Market overview: FTSE closes up 79 points at 5,862
Thu 01 Nov 2012
LONDON (SHARECAST) - 1630:Close The FTSE closed up on Thursday, boosted by impressive gains from BT Group, Lloyds, BSkyB and Legal & General, combined with better-than-expected economic figures out in China. Worth pointing out, trading volumes were even more depressed than usual due to the All Saints’ Day festivity on the Continent. Centamin bounced back slightly after it resumed trading following a temporary halt. In economic news, UK Manufacturing PMI was down for second month running, while the CBI forecast that the British economy will grow slightly more than had been previously estimated both this year and the following. The FTSE ended the day 79 points higher at 5,862.
1515: Despite the sharp rise seen today in Lloyd´s stock price this is what analysts at Charles Stanley had to say: "We remain concerned about the outlook for the UK economy and the knock on impact that a relapse in the Euro area would have on the UK and the bank most exposed to the UK consumer. There is also the potential for further ‘banana skins’ down the road. The PPI redress situation has turned out far worse than expected and it is possible that issues like customer redress relating to ‘interest only’ mortgages could prove painful for the UK’s largest mortgage lender. Therefore, despite an impressive improvement in the underlying performance in 2012 our recommendation on the stock remains just a Hold."
1443: Centamin is bouncing 13 per cent higher after resuming trade. Meanwhile, and amongst the minnows, Leni Oil&Gas is now up by 24.9 per cent. Worth pointing out as well, positive comments out today from analysts at Shore Capital and Liberum Capital on Lloyds. For their part, technical analysts at Charles Stanley have this to say on Glaxo Smith Kline: " (...) As long as this line holds the technical outlook for GSK will remain supportive–however, a close below 1370p or so would send a particularly negative signal." FTSE 100 at day´s highs, up by 69 to 5,851.
1415: ISM´s Holcomb has reportedly said that the rise in the ISM new orders sub-index is deceitful.
1400: US October ISM manufacturing sector PMI comes in at 51.7,versus the 51 expected by the consensus. New orders subindex rises to 54.2 from 52.3. The Conference Board consumer confidence index for the month of September has come in at 72.2, below the 73 forecast. The previous month´s estimate has been revised down to 68.4 from 70.3. Worth noting, the bulk of the rise came from the current situation sub-index, which is a moderately negative aspect of the report. A note of caution as well as regards today´s weekly unemployment claims, as data from New Jersey and Washington DC had to be estimated due to Sandy.
1231: US Markit manufacturing sector PMI comes in at 51 for October, after 51.3 for the month before (Consensus: 51.3). Not to be confused with the much better known PMI from the Institute for Supply Management (PMI).
1230: Initial weekly unemployment claims fall 9,000 to 363,000 (Consensus: 370,000). Unit Labour costs dropped 0.1% in the third quarter (Consensus: 0.8 per cent). More US data expected later on, including the ISM manufacturing report at 14:00. So the data-storm is not over yet. As well, 42 S&P 500 components are due to come out with their latest quarterly updates today. Power is expected to have been restored to all of Manhattan by Saturday, according to ConEdison, Bloomberg reports. FTSE 100 up 38 to 5,821.
1228: BSkyB says 95 per cent of shareholders vote to re-elect James Murdoch. As an aside, economists at JP Morgan have joined the "no-more-stimulus" camp before next week´s meeting of the Monetary Policy Committee (MPC).
1227: Dixons Retail is surging 16 per cent higher on media reports that rival Comet will appoint insolvency administrators.
1215: US ADP employment report shows 158,000 jobs were created in October (Consensus: 135,000).
1055: Shares in Lloyds are now trading 6.5 per cent higher this morning after a well-received third-quarter update. Nomura said that while the results will reassure investors that management plans are on track, the broker maintained its 'reduce' rating for the stock, saying that with the shares already rallying significantly over the year and no material upgrade to core earnings, 'we would not expect sustained strength on the back of these numbers and see the 7.0 per cent opening print this morning as an overreaction on short covering'.
1018: BT has usurped Lloyds Banking at the top of the Footsie tree. The telecoms giant is powering ahead despite being forced to revise its full-year revenue guidance after suffering a 'triple whammy of recession, regulation and rain' in the July - September quarter (the second quarter of BT's fiscal year). insurer Legal & General is also flying after it revealed sales hit record levels in the third quarter. Meanwhile, fashion chain Next claws back some of the losses suffered after yesterday's trading update, as Deutsche Bank ups its price target for the stock from 3650p to 3800p, while French broker SocGen raises its price target to 3544p from 3313p. Footsie did have a peek above the 5800 parapet round about 09:00 but is back in sub-5800 territory at 5,797, up 14.
0944: Etablissements Maurel & Prom is rocketing 12% higher, after three people familiar with the matter said China Petrochemical is considering a takeover offer for the French oil explorer, Bloomberg News reports.
0932: UK manufacturing sector purchasing managers´ index for the month of October has come in at 47.5 (Consensus: 48), versus 48.1 for the month before (revised down from 48.4). The above as a result of the declines seen in the production and new orders subindices, with the latter having fallen from 49.9 to 47.7. This is what Rob Dobson, Economist at Markit, had to say: "While the road to an export-led recovery is still blocked by the ongoing difficulties in the Eurozone, it is concerning to hear further reports of the global slowdown hurting trade with other regions such as Asia." FTSE 100 bouncing back by 13 to 5,795.
0859: This is what analysts at Nomura are saying about BT´s results: "The market’s concerns that Global Services weakness, unhelpful regulation and general economic malaise would drip through to BT’s profitability performance and affect its guidance targets have not materialised. Instead, BT posted margin expansion of 300 basis points -a basis point is one hundredth of a percentage point- in the second quarter, beating our earnings before interest, taxes, depreciation and amortisation (EBITDA) forecast by 1.3 per cent, and maintained EBITDA and cash flow guidance. As fiscal year 2013 is now absorbing a 60m pound hit from ladder pricing regulation, stable guidance is effectively a 1 per cent upgrade."
0812: A clutch of well-received updates from blue-chip stocks has helped Footsie creep into positive territory early on. Part-nationalised lender Lloyds Banking leads the snail-paced advance, after reaffirming full year guidance despite setting aside another billion quid to cover potential payment protection insurance mis-selling claims. Other banking titans rise in sympathy, as the banking results season gets under way. BT and BSkyB are going head to head near the top of the Footsie leader board, as they do in the triple-offer (phones, broadband, pay TV) communications market. Both released upbeat trading statements this morning. Letting the side down is Croda, the speciality chemicals manufacturer, which said that European markets remained difficult in the third quarter. Worth pointing out perhaps, in-line or better than expected macro-economic data out today in China (PMI) and South Korea (exports), while PMI´s in Australia and India rose. FTSE 100 is up 14 at 5,796.