UK stocks rose modestly to a one-month high on Wednesday as the FTSE 100 moved above 6430 to its highest since November 4. European markets were more mixed with the German DAX hovering around 11,250, essentially unchanged.
Healthcare stocks led gains on the UK benchmark with AstraZeneca PLC (L:AZN), GlaxoSmithKline PLC (L:GSK) and Shire PLC (L:SHP) three of the four biggest risers after broker upgrades. There has been a bounce back in travel and leisure shares with IAG (L:ICAG), TUI and Carnival (L:CCL) all higher after the sector was beaten down amidst fears of a slowdown in the sector following the Paris terror attacks. A 5% plunge in Sage shares after poorly-received results meant technology was the worst performing sector. Another drop in the price of oil after Iran said it doesn’t need permission to boost production meant oil & gas shares were a drag.
The euro plunged after data showed Eurozone inflation was stuck at a meagre 0.1% year-over-year in November, missing estimates of a slight rise to 0.2%. The inflation miss adds to the case for stronger action from the ECB tomorrow. The data could be the difference-maker for the ECB choosing to increase the size of monthly asset purchases over just extending the end-date of the QE program.
The British pound slipped against the euro and the dollar on Tuesday after data showed a significant slowdown in construction activity during November. A reading of 55.3 on the construction PMI missed estimates of a slowdown to 58.4 from last month’s 58.8 and marked a seven month low. It’s the second significant UK economic miss this week after data yesterday showed manufacturing activity unexpectedly slowed.
US stocks look set for a flat open ahead of US ADP unemployment data and testimony from Fed Chair Janet Yellen as well as earnings from American Eagle Outfitters (N:AEO).
Shares of Facebook (O:FB) could be in play after founder and CEO Mark Zuckerberg pledged to give away 99% of his shares over the course of his lifetime in a letter to his newborn baby. Mr Zuckerberg’s holding are not expected to see any significant drawdown in the near term and he plans to be at the helm of the social network for “many, many years.” So the takeaway is that the share giveaway shouldn’t have any bearing on his commitment to the company.
USA pre-opening levels
S&P 500: 1 point higher at 2,103
Dow Jones: 2 points higher at 17,890
Nasdaq 100: 6 points higher at 4,722
DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.