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Market ReportMID SESSION MARKET WRAP

FTSE 100 sitting pretty ahead of US jobs report

An unlikely combination of tobacco and drugs stocks are driving the top-share index's advance

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The Footsie has clawed back all of yesterday's losses

The FTSE 100 has now clawed back all of yesterday’s losses and more, as investors dive into tobacco and pharmaceutical stocks.

Just gone half past twelve the FTSE 100 was up 69 points at 6,815.

Fags makers Imperial Brands PLC (LON:IMB) and British American Tobacco PLC (LON:BATS) both advance by more than 2% while drugs giants GlaxoSmithKline PLC (LON:GSK) and AstraZeneca PLC (LON:AZN) climb 2.15 and 1.7% respectively.

Roxi Petroleum PLC (LON:RXP) was wanted after a reserves update for the South Yelemes Fields’ post-sale reservoirs. The Kazakhstan-focused oil and gas company’s executive chairman, Clive Carver, said: “We believe the results strongly indicate the current value of the company is largely covered by just the reserves from the shallow wells drilled at South Yelemes.”

The shares were up 7.5% at 10.75p.

Eye-popping growth in the top-line spurred Constellation Healthcare Technologies Inc 6% higher to 151p.

The US-focused healthcare management company saw revenues rise by almost 80% year-on-year to US$50mln in the six months ended June.

Woe betide a growth stock that disappoints the market … shares in Eckoh PLC (LON:ECK), the provider of secure payment and customer contact technology, have been on a decent run in the last six months as the company made inroads into the US market, but shares fell to earth with a bump today.

The company’s stock market capitalisation was reduced by a quarter as it revealed it is suffering growing pains. It warned that profits for the year would be flat and therefore miss market expectations, citing changes taking place in the US for the temporary glitch.

Scottish precious metals outfit Scotgold Resources Limited (LON:SGZ) tumbled 14% as it revealed conversion of loan notes would increase the number of shares in issue by 36.67mln.

 

Lifeline Scientific Inc (LON:LSIC) has entered into a definitive merger agreement with Shanghai Genext Medical Technology (SGM). The cash offer from SGM values Lifeline Scientific at around US$87.8m or US$4.083 in cash per share. The shares fell 24.5p to 285p in London.


Open

On a relatively quiet day for corporate news, London’s blue chips have opened slightly higher ahead of this afternoon’s US jobs report for August.

“We expect job growth of 175,000 in August. This is below the prints of the past two months but still above the amount needed for labour market slack to come down,” said Danske Bank Markets.

The FTSE 100 was up 34 points at 6,780, clawing back some of yesterday’s losses.

The UK Markit/CIPS construction survey for August gave sentiment a small fillip. Activity is still contracting (as indicated by an index value below 50), but the index value of 49.2 was up from July’s 45.9 and better than the 46.3 economists had been expecting.

“UK construction activity fell for a third successive month in August as the industry goes through its toughest spell since 2009. While the sector saw a welcome easing in the rate of decline, uncertainty about the impact of Brexit remains widespread and confidence low by historical standards,” said Chris Williamson, the chief economist at Markit.

The mid-cap FTSE 250 index, down 19 at 17,830, was heading in the opposite direction to its bigger brother, largely as a result of a 12% fall in the share price of retirement homes builder McCarthy & Stone (LON:MCS).

While other house builders have been quite upbeat about post-Brexit vote trading, McCarthy indicated some weakness in the secondary housing market since our trading update on 29 June. 

“Whilst web site enquiries have increased, and we have continued to take new reservations, these have been at a lower level than we saw in the first nine months of the financial year and cancellations have been at higher levels,” the company said.

Fellow FTSE 250 constituent Go-Ahead Group PLC (LON:GOG) was travelling in the right direction, advancing 203p to 2,201p in the wake of a generally bullish full-year trading update.

The core bus division had a good year, with the regional bus unit notching up a record year of profits, but a slightly better-than-expected performance by the railway business was marred by a tough year for the Govia Thameslink Railway (GTR) franchise, which runs the Thameslink, Great Northern and Southern networks, as well as the Gatwick Express service.

In the small caps market, the importance of Google to growing tech firms was underlined by two announcements this morning.

Proximity marketing and digital payments firm Proxama PLC (LON:PROX) shot up 23% as it became only the second company in the world to be certified as a Google location services provider.

Proxama’s rise was topped by Toumaz Ld (LON:TMZ), which soared 28% after it unveiled its first design win for its Minuet speaker toolkit.

 

The group's consumer audio business was chosen by Harman International Industries, the world's leading provider of wireless home audio devices to power its new Google Cast-enabled wireless home speaker


Opening snapshot at 8.15am

The FTSE 100 was up 20 points to 6,769.

The top winner was Royal Bank of Scotland Group (LON:RBS) up 1.5% to 204p.

Carnival PLC (LON:CCL) was the biggest loser down 2% to 3,589p.

News

Brady CEO steps down

Eckoh suffers growing pains

TomCo Energy raises £400,000 in share placing


Preview at 6.53am

The FTSE 100 is set to make a quiet start to the last day of a shortened trading week as traders go into wait-and-see mode ahead of the US employment figures this afternoon.

The index of blue-chip shares will start the session 17 points higher at 6,772.97, according to the spread betting firms.

All eyes will be focused Stateside and on the US non-farm payrolls, which are expected to reveal around 180,000 jobs have been created in August.

Any out-performance will increase the odds of a September rate hike, analysts said.

However, an undershoot might convince Fed chair Janet Yellen and her cohorts to keep their powder dry.

In fact weak manufacturing data – which has seen the sector slip into recession – may already have convinced them to do just that.

Overnight Wall Street was flat, while Asia was mixed and reasonably quiet.  

Back here in the UK it is expected to be a slow day for corporate news on the last session of the summer holiday period.

*Brent crude 32 cents higher at US$45.77 a barrel.

*Gold US$3.30 higher at US$1,316 an ounce.

City Headlines

*Mail Online, the world’s biggest English language news web site, is leading a drive to amend UK press regulation so that content generated overseas is not overseen by British rules – FT.

*The City’s dominance in foreign exchange trading is on the wane as Asia and other emerging markets make inroads into the world’s largest financial market, according to an authoritative three-yearly report – Times.

Anglo American’s plan to sell off unwanted mines is facing renewed scrutiny from its biggest shareholder – Telegraph.

*Apple chief executive Tim Cook says the European Commission ruling that Apple should pay €13bn over its tax arrangements in Ireland is “total political crap” and “maddening” – Independent.

*The battle for control of Poundland took a fresh twist after a voracious New York hedge fund raised its stake in the high street chain to nearly 25% - Daily Mail.

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