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Share Price: 8,978.00
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MARKET COMMENT: UK Stocks To Join Global Sell-Off On Yellen Comment

Thu, 20th Mar 2014 07:42

LONDON (Alliance News) - UK equities are set to follow US and Asian stocks lower Thursday after comments made by Federal Reserve Chair Janet Yellen after the UK stock market close sparked fears that US interest rates may rise sooner than expected.

As had been expected, the Fed further reduced the pace of its quantitative easing programme Wednesday. It trimmed a further USD10 billion from its monthly asset-purchases, saying that its interest rate, which has been at an unprecedented low since December 2008, would likely remain near zero for a "considerable time" after the conclusion of its bond buying.

However, "it was the press conference after the initial decision which caused markets to sell-off sharply," says Michael Hewson, chief market analyst at CMC Markets.

Yellen, in her first post meeting press conference as Fed chair, said that the "considerable time" alluded to before interest rate was lifted was "hard to define", but "probably means something in the order of around six months, or that type of thing."

"Whether she intended it to be taken so literally is open to debate, but it was enough to prompt a sharp reversal, and as such we can expect to see a lower open in Europe this morning," says Hewson.

The NASDAQ Composite and S&P 500 both closed down 0.6%, while the DJIA closed down 0.7%. In Asia, the Nikkei in Tokyo has closed down 1.7%, while, ahead of the UK market open, the Hang Seng and Shanghai Composite index trade down 1.5% and 0.7%, respectively.

In the UK, both CMC Markets and IG indicate the FTSE 100 to open firmly lower at approximately 6,543 points, having closed at 6,573.13 on Wednesday.

Yellen's claims were supported by projections released after Wednesday's meeting. These showed that the vast majority of the 16 members of the rate-setting Federal Open Market Committee expects the first hike in interest rates to occur in 2015. One expects the benchmark rate to be raised before the end of 2014, while two forecast the increase only in 2016.

The central bank also altered its forward guidance on interest rates, following the example set by the Bank of England, dropping its 6.5% unemployment target in favour of a broader range of indicators.

In the forex market, the dollar shot higher in the wake of the comments, pushing to multi-day highs against the pound and the euro. Prior to the UK equity market open, sterling trades at USD1.6544, while the euro trades at USD1.3835.

In data just released, Germany's producer price index has recorded its seventh successive monthly decline.

The industrial producer price index decreased 0.9% in February from the same month of last year, the Federal Statistical Office said. This followed a 1.1% contraction in January. Month-on-month, producer prices held steady in February, after dropping 0.1% in the beginning of the year. Expectations were for a 0.1% increase.

Still to come in the data calendar, the UK CBI industrial trends survey is released at 1100 GMT. In the US, initial and continuing jobless claims data are released at 1230 GMT, ahead of existing home sales data and the Philadelphia Fed manufacturing survey at 1400 GMT. US bank stress test results are released at 2030 GMT.

In the corporate calendar, retailers Next and Ted Baker have been joined by Savills, Premier Farnell, Ophir Energy and UK Commercial Property Trust in releasing full-year results for 2013. FTSE 100-listed United Utilities has released a trading statement, while Crest Nicholson has released an interim management statement.

By James Kemp; jameskemp@alliancenews.com; @jamespkemp

Copyright 2014 Alliance News Limited. All Rights Reserved.

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1 May 2024 16:42

London close: Stocks fall ahead of US Fed decision

(Sharecast News) - London markets closed lower on Wednesday, as investors digested the latest UK manufacturing data and anticipated an impending policy announcement from the US Federal Reserve.

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1 May 2024 08:57

LONDON MARKET OPEN: FTSE 100 shakes off New York slump before Fed

(Alliance News) - Stock prices in London opened mixed on Wednesday, with the FTSE 100 brushing off some pre-Federal Reserve decision trepidation to record an early rise, while the dollar climbed on the expectation that Jerome Powell will sound hawkish in his press conference later.

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1 May 2024 08:54

TOP NEWS: Next first-quarter beats forecast and backs annual outlook

(Alliance News) - Next PLC on Wednesday said sales in its first quarter topped its forecast, and it maintained annual expectations but predicted a "weaker" second-quarter ahead.

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1 May 2024 08:27

Britain's Next keeps profit guidance after first-quarter sales rise

First-quarter full price sales up 5.7%

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1 May 2024 07:46

LONDON BRIEFING: GSK ups outlook; Next first-quarter beats forecast

(Alliance News) - Equities in London are called to open flat on Wednesday, ahead of the latest Federal Reserve interest rate decision, while a host of financial markets in mainland Europe and beyond are closed for public holidays.

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1 May 2024 07:04

Next warns on Q2 but holds guidance as first-quarter sales beat estimates

(Sharecast News) - UK fashion retailer Next said first-quarter sales came in ahead of forecasts and held guidance for the full year but warned that the next three months would be weaker due to wet spring weather.

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24 Apr 2024 14:19

UK earnings, trading statements calendar - next 7 days

Thursday 25 April 
Aquila European Renewables PLCFull Year Results
Argo Blockchain PLCFull Year Results
AstraZeneca PLCQ1 Results
Barclays PLCQ1 Results
Checkit PLCFull Year Results
Coca-Cola Europacific Partners PLCTrading Statement
Destiny Pharma PLCFull Year Results
Dillistone Group PLCFull Year Results
Focusrite PLCHalf Year Results
Gem Diamonds LtdTrading Statement
Hikma Pharmaceuticals PLCTrading Statement
Hummingbird Resources PLCTrading Statement
Ibstock PLCTrading Statement
Inchcape PLCTrading Statement
J Sainsbury PLCFull Year Results
London Stock Exchange Group PLCQ1 Results
Persimmon PLCTrading Statement
Pinewood Technologies Group PLCFull Year Results
PPHE Hotel Group LtdTrading Statement
PureTech Health PLCFull Year Results
Relx PLCTrading Statement
Renewi PLCTrading Statement
Schroders PLCQ1 Results
Skillcast Group PLCFull Year Results
Travis Perkins PLCTrading Statement
Trifast PLCTrading Statement
Unilever PLCQ1 Results
WAG Payment Solutions PLCTrading Statement
Weir Group PLCTrading Statement
WH Smith PLCHalf Year Results
WPP PLCTrading Statement
Zinc Media Group PLCFull Year Results
Friday 26 April 
Facilities by ADF PLCFull Year Results
Kingspan Group PLCTrading Statement
Loungers PLCTrading Statement
NatWest Group PLC Q1 Results
Pearson PLCTrading Statement
Record PLCTrading Statement
Smurfit Kappa Group PLCTrading Statement
Taylor Maritime Investments LtdTrading Statement
Monday 29 April 
Beazley PLCTrading Statement
Biome Technologies PLCFull Year Results
Christie Group PLCFull Year Results
Gresham House Energy Storage Fund PLCFull Year Results
Gresham Technologies PLCFull Year Results
Jadestone Energy PLCFull Year Results
Oxford BioMedica PLCFull Year Results
SpaceandPeople PLCFull Year Results
Tuesday 30 April 
Avacta Group PLCFull Year Results
Card Factory PLCFull Year Results
Capital & Regional PLCFull Year Results
Close Brothers Group PLCTrading Statement
Coca-Cola HBC AGTrading Statement
Elementis PLCTrading Statement
essensys PLCHalf Year Results
Fadel Partners IncFull Year Results
Glencore PLCTrading Statement
Hargreaves Lansdown PLC Trading Statement
Howden Joinery PLCTrading Statement
HSBC Holdings PLCQ1 Results
Kelso Group PLCFull Year Results
Northcoders Group PLCFull Year Results
Phoenix Spree Deutschland LtdFull Year Results
RBG Holdings PLCFull Year Results
Rotork PLCTrading Statement
Safestore Holdings PLCHalf Year Results
Shield Therapeutics PLCFull Year Results
St James's Place PLCTrading Statement
Strip Tinning Holdings PLCFull Year Results
Whitbread PLCFull Year Results
Wednesday 1 May 
Computacenter PLCTrading Statement
GSK PLCQ1 Results
Haleon PLCTrading Statement
HSS Hire Group PLCFull Year Results
Intelligent Ultrasound Group PLCFull Year Results
Maintel Holdings PLCFull Year Results
Next PLCTrading Statement
Smith & Nephew PLCTrading Statement
  
Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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LONDON MARKET CLOSE: New record close for FTSE 100 as war fears ease

(Alliance News) - London's FTSE 100 surged on Monday, with blue-chip equities supported by an easing of geopolitical worry, and hope that the Bank of England is getting a handle on UK inflation.

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London close: Stocks jump on weaker sterling, easing geopolitics

(Sharecast News) - London's financial markets closed in the green on Monday, with the top-flight index remaining near record highs by the close.

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LONDON BROKER RATINGS: Jefferies raises B&M to 'hold'

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LONDON MARKET OPEN: Stocks mixed as UK data douses BoE cut hope

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9 Apr 2024 13:09

PRESS: Frasers and Next eye buying Ted Baker retail stores - Times

(Alliance News) - Next PLC and Frasers Group PLC are sizing up buying Ted Baker's European retail division, The Times reported on Tuesday.

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Frasers, Next interested in Ted Baker's European retail arm - report

(Sharecast News) - Mike Ashley's Frasers Group and Next have reportedly expressed an interest in purchasing Ted Baker's stricken European retail arm.

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LONDON BROKER RATINGS: RBC resumes Direct Line at 'sector perform'

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