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| Subject: ADVFN Morning Euro Markets Bulletin - July 7th 2010 Wed Jul 07, 2010 9:21 am | |
| By ADVFN.comADVFN offer FREE streaming stocks and shares data form around the world. SEE London Markets Report : | Blue chips head lower
Market Movers
- FTSE 100 4,904.66 -1.22%
- techMARK 1,563.13 -0.96%
- FTSE 250 9,411.08 -0.95%
London’s blue chips have retreated after the surge yesterday with a cautious update from Marks & Spencer dampening the mood.
The High Street bellwether reported a 3.6% rise in UK like-for-like sales in the first quarter but is cautious about the outlook for consumer confidence and spending. Like for like sales in general merchandise, which includes clothing, were up 6.0% in the 13 weeks ended 3 July, with like for like sales growth in food of 1.5%.
Anglo-Swiss mining titan Xstrata has given the green light to a huge investment in a brownfield expansion to the Tintaya copper mine in southern Peru. The Xstrata board has approved a $1.47bn investment to develop the Antapaccay copper project, located around 10 kilometres from the Tintaya open pit mine which is expected to be exhausted in 2012.
Shares in BP continue to rise on talk of Middle East investment and possible capping of the leaking Gulf of Mexico well.
Tullow Oil can proceed with the $1.5bn acquisition of a 50% stake in two big oil fields in Uganda from Heritage Oil after the government there gave approval after months of wrangling. Tullow exercised its first refusal rights over blocks 1 and 3A in the Albert Basin in Uganda after Heritage agreed to sell the stakes to Eni of Italy.
Aquarius Mining is lower after five people died yesterday at its Marikana platinum mine when a shaft collapsed.
Storage firm Big Yellow Group enjoyed a “robust” quarter with a particularly “strong” June. Annualised store revenue, for the 51 wholly owned stores, rose 9% to £59.8m at 30 June 2010. Total store revenue was £14.4m for the quarter, up 10% from the same quarter last year.
Private equity leviathan 3i said its investments are stabilising or improving while the pipeline of investment opportunities looks promising. Investment in the second quarter of 2010 totalled £105m, compared to £79m in the second quarter of 2009.
Enterprise software giant Autonomy has licensed its Intelligent Data Operating Layer (IDOL) software to Kraft Foods, the US processed foods giant which last year bought up UK confectionery firm Cadbury. Financial details of the deal were not disclosed.
South African bank Investec has received a number of approaches from parties interested in acquiring its Rensburg Fund Management (RFM) subsidiary. The business was acquired as part of the takeover of Rensburg Sheppards in June.
Carillion said the coalition government’s cuts on the Building Schools for the Future programme will not have a "material impact" on the group’s orders. |
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| UK Event Calendar for today | INTERIM EX-DIVIDEND DATE ATH Resources, CareTech Holding, Chrysalis VCT, Dunedin Smaller Companies Inv Trust, ITE Group, Japan Leisure Hotels, Octopus Phoenix VCT, Octopus Titan VCT 1, Octopus Titan VCT 2, Pressure Technologies, Safestore, Sinclair (William) Holdings, THB Group
QUARTERLY EX-DIVIDEND DATE British Land Co, Schroder Income Growth Fund
INTERNATIONAL ECONOMIC ANNOUNCEMENTS Crude Oil Inventories (US) (15:30) Factory Orders (GER) (11:00) GDP (2nd release) (EU) (10:00) MBA Mortgage Applications (US) (12:00) Trade Balance (FRA) (07:45) Household Consumption (EC) (10:00) Government Expenditure (EC) (10:00)
FINALS Great Eastern Energy Corp. GDR, Northern Bear, Photo-Me International
ANNUAL REPORT Cropper (James)
IMSS Big Yellow Group, Booker Group
AGMS 3i Group, Aveva Group, Booker Group, Capital Gearing Trust, Eastern European Trust, IBIS Media VCT, Leni Gas & Oil, May Gurney Integrated Services, PayPoint
TRADING ANNOUNCEMENTS Cape, Carillion, CRH
UK ECONOMIC ANNOUNCEMENTS BRC Shop Price Index (00:01)
FINAL DIVIDEND PAYMENT DATE Cineworld Group, Restaurant Group, Staffline Group
FINAL EX-DIVIDEND DATE Bond International Software, Burberry Group, Chloride Group, De La Rue, Hyder Consulting, Investment Company (The), Monks Inv Trust, New Century AIM VCT 2, Octopus Protected VCT 1, Rensburg AIM VCT, Shanks Group, Vedanta Resources, Walker Greenbank, Wincanton |
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| European Markets Report | European stocks were back in reverse gear following the stellar gains posted yesterday.
The German DAX is down 40 points to 5,900 with the French CAC 38 points lower at 3,385
A report today could show growth in German factory orders slowed. It is expected to rise 0.3% in May against the 2.8% gain seen the previous month.
On the corporate front, Air Berlin said the number of passengers it transported in June rose 3.4% to 3.02m from the same period last month.
French catering and services group Sodexo saw third-quarter revenue total €4bn, rising from €3.8bn in the year-ago period. It expects to achieve organic revenue growth for 2010 of around 2%
Peugeot Citroen saw unit sales hit record figures, jumping 16.9% in the first half of 2010 to 1.86m units.
US Markets Report
Dow breaks losing run
US investors came back from their Independence Day holiday fresh enough to send the Dow higher for the first day in eight, despite a wobble near the close on a worse than expected decline in service sector figures.
Dow Jones closed 57 higher at 9,743. Nasdaq added 2 points to 2,094. The S&P 500 was up 5 points to 1,028. All three indices had been much higher earlier in the day.
The Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90% of the US economy, fell from 55.4 in May to 53.8 in June. A much smaller fall to 55 was expected.
The sale of some of its assets in the Gulf of Mexico to Superior Energy Services made oil services provider Baker Hughes the best performer in the S&P.
Iron ore producer Cliffs Natural Resources is paying $757m for the West Virginia coal operations of INR Energy. This has boosted fellow coal producers Peabody Energy, Massey Energy and Arch Coal.
Barclays says that the slump in hospital shares has been overdone and Tenet Healthcare is one of the best performers.
General Electric move higher because of large contracts for power plant equipment and services.
Positive market news from the Semiconductor Industry Association has boosted Micron Technology and Micro Devices. |
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| Forex: | US dollar continues to slip on slow down fears
A recovery in risk appetite yesterday saw the US dollar continue to come under pressure across the board as it fell to its lowest level against a basket of currencies since early May.
This pressure intensified after the release of further economic data fell short of analysts forecasts. ISM Non-Manufacturing data for June came in at 53.8 against an expectation of 55, and not only that the employment part of the index fell below the key 50 level to 49.7. Following on from last week’s poor ISM data the signs point to a significant slow down in the US recovery.
The euro was also helped by news of a successful Spanish government €6bn 10 year bond sale, which was met with healthy demand from overseas as well as at home. This has prompted speculation that maybe Spain’s problems aren’t as bad as they are painted. This month’s bank stress tests could well confirm that one way or the other.
Today the markets should hear about the methodology of one of the stress tests that simulates the impact of a severe economic shock on about 100 banks in the euro zone as well as countries outside it. Already France, Germany, Spain and Austria have stated that everything is fine with their banks, fuelling concern in the markets that the tests won’t be anywhere near rigorous enough.
Sterling was weighed down yesterday by concerns expressed from the British Chamber of Commerce that activity in the services sector remains relatively sluggish and warns that many of the factors supporting growth have been only temporary and the economy faces serious headwinds. Despite the fact that the survey came across as relatively positive it would appear that this could well have already been priced in, hence the rather tepid response.
With little in the way of UK and US data today, it is likely that the markets will focus on the EU GDP revision for Q1 which is expected to be unchanged at 0.6%, and German factory orders for May.
EURUSD – Yesterday’s poor US data has further undermined the dollar and sent the single currency to its highest level in six weeks stopping at the 1.2670 resistance area. This recent rally in the Euro looks set to test the down trend line resistance from the 1.5142 highs in December, which comes in at the 1.2760 level. The inverse head and shoulders pattern break we saw last week continues to dominate sentiment and the risk remains for further gains while above the 50 day moving average around the 1.2450 level and this area needs to hold for further upside to be forthcoming. The Euro should also find support around the 1.2570/80 area.
GBPUSD – the pounds inability to break above the recent highs and resistance around the 1.5230/50 area is a concern especially given that the Euro has been able to make new highs. The key resistance levels on the top side remain around the 50% retracement level of the 1.6460-1.4230 down move at 1.5345, as well as trend line resistance from the November 2009 highs at 1.6880 which now comes in around the same level. Dips should be confined to the interim support area around 1.5080 which has held for the past couple of days. A break below these lows could well yield up a deeper test towards 1.4980.
EURGBP – the lower euro scenario appears to be under threat now we have broken above the resistance around the 0.8320/30 area. We need the June 2009 lows and old support to keep a lid on this short squeeze around 0.8400. This was the long term support, the break of which targeted the move below 0.8170 last month. Longer term the objective remains for a test towards 0.8000 on the way to 0.7785 over the coming few month’s which is a 61.8% Fibonacci retracement of the 3 and half year up move from 0.6570 to 0.9805.
USDJPY – the 88.00 area continues to cap the dollar and yesterdays poor US data did nothing to help overcome this resistance in that respect. While US yields look weak the yen will continue to gain irrespective of risk appetite. The US dollar looks to be set to head towards 84.80 by way of support around 86.80. A recovery back above 88.20/30 is needed to stabilise the dollar in the short - term. |
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| Press round-up: BP, Apple, RBS | BP has agreed an unprecedented deal to give the US Government the last word on worldwide asset sales, mergers or corporate restructuring in the wake of the Deepwater Horizon oil disaster.
It has bowed to pressure from the Department of Justice, which has asked to be notified at least 30 days before BP undertakes any transaction that could affect the future shape of the company. BP has also agreed to submit monthly financial statements, details of credit and loan agreements and other reports about its financial health, the Times reports.
The Daily Telegraph has learned that BP bosses are seeking to calm the concerns of top institutional investors by claiming they are ready to roll out a "robust defence" as soon as the oil leak is capped. Tony Hayward, BP's chief executive, was last night touring the Middle East to reassure the oil giant's partners, as sources said the company is still trying to drum up interest in its shares among Gulf investors. BP confirmed that Abu Dhabi, rumoured to be interested in taking a stake, was "on Mr Hayward's itinerary" following a stop at the company's operations in Azerbaijan, the Telegraph adds.
Apple has banned dozens of applications from its iTunes digital store after bogus purchases from hundreds of compromised customer accounts drove the apps to the top of the popularity charts for paid electronic books. Apple said it banned a Vietnamese developer using the name Thuat Nguyen for violations including “fraudulent purchase patterns” and removed his apps from the store. But other apps also enjoyed a sudden rush to bestseller status, suggesting that hackers were using the same techniques more broadly, the FT reports.
The Bank of England has made nearly £10bn in paper profits by buying UK government bonds as part of emergency efforts to pump money into the British economy. The financial shot in the arm – a buy-back programme that began in March 2009 and involved purchasing nearly £200bn in gilts – has generated gains of £9.7bn for the Bank, according to analysis for the Financial Times.
Royal Bank of Scotland is preparing to sell up to £3bn ($5bn) of real estate loans made during the property boom in the largest property disposal from its non-core banking business to date. The disposal is part of a five-year project by RBS under the leadership of Stephen Hester, chief executive, to shed large chunks of its business that the bank can no longer afford to hold, the FT reports.
Public-sector pensions are worth twice as much as was previously thought and workers should expect to pay significantly more for them, an influential report will say today. The Public Sector Pensions Commission (PSPC) will suggest that the true value of the main unfunded public-sector pension schemes – which guarantee a percentage of final salary on retirement – is over 40%of salary. The current combined employer and employee contribution rates, it says, are "artificially set" too low at about 20% of salary, reports the Independent.
Agricultural Bank of China is poised to pull off the world’s biggest flotation in a move that would trump its rival, the Industrial & Commercial Bank of China. AgBank, the last of China’s four big banks to go private, has raised $19.2bn (£12.7bn) in Hong Kong and Shanghai and could push that to more than $22bn if over-allotment options are exercised, the Times reports.
Marks & Spencer is facing the fresh threat of a shareholder rebellion as an influential pension fund consultant called for a veto of its pay report at the annual meeting next week. Pirc, which advises funds with £1.5 trn in assets, said that it was concerned about a £14.8 million signing-on package for Marc Bolland, the retailer’s new chief executive, the Times reports.
QinetiQ is to make hundreds of scientists redundant as it restructures its operations to cope with falling government spending. The former Defence Evaluation and Research Agency, which was privatised four years ago, said that 391 jobs would go in Britain, and hinted that more would be cut later, the Times reports.
One of the private equity world’s most sought-after secrets has finally been revealed with the disclosure that the co-founders of Kohlberg Kravis Roberts each hold stakes worth about $800m (£528m) in the buyout firm. Henry Kravis and George Roberts, who featured in the 1990 book Barbarians at the Gate, each own 87m shares in the firm, which will list its shares in New York on July 15, the Telegraph reports.
European banking supervisors are expected to try to assuage concerns that their stress tests have not been tough enough, by publishing details of the types of calamities banks have been asked to withstand. As the Committee of European Banking Supervisors publishes an outline of its methodology, European parliamentarians will be voting on rules to toughen up bonus restrictions on bankers and increase the number of institutions expected to heed calls for bonus restraint,the Guardian reports. |
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