UK stock market: Key factors to watch on

European Stock Markets

Britain’s FTSE 100 index is seen to open 8 points higher at 7,256.1 on Tuesday, according to financial bookmakers, with futures up 0.15 percent ahead of the cash market open. 

SPORTS DIRECT: British sportswear retailer Sports Direct plans to buy back up to 100 million pounds ($139.7 million) of its equity as it seeks to further reduce the share capital of the company, it said on Tuesday.

DUNELM: British homewares retailer Dunelm Group Plc said total sales for its half year rose over 18 percent, aided by its Worldstores acquisition.

INTERCONTINENTAL: InterContinental Hotels Group (IHG) said it would not pay out any additional capital to investors in 2018 as it announced a better-than-expected profit for 2017 and a new strategy to speed growth.

HIKMA: Drugmaker Hikma Pharmaceuticals Plc said on Tuesday it appointed Sigurdur Olafsson as its chief executive, effective immediately.

WILLIAM HILL: British bookmaker William Hill will pay 6.2 million pounds ($8.7 million) as a penalty for breaching anti-money laundering and social responsibility regulations, the Gambling Commission said on Tuesday.

HSBC HOLDINGS: HSBC Holdings’ 2017 pre-tax profit rose 142 percent as the lender avoided the multi-billion dollar restructuring costs that marred its 2016 results but the profit growth lagged expectations as it took a writedown following U.S. tax changes.

CARILLION: Britain’s pensions regulator twice ignored requests from trustees of collapsed outsourcing firm Carillion to force the company to plug its pension deficit, lawmakers said on Tuesday.

GKN/MELROSE: British Prime Minister Theresa May said she would act in the national interest when asked for her reaction to a hostile takeover bid of aero-engineer GKN by Melrose.

LONDON STOCK EXCHANGE: The London Stock Exchange Group will launch a contract to compete directly with rival InterContinental Exchange ICE.N to wean markets off Libor by 2021, the British bourse said on Monday.

BALFOUR BEATTY: Britain’s Balfour Beatty on Monday said it sold a further 5 percent stake in Connect Plus, the operator of the M25 orbital motorway, for 42 million pounds ($58.90 million) in cash.

UBER: Taxi app Uber is dropping a legal appeal against the introduction of more stringent English language tests for drivers in London after the city’s transport regulator said it would water down its stringent proposals.

OIL: Oil markets were split on Tuesday, with U.S. crude was pushed up by reduced flows from Canada while international Brent prices eased.

GOLD: Gold prices fell for a third straight session on Tuesday as the dollar rebounded from over three-year lows hit last week, while investors waited for the minutes of the latest Federal Reserve meeting for clues on the outlook for U.S. interest rates.

METALS: London copper drifted lower on Tuesday as a firm dollar dictated direction in a thinly traded market, with holidays in top metals user China.

The UK blue chip index closed down 0.64 percent at 7,247.66 points on Monday, as weak results from Reckitt Benckiser underlined the murky growth outlook for big consumer goods makers and banking holidays in the U.S. and China slowed European markets.

FTSE 100 is a stunning growth opportunity as UK plc profits hit record high

European Stock Markets

What’s with all the gloom? Investors are wasting time fretting about the bond meltdown, stock market dip, Bitcoin, Brexit, you name it. Ignore these crashing bores! 

It is natural to feel anxious in the later stages of the second longest bull run in history, but do not let this affect your judgement. There are some great opportunities right now and believe it or not, the UK is high on the list.

Brexit bears

Yes I know we could end up crashing out of the EU just as inflation and interest rates soar, and the greatest bear market EVER kicks in. All that might happen, it might not. Nobody knows. But you cannot build your portfolio based only on worst-case scenarios, as you will miss the best that stock markets have to offer.

Here is one piece of news you may have missed during the current flurry of panic: profits at UK plc have hit a record high, thanks to strong global growth.

You heard that right. UK-listed companies reporting annual results between October and December saw sales and profits hit record highs, according to the latest Profit Watch UK from The Share Centre. Revenues jumped by 12.6% to £126.6bn, a new record for the latest group of companies to report results.

Watch those profits

Pre-tax profits leapt 44.8% to a new record of £11.2bn, with nine out of 10 companies posting an increase. FTSE 100 companies, which generate three-quarters of their earnings overseas, have done particularly well as they tap into buoyant global growth. Their pre-tax profits jumped by more than half, far faster than the domestic-focused mid-caps, but their profits still grew by nearly a third.

Investment research analyst Helal Miah said that even without exchange-rate gains, UK plc would still have posted record-breaking results. He expects more good news in 2018 due to continued global strength, even though the boost from the weak pound will dissipate: “With the wider global economy in great shape, multinationals will profit from strong trading conditions in their overseas businesses, and manufacturers and exporters will enjoy rising demand for their goods.”

Money machine

Companies that depend on domestic consumer demand are most likely to underperform, as real incomes continue to fall, he added. But overall, it is a hugely positive picture, and greatly at odds with the prevailing negative sentiment.

It also adds to my view that current market volatility is a major buying opportunity, exactly the ‘crash’ stock markets needed. I see it as further evidence that stock markets are a great way to build your wealth, especially as dividends hit an all-time record high in 2017.

Jump in

At time of writing, the FTSE 100 stands at 7,212, more than 7% below its all-time high, which gives you an opportunity to jump in at a discount. It could easily fall further, of course, but you will never buy at the exact bottom of the market. Despite the recent dip, the index is still up 10.4% over one year and 44.7% over five years. It currently yields 3.9%, thrashing cash. The UK is in good shape. Do not let the doomsayers convince you otherwise.

Credit Suisse Group Analysts Give London Stock Exchange Group (LSE) a GBX 4,450 Price Target

European Stock Markets

London Stock Exchange Group (LON:LSE) received a GBX 4,450 ($62.49) target price from Credit Suisse Group in a report released on Wednesday. The brokerage currently has a “buy” rating on the stock. Credit Suisse Group’s price objective points to a potential upside of 11.56% from the stock’s current price.

LSE has been the subject of several other reports. Citigroup reaffirmed a “buy” rating and issued a GBX 4,450 ($62.49) price target on shares of London Stock Exchange Group in a report on Friday, October 6th.

Royal Bank of Canada set a GBX 4,200 ($58.98) price target on shares of London Stock Exchange Group and gave the company a “buy” rating in a report on Wednesday, October 18th. Numis Securities reaffirmed a “hold” rating and issued a GBX 3,800 ($53.36) price target on shares of London Stock Exchange Group in a report on Thursday, October 19th. reaffirmed a “hold” rating and issued a GBX 3,600 ($50.55) price target on shares of London Stock Exchange Group in a report on Thursday, October 12th.

Finally, Deutsche Bank reaffirmed a “hold” rating and issued a GBX 4,000 ($56.17) price target on shares of London Stock Exchange Group in a report on Sunday, October 22nd. Seven equities research analysts have rated the stock with a hold rating and eight have issued a buy rating to the company. The stock currently has a consensus rating of “Buy” and a consensus target price of GBX 4,077.60 ($57.26).

London Stock Exchange Group (LON LSE) opened at GBX 3,989 ($56.02) on Wednesday. London Stock Exchange Group has a 12 month low of GBX 2,964.44 ($41.63) and a 12 month high of GBX 4,076 ($57.24). The stock has a market cap of $13,940.00 and a price-to-earnings ratio of 4,692.94.