the precious metal.
Additionally, a strong gain by Caterpillar (CAT) is helping to keep the Dow above the unchanged line, with the construction equipment manufacturer up by 3.3 percent after reporting stronger than expected fourth quarter earnings growth
The major averages have moved roughly sideways in recent trading, stuck on opposite of sides of the unchanged line. While the Dow is up 26.64 points or 0.2 percent at 12,783.60, the Nasdaq is down 5.15 points or 0.2 percent at 2,813.16 and the S&P 500 is down 2.58 points or 0.2 percent at 1,323.47. |
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| | Broker tips | | Nomura has downgraded its rating on the 'European Industrial Transportation' sector from bullish to neutral, saying that it expects slow growth or even no growth from stocks this year.
In its summary of the sector, Nomura said: "with the outlook for volume growth finely balanced between sub-trend growth and a double dip, and visibility as poor as we can remember it, we retain cautious forecasts at the start of 2012 and as a consequence focus our investment recommendations on the strongest companies in each subsector."
Changes/reiterations that Nomura has made to the UK transportation stocks under its coverage are are as follows:
IAG - Nomura keeps buy rating and 265p target; Firstgroup - Nomura downgrades from neutral to reduce, target cut from 333p to 330p; Go-Ahead- Nomura cuts target from 1,500p to 1,480p, neutral rating kept; Stagecoach - Nomura raises target from 281p to 305p, reiterates buy; EasyJet - Nomura reiterates buy rating and 470p target; DP World - Nomura slashes target from 1,040p to 880p, buy rating unchanged; Ryanair - Nomura downgrades from buy to neutral, target cut from €5.50 to €4.90.
Panmure Gordon has reiterated its hold recommendation on financial software provider Misys, saying that the figures were shy of its (and consensus) expectations.
"As we expected, Misys revenue is coming from selling ‘bits and pieces’ (i.e. moves/add/changes), which has driven up revenue in its Global Services division, but licence sales are down 6.5% year-on-year," said analyst George O'Connor.
"Takeover talks will keep the ‘pep’ in the share price and a good narrative on Bankfusion (8 new sales and 11 installs) should cheer investors but, following these results and associated downgrades, shares are coming down," he said. Panmure cuts its target from 335p to 295p.
EasyJet's first quarter statement impressed the both the markets and Panmure Gordon today, with the broker maintaining its buy rating for the budget airline.
Passengers carried in the three months to December 31st rose 8.1% to 12.9m, while the load factor improved 0.9 percentage points to 87.6%. Total revenues per seat increased by 9.2% while the cost per seat (excluding fuel) fell 1.6%.
"We believe this is a positive IMS, which demonstrates that EZJ’s revenues per seat continue to grow strongly. We retain our buy recommendation and 450p target price," said analyst Gert Zonneveld. |
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