The Morning Call - Interest Rate worries in the states translate into global correction.

Highlights of the Day

Asian Markets

A rout in global equities deepened in Asia as inflation worries gripped financial markets, sending stock futures sinking further into the red.

U.S. Markets

U.S. shares plunged in highly volatile trading, with both the U.S. 500 and U.S.30 indices slumping more than 4%, as the major U.S. index notched its biggest intraday points decline in history.

Today's News

BP posted a sharp rise on profit for 2017, beating analyst consensus, in a year the company described as one of its most successful in its recent history. BP posted underlying replacement cost profit of $6.17bn for 2017, more than double 2016’s $2.59bn, and ahead of company provided consensus of $46bn. Excluding a net charge for non-operating items of $3.31bn and net adverse fair value accounting effects, replacement cost profit was USD2.76 billion compared to a loss of $999m in 2016.

Hargreaves Lansdown hiked its interim dividend by 17% as it reported an increase in first half assets under administration (AUA) thanks to a jump in net new business. Total AUM rose 23% to £86.1bn in the six months to 31st December 2017 from £70.0bn the same period a year earlier. Net new business gained 43% to £3.34bn from £2.34bn a year ago as the company added 61,000 active clients, bringing the total to more than one million.

EasyJet reported an 8.7% jump in January traffic as the load factor ticked up. Passenger numbers grew to 5.16m from 4.75m in January last year, while the load factor – which gauges how full the planes are – rose to 88.4% from 86.2%. On a rolling 12-month basis, traffic was up 9.5% to 82.05m and the load factor edged up to 93.2% from 91.5%.

Softcat said trading in the first half was head of its expectations, with a strong performance experienced in all of its business segments. Gross profit and adjusted operating profit for the six months through December grew by 22% and 19%, respectively, reflecting ‘consistent performance across the period and further successful execution of the strategy’. ‘The nature of the company’s operations means that forward visibility is relatively low,’ Softcat said.

Ocado said its annual earnings fell after higher revenue was offset by mounting staff costs and investments in its business. Pre-tax profit fell sharply to £1.0m from £12.1m in 2016. ‘Profitability in the period was adversely impacted by the wage increases partly impacted by increased national living wage, higher costs associated with the opening of Andover customer fulfilment centre, our continued investment in a number of strategic initiatives to aid future growth, and additional depreciation,’ the company said.

St. Modwen Properties said chairman Bill Shannon intended to stand down at the company’s annual general meeting in March next year. The search for a new chairman would commence shortly, the company said, with a successor to be appointed later in 2018, before assuming the role formally in March 2019. The company also released its annual results, with trading profit up 15.2% to £64.6m and net asset value per share up 4.6% to 450.9p. It declared a total dividend of 6.28p per share, up 4.7%.

Munich Re AG said that its fourth-quarter net profit rose slightly and that it won’t reduce dividend payments, despite high losses from hurricanes during 2017. Fourth-quarter net profit at the German reinsurer was 530 million euros compared with €491m a year earlier. Gross premiums rose slightly to €12.11bn compared with €12.07bn in the year-earlier period, while the company’s investment result for the quarter was €1.98bn, up nearly 22% on year, Munich Re said.

BNP Paribas slightly increased its 2020 profitability target on the back of a strengthening European economy, although its quarterly earnings came below expectations due to higher costs and provisions against two specific corporate clients. The French bank’s net profit fell to 1.43 billion euros (£1.29 billion) in the fourth quarter from 1.44 billion a year earlier, below the 1.59 billion euros expected by analysts in a Reuters poll. Revenues fell 1.2 percent to 10.53 billion euros, versus the 10.47 billion predicted by analysts. BNP Paribas also set a 2017 dividend of 3.02 euros, up 11.9 percent from last year.

Gold rose as a plunge in global equities prompted investors to seek shelter in safe havens such as gold, although expectations of more U.S. rate hikes this year weighed on the market.

Oil Prices dropped by more than 1%, extending falls from the previous session as global financial markets tumbled lower in the wake of one of the biggest intra-day falls ever registered on Wall Street.

Companies Reporting this week

Day	Companies
Tuesday:	Ocado * BP * St Modwen * BNP Paribas * Munich Re
Wednesday:	Rio Tinto * Tllow Oil * Smurfit Kappa * GlaxoSmithKline
Thursday:	Beazley * Smith & Nephew * Total

Early Market Movements

Market	Index	Change	% Change
UK 100	7,116.4	-218.6	-3.0%
UK 250	19,177.6	-512.9	-2.6%
GER 30	12,279.5	-408	-3.2%
FRA 40	5,116.3	-169.5	-3.2%
U.S. 30	24,345.75	-1175.21	-4.6%
U.S. 500	2,648.9	-113.2	-4.1%
OIL (BRENT)	67.00	-0.62	-0.9%
GOLD	1,343.64	+3.97	+0.3%

UK Risers & Fallers (8:15am)

Company	Price	Change	% Change
Rank Group	232.25	+4.8	+2.1%
Randgold Resources	6572	+48	+0.7%
Stagecoach	122.95	-22.35	-15.4%
Scottish Mortgage	418.2	-26	-5.9%
NMC Healthcare	3048	-160	-5.0%

Latest Broker Views

Company	Broker	Recommendation	Price	Target
London Stock Exchange	JPMorgan	Overweight	3904	4600
Randgold Resources	UBS	Neutral	6554	6900
Rotork	UBS	Buy	279.7	315