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Market Briefing - UK markets ended in the green yesterday, boosted by a rally in housebuilders and travel stocks

Published: 08:34 03 Oct 2017 BST

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UK Market Snapshot

UK markets ended in the green yesterday, boosted by a rally in housebuilders and travel stocks. International Consolidated Airlines Group, Wizz Air Holdings and easyJet climbed 2.4%, 4.9% and 5.2%, respectively, on the back of news that Monarch Airlines went insolvent and had cancelled all flights and vacations booked through the company. Homebuilder, Taylor Wimpey added 2.1%, while its peers, Persimmon and Barratt Developments gained 4.2% each, after UK Prime Minister, Theresa May, promised an additional £10.0 billion funding to help people buy new homes. Other travel stocks, InterContinental Hotels Group, Thomas Cook Group and TUI advanced 1.0%, 1.2% and 1.5%, respectively. Bucking the trend, NEX Group tumbled 5.6%, after the company warned that its profitability at its post-trade business would be hurt due to extra spending on redesigning the operations. The FTSE 100 advanced 0.9%, to close at 7,438.8, while the FTSE 250 rose 0.4%, to settle at 19,957.1.

US Market Snapshot

US markets finished higher yesterday, with the trifecta of indices closing at their record high levels following gains in healthcare and financial sector stocks. Johnson & Johnson and Gilead Sciences advanced 0.9% and 3.1%, respectively. Financial firms, JPMorgan Chase, Citigroup and Morgan Stanley gained 1.4%, 1.5% and 1.6%, respectively. Gunmakers, Vista Outdoor, American Outdoor Brands and Sturm, Ruger & Co. climbed 2.4%, 3.2% and 3.5%, respectively. Walt Disney advanced 1.3%, after it reached a tentative programming deal with cable operator, Altice USA, up 0.8%, to keep ESPN and other networks on the air for millions of subscribers in the New York area. On the flipside, MGM Resorts International dropped 5.6%, in the wake of a mass shooting at the company’s Mandalay Bay property in Las Vegas. The S&P 500 gained 0.4%, to settle at 2,529.1. The DJIA rose 0.7%, to settle at 22,557.6, while the NASDAQ advanced 0.3%, to close at 6,516.7.

Europe Market Snapshot

Other European markets finished in positive territory yesterday, as the Euro weakened against its peers following a violent independence referendum in Catalonia during the weekend. Deutsche Lufthansa and Ryanair Holdings climbed 3.4% and 3.5%, respectively, amid news that Monarch Airlines had been placed into administration. Healthcare firms, Lonza Group and Sonova Holding advanced 1.5% and 1.7%, respectively. On the losing side, Societe BIC plunged 9.9%, after the company trimmed its sales outlook for 2017. Spanish lenders, Banco Santander, CaixaBank and Banco de Sabadell declined 1.6%, 4.4% and 4.5%, respectively. Energy giants, Eni and TOTAL slipped 0.2% and 0.5%, respectively, tracking losses in crude oil prices. The FTSEurofirst 300 index gained 0.5%, to close at 1,532.5. Among other European markets, the German DAX Xetra 30 rose 0.6%, to close at 12,902.7, while the French CAC-40 advanced 0.4%, to settle at 5,350.4.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning, tracking overnight strength on Wall Street. In Japan, Asatsu-DK has rallied 19.1%, after Bain Capital launched a ¥152.0 billion tender offer for the former. Auto exporters, Toyota Motor, Honda Motor and Mazda Motor have advanced 0.5%, 1.2% and 1.5%, respectively, amid a weaker Japanese Yen. On the contrary, energy majors, Japan Petroleum Exploration and Inpex have declined 1.8% and 2.0%, respectively, tracking losses in crude oil prices. In Hong Kong, Geely Automobile Holdings has surged 9.8%, after a broker upgraded its rating on the stock to ‘Overweight’ and doubled its target price to HK$30.0. Lenders, China Construction Bank and Industrial and Commercial Bank of China have jumped 5.3% and 5.5%, respectively. In South Korea, markets are closed today on account of a public holiday. The Nikkei 225 index is trading 0.8% higher at 20,558.2, while, the Hang Seng index is trading 1.6% up at 28,000.8.

Key Corporate Announcements Today

AGMs

Hargreaves Services, Provexis

Final Dividend Payment Date

WYG

Interim Dividend Payment Date

Arrow Global Group, Croda International, Globaldata, Greencore Group, Jardine Lloyd Thompson Group, Rathbone Brothers

Quarterly Payment Date

Honeywell International Inc.

Trading Announcements

Electrocomponents, Greggs, ITE Group

Key Corporate Announcements for Tomorrow

AGMs

AdEPT Telecom, Amedeo Air Four Plus Limited, Goodwin plc

Final Dividend Payment Date

Gateley (Holdings), Stagecoach Group

Interim Dividend Payment Date

Savills

Trading Announcements

Avacta Group, Topps Tiles

Commodity, Currency & Bitcoin

Commodity

At 0330GMT today, Brent Crude Oil one-month futures contract is trading 0.43% or $0.24 lower at $55.88 per barrel, ahead of the American Petroleum Institute’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract declined 1.18% or $0.67, to settle at $56.12 per barrel, extending its losses for a fifth consecutive session, amid signs of rising global crude oil production.

At 0330GMT today, Gold futures contract is trading marginally or $0.30 lower at $1272.40 per ounce. Yesterday, the contract declined 0.69% or $8.80, to settle at $1272.70 per ounce, as the greenback strengthened against its peers and as the US equity markets climbed to their record high levels.

Currency

At 0330GMT today, the EUR is trading 0.20% lower against the USD at $1.1710, ahead of the Euro-zone’s producer price index (PPI) data for August, slated to release in a few hours. Yesterday, the EUR weakened 0.69% versus the USD, to close at $1.1733. Meanwhile, the Euro-zone’s Markit manufacturing PMI rose to its six and a half year high level in September, despite missing the flash estimate. Also, the Euro-zone’s unemployment rate remained unchanged in August.

construction PMI data for September, scheduled to be released today. Yesterday, the GBP declined 0.91% versus the USD, to close at $1.3276, after UK’s manufacturing sector grew at a slower than expected pace in September. The US Dollar gained against its peers after data on the nation’s manufacturing activity for September painted a positive picture of the American economy.

Bitcoin

At 0330GMT today, BTC is trading 0.32% higher against the USD at $4411.25. Yesterday, BTC advanced 0.23% against the USD to close at $4397.18. In a major development, Russia’s Ministry of Finance has considered including cryptocurrency to the country’s financial literacy strategy. Additionally, news emerged that the investment banking giant, Goldman Sachs Group is planning to launch a dedicated Bitcoin trading operation.

Key Economic News

UK manufacturing PMI fell in September

Compared to a revised level of 56.70 in the previous month the manufacturing PMI in the UK recorded a drop to 55.90 in September. Market expectation was for the manufacturing PMI to fall to a level of 56.20.

Euro-zone unemployment rate steadied in August

In August, the unemployment rate remained steady at a level of 9.10% in the Euro-zone, compared to market expectations of a drop to a level of 9.00%.

Euro-zone manufacturing PMI climbed in September

In September, the final manufacturing PMI in the Euro-zone advanced to 58.10, compared to a reading of 57.40 in the previous month. The preliminary figures had recorded a rise to 58.20. Market expectation was for the manufacturing PMI to climb to 58.20.

German manufacturing PMI climbed in September

In September, the final manufacturing PMI registered a rise to 60.60 in Germany, at par with market expectations. The preliminary figures had also recorded a rise to 60.60. In the previous month, manufacturing PMI had registered a level of 59.30.

French manufacturing PMI advanced in September

The final manufacturing PMI advanced to 56.10 in France, in September, higher than market expectations of an advance to 56.00. Manufacturing PMI had recorded a reading of 55.80 in the previous month. The preliminary figures had indicated a rise to 56.00.

Italian manufacturing PMI remained flat in September

The manufacturing PMI in Italy remained flat at a level of 56.30 in September. Market anticipation was for the manufacturing PMI to climb to a level of 56.80.

Italian unemployment rate fell in August

In Italy, unemployment rate registered a drop to 11.20% in August, compared to a level of 11.30% in the previous month. Market anticipation was for unemployment rate to fall to a level of 11.20%.

Spanish manufacturing PMI advanced in September

The manufacturing PMI climbed to 54.30 in September, in Spain, compared to a reading of 52.40 in the prior month. Markets were expecting the manufacturing PMI to climb to 53.00.

Swiss real retail sales declined in August

In August, on a YoY basis, real retail sales slid 0.20% in Switzerland. In the prior month, real retail sales had recorded a revised unchanged reading.

Swiss SVME manufacturing PMI unexpectedly climbed in September

In September, the SVME manufacturing PMI in Switzerland recorded an unexpected rise to a level of 61.70, compared to market expectations of a fall to a level of 60.50. The SVME manufacturing PMI had registered a reading of 61.20 in the prior month.

US ISM backlog orders advanced in September

In September, ISM backlog orders registered a rise to 58.00 in the US. ISM backlog orders had recorded a level of 57.50 in the prior month.

US ISM new orders rose in September

ISM new orders rose to a level of 64.60 in September, in the US. ISM new orders had recorded a reading of 60.30 in the prior month.

US ISM manufacturing activity index unexpectedly advanced in September

In September, the ISM manufacturing activity index in the US registered an unexpected rise to 60.80, compared to a reading of 58.80 in the previous month. Market expectation was for the ISM manufacturing activity index to ease to 58.10.

US construction spending advanced more than expected in August

On a MoM basis, construction spending in the US registered a rise of 0.50% in August, more than market expectations for an advance of 0.40%. Construction spending had fallen by a revised 1.20% in the prior month.

US ISM production climbed in September

ISM production advanced to 62.20 in September, in the US. ISM production had recorded a level of 61.00 in the previous month.

US ISM inventories slid in September

ISM inventories recorded a drop to 52.50 in September, in the US, compared to a level of 55.50 in the previous month.

US Markit manufacturing PMI rose in September

Compared to a level of 52.80 in the previous month, the final Markit manufacturing PMI in the US registered a rise to 53.10 in September. The preliminary figures had recorded a rise to 53.00. Markets were anticipating the Markit manufacturing PMI to climb to 53.00.

US ISM prices paid index rose in September

The ISM prices paid index in the US rose to a level of 71.50 in September, compared to a level of 62.00 in the previous month. Markets were anticipating the ISM prices paid index to rise to a level of 63.00.

Japanese vehicle sales rose in September

In Japan, vehicle sales rose 0.40% on a YoY basis, in September. Vehicle sales had registered a rise of 4.70% in the previous month.

Japanese monetary base advanced less than expected in September

In September, on a YoY basis, the monetary base in Japan registered a rise of 15.60%, lower than market expectations for an advance of 16.70%. In the prior month, the monetary base had climbed 16.30%.

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