- Footsie moves moderately lower
- Bad Chinese bank loans reach 2005 high in first quarter
- Barclays and RBS flag investor concerns about Fed rate hikes
techMARK 2,730.25 -1.00%
FTSE 100 6,817.18 -0.35%
FTSE 250 15,332.97 -1.82%
Equities were continuing to gravitate lower come midday on the back of the news that in the first quarter of the year Chinese banks saw the biggest quarterly increase in non-performing loans since 2005 and ahead of further data releases on the state of US housing, due out on Friday afternoon.
"The median collection time for receivables increased to 90.4 days at the end of last year from 71.4 days in 2009 - that's close to the current average for Italy and Spain (90-100 days). We continue to be concerned about the stress in the Chinese financial market, which has already caused spreads on major banks to widen around 50-100bp since the end of last year. We remain short Australia to hedge the rising China risk," analysts at RBS explained to clients.
On Thursday global stocks moved lower across the board following the release of weaker than expected data on growth in the Eurozone's gross domestic product and the US housing market.
To take note of, and in reaction to all of the above, strategists at Barclays Research issued a note on Friday morning saying, amongst other things, that: "Judging from the rising sensitivities of US equities to Fed policy expectations, risk asset rotation [towards Europe and emerging markets as they re-accelerate] looks more likely if US inflation picks up from here, as we expect it to."
As an aside, on Thursday the Financial Times wrote about the confusion amongst market observers about just what exactly was the message which the Monetary Policy Committee had tried to convey on the previous day, with different reports and remarks from policy-makers seemingly pointing in different directions.
Nonetheless, and much as in US Treasuries last night, yields on long-term Gilts headed lower yesterday.
And then there is Ukraine
Acting as a backdrop, speaking overnight and following conversations with his counterparts from Britain, Italy, France and Germany, US Secretary of State John Kerry stated that "If Russia or its proxies disrupt the elections [the US and its allies] will impose sectoral economic sanctions as a result".
That came as Ukrainian forces successfully undertook operations against two militant bases near the towns of Slovyansk and Kramatorsk.
Intertek falls after taking hit from currency fluctuations
In UK company news, Intertek reported a 0.3 per cent rise in quarterly organic revenue as operating margins improved as a result of on-going restructuring measures. However, total revenues declined by 4.9% during the first quarter as a result of the appreciation in sterling. The inspection, product testing and certification company said it experienced strong performance of its key product-related business but weaker-than-expected activity in the energy market in the three months to the end of April 2014.
Supermarket operators Morrison and Sainsbury were seeing some buying interest for a second day. In related sector news, John Lewis reported a 15.6% year-on-year increase in its sales for the week ending on May 10th.
Coca-Cola HBC reported a drop in first quarter revenue and volumes due to the timing of Easter and foreign exchange
movements. The second largest bottler of the brands of The Coca-Cola Company said volume declined by 4% to 409.6m cases in the three months to March 28th and new sales revenue fell 7% to £1.3bn.
Keller Group reported that its overall trading in the four months to the end of April was in line with expectations in March. Although the Europe, Middle East and Africa region was behind, it said this was countered by a strong performance from its businesses in the US, with Asia and Australia on track. As such, its results for the full year remain in line with current market expectations.
Oil engineering group Lamprell has started the year well and is encouraged by the ongoing dialogue with a number of prospective clients for new projects and the recent $390m contract win with Ensco. In parallel, the firm has announced that it will pursue a rights issue with the aim of raising gross proceeds of £71.6m.
Analysts at Exane BNP Paribas upgraded their view on shares
of Dixon's Retail to 'outperform' from 'neutral'.
Morgan Stanley downgraded Evraz to 'equalweight' from 'overweight'.
FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 212.00p +3.31%
Diageo (DGE) 1,945.50p +1.89%
Sainsbury (J) (SBRY) 338.80p +1.80%
AstraZeneca (AZN) 4,792.50p +1.40%
British American Tobacco (BATS) 3,509.50p +1.24%
Tesco (TSCO) 306.25p +1.22%
Reckitt Benckiser Group (RB.) 5,020.00p +1.21%
HSBC Holdings (HSBA) 631.10p +0.98%
Unilever (ULVR) 2,713.00p +0.97%
Standard Chartered (STAN) 1,320.50p +0.96%
FTSE 100 - Fallers
Barratt Developments (BDEV) 339.60p -5.09%
Intertek Group (ITRK) 2,949.00p -4.56%
Weir Group (WEIR) 2,485.00p -4.35%
Ashtead Group (AHT) 769.00p -4.11%
easyJet (EZJ) 1,487.00p -4.06%
Sports Direct International (SPD) 700.50p -4.04%
Hargreaves Lansdown (HL.) 1,154.00p -3.91%
Anglo American (AAL) 1,553.50p -3.39%
TUI Travel (TT.) 409.60p -3.35%
IMI (IMI) 1,534.00p -3.34%
FTSE 250 - Risers
Grainger (GRI) 222.20p +3.35%
Thomas Cook Group (TCG) 160.10p +2.56%
Renishaw (RSW) 1,680.00p +1.45%
Bank of Georgia Holdings (BGEO) 2,383.00p +1.15%
Vedanta Resources (VED) 977.00p +1.14%
Countrywide (CWD) 545.00p +0.93%
Rank Group (RNK) 155.50p +0.78%
Ultra Electronics Holdings (ULE) 1,777.00p +0.68%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 521.50p +0.68%
Tate & Lyle (TATE) 692.50p +0.65%
FTSE 250 - Fallers
Evraz (EVR) 95.00p -7.14%
RPS Group (RPS) 270.60p -6.33%
Booker Group (BOK) 144.10p -5.69%
African Barrick Gold (ABG) 211.10p -5.55%
Grafton Group Units (GFTU) 528.00p -5.46%
Regus (RGU) 181.90p -4.76%
Just Retirement Group (JRG) 146.60p -4.68%
Aveva Group (AVV) 2,062.00p -4.63%
Pace (PIC) 343.40p -4.61%
Rentokil Initial (RTO) 119.10p -4.57%
FTSE TechMARK - Risers
FTSE TechMARK - Fallers
SDL (SDL) 299.00p -4.17%
Torotrak (TRK) 23.00p -3.66%
Vectura Group (VEC) 130.00p -2.26%
Sepura (SEPU) 137.00p -2.14%
Gresham Computing (GHT) 130.00p -1.89%
Dialight (DIA) 870.00p -1.58%
NCC Group (NCC) 185.25p -1.46%
Ricardo (RCDO) 680.00p -1.45%
BATM Advanced Communications Ltd. (BVC) 17.25p -1.43%
E2V Technologies (E2V) 155.75p -1.42%