LONDON (SHARECAST) - -Chinese data and US figures lift sentiment
techMARK 2,094.74 +0.12%
FTSE 100 5,805.61 +0.21%
FTSE 250 11,855.67 +0.15%
-All eyes on Spain and Greece ahead of EU summit
-Citi economist predicts 'Grexit'
-Spanish 10 year bond yields rise 19bp to 5.82 per cent
-Greek 10 year bond yields fall 48bp to 17.56 per cent
London's FTSE 100 index finished the day in positive territory after some better-than-expected results from Citigroup and retail sales figures in the US boosted buying in afternoon trade.
Stocks were given a lift early on after export data from China beat expectations: exports rose by 9.9% in September to a record monthly high, well ahead of the prior month's 2.7% rise and better than the consensus estimate of a 5.5% gain.
However, the focus on stock markets continues to be on the Eurozone with speculation about a Spanish bailout and Greek exit doing the rounds ahead of the EU's summit on Thursday. One anonymous official told Reuters that Spain is likely to request aid in November, despite the government's insistence that it does not need help.
"The source said that if Spain does request a bailout this is likely to be dealt with in conjunction with a revised loan programme for Greece. Although sentiment has changed somewhat some investors are still waiting for more details on how Spain would be bailed out and how ministers would avoid the mistakes made when Greece was rescued," said trader Matthew Nelson from Spreadex this afternoon.
German Finance Minister Wolfgang Schaeuble said this weekend that a Greek default "will not happen", pushing Greek 10-year bond yields on the secondary market to their lowest level since the debt restructuring in March.
Citi's Chief Executive William Buiter argued today in the Financial Times that Greece will exit the Eurozone unless it obtains a 'de facto' write-off of the €300bn in remaining sovereign debt.
He also said: "Also necessary to save the euro and create the conditions for a resumption of growth is a restructuring of the debt of the most likely insolvent sovereigns – Greece, Portugal, Ireland, Cyprus and possibly Spain, Italy and Slovenia."
FTSE 100: Kingfisher on the up after investors' day
DIY shop retailer Kingfisher was a high riser following an analyst visit to its Screwfix operations on Friday. Espirito Santo, Jefferies and Panmure Gordon reiterated their 'buy' ratings on the stock today, while speculation that the company is thinking of launching its Screwfix chain in France was lifting shares.
"Kingfisher's Investor Day provided interesting insights into the growth outlook at B&Q and Screwfix. The former is relatively mature and will benefit from group scale in common ranging and direct sourcing, while the latter still has significant organic growth opportunity and is leading the group's multichannel strategy," said analyst Philip Dorgan from Panmure Gordon. "While there are some headwinds to overcome, we believe that Kingfisher's long term growth prospects mean that the current valuation of 11.8x trough earnings is a good entry point."
Financial services provider Hargreaves Lansdown continued to make gains following Friday's interim results, in which it reported record levels of revenue, assets under administration and client numbers in the second quarter.
UK lenders HSBC, Barclays and Lloyds were in demand this afternoon but part-nationalised lender Royal Bank of Scotland (RBS) was bucking the trend. RBS fell after confirming that Spanish banking giant Santander is going back on its agreement to purchase 316 RBS branches in the UK.
Emerging markets-focused bank Standard Chartered was making gains after analysts at Citi named it as one of their most preferred stocks. The broker said that the lender has underperformed its peers in the European bank sector during the third quarter and by 15% in the year-to-date.
Mining peers Kazakhmys, Evraz, Anglo American and Rio Tinto were firmly lower after Goldman Sachs downgraded its ratings on all four stocks.
Meanwhile, Babcock, the engineering support services firm, was on the up after Bank of America Merrill Lynch hiked its target price for the shares by over 20% from 870p to 1,050p. However, the broker maintained its 'neutral' rating.
Telecoms group BT was also a heavy faller after Barclays Capital lowered its rating to 'equal weight' and cut its target price for the shares from 260p to 230p.
FTSE 250: SDL sinks on tech slowdown
Information management firm SDL fell after saying that first-half trends had continued into the third quarter: services sales are strong but technology revenues continue to be 'suppressed'.
Investec downgraded the stock from 'buy' to 'hold' today, saying: "We continue to see SDL as an appealing investment proposition due to its position of strength in multiple growth markets. However to justify a premium rating we believe the company will need to deliver on its growth potential within the technology business as well as the services business."
Nickel and zinc miner Talvivaara was unwanted after saying that heavy rainfall in the third quarter is proving a major obstacle in its aim of mining 17,000 tonnes of nickel this year.
Foam products supplier Filtrona was in demand after firing on all cylinders in the third quarter with like-for-like sales up by one-tenth year-on-year.
Rentokil Initial gained after the Sunday Telegraph said that the firm is working to spin-off its loss-making City Link business by the end of the year.
House builder Bovis Homes was in demand after JPMorgan Cazenove upgraded the stock to 'overweight' and lifted its target price from 485p to 560p.
FTSE 100 - Risers
Admiral Group (ADM) 1,119.00p +2.94%
Kingfisher (KGF) 275.80p +2.72%
Standard Chartered (STAN) 1,461.50p +2.38%
Barclays (BARC) 236.85p +2.00%
British Land Co (BLND) 532.00p +1.92%
Hargreaves Lansdown (HL.) 725.50p +1.90%
Lloyds Banking Group (LLOY) 40.32p +1.56%
Land Securities Group (LAND) 796.50p +1.53%
ITV (ITV) 90.90p +1.51%
Aberdeen Asset Management (ADN) 331.30p +1.35%
FTSE 100 - Fallers
Kazakhmys (KAZ) 690.00p -3.56%
Eurasian Natural Resources Corp. (ENRC) 319.80p -2.77%
Evraz (EVR) 229.20p -2.18%
Anglo American (AAL) 1,788.50p -1.97%
Rio Tinto (RIO) 2,973.50p -1.60%
International Consolidated Airlines Group SA (CDI) (IAG) 158.00p -1.37%
Fresnillo (FRES) 1,916.00p -1.24%
Vedanta Resources (VED) 1,072.00p -1.20%
Royal Bank of Scotland Group (RBS) 268.10p -1.03%
Vodafone Group (VOD) 173.30p -0.86%
FTSE 250 - Risers
Filtrona PLC (FLTR) 548.00p +7.45%
Savills (SVS) 408.00p +3.87%
Kentz Corporation Ltd. (KENZ) 424.70p +3.84%
Spectris (SXS) 1,600.00p +3.29%
Hikma Pharmaceuticals (HIK) 745.50p +3.18%
Kenmare Resources (KMR) 37.63p +2.95%
St James's Place (STJ) 385.60p +2.85%
Daejan Holdings (DJAN) 2,825.00p +2.69%
Stobart Group Ltd. (STOB) 118.60p +2.68%
London Stock Exchange Group (LSE) 957.00p +2.63%
FTSE 250 - Fallers
Bumi (BUMI) 245.30p -12.39%
SDL (SDL) 568.00p -11.25%
Talvivaara Mining Company (TALV) 135.40p -7.39%
Perform Group (PER) 400.00p -6.98%
Hunting (HTG) 777.50p -4.31%
Lonmin (LMI) 486.60p -3.83%
FirstGroup (FGP) 184.60p -3.20%
Morgan Crucible Co (MGCR) 220.30p -3.08%
Investec (INVP) 358.40p -3.08%
Ocado Group (OCDO) 64.45p -3.01%