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FTSE 100 closes below 7,500; Marks & Spencer top riser

Last updated: 12:10 22 May 2017 EDT, First published: 01:55 22 May 2017 EDT

london skyline
  • FTSE 100 closes up 25 at 7,496

  • Pound slips 

  • Marks & Spencer top riser

 

FTSE 100 lost some of the gains made earlier but still closed the day higher - up around 15 points.

The index of leading UK shares finished the first day of the new week at 7,496, up 0.34% with retailer Marks & Spencer (LON:MKS) the top dog, up 2.83% to 395.8p, ahead of its full year figures to be revealed later in the week.

Another retailer Burberry (LON:BRBY) added 2.45% to 1,756p.

The bluechip index was bolstered by lower sterling,  which lost 0.11% against the US dollar, but somewhat jittery after Prime Minister Theresa May made a climb-down on the so-called ' dementia tax' and fears over what the shape of Brexit may be continued to swirl.

The FTSE 250 added over 96 to 19,908.

Brent crude rose impressively 2.48% to $53.80 a barrel on hopes of a revamped output deal when the Organisation for Petroleum Exporting Countries (OPEC) meet in Vienna.

MID-SESSION

The FTSE 100 index tested session highs in late afternoon trading, bolstered by a sprightlier-than expected start across the pond.

US stocks headed higher for a third straight session early on, extending the recovery at the end of last week having slumped on Wednesday on worries that a scandal over Russian interference in last November’s US election might see President Trump impeached.

The Dow Jones opened 61 points higher at 20,866, while the S&P added 6 points at the opening bell to kick off the week at 2,388.

Sticking with North America, Ford Motor Company (NYSE:F) has recently confirmed on social media what those of us in this time zone have known for a few hours – chief executive Mark Fields ison his way out.

Ford took to Twitter to say Jim Hackett will replace Fields, who is apparently “retiring” at the ripe old age of 56.

The move seems to have reassured Ford shareholders, with the stock up 1.7% to US$11.06 in early deals over in New York.

Back to the UK and the FTSE 100 was hovering 38 points higher around the 7,508 mark in late trading, an area it’s been flirting with for most of the afternoon.

The solid start to the week is in large part due to the fall in the value of sterling, which has managed to stabilise just above the US1.30 mark having previously fallen below that number.

The UK currency also slipped to a two month low against the euro which is bad news for British holidaymakers. On the markets, £1 will currently get you €1.157 – around 0.5% less than last Friday.

Depending on who you believe, the dip is down to either a bad weekend for Theresa May (the City’s preferred choice at next month’s election) or a strengthening US dollar which ticked higher as Donald Trump’s Middle East tour concluded without any fireworks.

A weaker pound helps to boost foreign currency-denominated earnings made by the big multinationals, like those listed on the FTSE 100.

That, along with higher iron ore, copper, gold and silver prices, served to benefit the miners this morning. Anglo American PLC (LON:AAL), Fresnillio PLC (LON:FRES) and Randgold Resources PLC (LON:RRS) all added the best part of 1% to their share prices early on, although they fell back later on.

Another group that actually held on to their initial gains were the big-name oilers, with the likes of BP PLC (LON:BP.) (+0.7%) and Royal Dutch Shell PLC (LON:RDSB) (+0.4%) which benefitted from the rise in oil prices ahead of Thursday’s OPEC meeting.

Crude oil prices were trading at their highest for more than a month on hopes of a revamped output deal when the Organisation for Petroleum Exporting Countries meet in Vienna.

Elsewhere, Marks and Spencer Group Plc (LON:MKS) was one of the top blue chip risers and was up more than 2% to 392.7p ahead of its preliminary results which are due out on Wednesday.

The big faller on the FTSE 100 today was Micro Focus International PLC (LON:MCRO) which slumped more than 3% on the back of a bearish broker note and downgrade from analysts at Credit Suisse.

WATCH: 'The market is finally waking up' - Greatland Gold boss

Away from the big boys, Greatland Gold plc (LON:GGP) was going great guns, up more than 15% after it reported an airborne survey at its Ernest Giles project had identified several new structural targets indicative of gold mineralisation.

1.10pm...US set to open broadly flat

After a mid-morning lull, the FTSE 100 kicked on again into the early afternoon and moved back above the 7,500 mark.

Shortly after 1pm, the UK blue chip index was 40 points higher at 7,510 which is its highest point today, although there’s still work to be done to get back to the fresh all-time peak of 7,533 it hit last Wednesday.

Alongside the oilers and miners which have benefitted from higher crude oil prices and a weaker pound, phone operators Vodafone Group PLC (LON:VOD) and BT Group plc (LON:BT.A) are leading the FTSE higher.

Vodafone continued its recent run following last week’s full-year results with shares up 1.7% to 224p, while BT’s own mini-rally has also continued into Monday and it is up almost 1% at 314.2p.

Software group Micro Focus International PLC (LON:MCRO) is one of the heaviest fallers today. It has slumped 3% to £24 following a bearish note and downgrade from Credit Suisse.

On the second line, Cairn Energy PLC (LON:CNE) was boosted as broker Macquarie upgraded it to ‘outperform’ from ‘neutral’. The oil and gas firm gained 3% to trade at 217.7p.

On the currency markets, the pound wobbled early on versus the dollar before a mini-rally saw it creep back (just) above the US$1.30 mark although it’s still 0.2% down so far today.

Sterling also lost ground on the euro, with the exchange rate falling 0.5% to €1.156 – the lowest price since the end of March.

Across the pond, with Donald Trump not making too many headlines over the weekend, the US stock markets look set to enjoy a relatively quiet start to trading.

The Dow Jones is seen as opening 3 points higher at 20,841, while the S&P 500 is being tipped to open ever so slightly in positive territory at 2,384.

Spreadex analyst Connor Campbell said: “The Dow Jones looks keen to not do anything this afternoon, the futures pointing to an effectively flat start to the US session

“[It] had quite the time of it last week, ending Friday around 300 points lower than the 21000-plus levels it struck on Tuesday. So far there hasn’t been any new Trumpdates this Monday, so investors may use the clear calendar to catch their breath.”

12.05pm...88 Energy on a run today, but Zak Mir reckons it can go even higher

11.55am...Boohoo CFO takes home more than his bosses

Online fashion retailer Boohoo.com PLC (LON:BOO) has revealed how much it paid its execs in 2016 and it was something of a surprise.

According to its latest annual report, the firm paid chief financial officer Neil Catto the princely sum of £1.97mln last year, while joint chief executives Mahmud Kamani and Carol Kane took home ‘just’ £395,000.

The CEOs still have a stake in Boohoo worth the best part of £300mln, so don’t fret too much over their financial health.

11.30am...Help from above for the Church of England’s fund?

One can only assume it got some help from above as the Church of England’s investment fund generated “stellar” returns last year.

The fund – worth almost £8bn – is managed by the Church Commissioners for England body in order to, as it says, “support the Church of England as a Christian presence in every community”.

The 17.1% return on investment in 2016 was more than double what it posted a year earlier.

Chief executive of the Church Commisioners, Andrew Brown, said the group contrinuted almost £231mln to the Church in 2016.

Astonishingly that figure only accounted for around 15% of the Church’s overall income, with most funding coming from the “extraordinary generosity of parishioners”.

Elsewhere, banking giant Barclays PLC (LON:BARC) is stepping up its email security after its chief executive responded to a message from a prankster earlier this month.

A warning message will now appear whenever an employee sends a message to an external email address from a mobile, after it previously only happened on desktop computers.

A disgruntled customer used this loophole to his advantage and sent a message to CEO Jes Staley using the Gmail account john.mcfarlane.barclays@gmail.com, purporting to be chairman John McFarlane.

According to the Financial Times, in the messages to the fake account, Staley – who had just been defended by his chairman at the AGM – called McFarlane a “unique man”.

He continued: “You came to my defense today with a courage not seen in many people. How do I thank you?”

And finally, you’ve probably heard of a ten-bagger and maybe the odd fifty-bagger, but what about a 35,000-bagger? Thought not.

Well that’s the return one lucky lady is set to realise later this year when her diamond ring goes under the hammer.

The owner thought she was buying a piece of costume of jewellery when she forked out a tenner for the “exceptionally sized” stone back in the 1980s.

Little did she know it was a 26 carat white diamond cut in the 19th century worth around £350,000.  

10.35am...Active Energy CEO: 'Timber license deal a match made in heaven'

It's one of this morning's biggest risers in London, so have a listen to what the boss of Active Energy Group PLC (LON:AEG) thinks of today's timber licence deal in Canada...

10.25am...FTSE 100 heads above 7,500

The FTSE 100 nudged back above the 7,500 midway through this morning’s session as oilers and miners dragged the index higher.

The likes of BP PLC (LON:BP.) (+0.7%) and Royal Dutch Shell PLC (LON:RDSB) (+0.4%) benefitted from the rise in oil prices ahead of Thursday’s OPEC meeting to discuss production targets.

Crude oil prices are trading at their highest for more than a month on hopes of a revamped output deal when the Organisation for Petroleum Exporting Countries meet in Vienna.

Brent crude gained 0.7% to edge above the US$54 level, while West Texas Intermediate crude wasn’t too far off of US$51 as it jumped 0.8%.

Mining shares were also on the rise with Anglo American PLC (LON:AAL), Fresnillio PLC (LON:FRES) and Randgold Resources PLC (LON:RRS) all adding the best part of 1% to their share respective prices.

Some of the blue chip index’s gains can be put down to the weaker sterling, which slipped back below the US$1.30 mark.

A weaker pound helps to boost foreign currency-denominated earnings made by the big multinationals, like those listed on the FTSE 100.

Depending on your source, the dip is down to a bad weekend for Theresa May (the City’s preferred choice at next month’s election) or it could be due to a strengthening US dollar which ticked higher as Donald Trump’s Middle East tour concluded without any fireworks.

9.55am...So much for Brexit bringing down property prices…

Asking prices for homes in the UK increased for the fifth month in a row over the past month, hitting a new record high in the process.

The housing market seemingly shrugged off any uncertainty created by Brexit or June’s snap election as prices sought by sellers rose 1.2% in the four weeks to 13 May, with the average asking price hitting a fresh peak of £317,218, according to research from Rightmove.

Typical family homes saw the biggest rise, with the average asking price for three or four bedroomed, non-detached houses jumping 5.4% year-on-year over the same period to £270,953.

That’s because families with children under the age of 11 were almost twice as likely to be moving home than the average person, as they looked for bigger properties near better schools.

“As well as that shrinking house feeling, parents with young children also have the pressures of travelling times to amenities as well as the weekday school commute,” said Rightmove director and analyst Miles Shipside.

“What seems to be happening is that moving pressures are understandably taking priority over electioneering and Brexit worries.”

9.15am...Active Energy and co push AIM All-Share towards all-time highs

Like the FTSE 100, the AIM-All Share got off to a strong start on Monday, with several big risers pushing the junior market towards all-time highs.

The index peaked at 979.99 on Wednesday before falling back later on the week, but it’s back up to 979 this morning with a test of 980 looking likely at the moment.

One of those pulling the junior market higher is Active Energy Group PLC (LON:AEG), which is one of the biggest risers in the City after soaring more than 30% higher.

The AIM-quoted group has signed an in-principle deal for a Crown timber licence and forest management agreement with the Province of Newfoundland and Labrador in Canada relating to two Forest Management Districts covering 1.2mln hectares.

On top of that, both parties are also evaluating “a number of other collaborative opportunities” involving timber processing and the commercialisation of Active’s CoalSwitch product.

Echo Energy Plc (LON:ECHO) was on a tear as well, with investors seemingly excited about the next stage for the company formerly known as Independent Resources.

The explorer secured another £10mln in funding from a Bahamas-based investor on Friday which Chairman James Parsons said was the “last of an initial phase” of institutional investment.

The financing was seen as a precursor to the group’s first proposed acquisition in South America, meaning Echo is now in a position to potentially splash some cash in the coming weeks.

Thor Mining PLC (LON:THR) also ticked higher in early deals after it announced a 55% tungsten resource inventory increase at its Pilot Mountain project in Nevada.  

The total resource inventory now stands at 11.73 million tonnes at 0.28% tungsten, and executive chairman Mick Billing reckons Pilot Mountain resource inventory still has “considerable growth potential”.

Shares added 7% to 0.83p.

8.50am...M&S trading higher ahead of results

The FTSE 100 took its cue from buoyant markets in Asia overnight to open its weekly account in the black, posting a 28 point gain to move to 7,498.58.

Dollar weakness was cited for the continued interest in equities with greenback floundering as further political pressure was heaped on President Trump.

There was buying of Marks & Spencer (LON:MKS), which was up 1% in early deals, ahead of the company’s prelims on Wednesday.

The miners were also in demand – both mainstream and the precious metal diggers – while tech giant Micro Focus (LON:MCRO) was the Footsie’s biggest casualty.

Among the small-caps, Active Energy Group (LON:AEG) was the stand-out performer, adding 34% after signing a timber licence and forest management deal in Canada.

Greatland Gold (LON:GGP) continued its surge after last week’s announcement of a tie-up with the US giant Newmont.

6.45am...Footsie set to open higher 

The FTSE 100 looks set to start the week in positive territory after receiving a boost from the weaker US dollar.

The spread betting groups are predicting the index of blue-chip shares will open 28 points higher at 7492.7, taking its cue from the rise in Asia’s main stock markets.

There the demise of the greenback amid growing pressure on the Trump administration led to the regional MSCI Index posting its biggest monthly gain.

“Since Donald Trump won the US Presidency in November, equity markets have made significant gains on the premise that his presidency would deliver a bonfire of red tape, significant tax reform and infrastructure spending,” said Michael Hewson, analyst at CMC Markets.

“While we’ve certainly had a bonfire, it’s been one of negative headlines, own goals and political controversies, as the new President has lurched from one controversy to another.

“This has seen the US dollar, along with bond yields, lose all of their Trump related gains while gold prices have rebounded, as expectations about a reflationary stimulus ebb away.

“This reduction in expectations doesn’t appear to have dampened the ardour of equity investors who still appear optimistic despite last week’s sharp plunge, and remain happy to buy dips, but that doesn’t mean a correction isn’t overdue, something that even now investors appear way too complacent about.” 

Back here in dear old Blighty, it is all about the retailers this week with updates from Marks & Spencer (LON:MKS), B&Q owner Kingfisher (LON:KGF) and Dixons Carphone (LON:DCP) on Wednesday. Daily Mail & General Trusts (LON:DMGT) reports the next day as does Pets at Home (LON:PETS).

  • Pound worth US$1.3011
  • Gold down 40 cents an ounce at US$1,253.20
  • Brent crude US$53.99, up 38 cents a barrel

Business Headlines 

  • A team of salvage experts hoping to recover billions of pounds worth of gold from deep-sea shipwrecks are looking for investors to back their treasure hunt. Britannia’s Gold has launched a £5mln equity fundraising for their exploration of ships sunk in the First and Second World Wars – Daily Mail.
  • Saudi Arabia’s sovereign wealth fund plans to invest US$65bn with foreign asset managers, underscoring the dramatic transformation under the leadership of Mohammed bin Salman, the country’s powerful deputy crown prince – FT.
  • Huntsman Corporation and Switzerland’s Clariant are set to unveil a US$14 billion all-stock cross-border merger on Monday, in a transaction that will allow the two speciality chemicals companies to form a formidable industry challenger – FT.
  • Investors could face an extra €100bn bill if Brussels forces the clearing of euro-denominated trades away from London because of Brexit, the Chief Executive of the London Stock Exchange has warned – Times.
  • While some business leaders have vented their anger at Theresa May’s plans to enforce changes in areas such as pay and workers’ rights, bankers have been relatively sanguine – Times.
  • Qatar is on a fresh drive to woo the UK’s financial community, marketing itself as the “Wall Street of the Middle East” at roadshows across the country as it spruces up its image ahead of the 2022 FIFA World Cup, Telegraph.
  • The case for profitable ethical investing has been bolstered by the Church Commissioners for England, as the fund announced divine returns on its financial portfolio for 2016 – Guardian.
  • Shell shareholders including the Church of England, European pension funds and Dutch activists will send a signal to the board of the Anglo-Dutch company this week by voting for it to set new climate change goals – Guardian.

Proactive news headlines…

88 Energy (LON:88E ASX:88E) has started to process data from its Icewine#2 well in Alaska with production testing remaining on track for the end of June. Wireline logging was completed over the weekend, it said, with the quality of the data described as excellent and complementary to the core and logs retrieved at Icewine#1, the first well on the prospect.

Providence Resources PLC (LON:PVR) and its partners have received confirmation of the Dunquin exploration licence 3/04 until 2025 subject to planned work being carried out. The licence lies in 1,500m water in the southern Porcupine Basin around 170 km off the south west coast of Ireland. 

Midatech Pharma Plc (LON:MTPH NASDAQ:MTP) has selected its preferred compound candidate for testing as a potential therapy for glioblastoma (GBM), a rare form of brain cancer.  “The compound is under final evaluation with some key pre-clinical studies to confirm efficacy before being progressed into IND enabling trials and thereafter full development studies. Additional candidates are also being evaluated in parallel.” 

Clinigen Group PLC (LON:CLIN) has received a significant boost with the European authorities giving the green light for the use of Cardioxane in children undergoing chemotherapy. The AIM-listed group acquired the drug in 2013, and had been working hard in both Europe and the US since then to support a change in the labelling of the anti-toxicity treatment. 

Active Energy Group PLC (LON:AEG) has signed an in-principle deal for a Crown timber licence and forest management with the Province of Newfoundland and Labrador in Canada relating to two Forest Management Districts covering 1.2mln hectares. Shares rise 37% to 3.08p.

IXICO Plc (LON:IXI), the digital tech company focused on neuroscience, said it is on track to deliver double-digit growth for the year. “Profitability is an important target that we believe is within our reach without sacrificing appropriate investments in innovation, enhancing infrastructure and commercial capabilities,” it said in a statement published alongside its interim results.

Corero Network Security PLC (LON:CNS) said its SmartWall service is now up and running at tier one internet service provider GTT Communications Inc (NYSE:GTT).

Asiamet Resources Limited (LON:ARS) said the results to date from the metallurgical test work being carried out on ore from its BKM deposit copper in Indonesia had been “very positive”. Remember, this work, which is only part-way complete, is key to whether the company uses a cheap and straightforward recovery mechanism called solvent extraction and electro-winning.

Hummingbird Resources PLC (LON:HUM) has said pre-production mining at its Yanfolila gold project in Mali is on schedule to commence in the third-quarter of 2017 following delivery of a Ball mill from Europe, with the contract mining fleet also arriving on site.

Horizon Discovery Group PLC (LON:HZD) has gained exclusive worldwide rights to use a novel transposon-based technology platform that will broaden its gene editing capabilities.

Avacta Group Plc (LON:AVCT) said two unnamed but “leading” US biotech companies have separately taken exclusive rights to Affimer reagents for research and development use to support their respective drug development programmes. This followed technical evaluations of the technology. Commercial terms were not disclosed.

Condor Gold PLC (LON:CNR) has unveiled “excellent” drill results from an initial 2,000m drill programme on the Mestiza Vein Set at its La India Project in Nicaragua. In a statement, the AIM-listed firm said the initial seven drill holes have focused on the Tatiana Vein and results to date have been excellent and broadly validated the Soviet era drilling.

Portfolio analytics software developer StatPro Group PLC (LON:SOG) is to tell shareholders at today’s annual general meeting that news sales have progressed well this year. 

Sunrise Resources Plc (LON:SRES) said it will look to unlock the value inherent in its other project interests through joint venture, sale or other arrangements, and apply the funds to progress its pozzolan and perlite strategy.

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