Monday 19 November 2012
QUOTE OF THE DAY
Time is more valuable than money. You can get more money, but you cannot get more time
- Jim Rohn
THIS MORNING IN LONDON
FTSE 100
5,680
74.90 1.34%
FTSE 250
11,678
101.11 0.87%
FTSE 350
3,032
38.15 1.27%
FTSE All Share
2,969
36.66 1.25%
AIM 100
3.050
26.38 0.87%
AIM All Share
685
4.06 0.60%
12:41 pm
Markets rise as concerns over US budget ease
Stocks advanced on Monday morning as optimistic comments by US lawmakers over the weekend regarding the budget lifted hopes that the government will come to an agreement to avert the impending 'fiscal cliff' by the January 1st deadline.
"Today has very little in terms of economic data to be announced, making for a market largely driven by underlying economic and geo-political factors," said market analyst Craig Erlam from Alpari.
Speaking to reporters in Bangkok yesterday, President Barack Obama said: "I am confident we can get our fiscal situation dealt with." This follows discussions between key members of Congress on Friday which were labelled by all sides as "constructive".
On this side of The Pond, investors were also digesting comments made by Bank of England policy maker David Miles this weekend. In an interview with Sky News, he said: "if it turns out that not enough has been done, that the economy's going to stay in a recessionary state and that's going to drive inflation down, there is more we can do. We have not run out of ammunition."
Markit's UK Household Finance Index reached a 23-month high in November, although concerns were voiced for the outlook going forward. The figures also suggested that household spending picked up in November, which is seen as key if the economy is to keep growing in the fourth quarter.
With little data elsewhere due out today, the focus of markets likely to be on developments of fiscal cliff talks Stateside and tomorrow's Eurogroup meeting on Greece in Brussels.
Markus Huber, the head of German HNW trading at ETX Capital said this morning: "It will be interesting to see how long the current optimism will last and how quickly the focus will shift to Greece, so far in the US all we have are words and any kind of deal still seems to be far off at this stage and concerning Greece there are still huge divisions between individual countries how to raise the additional funds needed."
He noted that this week is likely to see volumes decline substantially as the week progresses with US markets closed for Thanksgiving on Thursday.
FTSE 100: HSBC and Barclays making gains
Banking giant HSBC rose after confirming press speculation that it is mulling a sale of its minority stake in Chinese insurance giant Ping An Insurance. HSBC holds a 15.57% stake in Ping An, China's second-largest insurance firm by assets, which is worth an estimated $9.5bn. The stock was also given a lift by Invtestec which lifted its rating on the shares to 'buy' this morning, saying that the downgrade cycle could finally be over.
Sector peer Barclays was performing well after Goldman Sachs upgraded its recommendation to 'buy'. Its analysts wrote that: "Against a backdrop of a new senior management team and ongoing regulatory pressure, Barclays may announce plans to restructure its operations at the group's Strategy Review (February 12, 2013). If Barclays delivers on a business plan to generate returns that match the group's cost of capital, the stock could offer sector-leading upside, on our analysis."
In contrast, outsourcing group Serco and security firm G4S were in the red this morning, pressured lower by downgrades from Credit Suisse. The broker has cut its ratings for both stocks from 'outperform' to 'neutral'.
Oil giant BP was also a high riser on reports that it is considering a share repurchase programme of around $4bn after it banks the proceeds of the TNK-BP sale to Rosneft. Resource peers ENRC, Randgold, EVRAZ and Fresnillo were also in demand as risk appetite increased.
Financial services giant Old Mutual was in demand after snapping up a majority stake in Latin American AIVA Business Platforms in an effort to strengthen its distribution capability in selected emerging markets.
Temporary power and temperature control giant Aggreko gained after winning a $75m contract in Côte d'Ivoire to provide short-term power supply.
Cruise operator Carnival continued to rise after announcing Friday that it will be paying 50 US cents a share to investors next month as a special dividend, in additional to the previously-announced regular quarterly payout of $0.25 per share.
Quality and safety testing group Intertek fell after admitting that revenue growth slowed down from 29.9% in the first half to 20.1% during the 10 months to the end of October.
FTSE 250: Ocado soars after finding more time and money
Online grocer Ocado jumped after saying it had secured more time to pay off debts and would raise £35.8m through a placing of shares. The firm said it would use the extra time and money to increase its ranges, improve the customer experience and go on a marketing drive.
Platinum miner Lonmin was following close behind on continuing optimism after shareholder Xstrata announced that it would take part in the firm's upcoming capital call.
Siberian explorer RusPetro rose after reporting that increased oil production led to a 22% jump in revenue in the third quarter.
In small cap news, shares in AIM-listed Lamprell faltered then jumped after it announced details of even greater losses for 2012 but said it was on the road to recovery. The oil and gas engineering firm now anticipates a total projected loss for 2012 of around $105m.
FTSE 100 - Risers
Barclays (BARC) 243.80p +4.10%
Eurasian Natural Resources Corp. (ENRC) 269.30p +3.74%
Randgold Resources Ltd. (RRS) 6,555.00p +3.23%
International Consolidated Airlines Group SA (CDI) (IAG) 163.10p +2.90%
ARM Holdings (ARM) 731.00p +2.81%
Evraz (EVR) 224.70p +2.79%
Fresnillo (FRES) 1,928.00p +2.72%
Vedanta Resources (VED) 1,063.00p +2.61%
Kazakhmys (KAZ) 671.50p +2.60%
BP (BP.) 427.20p +2.54%
FTSE 100 - Fallers
Serco Group (SRP) 538.50p -2.09%
Intertek Group (ITRK) 2,793.00p -1.52%
Pennon Group (PNN) 593.00p -1.08%
Croda International (CRDA) 2,271.00p -0.92%
G4S (GFS) 241.90p -0.90%
BG Group (BG.) 994.70p -0.58%
Shire Plc (SHP) 1,723.00p -0.35%
Bunzl (BNZL) 1,024.00p -0.29%
Sage Group (SGE) 299.70p -0.20%
Compass Group (CPG) 691.50p -0.07%
FTSE 250 - Risers
Ocado Group (OCDO) 76.25p +25.93%
Lonmin (LMI) 502.50p +6.62%
Ferrexpo (FXPO) 209.80p +5.96%
Henderson Group (HGG) 113.60p +4.12%
Talvivaara Mining Company (TALV) 109.80p +3.88%
JD Sports Fashion (JD.) 725.00p +3.87%
Ruspetro (RPO) 91.15p +3.58%
London Stock Exchange Group (LSE) 968.50p +3.47%
Bumi (BUMI) 273.20p +3.41%
Essar Energy (ESSR) 122.80p +3.19%
FTSE 250 - Fallers
Mitie Group (MTO) 272.30p -6.10%
Dunelm Group (DNLM) 659.00p -1.64%
Kenmare Resources (KMR) 33.80p -1.46%
Cranswick (CWK) 754.50p -1.44%
Genus (GNS) 1,274.00p -1.32%
Ultra Electronics Holdings (ULE) 1,491.00p -1.06%
Centamin (DI) (CEY) 68.60p -1.01%
Aveva Group (AVV) 1,957.00p -0.96%
Utilico Emerging Markets Ltd (DI) (UEM) 161.50p -0.92%
IP Group (IPO) 108.00p -0.74%
WHAT THE BROKERS SAY
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Costain Group
Optos
Leni Oil & Gas
Fenner
The Running Trading Thread
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BOOK OF THE WEEK
By Niall Ferguson
A book review by James Faulkner of WatsHot.com
One could be forgiven for lifting an eyebrow at the title of Niall Ferguson's book (and television series) exploring the development of global finance - surely a more apposite title given the current climate would be The Descent of Money, or something along those lines? But the really great thing about historians is that they take a much more eclectic and measured view of present circumstances than most of us can afford by the very nature of our own professions and preoccupations. The recent G20 Summit in London demonstrated how angry many people are at their own financial plight, the apparent greed of bankers and financiers, and the great gulf between the haves, the have-nots and the 'have-yachts' as Ferguson puts it. Yet Ferguson shows us that the problems of today aren't products of the financial system itself, rather they are the products of our own tendency to lurch from irrational exuberance to excessive pessimism.
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