European Stock Markets
The FTSE 100 index was flat Monday midday, while the FTSE 250 was
slightly lower, both retreating after setting new record highs earlier
in the session.
The FTSE 100 is little-changed so far today, but having touched a new record at the beginning of the session the broadly bullish trend remains intact. Given the slew of trading updates this week we can expect a healthy dose of volatility in individual names, even if the wider index retains the 2017 characteristic of outward calm," said IG chief market analyst Chris Beauchamp.
London's index of large-caps remained flat despite facing a significant drag from Micro Focus International, as shares in the software maker hit their lowest levels since August after the firm's interim results disappointed traders.
Another company experiencing a "dose of volatility" on Monday was Mothercare, shares dropping to an all-time low after a weak Christmas performance and subsequent downgraded guidance. This comes as other London-listed retailers prepare to release their Christmas results over the coming weeks.
The FTSE 100 index was flat, just 1.68 points higher at 7,725.90 Monday midday, having hit a fresh all-time high of 7,733.39 earlier in the session.
The mid-cap FTSE 250 index was down 0.1% at 20,920.40, having reached its own all-time high of 20,984.76 earlier on Monday. The AIM All-Share index was flat at 1,067.66.
The BATS UK 100 index was up 0.2% at 13,125.20. The BATS 250 was up 0.1% at 19,022.78, and the BATS Small Companies was flat at 12,944.31.
In UK data on Monday, preliminary data from Halifax and IHS Markit showed house price growth slowed sharply in December and prices declined from the previous month.
The house price index rose 2.7% year-on-year following 3.9% increase in the previous month. The latest increase was the smallest since August, when prices grew 2.6%.
In the October-December quarter, house prices rose 1.3% from the previous three months ending September. On a monthly basis, house prices fell 0.6% from November,when they rose 0.3%. The latest fall was the first since June.
Blue-chip housebuilders were lower on Monday, with Taylor Wimpey down 1.4%, Persimmon down 1.1% and Barratt Developments down 0.9%. FTSE 250 homebuilders such as Crest Nicholson and Redrow were down 1.2% and 0.9%, respectively.
Sterling was flat against the dollar, quoted at USD1.3545 Monday midday, compared to USD1.3565 at the London equities close on Friday.
On the continent, the CAC 40 stock index in Paris was up 0.4% while the DAX 30 in Frankfurt was also up 0.4% Monday midday.
Survey results from European Commission on Monday showed eurozone economic confidence improved further in December, rising more-than-expected to 116 from 114.6 in November. This was the highest score since October 2000 and above the forecast of 114.7.
The industrial confidence indicator came in at 9.1 versus 8.1 a month ago. The expected score was 8.4.
In addition, preliminary data from Eurostat on Monday showed eurozone retail sales rebounded strongly in November, surpassing economists' expectations to grow a seasonally-adjusted 1.5%, from a 1.1% fall in October. Economists had expected 1.2% growth in November.
The latest sales growth was the fastest since October 2016, when sales grew 2%. Growth was led by a 2.3% increase in the non-food products segment, within which sales of textiles, clothing and footwear surged 5.9%.
The euro was quoted at USD1.1990 Monday midday, down from USD1.2033 at the European equities close on Friday.
Stocks in New York were called for a higher open on Monday, with the Dow Jones Industrial Average seen up 0.2%, and both the S&P 500 index and Nasdaq Composite called to open flat.
In the afternoon, US consumer credit change figures are at 2000 GMT. Additionally, there are several speakers from the Federal Reserve in Monday's calendar, with Federal Open Market Committee members Raphael Bostic to speak at 1740 GMT and John Williams at 1835 GMT. Boston Fed President Eric Rosengren speaks at 2100 GMT.
"Williams and Rostic will both be voters on the FOMC this year and so their views will be very closely monitored and could have an impact, although with Jerome Powell set to succeed Janet Yellen as Chair next month and a number of roles still to be filled, there remains an element of uncertainty when it comes to Fed policy going forward," noted Oanda senior market analyst Craig Erlam.
Later in the week, earnings season on Wall Street begins with fourth-quarter results on Friday from banks JPMorgan and Wells Fargo as well as asset management firm BlackRock.
On the London Stock Exchange at midday, Micro Focus International was rooted to the bottom of the FTSE 100, down 17%.
Reported revenue rose by 80% for the six months to October 31, to USD1.23 billion from the USD684.7 million recorded the same period in the prior year, USD569.8 million of this generated by HPE Software.
However, stripping out the merger with HPE, revenue fell 2.9% year-on-year to USD664.7 million from USD684.7 million. Ahead, Micro Focus said it expect revenue for the year to October 2018, its new year-end date, to fall between 2% and 4% on a pro forma basis.
Also lower on Monday was Paddy Power Betfair, down 1.9%. Morgan Stanley downgraded the bookmaker to Underweight from Equal Weight.
At the other end of the index of large-caps was G4S, up 4.8%. UBS upgraded the security services provider to Buy from Neutral, and promoted the firm to one of its top picks in the European Support Services sector.
Experian, also upgraded by UBS to Buy from Neutral and added as a top pick in the sector, was up 1.2%.
In the FTSE 250, BBA Aviation was up 3.1% after Citigroup raised the aviation services company to Buy from Neutral.
Towards the other end of the index was GCP Infrastructure Investments, down 2.5% at 123.77 pence at midday.
The fund said it intends to raise GBP60 million via placing new ordinary shares under the company's 2017 placing programme. The company plans to place new shares at 122.0 pence per share, a discount of 5.0p per share to the closing market price of 127.0p on Friday.
Turning to the other big faller of the day, Mothercare, IG's Beauchamp said: "Online sales are supposed to be a firm's salvation, but even here the reverse-Midas touch applies. Other retailers are not too badly affected, however, with many investors taking the view that Mothercare remains a special basket-case, unable to sort out its problems despite years of effort."
Mothercare was down 25% at 46.40p on Monday, having hit an all-time low of 42.05p earlier in the session. Shares in the firm traded as high as 134.00p in 2017.
The mother and baby products retailer said it expects profit for its financial year to fall after a disappointing Christmas, with UK trading particularly weak. Trading in the UK saw like-for-like sales down 7.2%. Online sales, which now represent around 42% of total UK sales, fell 6.9%.
Mothercare lowered its estimate for adjusted profit for the year ending March 25 to between GBP1.0 million and GBP5.0 million, from the GBP19.7 million reported in 2017.
McBride was another Main Market constituent having a poor day on Monday, dropping 13%.
The consumer goods manufacturer warned first half adjusted operating profit will be lower than board expectations due to lower sales and a number of cost challenges including raw materials, labour market pressures and transportation costs.
Carillion was up 18% after confirming it intends to presenting a business plan to creditors on Wednesday in an attempt to restructure its balance sheet.
The FTSE 100 is little-changed so far today, but having touched a new record at the beginning of the session the broadly bullish trend remains intact. Given the slew of trading updates this week we can expect a healthy dose of volatility in individual names, even if the wider index retains the 2017 characteristic of outward calm," said IG chief market analyst Chris Beauchamp.
London's index of large-caps remained flat despite facing a significant drag from Micro Focus International, as shares in the software maker hit their lowest levels since August after the firm's interim results disappointed traders.
Another company experiencing a "dose of volatility" on Monday was Mothercare, shares dropping to an all-time low after a weak Christmas performance and subsequent downgraded guidance. This comes as other London-listed retailers prepare to release their Christmas results over the coming weeks.
The FTSE 100 index was flat, just 1.68 points higher at 7,725.90 Monday midday, having hit a fresh all-time high of 7,733.39 earlier in the session.
The mid-cap FTSE 250 index was down 0.1% at 20,920.40, having reached its own all-time high of 20,984.76 earlier on Monday. The AIM All-Share index was flat at 1,067.66.
The BATS UK 100 index was up 0.2% at 13,125.20. The BATS 250 was up 0.1% at 19,022.78, and the BATS Small Companies was flat at 12,944.31.
In UK data on Monday, preliminary data from Halifax and IHS Markit showed house price growth slowed sharply in December and prices declined from the previous month.
The house price index rose 2.7% year-on-year following 3.9% increase in the previous month. The latest increase was the smallest since August, when prices grew 2.6%.
In the October-December quarter, house prices rose 1.3% from the previous three months ending September. On a monthly basis, house prices fell 0.6% from November,when they rose 0.3%. The latest fall was the first since June.
Blue-chip housebuilders were lower on Monday, with Taylor Wimpey down 1.4%, Persimmon down 1.1% and Barratt Developments down 0.9%. FTSE 250 homebuilders such as Crest Nicholson and Redrow were down 1.2% and 0.9%, respectively.
Sterling was flat against the dollar, quoted at USD1.3545 Monday midday, compared to USD1.3565 at the London equities close on Friday.
On the continent, the CAC 40 stock index in Paris was up 0.4% while the DAX 30 in Frankfurt was also up 0.4% Monday midday.
Survey results from European Commission on Monday showed eurozone economic confidence improved further in December, rising more-than-expected to 116 from 114.6 in November. This was the highest score since October 2000 and above the forecast of 114.7.
The industrial confidence indicator came in at 9.1 versus 8.1 a month ago. The expected score was 8.4.
In addition, preliminary data from Eurostat on Monday showed eurozone retail sales rebounded strongly in November, surpassing economists' expectations to grow a seasonally-adjusted 1.5%, from a 1.1% fall in October. Economists had expected 1.2% growth in November.
The latest sales growth was the fastest since October 2016, when sales grew 2%. Growth was led by a 2.3% increase in the non-food products segment, within which sales of textiles, clothing and footwear surged 5.9%.
The euro was quoted at USD1.1990 Monday midday, down from USD1.2033 at the European equities close on Friday.
Stocks in New York were called for a higher open on Monday, with the Dow Jones Industrial Average seen up 0.2%, and both the S&P 500 index and Nasdaq Composite called to open flat.
In the afternoon, US consumer credit change figures are at 2000 GMT. Additionally, there are several speakers from the Federal Reserve in Monday's calendar, with Federal Open Market Committee members Raphael Bostic to speak at 1740 GMT and John Williams at 1835 GMT. Boston Fed President Eric Rosengren speaks at 2100 GMT.
"Williams and Rostic will both be voters on the FOMC this year and so their views will be very closely monitored and could have an impact, although with Jerome Powell set to succeed Janet Yellen as Chair next month and a number of roles still to be filled, there remains an element of uncertainty when it comes to Fed policy going forward," noted Oanda senior market analyst Craig Erlam.
Later in the week, earnings season on Wall Street begins with fourth-quarter results on Friday from banks JPMorgan and Wells Fargo as well as asset management firm BlackRock.
On the London Stock Exchange at midday, Micro Focus International was rooted to the bottom of the FTSE 100, down 17%.
Reported revenue rose by 80% for the six months to October 31, to USD1.23 billion from the USD684.7 million recorded the same period in the prior year, USD569.8 million of this generated by HPE Software.
However, stripping out the merger with HPE, revenue fell 2.9% year-on-year to USD664.7 million from USD684.7 million. Ahead, Micro Focus said it expect revenue for the year to October 2018, its new year-end date, to fall between 2% and 4% on a pro forma basis.
Also lower on Monday was Paddy Power Betfair, down 1.9%. Morgan Stanley downgraded the bookmaker to Underweight from Equal Weight.
At the other end of the index of large-caps was G4S, up 4.8%. UBS upgraded the security services provider to Buy from Neutral, and promoted the firm to one of its top picks in the European Support Services sector.
Experian, also upgraded by UBS to Buy from Neutral and added as a top pick in the sector, was up 1.2%.
In the FTSE 250, BBA Aviation was up 3.1% after Citigroup raised the aviation services company to Buy from Neutral.
Towards the other end of the index was GCP Infrastructure Investments, down 2.5% at 123.77 pence at midday.
The fund said it intends to raise GBP60 million via placing new ordinary shares under the company's 2017 placing programme. The company plans to place new shares at 122.0 pence per share, a discount of 5.0p per share to the closing market price of 127.0p on Friday.
Turning to the other big faller of the day, Mothercare, IG's Beauchamp said: "Online sales are supposed to be a firm's salvation, but even here the reverse-Midas touch applies. Other retailers are not too badly affected, however, with many investors taking the view that Mothercare remains a special basket-case, unable to sort out its problems despite years of effort."
Mothercare was down 25% at 46.40p on Monday, having hit an all-time low of 42.05p earlier in the session. Shares in the firm traded as high as 134.00p in 2017.
The mother and baby products retailer said it expects profit for its financial year to fall after a disappointing Christmas, with UK trading particularly weak. Trading in the UK saw like-for-like sales down 7.2%. Online sales, which now represent around 42% of total UK sales, fell 6.9%.
Mothercare lowered its estimate for adjusted profit for the year ending March 25 to between GBP1.0 million and GBP5.0 million, from the GBP19.7 million reported in 2017.
McBride was another Main Market constituent having a poor day on Monday, dropping 13%.
The consumer goods manufacturer warned first half adjusted operating profit will be lower than board expectations due to lower sales and a number of cost challenges including raw materials, labour market pressures and transportation costs.
Carillion was up 18% after confirming it intends to presenting a business plan to creditors on Wednesday in an attempt to restructure its balance sheet.
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