European shares open lower as bond tapering and the US debt ceiling damps enthusiasm.

Yet again, European shares are seen opening lower with the Federal Reserve’s bond tapering and the looming US debt ceiling deadline damps enthusiasm for shares. Asian markets were also in decline for a second day following worse than expected US consumer confidence figure which showed a slump in September to a four-month low.
 

With today being the only day without a Federal Reserve member speaking, markets may pause for a brief period as investors weigh the prospects of a last minute deal to avoid the debt ceiling limit. A failure to lift the cap on what the government can borrow could see the shutdown of the US government which in turn would threaten the US sovereign rating. However, despite four consecutive days of losses, the S&P 500 and the Dow Jones remain just 2 percent from all-time highs, demonstrating the lack of concern over the ceiling limit.
 

Gold swung between gains and losses amid concern the US Federal Reserve will slow the pace of its monthly bond purchases before year end. WTI crude snapped four days of loses ahead of US data today which could show crude stockpiles dropped in the world’s largest oil consumer. 

Risers

BAE Systems, +2.48%

Shares in BAE Systems have taken off after news emerged that the company was back in the running for a £5bn South Korea jet fighters deal. South Korea is thought to favour a US manufacturer however, given its long military relationship with the superpower. Additionally, Sweden have announced plans to buy 100 armoured vehicles from BAE whilst they have also received a $20.7M contract with the U.S. navy.

Iofina, +17.4%

Iodine specialist Iofina posted record revenues in its latest half year as its new extraction process made its first significant contribution. Revenues in the six months to June rose by 51% to $11.6mln, with losses on a like-for-like basis reduced to $122,000 from $970,000. The company said the business is usually weighted towards the first half but the production ramp up will deliver higher profits in the second half this time.
 

Greencore Group, +3%

Greencore Group plc was upgraded by Numis Securities Ltd from a “hold” rating to an “add” rating in a research note issued today. The firm currently has a 153p price target on the stock. Numis Securities Ltd’s target price points to a potential upside of 9.48% from the stock’s previous close.

Oracle Coalfields, +14.61%

Among the small caps, Oracle Coalfields was a star riser with shares soaring above 40% on news of its development tie-up with a Chinese company. The Pakistan-focused company has signed a Joint Development Agreement (JDA) with Chinese firm CAMCE for the development of its Thar coal mine and power plant project in Sindh Province. 

Vitesse Media, +12.5%

Vitesse Media narrowed its first-half pre-tax loss to £0.14m, from £0.25m. Revenue was £1.0m, from £0.99m. Vitesse's events team has secured two new contracts to deliver in the first half of the 2014 financial year. The technology team is scheduled to launch the Information Age Knowledge Bank in the autumn, a new data service for companies. 

Fallers

Carnival Corp, -6.95%

Registering the most significant losses within the FTSE 100 today, Carnival Corp shares have sunk after the world’s largest cruise operator said its profit fell 30 per cent in the third quarter and that bookings so far for the next nine months are lower than in previous years. The company has been discounting cruise packages to try to lure more consumers on board its ships, a move that is eating into its profits. Analysts say Carnival is a solid company with strong growth potential given the appeal of cruises to ageing populations, as well as economic recoveries in key markets such as the United States and Europe. However, the company is struggling to rebuild its brand appeal after a string of mishaps.

SSE & Centrica, -3.23% & 2.42%

Shares in SSE (along with Centrica), have plunged after Ed Miliband announced plans to freeze energy bills. Labour leader Ed Miliband has written to Britain's six big energy suppliers and urged them to work with his party over plans for a price freeze or risk reinforcing in the public mind that "you are part of the problem not the solution." Though likely to be popular with voters, who have been hit in recent years by rising energy costs, the plan has placed Labour on a collision course with the energy companies. The plan to impose a cap on business and consumer energy bills until January 2017 could cost the companies 4.5 billion pounds ($7.2 billion).

Tesco, -2.7%

Tesco Plc (TSCO), the U.K.’s largest retailer, fell the most in more than three months as JPMorgan Cazenove cut the stock to underweight a week after being dropped as the supermarket company’s co-brokerage adviser. Tesco is struggling to maintain its dominant 30 percent market share as consumers defect to discounters, upscale chains such as Waitrose and the Internet. The grocer’s market share fell to 30.2 percent in the 12 weeks ended Sept. 16 from 30.9 percent a year earlier, Kantar Worldpanel said yesterday. Tesco is scheduled to report first-half earnings Oct. 2.

Sage Group, -2.25%

Sage Group’s stock had its “underweight” rating reaffirmed by equities research analysts at Morgan Stanley today. They currently have a 320p price target on the stock. Morgan Stanley’s target price would suggest a potential downside of 7.81% from the company’s current price.

Havelock Europa, -15.08%

Retail and educational interiors group Havelock Europa's group revenue from continuing operations fell by 9% to £34.2m in the six months to the end of June. The loss before taxation was £2.0m (2012: loss from continuing operations of £1.2m) and the loss per share was 4.7p (2012: 2.6p loss from continuing operations). Group net debt increased to £4.8m (December 2012: £2.4m) as a consequence of capital expenditure which totalled £0.9m and an increase in inventories, principally of manufactured product, to support revenue growth in the second half of the year.