Market Snapshot
Appetite for risk was strong and demand for equities high on European markets today amidst increased confidence that central bank activity will boost economic growth. Subsequent prospects for the demand outlook drove metal prices to new highs.
Europe’s economy grew 1% in the three months through June, in line with expectations, though on a country-by-country basis there are still huge discrepancies, statistics from the EU showed today. Meanwhile, the OECD announced it estimates combined growth for the 33-member region was 0.9% in the second quarter versus its previous estimate of 0.7%.
Ahead of the Bank of England’s rate decision tomorrow, the British Retail Consortium’s retail price index indicated marginal inflation in September compared to August. With higher oil and wheat costs, food prices in the UK are now at a 15-month high, but weak demand may curb further inflationary pressures.
At midday today, the FTSE 100 gained 0.7% to 5,675 points, its highest level since late April. The FTSE 250 added 0.6% to 10,747 points. Miners were on top as metal prices soared and gold reached a new record high of $1,346 per ounce.
Wall Street futures were upbeat in New York. Two employment figures are due from the US today – a report on private-sector jobs from payroll processing firm ADP and outplacement company Challenger, Gray & Christmas’ planned job cuts.
Market Risers
Antofagasta (ANTO), Anglo American (AAL), Xstrata (XTA), up 4.1-3.2%: Miners gain on growth expectations and high metal prices.
British Airways (BAY), up 3.8%: Yesterday reported first passenger traffic increase since February.
easyJet (EZJ), up 10%: Expects annual earnings to beat guidance.
Market Fallers
Sainsbury (SBRY), down 1.1%: Profit-taking after better-than-expected trading update. Analysts point to shares as overvalued due to M&A speculation.
Admiral Group (ADM) down 4.3%, Kingfisher (KGF), down 1.7%: Lose dividend appeal as shares trade ex-dividend.
TUI Travel (TT.), down 2.3%: Negative broker sentiment
Autonomy Corporation (AU), down 13.3%: Warns that full-year revenue will be around 3% below market expectations.