FTSE slipped off three-week highs on Friday with mining stocks among the worst off.]]> |||
London - Britain's top equity index slipped off three-week highs on Friday, with mining stocks among the worst performers as weak metals prices weighed on the sector.
The blue-chip FTSE 100 index was down by 0.1 percent, or 8.29 points, at 6,769.37 points going into the close of trading. The London stock market is closed for a public holiday on Monday.
Gold and silver miner Fresnillo was the worst-performing FTSE 100 stock in percentage terms, falling 2 percent as the price of gold remained stuck near a two-month low.
Traders pointed to a dovish tone in a speech on Friday by U.S. Federal Reserve Chair Janet Yellen as limiting the stock market's losses.
Yellen said the Fed should move cautiously in determining when interest rates should rise.
Nevertheless, equity traders remained on the backfoot, with tensions in Ukraine - where Kiev said Moscow sent a convoy of aid trucks into eastern Ukraine without its consent - also weighing on stock markets.
The FTSE 100 hit a peak of 6,894.88 points in mid-May, its highest level since December 1999, but the market has since given up much of that ground due partly to worries over conflicts in Ukraine and also in Iraq.
Basil Petrides, sales trader at Beaufort Securities, said investors could be tempted to sell out and book profits if the FTSE could not break above previous highs in the 6,830-6,890 points range set in the last two months.
“If it does not take out those previous highs, then it could lead to a minor pullback,” he said.
Others were a bit more positive on the FTSE's prospects, with the UK stock market buoyed by Britain's gradual economic recovery and a pick-up in corporate takeover activity.
Carlo Alberto de Casa, senior market analyst at online brokerage ActivTrades, said the FTSE could climb to 6,825-6,830 points if it broke above the 6,785 point level.
“The longer-term trend still looks positive,” he said.
The dollar reached an 11-month high against the euro after Yellen's speech.]]> |||
New York - The dollar reached an 11-month high against the euro after Federal Reserve Chair Janet Yellen cited jobs gains made during the five years of economic recovery while noting slack remains in the U.S. labor market.
The U.S. currency rose to the highest level since February against its major peers amid speculation the Fed will raise interest rates next year. The Canadian dollar fell to an almost four-month low after a government report showed the inflation rate slowed for the first time in five months. The yen gained earlier after a Russian aid convoy crossed the border into Ukraine, which said it hadn’t consented to the move.
“People are buying dollar on the fact that we’ve now passed the event risk of Yellen’s speech,” said Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. “It wasn’t overly hawkish, it seems status quo for now. At the same time, she didn’t try to quell early-rate-hike expectation.”
The U.S. dollar gained 0.3 percent to $1.3237 per euro at 10:47 a.m. in New York, after appreciating to $1.3228, the strongest level since Sept. 9. The greenback added 0.3 percent to 104.14 yen after advancing to 104.18, the highest since Jan. 23. The euro fell 0.1 percent to 137.78 yen.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, increased 0.2 percent to 1,029.65, touching the highest level since Feb. 4.
Canada’s consumer price index rose 2.1 percent in July from a year ago following June’s 2.4 percent pace, Statistics Canada said today. Economists surveyed by Bloomberg News forecast a 2.2 percent pace, according to the median of 20 responses.
“Initially we had a weakening in the Canadian dollar as everyone’s eyes went to CPI, which was softer than expected, so that provides some more leeway for the Bank of Canada to maintain its neutral tone,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by telephone from Toronto.
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.2 percent to C$1.0959 per U.S. dollar. The currency weakened to as low as C$1.0980, approaching the low of C1.0986 reached on Aug. 6, the least since May.
“The economy has made considerable progress in recovering from the largest and most sustained loss of employment” since the Great Depression, Yellen said in a speech at the Kansas City Fed’s annual economics conference in Jackson Hole, Wyoming. Even so, she underscored the Federal Open Market Committee statement last month that “underutilization of labor resources still remains significant.”
Yellen’s remarks appeared in line with the message from minutes of the July FOMC meeting, which showed officials growing more aware that labor markets are approaching full employment. She has said the central bank has no “mechanical answer” for when to raise rates, and that before doing so policy makers must be certain the economy is on a solid footing.
Futures traders saw about a 54 percent chance the Fed will raise its key interest rate to at least 0.5 percent by July, according to data compiled by Bloomberg. The central bank has kept its benchmark rate at almost zero since December 2008.
The dollar has strengthened 1.7 percent in the past month, the best performer among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes after Norway’s krone. The euro fell 0.3 percent and the yen declined 1.2 percent.
Russia is invading under the cover of the aid trucks, said Valentyn Nalyvaychenko, the head of Ukraine’s security council, according to the Interfax news service. More than 150 trucks entered the country through a border checkpoint in a rebel-held area. Ukraine allowed the convoy to enter to avoid provocations after failing to discuss its safety with the Russian side, the Ukrainian Foreign Ministry in Kiev said in a statement.
Stocks showed muted reaction after Yellen said Fed should be cautious in rate decision.]]> |||
New York - U.S. stocks were little changed on Friday, in the wake of comments from Federal Reserve Chair Janet Yellen.
Stocks showed muted reaction to comments from the Fed chair who, in a speech at a central banking conference in Jackson Hole, Wyoming, said U.S. labor markets remain hampered by the effects of the Great Recession and that the Federal Reserve should move cautiously in determining when interest rates should rise.
“The reaction was a few weeks ago when the GDP number came out,” said Michael Marrale, head of research, sales and trading at ITG in New York.
“At that point I thought you'd have some who step up and would want to sell the news in anticipation of a rate hike coming sooner than expected at that time, so I think people have already positioned for that.”
Investors will also monitor the situation in Ukraine after authorities there said trucks from a Russian aid convoy had crossed into Ukraine without permission, a move it described as a “direct invasion” of its territory.
The S&P 500 has risen for four straight sessions to start the week, its longest streak in two months, rallying to a record closing high of 1,992.37 on positive economic data. The benchmark index is up 1.9 percent for the week, on track for its best week in four months.
The Dow Jones industrial average fell 14.58 points or 0.09 percent, to 17,024.91, the S&P 500 lost 2.62 points or 0.13 percent, to 1,989.75 and the Nasdaq Composite added 4.88 points or 0.11 percent, to 4,536.99.
Retailers moved higher, led by a 5.9 percent advance in Ross Stores to $73.32 after the apparel and home fashion retailer posted second-quarter results. The S&P retail index gained 0.3 percent and was on track for its best week since late February.
Foot Locker climbed 2.7 percent to $53.98 after the athletic footwear and apparel retailer reported second-quarter earnings.
Aeropostale shares slumped 8.7 percent to $3.57. The teen apparel retailer reported a drop in same-store sales and a second-quarter loss a day earlier.
GameStop Corp reported that quarterly revenue surged 25 percent over the prior year, topping expectations and sending shares up 6.1 percent to $42.97.
Peregrine Semiconductor shares jumped 61.1 percent to $12.39 after Murata Electronics North America said it would buy the rest of chipmaker it does not already own for $12.50 per share.
US stocks were little changed after the Standard & Poor's 500 Index reached a record.]]> |||
New York - U.S. stocks were little changed, after the Standard & Poor’s 500 Index reached a record, as investors awaited a speech by Federal Reserve Chair Janet Yellen for clues on the timing of higher interest rates.
The S&P 500 fell less than 0.1 percent to 1,991.43 at 9:31 a.m. in New York. The benchmark gauge is within 10 points of the 2,000 milestone and is heading for a 1.9 percent weekly increase.
“With very little corporate or economic news due elsewhere, her comments are likely to have the full attention of investors,” Richard Hunter, the head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail, referring to Yellen’s speech. “More recent strength in economic data, and Fed minutes which implied that the U.S. economic recovery is becoming established, both point to a potential rate hike slightly earlier than widely expected.”
Optimism that the Fed will support a recovering economy sent the S&P 500 to an all-time closing high of 1,992.37 yesterday. Data from housing to manufacturing indicated that the world’s largest economy continues to strengthen. Yellen speaks today in Jackson Hole, Wyoming, at a Fed symposium also being attended by European Central Bank President Mario Draghi.
Minutes from the Fed’s July meeting released earlier this week reinforced the central bank’s commitment to supporting the recovery even as some policy makers indicated a willingness to raise rates sooner than anticipated.
Fed Bank of St. Louis President James Bullard said the U.S. central bank may begin tightening monetary policy earlier than officials previously expected, while Atlanta Fed President Dennis Lockhart urged more patience.
“The evidence is leading toward an earlier increase than would have been in the works earlier this year,” Bullard said in an interview yesterday with Kathleen Hays on Bloomberg Radio in Jackson Hole. “Labor markets have improved quite a bit relative to what the committee was thinking.”
Atlanta’s Lockhart, who spoke in a separate Bloomberg Radio interview yesterday, still warned of the risk of “moving prematurely and snuffing out some progress.”
Yellen has highlighted uneven progress in the labor market in making the case for further accommodation.
Draghi will also speak in Wyoming, amid mounting speculation European policy makers will enact more stimulus. A report yesterday showed Markit’s euro-area manufacturing and services indexes dropped in August. In June, the ECB introduced targeted long-term refinancing operations to improve bank lending in the non-financial private sector.
Three rounds of Fed stimulus and better-than-projected corporate earnings have helped the S&P 500 almost triple since its low in March 2009. The gauge has climbed for the past four days, the longest streak since June 20, and is heading for its biggest weekly gain since April. The S&P 500 has not had a decline of 10 percent in almost three years. It trades at 17.8 times the reported earnings of its companies, near the highest level since 2010.
The S&P 500 has rebounded 4.3 percent from a two-month low on Aug. 7, bolstered by easing tensions in Ukraine and speculation that central banks will keep interest rates low.
Equity futures slipped earlier today as tensions flared again in Eastern Europe. Trucks carrying humanitarian aid from Russia crossed the border to Ukraine, which said the move amounted to an invasion as the convoy moved without its consent. Valentyn Nalyvaychenko, the head of Ukraine’s security council, said Russia is invading under the cover of the aid trucks, according to the Interfax news service.
Emerging-market stocks headed for their second weekly gain led by technology shares.]]> |||
Emerging-market stocks headed for their second weekly gain led by technology shares on speculation the strengthening U.S. economy will boost demand for exports from developing nations. The Micex Index ended a 10-day rally.
Samsung Electronics Co. rose 1 percent as a tech gauge climbed after dropping the most in two weeks yesterday. The Shanghai Composite Index posted its longest weekly winning streak since 2012. The Micex ended its longest stretch of gains in almost nine years and the ruble weakened on concern an aid convoy will stoke more tension with Ukraine. The hryvnia slid 2.4 percent, extending this month’s biggest drop worldwide.
The MSCI Emerging Markets Index added 0.3 percent to 1,085.11 at 1:04 p.m. in London, taking gains this week to 1 percent. Data from housing to manufacturing yesterday signaled the U.S. economy is accelerating. Federal Reserve Chair Janet Yellen speaks today at a symposium in Jackson Hole, Wyoming as investors look for clues on the timing of higher interest rates.
“Decent data out of the U.S. yesterday helped external demand for emerging-market exports,” Michael Wang, a emerging- markets strategist in London at Amiya Capital LLP, said by e- mail. “The halting of the aid convoy is negative for emerging- market risk sentiment.”
All but two of 10 industry groups in the developing-nation gauge rose, led by a 1 percent advance in the information technology measure. The premium investors demand to own developing-country debt over U.S. Treasuries climbed one basis point to 281, according to JPMorgan Chase & Co. indexes.
A Bloomberg gauge tracking 20 developing-nation currencies was little changed as it headed for a 0.5 percent weekly drop. The ruble weakened 0.6 percent to 36.2240 per dollar, the largest retreat among 24 developing countries monitored by Bloomberg.
The Micex fell 1.7 percent in Moscow. Mail.Ru Group Ltd. tumbled the most in more than five months in London after the operator of a social networking site cut its full-year sales forecast amid a slowdown in advertising spending as sanctions against Russia threaten to exacerbate an economic slowdown.
The hryvnia slid to 13.55 per dollar, taking this month’s drop to 9.4 percent. Russia is invading under the cover of aid trucks, Valentyn Nalyvaychenko, the head of Ukraine’s security council, said on TV5. Ukraine said the convoy moved into the country without its consent.
The Russian gauge rallied 9.6 percent in the previous 10 days on bets a meeting between President Vladimir Putin and his Ukrainian counterpart next week will reduce tension. Declines today were “stoked by the news of the convoy entering Ukraine without permission,” Neil Shearing, the chief emerging-market economist at Capital Economics Ltd., said by phone from London.
Today’s gain boosted the 2014 advance for the MSCI Emerging Markets Index to 8.2 percent, beating the 4.7 percent increase in the MSCI World Index. The rally pushed developing-country valuations to 11.3 times projected 12-month earnings, near the highest since 2011, compared with a multiple of 15 for the MSCI World.
The South Korean won strengthened 0.6 percent, the most in more than a week, while the Malaysian ringgit and Indian rupee appreciated by at least 0.3 percent.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.1 percent, while the Shanghai Composite Index added 0.5 percent, extending gains this week to 0.6 percent, its sixth week of advances. Taiwan’s Taiex Index rose 1.4 percent, the most since Oct. 3, while Indian shares rose to a record, paced by increases in Infosys Ltd.
Gold rebounded from a two-month low as investors awaited Fed speeches.]]> |||
Gold rose in New York, rebounding from a two-month low, as investors awaited speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi today at a meeting of central bankers.
Bullion declined 1.9 percent this week as the dollar climbed to an 11-month high against the euro on signs that the U.S. is recovering while Europe’s economy falters. Data this month showed U.S. home sales rose and manufacturing accelerated while euro-area growth stalled in the second quarter.
“Relative calm has been restored to the gold market ahead of the much anticipated Fed symposium later today,” UBS AG analyst Edel Tully said in a report. “The return of physical demand likely helped gold find its floor yesterday.”
Gold for December delivery rose 0.5 percent to $1,281.60 an ounce by 7:30 a.m. on the Comex in New York on volumes that were 37 percent lower than the 100-day average for this time of day, data compiled by Bloomberg show.
The metal yesterday dropped to $1,273.40, the lowest level since June 18, as minutes of the Fed’s last meeting signaled that policy makers may raise interest rates earlier than expected. Gold for immediate delivery rose 0.3 percent to $1,280.63 an ounce in London, according to Bloomberg generic pricing.
CME Group Inc. reduced the margin requirements on Comex gold trading, cutting the minimum cash deposit for speculators 15 percent to $5,060 per 100-ounce contract at the close today.
Speculation that the U.S. central bank would cut stimulus as the economy recovered fueled a 28 percent drop in gold prices last year. Yellen and Draghi are scheduled to speak today at the Kansas City Fed’s symposium in Jackson Hole, Wyoming.
Bullion is still 6.6 percent higher this year as tensions in the Middle East and Ukraine boosted haven demand. Israel vowed to target more Hamas leaders after yesterday killing three commanders, while the U.S. said the militant Islamic State poses an “imminent threat” after American journalist James Foley was beheaded. The first trucks carrying humanitarian aid from Russia crossed the border to Ukraine.
Silver for delivery in December rose 0.4 percent to $19.565 an ounce. The metal dropped yesterday to $19.355 an ounce, the lowest since June 12, and is heading for the first weekly gain in six weeks.
Platinum for delivery in October advanced 0.4 percent to $1,424.30 an ounce. It fell as much as 1.1 percent yesterday to $1,414 an ounce, the lowest since May 1. Palladium for September delivery gained 0.4 percent to $883.
Prices fell amid downbeat Chinese data and low likelihood of supply disruptions.]]> |||
London - Oil prices fell on Friday amid downbeat Chinese manufacturing data and the low likelihood of supply disruptions in conflict-hit Iraq, Ukraine and Libya, analysts said.
US benchmark West Texas Intermediate for October delivery slid 41 cents to $93.55 a barrel.
Brent North Sea crude for October dropped 27 cents to stand at $102.36 a barrel in London deals.
Trading is “likely weighed by weaker-than-expected Chinese manufacturing data”, Fat Prophets resources analyst David Lennox told AFP.
The HSBC preliminary purchasing managers index for China's manufacturing sector slipped to 50.3 in August, down from a final reading of 51.7 in July. The figure, released Thursday, was the lowest for three months, the British banking giant said in a statement.
The indicator is a closely watched gauge of the health of the Asian economic powerhouse, with a reading above 50 indicating the sector is expanding.
“Prices are perhaps also under pressure as dealers stand on the sidelines tracking the various geopolitical crises going on right now,” Lennox said.
“The likelihood of significant disruptions is low for now,” he said.
In Iraq, the OPEC oil cartel's second-biggest producer, Islamist militants who have overrun large swathes of the country's north and west are now being pinned back by US military strikes that began on August 8.
In Libya, another OPEC member, crude exports are steadily increasing after a deal between Tripoli and rebels ended a year-long blockade of terminals.
Concerns over the prospect of a full-blown military conflict between Russia and Ukraine have also eased after multi-party talks aimed at diffusing the situation last weekend.
The dollar was steady on Friday after its strongest weekly run since March.]]> |||
London - The dollar was steady on Friday after its strongest weekly run since March and world stocks were near all-time highs as markets waited for steers from the Federal Reserve and ECB on diverging policy plans.
European shares opened barely changed and heading for their biggest weekly gain since February, while Asian markets hitched a ride on another record close for Wall Street to end the week near a six-and-half-year high.
Emerging market stocks were also stronger but investors were beginning to move to the sidelines ahead of speeches by Fed Chair Janet Yellen and ECB President Mario Draghi at the annual gathering of central bankers in Jackson Hole, Wyoming. Talk will focus on labour markets and economic prospects but traders will be listening for any clues about the timing of U.S. interest rate rises and how the ECB plans to tackle the euro zone's stubbornly low inflation.
“Everyone expects her to make another speech that the labour market isn't as rosy as the headline employment numbers suggest,” Aberdeen Asset Management portfolio manager Luke Bartholomew said.
“We are all set up for her to be dovish, so the surprise would be if she wasn't.”
With that uncertainty in mind, the dollar was hovering just below its 2014 peak against a basket of major currencies, as the euro at $1.3280 stayed just away from an 11-month low of $1.3242 struck on Thursday.
TALKING ABOUT JACKSON HOLE
Janet Yellen makes her first trip to Jackson Hole as Fed chair after U.S. data on Thursday showed home resales rose to a 10-month high in July, unemployment claims fell and a gauge of future economic activity grew solidly.
Kansas City Fed President Esther George said the time has come for higher U.S. rates, though less hawkish San Francisco Fed President John Williams said the bank should wait until next summer.
Rate hike-sensitive 2-year U.S. government bonds have seen their yields rise the most since March this week. In contrast, worries about the euro zone slipping towards deflation and near-zero growth pinned German 10-year government bond yields firmly below 1 percent on Friday.
ECB President Mario Draghi is under pressure to use his last remaining tool - printing money to buy huge amounts of bonds - to tackle near-zero inflation but he is not expected to show any renewed urgency in that regard when he speaks later.
“The odds of QE in the near-term are relatively low,” Pimco's European strategist and portfolio manager Myles Bradshaw said. “The market is thinking more about what will happen in 2015.”
MSCI's broadest index of Asia-Pacific shares outside Japan ended within a few points of a 6-1/2 year while the main emerging market index hit a three-year high. It is perhaps surprising considering the tumble it took last May and in January when U.S. rate hike talk was also top of the agenda. But stocks in China have now risen for the last six weeks and Russia stocks have been on a rebound for the last two.
In commodities trading, spot gold rose 0.2 percent to $1,279.90 an ounce, after losing 1.3 percent on Thursday as rate expectations sent it ploughing through some key support levels to a two-month low. U.S. crude was slightly higher at $93.98 a barrel, but still set to post a fifth straight weekly fall.
The sophistication, wealth and military might of Islamic State militants represent a major threat to the United States that may surpass that once posed by al Qaeda, U.S. military leaders said on Thursday. So far, however, the fighting has had little impact on oil supply.
The London Stock Exchange Group's net profits surged by nearly 50 percent in Q1.]]> |||
London - The London Stock Exchange Group's net profits surged by nearly 50 percent in the first quarter on the back of a resurgence in stock market flotations, it said on Friday.
Earnings after taxation soared to £52 million ($86 million, 65 million euros) in the three months to June, compared with £35.4
million a year earlier, the LSEG said in a results statement.
Pre-tax profits meanwhile jumped 40 percent to £83.6 million in the reporting period, while sales rallied by a fifth to £299.9
The group's performance was lifted also by clearing house unit LCH. Clearnet, in which LSEG bought a majority holding in 2012.
The company announced plans to raise £938 million from a rights issue, or sale of new shares, to help fund its $2.7-billion acquisition of US asset manager Frank Russell Co.
“We continue to make good progress, delivering a strong financial performance this quarter,” said chief executive Xavier Rolet in the earnings release.
He added: “We have seen a resurgence in the IPO (initial public offering) market with an increase in both the number of companies joining our markets and the amount of money raised.
“While the summer period is seasonally slower, our diversified business is very well positioned for further growth.”
The operator of Britain's main exchange and Italy's Borsa Italiana repeated that the number of initial public offerings (IPOs) or flotations on its markets more than doubled to 78 from 33 in the same part of last year. New issue activity continued in July and August, it added.
Shares flat in early trading as investors became cautious ahead of US Fed speech.]]> |||
Paris - European shares were flat in early trading on Friday, taking a breather following a brisk two-week rally, with investors turning cautious ahead of a speech by U.S. Federal Reserve Chair Janet Yellen.
At 0730 GMT, the FTSEurofirst 300 index of top European shares was up 0.04 percent at 1,355.66 points, after gaining 2.3 percent in the past four sessions, set to record its biggest weekly gain in six months.
Yellen is due to speak later in the day at the annual gathering of central bankers in Jackson Hole, Wyoming. Investors will be looking for any fresh signals about the timing of U.S. interest rate increases.
Minutes from the Fed's July meeting on Wednesday showed policymakers debated whether interest rates should be raised earlier given a surprisingly strong job market recovery.
The FTSEurofirst 300 has risen 4.5 percent since a low hit two weeks ago, regaining ground following a sell-off triggered in June by worries over the crisis in Ukraine.
But despite the sharp two-week rally, the index is still down 3.2 percent from a 5-1/2 year high hit in June.
“European indexes are halted by big resistance levels. At this point, investors should think about hedging their portfolios, even if the U.S. market continues to rally,” Aurel BGC chartist Gerard Sagnier said.
The euro zone's blue-chip Euro STOXX 50 index was flat, at 3,125.34 points. In the first minutes of trading, the index tested a key resistance level representing its 200-day moving average, before slightly retreating.
Around Europe, UK's FTSE 100 index was up 0.1 percent, Germany's DAX index up 0.1 percent, and France's CAC 40 down 0.1 percent.
On Wall Street on Thursday, the S&P 500 ended at a record high after a flurry of positive economic data, including existing home sales jumping to a 10-month high and initial jobless claims dropping sharply.
Shares in European banks featured among the top gainers, with Deutsche Bank up 1.5 percent, Credit Agricole up 0.9 percent and UniCredit up 1 percent.