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Market Briefing - UK markets finished in positive territory yesterday, amid weakness in Pound after reports indicated that Scotland could call for second referendum

Published: 08:16 28 Feb 2017 GMT

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UK Market Snapshot

UK markets finished in positive territory yesterday, amid weakness in Pound after reports indicated that Scotland could call for second referendum. Bunzl climbed 3.4%, after the company reported a jump in its pre-tax profit for 2016 boosted by acquisitions and organic growth. Persimmon added 0.3%, after the housebuilder posted better than expected revenue and adjusted pre-tax profit in 2016 as it sold houses at higher prices and bought cheaper land. Bucking the trend, insurers, Admiral Group and Direct Line Insurance Group tumbled 2.5% and 7.2%, respectively, after news indicated that cut in the discount rate used to calculate the amount to be paid for personal injury compensation claims would increase their payout to claimants. London Stock Exchange Group declined 1.1%, after the company ended its planned merger with Deutsche Boerse. The FTSE 100 advanced 0.1%, to close at 7,253.0, while the FTSE 250 rose 0.4%, to settle at 18,671.1.

US Market Snapshot

US markets closed higher yesterday, with the DJIA index posting twelfth straight record close ahead of the President Donald Trump’s speech scheduled later today. La Jolla Pharmaceutical rallied 76.8%, after positive results were announced by the drugmaker from a phase 3 trial of its hypotension treatment. Sotheby’s surged 15.7%, after its earnings for the fourth quarter surpassed analysts’ expectations. Tegna climbed 3.5%, after the company reported upbeat earnings for the fourth quarter. Boeing, Lockheed Martin and Northrop Grumman added 1.1%, 1.3% and 1.5%, respectively, after Donald Trump stated that he would include 10.0% increase in defence spending in his first budget proposal. Energy stocks, Exxon Mobil and Chevron edged 0.6% and 1.5% up, respectively, amid higher crude oil prices. The S&P 500 gained 0.1%, to settle at 2,369.8. The DJIA rose 0.1%, to settle at 20,837.4, while the NASDAQ advanced 0.3%, to close at 5,861.9.

Europe Market Snapshot

Other European markets ended mostly in negative territory yesterday. PostNL plunged 7.4%, after the company posted lower than expected revenue for the fourth quarter due to a decrease in its mail volumes in Netherlands. Deutsche Borse declined 2.5%, after the London Stock Exchange Group ended its proposed merger with the former stating that it is unlikely to be approved by the European Commission. Total dropped 1.0%, after the oil major agreed to sell its stakes and transfer operatorship in various mature assets in Gabon to Perenco. On the flipside, Deutsche Bank advanced 1.9%, after the lender cut its 2016 bonus pool by almost 80.0%. The FTSEurofirst 300 index declined 0.2%, to close at 1,456.5. Among other European markets, the German DAX Xetra 30 rose 0.2%, to close at 11,822.7, while the French CAC-40 marginally slipped, to settle at 4,845.2.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning, tracking overnight gains in US equities. In Japan, exporters, Honda Motor, Panasonic and Sony have advanced 1.1%, 1.2% and 1.6%, respectively. Takata has gained 0.7%. The company yesterday formally pleaded guilty to fraud and agreed to pay $1.0 billion in penalties for concealing a deadly defect in millions of its air bags. In Hong Kong, oil giants, CNOOC, China Petroleum & Chemical and PetroChina have declined 0.2%, 0.5% and 0.7%, respectively. In South Korea, index majors, Samsung Electronics, POSCO and SK Hynix have climbed 1.1%, 2.0% and 3.0%, respectively. The Nikkei 225 index is trading 0.7% higher at 19.250.4. The Hang Seng index is trading 0.1% down at 23,910.5, while the Kospi index is trading 0.4% up at 2,093.6.

Key Corporate Announcements Today

AGMs

Elegant Hotels Group, Sage Group, Ganapati

EGMs

Fondul Proprietatea S.A. GDR (Reg S)

Final Dividend Payment Date

Chrysalis VCT, Polar Capital Global Financials Trust, Renew Holdings, TUI AG Reg Shs (DI), Watkin Jones

Interim Dividend Payment Date

Albion Enterprise VCT, Bankers Inv Trust, City Natural Resources High Yield Trust, CQS New City High Yield Fund Limited, Diverse Income Trust (The), Ecofin Global Utilities and Infrastructure Trust, Edinburgh Inv Trust, Ediston Property Investment Company, F&C Commercial Property Trust Ltd., Fair Oaks Income Fund Limited, Henderson Far East Income Ltd., Henderson International Income Trust, London & St lawrence Inv Co., NB Private Equity Partners Ltd., Polar Capital Global Healthcare Growth & Income Trust, TwentyFour Select Monthly Income Fund Limited, UK Commercial Property Trust

Quarterly Payment Date

City of London Inv Trust, Picton Property Income Ltd

Trading Announcements

Babcock International Group, OPG Power Ventures, Oxford Immunotec Global

Key Corporate Announcements for Tomorrow

AGMs

Aberforth Smaller Companies Trust, Ediston Property Investment Company

EGMs

ICG-Longbow

Quarterly Payment Date

Toro Limited

Quarterly Ex-Dividend Date

Bank of America Corp.

Trading Announcements

Inchcape

Key Economic News

UK consumer confidence dropped in February

In February, the consumer confidence in the UK recorded a drop to -6.00, compared to a level of -5.00 in the previous month. Markets were expecting the consumer confidence to drop to a level of -6.00.

UK business barometer advanced in February

The business barometer recorded a rise to 40.00 in February, in the UK. The business barometer had registered a reading of 29.00 in the prior month.

Euro-zone industrial confidence index recorded a rise in February

The industrial confidence index registered a rise to 1.30 in February, in the Euro-zone, compared to market expectations of a rise to 1.00. In the prior month, the industrial confidence index had recorded a reading of 0.80.

Euro-zone three-month average of M3 money supply advanced in the November-January 2017 period

On a YoY basis, the three-month average of M3 money supply recorded a rise of 5.00% in the November-January 2017 period, in the Euro-zone. The three-month average of M3 money supply had risen 4.80% in the October-December 2016 period.

Euro-zone private sector loans rose in January

Private sector loans rose 2.20% on an annual basis in the Euro-zone, in January. In the previous month, private sector loans had risen 2.00%.

Euro-zone consumer confidence index registered a drop in February

The final consumer confidence index in the Euro-zone registered a drop to -6.20 in February, compared to a revised level of -4.80 in the prior month. Market anticipation was for the consumer confidence index to fall to a level of. The preliminary figures had also indicated a fall to -6.20.

Euro-zone M3 money supply rose more than expected in January

M3 money supply in the Euro-zone recorded a rise of 4.90% in January on a YoY basis, compared to an advance of 5.00% in the prior month. Market anticipation was for M3 money supply to rise 4.80%.

Euro-zone business climate indicator climbed in February

In February, the business climate indicator in the Euro-zone registered a rise to 0.82, compared to a revised level of 0.76 in the previous month. Market expectation was for the business climate indicator to climb to 0.79.

Euro-zone services sentiment indicator rose in February

Compared to a revised level of 12.80 in the previous month the services sentiment indicator climbed to 13.80 in February, in the Euro-zone. Markets were anticipating the services sentiment indicator to climb to 13.30.

Euro-zone economic sentiment indicator advanced in February

The economic sentiment indicator advanced to 108.00 in February, in the Euro-zone, compared to a level of 107.90 in the previous month. Market expectation was for the economic sentiment indicator to rise to 108.10.

Spanish CPI dropped more than expected in February

On a monthly basis, the flash consumer price index (CPI) in Spain fell 0.30% in February, more than market expectations for a drop of 0.20%. In the previous month, the CPI had fallen 0.50%.

Spanish CPI rose less than expected in February

In Spain, the preliminary CPI recorded a rise of 3.00% in February on an annual basis, compared to a similar rise in the previous month. Market anticipation was for the CPI to rise 3.20%.

Spanish HICP index dropped as expected in February

The preliminary harmonised consumer price (HICP) index registered a drop of 0.30% in Spain on a MoM basis in February, meeting market expectations. The HICP index had recorded a drop of 1.00% in the prior month.

Spanish HICP index advanced less than expected in February

In February, the flash HICP index rose 3.00% in Spain on a YoY basis, compared to a rise of 2.90% in the previous month. Markets were anticipating HICP index to advance 3.10%.

US Dallas Fed manufacturing business index surprisingly climbed in February

In February, the Dallas Fed manufacturing business index in the US rose unexpectedly to a level of 24.50, compared to a level of 22.10 in the prior month. Market anticipation was for the Dallas Fed manufacturing business index to fall to 19.40.

US durable goods orders (ex transportation) unexpectedly dropped in January

On a monthly basis, the preliminary durable goods orders (ex transportation) unexpectedly dropped 0.20% in January, in the US, less than market expectations for an advance of 0.50%. Durable goods orders (ex transportation) had advanced 0.50% in the prior month.

US pending home sales climbed in January

Pending home sales rose 2.70% in the US on an annual basis, in January. In the previous month, pending home sales had registered a drop of 2.00%.

US durable goods orders advanced more than expected in January

In January, the flash durable goods orders in the US recorded a rise of 1.80% on a monthly basis, higher than market expectations for a rise of 1.60%. In the prior month, durable goods orders had dropped 0.50%.

US non-defense capital goods orders (ex aircraft) recorded an unexpected drop in January

In January, on a monthly basis, the flash non-defense capital goods orders (ex aircraft) unexpectedly fell 0.40% in the US, less than market expectations for a rise of 0.50%. In the previous month, the non-defense capital goods orders (ex aircraft) had climbed 0.70%.

US non-defense capital goods shipments (ex aircraft) unexpectedly slid in January

The flash non-defense capital goods shipments (ex aircraft) in the US unexpectedly dropped 0.60% on a MoM basis in January, compared to an advance of 1.00% in the previous month. Markets were anticipating the non-defense capital goods shipments (ex aircraft) to climb 0.20%.

Japanese vehicle production rose in January

Vehicle production in Japan climbed 3.80% on an annual basis, in January. Vehicle production had risen 4.20% in the previous month.

Japanese large retailer's sales dropped more than expected in January

In January, large retailer's sales fell 1.10% in Japan on a monthly basis, compared to a fall of 1.30% in the prior month. Markets were anticipating large retailer's sales to fall 1.00%.

Japanese industrial production rose less than expected in January

On an annual basis, in Japan, the flash industrial production registered a rise of 3.20% in January, less than market expectations for a rise of 4.40%. In the previous month, industrial production had registered a similar rise.

Japanese retail trade rose as expected in January

Retail trade advanced 1.00% in Japan on a YoY basis in January, compared to a revised advance of 0.70% in the previous month. Market anticipation was for retail trade to advance 1.00%.

Japanese retail trade rose more than expected in January

On a monthly basis, retail trade registered a rise of 0.50% in January, in Japan, compared to a revised drop of 1.60% in the prior month. Markets were anticipating retail trade to rise 0.30%.

Japanese industrial production unexpectedly slid in January

In January, on a MoM basis, the preliminary industrial production unexpectedly fell 0.80% in Japan, less than market expectations for a rise of 0.40%. Industrial production had climbed 0.70% in the previous month.

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