News Column

MARKET COMMENT: UK Stocks Touch Higher, Wall Street Pointed Up

August 12, 2014



LONDON (Alliance News) - UK markets are trading marginally higher after recovering from an early fall, and early indications suggest that Wall Street will start higher.



Equity markets in Europe have been hit by weak economic confidence survey results in Germany and Europe, but that failed to weigh on the London markets.



The ZEW survey for German economic sentiment came in much lower than economists' expectations at 8.6, significantly missing the consensus of 18.2. Similarly, the European ZEW economic sentiment survey fell considerably below the 41.3 consensus at 23.7. These readings partly reflect investor concerns about how the tensions with Russia over the situation in Ukraine will impact the large European economies.



The results caused the DAX to drop by half a percent, although the index has since recovered marginally. The German index was down 0.4% mid-morning, with the CAC 40 in Paris down by the same amount.



However, the FTSE 100 is fractionally higher at 6,635.9, the FTSE 250 is up 0.3% at 15,507.3 and the AIM All-Share index is up 0.3% at 755.5.



The Euro took a hit amid the ZEW survey results, and is down against the US Dollar at 1.3343.



The top gainer in the FTSE 100 is Prudential, after it increased its dividend payout by 15% to 11.19 pence a share as it reported a 7% increase in operating profit. It took a hit from currency movements, but still made a GBP1.52 billion operating profit in the six months ended June 30, compared with GBP1.42 billion in the corresponding period last year. The stock is up 2.2% at 1,368p.



Hargreaves Lansdown is the FTSE 100's biggest faller after UBS downgraded it to Sell, from Hold, with a price target of 850p. UBS believes that the market "significantly overestimates" the potential for new business as the boost it received from the retail distribution review fades. The company's shares are down 2.7% at 1,053p.



Just Eat is the leading riser of the FTSE 250 after it reported pretax profit of GBP8.6 million for the six months to June 30, up from GBP3.1 million a year earlier, buoyed by a 58% rise in revenue to GBP69.8 million, from GBP44.1 million. The growth was driven by orders from mobile devices following the launch of its iPad app in the UK. Just Eat shares are trading up 11% at 243.63p.



Serco Group is up 4.5% to 343.6p, after new Chief Executive Rupert Soames hired former Aggreko colleague Angus Cockburn as the company's new chief financial officer. Cockburn is interim CEO at Aggreko, but had already told the temporary power company that he didn't want the job permanently and was seeking fresh challenges. He was Aggreko's CFO for many years under Soames.



The economic calendar remains relatively quiet for the rest of Tuesday, with the US National Federation of Independent Business' Business Optimism index due at 1230 BST - the expectation is for a reading of 95.3, up from the previous result of 95.0 - and the Johnson Redbook Index of retail sales set to be released at 1355 BST.



Currently, US futures indicate that Wall Street is set to open 0.2% higher.



By Neil Thakrar; neilthakrar@alliancenews.com






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Source: Alliance News


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