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FTSE 100 pare losses but Italian poll jitters persist

Last updated: 17:35 02 Dec 2016 GMT, First published: 06:51 02 Dec 2016 GMT

Renzi-on-referendum_514417426
  • FTSE 100 closes down 22pts
  • Italian poll gives investors jitters
  • Pound rises to $1.2626
  • Brent crude up 0.2% to $54.03
 

FTSE 100 shares pared losses but still ended lower on Friday on Italian referendum jitters.

The blue-chip ticker ended down 0.3% at 6730 with investors cautious ahead of Italy's referendum at the weekend.

The vote is about weakening the powers of the bloated Italian Senate. But a vote to defy premier Matteo Renzi could lead to a banking crisis and even start the process of throwing the third-largest economy out of the euro zone.

Among the biggest fallers in London were mining giant BHP Billiton (LON:BLT) down 2.6% to 1304p and bank Barclays (LON:BARC) down 2.8% to 212.95p. The biggest faller was Royal Bank of Scotland Group (LON:RBS) down 3.2% at 193.4p.

In the mid-cap FTSE 250 which closed down 0.4% at 17,435, shares in Berkeley (LON:BKG) shot up 8.5% to 2760p and were the top riser, after the housebuilder posted a 34% rise in half-year profits.

However, the company also said reservations were down 20% over the period, which it blamed on the higher stamp duty for buy-to-let landlords and uncertainty caused by the Brexit vote.

By a similar 8.8%, Laird PLC (LON:LRD) shares fell to 138.1p, making it the top laggard in the FTSE 250. The electronics company said it is to raise £185mln through a rights issue and scrap its final dividend in a bid to strengthen its financial position.

Through the rights issue, the company will offer shares to existing shareholders in proportion to their existing holdings in the first quarter of 2017.

Conversely, the small-cap FTSE AIM 100 Index closed up 0.1% to 3896 and the FTSE AIM All-Share Index up 0.08% at 813.

Overall, 25% of London stocks gained on Friday but this was outweighed by 38% which fell.

In small caps, Amryt Pharma plc (LON:AMYT) surged 20% after it secured a €20mln European Investment Bank facility that will help fund a late stage clinical study of a potentially breakthrough treatment for a rare skin disease.

cloudBuy PLC (LON:CBUY) said it had drawn down £1mln from a £5.75mln facility it agreed earlier this year.

In doing so it has issued 362,800 convertible and 637,200 non-convertible loan notes of £1 each to investor Robert Sella.

The provider of cloud-based e-commerce marketplaces has a further £1.43mln “to be utilised in future”. Shares closed at 4.25p.


 

14:00 -- FTSE 100 in red as non-farms point to US rate rise

  • FTSE 100 down 44

  • Italian vote concerns hang heavy over European markets

  • US economy adds 178,000 jobs in November, slightly below forecasts

  • Housebuilder Berkeley Group soars after interims

 

FTSE 100 drifted in the red as US non-farm numbers came in lower than expected.

London’s blue chip index was 44 points down at 6,708 shortly after the data was announced.

The US economy added 178,000 jobs in November compared to forecasts of around 200,000.

Expectations beforehand were that a strong number would almost certainly seal a rate rise at the next Federal Reserve meeting.

US unemployment fell to a nine-year low and there was also a fall in average hourly earnings, which will ease some concerns over inflation said economists.

Even so economists believe the number was strong enough to make a tightening of US monetary policy ahead of Christmas a nailed–on certainty.

FTSE 100’s subdued response suggests investors were more worried about the Italian vote over the weekend.

Banks in Italy took a bashing over what some fear may yet turn into an Italian version of Brexit and the downbeat mood meant it was only special situations that generated buying interest.

Berkeley Group PLC (LON:BKG) jumped almost 8.3% even though it revealed reservations for its houses and flats had dropped by 20% since the Brexit vote.

Shares rose to 2,757p as analysts still expect plenty of cash to flow out of the builder to shareholders.

“A new five-year profit plan should give more confidence to the market,” said Clyde Lewis at broker Peel Hunt.

“We continue to believe there is a lot of value in Berkeley at the current share price,” 

 

10.45am...FTSE 100 under pressure ahead of non-farm payrolls

FTSE100 headed into the weekend in a bit of bother ahead of the latest set of US jobs numbers and Italian constitutional vote.

London’s blue chip index was 67 points lower at 6,686, with investors getting nervous ahead of the non-farm payrolls at 1.30pm.

Market commentators expect it to be the forerunner of a US interest rate rise at the next Federal Reserve meeting.

Estimates are for around 160,000 jobs to have been created in November and any number close to that is seen as being sufficient to tip the Fed’s hand.

Consumer goods companies were under pressure with Unilever (LON:ULVR), BAT Industries PLC (LON:BATS) and Compass Group PLC (LON;CPG) all down by 3%

Shell (LON:RDSB) was weak despite a bullish write-up from UBS and dipped 1.8% to 2,140p as the boost from the OPEC deal Wednesday wore off.

BP (LON:BP.) was also under pressure despite the news it is moving back into the Gulf of Mexico, the scene of its fatal and hugely expensive Macondo disaster.

Berkeley Group PLC (LON:BKG) jumped almost 5% even though it revealed reservations for its houses and flats had dropped by 20% since the Brexit vote.

Shares rose to 2,665p as analysts still expect plenty of cash to flow out of the builder to shareholders.

IPhone component supplier Laird (LON:LRD) was a big losers among the mid-caps as it unveiled a £185mln right issue and cut dividend.

Prospex Oil and Gas PLC (LON:PXOG) jumped 24% as it had its drilling plan for the Kolo Licence, onshore Poland, approved.

 

8.08am ..FTSE 100 starts lower as US jobs come into view

As predicted, FTSE 100 started off lower as traders await the US non-farm job creation number later.

The blue chip index is down around 30 points at 6,752, with holding firm DCC Plc (LON:DCC) among the top laggards, down 3.29% to 5,900p.

Also lower was house builder Berkeley Group Holdings plc (LON:BKG), down 1.73% to 2,501p as it said the stamp duty hike and uncertainty surrounding Brexit are to blame for its weaker-looking pipeline.

Forward sales for the coming six months stand at £2.9bn, down significantly from the £3.25bn it reported back in April.

Among top risers on the blue chip exchange was Dixons Carphone plc (LON:DC.), which added3.8% to 340.5p.

6.50am

FTSE 100 is called to start around 43 points lower as investors fret ahead of Italy's referendum on Sunday and the US non-farm job numbers later.

The blue chip benchmark closed Thursday around 30 lower, or 0.45%, at 6,752 as oil firms continued doing well, but today financial spreadbetters at IG Index are calling the index to open 43.8 lower.

Italian PM Matteo Renzi wants to bring in sweeping changes in a yes/no vote in which he has put his job on the line.

The changes are aimed at making the country more efficient and more competitive. Included is reducing the number of MPs and speeding up the political process.

Commentators and analysts say a 'no' result could cause great uncertainty and throw into doubt again Italy and its banking structure, which would likely be felt across the EU.

It certainly puts European Union project risk in focus once more.

Ken Odeluga, from City Index, said: "Volatility would probably fan out from bank shares. The weakest banks in the rest of Europe would then be eyed. We could expect Deutsche Bank, Commerzbank, RBS, UBS, and others to be in the frame."

It's certainly a big day ahead on the macro front and the US jobs report is sure to affect markets.

Japanese broker Nomura forecasts nonfarm payrolls to have increased by 160,000 last month (November), comparable with the gains seen in October.

The general mood is that something extraordinary would have to happen to take a December interest rate rise off the table for the US Federal Reserve.

In corporate news, Berkeley Group Holdings plc (LON:BKG) reports interims, and the market will be looking for clues from the housebuilder about how the London market is actually faring and where it is heading.

On Wall Street, the Dow closed 0.36% higher at 19,191 but the broader S&P500 index finished 0.35% down at 2,191.

In Asia, the Nikkei 225 in Japan is down 0.5% to 18,421 and the Shanghai Composite Index is 0.76% lower.

Commodities

Gold - up 0.53% to US$1,175.60 an ounce

US crude (WTI), down 0.86% to US$50.62.

£ against US$ - 1.2623  

City Headlines

Asos accused of underpaying new warehouse staff  - The Guardian

MP asks spending watchdog to investigate Nissan Brexit deal - The Guardian

Is there no end to rail misery? Now fares for season tickets are set to rise by up to £260 - Daily Mail

The pound surged towards a three-month high against the euro after Brexit minister David Davis said Britain would consider making payments to the EU budget in return for access to EU markets - The Telegraph.

BP is to  invest in its biggest project in the Gulf of Mexico since it suffered the worst ever oil spill in its history in the region, after giving the go-ahead to spend $9bn building a new platform in the Mad Dog oil field - The Telegraph.

Mining and trading giant Glencore has declared “job done” on reducing its vast debt pile – Telegraph

Ryanair bids to become the 'Amazon of travel' as it takes on the big tour operators by offering discount package holidays for the first time - Daily Mail

Bids and rumours

The Prudential Regulation Authority, Britain’s financial regulator, has been seeking a rescuer for Manchester Building Society but has been turned down by Nationwide, Britain’s largest society - The Times

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