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DJ Global Equities Roundup: Market Talk

· 02/05/2021 05:46

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

1045 GMT - Anglo American stands out from its mining peers owing its exposure to platinum group metals and diamonds, which is attractive in the near term and offers more compelling growth, Berenberg says. The bank says it sees Anglo American as a defensive pick versus Rio Tinto and BHP, but that it prefers Rio Tinto over BHP in the near term on dividend upside. Berenberg initiates Anglo American with a buy recommendation and target price of 2,000 pence, while Rio Tinto and BHP are both placed at hold, with target prices of 6,000 pence and 2,000 pence, respectively. (sabela.ojea@wsj.com; @sabelaojeaguix)

1041 GMT - India's Sensex notched another record closing as the market sustained a winning streak for the entire week. The benchmark index rose 0.2% to settle at 50731.63. The financial sector has extended strong gains since the start of the week, when the government unveiled aggressive spending plans for the upcoming fiscal year. State Bank of India soared 11% and Kotak Mahindra Bank rose 3.7%. The utilities industry lent further support, with Power Grid Corp. of India up 0.9% and power producer NTPC rising 0.6%. (yifan.wang@wsj.com)

1039 GMT - Although Signature Aviation has reached an agreement in terms of a recommended cash offer valuing the company at GBP3.5 billion, other parties may yet make a higher offer, Peel Hunt says. The aviation support-services company confirmed on Jan. 8 that it had received an approach from Carlyle Investment Management regarding a possible offer, although no proposal had been received, the U.K. brokerage says. "We await with interest to see whether Carlyle or any other interested party make a higher offer," the brokerage says. Peel Hunt has an add rating on the stock and raises the target price to 411 pence, from 405 pence, to reflect the recommended offer. (anthony.orunagoriainoff@dowjones.com)

1036 GMT - Johnson Matthey could face increased Chinese competition in the expanding electric-vehicle battery market, says Barclays, cutting its recommendation to underweight from equalweight and its price target to 2570 pence from 2640p. Barclays says Chinese battery producers are likely to benefit as key patents for lithium ferro-phosphate battery technology expire in the next year, allowing them to more easily export LFP batteries as well as produce them for domestic Chinese customers. "This expansion could shrink total addressable market estimates for producers of high-nickel cathodes like Johnson Matthey," Barclays analysts say. "In time, we expect high-nickel pricing in Europe to come under pressure too. JM looks most levered to this risk, with valuation close to peak." Shares fall 2.6% to 2932p. (philip.waller@wsj.com)

1019 GMT - Specialty insurer Beazley's pretax loss for 2020 was significantly smaller than expected, Shore Capital says. The company posted a $50.4 million loss for the year, and the market had anticipated a loss of $106.4 million, the U.K. investment group says. Shares in Beazley rise 14% to 367.60 pence. However, given that the insurance market is in a much better position than in the year-earlier period, Shore believes that the stock price reaction is significantly overdone. Shore has a buy rating on the stock with a target price of 321 pence. (sabela.ojea@wsj.com; @sabelaojeaguix)

1003 GMT - Base metals jump as investors' appetite for riskier assets returns amid hopes for the U.S. economy and stimulus measures. Three-month copper on the LME rises 1.3% to $7,912 a metric ton, aluminum gains 0.8% to $2,011 a ton and nickel rose 1.7% to $17,905 a ton. Global markets see riskier assets--such as stocks, oil and base metals--rising in tandem. "Risk appetite continued to surge in response to more vaccines being available in the U.S. and better-than-expected initial unemployment claims," says TD Securities. Investors are also hopeful that the Biden administration can pass another round of stimulus measures, providing extra support to the U.S. economy. (william.horner@wsj.com)

1000 GMT - Vinci's 2020 results showed an exceptionally strong free cash flow that supported a dividend in line with the previous year, UBS says. The French construction and infrastructure company's FCF generation was nearly flat year-on-year at EUR4 billion, compared with UBS's expectations of EUR2.1 billion. This was partly driven by a working-capital inflow of EUR2.3 billion, which led to net debt at EUR18 billion at year-end--around EUR2 billion below UBS's estimates. "As a result of this strong cash generation, Vinci is keeping the dividend flat at EUR2.04 vs consensus of EUR1.30," the bank says. Shares trade 5.6% higher at EUR85.82. (giulia.petroni@wsj.com)

0959 GMT - Carlsberg's cautious guidance should have been widely anticipated, says Jefferies. The brewer guided for 2021 organic Ebit growth of 3%-10%, against consensus of 10.5%. "We see opportunities for positive earnings momentum through the year as recovery comes through." Jefferies says that Carlsberg shares aren't expensive, but it prefers AB Inbev and Heineken, which are less well-liked and have greater gearing to recovery. Carlsberg shares rise 3.3%. (dominic.chopping@wsj.com)

0954 GMT - European stocks gain after mixed trading in Asia, a higher Wall Street close and ahead of U.S. job data later. The Stoxx Europe 600 rises 0.4%, the CAC-40 is up 1%, the DAX advances 0.2% and the FTSE 100 increases 0.1%. The price of a barrel of Brent crude gains 1.2% to $59.52 while gold and silver prices rise. The FTSE MIB climbs 1.2% on continued optimism about a potential new Italian unity government under former ECB boss Mario Draghi. "Europe was largely quiet, hesitant to do too much until Friday afternoon's U.S. non-farm payroll numbers," says Connor Campbell at Spreadex. "The markets did still err on the positive side, however." (philip.waller@wsj.com)

0945 GMT - The agreement for RTL Group to sell its U.S. ad-tech company SpotX to Magnite for $1.17 billion in cash and stock is expected to strengthen the dividend payout for shareholders of the Luxembourg-based media company, Citi says. "The price RTL has received for SpotX is higher than we expected and shareholders should benefit from this as the capital gain will boost the dividend pay out in 2021," Citi says. The transaction is expected to close in the second quarter of 2021. RTL Group shares trade 6% higher at EUR46.56. (mauro.orru@wsj.com; @MauroOrru94)

0935 GMT - Singapore shares nudged higher amid risk-on sentiment driven by strong U.S. data and optimism that the rollout of Covid-19 vaccines in the U.S. could lead to the reopening of the world's largest economy. The FTSE Straits Times Index closed 0.05% higher at 2907.11, led by a mixed bag of companies. Mapletree Logistics Trust added 1.0%, Sembcorp Industries rose 0.6% and Genting Singapore gained 0.6%. (ronnie.harui@wsj.com)

0933 GMT - Gold rises but is still on course for its worst week since the start of the year, as U.S. Treasury yields climb. Comex futures are up 0.9% at $1,807.50 a troy ounce, but the metal slumped below $1,800 an ounce on Thursday for the first time since November. Hopes for U.S. stimulus measures helped Treasury yields firm, weakening the appeal of gold as a haven asset. "The prospect of a juicy wave of government spending and borrowing sent longer yields higher," says Jeffrey Halley, market analyst at Oanda. "The risks are skewed towards more downside pain for a structurally long gold market as the weekend approaches," he says, adding that U.S. jobs data due out later Friday would be key. (william.horner@wsj.com)

(END) Dow Jones Newswires

February 05, 2021 05:46 ET (10:46 GMT)

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