London open: Markets flat ahead of busy week
The FTSE 100 was little changed early on from Friday’s closing price of 6,730.67.
Following a relatively quiet festive season in terms of corporate news and economic data, the calendar is pointing to several key ‘risk events’ in the next few days that could spark some volatile moves on financial markets worldwide. These include inflation figures, central bank meetings in the UK and Europe, and Friday’s all-important jobs report in the States.
A series of global purchasing managers’ indices (PMIs) from services sectors are in focus today, after data last week showed a weakening in manufacturing growth in China, the US and UK in December.
According to consensus estimates, service-sector growth is expected to have accelerated slightly in the UK and US in December. The final estimate of the Eurozone services PMI confirmed a small slowdown from the previous month, with France’s services sector still firmly in contraction.
Meanwhile, figures released overnight saw the HSBC/Markit PMI survey for China’s services sector decline from 52.5 to 50.9, showing that growth had slowed significantly in December.
“This number still represents growth in the industry so it isn’t worth worrying about at this stage. However, it could be an early warning sign that, as in 2013, China is going to struggle to maintain these high levels of growth,” said Market Analyst Craig Erlam from Alpari.
RSA Insurance was a high riser this morning after UBS raised its target price for the stock from 100p to 113p and maintained a ‘buy’ rating. The bank added the stock to its ‘Alpha Preferences Most Preferred List’, saying: “While there are significant uncertainties, we think that the balance of risks is to the upside.”
Financial peers Hargreaves Lansdown, Prudential, HSBC and Legal & General were also performing well in early trading.
Retailers will be closely watched this week ahead of trading updates from the likes of Marks & Spencer, Tesco and Sainsbury. The festive reporting season so far has been a mixed bag, with a profit warning from Debenhams contrasting with a stellar update from Next on Friday.
M&S was a heavy faller this morning on speculation that it is a “likely candidate to suffer from the highly promotional and competitive clothing market”, according to Equity Analyst Amisha Chohan from Sanlam Securities.
Petrofac rose after Deutsche Bank lifted the stock to ‘buy’, while oilfield services peer Wood Group was dampened after the bank cut its rating to ‘hold’.
FTSE 100 – Risers
RSA Insurance Group (RSA) 97.25p +5.53%
Petrofac Ltd. (PFC) 1,241.00p +1.64%
Coca-Cola HBC AG (CDI) (CCH) 1,748.00p +1.33%
Hammerson (HMSO) 503.00p +0.80%
HSBC Holdings (HSBA) 661.30p +0.75%
IMI (IMI) 1,543.00p +0.72%
Sports Direct International (SPD) 739.00p +0.68%
Ashtead Group (AHT) 781.00p +0.58%
BAE Systems (BA.) 434.70p +0.58%
Tesco (TSCO) 332.35p +0.56%
FTSE 100 – Fallers
Marks & Spencer Group (MKS) 435.80p -1.85%
Randgold Resources Ltd. (RRS) 3,865.00p -1.50%
Carnival (CCL) 2,456.00p -0.97%
CRH (CRH) 1,565.00p -0.95%
Rio Tinto (RIO) 3,338.50p -0.93%
Reckitt Benckiser Group (RB.) 4,743.00p -0.88%
InterContinental Hotels Group (IHG) 1,985.00p -0.70%
Vodafone Group (VOD) 234.15p -0.66%
WPP (WPP) 1,373.00p -0.65%
Tullow Oil (TLW) 850.00p -0.64%