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Share Views: Mike van Dulken on today's Company Results and Macro considerations


ShareCast News


FTSE 100 movers: Miners lead march up, Smiths slips on CFO exit

Fri, 19th May 2017 14:20


(ShareCast News) - London's blue chip benchmark continued its gradual recovery from the Trump-inspired panic on Wednesday, with the FTSE 100 hovering just below its all-time high.

Miners were driving the gains, as further US dollar weakness gives succour to commodity prices, with Anglo American leading the charge and Rio Tinto alongside Glencore in the top ten.

Combined with the US political instability, this was pushing US long-dated yields down and lifting precious metals, which boosted the likes of Fresnillo.

"Further US dollar weakness and worries about the Washington situation should mean that there is more upside to come here," said analyst Chris Beauchamp at IG, who was less enthusiastic about the energy.

"The market is gearing up for the OPEC meeting, which is going to go down as a make or break moment for oil prices. There is a real sense that, while the last big meeting staved off disaster, OPEC ministers threw away their chance by over-egging the chance of a fundamental shift in market dynamics. Now their task is much harder, and while oil has rallied hard over the past two weeks, latecomers could come away with burnt fingers if the cartel fails to live up to expectations."

Elsewhere stocks were lifted along with the rising tide of sentiment, with Micro Focus continuing to creep back after its big fall earlier in the month, while Next was higher after the strong ONS retail numbers the previous day.

Engineer Smiths led the fallers after chief financial officer Chris O'Shea stepped down with immediate effect. The company assured that current trading and the outlook remain in line with previous guidance.

Hikma Pharmaceuticals took a hit today when the company slightly lowered its full-year revenue forecast to a range of $2-2.1bn, from the previous guidance of $2.2bn after the US drug regulator turned down its second application for an asthma drug. The share price has gapped lower twice in 10 days and the stock is now sitting at a six-month low. Broker Numis said consensus forecasts had come down since the US decision "but will need to come down further given the increased pressure on the US generics business".

Experian was down the day after its preliminary results as analysts at Jefferies downgraded the credit checking company to 'hold' from 'buy' and cut the price target to 1,550p from 1,670p. Although increased innovation should help the group to grow at least in line with end markets, Jefferies pointed out that US credit momentum is slowing and said it is unclear whether Consumer Services can revive after more than two years of disruption.

Proeprty developers Land Securities and British Land were both downgraded to 'neutral' from 'overweight' by JP Morgan Cazenove, with not much value to look for now. Following results for the pair earlier in the week, JPM said a bearish summer Deloitte Crane Survey confirmed its concerns over future London office supply for LAND and it sees total returns challenged by a steady -3.3% decline in NAV over the period to 2021.



FTSE 100 - Risers

Anglo American (AAL) 1,095.50p 2.67%

Micro Focus International (MCRO) 2,470.00p 2.57%

ITV (ITV) 196.00p 2.08%

Next (NXT) 4,443.00p 2.04%

Smurfit Kappa Group (SKG) 2,139.00p 1.91%

Rio Tinto (RIO) 3,158.00p 1.82%

easyJet (EZJ) 1,251.00p 1.71%

Glencore (GLEN) 295.80p 1.65%

Babcock International Group (BAB) 937.50p 1.63%

Fresnillo (FRES) 1,606.00p 1.58%

FTSE 100 - Fallers

Smiths Group (SMIN) 1,584.00p -2.76%

Experian (EXPN) 1,625.00p -2.11%

Johnson Matthey (JMAT) 3,025.00p -1.79%

Land Securities Group (LAND) 1,073.00p -1.74%

Hikma Pharmaceuticals (HIK) 1,674.00p -1.53%

British Land Company (BLND) 629.50p -1.41%

Royal Mail (RMG) 428.20p -1.25%

Tesco (TSCO) 182.15p -1.01%

DCC (DCC) 7,475.00p -0.80%

Schroders (SDR) 3,101.00p -0.77%




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