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FTSE 100 off to a flyer as investors pile into banking stocks

Published: 09:36 17 Jun 2016 BST

Shares shot higher

The Greek bail-out story returned to prominence of Friday, with a new deal for the southern European country giving markets an early lift.

A bail-out worth some €7.5bn has been agreed by Eurozone finance ministers, giving a fillip to the FTSE 100 index, which was up 67 points (1.1%) at 6,017.

Banks were leading the advance, as the perception grows that the momentum of the Brexit campaign may have been halted by yesterday’s tragic events that led to the death of MP Jo Cox.

Small caps, which have generally been less buffeted by the whole EU referendum saga, were getting nowhere near the level of love of their bigger brethren, with the FTSE Aim All-Share up just a couple of points at 711, though the FTSE Aim 100 index fared a bit better, rising 18 points to 3,341.

Born-again zinc recovery specialist ZincOx Resources plc (LON:ZOX) saw its shares surge 0.28p to 0.9p as it raised £300,000 by issuing shares at a penny a pop.

EU Supply PLC (LON:EUSP), the e-procurement software firm, was wanted after chief executive officer Thomas Beergrehn stuck his hand in his sky-rocket to buy 1.4mln shares at 4.25p a share.

The shares climbed 12% to 4.75p.

Shares in Kodal Minerals PLC (LON:KOD), which were hit hard back in April after flooding the market with shares, perked up this morning, rising 6.3% to 0.04p on the back of full-year results.

The pre-revenue company’s loss before tax narrowed dramatically to £465,622 in the year to 31 March, 2016 from £3.96mln the year before.

Vast Resources PLC (LON:VAST), the AIM-listed resource development and production company, announced that, as a cost cutting initiative, it has terminated the brokerage agreement with Dowgate Capital Stockbrokers.

The shares rose 6.5% to 0.17p on the news.

The danger of being over-reliant on one customer was made apparent by this morning’s announcement from CDialogues PLC (LON:CDOG), the provider of mobile marketing services to mobile network operators.

The group has received a notice of termination from Numbase Limited in respect of the four contracts from which CDialogues generates all of its current revenues.

The shares lost more than a quarter of their value as the company initiated a strategic review.

Scancell Holdings Plc(LON:SCLP) said it is working as quickly as possible to secure new supplies of its flagship cancer drug SCIB1 after withdrawing the current batch.

The news hit the shares, which retreated to 13.875p from 18.5p overnight.


Early snapshot

It’s all aboard the Footsie express this morning as the top-share index started like a train.

The FTSE 100 index was up 70 points at 6,021 after 35 minutes of trading, with just a handful of defensive favourites – Randgold Resources, Fresnillo, National Grid, Unilever and British American Tobacco – left on the platform.

Banks were leading the charge with Lloyds Banking Group PLC (LON:LLOY) top of the tree, up 4.9% at 64.375p.


Preview at 6.52am

The FTSE 100 looks set to start the final session of the trading week in positive territory, shrugging off the market’s jitters over Britain’s potential exit from the EU.

The spread betting firms are predicting the index of blue-chip shares will rise around 40 points on opening to 5,990.

Sentiment will no doubt be buoyed by Wall Street overnight as the main stock indices in the US shrugged off some fairly steep early losses to end the session higher.

The Dow Jones Industrial ended a five-day losing streak with a 0.5% gain, while the broader-based S&P 500 was up 0.3%. The tech-focused Nasdaq finished flat.

In Asia the momentum was positive with Japan’s Nikkei given a push by the weak yen, which helped the country’s export stocks.

In China the Shanghai Composite and Hang Seng were trading respectively 0.9% and 0.8% higher.

Here in the UK it is expected to be a quiet day for corporate news with JD Sport’s annual meeting accompanied by an update on trading from the trainer retailer.

  • Brent crude trading 56 cents higher at US$47.75 per barrel.
  • Gold US$8.70 lower at US$1,287.40 per ounce.
  • Market rumour: UFC could soon be in new hands with two rival bids for the organisation expected by the end of the week. Two groups, WME-IMG in conjunction with Dalian Wanda, and China Media Capital, had similar bids in the $4.1bn range.

City Headlines

  • Salesforce.com considered making a takeover bid for LinkedIn before Microsoft won the professional social networking company over with its own $26bn offer – FT.
  • Thousands of investors have been dealt a blow after the Supreme Court narrowly ruled in favour of Lloyds Banking Group’s controversial decision to call in more than £3bn of high income-paying bonds – FT.
  • Britain’s biggest Owner of shopping centres is in talks to buy up the 50% it does not already own of a site near Birmingham for about £410mln – Times.
  • HSBC has agreed to pay more than £1bn to settle a securities fraud class action that stemmed from the bank’s takeover of a US sub-prime lender more than a decade ago – Telegraph.
  • Europe will rely on Russia for record imports of natural gas this year as domestic production plunges following the crash in oil and gas prices, said Gazprom Boss Alexei Miller – Telegraph.

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