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FTSE 100 shares hit 11th successive record high as sterling dips

Last updated: 17:36 12 Jan 2017 GMT, First published: 06:56 12 Jan 2017 GMT

Polar bears sleeping
  • FTSE 100 hits 11th successive record high

  • But retailers take a bashing

  • The pound was down 0.04% against the US dollar at $1.2206

  • Pound was also down 0.8% versus euro at €1.1447

 

FTSE 100 shares did it again on Thursday – the 11th successive record high close – as turbulence in sterling finally gave in to a further steady decline and helped push stocks higher. All except retailers, that is.

At first, sterling rose against the US dollar as the US currency reeled following a news conference from US President-elect Donald Trump the previous session where Trump failed to give any further detail on his economic plans while upsetting pharma stocks at home.

However, the pound subsequently fell back on the news that Prime Minister Theresa May will give a major speech about her Brexit plans next Tuesday.

The FTSE 100 closed just 1.88 points higher on the day at 7,292.37. But that 0.03% gain was enough to register its record high.

Top riser was Veinna-headquartered international packaging and paper group Mondi Plc (LON:MNDI) up 5.6% to 1742p after had its “buy” rating reissued by stock analysts at Deutsche Bank AG and Jefferies. The latter broker said it has now set a ‘Buy’ rating on shares of Mondi with a price target of 1900p.

But on the flipside, on a day nicknamed "Super Thursday" because so many retail updates were released, the biggest faller was Primark owner Associated British Foods (LON:ABF), with shares down 4.5% to 2576p. Dixons Carphone (LON:DC.) was second, down 2.9% to 346.8p. Pharma Shire (LON:SHP) which overnight endured the news it will settle for $350mln US official allegations it paid kickbacks to induce doctors to use a product aimed at treating foot ulcers.

Next biggest faller was namesake Next (LON:NXT) down 2.5% to 4033p.

Total sales at Primark rose 11%, with like-for-like sales "good". However, it said like-for-like sales were down in Germany and the Netherlands.

Tesco's (LON:TSCO) shares fell 1.3% to 206.05p, despite the UK's largest supermarket reporting a 0.7% rise in UK like-for-like sales over Christmas.

Investors welcomed news of better-than-expected sales at Marks and Spencer (LON:MKS) in its clothing division, sending the High Street giant's shares up 1.3% to 344.9p.

Underlying sales in the clothing and homeware division rose 2.3% - well above analysts' expectations for about 0.5%.

In the FTSE 250, which fell 0.5% to 18303, shares in JD Sports (LON:JD.) jumped 7.6% to 350p after it reported a strong increase in sales and raised its full-year profit forecast.

Also on the FTSE 250 retailer Debenhams rose by 5.4% to 57.3p, while Dunelm (LON:DNLM) lost 6.9%to 742p and the top decliner in the mid-caps was AO World (LON:AO.) down 11.9% to 162.3p. AO World's third quarter revenue climbed but the European online electrical retailer remained cautious about the final quarter given the uncertain economic outlook in the UK.

The FTSE AIM 100 Index was flat at 4169 and the FTSE AIM All-Share Index the same at 870.

A Total of 26% of London stocks gained while 38% fell.


1436 GMT - FTSE 100 back in positive territory as gold glisters

  • FTSE 100 in positive territory and above 7,300

  • Miners in demand, Mondi top riser 

  • Gold back above US$1,200 an ounce for first time since November

Perhaps the FTSE 100 will extend its winning streak to an 11th successive trading day after all.

Spending most of the day in negative territory, the index of blue-chip shares flipped and was trading 11 points higher 7,301 at 2.30pm.

The miners were once again in demand with Anglo American (LON:AAL) and Randgold (LON:RRS) leading the way.

The latter benefited from a rise in the value of gold with the price of the yellow metal up 0.7% and above the US$1,200 an ounce mark for the first time since late November.

Traders were at a loss to explain the rise in shares in packaging giant Mondi (LON:MNDI), which topped the Footsie leader board.

Delving down into the small-caps, investors reacted poorly to Mayan Energy’s (LON:MYN) operations update as the stock tumbled 25%.

Uranium Resources (LON:URA) was taking the lift in the other direction (up 33%), boosted by a marked improvement in the outlook for the radioactive element.

READ: Uranium market tipping into deficit 

2.30pm...Footsie takes a snooze

  • FTSE 100 down nine points to 7,282

  • The market wanted more from Tesco and AB Foods

  • Car insurers hit by Macquarie research note

  • Edenville Energy the pick of the small cap movers

The second half of the morning trading session saw the FTSE 100 recover, though it was hardly worthy of the description “a rally”.

At around 12.30, the top-share index was down 10 points at 7,281, with mining stocks doing much to limit the index’s decline.

Retailers dominated the news flow, prompting one harassed retail analyst to have a brief but heart-felt rant at investor relations departments for their lousy scheduling skills.

Primark owner Associated British Foods PLC (LON:ABF) remain rooted at the bottom of the Footsie league table, down 3.6% after its trading update.

Supermarket leader Tesco PLC (LON:TSCO), down 2.1%, was not faring much better, as the market had perhaps read too much into recent grocery market share data, leading it to expect more of Tesco’s Christmas trading performance.

Aussie finance house Macquarie had little upbeat to say in a research note this morning about the UK car insurance market, pushing down the share prices of Direct Line Insurance Group PLC (LON:DGL) and Admiral Group PLC (LON:ADM).

Macquarie has cut its price target for Direct Line from 345p to 295p; the shares were off 4.6p at 347.6p.

The firm’s price target for Admiral of 1,542p is well short of the current share price of 1,767p, down 3p on the day.

Edenville Energy PLC |(LON:EDL) was the top performer, as it said trial mining at the Rukwa coal project, near Sumbawanga in western Tanzania, had commenced.

The shares shot up 42.5%.

STM Group Plc (LON:STM) was wanted, as it issued a trading update.

The shares advanced 22.4% to 46.5p after the cross-border financial services provider said the pricing initiative taken by the board in the earlier part of the financial year has significantly increased the take-on of new business for its QROPS international pensions product.

New policies for the second half of the year were up by circa 50% on the first half of the year and 27% on the second half of 2015.

11.20am…Small cap movers

Greatland Gold PLC (LON:GGP) led the way this morning, up more than 15% after it identified two large zones of gold mineralisation from shallow drilling at the Ernest Giles project in Western Australia.

Ernest Giles is 1,000 sq km in size and may contain may contain similar multi-million ounce gold deposits to those discovered in other large greenstone belts in Western Australia, said chief executive Callum Baxter.

BOS GLOBAL HOLDINGS Limited (LON:BOS) continued its fine form since its return from suspension yesterday, with shares up 13% in the morning session.

It wasn’t the most thrilling of news releases today – a £1.39mln drawdown on a convertible note agreement – but the excitement over the potential for its workforce productivity software is nudging the shares higher.

At the other end of the spectrum, oil and gas firm Mayan Energy (LON:MYN) plummeted by almost a third after its development effort at Shoats Creek in Louisiana ran into difficulties.

Red Rock Resources PLC (LON:RRR), which has a stake in the project, was also trading lower on the back of the issue – a blocked well that requires remedial work.

10.30am...'Santa rally' coming to an end? Possibly.

The FTSE 100 has been on a rampant march over the past couple weeks. The so-called ‘Santa rally’ began on 22 December and has continued over the Christmas period and well into 2017.

It has added more than 200 points in that period, but it couldn’t eke out a thirteenth straight day of gains, could it? The answer to that looks like a no.

One analyst commented yesterday that the rally “won’t go on forever”, and he was proven right with the blue chip index losing 8 points just before 11am this morning.

That in itself was a rally from earlier on though when the index was down more than 20 points.

London-listed stocks like AstraZeneca PLC (LON:AZN) and GlaxoSmithKline PLC (LON:GSK) were down for the second day in a row after Donald Trump warned that pharmaceutical companies were “getting away with murder”.

Primark owner Associated British Foods PLC (LON:ABF) was down more than 3% as well, despite enjoying a sweet Christmas trading period thanks to its retail and sugar divisions.

Tesco PLC (LON:TSCO) was another one on the way down this morning with the supermarket giant was the latest retailer to put out its Christmas trading update.

All-in-all it wasn’t a terrible set of figures, although it seems the markets were expecting a little more given the progress reported by its peers earlier in the week.

Neil Wilson, senior market analyst at ETX Capital, said: “Optimism from Sainsbury’s and Morrisons good results earlier this week had fuelled some buying but looks like Tesco has not delivered anything extra.”

8.40am...Marks wins City plaudits

The FTSE 100 failed to maintain the upward momentum of the last 12 trading days as it opened lower with most of the attention focused on retail sector and the blizzard of updates out Thursday.

At 8.40am, the index of blue-chip shares was down 12.6 points at 7,277.89 as it succumbed to a mild bout of profit-taking.

The major talking point of a busy day for corporate news was the better than expected Christmas update from retail Bellwether Marks & Spencer (LON:MKS).

It reported its first quarterly rise in clothing sales in more than two years – news that propelled the shares 3% higher and to the top of the Footsie leader board.

The risers were a mix of retail and mining, while the defensive drugs stocks endured a mild sell-off early on.

Also marked down was Tesco PLC (LON:TSCO), with much of the good news in its update already priced in to the shares following bullish trading statements from rivals J Sainsbury PLC (LON:SBRY) and Wm Morrison Supermarkets (LON:MRW).

“The much publicised potential damage to the UK economy following Brexit is an area where the UK consumer seems not to have read the script,” said Richard Hunter of investment firm Wilson King.

“For Tesco, this has translated into a solid Christmas performance across food and non-food alike. The general direction of travel for the group remains positive, food inflation has yet to kick in and Tesco’s concentration on efficiency and cost control are also contributors to an improving outlook.” 

6.45am...winning streak to end

Could the FTSE 100’s New Year’s winning streak be coming to an end? London’s blue chip stock benchmark is expected to start Thursday on the back foot.

The markets are increasingly looking to the risks and volatility coming as the United States prepares for President Donald Trump, with his hotly anticipated official press conference last night.

“The press conference did highlight a few things that could become a motif of the Trump administration going forward,” said Kathleen Brooks, analyst at City Index.

“Firstly, he is still happy to call out entire corporate sectors that he thinks operate unfairly or charge the US government too much for products and services. Healthcare and defence were both in the firing line earlier.

“This had an immediate impact on the stock market, and healthcare was the worst performer in the S&P 500 and the Dow Jones on Wednesday. For now the pharma and defence sectors are under the Trump microscope, but the risk is that he turns on other sectors down the line, which could cause bouts of volatility.”

Nonetheless, New York’s Dow Jones ended nearly 100 points, 0.5%, higher closing at 19,954 while the S&P 500 added 0.3% at 2,275. The Nasdaq was up 0.2% at 5,563.

In Asia, Japan’s Nikkei was down 1.2% at 19,134 while Hong Kong’s Hang Seng dropped 0.6% to 22,800. The Shanghai Composite was 0.45% lower at 3,122.

IG Markets sees London’s FTSE 100 starting today’s trading lower, calling the benchmark down about 9 points at 7,279 to 7,283.

City headlines

  • Donald Trump has rocked the pharmaceutical industry by unexpectedly warning that his government will push for lower drug prices in his latest broadside against big business, reports the FT.
  • The US President–elect also accused US intelligence chiefs of acting like Nazis yesterday after a dossier containing lurid sex claims was published reports the Times,
  • The Times reports that the Bank of England will upgrade its UK growth forecast next month as Governor Mark Carney warned Brexit could trigger a worse financial crisis in Europe than Britain.
  • Bovis Homes, whose chief executive left abruptly on Monday, was willing to pay its customers as much as £3,000 to complete deals by December 23 – even if the property was not finished, reports the Mail.
  • The Times adds that other house builders have distanced themselves from Bovis over claims that it is “industry practice” to pay customers cash to complete on unfinished homes by a certain date.
  • FTSE 100 set a new record high yesterday and sealed an historic winning streak after it rose for a  twelfth  consecutive trading sessions, the Telegraph reports.
  • An activist investor has transferred hundreds of shares in water firm Dee Valley to local people and employees in a bid to stage a coup over a potential takeover, reports the Mail. The shareholder, believed to be a Dee Valley employee, bought shares in the company in early December and shortly afterwards transferred 445 of them to individuals.
  • The City of London has retreated from demanding continued access to the single market in any post-Brexit deal with the EU, according to its principal lobbying group, reports the FT.

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