FTSE 100 closes at new record peak; G20 finance leaders not concerned about financial regulation roll back

 German Finance Minister Wolfgang Schaeuble (L) and US Secretary of the Treasury Steven Mnuchin (R) during a joint press conference
 German Finance Minister Wolfgang Schaeuble and US Secretary of the Treasury Steven Mnuchin during a joint press conference in Berlin ahead of the G20 finance ministers meeting Credit: EPA
  • Pound rises towards $1.24 as dollar wallows at five-week lows
  • FTSE 100 sets another new record high 
  • Banking stocks rise on rate hike talk and bullish broker notes
  • Investors eye G20 finance ministers meeting 
  • China stocks suffer worst day in three months 

Market report: FTSE 100 closes at record high

The FTSE 100 continued its record run, closing at a new all-time high for a second successive day.

London’s blue chip index set a new intraday peak of 7,447, before finishing up 9.01 points, or 0.12pc, at 7,424.96, led higher by banking stocks which rallied on bullish broker notes and European Central Bank rate hike talk. However, gains were capped by a strong pound.

Natixis raised Royal Bank of Scotland’s rating from “reduce” to “buy” and lifted its price target to 289p from 224p as it believes the bank is “reaching a turning point”.

Analysts said: “The time is near when the long-standing strengths of the core bank will outweigh the material drag of legacy items.” However, Natixis thinks RBS’s financial performance will not normalise until 2020.

Meanwhile, Morgan Stanley upgraded Barclay’s rating to “overweight” on a brighter outlook for fixed income revenue pool. Analyst Chris Manners said: “After a decade of secular declines, fixed income revenues can start to sustainably grow.” It also expects the bank’s capital concerns will abate.

Separately, European Central Bank policymaker Ewald Nowotny said the bank would decide at a later date whether to raise interest rates before or after ending its bond purchase programme.

In its wake, Royal Bank of Scotland climbed 3.3p to 243.9p and Barclays added 1p to 230.4p. However, Lloyds dipped 0.2p by close to 69.3p.

The insurance sector also climbed the leaderboard amid speculation in the City that the recent Ogden discount rate decision will get amended. Last month, the Ministry of Justice cut the Ogden discount rate used to calculate lump sum payments for personal injury claims to -0.75pc from 2.5pc,  which would lead to higher payouts and weigh on insurers’ profits.

Separately, Bernstein raised Admiral’s price target to £20 from £19.15. In its wake, shares in Admiral jumped 37p to £19.45, Direct Line advanced 0.6p to 334.4p and Hastings rose 6.8p to 253.3p.

Mining giant Antofagasta eked out gains of 8.5p to 852.5p on the back of two bullish broker notes. Deutsche Bank hiked its price target to 800p from 700p, while Citigroup said the miner is “regaining its mojo”.  

Elsewhere, JP Morgan raised Prudential’s rating to “neutral” as concerns about its US And UK business recede, sending shares 7p higher to £17.61.

On the other side, Randgold Resources lost ground, down 30p to £70.70, after Numis downgraded its rating to “hold” as it sees limited upside for the FTSE 100 stock.

Ahead of its half-year results, Associated British Foods became a target of Numis, which cut its rating to “hold”. Shares dipped 14p to £26.16.

Pharma giant Hikma received its second rating downgrade in two days. HSBC cut its rating to “reduce” amid concerns about generic drug pricing. On Thursday, JP Morgan cut its rating to “neutral” citing a “less compelling” valuation. The FTSE 100 tumbled 22p to £21.68.

On the mid-cap index, Tullow Oil suffered its worst day in almost 13 years, plunging 35p to 202.3p, after announcing a £607m rights issue.

Meanwhile, Berkeley Group rallied 181p to £31.44, marking its highest level since the Brexit vote. The housebuilder now sees full-year profits coming in at the top end of market forecasts. Its peers Barratt Developments climbed 8.5p to 543p and Taylor Wimpey added 2.2p to 194.7p.

Finally, Aim-listed Panmure Gordon surged 64.7pc to 98p after former Barclays boss Bob Diamond through this private equity firm Atlas Merchant Capital, alongside QInvest, reached a deal to take the stockbroker private.

With that, it's time to close for today. Thanks for following our markets coverage this week. 

FTSE 100 sets another new closing peak

That's two days on the trot. The FTSE 100 has closed at a record high of 7,424.96, up 9.01 points, or 0.12pc, on the day, buoyed by a move higher in banking stocks and insurers. 

Elsewhere in Europe, here's how markets finished: 

  • DAX: +0.01pc
  • CAC 40: +0.15pc
  • IBEX: +0.72pc

Reflecting on the week that was for financial markets, Chris Beauchamp, of IG, said: "The week is meandering to its close, as investors look to tie up a few loose ends after a busy week. Around the world markets seem to have paused for breath, with the focus shifting now away from the Fed towards the French elections, which are moving upon us at speed.

"Equities remain buoyant, even if they have failed to move much higher in the two days since the Fed meeting. Gold prices continue to advance as the dollar remains under pressure, with the parallels to 2016’s price action remarkably similar. Brexit, Scoxit, the French elections and inflation uncertainty all make a convincing case for why gold will go higher, but there is still much work to be done to restart the failed bull  move we saw last year."  

Build on the green belt to boost the economy, OECD tells Britain 

Britain’s economy is stifled by the green belt and other building restrictions which have crushed the supply of housing, pushing up pricesand making it hard for people to move home to find work.

Unaffordable housing is harming productivity which damages GDP growth and living standards, the Organisation for Economic Co-operation and Development has warned.

The advice comes as house prices increased further beyond the grasp of many would-be first-time buyers.

On average working people in England and Wales can now expect a property to cost 7.6-times their income, according to the Office for National Statistics, more than double the 3.6-times it cost in 1997.

BOJ's Kuroda: there is global consensus on importance of free trade

Another update from the G20 meeting: Bank of Japan Governor Haruhiko Kuroda saidthere is a consensus among the global community that it was important to promote free trade.

"I don't think the consensus will be suddenly toppled," though there was uncertainty on how the G20 debate on trade will unfold, Kuroda told reporters upon arrival for the Group of 20 finance leaders' gathering in Baden Baden.

Bank of Japan Governor Haruhiko Kuroda  Credit: Reuters

Kuroda also said he will explain to his G20 counterparts that the BOJ will continue to pursue "powerful monetary easing" for the domestic purpose of achieving its 2 percent inflation target.

Report from Reuters

Equity rally running out of steam? 

After hitting an intraday record high in afternoon trade, the FTSE 100 has since turned negative, down 0.1pc. 

Connor Campbell, of SpreadExsaid: "After all the excitement in the last few days, coupled with an empty economic diary, it is understandable that the market has been running on fumes this Friday. The worry is that, at their current highs, the Western indices are now lacking a sense of purpose, especially with the week’s Federal Reserve meeting in the rear-view mirror.

"Next week sees one of those dreary post-Fed calendars, leaving the UK inflation and retail sales readings – most pertinent to the pound’s current rebound, especially if the former hits 2.0pc– as the main focus for investors."

Circassia's shares soar as AstraZeneca takes $50m stake in business

Shares in Circassia surged by as much as 20pc today after AstraZeneca announced it will take a $50m stake in the business. Julia Bradshaw has the details: 

Shares in Circassia, the British biotech minnow backed by Neil Woodford, surged by as much as 20pc after it announced a deal with AstraZeneca in which the pharmaceuticals giant will take a 14pc stake in the struggling business.

Circassia, once considered one of the UK's most promising biotechcompanies, has faced an uncertain future since its much-hyped cat allergy drug failed spectacularly in final clinical trials nine months ago, sending its shares downy by 64pc.

Since then, Steve Harris, the chief executive, has attempted to set out a fresh direction, focusing on Circassia’s respiratory portfolio, which includes a pipeline of generic drugs and an asthma monitoring device called Niox that is already on the market.

Under the terms of the deal with AstraZeneca, Circassia will get the commercial rights in the US to two of its respiratory drugs, Tudorza and Duaklir.

Read the full story here

US  consumers' long-term inflation expectations fell to 2.2pc year-on-year in March

Berkeley increases profit forecasts as London market stabilises

Shares in Berkeley jumped 5.6pc this afternoon, its highest level since the Brexit vote, after it forecast full-year profits will be at the top end of market estimates. 

Rhiannon Bury reports: 

London-focused housebuilder Berkeley Group brushed off concerns about the capital's housing market, after saying that it expects to hit the top of its profit forecasts this year. 

Shares in Berkeley rose rapidly after it said the market in the London and South East has stabilised.

Its confident outlook came despite a 30pc dip in the number of new homes the company had begun building in London since August compared to the same period in the previous year, a dip it blamed on nervousness following the vote to leave the European Union, recent changes to stamp duty and increased demands from the planning system.

“Berkeley is concerned by this under-supply and the knock-on effect it has on the provision of housing of all tenures which, if not addressed, represents a threat to London remaining an inclusive and open global city,” Berkeley, which is led by chief executive Rob Perrins, said.

Read the full story here

Pound on track for biggest weekly gain since early December

Over to FX markets, where the pound is on track for its best week since early December. 

It is currently trading up 1.65pc so far this week, that marks its biggest weekly gain since the week ended December 2 last year, when it recorded gains of 1.85pc. 

The local currency is also set for its first weekly gain since February. 

US stocks open little changed

There was little excitement at the opening bell on Wall Street as stocks remained relatively unchanged. 

Here's a quick snapshot: 

  • Dow Jones: +0.12pc
  • S&P 500: +0.07pc
  • Nasdaq: +0.05pc

FTSE 100 sets new record high

The FTSE 100 has set a new record high for a second successive trading session. 

It rose by as much as 0.42pc to 7,447.00 surpassing yesterday's record high of 7,444.62. The blue chip index is current trading up 0.32pc. 

Broad support for implementing BEPS initiatives against tax evasion

Meanwhile, Reuters is citing G20 sources as saying there is broad support for implementing BEPS initiatives against tax evasion. 

There's broad interest at Baden-Baden talks in continuing to cooperate on taxation, reports said this afternoon. 

For those who don't know BEPS (Base erosion and profit shifting) refers s to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity.

Finance ministers drop reference to climate change in draft G-20 statement

Bloomberg is reporting that finance ministers have dropped any reference to climate change in a draft G20 statement. 

Here's the Bloomberg report: 

Finance ministers from the world’s biggest economies dropped a reference to climate change in a draft of their statement at a Group of 20 meeting, frustrating plans by Germany to devote a section to the topic, according to people familiar with the talks.

Deputies concluded crafting the communique on Thursday evening, and ministers and central-bank governors will debate the document in the German town of Baden-Baden on Friday. The language may still change before the final version is released the next day.

Germany is using its year as G-20 president to push for the group to support climate protection. That effort has run into resistance from countries including the US, China, India and Saudi Arabia, one G-20 official said, speaking on condition of anonymity because the talks were private.

“There can be a way to overcome disagreements today -- that is, not writing about it in the communique,” French Finance Minister Michel Sapin told reporters in the southwestern German spa town on Friday. “But not writing about it doesn’t mean not talking about it. Not writing about it means that there are difficulties, that there is a disagreement and that we we must work on them in the coming months.”

US stocks poised to open flat as G20 finance leaders meet in Germany

US stocks are set to open flat as G20 finance ministers and central bankers meet in Germany for two days of discussions about the world economy. 

Topics such as exchange rates, protectionism and economic reform are set to be on the agenda in Germany. 

Tullow Oil to battle debt with £607m cash call

Shares in Tullow Oil are set for their worst day in almost 13 years after it annouced a £607m rights issue. The mid-cap stock has slumped 15.7pc to 200p. Jillian Ambrose has the details: 

Tullow Oil is preparing to issue new shares in a bid to raise £607m to help tackle its $4.8bn (£3.9bn) debts.

The London-based oil company will issue 466.9 million shares at 130p each, which is 45.2pc lower than Thursday's closing price. The heavy discount triggered a market sell-off that caused shares to plummet almost 15pc to 202p.

The Africa-focused oil explorer racked up its debt pile after the 2014 oil price crash battered revenues while Tullow was investing heavily in an oil project off Ghana.

The strain has propelled the company’s ratio of debt to more than five times its annual earnings before interest tax, depreciation, and amortisation. Tullow hopes to drive down debt to 2.5 times its annual earnings.

Read the full story here

Half-time update: European bourses edge higher

After a shaky start to the final trading session, European bourses have edged higher as banks rise on rate hike chatter. 

ECB policymaker Ewald Nowotny said the central bank will decide at a later time whether to raise interest rates before or after ending its bond purchase programme. 

Just after midday: 

  • FTSE 100: +0.2pc
  • DAX: +0.06pc
  • CAC 40: +0.33pc
  • IBEX: +0.08pc

 Connor Campbell, of SpreadEXsaid: "After having a bit of a lie-in following yesterday’s exertions the market has perked up somewhat this Friday morning.

"The FTSE nudged towards its all-time intraday high with a 10 point rise as the day went on, the index needing one final push to surpass yesterday’s peak. Even the pound looked more chipper as lunchtime approached, building on its 2 week high against the dollar while swiping 0.3pc off of the euro." 

Schaeuble: G20 not concerned about financial regulation roll back

Returning to the G20 meeting, German finance minister Wolfgang Schaeuble has said that finance leaders are not concerned that hard-fought financial market regulation would be rolled back.

His comments come during a talk about US deregulation at the G20 meeting in Germany this morning.  

German Finance Minister Wolfgang Schaeuble (L) and US Secretary of the Treasury Steven Mnuchin (R)  Credit: EPA

The Trump administration has argued that excessive bank regulation is saddling lending and holding back growth. However, European leaders have argued that new regulation is integral for stability and removing them could sow the seeds of another crisis. 

British Airways owner enters low-cost long-haul fray with new airline Level

The owner of British Airways is entering the fray of the burgeoning low-cost long-haul market with a new airline to be named Level in a bid to take the wind out of rivals such as Norwegian and WestJet.

International Airlines Group said Level will launch in June with an initial two new Airbus A330 aircraft flying from Barcelona to Los Angeles, San Francisco, Buenos Aires and Punta Cana, in the Dominican Republic.

Willie Walsh, IAG chief executive, said Level would become IAG’s fifth main airline brand alonside Aer Lingus, British Airways, Iberia and Vueling.

IAG chief Willie Walsh said Level would launch in Barcelona but add other European destinations soon Credit: PA

Mr Walsh added Barcelona was “just the start” and that other European destinations would be added.

Level will be initially staffed by Iberia’s flight and cabin crew, creating up to 250 jobs in Barcelona, the launch city for the brand.

Fares will start from €99 for a one-way ticket. Checked luggage, meals and seat selection will be among the perks for those willing to pay for one of the 21 premium economy seats each aircraft will have.

The remaining 293 seats will be economy, where passengers will be able to choose what they want to pay for.

Read the full story here by Bradley Gerrard 

Eurozone construction output sees largest fall since 2013 in January 

Eurozone construction output experienced its biggest fall in January since March 2013, data showed this morning, due to a steep fall in civil engineering and building activity. 

It fell 6.2pc year-on-year in January, following a downwardly revised 3pc rise to December's figures. Civil engineering fell 8.2pc after jumping 7.9pc in December, while building activity declined by 5.9pc following an increase of 1.9pc in the previous month. 

Month-on-month construction output in the eurozone plunged 2.3pc in January. 

Claus Vistesen, of Pantheon Macroeconomics, described the data as "grim", but added that it also "very likely a temporary blip". 

Mr Vistesen added: "EZ construction stalled at the start of 2017. The weakness was broad based across all the major economies, but big falls in France and Spain were the key drivers, chiefly in civil engineering.

"We suspect this was due to unusually cold weather, and heavy snowfalls, which disrupted road works and other public projects. We expect a rebound next month. That said, this setback makes it difficult for us to come up with an upbeat forecast for Q1 as a whole."  

Eurozone exports rise in January, but trade balance in deficit 

The euro zone recorded in January a trade deficit for the first time in three years as a rise in exports from a year earlier was more than offset by a larger increase of imports, the European Union statistics office said today.

Eurostat said the 19-country currency area recorded a €0.6bn deficit in January in its trade balance with states outside the bloc.

It is the first deficit, unadjusted for seasonal factors, since January 2014. Deficits are not unusual in January, when winter demand for energy can peak and export of other products, such as food and drink, slow.

Eurozone exports grew by 13pc in January on the year to €163.9bn, but the rise was counterbalanced by a 17pc increase of imports, which totalled €164.5bn, unadjusted figures showed.

Compared with December, figures adjusted for seasonal factors showed a 0.6pc drop of exports in January and a 4.1pcrise of imports.

Over the whole of last year, euro zone exports to the rest of the world were stable at a volume of around €2 trillion, Eurostat data showed. Imports went down 2pc from 2015, while trade among euro zone countries was up 1 percent to a volume of €1.7 trillion.

Report from Reuters

London trading flat amid profit taking

There's been little movement in London this morning, with the FTSE 100 eking out modest gains of 16.26 points, leaving just over 10 points short of a new intraday record high.

Despite a lacklustre start to the final trading session of the week the blue chip index is currently up 1.23pc so far this week.   

Joshua Mahony, of IG, said: "London stocks are trading flat this morning, as we look to be closing out a remarkable week in somewhat unremarkable fashion. Yesterday’s record close for the FTSE highlights that it has been a particularly positive week for UK stocks, which enjoyed a substantial boost in the wake of the Dutch election and FOMC meeting. Short term traders typically avoid holding positions over the weekend, and perhaps today is highlighting that fact, with profit taking evident after yesterday’s initial spike higher." 

Carney highlights the FSB priorities under the German G20 presidency

The Financial Stability Board (FSB) has today published a letter from Mark Carney, Chair of the FSB, sent to G20 Finance Ministers and Central Bank Governors ahead of their meeting which takes place today and tomorrow. 

In the letter, Mark Carney highlighted the good progress made in implementing the post-crisis reforms. He also warned against the risk of a loss of momentum in completing and fully implementing essential international standards. He flags the risk that this could pose to the maintenance of an open global financial system. 

The letter outlines the FSB priorities under the German G20 presidency which are: 

  1. Transforming shadow banking into resilient market-based finance, including by addressing structural vulnerabilities in asset management;
  2. Making derivatives markets safer by progressing the post-crisis reforms to over-the-counter derivatives markets and delivering coordinated guidance on central counterparty resilience, recovery and resolution;
  3. Supporting full and consistent implementation of post-crisis reforms, including the development of a structured framework for post-implementation evaluation of the effects of reforms;
  4. Addressing new and emerging vulnerabilities, including misconduct risks, as well as those stemming from the decline in correspondent banking and from climate-related financial risks. 

G20 finance heads to repeat FX assurances, no deal yet on rejecting protectionism

 The world's financial leaders will renounce competitive devaluations and warn against exchange rate volatility, Reuters  has reported this morning.

In a draft statement seen by Reuters, which may still change and is to published only on Saturday, it said that monetary policy will keep supporting growth and price stability but cannot alone lead to balanced economic growth.

The G20 finance ministers have not yet found a common stance on trade and protectionism, it also said. 

G20 finance meeting gets underway in Germany

A symposium at the G20 Finance Ministers and Central Bank Governors Meeting in Baden-Baden, southern Germany, on March 17, 2017. Finance ministers from the world's top nations gather in Germany on March 17, as fears grow of a looming trade war over US President Donald Trump's America First policy. 

Christine Lagarde, Managing Director of the International Monetary Fund (IMF) arrives for a symposium at the G20 Finance Ministers and Central Bank Governors Meeting in Baden-Baden Credit: AFP
G20 Finance Ministers and Bank Governors meeting in Baden Baden Credit: AFP
Former president of the European Central Bank (ECB), Jean-Claude Trichet (L), CEO of German Bundesbank, Jens Weidmann (4thL) and German Finance Minister Wolfgang Schaeuble (3rdR)  Credit: AFP

G20: Some more pragmatism from Trump’s team on global trade? 

Strategists at MUFG think the signs of a more pragmatic approach to global trade discussions by the Trump administration are likely to be evident in Germany today with the G20 finance ministers’ meeting taking place in Baden-Baden.

"In a press conference yesterday with German Finance Minister Schaeuble, US Treasury Secretary Mnuchin was diplomatic in acknowledging the differences between the euro being for 19 different countries and the dollar for one. That meant there were many complexities around the scale of Germany’s trade and current account surpluses. While we should expect US comments over the weekend against competitive devaluations, we are unlikely to get divisive comments that would raise tensions and potentially move key FX rates. The tone in Germany will likely be set in Washington with Angela Merkel due to meet President Trump in the White House today.

"A draft communique has apparently been agreed and will now be discussed before its release on Saturday. Bloomberg reports that many countries including the EU and the UK want to maintain references to “multi-lateral” and “rules-based” trade while the US is pushing for a change with greater importance given to “fair” trade. We don’t expect much in the way of market-moving events from the gathering."

Markets expect a smooth G20 finance meeting

Pound rises towards $1.24 in early trade

The pound edged higher after a brief dip when Europe came into play in early trade. The local currency is trading 0.24pc higher this morning at $1.2381 against the US dollar, after slumping to an intraday low of $1.2324.

The latest move higher comes as the dollar wallows at a five-week low after the Fed signalled fewer rate hikes than previously expected. Although the US central bank hiked rates as widely expected on Wednesday, it did not change its forecast for a further two rate hikes this year, disappointing dollar bulls. 

Yesterday, the pound surged by 1.27pc after the Bank of England voted 8-1 to leave interest rates unchanged, representing the first interest rate split since July 2016. 

Credit: Bloomberg

Panmure Gordon confirms Bob Diamond and Qatari takeover

Panmure Gordon has confirmed Atlas Merchant Capital and QInvest will take the company private, sending shares 70pc higher in early trade. Ashley Armstrong and Jon Yeomans have the details: 

Bob Diamond, the former Barclays chief executive, has joined forces with a Qatari investment bank to swoop on Panmure Gordon, one of Britain’s oldest stockbrokers.

The deal, confirmed this morning, will see Mr Diamond’s private equity vehicle, Atlas Merchant Capital, and QInvest, the Qatari investment bank, take the company private. QInvest already owns a 43pc stake in Panmure.

The firm can trace its roots to 1876 and has been a fixture in the City of London, with alumni that include three generations of David Cameron’s family.

The takeover offer of 100p a share values Panmure Gordon at £15.5m, a substantial premium to its £9.25m market value before news of the deal broke on Thursday night. Panmure's board said it would recommend the offer to its shareholders.

Former Barclays CEO Bob Diamond Credit: EPA

Shares in the stockbrocker promptly surged 70pc on open, reaching the bid price of 100p.

The return of Mr Diamond to the Square Mile comes just a month after the banking veteran fronted an acquisition to buy the Greek banking arm of France’s Credit Agricole via the same investment vehicle.

Read the full story here

G20 finance meeting: What's on the agenda

Reuters has compiled a very useful list of topics on the agenda at today's G20 finance meeting: 

  1. The main theme of the meeting is likely to be the degree of consensus against protectionism that all G20 countries will be able to agree on, given protectionist views of the new U.S. administration of Donald Trump such as the border tax on imports. Last September, G20 leaders declared "opposition to protectionism on trade and investment in all its forms" in a pledge that has appeared in most G20 communiques for a decade.
  2. While discussions on exchange rate policies are usually conducted among the G7 countries - United States, Canada, Japan, Germany, France, Italy and Britain - the G20 also tends to include some reference to currencies in its statement. 
  3. The phrase that has appeared with some variations in many G20 statements in the past is similar to the one adopted during last year's Chinese presidency of the group:"We reiterate that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. Our relevant authorities will consult closely on exchange markets. We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes."
  4. The early draft of the Baden-Baden meeting does not contain these phrases, but officials from several G20 members have told Reuters they would push for the words to be included in the end so as not to alarm markets that the G20 approach has changed.
  5. G20 leaders agreed in 2014 in Australia to launch reforms that would help boost global economic growth by an additional 2 percent of gross domestic product over five years until the end of 2018, adding an extra $2 trillion to the global economy.
  6. Each G20 country was to propose reforms, called a growth strategy, that would boost GDP. Their effectiveness and implementation is checked by peers, the IMF and the OECD.
  7. Last September, G20 leaders said: "We are making further progress towards the implementation of our growth strategies, but much more needs to be done", emphasising implementation.
  8. To help focus minds on the growth strategies and make it easier to reject protectionism, Germany wants the G20 to sign up to a list of principles to make economies more resilient to shocks. These would include sound public finances, reducing vulnerabilities in the private sector, a favourable business environment, a flexible labour market and efficient social security systems.
  9. The early draft G20 communique seen by Reuters says: "We agree on a set of principles to foster economic resilience which provides an indicative menu that will guide us in choosing country-specific commitments to strengthen economic resilience."
  10. The G20 are also likely to agree to act together to stop hackers from infiltrating and damaging networks of banks and other financial institutions.
  11. Finally the ministers will push for the implementation of a scheme that is to deter large international companies such as Google, Starbucks, Amazon, Facebook or EBay from aggressive tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
  12. The scheme is called Base Erosion and Profit Shifting (BEPS) and encompasses over 100 countries and jurisdictions. G20 ministers expect the OECD to prepare by July, when G20 leaders are to meet in the German city of Hamburg, a list of countries that do not want to cooperate in this scheme. "Defensive measures will be considered against listed jurisdictions," the G20 draft communique said.

Who attends the G20 finance meeting? 

Finance ministers and central bank governors from the world's top 20 economies will meet in the German spa town of Baden-Baden on March 17-18 to discuss the global economy.

Let's take a look at who will be in attendance: 

  • The G20 includes: Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States.
  • It also comprises a total of 12 institutions, including the International Monetary Fund (IMF), World Bank and the Organisation for Economic Cooperation and Development (OECD).
  • Germany, which holds the rotating chair of the G20 this year, has also invited to Baden-Baden as guests Ivory Coast, Morocco, the Netherlands, Norway, Poland, Rwanda, Senegal, Singapore, Spain, Switzerland and Tunisia.

Banking stocks gain on rate hike chatter

Although European bourses faltered at the opening bell, banking stocks made gains after an ECB policymaker rekindled talk of a possible rate hike. 

ECB policymaker Ewald Nowotny said the central bank will decide at a later time whether to raise interest rates before or after ending its bond purchase programme. 

Shares in Royal Bank of Scotland rose 1.3pc, Barclays  added 0.7pc and Lloyds climbed 0.2pc. 

European bourses dip as miners retreat

European bourses have struggled for direction at the opening bell after a stellar trading session yesterday. Mining stocks, which lead markets higher, have retreated in early trade. 

Here's a snapshot of the current state of play: 

Credit: Reuters

 Henry Croft, of Accendo Markets, said: "Calls for a slightly negative open come after the US dollar finds a floor overnight following two days of Fed-inspired weakness further exacerbated by a hawkish BoE, applying the brakes to the commodity sector rally that took off after the central bank stuck to its guns regarding further rate hikes. This could, however, provide some upside for the UK’s FTSE 100 as its international contingent benefit from translational gains derived from GBP weakness." 

China stocks post worst day in three months

 China's main stock indexes fell on Friday, posting their worst day since last December, as investors await fresh evidence of a sustainable recovery in the world's second-largest economy.

The blue-chip CSI300 index and the Shanghai Composite Index both lost around 1 percent to 3,445.81 points and 3,237.45 points, respectively.

For the week, the CSI was up 0.5pc, while the gained 0.8pc.

China's central bank on Thursday raised short-term interest rates in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the raised U.S. rates overnight. 

The central bank tried to soothe jitters by saying the interbank rate increase did not point to any change in its monetary policies and was not tantamount to a hike in its benchmark policy rate.

But analysts said the rate moves, more of which are expected, will eventually translate into higher borrowing costs for Chinese companies and consumers.

For the day, most sectors lost ground, dragged down by material  plays and by banking stocks, as higher borrowing costs typically pressure rate-sensitive sectors such as property and banking.

Report from Reuters

Agenda: First G20 finance ministers meeting of the Trump era

Good morning and welcome to our live markets coverage. 

Today, the G20 finance ministers and central bankers will hold their first meeting of the year in Baden-Baden, Germany, today and tomorrow. Most notably, it is the first G20 meeting of the Trump era.  Already, analysts have said the US dollar is on the defensive on the run up to both the Fed and G20 meetings.

Earlier in the week, Lee Hardman, of MUFG, cautioned: “ The US dollar could be vulnerable to the downside if the Trump administration provides further rhetoric displaying concern over the strength of the US dollar and over other countries policies which have encouraged weak domestic currencies such as in Europe, Japan, and China.”

Also on the agenda: 

Full-year results: React Group

Interim results: Goodwin

Trading update: Investec, SThree, Berkeley Group

AGM: Premier African Minerals, Chemring Group, Spitfire Oil, Toro

Economics: industrial production m/m (US), capacity utilisation rate (US), preliminary UoM inflation expectations (US), preliminary UoM consumer sentiment (US), trade balance (EU), consumer confidence (EU)

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