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FTSE 100 regains ground at the close

The FTSE 100 closed 32.86 points higher at 7,218.16 on Thursday, just easing off its late afternoon high of 7,235

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US stocks were trading slightly higher as bond yields recovered after a recent drop that had sparked fears over slow-down in the global economy
  • FTSE 100 index ends 32.86 points higher

  • Sterling weakness boosts blue-chips

  • US stocks also rally

 

5.15pm: FTSE 100 dips slightly at close

The FTSE 100 closed 32.86 points higher at 7,218.16 on Thursday, just easing off its late afternoon high of 7,235 but still a solid gain after the previous session's sharp falls.

On Wall Street, US stocks were trading slightly higher as bond yields recovered after a recent drop that had sparked fears over slow-down in the global economy, with a reduction in US GDP data much as expected.

Joshua Mahoney, senior market analyst at IG noted: "A downward revision to US growth today did little to deter the dollar today, with the dollar index closing in on a two-year high this afternoon. However, much of the strength in the dollar seems to stem from weakness in corresponding currencies, with German growth concerns and the UK political picture causing further downside for European exchange rates." 

"The trade war has impacted US producers in much the same way as the prospect of a no-deal Brexit affected the behaviour of UK firms. Stockpiling and frontloading purchases has been a common feature for US producers as they seek to mitigate the detrimental impact of the US-China tariffs. However, with stockpiling having helped provide a short-term boost to US growth, the worry is that we will see a significantly lower rate of growth once that trend is reversed," he added.

3.50pm: Sterling's weakness gives lift to Footsie stocks

After yesterday's heavy losses, the Footsie has regained its composure today, quietly accumulating a 50 point gain.

With around 45 minutes of the trading session left, London's index of leading shares was up 0.7% at 7,235, extremely adjacent to its high point for the day.

Just 13 index constituents were in the red, including ex-dividend stocks National Grid and Whitbread.

The top riser was steel maker Evraz plc (LON:EVR), which rose 3.1%, closely followed by engineering outfit Halma PLC (LON:HLMA), which was also up 3.0%.

3.15pm: US open not as hale and hearty as anticipated

As expected, US indices opened higher, albeit not as strongly as expected.

The Dow Jones industrial average was 65 points (0.3%) to the good at 25,192 while the broader-based S&P 500 was 12 points (0.5%) firmer at 2,795.

In dear old Blighty, the FTSE 100 index was up 40 points (0.6%) at 7,225, helped by a bit of sterling subsidence against the US dollar.

The mid-cap FTSE 250 was performing even better, rising 149 points (0.8%) to 19,095, led by Kier Group PLC (LON:KIE), the infrastructure services group, which was up 14.5%.

Engineering software group AVEVA Group PLC (LON:AVV), up 5.7%, was another winner; the stock has been widely tipped for promotion to the FTSE 100 in next month's reshuffle, which would lead to a large number of index-tracking funds adding the stock to their portfolios.

Among the small caps, clean fuel and energy storage company ITM Power PLC (LON:ITM) was on a charge, rising 6.6% to 34.1p after a trading update.

Nuformix (LON:NFX) was up by 24% after unveiling positive results in its clinical study for the company's lead programme NXP001.

The pharmaceutical development company said its lead drug – a treatment for chemotherapy-induced nausea – achieved “bioequivalence to Merck's EMEND” drug.

 

2.15pm: US benchmarks set to open higher

Ahead of the open on Wall Street, spread betting quotes were pointing to a modestly firmer start.

The Dow Jones was tipped to open 31 points higher at 25,157 after slumping 221 points yesterday and the S&P 500 was expected to start some 5 points firmer at 2,788 after plunging 20 points yesterday.

On this side of the pond, the FTSE 100 was up 36 points at 7,222.

12.15pm: FTSE 100 continues to climb at leisurely pace

Progress by the Footsie remains painfully slow and it looks like it might be the same story for US benchmarks when Wall Street opens.

London's index of leading shares was up 31 points (0.4%) at 7,217, with financial stocks such as Standard Life Aberdeen PLC, Schroders PLC, London Stock Exchange PLC, Phoenix Group Holdings PLC, Hiscox PLC, Hargreaves Lansdown PLC and Standard Chartered PLC to the fore.

“With seemingly little reason behind it, the European rebound gathered pace as Thursday went on – though it is worth noting, at the moment the Dow Jones isn’t looking quite as enthusiastic,” reported Connor Campbell of Spreadex.

“Still, barring some kind of miracle on Friday, it has been a rough month for the UK index, given that it started it at 7450," he added.

The chances of easyJet PLC (LON:EZJ) getting relegated from the FTSE 100 after a six-year stint grew as shares in the no-frills airline declined 0.8% to 881.2p, leaving it as the constituent with the lowest market capitalisation (at £3.53bn).

The next lowest capitalisation is Marks and Spencer Group Holdings PLC (LON:MKS), which is down 2.8%, giving it a market cap of just under £4bn.

“EasyJet is almost certain to drop out of the main index,” predicted Helal Miah, an investment analyst at The Share Centre.

“We have touted Marks and Spencer as a relegation candidate on many occasions in the past, but always just managed to escape the drop, and it looks like doing so again thanks to the timing of the rights issue which lifts its market cap just in time; however, it is still close to a drop out of the main index which will mark a significant point in the retail environment,” Miah suggested.

“As a flagship UK retailer who seems to have been ever present in the main index, the drop would reflect the sorry state of affairs for the sector,” he added.

Once upon a time, M&S dropping out of the top shares index would have been as unthinkable as Imperial Chemical Industries (ICI) falling into foreign hands; that happened, and so could M&S’s relegation.

It’s not all doom and gloom in the retail sector, however, as JD Sports Fashion PLC (LON:JD.), with a market capitalisation of £6bn, looks nailed on to get promotion to the big league.

11.10am: Leading shares edge higher

London’s leading shares have, on balance, been edging higher in the second half of the morning trading session.

The FTSE 100 was up 27 points (0.4%) at 7,212, just a few points below its intra-day high.

Tesco PLC (LON:TSC) was failing to participate in the advance, sliding 0.5% after Deutsche Bank slightly lowered its earnings per share estimates for the heavyweight of the supermarket sector.

Among the mid-caps, bus and trains outfit FirstGroup PLC (LON:FGP) got the thumbs-up for its results statement and strategic reboot.

“The company appears to be taking an increasingly narrow road in terms of its strategy. Bowing to pressure from activist and 10% shareholder Coast Capital the Greyhound bus operation will be sold, and the company also plans to spin off its UK bus operations,” observed AJ Bell's Russ Mould.

“With its UK rail division running off track, it looks like its commitment to this area is wavering too. This leaves just US school buses and private transit operations in the States, suggesting FirstGroup believe the best businesses come in smaller packages.

“It remains to be seen if this will be enough to deflect calls from Coast Capital for a change in management.

“Chief executive Matthew Gregory could at least argue the case for more time, given he has only been in the driver’s seat since November 2018,” Mould suggested.

FirstGroup shares were up 4.4%.

10.15am: Investors lick their wounds

London's index of heavyweight shares has continued the firmer trend seen late yesterday afternoon.

The Footsie was up 19 points (0.3%) at 7,204 despite the usual Thursday gaggle of ex-dividend stocks and a slight firming of sterling against the US dollar.

“European stocks have surprisingly managed to shake off a weak close on Wall Street Wednesday where indices dropped to their lowest level in ten weeks on a heady mixture of trade war worries and growing concerns over the state of the US economy. This morning the FTSE is nudging higher mainly thanks to banking and insurance stocks but slightly higher oil prices are also adding to the rally, helping oil majors and mining stocks,” reported Fiona Cincotta at City Index.

Johnson Matthey PLC (LON:JMAT), the platinum refiner, found the market hard to please with its full-year results.

“While sales performance was good, the operating profit figures were a little more mixed, with profits at the New Markets division falling to just £2mln, an 85% fall,” noted Helal Miah, an investment research analyst at The Share Centre.

“Foreign currency movements are also expected to impact sales and underlying operating profits by £6mln and £2mln respectively for the upcoming year. These factors may help to explain the 4% fall in the share price this morning even though they are keeping their overall guidance for 2020 unchanged,” he added.

That 4% price fall has now been trimmed to a 3% decline.

8.55am: Cautious recovery for Footsie

It was a case of the calm after the storm with the FTSE 100 rising 20 points to 7,205.31 after Wednesday’s sharp sell-offs both in London and on Wall Street.

Still, traders still appear to be in jittery mood given the current state of Sino-American relations after Beijing reacted to the recent round of US sanctions by threatening an embargo on rare earth minerals used in computers, phones and electric car batteries.

“From pretty much assuming the US and China would strike a deal, the market is repricing for a prolonged fight,” said Neil Wilson, an analyst at Markets.com.

Stocks going ex-dividend knocked around 5 points from the index. Included in the list of companies trading without entitlement to a pay-out were National Grid (LON:NG.), off 6%, Marks & Spencer Group (LON:MKS), down 2.8% and Whitbread (LON:WTB), 1.5% lower.

It has been an up and down few days for private hospital owner NMC Healthcare (LON:NMC) in the wake of Tuesday’s trading update. After a sharp sell-off Wednesday there was 2.2% bounce today.

Shares in ITV (LON:ITV), up 2.5%, topped the Footsie climbers’ page ahead of the launch of series five of Love Island, with excitement growing following the release of the full cast list.  The reality TV backlash following the Jeremy Kyle Show cancellation seems unlikely to prevent the ‘reality’ show being a ratings winner, analysts said.

Proactive news headlines:

HemoGenyx Pharmaceuticals PLC (LON:HEMO) chief executive Vladislav Sandler said the company was encouraged by new data on its antibody drug candidate for use in acute lymphoblastic leukaemia (ALL).

Cadogan Petroleum PLC (LON:CAD) has revealed a successful outcome in its well testing programme at the Blazh-10 well in western Ukraine. Blazh-10 produced some 275 barrels of oil per day during testing and the company has now decided to continue producing from the well in a natural flow.

BigDish PLC (LON:DISH) has announced plans to roll out its yield management platform for restaurants across the entire UK. The London-listed firm said that to ensure a smooth rollout it had divided the UK into ten territories and would begin recruiting managers for each, a process that would take around three to four months.

ITM Power PLC (LON:ITM) “is undoubtedly in the right place at the right time”, chief executive Graham Cooley told investors as the energy storage and clean fuel company provided an upbeat assessment of current trading and prospects.

Immotion Group PLC (LON:IMMO) shares bobbed higher on Thursday after it signed an agreement to install its virtual reality (VR) cinema pods at the Santa Barbara Zoo in Florida, the first zoo to incorporate its products.

KRM22 PLC (LON:KRM) has agreed to acquire Dutch-based risk management and post-trade services group Object+ for around £3mln.

Renewables investor Greencoat UK Wind PLC (LON:UKW) has raised £375mln through a share issue at 133p for more additions to its portfolio of wind farms. Stephen Lilley, the fund’s manager, said the money raised would strengthen the balance sheet and enable it to take advantage of a large pipeline of opportunities currently available.

Applied Graphene Materials PLC (LON:AGP) is to showcase two applications of its graphene technology in the aerospace sector at a prestigious industry event. The graphene specialist will attend the National Aerospace Technology Exploitation Programme (NATEP) showcase event to present the results of the two projects.

Brady PLC (LON:BRY), the provider of trading and risk management solutions to the energy and commodities sectors, has traded in line with expectations this year.

Quadrise Fuels International PLC (LON:QFI) has pencilled a partnership deal with Saudi Arabia-based investment firm, Al Khafrah Holding Group.

United Oil & Gas PLC (LON:UOG) chief executive Brian Larkin has described himself as delighted as the explorer reported on a “year of considerable progress”. Big Pic in February.

Lombard Odier has conditionally agreed to make another investment in i3Energy PLC (LON:I3E), the independent oil and gas company. Funds managed by Lombard Odier Asset Management will buy £3mln of i3 loan notes, and have also signed up to take £2mln of new shares issued at 37p a pop and warrants to subscribe for £3mln of new shares.

Vast Resources PLC (LON:VAST) has raised £900,000 through an equity sale organised by the company’s broker SVS Securities. The funds will be used to meet the group’s current financing needs in Romania where it is advancing towards production.

Afarak Group PLC said Wednesday that it has made agreements regarding its funding after securing a combination of an off-take agreement for chrome ore and several financing agreements. Under the off-take agreement, the group said it will deliver goods from its South African mines from July 2019 to July 2023 and against these deliveries will receive a prepayment for the goods.

Keywords Studios PLC (LON:KWS), the international technical services provider to the global video games industry, announced that 77,006 new ordinary shares have been issued to the vendors of Fire Without Smoke Ltd. in respect of the non-contingent deferred share consideration due on the first anniversary of the business being acquired.

Ncondezi Energy Limited (LON:NCCL) announced the receipt of a new shareholder loan conversion notice in relation to 1,546,934 new ordinary shares in the company from a lender at a conversion price of 10.0p per share.

6.45am: FTSE 100 set to rise 

The FTSE 100 is expected to show a slight improvement on Thursday’s open, albeit with sentiment across global equities remaining weak.

London’s blue chip index is seen about 15 points higher with just over an hour to go until the open, with IG Markets calling the price 7,187 to 7,190.

Nonetheless, traders can’t shake concerns over the escalating trade ‘war’ between Donald Trump’s United States and China in the wake of the Chinese threat to withhold rare earth metal supplies.

China has a tight grip on rare earths - which are vital ingredients in high technology components - because more than 70% of the world’s viable deposits exist within its borders. It is something of a unique weapon in the trade ‘war’.

“The very fact that China played that card highlights how serious the situation has become,” said David Madden, an analyst at CMC Markets.

“Equity markets in Europe and the US endured heavy losses on the back of the news, and trade tensions have reached new heights. The Trump administration will have to carefully consider its next move.”

He added: “The fear is evident by the moves in the bonds markets. The yield on the 10-year US government bond dropped to 2.21% a fresh 20 month low, while the 3 month bond yield touched 2.36%.

“The fact the longer-dated bond yield has dropped below the short-term bond yield has spooked investors as that phenomenon has historically forewarned recessions.”

Wall Street reflected the extent of investor concerns on Wednesday. The Dow Jones marked a 221 point or 0.87% decline for the session to close at 25,126. The S&P 500 similarly dropped 0.69% to 2,783 while the Nasdaq was down 0.79% at 7,547.

In Asia, Japan’s Nikkei gave up 0.47% to trade at 20,902 whilst Hong Kong’s Hang Seng was off 0.55% at 27,085, and, the Shanghai Composite was 0.92% lower at 2,887.

Significant announcements for Thursday:

Finals: Johnson Matthey PLC (LON:JMAT), FirstGroup PLC (LON:FGP), Pennon Group plc (LON:PNN), De La Rue plc (LON:DLAR), Helios Underwriting PLC (LON:HUW)

Interims: Daily Mail & General Trust PLC (LON:DMGT, Urban & Civic PLC (LON:UANC)

AGMs: hVivo PLC (LON:HVO)

Ex-dividends to knock 5.38 points off FTSE 100 index: Marks & Spencer Group PLC (LON:MKS), National Grid PLC (LON:NG.), Sage Group PLC (LON:SGE), Whitbread plc (LON:WTB)

Economic data: US weekly jobless claims; US preliminary GDP; US pending home sales

Around the markets

  • Pound: US$1.2632, up 0.05%
  • Gold: US$1.276 per ounce, down 0.28%
  • Brent crude: US$69.70 per barrel, down 0.55%
  • Bitcoin: US$8,712, up 2.45%

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