London midday: Slow grind higher continues

8th May 2013 11:41

Equities in London are continuing their slow grind higher, with the benchmark Footsie now gaining 19 points to the 6,576 point mark. That followed yesterday´s rise in the Dow Jones Industrial Average to above the 15,000 point mark for the first time in its 117 year history and stronger-than-expected results out of several corporate heavyweights on both sides of the Atlantic, such as Walt Disney - last night. Also spurring Wedneday´s gains was the release of much better-than-expected industrial production data out of Germany. As an aside, Goldman Sachs reportedly reiterated its bullish short-term stance on copper prices. Data out overnight in China raised quite a few eyebrows, although in no small part due to economists´ incredulity regarding the accuracy of those figures. The Asian giant reported a larger-than-expected trade surplus for the month of April. However, Zhiwei Zhang, China economist at Nomura, cautioned that this should not be taken as a sign of recovery as April had two more working days than last year and that the data may suggest continued capital inflows. In fact, tighter regulations on mis-reporting by importers and exporters may lead to slower trade growth going forward, he added.Back in the United Kingdom, former Monetary Policy Committee (MPC) member Andrew Sentance - a well-known "hawk" - this morning "tweeted" that it is "unlikely that the MPC will follow the Governor and vote for more quantitative easing this week. In fact, there is a stronger case for a small rise in interest rates."Also quite significant were remarks from European Central Bank (ECB) governing council member Jorg Asmussen to the effect that the European Union must move quickly to create a banking union.No macroeconomic statistics are slated for release today Stateside.J.P. Morgan upgrades HalfordsAnalysts at J.P. Morgan upgraded their recommendation on shares of Halfords to overweight from underweight. They view current forecasts for the 2015 fiscal year as conservative and see 10% upside to current consensus estimates for retail revenues. Melrose, the industrial conglomerate which buys and sells manufacturing businesses, impressed investors on Wednesday after reporting that its recently acquired Elster business has achieved further improvements and, as such, performed significantly ahead of the same pre-acquisition period last year.  Next reported a 1.9% fall in retail sales in the first quarter, blaming an unseasonably cold March. The UK retailer said poor weather stopped shoppers from stocking up on new summer ranges in March, which affected the overall performance of the first three months of the year. Sales picked up in April as the weather warmed up.  BAE Systems said trading has been consistent with management expectations in the first four months of the year and the outlook for earnings growth remains unchanged. The British multinational defence, security and aerospace company anticipates a modest rise in earnings this year, subject to US defence budgets.  Supermarkets group Sainsbury lifted profits 6.2% last year as it increased its market share to the highest level for a decade. The grocer has reached an agreement to take full ownership of its joint venture banking business, but did not address rumours about the potential impending departure of Chief Executive, Justin King. Across the group, with total sales rising 4.6% to £25.6bn, underlying profits up 6.2% to £756m and earnings per share up 9.3% to 30.7p in the 52 weeks to March 16th 2013, the grocer hiked its dividend 3.7% to 16.7p.  Standard Chartered´s first quarter interim management statement (IMS) has triggered a sharp sell-off, as analysts seem to be somewhat sceptical of management´s reaffirmation that they are comfortable with consensus 2013 forecasts for profit before tax of $8.2bn, which would mark a 19% rise versus last year. Even so, some brokers believe Wednesday morning´s retreat in the share price should be viewed an an "opportunity," as is the case of those at Investec. Sage Group, the FTSE 100 listed company which provides business management software, announced that its Chief Financial Officer has given notice of his plan to leave to take up the same role at WANDisco. He will leave at the end of August this year, the company said, adding that it has started its search for a replacement.AB