Market briefing: UK markets finished higher yesterday buoyed by the energy sector and commodity related shares

Date

5/2/2016 7:36:08 AM

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(MENAFN- ProactiveInvestors - UK) Proactive Investors Thu

UK Market Snapshot
UK markets finished higher yesterday buoyed by an advance in energy sector and commodity related shares. Miners Glencore Antofagasta and Anglo American climbed 0.6% 1.7% and 4.5% respectively. BP and Royal Dutch Shell gained 1.7% and 2.5% respectively tracking gains in crude oil prices. GlaxoSmithKline rose 2.1% after it reported a jump in its revenue and core earnings for the first quarter. Barclays added 0.5% after it posted better than expected revenue for the first quarter and its CEO stated that the lender would speed up the disposal process of 'noncore' businesses and try to improve earnings at its investment bank. On the losing side Sepura tanked 47.3% as it faces a cash crunch. Standard Chartered shed 1.1% following a broker downgrade on the stock to 'Sell' from 'Hold' who also reduced its price target to 454.0p from 460.0p.The FTSE 100 advanced 0.6% to close at 6319.9 while the FTSE 250 rose 0.8% to settle at 17083.7.
US Market Snapshot
US markets ended mostly higher yesterday after the US Federal Reserve (Fed) indicated that it would gradually hike interest rates in future. Boston Scientific soared 11.2% after it increased its forecasted earnings for 2016 following robust sales growth in the first quarter. Comcast added 0.4% after its first quarter results surpassed analyst projections. On the flipside Twitter sank 16.3% after its revenue for the first quarter fell short of market expectations and it offered a weak outlook for the current quarter. H&R Block tanked 13.6% as it projected lower revenue for the current fiscal year and disclosed plans of cost cutting and management changes. Apple declined 6.3% after it reported disappointing results for the second quarter and projected lower than expected sales for the third quarter. The S&P 500 gained 0.2% to settle at 2095.2. The DJIA rose 0.3% to settle at 18041.6 while the NASDAQ slid 0.5% to close at 4863.1.
Europe Market Snapshot
Other European markets closed in the green yesterday following some positive corporate releases. Statoil advanced 6.1% after it reported a surprise profit in the first quarter amid help from a cut in its operational cost. Adidas jumped 6.0% after it boosted its projected earnings for the full year following upbeat first quarter results. Total rose 2.8% as its earnings for the first quarter beat market expectations due to improved results from its refining and chemicals unit. On the contrary Neste plunged 7.8% after it posted higher than expected drop in its earnings for the first quarter. Munich Re fell 3.9% after it stated that first quarter earnings would be lower than prior estimates.The FTSEurofirst 300 index gained 0.3% to close at 1370.7. Among other European markets the German DAX Xetra 30 rose 0.4% to close at 10299.8 while the French CAC-40 advanced 0.6% to settle at 4559.4.
Asia Market Snapshot
Markets in Asia are trading mostly higher this morning. In Japan the Nikkei 225 index has reversed its earlier gains and has dropped about 3.0% following the Bank of Japan (BoJ) decision to keep interest rates unchanged. Exporters Toyota Motor Honda Motor and Nissan Motor have declined 3.6% 4.3% and 4.8% respectively as the Japanese Yen gained against the US Dollar. However Mitsubishi Motors has surged 8.1% after it reported upbeat operating earnings for the year ended March. In Hong Kong oil firms PetroChina and China Petroleum & Chemical have advanced 1.7% and 2.4% respectively. In South KoreaSamsung Electronics has dipped 2.7% despite reporting an 11.7% annual rise in its first quarter operating profit. The Nikkei 225 index is trading 1.4% higher at 17533.8. The Hang Seng index is trading 0.2% up at 21400.8 while the Kospi index is trading 0.6% lower at 2003.1.

Commodity Currency and Fixed Income Snapshots
Crude Oil
At 0330GMT today Brent Crude Oil one month futures contract is trading 0.30% or $0.14 lower at $47.04 per barrel. Yesterday the contract climbed 3.15% or $1.44 to settle at $47.18 per barrel after the Energy Information Administration reported that US crude production dropped by 15000 barrels to 8.94 million barrels per day in last week. Meanwhile reports also showed that crude supplies in the US jumped by 2.0 million barrels in the week.
Gold
At 0330GMT today Gold futures contract is trading 0.14% or $1.80 lower at $1248.60 per ounce. Yesterday the contract advanced 0.66% or $8.20 to settle at $1250.40 per ounce after the US Fed statement indicated that policy makers would take a slow approach while raising interest rates in 2016.
Currency
At 0330GMT today the EUR is trading 0.15% higher against the USD at $1.1339 ahead of the German inflation and unemployment data both for April schedule to release today. Yesterday the EUR strengthened 0.22% versus the USD to close at $1.1321 after the GfK consumer confidence in Germany rose more than expected for May.
At 0330GMT today the GBP is trading a tad lower against the USD at $1.4539. Investors will closely assess the US annualised GDP growth for the first quarter due later today. Yesterday the GBP weakened 0.26% versus the USD to close at $1.4543 after data showed that UK's economy slowed on a quarterly basis in the first quarter.
Fixed Income
In the US long term treasury prices rose and pushed yields sharply lower after the US Fed kept its interest rates unchanged at its recent policy meeting. Yesterday yield on 10-year notes plunged 7 basis points to 1.87% while yield on 2-year notes lost 3 basis points to 0.83%. Meanwhile 30-year bond yield fell 5 basis points to 2.71%.

Key Economic News
UK GDP rose as expected in 1Q 2016
On a QoQ basis the flash gross domestic product (GDP) rose 0.40% in 1Q 2016 in the UK in line with market expectations. In the prior quarter GDP had risen 0.60%.
UK GDP rose more than expected in 1Q 2016
On an annual basis the flash GDP advanced 2.10% in 1Q 2016 in the UK compared to a similar rise in the previous quarter. Market expectation was for GDP to rise 2.00%.
UK index of services rose less than expected in February
The index of services registered a rise of 0.10% in the UK on a monthly basis in February compared to a revised similar rise in the previous month. Market expectation was for the index of services to rise 0.20%.
UK index of services rose less than expected in February
In February on a MoM basis the index of services in the UK climbed 0.70% compared to an advance of 0.90% in the November-January 2016 period. Market expectation was for the index of services to climb 0.80%.
UK CBI distributive trade survey's retail sales balance recorded a surprise drop in April
In April the CBI distributive trade survey's retail sales balance dropped unexpectedly to 13.00% in the UK lower than market expectations of a rise to a level of 13.00%. The CBI distributive trade survey's retail sales balance had registered a reading of 7.00% in the prior month.
Euro-zone M3 money supply advanced as expected in March
In March M3 money supply rose 5.00% on an annual basis in the Euro-zone meeting market expectations. M3 money supply had registered a similar rise in the previous month.
Euro-zone private sector loans advanced less than expected in March
Private sector loans in the Euro-zone registered a rise of 1.60% in March on an annual basis compared to a similar rise in the prior month. Markets were anticipating private sector loans to rise 1.70%.
Euro-zone three-month average of M3 money supply advanced in the January-March 2016 period
In the Euro-zone the three-month average of M3 money supply registered a rise of 5.00% on a YoY basis in the January-March 2016 period. In the December-February 2016 period the three-month average of M3 money supply had advanced 4.90%.
German consumer confidence index advanced unexpectedly in May
In May the consumer confidence index in Germany registered an unexpected rise to 9.70 compared to market expectations of an unchanged reading. The consumer confidence index had registered a reading of 9.40 in the prior month.
German import price index fell less than expected in March
On a YoY basis the import price index eased 5.90% in March in Germany less than market expectations for a drop of 6.20%. The import price index had recorded a drop of 5.70% in the previous month.
German import price index rose more than expected in March
In March on a monthly basis the import price index recorded a rise of 0.70% in Germany higher than market expectations for an advance of 0.30%. In the previous month the import price index had dropped 0.60%.
French consumer confidence remained flat in April
In France consumer confidence remained unchanged at 94.00 in April. Markets were expecting consumer confidence to advance to 95.00.
Italian consumer confidence index declined surprisingly in April
Compared to a revised reading of 114.90 in the previous month the consumer confidence index eased unexpectedly to a level of 114.20 in Italy in April. Market anticipation was for the consumer confidence index to advance to 115.00.
Italian business confidence index climbed in April
In Italy the business confidence index recorded a rise to 102.70 in April compared to market expectations of a rise to a level of 102.50. In the prior month the business confidence index had registered a reading of 102.20.
Spanish retail sales advanced more than expected in March
On an annual basis retail sales climbed 4.40% in March in Spain higher than market expectations for an advance of 3.40%. Retail sales had advanced 3.90% in the previous month.
Swiss UBS consumption indicator advanced in March
In March UBS consumption indicator in Switzerland climbed to 1.51 compared to a revised reading of 1.45 in the previous month.
US Fed keeps interest rate steady
The US Federal Reserve (Fed) left interest rates unchanged and gave no clear direction on future moves. In a statement that largely mirrored the one issued after its last policy meeting in March the central bank's rate-setting committee described an improving labor market but acknowledged that economic growth seemed to have slowed. While it held back on its previous warnings about risks to US growth from the world economy the Fed insisted that it would continue to closely monitor inflation indicators and global economic and financial developments closely.
US pending home sales rose more than expected in March
Pending home sales recorded a rise of 1.40% in the US on a MoM basis in March more than market expectations for an advance of 0.50%. In the prior month pending home sales had climbed by a revised 3.40%.
US mortgage applications fell in the last week
Mortgage applications in the US slid 4.10% on a weekly basis in the week ended 22 April 2016. Mortgage applications had risen 1.30% in the previous week.
US pending home sales advanced more than expected in March
On an annual basis pending home sales in the US climbed 2.90% in March higher than market expectations for an advance of 0.80%. Pending home sales had recorded a revised rise of 5.00% in the previous month.
BoJ surprises with unchanged policy
The Bank of Japan (BoJ) kept monetary policy unchanged with rates at -0.1% and maintained its pledge to increase base money or cash and deposits in circulation at an annual pace of 80 trillion. The bank announced a loan support program worth 300 billion for banks in areas hit by the recent earthquake.
Japanese industrial production rose surprisingly in March
The preliminary industrial production unexpectedly rose 0.10% on a YoY basis in March in Japan higher than market expectations for a fall of 1.60%. Industrial production had registered a drop of 1.20% in the previous month.
Japanese unemployment rate fell unexpectedly in March
In Japan unemployment rate registered an unexpected drop to a level of 3.20% in March lower than market expectations of a steady reading. In the prior month unemployment rate had recorded a reading of 3.30%.
Japanese vehicle production climbed in March
On an annual basis vehicle production advanced 1.20% in Japan in March. Vehicle production had fallen 6.90% in the previous month.
Japanese retail trade fell less than expected in March
On a YoY basis retail trade fell 1.10% in Japan in March less than market expectations for a fall of 1.40%. Retail trade had risen by a revised 0.40% in the previous month.
Japanese small business confidence index fell in April
The small business confidence index recorded a drop to 47.80 in Japan in April compared to a level of 48.80 in the previous month. Markets were expecting the small business confidence index to drop to a level of 48.50.
Japanese retail trade rose more than expected in March
In March retail trade climbed 1.40% in Japan on a MoM basis compared to a drop of 2.30% in the prior month. Markets were anticipating retail trade to climb 0.50%.
Japanese National CPI ex-food energy rose less than expected in March
In March on a YoY basis National CPI ex-food energy recorded a rise of 0.70% in Japan compared to an advance of 0.80% in the previous month. Markets were anticipating National CPI ex-food energy to advance 0.80%.
Japanese Tokyo CPI fell more than expected in April
On a YoY basis Tokyo consumer price index (CPI) in Japan recorded a drop of 0.40% in April more than market expectations for a drop of 0.20%. Tokyo CPI had fallen 0.10% in the prior month.
Japanese job to applicant ratio registered an unexpected rise in March
In March job to applicant ratio rose unexpectedly to a level of 1.30 in Japan higher than market expectations of a steady reading. In the previous month job to applicant ratio had recorded a reading of 1.28.
Japanese Tokyo CPI excluding fresh food fell as expected in April
On a YoY basis Tokyo CPI excluding fresh food slid 0.30% in Japan in April in line with market expectations. Tokyo CPI excluding fresh food had registered a similar fall in the prior month.
Japanese National CPI ex-fresh food declined more than expected in March
In March National CPI ex-fresh food in Japan recorded a drop of 0.30% on an annual basis more than market expectations for a fall of 0.20%. National CPI ex-fresh food had recorded a flat reading in the prior month.
Japanese national CPI surprisingly fell in March
In March the national CPI unexpectedly eased 0.10% on a YoY basis in Japan lower than market expectations for an unchanged reading. The national CPI had risen 0.30% in the previous month.
Japanese industrial production rose more than expected in March
The flash industrial production registered a rise of 3.60% on a monthly basis in Japan in March compared to a fall of 5.20% in the prior month. Markets were anticipating industrial production to rise 2.80%.
Japanese investors became net buyers of foreign bonds in the previous week
Japanese investors were net buyers of 984.70 billion worth of foreign bonds in the week ended 22 April 2016 from being net buyers of a revised 843.00 billion worth of foreign bonds in the previous week.
Japanese investors turned net buyers of foreign stocks in the previous week
Japanese investors turned net buyers of 20.90 billion worth of foreign stocks in the week ended 22 April 2016 as compared to being net sellers of 503.40 billion worth of foreign stocks in the prior week.
Foreign investors became net buyers of Japanese bonds in the previous week
Foreign investors remained net buyers of 411.20 billion worth of Japanese bonds in the week ended 22 April 2016 from being net buyers of 770.90 billion worth of Japanese bonds in the previous week.
Foreign investors became net buyers of Japanese stocks in the previous week
Foreign investors remained net buyers of 602.00 billion worth of Japanese stocks in the week ended 22 April 2016 as compared to being net buyers of 538.60 billion worth of Japanese stocks in the previous week.
Japanese Tokyo CPI excluding food and energy advanced more than expected in April
In April on an annual basis Tokyo CPI excluding food and energy in Japan rose 0.60% more than market expectations for an advance of 0.50%. Tokyo CPI excluding food and energy had registered a similar rise in the prior month.
Japanese all industry activity index fell less than expected in February
On a monthly basis the all industry activity index recorded a drop of 1.20% in Japan in February less than market expectations for a drop of 1.30%. The all industry activity index had registered a revised rise of 1.20% in the prior month.
Japanese household spending dropped more than expected in March
Household spending fell 5.30% on an annual basis in Japan in March compared to a rise of 1.20% in the previous month. Market expectation was for household spending to drop 4.10%.
Japanese large retailer's sales declined more than expected in March
Large retailer's sales in Japan dropped 1.20% in March on a monthly basis compared to a rise of 2.20% in the prior month. Market anticipation was for large retailer's sales to ease 0.90%.