UK/Euro Financial Market Daily Morning Briefing 28-03-2014

London open: Miners rise on Chinese stimulus hopes, insurers drop

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INTERIMS
Imperial Innovations Group

INTERIM DIVIDEND PAYMENT DATE
Clinigen Group, Downing One VCT , Foresight 3 VCT, Genus, Ruffer Investment Company Ltd Red PTG Pref Shares

QUARTERLY PAYMENT DATE
Barclays, BP

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
Business Climate Indicator (EU) (10:00)
Economic Sentiment Indicator (EU) (10:00)
U. of Michigan Confidence (Final) (US) (13:55)
Speech President Chicago Fed
Speech President Kansas City Fed
Preliminary CPI (GER)
Preliminary CPI (SP) (08:00)

GMS
Trinity Mirror

FINALS
Asia Resource Minerals, Cathay International Holdings Ltd., Chesnara, Futura Medical, HydroDec Group, Judges Scientific, Optimal Payments Plc, Songbird Estates

ANNUAL REPORT
National Express Group

SPECIAL DIVIDEND PAYMENT DATE
Beazley, Ferrexpo, NewRiver Retail Ltd. (Reg S)

EGMS
Alpha Bank GDR (Reg S) USD

AGMS
Banco Santander S.A. (CDI), BlackRock Commodities Income Inv Trust, ECR Minerals, Ferrex, Formation Group, Helius Energy, Invista European Real Estate Trust Sicaf, Milestone Group, MTI Wireless Edge Ltd., Sinclair (William) Holdings, Sphere Medical Holding, St. Modwen Properties, SVG Capital, Turkiye is Bankasi A.S GDR C Shs (Reg S), United Bank Ltd GDR (Reg S)

TRADING ANNOUNCEMENTS
ICAP

UK ECONOMIC ANNOUNCEMENTS
Balance of Payments (09:30)
GfK consumer Confidence (09:30)
Current Account (09:30)
GDP (quarterly national accounts) (09:30)
GFK Consumer Confidence (00:05)
Index of Services (09:30)

FINAL DIVIDEND PAYMENT DATE
Arden Partners, Brewin Dolphin Holdings, Hazel Renewable Energy VCT 1, Hazel Renewable Energy VCT 2, Henderson Value Trust, Jersey Electricity 'A' Shares, Sanderson Group, SWP Group

FINAL EX-DIVIDEND DATE
DP World Limited

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Europe open: Stocks rise before Eurozone consumer confidence data

- Eurozone consumer confidence data out
- German inflation figures to be released
- Tensions remain high over Crimea

FTSE 100: 0.51%
DAX: 0.75%
CAC 40: 0.44%
FTSE MIB: 0.81%
IBEX 35: 0.72%
Stoxx 600: 0.64%

European stocks gained ahead of a report that may show Eurozone consumer confidence rose in March.

A report at 10:00 GMT is expected to show Eurozone economic confidence increased to a reading of 101.3 in March, from 101.2 a month earlier.

German inflation figures will also be in focus when released at 13:00 GMT. Analysts predict consumer prices in Europe's biggest economy rose by 1.1% year-on-year in March.

In the US, the University of Michigan will unveil its consumer confidence index which is tipped to edge up to 80.5 in March from 79.9 a month ago.

Also in the US, investors will be watching for data on personal spending and income.

Russia's annexation of Crimea illegal, UN confirms

The United Nations (UN) General Assembly yesterday approved a resolution which deemed the Moscow-led referendum that led to Russia's annexation of Crimea from Ukraine as illegal.

The vote came after the International Monetary Fund agreed to throw financial aid to Ukraine in a deal worth $14-18bn.

The US Congress also passed legislation yesterday supporting a $1bn loan guarantee for Ukraine.

Intesa Sanpaolo

Intesa Sanpaolo advanced as Italy's second-biggest bank forecast dividend payouts of €1bn this year and €2bn next year.

Pirelli & C. SpA gained after the Italian tyre maker reported 2013 earnings which beat analysts' estimates.

Deutsche Wohnen climbed after the German residential landlord said annual profit jumped 68%.

The euro fell 0.17% to $1.3716.

Brent crude futures rose $0.046 to $107.880 per barrel, according to the ICE.

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US close: Citi leads stocks lower as data comes in mixed

- Jobless claims fall to four-month low
- GDP revised higher, pending home sales fall
- Citi falls after failing Fed stress tests

Dow Jones: -0.03%
Nasdaq: -0.54%
S&P 500: -0.19%

There was no respite from selling pressure on Thursday as stocks on Wall Street finished with moderate losses, with investors digesting mixed economic data and the results of the banking stress tests.

Figures out during the session showed that jobless claims fell more than expected last week, economic growth estimates were revised higher, albeit not as much as expected, and pending home sales slumped.

Meanwhile, Citigroup fell sharply after it was found to be one of the few banks that failed the Federal Reserve's stress tests, along with the US units of European counterparts RBS, HSBC and Santander.

The Dow Jones Industrial Average finished broadly flat by the closing bell, while the Nasdaq dropped 0.5% and the S&P 500 fell 0.2%.

Markets had suffered steep losses on Wednesday after comments from President Barack Obama sparked a sell-off in afternoon trade as he warned that Russia faces further sanctions if it continues to take steps to further destabilise Ukraine.

Economic data

US jobless claims dropped to their lowest levels in nearly four months last week, according to the Labor Department. Initial claims for unemployment benefits fell by 10,000 to a seasonally-adjusted 311,000 in the seven days to March 22nd, from a revised 321,000 the week before.

This was the lowest since November and surprised analysts who had expected claims to rise to 323,000.

US gross domestic product growth in the fourth quarter was revised higher to an annualised rate of 2.6%, from the initial 2.4% estimate. However, the consensus estimate was for a revision to 2.7%.

Pending home sales fell at a year-on-year rate of 10.2% in February, worse than a revised 9.3% decline in January and the 9% drop expected by analysts.

Banks in focus

Citi fell sharply after the Fed rejected the bank's capital plans to lift dividends and increase share buybacks. The central bank said that it had concerns about the "overall reliability of Citigroup's capital planning process".

Other banks including JPMorgan Chase, Bank of America and Goldman Sachs, however, managed to pass the stress tests.

Gaming group King Digital Entertainment extended losses after a disappointing stock-market debut on Wednesday in which the Candy Crush maker's shares dropped 15%. The stock was down a further 3% on Thursday.

Accenture was a heavy faller after saying that a "challenging" environment will likely continue for its consulting business, which accounts for over half of group sales.

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Friday newspaper round-up: Housing bubble, Scotland, AO World

The number of borrowers being offered dangerously large mortgages is at an all-time high, the Bank of England has warned. About one in ten homebuyers are borrowing more than four times their income, the Bank said, stoking fears that the nation is in the grip of an unsustainable housing bubble. In London, almost one in five buyers are taking out "high income-multiple" loans as the cost of the average property approaches 500,000 pounds. - The Times

The European Commission has dealt a blow to First Minister Alex Salmond and left Scotland facing a massive pensions blackhole if there is a Yes vote in the referendum. Officials declared there would be no change in the rules governing cross-border pension schemes – despite a widely held belief that the regulations were to be relaxed. Finance secretary John Swinney was among those who expected the European Union to make the change. - Scotsman

Some of London's leading hedge funds are betting that AO World's share price will slide amid speculation that the online appliances retailer makes more money from selling warranties than it does from shifting white goods. While AO World refuses to split out the profits it makes from selling washing machines and kettles compared with insurance policies, speculation has been rife in the stock market that warranties accounted for as much as 90% of its earnings. - The Times

Creditors of Lehman Brothers are to receive an additional payout of $17.9bn, more than five years after the investment bank plunged into bankruptcy and pushed the global financial system into chaos. The distribution in the United States, including to third parties such as hedge funds that bought the bank's debt at a discount after the bankruptcy, will bring the payouts to $56bn. Further payments are expected to bring the final total to $80bn. - The Times

The City has switched into overdrive, the London Stock Exchange has revealed, with money raised on the Square Mile's markets almost doubling so far this financial year.  The LSE said the total cash raised in the 11 months to the end of February was £28.3bn, compared with £14.8bn in the same period last year. This equates to a 91% increase in the financial year so far, with the number of new fundraisings or stock market floats soaring to 162 from 107. - The Daily Mail

Morrisons chief executive Dalton Philips is giving up his annual bonus after a disastrous year in which Britain's fourth-biggest grocer issued two profits warnings and saw bank details of 100,000 staff posted online after a theft. He decided to give up a cash-and-shares award totalling £374,000 after the group lost market share and warned underlying profit for 2014 would be half the £732m analysts were expecting. New finance director Trevor Strain chose to take his bonus of £211,000 and sold shares to pay the tax liability. - The Daily Mail

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