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 |  Subject: ADVFN Morning Euro Markets Bulletin - June 3th 2010  Thu Jun 03, 2010 9:44 am | |
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Stocks post good gains
Market Movers
techMARK 1,614.63 +1.49%
FTSE 100 5,234.29 +1.61%
FTSE 250 9,827.08 +1.73%
London's top stocks motor ahead in early deals with all leading shares in positive territory, thanks to the stellar performance from Wall Street last night.
Miners are the main benefactors with Eurasian Natural Resources, Xstrata, Rio Tinto and Kazakhmys amongst the strong risers.
Xstrata has suspended A$586m of expenditure on Australian projects, saying neither will be viable under the government's proposed tax on super profits.
DIY retailer Kingfisher, which owns the B&Q chain in the UK, reported a 1.8% decline in like for like (LFL) sales in the first quarter in which adverse weather conditions across Europe and ongoing economic uncertainty impacted consumer demand. Total sales in the 13 weeks ended 1 May were broadly flat on a reported basis and 0.2% down in constant currency terms. Retail profit was up 12%, helped by margin and cost self-help initiatives.
BP has agreed to fund the six sections of the Louisiana barrier islands proposal, which is estimated to cost the oil explorer $360m. The group will not manage or contract directly for the construction of the island sections and said it will not assume any liability for unintended consequences of the project.
The recovery in platinum prices last year came slightly too late for Johnson Matthey, which refines the precious metal, to post a rise in profits or revenues in the year to March 31. Pre-tax profits for the year totalled £254.1m, down from £267.9m the previous year, on revenues that slipped to £7.84bn from £7.85bn.
Synergy Health, which provides outsourced support services to the health industry, posted a 50% rise in profits and said it starts the new year in a “strong position.” Profit before tax for the year came in at £24.5m from £16.3m before on revenue that rose 4.5% to £286.4m. Underlying revenues rose 7.5%.
Property firm Helical Bar swung into an annual pre-tax profit and increased its dividend as the value of its investment properties rose. For the year to 31 March 2010 the group posted a pre-tax profit of £7.9m compared to a loss of £71.9m the same time a year before. Revenue for the period fell to £67.4m from £81.8m.
Property investor Quintain Estates & Development said full year pre-tax losses narrowed as the value of its assets fell 1.5%. |
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| | UK Event Calendar for today | INTERIMS
Redhall Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Factory Orders (US) (15:00)
Initial Jobless Claims (US) (13:30)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
Retail Sales (EU) (10:00)
GMS
AfNat Resources Limited , China Private Equity Investment
FINALS
API Group, Eco City Vehicles, Helical Bar, Johnson Matthey, Mckay Secs., Quintain Estates & Development, RIT Capital Partners, Synergy Healthcare
ANNUAL REPORT
3i Group, RIT Capital Partners
EGMS
Bramdean Alternatives GBP Shares, MHP S.A. GDR (Reg S)
AGMS
Camellia, Cathay International Holdings, Dori Media Group, Empresaria Group, International Public Partnerships Ltd., M Winkworth, Metrodome Group, Morrison (Wm) Supermarkets, Peel Hotels, Real Good Food Company, Severfield-Rowen, Verona Pharma, Vislink, Westminster Group
TRADING ANNOUNCEMENTS
Kingfisher
UK ECONOMIC ANNOUNCEMENTS
Official Reserves (09:30)
PMI Composite (09:30)
PMI Services (09:30)
FINAL DIVIDEND PAYMENT DATE
888 Holdings, Croda International, Hydro International, Playtech, Rexam, Weir Group |
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| | European Markets Report |
Euro pulls back from lows as risk appetite improves
US stock markets rallied strongly last night on positive housing and new car sales data; however this return of risk appetite hasn’t translated into much in the way of gains in riskier assets in currency markets.
Today’s US ADP private sector jobs data and weekly jobless claims, will be closely scrutinised today for evidence of a strong number in tomorrow’s US employment report where a high number of around 500k is expected by a number of forecasters.
Any disappointment on these high expectations could see further volatility take hold.
Yesterday’s news that Iran is reported to be selling up to €45bn worth of reserves and looking to replace them with gold ingots and US dollars appears to have been largely shrugged off by the euro currency, dipping briefly before recovering.
The disposal of these reserves has already begun and is expected to take place in 3 phases. €15bn worth of euros will be dispersed in the first phase and on its own this action may not be that significant, in that other central banks have pledged to support the Euro over the past few days. This is likely to be more supportive of gold than the US dollar given the problems Iran has with respect to sanctions from US institutions, but it is significant that a central bank has broken ranks and decided that it places a greater weight on protecting the value of its holdings, than to prop up what it perceives is an ailing currency.
It will be interesting to note whether central banks continue to be supportive if the Euro breaks below 1.2100, especially China which has nearly $600bn worth of Euro denominated holdings?
Sterling has continued to remain firm, trading at its highest levels since January against a basket of currencies after construction activity for May expanded for the ninth month running, and at its fastest rate since August 2007, increasing to 58.5 from 58.2 in April. It has benefited most against the Euro hitting its highest levels in 18 months. The last of purchasing manager data this week, this time for the service sector out today, is expected to have climbed to 55.5 in May after dipping to 55.3 in April, due to the volcanic ash disruption, from 56.5 in March.
In Asia the yen has continued to remain weak on continued political uncertainty as well as speculation that finance minister Naoto Kan could replace the outgoing Prime Minister. Kan is known as a bit of a dove when it comes to further stimulus measures from the Bank of Japan.
EURUSD – the single currency continues to rebuff attempts to break and close below the key 1.2135 level. At the risk of sounding like a broken record the 1.2135 level remains the proverbial line in the sand, and we need a daily close below here to set off a move towards the 1.1700 level, and 2005 lows.
For now this key 50% Fibonacci level has kept the declines at bay, but with rallies becoming shallower the risk still remains for an eventual break.
There is minor resistance around the 1.2300 area but to break higher significantly we would need to see a break above the 1.2450/60 level for a move towards 1.2700 to unfold.
GBPUSD – yesterday we saw the pound test the 1.4780 level as expected on improving data from the manufacturing sector. While we stay above trend line support which is now at 1.4530, the odds continue to favour another test of the 1.4780 level, and possibly even 1.4850. A break below 1.4535/45 would re-target yesterday’s lows around the 1.4430/40 area.
Key support level remains around the 1.4230/50 level and remains the key barrier to any further sterling declines in the short-term. The 1.4000 level remains a key support on a monthly close.
EURGBP – the positive sterling data has continued to weigh on the Euro pushing it lower just short of the 0.8250 area, rebounding from 0.8282. Now that the single currency has closed below the 0.8400 level which had supported it until recently the likelihood of further Euro losses continues to look likely. The next target remains the 0.8250 level on the way towards the 0.8170 level.
The 0.8170 level is a 50% retracement of the up move from the 2007 lows at 0.6537 to the 2008 highs at 0.9801.
USDJPY – the current political instability in Japan continues to weigh on the yen, as it edges towards the 92.80 level, which remains the next target while above 89.80 and the recent range support around the 90.70/80 area.
Any overspill of 92.80 could well see a test towards 93.30. |
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| | US Markets Report |
US stocks stage strong recovery
US stocks powered ahead, closing up more than 200 points as house sales data gave sentiment a boost.
Dow Jones ended the day 225 points ahead at at 10,249. Nasdaq gained 58 points at 2,281 and the S&P 500 added 27 points at 1,098.
The pending home sales index rose 6% in April compared with expectations of 4.3%. The March figure was revised from 5.3% to 7.1%.
Car sales figures had GM reporting a 32% gain in sales and Ford reporting a 23% increase in May. Toyota's sales rose 7%.
On the corporate front, AIG was in focus after UK insurer Prudential scrapped it contentious plans to buy AIG's Asian arm (AIA). In a statement, chairman Harvey McGrath said the Pru took the decision to withdraw after failing to negotiate a cut in the $35.5bn purchase price for AIA. The Pru's $21bn right issue to finance the deal will now also be scrapped.
US authorities have launched a criminal investigation into the Deepwater Horizon oil disaster. BP, which has seen over £40bn wiped off its value since mid-April, is facing increasing anger over the Gulf of Mexico spill, the biggest in American history.
Although BP continues to slump, the Halliburton share price has bounced back by more than 10%. Other oil services companies, including Schlumberger and Smith International were also higher.
Amgen has received FDA approval for Denosumab, its bone-strengthening injection for postmenopausal women with osteoporosis. Hopes for bumper sales of Toy Story 3 merchandise boosted Walt Disney.
S&P 500 - Risers
Halliburton Co (HAL) $23.68 +11.96%
Amgen Inc. (AMGN) $56.09 +10.50%
Baker Hughes International (BHI) $39.63 +10.48%
Southwestern Energy (SWN) $40.42 +9.87%
Range Res Corp. (RRC) $47.90 +9.61%
S&P 500 - Fallers
Tellabs Inc. (TLAB) $7.99 -2.98%
King Pharmaceuticals (KG) $8.14 -2.16%
Best Buy Co Inc. (BBY) $40.20 -1.28%
Family Dollar Stores (FDO) $40.09 -0.40%
Visa Inc (V) $71.25 -0.34%
Dow Jones I.A - Risers
American Express Inc. (AXP) $40.97 +4.54%
Walt Disney Co. (DIS) $34.74 +4.23%
Hewlett-Packard Co. (HPQ) $47.27 +3.71%
Bank Of America Corp. (BAC) $15.89 +2.91%
Intel Corp. (INTC) $21.78 +2.83% |
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| | Thursday's newspaper round-up: Mervyn King, regulation, Coutts |
Mervyn King, the governor of the Bank of England, is paid more than twice the amount the prime minister receives, according to the FT. The Telegraph says King has refused a pay rise for the next two years as the public sector braces itself for a period of restraint.
An urgent review of impending regulation costing billions of pounds a year has been announced by Vince Cable, the business secretary, as part of a wider package designed to cut red tape, says the FT.
Coutts, the Royal Bank of Scotland (RBS) unit best known as the Queen's banker, is to bear the brunt of a round of 500 job cuts at the state-owned bank's wealth-management operation, according to the Independent.
AIG faces the real prospect of receiving less than the $35.5bn (£24.2bn) the Prudential first offered to buy AIA should it choose to push ahead with a stock market float for it Asian-focussed life business, says the Telegraph
Star fund manager at Jupiter emerges as largest shareholder as it goes ahead with London listing worth up to £868 million, writes the Times.
Jean-Marie Messier, the tycoon who propelled Vivendi Universal to meteoric boom and bust in 2002, expressed limited remorse yesterday on the first day of his trial for embezzlement and misleading investors, says the Independent.
Cattles, the troubled doorstep lender whose shares were suspended in April last year, is considering a possible restructuring deal that is likely to see shareholders receive a cash payment of a maximum of 1p per share, writes the Independent.
Northern Rock, the nationalised bank, is offering to buy back its junk-rated debt at a fraction of the original value in a move it hopes will generate £700m in profit, says the Telegraph.
Airbus has started to sign up partners to bid for a $40 billion (£27 billion) Pentagon contract but is refusing to give their names amid fears of a backlash from American politicians, says the Times.
Staff at the credit ratings agency Moody's were bullied by Wall Street bankers, harassed by profit-hungry bosses and starved of the time and resources they could have used to check their disastrous ratings of mortgage derivatives, an inquiry into the causes of the credit crisis was told, reports the Independent.
The number of British companies bought by foreign-owned groups far surpassed the number of foreign firms bought by British groups in the first quarter of the year, according to official statistics published yesterday, writes the Independent.
The fashion chain New Look kept alive the possibility that it might float the business as it posted a 17.7 per cent uplift in annual profits yesterday, says the Independent. |
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