Thursday 13 September 2012
QUOTE OF THE DAY
The two most beautiful words in the English language are 'check enclosed'
- Dorothy Parker
THIS MORNING IN LONDON
FTSE 100
5,785.32
3.24 0.06%
FTSE 250
11,833.64
22.59 0.19%
FTSE 350
3,086.11
2.28 0.07%
FTSE All Share
3,020.63
2.29 0.08%
AIM 100
3,161.99
10.10 0.32%
AIM All Share
698.05
2.60 0.37%
11:46 am
Markets look to Fed for a boost
- Markets tentative ahead of FOMC announcement
- Stocks already priced in stimulus
- Next and BAE provide a drag in London
The FTSE 100, like other stock markets across Europe, was broadly flat by Thursday lunchtime ahead of a pivotal policy decision by the Federal Reserve expected later on.
Yesterday, the STOXX Europe 600 Index rose to a 14-month high after the German Constitutional Court approved the European Stability Mechanism (ESM), clearing the way for Germany to sign the agreement into law.
"European financial markets are on the soft side this morning, with investors holding back from building risk positions ahead of the Federal Open Market Committee meeting after the European closing bell," said market strategist Ishaq Siddiqi from ETX Capital. "European indices are in tight ranges as are peripheral bonds while the dollar earlier hit seven-month lows versus the yen on the expectation that the Fed will resort to stimulus measures," he said.
Markets have already priced in a high probability of a new round of monetary stimulus. Analyst Henry Skeoch from Barclays Research said: "should the Fed fall short of market expectations, there may be risks of a reversal of the recent strong performance in risk assets and sharp sell-off in core rates."
FTSE 100: Next, BAE are heavy fallers in morning trade
High Street retailer Next tanked despite a decent first half in which revenues rose 4.8% and profits increased 10.2%. However, the firm warned that the second half has got off to a poor start: "Disappointing sales in an unusual August and early September reinforce the wisdom of [our] conservative approach."
The stock was also pressured lower this morning after Investec downgraded its rating from buy to hold, highlighting that the shares are close to an all-time high.
Defence group BAE Systems was also a heavy faller, pulling back after surging yesterday on discussions with aerospace giant EADS regarding a "possible combination" of the businesses. Investec, Societe Generale and Oriel Securities cut their recommendations for the stock this morning.
Accountancy software group Sage was among the risers as big speculation continues to lift the stock. The Daily Mail reported earlier this week that private-equity firms KKR & Co and Blackstone could make a GBP5.58bn offer.
British telecoms giant BT was extending yesterday's gains after sealing a "ground-breaking" GBP152m deal on afternoon for a range of exclusive live rights for Premiership Rugby, dealing a massive blow to current broadcaster BSkyB.
FTSE 250: Premier Farnell, Imagination Tech head opposite directions
Electronics components supplier Premier Farnell surged after seeing the year-on-year decline in its top line slow in the second quarter, as it sacrificed margin to protect market share.
The day after the much ballyhooed release of Apple's iPhone5, chip designer Imagination Technologies released a well-timed trading update in which it revealed its business momentum has continued in the new financial year. Nevertheless, shares fell sharply early on.
Homewares retailer Dunelm rose after saying pre-tax profit climbed a better than expected 15.1% in the first half and while it remains cautious of the UK consumer environment it is confident in the future prospects of the business.
FTSE 100 - Risers
Resolution Ltd. (RSL) 222.00p +2.16%
Rolls-Royce Holdings (RR.) 846.00p +2.11%
Hargreaves Lansdown (HL.) 638.50p +1.35%
Vodafone Group (VOD) 176.30p +1.32%
Sainsbury (J) (SBRY) 336.50p +1.32%
BG Group (BG.) 1,254.50p +1.21%
Prudential (PRU) 831.50p +1.09%
SSE (SSE) 1,383.00p +1.02%
Aberdeen Asset Management (ADN) 297.00p +0.92%
ARM Holdings (ARM) 560.00p +0.90%
FTSE 100 - Fallers
BAE Systems (BA.) 340.50p -6.35%
Next (NXT) 3,365.00p -5.98%
Vedanta Resources (VED) 956.50p -2.94%
ICAP (IAP) 329.80p -2.54%
Evraz (EVR) 263.30p -2.12%
Glencore International (GLEN) 352.00p -2.11%
Rio Tinto (RIO) 3,013.00p -2.08%
Eurasian Natural Resources Corp. (ENRC) 328.40p -1.82%
Ashmore Group (ASHM) 322.90p -1.58%
Kazakhmys (KAZ) 667.50p -1.55%
FTSE 250 - Risers
Premier Farnell (PFL) 190.00p +10.59%
Essar Energy (ESSR) 112.30p +3.89%
Barratt Developments (BDEV) 164.50p +3.59%
SDL (SDL) 665.00p +3.58%
Stobart Group Ltd. (STOB) 116.50p +3.28%
Ophir Energy (OPHR) 614.00p +3.19%
Atkins (WS) (ATK) 684.00p +2.55%
Dunelm Group (DNLM) 640.50p +2.48%
Persimmon (PSN) 757.00p +2.44%
Gem Diamonds Ltd. (DI) (GEMD) 182.50p +2.18%
FTSE 250 - Fallers
Imagination Technologies Group (IMG) 580.50p -4.84%
Home Retail Group (HOME) 95.20p -4.23%
Debenhams (DEB) 96.60p -3.40%
Bumi (BUMI) 284.50p -2.93%
Talvivaara Mining Company (TALV) 152.30p -2.62%
EnQuest (ENQ) 120.50p -2.59%
Afren (AFR) 134.10p -2.40%
Computacenter (CCC) 399.80p -2.23%
Bodycote (BOY) 386.10p -2.15%
Investec (INVP) 387.00p -2.03%
FREE SHARE TIP OF THE DAY
From top chartist Zak Mir of Zaks-TA.com
Kingfisher (KGF) It seems to be the case that in the immediate aftermath of every trading update in Kingfisher there is a wobble in the stock, effectively a brief bear trap, followed by a resumption of the upside. As far as the situation today is concerned it can be said that while there is no end of day close back below the December support line at 262p we should be looking at a return to the summer resistance zone through 290p over the next 3-4 weeks.
Click here to view the rest of the article
WHAT THE BROKERS SAY
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Cluff Gold
Dunelm Group
Rivington Street Holdings
Taylor Wimpey
Running trading thread
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By Nicolas Sarkis
A book review by James Faulkner of watshot.com
"While less sophisticated players may well prefer to kneel and pray that the poor returns on stocks since 2000 will soon somehow be miraculously transformed into a new bull market, serious investors should instead delve into the history books." These are the words of warning Nicolas Sarkis conveys to his readers as he heralds a "lost era" for equities in the opening chapter of his refreshing appraisal of the investment landscape, Fear and Greed. Sarkis, the founder of investment firm AlphaOne Partners and notable for being the youngest ever Goldman Sachs Associate, sets out to equip readers with the insight necessary to avoid the pitfalls of investing in a "lost era"; indeed, he is well placed to do so, having preserved and increased his clients' wealth throughout the turbulent years of the financial crisis.
The book can broadly be divided into two parts; the first six chapters deal with specific investments and market themes - equities, deleveraging, gold, emerging markets, government defaults, and the euro - while the last four address some of the broad sweeping issues that will colour the investment environment for years to come - fearfulness among investors, regulation, fraudsters, and central bankers (perhaps he should have put the last two in the same chapter?). Sarkis is particularly bullish on gold due to the fact that it has a low correlation to equities, making it "a great asset for balancing out risks on equity investments and vice versa". However, for those looking to diversify into emerging markets he cautions that a renewed downturn would probably see them among the worst performing asset classes, particularly in Asia, where China shows many symptoms of a bubble.
Click here to view the rest of the article
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