Thursday 15 November 2012
QUOTE OF THE DAY
Money, if it does not bring you happiness, will at least help you be miserable in comfort
- Helen Gurley Brown
THIS MORNING IN LONDON
FTSE 100
5,756.21
-30.04 -0.52%
FTSE 250
11,781.32
-15.90 -0.13%
FTSE 350
3,070.83
-14.45 -0.47%
FTSE All Share
3,006.65
-13.80 -0.46%
AIM 100
3,082.68
-2.87 -0.09%
AIM All Share
690.99
0.03 0.00%
11:43 am
Stocks slump on global economic concerns
US budget talks, Eurozone debt concerns and violence in the Middle East combined to pressure stocks lower on Thursday, pushing the Footsie to levels not seen since early September.
The FTSE 100 hit an intraday low of 5,687 early on, before recovering to around the 5,700 mark by lunchtime. The last time the index closed lower was on September 5th when it finished at 5,658.
Headlines continue to focus on the impending US 'fiscal cliff' as the country's politicians prepare for talks scheduled for Friday to come to an agreement on how to deal with the budget deficit. President Barack Obama's administration and Republican lawmakers must come to an agreement in order to avoid $607bn in spending cuts and tax increases that, if not changed, will take effect on January 1st.
On this side of the Atlantic, it was revealed today that Eurozone gross domestic product (GDP) contracted by 0.1% in the third quarter, in line with consensus estimates. After accounting for a 0.2% decline in the second quarter, it means that the single-currency area entered technical recession - contracting for a second consecutive quarter.
Dampening the outlook further was Belgium's central bank governor and ECB governing council member, Luc Coene, who said that Greece will eventually need another haircut on its "towering debt".
In the UK, where sentiment is still fragile after the Bank of England yesterday cut its growth estimate for 2013, the Office for National Statistics revealed today that retail sales volumes fell by 0.8% in October, much worse than the 0.1% fall expected by analysts.
In addition to the US 'fiscal cliff' and Eurozone concerns that continue to plague the markets, "the ongoing conflict between Israel and Hamas seems to be in danger of escalating causing additional uncertainty with investors fleeing out of stocks as a result," according to Markus Huber, head of German HNW trading at ETX Capital.
FTSE 100: Wood Group drops after Nomura comments
Oilfield services firm Wood Group sank after Nomura named its as one of the "top 'reduces' for 2013." The broker said that the stock is trading at a 24% premium to the sector average which is "unwarranted given undifferentiated business model and limited upside to EPS."
Life insurer Resolution tanked after a somewhat mixed update, saying that new business profitability is continuing to improve, but that its international business is "below par" and it will incur higher costs from IT updates.
Oil giant BP fell after announcing that it is close to resolving claims with US regulators relating to the Gulf of Mexico oil spill in 2010. The resolutions are expected to represent the largest criminal penalty in history.
Rexam, the consumer packaging giant, dropped after revealing weakness in its Healthcare division, despite a broadly 'in line' performance in the third quarter across the group.
British Gas owner Centrica fell after saying that average UK residential gas consumption for the first ten months of 2012 was 9% higher than for the same period of 2011, while average electricity consumption was 1% lower.
Sector peer National Grid was subdued despite saying that underlying pre-tax profit of £1,154m for the six months to the end of September was up 21% from £953m the year before.
Mining and banking stocks were performing relatively well today despite the macroeconomic uncertainty, with EVRAZ, Kazakhmys, RBS and Barclays among the best performers.
Copper miner Antofagasta was bucking the trend after a decline in copper and molybdenum prices partially offset the benefits of increased volumes in the first nine months of 2012.
FTSE 250: WS Atkins surges after half-year report
Design and engineering consultancy group WS Atkins jumped after it topped expectations with its interim profits, and signalled optimism for the future by announcing that it has resumed recruiting.
Nickel miner Talvivaara rose strongly after replacing its CEO Harri Natunen with Pekka Perä following the interruption to metals production caused by leakage in a gypsum pond.
Construction group Kier was also in demand after saying that it remains on course to meet full year expectations as it builds momentum towards the second half of the year.
FTSE 100 - Risers
Evraz (EVR) 224.50p +3.27%
Kazakhmys (KAZ) 675.50p +2.19%
Royal Bank of Scotland Group (RBS) 283.40p +2.05%
Xstrata (XTA) 966.00p +1.93%
GKN (GKN) 206.40p +1.83%
Eurasian Natural Resources Corp. (ENRC) 280.30p +1.48%
Barclays (BARC) 240.90p +1.37%
Burberry Group (BRBY) 1,191.00p +0.93%
Fresnillo (FRES) 1,952.00p +0.88%
Vedanta Resources (VED) 1,071.00p +0.85%
FTSE 100 - Fallers
Wood Group (John) (WG.) 798.00p -5.00%
Resolution Ltd. (RSL) 229.20p -4.30%
Marks & Spencer Group (MKS) 369.40p -2.38%
Kingfisher (KGF) 277.00p -2.12%
Amec (AMEC) 1,035.00p -1.99%
Sainsbury (J) (SBRY) 332.70p -1.80%
Babcock International Group (BAB) 957.00p -1.64%
International Consolidated Airlines Group SA (CDI) (IAG) 164.00p -1.50%
Whitbread (WTB) 2,380.00p -1.49%
Old Mutual (OML) 167.10p -1.47%
FTSE 250 - Risers
Atkins (WS) (ATK) 696.00p +9.09%
Talvivaara Mining Company (TALV) 114.50p +9.05%
Investec (INVP) 385.70p +4.81%
Bumi (BUMI) 278.00p +4.75%
Kier Group (KIE) 1,149.00p +3.89%
Bank of Georgia Holdings (BGEO) 1,070.00p +3.58%
Domino Printing Sciences (DNO) 540.00p +3.45%
Savills (SVS) 416.10p +2.97%
Ted Baker (TED) 988.50p +2.86%
Daejan Holdings (DJAN) 2,820.00p +2.77%
FTSE 250 - Fallers
Man Group (EMG) 75.40p -3.58%
IP Group (IPO) 103.80p -3.44%
BBA Aviation (BBA) 197.90p -3.09%
Big Yellow Group (BYG) 329.00p -2.75%
Perform Group (PER) 390.40p -2.40%
Redrow (RDW) 151.20p -2.39%
Ruspetro (RPO) 97.25p -2.26%
Smith (DS) (SMDS) 198.50p -2.22%
Imagination Technologies Group (IMG) 454.90p -2.15%
easyJet (EZJ) 646.00p -2.05%
WHAT THE BROKERS SAY
AMEC: Nomura raises target price from 1240p to 1340p, buy rating remains unchanged. Barclays Capital reduces target price from 1350p to 1320p, underweight rating kept.
ICAP: JP Morgan reduces target price from 350p to 324p, neutral recommendation unchanged. Berenberg reduces target price from 425p to 370p, hold rating kept. Barclays Capital cuts target price from 410p to 370p, overweight rating kept. UBS reduces target price from 305p to 290p, neutral rating remains maintained.
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THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Fenner
Leni Gas & Oil
Caza
The Running Trading Thread
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BOOK OF THE WEEK
By Nassim Taleb
A book review by Ross Jones
The majority of us want to push for more in our lives and it is my belief that without the drive and ambition to succeed in your job, and your everyday life, things would be pretty boring. But that then sparks the question; what makes some people more successful than others? The typical answer would be skill, talent, effort and dedication, but Nassim Taleb suggests it is something altogether more unpredictable. The author of the fantastic The Black Swan argues that success, and even life, is all about luck. Taleb proposes that it is only because we fail to truly grasp the role of probability in our lives that we continue to put our respective successes down to skill and talent, as opposed to chance.
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