28th Feb 2014 17:14
LONDON (Alliance News) - UK stocks have had a mixed day Friday, as the UK market once again gets pulled out of an early slump to close almost flat after a positive open on Wall Street. US stocks are continuing to push to new highs after the close of European markets, despite the ongoing situation in Ukraine that has seen investor sentiment wobble throughout the week.
The FTSE 100 has closed fractionally lower Friday at 6,809.70. Over the week, after rallying to a 14-year high on Monday, the UK's leading index has lost 28 points, or 0.4%.
Boosted by some strong individual stock movers, the FTSE 250 has outperformed the UK market Friday, gaining 1.2% to close at 16,726, while the AIM All-Share has closed up 0.7% at 892.12.
In Europe, the CAC 40 has closed fractionally higher, while the DAX 30 has closed up 0.8%.
Stocks across Europe initially opened lower but turned around after data showed that Eurozone-wide consumer price growth remained stable in February, with CPI recording a 0.8% rise. Economists had been expecting a decline in the reading to 0.7%, given that German, Italian, and Spanish prices all fell this month.
Forex.com research director Kathleen Brooks suggests this month?s increase could be down to France. "In January, France raised VAT, but while this did not impact January?s prices it could have had a delayed pass-through effect until this month," says Brooks.
The price stability makes any further policy easing by the European Central Bank at next week's rate setting meeting less likely and as a result the euro jumped almost a cent against the dollar to a new high for the year, peaking above USD1.38.
The euro also has gained against the pound, with European common currency currently trading at GBP0.8240. The dollar was the weakest of the major currencies Friday, suppressed by a lower revision in fourth-quarter US GDP, while the pound received a boost from a further strong reading of the UK housing market. Against the dollar, the pound has reached a 9-day high of USD1.6769.
Fourth-quarter USD GDP was revised down Friday to 2.4% from an initial reading of 3.2%. Although economists had expected a revision due to the winter storms in the US, the number came in worse than the 2.5% expected.
Global equities actually pushed higher in afternoon trade however, as further US data came out stronger then expected. The Chicago PMI pushed up to 59.8 in February, from 59.6 in January, considerably better that the 57.0 that had been expected by economists given the recent weather-effect.
US consumer sentiment also rose in February, according to the Reuters/Michigan consumer sentiment survey, which recorded 81.6, up from 81.2 in January, beating expectations of 81.3.
After the European market close, the S&P 500 is up 0.5%, continuing to trade close to all-time highs. The DJIA is also up about 0.5%, while the Nasdaq Composite is up 0.3%.
UK house prices increased by 9.4% year-on-year in February, according to the latest Nationwide house price index. The index shows prices accelerating from the 8.8% growth recorded in January, faster than the 9.0% rise that was expected by economists.
Economists say that the fastest house price inflation since May 2010 is being supported by the constrained supply of housing. "In England around 109,500 new homes were built in 2013, this is 38% below the level recorded in 2007 and around half the projected number of households that are expected to form each year in the years ahead," says Shore Capital analyst Gerard Lane.
The UK's fascination with property continues to be evidenced by traffic volume on Rightmove. The property search website announced full-year results Friday and said its site traffic increased by 27% to 14 billion in 2013 - that's over 38 million visits per day, or almost 1.6 million per hour. Rightmove also saw a solid increase in its profits, and the shares were amongst the biggest gainers in the FTSE 250 Friday, closing up 5.0%.
Outsourcing group Serco received a big boost Friday on the news that it has poached Aggrekko Chief Executive Rupert Soames as its new CEO. As one of the larger companies in the FTSE 250, Serco accounts for roughly 0.6% of the market cap of the whole index. The 12% gain made by Serco Friday therefore went some way to accounting for the FTSE 250's outperformance of the FTSE 100. Meanwhile, the loss to Aggrekko was it's stock price fall 4.9%.
William Hill was the biggest gainer on the FTSE 100, closing up 6.1% after raising its dividend and saying trading had turned around in February this year after a difficult January.
Mondi closed up 5.9% after the paper and packaging company said its profit rose significantly in 2013, convincingly beating 2012 results, as the firm delivered a "record financial performance".
Old Mutual was also a big blue-chip gainer, closing up 5.9% after saying its pretax profits rose by 11% in 2013. The life-insurance and investment company also said it intends to spin-off its US Asset Management business this year. Shore Capital expects the market to respond favourably to the planned IPO of the US asset management business, which, with funds under management of USD257 billion, could be valued at over USD3 billion.
Pearson led the blue-chip fallers. The publisher closed down 5.8% after posting lower 2013 pretax profit, as it was hit by lower margins in North America and an accounting charge for the merger of its Penguin books unit with Random House.
In the corporate calendar Monday, Chinese non-manufacturing PMI is released at 0100 GMT, before the world's second largest economy's HSBC manufacturing PMI is released by Markit at 0145 GMT. Italian manufacturing data is scheduled for 0843 GMT, ahead of the French equivalent at 0848 GMT, the German reading at 0853 GMT, and the EU's at 0858 GMT. UK manufacturing PMI is released at 0928 GMT, with UK consumer credit and mortgage approvals at 0930 GMT.
In the afternoon, US personal consumption and spending data are released at 1330 GMT. US Markit manufacturing PMI is released at 1358 GMT, with the ISM reading at 1500 GMT. US construction spending information is also scheduled for 1500 GMT.
ECB President Mario Draghi gives a speech at 1400 GMT.
In the corporate calendar, FTSE 100-listed Intertek Group is joined by FTSE 250-constituents Amlin, HellermannTyton, Keller Group, Senior and Ultra Electronics Holdings in releasing full-year results for 2013.
By Jon Darby; [email protected]; @jondarby100
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
AGK.LPearsonSeniorOld Mutual PLCWMH.LRightmoveULE.LKellerSercoMondiAston Martin Lagonda