Date: Thursday 05 Dec 2013
LONDON (ShareCast) - - FTSE 100 at lowest level since October 11th
- Autumn Statement, BoE, ECB in focus
- Eyes on jobs report ahead of Fed meeting
- AZ Electronic soars after 1.6bn-pound offer from Merck
techMARK 2,648.11 +0.15%
FTSE 100 6,498.33 -0.18%
FTSE 250 15,157.70 +0.20%
UK markets traded broadly sideways on Thursday, much the same as those over in the US, as investors adopted a cautious approach ahead of tomorrow´s US non-farm payrolls report. Acting as a backdrop, the ECB seemed to adopt a more steady-as-you-go policy bias, which may have on sentiment over on the Continent. Similarly, the Chancellor´s Autum statement reflected a conservative bias meant to ensure the medium-term sustainability of the recovery. While market participants seem to believe to be justified it offered little in the way of immediate additional stimulus.
In any case, the FTSE 100 still finished lower, ending below 6,500 for the first time in nearly eight weeks. The index fell 11.64 points on the day to 6,498.33, its worst level since October 11th.
Markets gave little reaction to announcements from the Bank of England this afternoon, with both choosing to leave benchmark interest rates unchanged as expected at 0.5% and 0.25%, respectively.
Sentiment was dampened slightly after ECB President Mario Draghi said at today´s press conference that he expects the Eurozone economy to remain weak next year. However, he did say that the Bank has a “powerful artillery of instruments available”.
As regards the Autumn Statement the Chancellor assured that the economic recovery was on track with Britain "currently growing faster than any other major advanced economy".
The Statement included upwardly revised growth forecasts from the Office for Budget Responsibility and downward changes to deficit estimates, but "offer[ed] little excitement for the markets", according to Toby Morris, Senior Sales Trader at CMC Markets.
"The FTSE instead took its first notable move from the US, with jobless and GDP data putting further pressure on the Fed to begin turning the taps the other way," he said.
Data this afternoon showed a sharp fall in US jobless claims last week along with a strong upwards revision to third-quarter economic growth in the States. While seasonal factors such as Thanksgiving could have affected claims and stronger inventory building boosted growth figures, the data boosted bets that the Federal Reserve could begin to scale back its stimulus programme as soon as this month.
AZ Electronic rockets after Merck offer
AZ Electronic Materials' share price rocketed after German drugs and chemicals giant Merck launched a 403.5p-a-share offer for the specialty chemicals firm, a 53% premium to yesterday's closing price. The all-cash recommended deal values the company at £1,565m and sent AZEM's stock up 51.4% to 398p.
Travel operator TUI Travel was in demand today after Numis reiterated its 'add' rating, saying that "the trading outlook for summer 2014 is increasingly positive".
Canaccord Genuity gave engineering and project management group AMEC a lift after it raised its stance from 'hold' to 'buy', saying that the company could benefit from the improving outlook for the UK nuclear market.
Supermarket stocks were under pressure today on the back of Tesco's disappointing third-quarter results yesterday, which showed that its like-for-like sales performance in the UK had deteriorated. Analysts at Panmure Gordon downgraded Tesco today from 'buy' to 'hold', saying that the company's continued market share loss and strong growth online "must […] inevitably put pressure on core store profits".
Rival grocers Morrison and Sainsbury were also down today, along with High Street retailers Next and Marks & Spencer.
Phoenix Group Holdings slumped after private equity firm TDR Capital said it has raised £145.2m from the sale of 22m shares in the firm.
FTSE 100 - Risers
Shire Plc (SHP) 2,707.00p +2.00%
Meggitt (MGGT) 489.50p +1.92%
Experian (EXPN) 1,097.00p +1.86%
TUI Travel (TT.) 374.60p +1.71%
Burberry Group (BRBY) 1,501.00p +1.62%
RSA Insurance Group (RSA) 103.10p +1.28%
Admiral Group (ADM) 1,210.00p +1.17%
Tullow Oil (TLW) 886.00p +1.14%
Bunzl (BNZL) 1,354.00p +1.04%
Smith & Nephew (SN.) 839.50p +1.02%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,152.00p -3.68%
Tesco (TSCO) 333.15p -2.01%
William Hill (WMH) 379.80p -1.81%
Babcock International Group (BAB) 1,268.00p -1.55%
CRH (CRH) 1,444.00p -1.50%
Carnival (CCL) 2,139.00p -1.47%
WPP (WPP) 1,310.00p -1.43%
Next (NXT) 5,470.00p -1.35%
Aviva (AV.) 412.70p -1.29%
Old Mutual (OML) 187.20p -1.16%
FTSE 250 - Risers
AZ Electronic Materials SA (DI) (AZEM) 395.00p +50.25%
Centamin (DI) (CEY) 42.60p +10.42%
Premier Farnell (PFL) 215.30p +4.51%
Alent (ALNT) 350.00p +4.48%
Smith (DS) (SMDS) 311.10p +4.05%
Howden Joinery Group (HWDN) 317.80p +3.65%
Enterprise Inns (ETI) 141.80p +3.50%
Ultra Electronics Holdings (ULE) 1,825.00p +3.28%
Halfords Group (HFD) 488.70p +2.54%
Taylor Wimpey (TW.) 106.00p +2.32%
FTSE 250 - Fallers
Phoenix Group Holdings (DI) (PHNX) 661.50p -6.04%
AL Noor Hospitals Group (ANH) 807.00p -5.06%
Polymetal International (POLY) 477.30p -4.64%
IP Group (IPO) 169.00p -4.52%
Essar Energy (ESSR) 72.70p -4.34%
Perform Group (PER) 400.00p -4.15%
Rank Group (RNK) 133.00p -3.41%
Savills (SVS) 620.00p -3.12%
Amlin (AML) 424.70p -2.90%
Workspace Group (WKP) 488.00p -2.79%
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