After managing to erase all of its losses in February the FTSE 100 has continued to push higher, taking out its February highs, and pushing back to levels last seen in the first week of January, on a combination of further gains across a range of sectors and a strong performance from the London Stock Exchange, on reports it could receive a counter proposal for its £20bn merger with Deutsche Boerse (DE:DB1Gn) from the owner of the New York Stock Exchange, Intercontinental Exchange.
These reports that ICE could be contemplating a counter bid sent the share price for LSE to new record highs, and while the reports were confirmed by the US group there remains no guarantee that an offer might be forthcoming. The big question here is whether ICE is mischief making here given that it is already having to integrate its recent acquisition of market data company Interactive Data, for $5.2bn.
Amongst the best performers the more buoyant tone in equity markets is helping money manager Hargreaves Lansdown (L:HRGV) post decent gains.
Direct Line (LON:DLGD) is also higher after posting some decent preliminary numbers for 2015, with profits rising to £520.7m from £506m in 2014.
It’s also been a mixed day for mining stocks with Anglo American (L:AAL) and BHP Billiton (L:BLT) continuing their recent run of gains with Anglo American trading at its best levels this year, before slipping back.
On the flip side Glencore's (LON:GLEN) shares have slipped back though they are now above the 125p share placement level that prompted the sharp move lower in September of last year. The company announced a loss of $8bn for 2015 as it booked a raft of impairments including a $4bn charge in its nickel operations. Also lower Randgold Resources (L:RRS) and Fresnillo (L:FRES) have slipped back as gold and silver prices slid back.
Barclays (L:BARC) share price also took a beating; with the shares being suspended at one point after the company announced a significant restructuring plan and cut the dividend.
Equipment rental firm Ashtead (L:AHT) was also having a bad day, despite a 20% rise in pre-tax profits which showed that in spite of weakness in its core markets, the company continued to do well. It would appear that the company’s prudent decision to cut back a little on capital expenditure has been taken as a sign that the company could be facing a slowdown in the coming months. Honestly there’s no pleasing some people, if you don’t plan for a bit of turbulence you get punished, and if you do plan you also get punished.
The oil and gas sector has also lagged behind today on the back of today’s weakness in the oil price.
US
US markets have taken their cues from today’s European session starting the month on the front foot, despite last night’s late sell-off. The latest vehicle sales data showed that US consumers were still happy to shell out for their favourite mode of transportation.
Ford \(NYSE:F) light vehicle sales rose 20.2% in February from a year earlier, and the best numbers since 2005.
On the data front the latest February ISM manufacturing index showed a slight improvement from January’s 48.2, coming in at 49.5. The employment component also improved after the sharp drop to 45.9, coming in at 48.5, however inventories showed a sharp fall, coming in at 47, down from 51.5 in January.
This slight improvement also needs to be weighed against some rather dovish comments from FOMC policymaker William Dudley when he said that he saw downside risks to the US economic outlook.
FX
The US dollar is having a mixed day up against the Japanese yen after the latest ISM manufacturing survey came in better than expected.
It is down heavily against the Canadian dollar after the latest Canadian GDP number came in much better than expected. An annual reading of 0.5% was well above expectations of 0%, and an improvement on the previous month of 0.2%.
The euro has also come under pressure after the latest manufacturing PMI data showed that German and French manufacturing more or less stagnated in February, reinforcing the likelihood of further policy easing at next week’s ECB rate meeting.
Commodities
Having traded near their highest levels in nearly two months Brent oil prices have slipped back today, as the recent upward momentum starts to show some signs of waning. This morning’s weak manufacturing PMI numbers from China may well have given the black gold an initial boost but we’re starting to see a little slippage in the absence of any new drivers after three days of decent gains.
Gold prices have slipped back a little after the unexpected improvement in the latest US ISM manufacturing data, while its Markit equivalent came in more or less as expected.
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