13th Nov 2014 17:24
LONDON (Alliance News) - The FTSE 100 rose marginally Thursday, marking its highest close since the end of September, with broadcasting company ITV ending the day as one the biggest gainers in blue-chip index on a day that also saw standout stock performances by London Stock Exchange Group, SABMiller and cruise company Carnival.
ITV's shares closed up 2.2% after it expressed confidence in seeing "another year of double digit profit growth", as it saw total external revenues rise 8% in its first nine months, driven by "strong progress" across all of its segments.
The broadcaster said external revenues rose to GBP1.80 billion from GBP1.66 billion a year before. Within this, Broadcast and Online revenues rose 7% to GBP1.43 billion from GBP1.34 billion, driven by 6% growth in net advertising revenue and 24% growth in Online, Pay and Interactive. The company said it expects to see Online, Pay and Interactive grow at a similar rate over the full year, due to new deals with pay platforms and strong demand for video on demand.
ITV said it expects Broadcast to see advertising revenues up 5% over the full year, which it said is "well ahead of the UK television advertising market and [its] best out-performance of the market for five years."
Overall, the FTSE 100 closed up 0.4% at 6,635.45, its highest closing level since September 29. The FTSE 250 closed up 0.2% at 15,631.89, while the AIM All-Share index closed fractionally higher at 718.57.
In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt closed up 0.2% and 0.4%, respectively. In the US, at the UK equity market close, the NASDAQ Composite, DJIA, and S&P 500 all were trading close to flat.
"Stocks are looking for one of two things to carry the trend higher; either slightly better European and Chinese data showing that the worst might be behind us or poorer data followed by an increase in government and/or central bank stimulus," said Jasper Lawler, market analyst at CMC Markets.
"If the data continues to disappoint but is not matched by government efforts (or at least talk of efforts) to drum up demand, then even a strong US outlook may only carry stocks so far," he added.
In macroeconomic data released Thursday final data from Germany showed the harmonised index of consumer prices, or HICP, was unrevised in October. The annual HICP inflation slowed to 0.7% in October, confirming the flash estimate, from 0.8% in September. French HICP, meanwhile, rose 0.5% annually following a 0.4% rise in September.
"The eurozone inflation readings were largely in line with market expectations, which probably explains why people aren't getting too down about them," said Craig Erlam, market analyst at Alpari. "However, they were released alongside the latest [European Central Bank] quarterly survey, which showed professional forecasters revising down their growth and inflation expectations for the next two years," he added.
Results of the latest Survey of Professional Forecasters for the fourth quarter, published in the ECB's monthly bulletin, showed that the inflation outlook for the eurozone in 2015 was lowered to 1% from the 1.2% seen earlier. The projection for 2014 was cut to 0.5% from 0.7%, while the outlook for 2016 was cut to 1.4% from 1.5%.
"These downward revisions were broad based, with around 85% of respondents revising down their forecasts for 2014 and 2015, and 60% doing so for 2016," the ECB said. "The main factors cited as being behind these downward revisions were lower oil prices and weaker-than-expected economic activity. On the other hand, the depreciation of the euro was cited as a counterbalancing factor in these revisions."
Surveyed experts also reduced the eurozone economic growth forecast for next year to 1.2% from 1.5%. The outlook for this year was cut to 0.8% from 1%. The projection for 2016 was downgraded to 1.5% from 1.7%.
Nearly 90% of the respondents cut their growth forecasts for this year and next, while two-thirds lowered their projection for 2016.
"The downward revisions for 2014 were driven by disappointing figures for GDP growth in the second quarter, as well as persisting low business confidence in some euro area countries, and a more pessimistic outlook for key export markets," the report said.
In the commodities market, Brent oil slumped to a new four-year low, trading below USD80 for the first time since September 2010. At the close of the UK equity market, Brent was trading at USD79.25.
The sell-off in oil ensured that travel-related stocks ended the day among the best-performers on the FTSE 100 Thursday, while oil-related stocks were among the biggest losers.
Carnival, closing up 2.8%, was the biggest riser in the blue-chip index, with International Consolidated Airlines and TUI Travel also closing firmly higher, up 2.0% and 0.6%, respectively. At the other end of the spectrum, Tullow Oil ended the day down 5.8%, making it the index's biggest loser, while Royal Dutch Shell 'A' and 'B' shares, closed down 2.1% and 2%, respectively.
Shell's shares also were hurt by going ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.
Similarly, FTSE 100-listed British Sky Broadcasting Group fell sharply Thursday after going ex-dividend, closing down 1.4%. The satellite broadcaster also confirmed it plans to change its name to Sky PLC following the completion of its acquisition of Sky Italia SrL and a 89.71% stake in Sky Deutschland AG.
The name change is subject to shareholder approval at the company's annual general meeting November 21. Its stock exchange ticker will change to SKY from BSY starting Friday.
Brewing giant SABMiller, meanwhile, ended the day among the stand out risers in the FTSE 100, closing up 1.2%. The company reported higher first-half profit and revenue, driven by growth in Africa and Latin America, notably for soft drinks, but held back by weaker sales in China and tougher competition in Australia.
It reported a pretax profit of USD2.83 billion for the six months to end-September, up from USD2.43 billion a year earlier, as revenue grew to USD11.37 billion, from USD11.10 billion, and the company continued to make cost savings.
"We anticipate that trading conditions will remain challenging but we expect to continue to grow volume and net producer revenue. Raw material unit input costs are expected to increase by low single digits in constant currency terms with some markets continuing to be impacted by foreign exchange movements on imported raw materials," SABMiller said in a statement.
London Stock Exchange Group, closing up 1.3%, was another riser in the blue-chip index. The group's shares moved firmly higher after it reported a rise in first-half pretax profit as it continues to prepare for life following the acquisition of Frank Russell Co.
It made a GBP136.8 million pretax profit in the six months to end-September, compared with GBP116.0 million in the corresponding period last year, as revenue rose to GBP592.6 million from GBP504.2 million. It said all its business areas grew, but in particular, its capital markets division delivered good growth in both primary and secondary market activities.
FTSE 250-listed St Modwen Properties, closing up 3.8%, was one of the biggest risers in the mid-cap index. The company's shares jumped after it said its joint venture with Vinci PLC has received resolution to grant planning permission for the redevelopment of the 57 acre New Covent Garden Market site in Nine Elms, London.
Electrocomponents, ending the day down 12%, was the heaviest faller in the FTSE 250. Shares in the company plunged after it posted a fall in pretax profit and revenue for the first half as the group was hit by the strength of sterling and said its chief executive is stepping down. Pretax profit was down 16% to GBP37.4 million in the six months to the end of September against GBP44.6 million a year earlier, on the back of a fall in revenue to GBP616.4 million from GBP635.4 million a year earlier.
Still to come on Thursday, Federal Reserve Chair Janet Yellen is due to give a speech at 1745 GMT, while the President of the Minneapolis Federal Reserve, Narayana Kocherlakota, is scheduled to speak at 2030 GMT.
In the data calendar Friday, preliminary third-quarter gross domestic product readings from France, Germany and Italy are released at 0630 GMT, 0700 GMT, and 0900 GMT, respectively. The preliminary reading of third-quarter GDP for the wider eurozone area is scheduled shortly after, at 1000 GMT, when eurozone consumer price inflation information for October also will be published.
In the afternoon, US retail sales and trade data for October are due at 1330 GMT, ahead of the preliminary release of the Reuters/Michigan consumer sentiment index for November at 1455 GMT and US business inventories data for September at 1500 GMT.
Also of note from the US, Federal Reserve Bank of St. Louis President James Bullard is expected to give a speech at 1410 GMT. In an interview in October, Bullard told Bloomberg News that the Fed should consider delaying the end of its quantitative easing programme to halt the decline in inflation expectations. While the suggestion was not heeded by the central bank, the doveish nature of the comment helped boost equity indices around the world.
In the corporate calendar, FTSE 100-listed IMI and Aggreko are joined by FTSE 250-listed Premier Farnell and The Restaurant Group in releasing interim management statements.
By James Kemp; [email protected]; @jamespkemp
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