LONDON (SHARECAST) - - Boeing, Facebook and SAP lift sentiment
- Stocks rebound after heavy losses yesterday
- Chinese and Eurozone data paints mixed picture
UK stocks finished in positive territory on Wednesday, albeit only just, after some decent corporate earnings offset some mixed economic data from China and the Eurozone.
Better-than-expected earnings from Facebook and Boeing pushed US stocks higher after the opening bell in New York. News that American new-home sales in September rose at their fastest rate since 2010 also gave markets a lift today. Tech stocks worldwide were making gains after German software giant SAP hiked its full-year revenue target.
"Global equities markets poured on some modest gains Wednesday after yesterday’s previous session losses as traders take to heart the brighter spots in earnings releases released today and Draghi’s attempt to charm his biggest critic, Germany," said market strategist Ishaq Siddiqi.
Meanwhile, European Central Bank (ECB) President Mario Draghi defended the Bank's bond purchase programme in front of German policymakers today. He attempted to quash concerns that its outright monetary transactions (OMTs) will lead to higher inflation.
UK stocks started with an upward bias early on after some upbeat Chinese data. HSBC's China manufacturing purchasing managers' index (PMI) for October ticked higher to 49.1 points from 47.9 in September, the best reading for three months. "October's flash PMI reading continues to recover for the second month, thanks in part to a gradual improvement in the new orders index, which picked up to a six-month high," said Qu Hongbin, chief economist for HSBC Holdings PLC's China arm.
However, trading was volatile this morning after some European economic figures failed to live up to expectations. Markit's Eurozone composite PMI, which measures the combined output of the manufacturing and service sectors, fell for a third consecutive month to 45.8 in October, from 46.1 the month before. This was the worst reading in 40 months. The consensus forecast was for an improvement to 46.5.
Meanwhile, the IFO Business Climate Index, a measure of corporate confidence in Germany, declined unexpectedly in October, the sixth consecutive monthly fall. The index fell to 100.0 this month, from 101.4 in September, under consensus expectations of a rise to 101.6.
FTSE 100: ARM and Reckitt provide a lift
Chip designer ARM Holdings continued to celebrate its forecast-beating third-quarter results yesterday. The stock was given an extra boost after SAP's bullish outlook.
Shares in household products and personal care behemoth Reckitt Benckiser also jumped after it produced solid results for the third quarter, with like-for-like net revenue growth of 4% at constant exchange rates driven by strong growth in emerging markets. It also said it will meet growth expectations for the full year.
Miners were doing a good job of propping up the FTSE, boosted by the upbeat economic data out from China overnight. Kazakhmys was the biggest of the sector's risers, with ENRC, Antofagasta, Evraz and Vedanta all hot on its heels.
Information services provider Experian was pulling back following yesterday's strong rise after it said it was increasing its stake in Brazilian credit bureau Serasa from 70% to 99.6% for $1.5bn in cash. Jefferies labelled the stock as a "core support services holding" but downgraded its rating on the shares from 'buy' to 'hold' on valuation grounds.
Cigarette and tobacco giant British American Tobacco (BATS) was under pressure after organic revenue growth and volumes were worse than expected in the third quarter. On a reported basis, sales fell 1% on the back of adverse exchange rate movements.
Holiday Inn and Crown Plaza owner InterContinental Hotels Group (IHG) was subdued after seeing growth in US revenue per available room (RevPAR) moderate in the third quarter as a result of a seasonal impacts.
FTSE 250: National Express goes into reverse
Bus and train group National Express plunged despite saying that third-quarter trading remained resilient. Investec retained its 'hold' rating on the stock toady, saying that "there are signs that austerity measures are beginning to hurt the group with weakening LFL revenue trends in Spain and some pressure in North America."
Lonmin shares were notably higher. It was revealed today, as part of the second day of the Marikana Commission of Inquiry, that an email from shareholder Ramaphosa called for strong action to manage the demonstrators during the protests earlier this year.
Argos and Homebase owner Home Retail jumped after announcing its decision to close 75 Argos stores over the next five years. "We have concluded a comprehensive business review of Argos which highlighted a clear opportunity to transform the business through increased investment in digital technologies," the group said.
Sportswear and accessories retailer Sports Direct slipped after saying that revenue growth had slowed from 25.3% in the first quarter to 18% in the second.
FTSE 100 - Risers
ARM Holdings (ARM) 675.50p +5.55%
Kazakhmys (KAZ) 750.00p +3.95%
Reckitt Benckiser Group (RB.) 3,768.00p +3.72%
Evraz (EVR) 250.30p +3.00%
Eurasian Natural Resources Corp. (ENRC) 341.60p +2.68%
BAE Systems (BA.) 312.20p +2.13%
Wolseley (WOS) 2,677.00p +1.59%
Petrofac Ltd. (PFC) 1,562.00p +1.56%
International Consolidated Airlines Group SA (CDI) (IAG) 157.20p +1.55%
Compass Group (CPG) 681.00p +1.41%
FTSE 100 - Fallers
Amec (AMEC) 1,049.00p -2.87%
Smiths Group (SMIN) 1,040.00p -1.61%
Resolution Ltd. (RSL) 213.00p -1.53%
WPP (WPP) 808.00p -1.52%
Vodafone Group (VOD) 172.45p -1.46%
Barclays (BARC) 229.90p -1.18%
Babcock International Group (BAB) 940.00p -1.16%
Old Mutual (OML) 170.80p -1.16%
Centrica (CNA) 321.70p -1.11%
Polymetal International (POLY) 1,098.00p -0.99%