Markets: Markets close in the red on Thursday
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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: 17:00
UK Markets: Thursday's close
At the end of an uneventful day on the FTSE 100 (UKX) the gains made earlier on Thursday slipped through investor's fingers in a late move into the red.
A lack of action from central banks meant there was little momentum to stop the leading share index from falling 15.58 points to 5,776.05.
Gulf Keystone Petroleum (GKP) was the most heavily bought stock on Interactive Investor as shares in the firm gained 5% following an announcement that it has struck oil.
Angus Campbell, head of market analysis at Capital Spreads, said: "Few buyers were tempted back into the market today and investors were not helped much either by central bank meetings where there was the glimmer of hope that further stimulus might be provided by the ECB or the BOE, but unfortunately nothing was forthcoming.
"Risk assets were also out of favour following a successful Spanish bond auction which made the likelihood of any bailout for the country in the near term even slimmer."
At a glance...
|GBP/USD: 1.5978||Gold: $1,723.30|
|GBP/EUR: 1.2540||WTI crude oil: $84.65|
|EUR/USD: 1.2743||All changes from 09:00 GMT.|
US Markets: 16:45 update
Wall Street gave up all of its earlier gains and more after Bloomberg News reported that European Union ministers would delay a Greek aid call for weeks.
The Dow slipped 32 points to 12900. The Nasdaq declined 12 points to 2925, while the S&P followed suit with a four-point fall to 1390.
Yule Catto jumps on IMS
Shares in Yule Catto (YULC) jumped more than 8% as it issued an interim management statement for the period 1 July to 8 November.
The company confirmed that it continued to perform in line with expectations "despite the challenging macro-economic conditions, particularly in Europe". By region, profits to date in Europe and North America remained "well ahead" of the prior year despite volumes down 10% and an adverse translation impact of £4.5 million due to the weaker euro. In Asia and rest of world, the non-nitrile businesses continued the positive momentum achieved in the first half.
Yule Catto added that it continued to make strong progress with synergy delivery from the PolymerLatex acquisition, remaining on track to realise £19 million of synergies in the current year, a year on year improvement of £16 million. The group continues to expect to deliver the total £25 million of targeted annual synergies by March 2013.
Looking ahead, full-year underlying pre-tax profits is expected to be ahead of 2011 pro-forma of £96 million. Separately, the group also announces its intention to change its name to Synthomer.
Shanks "confident" in medium-term growth prospects
Despite reporting a 29% fall in pre-tax profits to £14.3 million, Shanks (SKS) confirmed that it was "on track to deliver our revised expectations for the full year", adding that it remained "confident" in the group's medium-term growth prospects.
The group's growth activity continues to perform well, with significant investment being made. The group is targeting a post-tax return in the range of between 12% and 15%. Shanks is also using the very challenging conditions in solid waste to put in place major structural cost initiatives that are forecast by management to save £5 million in 2013, £13 million in 2014, £18 million in 2015 and £20 million per annum thereafter.
"Significant operational gearing exists now and profits should rebound strongly in time," stated John Lawson, analyst at Investec, reiterating his ‘buy' recommendation.
Development projects mean lower profits for Land Securities
Investment trust Land Securities (LAND) saw its net asset value per share largely unchanged in the six months to 30 September, while profit fell dramatically.
Pre-tax profit fell 65% to £131.4 million compared with the previous half after the company disposed of assets and underwent a number of development starts.
The company is shifting focus away from buying existing properties to rent out and is increasing its activity surrounding developing its own projects.
Robert Noel, chief executive, commented: "Our action to increase our development activity has improved our property returns, though funding this activity through sales rather than increased debt has, as expected, had a short term impact on earnings."
Assets up at Schroders
Asset management firm Schroders (SDR) saw its assets under management grow to £202.8 billion in the nine months to 30 September compared with £194 billion at the start of the period.
Net inflow hit £5.3 billion, a £200 million increase on the same period a year ago, whereas pre-tax profit fell to £266 million from £317 million previously.
Commenting on outlook, the company said: "We expect a slowdown in institutional flows in the short term, but demand in intermediary has picked up.
"It is not clear whether this more positive tone in intermediary will be sustained given the uncertain economic background, but long term we are well positioned with a broad product range, competitive investment performance and strong distribution."
G4S slumps on loss of prison contract
Shares in G4S (GFS)was the biggest blue-chip loser on news that it had lost its contract to run Wolds prison in East Yorkshire as well as failing to win a number of other private jail contracts.
The security firm was heavily criticised for its handling of the Olympic Games security contract in the summer when it failed to recruit enough staff, but ministers said the jail decision was unrelated.
A report by HM Inspectorate of Prisons in August said HMP Wolds had "clear weaknesses", with poor behaviour and high levels of drug use among inmates. G4S currently runs six prisons: Altcourse, in Liverpool; Parc in Bridgend; Rye Hill, near Rugby; Birmingham Prison; Oakwood, near Wolverhampton; and Wolds.
UK markets: 15:00 update
The FTSE 100 (UKX) held on to meek gains made in early trading as the market settled down after the losses made on Wednesday.
Mining and tobacco stocks helped the FTSE hold on to a 20 points gain to 5811.
Gulf Keystone Petroleum (GKP) was the most heavily traded stock on Interactive Investor, with most choosing to buy after the company confirmed a new discovery.
At a glance...
|GBP/USD: 1.5985||Gold: $1,718.50|
|GBP/EUR: 1.2538||WTI crude oil: $85.50|
|EUR/USD: 1.2748||All changes from 09:00 GMT.|
US Markets: Thursday's open
Markets across the Atlantic stocks rose mildly at the open on Thursday, with the Dow bouncing back after its largest drop this year, after jobless claims declined last week and the US trade deficit narrowed in September.
First-time applications for jobless benefits came to 355,000 last week, down from 363,000 the week before.
The US trade deficit in September fell to $41.5 billion from a revised $43.8 billion in August, thanks to a record high in the dollar amount of exports. Experts predicted that the smaller-than-expected deficit should have the effect of increasing growth in gross domestic product for the third quarter by two-tenths to three-tenths of a percentage point.
The Dow added 38 points to 12971. The Nasdaq jumped 11 points to 2948, while the S&P followed suit with a six-point rise to 1401.
BTG in fine health
Specialist Healthcare company BTG (BTG) managed to push its revenue 30% higher to £143.4 million in the six months to 30 September.
Pre-tax profit also climbed impressively and was 44% above what it was a year ago at £18.3 million.
Cash and cash equivalents, together with cash on fixed term deposits, was £150.7 million on 30 September compared with the 31 March figure of £111.9 million.
Chief executive Louise Makin commented: "These results benefited from a good performance from CroFab, continued geographic expansion of DigiFab and the US launch of Voraxaze. We are also starting to see the positive financial impact of selling LC Bead directly in the US."
IAG considers Spanish airline takeover
International Consolidated Airlines Group (IAG), has confirmed that it is considering making an offer for 100% of the share capital of Vueling Airlines.
The IAG board will consider the matter on Thursday but no decision to make an offer has yet been reached, the firm said, nor on any of its potential terms, including in particular the price.
IAG's subsidiary Iberia already has a 45.85% shareholding in Vueling.
Vueling is Spain's fourth-largest airline by passenger numbers and operates in the budget market.
House repossessions fall but number in arrears goes up
The number of house repossessions fell to its lowest figure sinice 2007 in the third quarter, according to data released by the Council of Mortgage Lenders.
But a strong labour market combined with low and stable mortgage rates have not been able to prevent a small rise in mortgage arrears. Repossessions are currently being kept low by continued lender forbearance.
Lenders took possession of 8,200 properties in the third quarter, equivalent to 0.07% of all mortgaged properties. This was a drop of 300 on the previous quarter.
Property economist at Capital Economics Matthew Poitnon commented: "The disconnect between rising mortgage arrears and falling possessions points to continued high levels of lender forbearance.
"But if the labour market weakens as we expect, this will only add to the number of arrears. In that case, even if it is still treated as a last resort, possessions are almost certain to rise."
JD Wetherspoon aim for a "reasonable outcome" in 2013
JD Wetherspoon (JDW) has reported like-for-like sales growth of 7.1% for the 13 weeks to 29 October, implying a 6% growth in the last seven weeks, while operating margins declined 40 basis points year-on-year to 8.6%.
The group has eight new pubs currently under development and continues to target c25 pub openings in 2013. While it flagged the challenges of VAT disparity and stealth taxes such as the late-night levy and gaming machine taxes from 1 February 2013, it continues to aim for a 'reasonable outcome' for 2013.
"The momentum is firmly with Wetherspoons and the stock price historically responds very well to like-for-like sales growth outperformance. As such we reiterate our 'buy' recommendation," stated Panmure Gordon’s Simon French.
Supergroup a 'buy' - Panmure Gordon
Supergroup (SGP) has confirmed that the company is "on track to deliver a profit figure in-line with the market’s expectations" as it release a second-quarter trading statement.
Like-for-like sales increased 5.8%. Buy division, retails sales jumped 32.2%, while wholesale sales climbed 9.2%.
Jean Roche upgraded the stock from 'hold' to 'buy': "We understand that the wholesale forward order book, a good lead indicator, is fairly encouraging. The shares are [up] 53.6% in the past three months as the market becomes more positively disposed towards the company, yet they trade on a [price-earnings to growth] ratio of only 0.7 [times] on our estimates and we see this as an attractive entry point. Finally we note the upside risk to forecasts from self-help and increased management discipline."
Morrisons sales fall
Sales excluding fuel at Morrisons (MRW) were down by 0.4% in the quarter to 28 october and like-for-like sales were down 2.1%.
The company said that consumer confidence is still fragile and high levels of promotional activity meant that the trading environment has remained challenging through the period and sales were lower than anticipated.
The market is expected to remain challenging for the remainder of the year, the supermarket said, but it anticipates its full-year financial performance will be broadly in line with expectations.
Analysts at Panmure Gordon kept their sell rating, commenting: "We think that the relatively slow rollout of new format stores and online are red herrings. Morrison is underperforming because it needs to do its day job better."
Balfour Beatty issues profit warning
Shares in Balfour Beatty (BBY) dropped 16% as it warned that profitability in 2012 would be slightly lower than expected at the time of the half-year results, although this would be "somewhat offset" by a slightly lower effective tax rate.
Furthermore, the company said that conditions that have led to a recent decline in the order book pointed to 2013 being "a difficult year" for construction services. After a small decrease in the first half, the order book saw a more significant decline in the third quarter. As a result, the group order book closed at £14.4 billion at the end of September, down from £15.0 billion at the end of June.
Still, Andy Brown, analyst at Panmure Gordon retained his 'buy' recommendation, attributing his positive stance to "broad international infrastructure positioning, strong professional services presence which along with its support services operations complements its core construction activity" and "attractive" valuation.
Bank of England sits tight at November meeting
The Bank of England has decided hold off from further stimulus, while keeping interest rates at 0.5%, the record low they have been at since March 2009.
It is likely that the Monetary Policy Committee (MPC) decided to hold off from more quantitative easing (QE) this month due to a combination of a better-than-expected rebound in GDP in the third quarter, belief that the 'Funding for Lending Scheme' is yet to fully impact and some concern that consumer price inflation will move back up in the near term and could prove sticky thereafter. Bank of England inaction may also reflect belief within the MPC that the scope for, and effectiveness of, further QE is diminishing so they need to use it sparingly.
"Nevertheless, with economic recovery currently looking feeble, fragile and far from guaranteed, we believe that the MPC will ultimately decide to give the economy a further helping hand with a final £50 billion of QE, taking the stock up to £425 billion," stated Howard Archer, chief UK and European economist at IHS Global Insight, "This seems most likely to occur in the first quarter of 2013, although it could very well happen in December if data and surveys over the coming month indicate that the UK economy is heading for renewed contraction in the fourth quarter."
However, he remained doubtful that the Bank of England will take interest rates below 0.50% given ongoing doubts within the MPC that such a move would have a net overall beneficial impact, adding that it was most likely that the Bank of England will keep interest rates at 0.50% for at least another two years.
UK Markets: Midday update
After a shaky first day following the US presidential elections, the FTSE 100 (UKX) held onto its gains, adding 14 points to 5806.
Gulf Keystone Petroleum (GKP) was the most actively traded stock by the users of interactive Investor.
Will Hedden, sales trader at IG predicted that investors would be closely watching the press conference in Brussels for more of Mario Draghi's wisdom, after he pointed the spotlight on Germany yesterday as the crisis starts to hit data releases from the backbone of the EU.
Looking ahead, Hedden is calling the Dow to open flat at 12,930. "Florida have still to call their election result, but the markets have very much moved on and we will look for further signs of the 'fiscal cliff' panic seen yesterday - we are definitely readying ourselves for more volatility in the run up to Christmas", he stated.
At a glance...
|GBP/USD: 1.5955||Gold: $1,715.30|
|GBP/EUR: 1.2518||WTI crude oil: $85.18|
|EUR/USD: 1.2744||All changes from 09:00 GMT.|
Sound Oil receives Nervesa EIA Approval
Italian-focused upstream oil and gas company Sound Oil (SOU) has received formal approval from the Treviso Province authorities of the environmental impact assessment (EIA) for the Nervesa appraisal well.
Formal operations at the site will then commence with a view to commencing drilling around the end of the year.
To find out what else they, and four other oil and gas companies had to say in: Thursday's oil and gas news.
Profit slide at Tate and Lyle despite revenue gain
Tate and Lyle (TATE) saw its pre-tax profit fall to £172 million in the half year to 30 September from £241 million a year before.
However, pre-tax profit rose 2% once one-off items were stripped out and sales rose 7% from £1.5 billion to £1.6 billion.
Tate & Lyle attributed this loss to an exceptional credit relating to the restart of its McIntosh sweeteners plant, based in the US, which was shut down around two years ago, but re-opened this summer.
SolGold Ecuador project makes progress
SolGold (SOLG) has announced a positive update on exploration activities at the Cascabel gold-copper porphyry project in Ecuador, causing shares in the company to climb 9% on Monday morning.
Read Thursday's mining news to find out what else they, and eight other mining companies had to say.
Belize boost for New World Oil and Gas
AIM-listed New World Oil and Gas (NEW) revealed on Thursday that its latest well on its Blue Creek prospect in northwest Belize was ahead of schedule and under budget.
New World has decided to use this opportunity to drill into the Y3 formation and the Hillbank intervals.
To find out more and the investor reaction read: New World Oil & Gas' Blue Creek project ahead of schedule and under budget.
Aviva to sell US business
Aviva (AV.) is progressing with its turnaround effort and has announced that it is in talks to sell its US business.
The UK's second largest insurance firm is looking to sell 16 of its non-core businesses in a move aimed at turning around its fortunes.
The company said that its search for a new chief executive is also progressing well.
Aviva has reported nine-month worldwide sales of life insurance and pensions to 30 September of £18.8 billion, a 10% fall on the previous year, but in line with forecasts.
Analysts at Panmure Gordon commented: "The share price remains highly volatile reflecting primarily the level of uncertainty created by the Euro crisis given that Aviva is the most exposed to European sovereign debt.
"Aviva remains a work in progress and we can understand nervousness of potential investors, but at the same time we view the valuation as compelling."
Experian revenues climb but profit falls
Experian (EXPN) saw revenue growth across all regions and from all global business lines, in the six months to 30 September, with double-digit growth across Latin America and Consumer Services.
Total group revenue was $2.3 billion (£1.4 billion). Revenue from continuing activities was up 12% at constant exchange rates and 6% at actual rates, principally due to the depreciation of the Brazilian real against the US dollar. There was organic revenue growth of 8% at constant exchange rates.
Total EBIT from continuing operations was $590 million, up 14% at constant exchange rates and up 6% at actual rates.
But pre-tax profit took a hit as it fell to $76 million from $351 million a year previously, as the company announced an efficiency programme designed to save $75 million a year.
Kurdistan boost for Gulf Keystone Petroleum
Gulf Keystone Petroleum (GKP) has made a new discovery in the Sheikh Adi Block in the Kurdistan Region of Iraq.
The well is located immediately to the west of the Company's Shaikan Block, which is a major commercial discovery
To find out more read: Gulf Keystone Petroleum confirms new discovery.
Greece approves austerity
Greek legislators have backed a new round of austerity measures that should clear the way for a new European bailout.
Protestors had earlier taken to the streets in demonstrations that turned violent as the country ground to a halt with a general strike.
The €13.5 billion (£10.5 billion) austerity bill, which includes tax rises and pension cuts, was passed with a majority of just three.
UK markets: 09:00 update
The FTSE 100 (UKX) moved into positive territory on Thursday as investors tried to make up ground lost on Wednesday. Resource stocks led the charge on a busy day for corporate reports.
The index of leading shares moved up 14 points to 5806.
Mike McCudden, head of derivatives at Interactive Investor, commented: "The panic over the [US] fiscal cliff which awoke in the collective psyche of investors yesterday has opened the door for some brave bargain hunters to emerge from the shadows this morning.
"The Greek parliament got their austerity measures through as anticipated, but their troubles are far from over. Investors do not expect any surprises from the European Central Bank later today, but as ever, they will hang on to Draghi's every word."
US Markets: Wednesday's close
US Stocks took a serious fall on Wednesday, with the Dow Jones having the worst day of the year. Fears over the looming fiscal cliff and the measures that Barack Obama will take to avoid toppling over it drove the collapse.
All three main indices fell more than 2%, with the Dow Jones losing 313 points to 12933, while the Nasdaq declined 75 points to 2937. The S&P 500 closed down 34 points at 1395.
At a glance...
|Nikkei 225: 8837 ( 136)||GBP/USD: 1.5976||Gold: $1,717.88|
|Hang Seng: 21567 ( 533)||GBP/EUR: 1.2511||WTI crude oil: $85.06|
|Shanghai Composite: 2072 ( 34)||EUR/USD: 1.2769|
08:00 - The FTSE 100 (UKX) opens at 5,791.63.
|AVIVA ORD 25P||538.00p||-0.74%|
|TATE & LYLE ORD 25P||597.50p||0.34%|
|ECR MINERALS ORD 0.1P||0.12p||-2.13%|
|MORRISON (WM) ORD 10P||180.70p||0.22%|
|SOUND OIL PLC||21.75p||-2.25%|
|NEW WORLD OIL ORD NPV||0.26p||0.00%|
|TULLOW OIL PLC||414.90p||-2.45%|
|BALFOUR B. ORD 50P||254.70p||-0.08%|
|WETHERSPOON(JD) ORD 2P||796.00p||-0.31%|
|CERES POWER HOLDINGS PLC||9.50p||1.06%|
|SCHRODERS VTG SHS £1||3,423.00p||0.47%|
|BURBERRY GRP ORD 0.05P||1,709.00p||0.53%|
|LAND SECS. ORD 10P||1,320.00p||-0.30%|
|RANDGOLD RES. ORD $0.05||4,779.00p||1.40%|
|EXPERIAN ORD USD0.10||1,247.00p||0.24%|
|INTERNATIONAL CONSOLIDATED ...||542.50p||-2.08%|
|MARECHALE CAP. ORD 1P||1.35p||0.00%|
|SHANKS GRP. ORD 10P||109.25p||0.69%|
|MERCOM OIL SANDS PLC ORD 0.1P||4.75p||8.57%|
|All data 15min delayed as of: 11:19:37 23/05/15|