Markets: FTSE 100 closes higher on Tuesday
Interactive Investor's Market Report brings you bite-sized news covering all the day's FTSE and AIM announcements, the latest on commodities, global and domestic economics, gold, oil and currencies as well as US markets. Updated throughout the day, it's the digest you can't afford to miss.
Last updated: 17:05
UK markets: Tuesday's close
The FTSE 100 (UKX) held onto its gains as Tuesday drew to a close, helped by Wall Street and rumours that Spain would finally request a bail-out from the European Union.
London's leading share index closed at 5870.54, 64.93 points higher.
Lloyds Banking Group (LLOY) was the most actively-traded stock by the users of Interactive Investor.
At a glance...
|GBP/USD: 1.6101||Gold: $1,734.55|
|GBP/EUR: 1.2350||WTI crude oil: $91.88|
|EUR/USD: 1.3035||All changes from 09:00 BST.|
US markets: 16:40 update
Wall Street continued its strong showing on Tuesday, on the back of positive earnings reports and rumours that Spain will finally cede and request a bail-out from the European Union.
The Dow Jones gained a healthy 121 points to 13546. The Nasdaq was up 30 points to 3095, while the S&P 500 moved 14 points north to 1454.
Spirit Pub Company reports in-line trading
Spirit Pub Company (SPRT) has issued an in-line set of preliminary results reporting pre-tax profits of £51.1 million versus consensus expectations of £52 million.
There was a proposed final dividend of 1.3p per share to bring the final dividend to 1.95p per share. The group reported a robust start to the 2013 financial year, with like-for-like sales in managed pubs up 4.8% for the first four weeks. The leased estate started the year in line with management expectations, with turnover down by 1.8% in the first four weeks and, with rent rebasing impacting the comparatives, like-for-like net income down by 4.8%.
Looking ahead, the company expects the consumer environment to remain tough but stable. While general cost pressures are easing slightly, the tax burden on input costs continues to be a headwind, primarily through the beer duty escalator and the expected impact of the CRC energy efficiency scheme.
"Self-help measures should lead to double-digit earnings growth in 2013, which makes Spirit an attractive investment proposition in our view," stated Lindsey Kerrigan, analyst at Panmure Gordon.
Ultima Networks in new solar installation
Ultima Networks (UTN) has won an engineering, procurement and construction (EPC) contract to install a 150 kilowatt solar photovoltaic installation from MJ & SC Collins, a local farm in Essex.
The installation will be situated on five farm buildings and will power the various industrial units, such as crop drying, needed to run the 3,000-acre arable farm. It is expected to be completed by end of October.
Phorm updates on commercial progress
Internet personalisation technology company Phorm (PHRM) on Tuesday confirmed it could use ISP data to profitably show targeted text advertising without the involvement of a search engine.
The company tested its text advertising system on more than 20 million advertising impressions across a wide variety of websites and advertisers. Over 20 campaigns were run in sectors such as electronics, travel, fashion, mobile phones, banking and jobs. Based on the results, Phorm was able to conclude that the model was valid with clicks being generated at margins in excess of 80%.
"This is truly a major milestone in the development of the business. Text advertising represents over half of the $90 billion (£56 billion) global advertising market and today, for the first time, we have demonstrated that there is a viable alternative delivery model based on our partnership with ISPs," commented chief executive Kent Ertugrul.
"We are very excited about the prospects of our business in Turkey and are now focused on using the excellent initial results to build revenue aggressively."
Global Lock Safety issues new shares
Global Lock Safety (GLOK) has issued five million shares as part of an employee bonus share scheme.
The shares represent 2% of the company's issued share capital and have been issued to various employees in satisfaction of certain bonus entitlements.
An application has been made to admit the shares to trading on AIM, expected to take place on or around 19 October.
UK Markets: 15:00 update
The FTSE 100 (UKX) continued to rack up gains as optimism pervaded due to strong showings from the US and Asia overnight and data showing UK inflation falling.
The consumer prices index fell from 2.5% last month to 2.2%, the lowest rate since November 2009.
The City’s leading share index climbed 62 points to 5868.
Lloyds Banking Group (LLOY) gained 5.3% on news that it looks set to be given the go ahead to carry out an asset swap with Scottish Widows. GKN (GKN) slumped 3.8% after a disappointing trading update.
AFC Energy (AFC) gained 23% on AIM, while Great Western (GWMO) lost almost a third.
Sound Oil (SOU) was back at the top of the buys on Interactive Investor as the stock lost 5.5%.
At a glance...
|GBP/USD: 1.6118||Gold: $1,746.30|
|GBP/EUR: 1.2354||WTI crude oil: $91.60|
|EUR/USD: 1.3051||All changes from 09:00 BST.|
US markets: Tuesday's open
US markets rose at the open on Tuesday as investors digested economic reports as well as earnings from several blue-chip companies.
Data showed a 0.6% rise in consumer prices in September, mostly because of higher gas costs, while the Federal Reserve said that the output of the nation’s factories, mines and utilities rebounded 0.4% in September after a steep drop in the prior month. The gain was above Wall Street expectations.
It was also announced that Vikram Pandit would be stepping down from his role of chief executive of Citigroup (C), effective immediately. He will be succeeded by Michael Corbat, who previously served as Citigroup’s chief executive of Europe, Middle East and Africa.
The Dow Jones climbed 90 points to 13514. The Nasdaq added 12 points to 3076, while the S&P 500 jumped nine points to 1449.
Looking ahead, the National Association of Home Builders/Wells Fargo housing market index is due for release, with economists expecting the gauge to reach 42 in October, from 40 in September, which was the highest level since June 2006.
Bellway (BWY) completed the sale of 5,226 homes in the year to 31 July, an increase of 6.2% compared to last year, pushing pre-tax profit 57% higher to £105.3 million.
The average selling price of these homes rose by 6.3% to £186,648, the highest the group has ever achieved. This has resulted in housing turnover rising in the year by 12.8% to £975.4 million.
The growth in both volume and average selling price has been driven by the group's strong performance in the south of the country, particularly in London, with its southern divisions accounting for 63% of housing turnover in the year.
The increase in volume and average selling price was further strengthened due to the increase in private completions, which rose by 13.4% from 3,843 to 4,358 homes.
The board proposed an increase in the final dividend by 59% from 8.8p to 14.0p per ordinary share. This makes a total dividend for the year of
20p, an increase of 60% compared with the previous year.
Carpetright on track
Carpetright (CPR) has reported results in line with management's expectations, but down on last year, for the two weeks ended 13 October 2012.
Like-for-like sales in the UK increased by 0.6%, but total sales in the UK declined by 0.6% due to the reduction in the number of stores year-on-year.
Excluding the expected contraction in sales from the wholesale business, the company said its core UK retail business would have reported like-for-like sales growth of 2.4% for the period.
Store base decreased by two during the period to 484, of which 82 have now been refurbished.
In the rest of Europe in local currency terms, like-for-like sales in the region decreased by 12.7% and total sales declined by 12.2%. Store base decreased by two to 141.
N Brown revenue up, profit down
Home-retail group N Brown (BWNG) has reported a 4.3% growth in revenue to £379.3 million in the half year to 1 September, but a slump in profit.
Operating profit fell 2.8% to £45.7 million and pre-tax profit was down 4.5% at £42 million after absorbing an anticipated £1.1 million of losses from the Simply Be concept stores.
Online sales provided the strongest growth, with a 12% increase to £196 million.
There will be a 3% increase in interim dividend to 5.5%.
Bodycote makes acquisition
Bodycote (BOY) has announced that it has acquired the business of Carolina Commercial Heat Treating, comprising six facilities in the south-eastern USA, together with an additional facility in southern Indiana.
The business was acquired from Bluewater Thermal Solutions for a total cash of $68 million (£42 million). Bodycote has not acquired any interest in the remaining 10 facilities owned by Bluewater in the Great Lakes region of the USA. The consideration has been met from existing cash resources and bank facilities.
In the 12 months to September the Carolina business delivered EBITDA of $11.7 million on sales of $34.9 million.
William Hill in Sportingbet acquisition
The revised proposal of 61.1p per share incorporated a "mix and match" facility under which Sportingbet shareholders will have the opportunity to apply to receive proportionately more cash or more shares.
For the full story, read: William Hill agrees Sportingbet takeover terms.
Senior sheds Hargreaves
Senior (SNR) has disposed of 100% of the issued share capital of Senior Hargreaves to the M+W Group for an undisclosed sum.
Hargreaves, previously operating in the group's Flexonics division, is one of the UK's leading heating and ventilation ducting suppliers to the nuclear and construction industry.
However, Hargreaves was Senior's only business operating in these markets and, although it had been a successful part of the group for nearly 60 years, the company decided that it no longer fitted into the ongoing strategic direction of Senior.
In the first nine months of 2012 Hargreaves reported sales of £17 million and operating profit of £700,000. Net assets at the end of September 2012 were £2.6 million.
SacOil statement holds shares back
Shares in SacOil (SAC) slipped more than 10% after an initial rise of 11% as the company said there was "no new information that has yet to be disclosed" regarding Block III in the Democratic Republic of Congo.
The announcement by the company followed a 60% share price rise on Monday on news that Africa's largest onshore oil deposit had been discovered.
For the full story, read: SacOil slips after Block III announcement.
Rio Tinto unveils third-quarter operations review
Rio Tinto (RIO) confirmed that the "business is resilient and operations are performing strongly" despite "volatile" markets as it unveiled its third-quarter operations review. Meanwhile, Petropavlovsk (POG) confirmed it was on track to achieve its full-year gold production target.
Find out what they, and six other diggers, had to say in: Tuesday's mining news.
Direct Line starts trading
Direct Line Group (DLG) has been admitted to the official list of the UK Listing Authority and trading on the London Stock Exchange's main market for listed securities.
The company will operate under the ticker DLG.
Its ordinary share capital currently consists of 1.5 billion shares.
Europa remains cash strapped
Read: Tuesday's oil and gas news, for our round-up.
UK markets: Midday update
The FTSE 100 (UKX) stayed firmly in the black as the strong US stock performance and the easing of Greek default fears gave investors encouragement. ()
Lloyds Banking Group (LLOY) gained 3.7% to be the biggest climber after it was reported that it will be allowed to swap assets with Scottish Widows.
GKN (GKN) lost 3.2% following the release of a downbeat trading statement.
SacOil (SAC) continued as the most popular buy on Interactive Investor after news of a massive oil find in South Africa. Lloyds was most heavily sold.
David Madden, market analyst at IG, commented: "The mood is positive in Europe today after Greek prime minister Antonis Samaras said he is confident that Greece will receive the next tranche of its bailout.
"In terms of economic data, the UK's latest inflation numbers tell us that consumer demand is falling, and it could be that the Bank of England might look to increase its bond-buying programme to stimulate the economy."
At a glance...
|GBP/USD: 1.6082||Gold: $1,740.08|
|GBP/EUR: 1.2365||WTI crude oil: $91.79|
|EUR/USD: 1.3016||All changes from 09:00 BST.|
House prices edge up in August - ONS
House prices edged up 0.1% month-on-month in August, having been flat in July, according to the Office for National Statistics (ONS).
It needs to be borne in mind that the ONS provides lagging evidence on house prices as the office calculates its index at the time when mortgages are competed. Furthermore, the data are for August and both the Halifax and the Nationwide have reported house price falls in September. Specifically, the Nationwide reported that house prices fell 0.4% month-on-month and 1.4% year-on-year in September. The Halifax also indicated that house prices fell 0.4% month-on-month while they put the year-on-year drop at 1.2% in the three months to September.
Howard Archer, chief UK and European economist at IHS Global Insight, is expecting house prices to drift down by around 3% from current levels "in the face of persistent limited market activity, still relatively low and fragile consumer confidence, and muted earnings growth". He pointed out that the housing supply-demand balance seemed to be in favour of sellers overall, with latest survey evidence from Hometrack indicating that movements in houses coming on to the market exceeded new buyers registering for a sixth successive month in September.
Informa revenues down
Revenue declined at event organiser Informa (INF) over the last nine months, but the firm assured investors it was trading in line with expectations.
Organic revenue was shown to have fallen 2% on the same period last year in what the company described as a tough market backdrop.
The company said the visibility and resilience of its cashflow remained strong and it viewed this as a key attraction of the business.
Academic information was the most robust division, with revenue growing 5.5%, but the events arm slid 2.6%.
Lloyds to borrow from insurance business
Lloyds Banking Group (LLOY) has been given the go-ahead to swap assets with its Scottish Widows life insurance business, Reuters has reported.
The apparent green light from the Financial Services Authority will mean the bank can shore up its finances and boost its cash position by borrowing £1 billion from Scottish Widows.
Portugal reveals 2013 budget
Portugal has outlined measures to reduce its budget deficit to 4.5% in 2013, sparking protests similar to those in Spain and Greece.
The measures include an average income tax rise from 9.8% in 2012 to 13.2% in 2013, a one-off 4% surcharge tax on all workers' earnings in 2013, €2.7 billion (2.2 billion) of cuts to come into effect in 2013, including laying off 2% of the country's 600,000 public sector employees and an increase in capital gains tax from 25% to 28%.
A general strike has been planned for 14 November, with opposition Socialist Party leader Antonio Jose Seguro describing the draft budget as "a fiscal atomic bomb".
Portugal is currently experiencing its worst recession since the 1970s, with the unemployment rate above 15%, and predicted to rise to 16.4% next year. While the government expects the economy to shrink by at least 3% in 2012 and by 1% in 2013, many economists forecast a greater contraction in 2013.
GKN warns of softening markets
Engineering group GKN (GKN) was the heaviest faller in the FTSE 100 after it issued a profit warning, despite reporting strong growth in revenue and profit for the last quarter.
The FTSE 100 firm said macroeconomic conditions had deteriorated in recent weeks and some "softening in order books is now evident, particularly
regarding European automotive and industrial markets".
It added that the fourth quarter was expected to show the usual seasonal performance improvement, but softening markets would take their toll.
Group sales in the three months ended 30 September totalled £1.6 billion, an 8% increase over the comparable period in 2011, half of which was organic growth.
UK inflation falls in September
UK inflation fell from 2.5% in August to 2.2% in September, just a whisker away from the target of 2%, and at the lowest rate since the end of 2009.
The main downward effect came from last year's rise in utility prices dropping out of the annual comparison. Core inflation was unchanged at 2.1%, while food inflation also stayed broadly the same
Vicky Redwood, chief UK economist at Capital Economics, was expecting inflation to edge up over the next couple of months. She calculated that the recently-announced utility price increases will add 0.1% to inflation for each of the next three months, while the food prices could start to rise as past commodity price increases feed through, and the rise in tuition fees will boost inflation in October.
"However, inflation should stay pretty close to the 2% target and we still expect it to fall below 2% further ahead in response to the weakness of demand and spare capacity in the economy," she stated.
"While next month's Monetary Policy Committee decision is shaping up to be a relatively close call, we still expect more asset purchases to be announced in the coming months."
Yahoo hires another Google executive
The appointment comes hot on the heels of the employment former Google executive Marissa Mayer as its chief executive.
"[De Castro's] operational experience in internet advertising and his proven success in structuring and scaling global organisations make him the perfect fit for Yahoo as we propel the business to its next phase of growth," said Mayer.
RBS moves towards reprivatisation
Royal Bank of Scotland (RBS) will get the go-ahead this week from government and regulators to exit the state-backed insurance scheme covering its old "toxic assets", in an early step towards reprivatisation, The Financial Times reported.
If the bank remained in the scheme beyond Thursday, a further £125 million quarterly premium would become payable, the newspaper said.
For more, read: RBS set to depart toxic asset scheme - FT.
UK markets: 09:15 update
London's leading share index added 27 points to 5832.
Lloyds Banking Group (LLOY) was at the top of the dealer board on reports of an asset swap between itself and its Scottish Widows subsidiary. International Consolidated Airlines Group (IAG) lost almost 2%.
SacOil (SAC) was the most actively-traded stock by the users of Interactive Investor.
"[Monday's] US macro data kept the run positive, giving equities a boost on the possibility that US growth could in fact be gaining momentum. This offset scepticism that better-than-expected China trade data was enough to negate worries over the nation/region's slowing economic growth," commented Mike van Dulken, head of research at Accendo Markets.
"Add to this optimism that Spain could be closer to asking for help, with a potential bond market reaction meaning neither the European Stability Mechanism nor the European Central Bank need disburse a dime, and we see equities maintain their positive trend." However, he questioned whether resistance was building.
US markets: Monday's close
US stocks finished higher on Monday, led by gains in the health-care and financial sectors.
The Dow Jones jumped 95 points to 13424. The Nasdaq added 20 points to 3064, while the S&P climbed 11 points to 1440.
At a glance...
|Nikkei 225: 8701 ( 123)||GBP/USD: 1.6086||Gold: $1,741.70|
|Hang Seng: 21175 ( 27)||GBP/EUR: 1.2380||WTI crude oil: $92.06|
|Shanghai Composite: 2098 ()||EUR/USD: 1.2989|