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Footsie closes down ahead of Fed statement

US shares moved higher as investors look to the Fed statement

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FTSE100 closed lower

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London shares ended the day lower as investors await the conclusion of the Fed policy meeting and Greece is still putting traders off.
The blue chip index closed out at 6,680, down almost 30 points.
The finish was the lowest level in five months as the Greece saga rumbles on and it increasingly looks like a Grexit is coming.
Meanwhile, in the UK, the MPC voted unanimously to keep UK interest rates unchanged.
Property firms did well with Persimmon (LON:PSN) the biggest gainer - up 1.63% at 1,991p.
It comes after mid cap peer Berkeley Group (LON:BKG) impressed with its full-year results.
British Land (LON:BLND) and Land Securities (LON:LAND) were on the losers bench however.
Berkeley  posted a pre-tax profit of £539.7mln for the year to the end of April, up 42% on the previous year.
In small caps, notable gainers were gold recovery firm Goldplat (LON:GDP), up 13.33% to 2.12p as it said it was making progress in clearing the backlog of by-product material waiting to be processed, thus improving cash flow.Tertiary Minerals (LON:TYM) also added 9.09% to 3p as it more than doubled the fluorspar resource at its MB project in Nevada, USA.Mobile Streams (LON:MOS) also soared almost 29% to 7.25pThe mobile device focused firm told investors it knew of no reason why

 

US

US shares moved higher in early deals unlike their European counterparts, where worries over Greece was getting the better of investors.
In focus stateside is the Fed policy meeting and a statement is expected at 6pm followed by a statement from Janet Yellen 30 minutes later.
The market mood appears to be upbeat probably because the hope is  a timeline will be given on when rates will be lifted. Markets like that security. Of course, a date may not be given as well!
So far conjecture ranges from September this year to the end of next.
David Madden, at spreadbetting firm IG takes a measured view:
"Janet Yellen doesn’t want traders getting too accustomed to the record-low interest rates, but at the same time the US economy isn’t ready for a rate hike, and this will override any possible warning of rates rising sooner than anticipated."
Meanwhile, in Greece, relations appear to be getting worse not better and the prospect of an exit from the Eurozone looks increasingly more real.
In the markets, the Dow Jones added 52 points to 17,956, the S&P500 added six, while the Nasdaq gained 18 to 5,074.
The FTSE100 is down 14 points at the time of writing..

Lunchtime

Investors have been given something else to think about other than the Greek debt negotiation epic, in the form of the conclusion of the latest Federal Reserve meeting.

“There still remains a great deal of indecision amongst investors about when the Federal Reserve might look at raising interest rates. While today’s meeting isn’t likely to see a move in rates the main focus is likely to be on the tone of the statement and the resulting press conference from Fed Chair Janet Yellen,” opines Michael Hewson, chief market analyst at spread betting firm CMC Markets.

“There is likely to be a nod to concerns about the situation in Greece, given the verbal interventions in recent days by Treasury Secretary Jack Lew, which suggests significant concern in the US government of possible ripple out effects,” Hewson speculated.

The meeting of the Federal Open Market Committee has put today's release of minutes from the most recent meeting of its Bank of England counterpart, the Monetary Policy Committee (MPC), in the shade.

The MPC voted unanimously to keep UK interest rates unchanged, but Alex Lydall, senior trader at Foenix boutique Foenix Partners, reckons it might not be long before Ian McCafferty and Martin Weale, who have a bit of form when it comes to voting in favour of an interest rate hike, get off the fence.

Despite US markets looking set for a firm opening, UK blue-chips have surrendered early gains.

The FTSE 100 is down 39 at 6,671, with property stocks featuring prominently among the laggards.

British Land (LON:BLND), Land Securities (LON:LAND), Intu Properties (LON:INTU) and Hammerson (LON:HMSN) sport losses ranging from 1.7% to 2.2%.

Property companies may be in the soup but house builders such as Persimmon (LON:PSN) and Barratt Developments (LON:BDEV) are wanted, after mid-cap peer Berkeley Group (LON:BKG) impressed with its full-year results.

The company, which is focused on London and the south-east, posted a pre-tax profit of £539.7mln for the year to the end of April, up 42% on the previous year.

Berkeley’s shares storm 8.4% higher to 3,423p, but fellow FTSE 250 constituent Betfair (LON:BET) is down 82p at 2,432p, after it warned that investment was crucial to keep up with rivals in the gambling sector.

Bid news has put a bit of pep in a couple of small caps.

Anite (LON:AIE), which performs testing of handsets and telecoms equipment, looks set to go Dutch, after Keysight Technologies of the Netherlands won the UK company’s backing for a 126p per share cash offer. Anite’s shares rose 24.5p to 127.5p.

Promethean World (LON:PRW), meanwhile, is mulling an indicative 40p a share proposal from Hong Kong-listed NetDragon WebSoft.

The UK company, which makes electronic whiteboards that have supplanted old-fashioned blackboards in many classrooms, saw its shares recover to 33.76p from 27.25p but that is still about one-sixth of the price at which it floated with much fanfare back in 2010, in what was a text-book example of how to tick off patient shareholders.

London open

London’s blue chip stocks opened higher for the first time this week ahead of the keenly anticipated conclusion of the latest Federal Reserve meeting.

Gains were made despite another defiant speech by the Greece prime minister Alexis Tsipras.

Positions between the country and the rest of Europe are hardening ahead of the IMF repayment deadline this month and negotiations appear to have stalled.

Fed chair Janet Yellen will be the focus today, however. June was the month when some people expected US interest rates to rise, but September or even perhaps later is now considered more likely.

In the US, the Dow Jones Industrial Average rose by 113 points or 0.6% to 17,904, while there were similar gains for the other main indices as well.

Back in the UK, the FTSE 100 was 15 points higher to 6,729 led higher by house builder Persimmon (LON:PSN).

A strong set of results for rival Berkeley Group (LON:BKG) boosted investor confidence in the sector. Persimmon’s shares rose 20p to 1,979p.

Away from the index, Berkeley was the biggest gainer of the mid-sized companies, gaining 8.5% to 3,429p.

The company posted a pre-tax profit of £539.7m for the year to the end of April, up 42% on the previous year.

Meanwhile, gambling group Betfair (LON:BET)  warned that investment was crucial to keep up with rivals. Shares eased 2.8% to 2,442p.

Breon Corcoran, chief executive, said: “The market remains highly competitive and, despite the introduction of the UK point of consumption tax, operators are still spending heavily on marketing and promotions.”

In broker news, insurance company Amlin (LON:AML) was lower after UBS lost faith in the company. The Swiss broker dropped its rating on the stock to ‘sell’ from ‘neutral’ sending shares 2.3% lower to 474p.

Conversely, Mr Kipling owner Premier Foods (LON:PFD) was higher as Investec sweetened on the stock. It bumped up the company to ‘buy’ from ‘hold’ and boosted its target price to 51p. Share rose 3% to 42p.

In small caps, Cap-XX (LON:CPX) the creator of the world’s thinnest super-capacitor, said initial feedback from clients has been positive. Shares rose 15% to 3.6p.

It wasn’t the only company to register impressive gains early on: Tertiary Minerals (LON:TYM) jumped 21% to 3.3p after the fluorspar explorer upgraded the resource at its MB project in Nevada.

Elsewhere, Internet platform business CentralNic (LON:CNIC) brought in £2.3 million via a premium placing to strengthen the balance sheet. Shares leapt 17% to 40p.

On the other side of the coin, however, Sefton Resources (LON:SER) led the fallers after it raised £800k through a placing of shares at 0.065p.

The company, which recently binned its equity finance facility with Darwin, saw shares ease more than 40% to 0.085p. 

Preview

London’s blue chips are set to rise ahead of the keenly anticipated conclusion of the latest Federal Reserve meeting.

Financial spread bet firms see Footsie opening around 15 points higher following a recovery overnight on Wall Street.

Gains are forecast despite another defiant speech by the Greece prime minister, with positions between the country and the  rest of Europe hardening ahead of the IMF repayment deadline this month.

Fed chair Janet Yellen will be the focus today, however. June was the month when some people expected US interest rates to rise, but September or even perhaps later is now considered more likely.

Economists hope or expect some guidance towards that today after which the question will become how rapidly the US central bank will start to raise rates.

In the US, the Dow Jones Industrial Average rose by 113 points to 17,904, with gains for the other main indices as well.

Asian markets were mixed with good gains for Hong Kong offset by dips in Tokyo sand Shanghai.

UK company news sees London-based house builder Berkeley Group report.

Market consensus is for revenue of £1.89bn and adjusted net income of £374 million - representing  a 16% rise in revenue and a 28% increase in adjusted net income.

Quick facts: Berkeley Group

Price: 4511 GBX

LSE:BKG
Market: LSE
Market Cap: £5.68 billion
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