LONDON (Alliance News) - The FTSE 100 and FTSE 250 are up for a sixth consecutive session Friday, as stocks continued to be buoyed by the European Central Bank's decision to launch a EUR60 billion a month full-blown quantitative easing programme.
ECB President Mario Draghi said Thursday the bank will start buying sovereign debt in March at a rate of EUR60 billion a month through September 2016 in a bid to revive the moribund European economy and put inflation back on track, a figure that was higher than expected. However, the bank also said it will continue until there is a "sustained adjustment in the path of inflation which is consistent with" the ECB's aim of achieving inflation rates below, but close to, 2% over the medium term, making the process effectively open-ended.
The news continues to lift stocks, and weigh on the euro.
After the ECB's move, focus in Europe now will be on Greece ahead of Sunday's snap election in the country after the Parliament failed in late December to agree on a new head of state. According to opinion polls, left-wing party Syriza is heading for a comfortable victory, and there are fears that Syriza-led coalition would try to renegotiate Greek debt and end austerity measures.
According to Bank of America Merril Lynch, some USD4.9 billion flowed out of European equities in the run-up to the ECB decision, with most of that going into the perceived safe-havens of bonds and precious metals. However, the flows reversed in the immediate run-up to the decision when it became clear the ECB was about to act, the bank said. Some USD2.3 billion flowed back into European equities, the biggest inflow since June of last year.
BAML said it has changed its euro-dollar forecast to USD1.10 by end-2015 and USD1.05 by end-2016, from USD1.20 and USD1.15, respectively
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Markets: London equity markets are broadly positive, marking a sixth session of gains, as investors welcomed the European Central Bank's decision to launch a EUR60 billion a month sovereign bond buying program. The euro fell to an 11-year low against the dollar in reaction to the ECB's monetary stimulus and on concerns ahead of Greek elections on Sunday.
US stocks are set for a marginally higher open, with stock futures indicating the DJIA and S&P 500 will open up 0.2% and the Nasdaq 100 up slightly.
FTSE 100: up 0.3% at 6,815.98
FTSE 250: up 0.3% at 16,431.67
AIM ALL-SHARE: down 0.04% at 696.24
GBP-USD: down at 1.4970
EUR-USD: down at USD1.1172
GOLD: down at USD1,295.53 an ounce
OIL (Brent): up at USD49.63 a barrel
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Top Corporate News
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Hong Kong-based conglomerate Hutchison Whampoa Ltd said it has entered into exclusive negotiations with Spanish telecoms group Telefonica SA regarding the potential acquisition of O2 UK for an indicative price of GBP9.25 billion in cash. Hutchison, which already owns Three UK, the smallest of the UK's mobile operators, said the GBP9.25 billion purchase price would be paid at completion, with a further GBP1 billion due based on the cumulative cash flow of the combined Three-O2 businesses. The timing and amount of this further payment would depend on the cash flow of the businesses, Hutchison said.
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Close Brothers's securities division is continuing to be a drag on the group, according to a first-half pre-close trading update, but the financial services group reported loan book growth in its banking division and a rise in assets under management over the course of the period. Overall, Close Brothers said it remains "confident" in the outlook for the current financial year. In a statement for the five months ended December 31, 2014, Close Brothers said that Winterflood Securities has suffered from "difficult" market conditions, with average bargains per day remaining broadly stable but income per bargain declining "significantly" due to higher market volatility and reduced investor risk appetite.
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Luxury shoemaker Jimmy Choo said revenue grew by 12% in 2014, with demand for its shoes in Asia being the main driver of growth. The British shoe company, which made its London debut late last year, said net revenue for 2014 was GBP299 million, up from GBP282 million in 2013, representing growth of 6.2% at actual currency, but 12% at constant currency rates. Retail revenue grew by 8.7% at actual rates to GBP193 million, with wholesale increased slightly by 1.9% to GBP100 million. Retail like-for-like sales grew by 5.7% at constant currency, buoyed by online.
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Carillion has signed contracts worth around GBP200 million to provide facilities management services for public sector prisons in the UK. The FTSE 250-listed construction and support services company said the award of the contracts is a confirmation of the announcement made by the UK Ministry of Justice in November last year, when Carillion was named preferred bidder on two contracts to provide a range of hard and soft facilities management services for the National Offender Management Service.
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Ultra Electronics said it is set to make a non-cash provision in its 2014 accounts after it received notice that its Oman Airport IT contract has been terminated. The company said it will start talks with the client next week to work towards a settlement and could not make any further comment at this stage.
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Spectris said it has struck a deal to buy privately-held US engineering software company ReliaSoft Corporation for USD42 million in cash. Spectris said Arizona-based ReliaSoft provides reliability engineering software, education, consulting and related services to product manufacturers and maintenance companies.
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AIM Movers
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Sable Mining shares have more than quadrupled after it said it is in talks with the Liberian government about a potential 25-year, iron ore transshipment and infrastructure development agreement that will allow the company to ship its ore from Guinea through Liberia to the port of Buchanan for export. HaiKe Chemical Group shares are up by three quarters after it said it expects to post a profit from continuing operations for 2014, as average selling prices and margins improved over the year. SpaceandPeople shares are up by a quarter after it said it expects to report full-year profit at the upper end of market expectations, boosted by "robust" trading in the last four months of the year. Miton Group is also doing well after it said it expects to pay a "good and growing dividend" for its last financial year, as it reported a rise in cash balances and said that adjusted pretax profit, which excludes amortisation, exceptional items and certain matters of taxation, is in line with expectations. Cambria Africa shares are down by a third after it said it no longer considered it was in the best interests of the company or shareholders to retain an AIM listing. Frontier Mining shares are down by a quarter after it said lower levels of production in the latter part of 2014 have led to copper sales being "insufficient to cover production costs". It said it has closed the Benkala mine for the winter, which will give the company time to hold potential partnership talks. Robinson is another faller after it warned it expects a more challenging 2015, even as revenue for 2014 is set to rise 20%.
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Other Top Economics And General
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UK retail sales increased unexpectedly in December, though at a slower rate than in November, official data showed. Retail sales volume, including automotive fuel, increased 0.4% month-over-month in December after the 1.6% rise in November, the Office for National Statistics said. Retail sales were expected to decline 0.6%. Excluding automotive fuel, retail sales advanced 0.2% versus the 1.7% increase in November. Economists had forecast sales to fall 0.7%. On an annual basis, the increase in overall sales volume slowed to 4.3% in December from 6.4% in November. The growth was forecast to ease to 3%.
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British car production increased at the fastest pace in seven years in 2014 despite challenges in some export markets, the Society of Motor Manufacturers and Traders said. Car production in 2014 climbed 1.2% from last year to 1,528,148 units in. This marked the best yearly growth since 2007. Production rose 27.1% year-on-year in December, which was the strongest December growth in a decade.
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The UK government this week published its plans to devolve more power to the Scottish parliament, including the responsibility for awarding onshore oil and gas licenses, but said it will retain powers over the North Sea and UK oil and gas receipts. In the document, the government has passed the power to award licenses for onshore oil and gas extraction to the Scottish parliament from the Secretary of State for Energy & Climate Change, who is currently Ed Davey. The government has also given the Scottish parliament the responsibility for mineral access rights for underground onshore oil and gas projects.
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British households perceived that the value of their home increased in January, but the pace of growth was the weakest in 14 months, survey figures from Markit Economics and Knight Frank showed. The Knight Frank/Markit House Price Sentiment Index fell to 58.2 In January from 59.1 in the previous month. Any figure above 50 indicates that prices are rising and the higher the figure, the steeper the increase. It was the twenty second consecutive month that the reading has been above 50.
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China's manufacturing sector contracted barely in January, the latest survey from HSBC Bank showed on Friday with a PMI score of 49.8. That beat forecasts for 49.5 and was up from 49.6 in December - although it remains below the boom-or-bust line of 50 that separates expansion from contraction.
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Saudi Arabia's King Abdullah bin Abdulaziz, who maintained strong relations with the West and joined in the fight against terrorism, has died and his brother Salman has become king. The king, whose age was believed to be 91, will be laid to rest after the noon prayer on Friday in the city of Riyadh at the Mosque of Turke al Abdullah. Following the funeral there will be a three-day period for condolences, state-run Saudi television said. The broadcaster announced that Abdullah's brother, Salman, 79, has become king. He has been crown prince and defence minister since 2012 and served as a governor of Riyadh province for almost five decades. It added that King Salman has called on the royal family's council to pay allegiance to Muqrin, the late king's half brother, as his crown prince.
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Waving the red and white flags of SYRIZA, tens of thousands of Greeks took to the streets of Athens on Thursday, declaring their determination to oust the conservative New Democracy party in favour of the anti-bailout leftists on election day. A mix of students, professionals and the elderly, overflowed from central Omonia square to hear 40-year-old SYRIZA leader Alexis Tsipras promise to upset the traditional parties that have ruled Greece for four decades. "We stand here and ask you for a clear mandate so that we can free the country from the bailout," Tsipras told supporters. Tsipras is almost certain to win Sunday's vote and will be the first ever leftist leader to be elected in Greece. Opinion polls show SYRIZA maintaining a solid lead of 4 to 5% over Prime Minister Antonis Samaras' New Democracy party.
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A senior leader of the separatists in eastern Ukraine said that the five-month old truce was over and that an offensive would be launched to secure control of the Donetsk region. "There will be no ceasefires anymore," Alexander Zakharchenko told students at Donetsk University, Russia's Interfax news agency reported. Zakharchenko also announced that his forces would retake control of the whole Donetsk region.
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Afternoon Watchlist (all times in GMT)
All Day World Economic Forum - Davos
13:30 US Chicago Fed National Activity Index
14:45 US Markit Manufacturing PMI Preliminary
15:00 US CB Leading Indicator
15:00 US Existing Home Sales
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Monday's Key UK Corporate Events
Green Dragon Gas - Operational Update
Aveva Group - Interim Management Statement
Sthree - Full Year Results
Porvair - Full Year Results
Cranswick - Q3 Trading Statement
LondonMetric Property - Interim Management Statement
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Sunday's Key Economic Events (all times in GMT)
23:50 Japan Adjusted Merchandise Trade Balance
23:50 Japan BoJ Monetary Policy Meeting Minutes
23:50 Japan Exports/Imports
Monday's Key Economic Events (all times in GMT)
All Day EU Eurogroup meeting
09:00 Germany IFO - Business Climate
09:30 UK BBA Mortgage Approvals
10:00 EU Retail Sales
14:45 US Markit PMI Composite/Services Preliminary
15:30 US Dallas Fed Manufacturing Business Index
23:50 Japan Corporate Service Price
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11 Jan 2017 09:36
