Market briefing: UK markets ended in positive territory yesterday, with the benchmark FTSE 100 index closing at its highest level for this year

2016-07-03 07:59:48

(MENAFN- ProactiveInvestors - UK) Proactive Investors, Fri

UK Market Snapshot
UK markets ended in positive territory yesterday, with the benchmark FTSE 100 index closing at its highest level for this year, after the Bank of England Governor, Mark Carney, indicated that the central bank could cut interest rate in near-term to boost the economy. 3i Group surged 8.5%, after it disclosed plans of investing further in Dutch discount retailer, Action, rather than selling its investment. Miners, Glencore, Anglo American and Antofagasta gained 4.2%, 4.3% and 5.1%, respectively, amid a rise in copper prices. On the contrary, Royal Bank of Scotland Group dipped 4.8%, after a broker downgraded its rating on the share to ''Equal weight'' from ''OveRWEight''. Travis Perkins fell 1.5%, following a broker downgrade on the stock to ''Hold'' from ''Buy'' and also reduced its price target to 1,540.0p from 2,300.0p. The FTSE 100 advanced 2.3%, to close at 6,504.3, while the FTSE 250 rose 1.7%, to settle at 16,271.1.
US Market Snapshot
US markets closed higher yesterday, extending their gains for a third consecutive session, boosted by news that the central banks across the world are mulling to increase their monetary stimulus measures to counter Brexit effects. Hershey soared 16.8%, after its Board of Directors rebuffed a $23.0 billion takeover offer from Mondelez International, up 5.9%. Progress Software surged 9.0%, after it reported upbeat earnings in the second quarter. Starz climbed 5.9%, following its acquisition by Lions Gate Entertainment Corp, down 3.4%, in a deal worth about $4.4 billion. On the other hand, Visa and MasterCard declined 3.4% and 4.4%, respectively, after a Federal appeals court rejected a $5.7 billion settlement of claims that they improperly fixed credit-card swipe fees. The S & P 500 gained 1.4%, to settle at 2,098.9. The DJIA rose 1.3%, to settle at 17,930.0, while the NASDAQ advanced 1.3%, to close at 4,842.7.
Europe Market Snapshot
Other European markets finished higher yesterday, as concerns over Britain''s decision to quit the European Union continued to recede and dovish remarks by the BoE Governor further boosted the investor confidence. RWE rallied 8.3%, after it provided details of the new renewable energy, grid and retail business that the utility company is splitting from its conventional power generation business. Anheuser-Busch InBev gained 2.8%, after South African regulator gave green signal to its proposed acquisition of SABMiller. On the downside, Banco Santander and Deutsche Bank lost 1.4% and 2.3%, respectively, after their US units failed to pass the US Fed''s annual stress test. The FTSEurofirst 300 index gained 1.0%, to close at 1,303.3. Among other European markets, the German DAX Xetra 30 rose 0.7%, to close at 9,680.1, while the French CAC-40 advanced 1.0%, to settle at 4,237.5.
Asia Market Snapshot
Markets in Asia are trading higher this morning, amid hopes of extra monetary stimulus by various central banks. In Japan, Nitori Holdings has jumped 7.6%, after a broker raised its price target on the stock. Sysmex has advanced 5.3%, after it boosted its stake in Riken Genesis in order to expand its foray into genetic research. However, Sumitomo Metal Mining has eased 0.2%, on reports that the company has entered into agreement to sell its entire 3.5% stake in PT Newmont Nusa Tenggara for about $350.0 million. Markets in Hong Kong are closed today to celebrate the Hong Kong Special Administrative Region Establishment Day. In South Korea, Hyundai Motor and Samsung Electronics have gained 1.1% and 3.4%, respectively. The Nikkei 225 index is trading 0.7% higher at 15,679.9, while the Kospi index is trading 1.0% higher at 1,990.7. Yesterday, the Hang Seng index rose 1.8% to close at 20,794.4.

Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.64% or $0.32 higher at $50.03 per barrel, ahead of the Baker Hughes weekly rig count data in the US, due later in the day. Yesterday, the contract declined 1.78% or $0.90, to settle at $49.71 per barrel, amid a recovery in the Nigerian and Canadian crude output from recent production outages.
Gold
At 0330GMT today, Gold futures contract is trading 0.92% or $12.10 higher at $1332.70 per ounce. Yesterday, the contract declined 0.47% or $6.30, to settle at $1320.60 per ounce, following gains in global equity markets.
Currency
At 0330GMT today, the EUR is trading 0.09% lower against the USD at $1.1096, ahead of the Euro-zone and German manufacturing PMIs data, both for the month of June, set to release in a few hours. Yesterday, the EUR weakened 0.17% versus the USD, to close at $1.1106. Meanwhile, the Euro-zone annual consumer prices came out of deflation zone in June.
At 0330GMT today, the GBP is trading 0.20% higher against the USD at $1.3337, ahead of Britain''s manufacturing sector data for June, due to release today. Investors will also closely monitor the US ISM manufacturing PMI for June, scheduled later today. Yesterday, the GBP weakened 0.88% versus the USD, to close at $1.3311, after the BoE Governor, Mark Carney, hinted that the central bank would probably ease its monetary policy in coming time.
Fixed Income
In the US, long term treasury prices rose and pushed yields mostly lower, after the BoE Governor, Mark Carney, indicated that the central bank could provide additional monetary stimulus to boost the UK economy. Yesterday, yield on 10-year notes fell 1 basis point to 1.49%, while yield on 2-year notes lost 4 basis points to 0.58%. Meanwhile, 30-year bond yield remained flat at 2.30%.

Key Economic News
BoE''s Carney hints at interest rate cut
The Bank of England (BoE) Governor, Mark Carney, warned that the uncertainty surrounding UK''s plan to leave the European Union (EU) would likely weigh on the nation''s economic growth and that further interest-rate cut and other measures will be needed. However, he expressed confidence in UK''s ability to adapt to a future outside the EU.
UK total business investment declined in 1Q 2016
The final total business investment recorded a drop of 0.60% in the UK on a quarterly basis, in 1Q 2016. In the prior quarter, total business investment had registered a drop of 2.00%. The preliminary figures had indicated a fall of 0.50%.
UK index of services rose more than expected in April
In April, on a MoM basis, the index of services climbed 0.60% in the UK, more than market expectations for an advance of 0.20%. In the prior month, the index of services had registered a revised drop of 0.30%.
UK current account deficit dropped in 1Q 2016
Current account deficit in the UK dropped to 32.60 billion in 1Q 2016, compared to a revised current account deficit of 34.00 billion in the previous quarter. Markets were anticipating the nation to post a current account deficit of 28.00 billion.
UK GDP rose as expected in 1Q 2016
On a QoQ basis, in the UK, the final gross domestic product (GDP) advanced 0.40% in 1Q 2016, at par with market expectations. GDP had recorded a rise of 0.60% in the previous quarter. The preliminary figures had also recorded a rise of 0.40%.
UK GDP rose as expected in 1Q 2016
In 1Q 2016, on an annual basis, the final GDP climbed 2.00% in the UK, in line with market expectations. The preliminary figures had also indicated a rise of 2.00%. In the prior quarter, GDP had advanced 2.10%.
UK total business investment slid in 1Q 2016
The final total business investment in the UK registered a drop of 0.80% in 1Q 2016, on a YoY basis. In the prior quarter, total business investment had advanced 3.00%. The preliminary figures had recorded a fall of 0.40%.
UK index of services rose more than expected in April
In the UK, the index of services climbed 0.50% in April, on a MoM basis, more than market expectations for an advance of 0.40%. In the January-March 2016 period, the index of services had registered a rise of 0.60%.
Euro-zone CPI rose more than expected in June
The flash core consumer price index (CPI) in the Euro-zone rose 0.90% on a YoY basis in June, higher than market expectations for a rise of 0.80%. In the previous month, the core CPI had risen 0.80%.
Euro-zone CPI advanced surprisingly in June
On an annual basis, the preliminary CPI in the Euro-zone unexpectedly climbed 0.10% in June, higher than market expectations for a steady reading. The CPI had registered a drop of 0.10% in the previous month.
German retail sales rose more than expected in May
On a YoY basis, retail sales in Germany recorded a rise of 2.60% in May, more than market expectations for an advance of 2.50%. In the previous month, retail sales had registered a revised rise of 2.70%.
German unemployment rate remained steady in June
The seasonally adjusted unemployment rate remained steady at 6.10% in Germany, in June. Market expectation was for unemployment rate to record a steady reading.
German number of people unemployed dropped more than expected in June
The number of people unemployed in Germany dropped 6.00 K in June, compared to a drop of 11.00 K in the previous month. Markets were expecting the number of people unemployed to ease 5.00 K.
German retail sales advanced more than expected in May
In May, retail sales rose 0.90% on a MoM basis in Germany, higher than market expectations for a rise of 0.60%. Retail sales had recorded a revised drop of 0.30% in the prior month.
French EU normalised CPI advanced as expected in June
The preliminary EU normalised CPI in France recorded a rise of 0.20% on a monthly basis in June, compared to an advance of 0.50% in the prior month. Market expectation was for EU normalised CPI to rise 0.20%.
French CPI (ex-tobacco) rose as expected in June
In June, on a MoM basis, the flash CPI (ex-tobacco) registered a rise of 0.20% in France, compared to a rise of 0.40% in the previous month. Market anticipation was for the CPI (ex-tobacco) to rise 0.20%.
French PPI advanced in May
In France, the producer price index (PPI) registered a rise of 0.30% in May on a monthly basis. In the previous month, the PPI had dropped by a revised 0.40%.
French consumer spending surprisingly fell in May
On a monthly basis in May, consumer spending recorded an unexpected drop of 0.70% in France, less than market expectations for an unchanged reading. In the prior month, consumer spending had dropped 0.10%.
Italian PPI recorded a rise in May
On a monthly basis, the PPI rose 0.70% in May, in Italy. The PPI had registered a drop of 0.90% in the previous month.
Italian deficit to GDP (YTD) advanced in 1Q 2016
Deficit to GDP (YTD) advanced to 4.70% in Italy, in 1Q 2016. Deficit to GDP (YTD) had registered a level of 2.60% in the prior quarter.
Italian CPI rose less than expected in June
The flash CPI advanced 0.10% on a MoM basis in Italy in June, less than market expectations for a rise of 0.20%. In the prior month, the CPI had risen 0.30%.
Italian EU normalised CPI rose less than expected in June
On a MoM basis, the flash EU normalised CPI in Italy advanced 0.10% in June, lower than market expectations for an advance of 0.20%. In the prior month, the EU normalised CPI had advanced 0.30%.
Italian PPI recorded a drop in May
The PPI recorded a drop of 4.20% on an annual basis in Italy, in May. In the prior month, the PPI had fallen 4.50%.
Spanish current account surplus widened in April
Current account surplus in Spain widened to 2.60 billion in April. Spain had posted a revised current account surplus of 0.90 billion in the previous month.
Swiss KOF economic barometer recorded a rise in June
The KOF economic barometer rose to a level of 102.40 in June, in Switzerland, compared to a revised level of 101.80 in the prior month. Markets were expecting the KOF economic barometer to climb to a level of 102.60.
US Chicago Fed purchasing managers index registered a rise in June
The Chicago Fed purchasing managers index registered a rise to 56.80 in the US, in June, higher than market expectations of an advance to a level of 51.00. The Chicago Fed purchasing managers index had recorded a reading of 49.30 in the prior month.
US initial jobless claims climbed in the last week
In the US, the seasonally adjusted initial jobless claims registered a rise to 268.00 K in the week ended 25 June 2016, compared to a revised reading of 258.00 K in the previous week. Markets were expecting initial jobless claims to climb to 267.00 K.
US continuing jobless claims declined surprisingly in the last week
The seasonally adjusted continuing jobless claims eased unexpectedly to a level of 2120.00 K in the US, in the week ended 18 June 2016, lower than market expectations of an advance to a level of 2151.00 K. Continuing jobless claims had recorded a revised reading of 2140.00 K in the prior week.
Canadian industrial product price index rose more than expected in May
The industrial product price index in Canada recorded a rise of 1.10% on a MoM basis in May, more than market expectations for an advance of 0.30%. In the prior month, the industrial product price index had dropped 0.50%.
Canadian raw material price index advanced more than expected in May
On a MoM basis, the raw material price index in Canada advanced 6.70% in May, higher than market expectations for an advance of 5.00%. The raw material price index had advanced 0.70% in the prior month.
Japanese Tankan large all industry capex rose more than expected in 2Q 2016
In 2Q 2016, on a QoQ basis, Tankan large all industry capex in Japan recorded a rise of 6.20%, compared to a fall of 0.90% in the previous quarter. Markets were anticipating Tankan large all industry capex to climb 5.30%.
Japanese National CPI ex-food, energy advanced as expected in May
In May, National CPI ex-food, energy recorded a rise of 0.60% in Japan on an annual basis, compared to an advance of 0.70% in the prior month. Markets were expecting National CPI ex-food, energy to advance 0.60%.
Japanese Tankan large manufacturing outlook index recorded an unexpected rise in 2Q 2016
In 2Q 2016, the Tankan large manufacturing outlook index registered an unexpected rise to 6.00 in Japan, higher than market expectations of a steady reading. The Tankan large manufacturing outlook index had registered a reading of 3.00 in the previous quarter.
Japanese housing starts advanced more than expected in May
In Japan, housing starts climbed 9.80% in May, on a YoY basis, higher than market expectations for an advance of 4.80%. In the prior month, housing starts had advanced 9.00%.
Japanese annualised housing starts registered an unexpected rise in May
In Japan, the annualised housing starts rose unexpectedly to a level of 1.02 million units in May, higher than market expectations of a drop to a level of 0.97 million units. In the previous month, the annualised housing starts had registered a level of 1.00 million units.
Japanese National CPI ex-fresh food declined as expected in May
National CPI ex-fresh food eased 0.40% in Japan, on an annual basis in May, at par with market expectations. In the prior month, National CPI ex-fresh food had registered a drop of 0.30%.
Japanese job to applicant ratio climbed in May
Job to applicant ratio recorded a rise to 1.36 in May, in Japan, compared to market expectations of a rise to 1.35. Job to applicant ratio had registered a level of 1.34 in the prior month.
Japanese unemployment rate remained flat in May
In May, unemployment rate remained flat at a level of 3.20% in Japan, at par with market expectations.
Japanese construction orders climbed in May
In Japan, construction orders climbed 34.50% on an annual basis, in May. In the prior month, construction orders had registered a drop of 16.90%.
Japanese Tankan non-manufacturing outlook index remained flat in 2Q 2016
In 2Q 2016, the Tankan non-manufacturing outlook index remained flat at a level of 17.00 in Japan, at par with market expectations.
Japanese national CPI fell less than expected in May
In May, the national CPI in Japan, fell 0.40% on a YoY basis, less than market expectations for a fall of 0.50%. The national CPI had registered a drop of 0.30% in the previous month.
Japanese manufacturing PMI recorded a rise in June
The final manufacturing PMI in Japan recorded a rise to 48.10 in June. Manufacturing PMI had registered a level of 47.70 in the previous month. The preliminary figures had recorded a rise to 47.80.
Japanese household spending declined as expected in May
In May, household spending in Japan slid 1.10% on an annual basis, compared to a fall of 0.40% in the previous month. Market expectation was for household spending to ease 1.10%.
Japanese Tankan large manufacturing index steadied in 2Q 2016
In 2Q 2016, the Tankan large manufacturing index remained unchanged at a level of 6.00 in Japan, higher than market expectations of a fall to a level of 4.00.
Japanese Tokyo CPI fell more than expected in June
In June, Tokyo CPI eased 0.50% on an annual basis in Japan, compared to a similar fall in the prior month. Markets were expecting Tokyo CPI to ease 0.40%.
Japanese Tankan non-manufacturing index declined in 2Q 2016
The Tankan non-manufacturing index in Japan fell to a level of 19.00 in 2Q 2016, in line with market expectations. The Tankan non-manufacturing index had recorded a level of 22.00 in the prior quarter.
Japanese Tokyo CPI excluding food and energy rose as expected in June
In June, on a YoY basis, Tokyo CPI excluding food and energy registered a rise of 0.40% in Japan, at par with market expectations. In the previous month, Tokyo CPI excluding food and energy had advanced 0.50%.
Japanese Tokyo CPI excluding fresh food dropped as expected in June
On a YoY basis in June, Tokyo CPI excluding fresh food eased 0.50% in Japan, in line with market expectations. Tokyo CPI excluding fresh food had registered a similar fall in the prior month.
Chinese NBS non-manufacturing PMI advanced in June
The NBS non-manufacturing PMI in China rose to a level of 53.70 in June, compared to a revised level of 53.10 in the prior month.
Chinese Caixin/Markit manufacturing PMI index slid unexpectedly in June
Caixin/Markit manufacturing PMI index in China eased unexpectedly to a level of 48.60 in June, compared to a level of 49.20 in the previous month. Market expectation was for Caixin/Markit manufacturing PMI index to record a steady reading.
Chinese NBS manufacturing PMI declined in June
In June, the NBS manufacturing PMI in China eased to 50.00, compared to a level of 50.10 in the previous month. Markets were anticipating the NBS manufacturing PMI to fall to a level of 50.00.