If in doubt turn to Russia for a market catalyst
Forceful rhetoric from Obama overnight regarding Putin and Russia has taken the wind out of European equity markets sails as the two day rally comes to an abrupt end. In a market clearly lacking in conviction for where to go next we again turn to the situation in Russia to provide a catalyst for market direction as we seem to have done repeatedly over the past few weeks. Retail sales figures this morning failed to move the market and we now hope that this afternoons GDP numbers from the US will provide some concrete economic data on which to base genuine market valuations and hence give traders something on which to hang their bullish or bearish coats.
After a stellar 2013 Hennes & Mauritz, the second biggest fashion retailer in the world is 4% lower this morning on news of weaker than expected first quarter profits. This was blamed on both the general retail environment they find themselves in which is proving to be particularly challenging with the worlds current economic situation as well as a recent increase in business investment with online service development being a major area of spend. This was eased with news of a 12% increase in sales for March and a continuation of market share gains.
Another equity on the slide is engineering services group Babcock International briefly trading below 1300 after announcing a deal had been agreed to buy Avincis for £920million which will be funded through a fully underwritten rights issue.
A stock on the rise is United Internet who have announced a 25% increase in overall earnings and over 10% rise in sales. The German provider of internet services is up just over 4% as a result of the good news.
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