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FTSE 100 shares swing but close below 7200

Last updated: 17:31 20 Jan 2017 GMT, First published: 06:52 20 Jan 2017 GMT

Donald Trump

FTSE 100 shares swung on Friday but ended down 10 points and below 7200 as the 45th President of the United States was being sworn in.

Meanwhile, Wall Street stayed in the black although it pared gains as all eyes were on Donald's Trump's bright red necktie at his inauguration ceremony.

The FTSE 100 closed down 0.1% at 7198 and 140 points lower than where they began the week. The top declining component was AstraZeneca plc (LON:AZN) down 3.4% to 4319.5p. The stock was still reeling from news that the president of GlaxoSmithKline's global pharmaceuticals division, Abbas Hussain, is leaving the company later this year, to be replaced by AstraZeneca's Luke Miels.

BT (LON:BT.A) shares were the second-highest riser, up 2.4% to 387.15p as the company gave details on upcoming price hikes for services like BT Sport and broadband. It precedes the telecoms giant's third quarter trading update set to be released next Friday.

HSBC fell 0.9p to 678.4p after the bank agreed to stump up £4mln to pay back customers subjected to 'unreasonable' debt collection practices following a UK regulatory probe.

The FTSE 250 midcaps closed down 0.4% at 18,150 and led by motoring association AA plc (LON:AA.) down 6.2% to 254p after the house broker to the AA pulled the handbrake on its client’s shares today, which had investors wondering whether the breakdown firm’s imminent update would contain a note of caution about trading.

Analysts at Liberum, the FTSE 250 firm’s joint broker alongside Morgan Stanley and Cenkos, cut its profit forecasts for 2018 by 6% and its target price from 375p to 340p as it predicted that the AA’s recovery over the next couple of years would not be as pronounced as expected.

The FTSE AIM 100 Index closed down 0.04% at 4161 and the FTSE AIM All-Share Index was the market outperformer, up 0.1% at 873.

Across the bourse, 30% of stocks gained and 33% lost value.


1431 GMT - FTSE 100 flat as traders assess the Trump betting

The FTSE 100 was flat as a pancake, marking time ahead of the inauguration of Donald Trump with index of blue-chip shares down 1.6 points at 7,206.85.

Seemingly unencumbered by the day job, traders could be forgiven for looking at the latest Trump betting between periodic glances at the Reuters and Bloomberg screens.

The President-elect is 7-4 with bookie Paddy Power not to make it through his first term in office and 7-4 to be impeached in the first six months.

It is odds-on The Donald will use the phrase “making America great again” in his speech later and you’ll even get a price on his skin colour for the big day, with the Tiger’s Eye shade of orange 6-1 favourite.

Finally, do the sporting gods know something we mere mortals don’t and are they trying to tell us something? A horse called World’s End won the 1.40 at Chepstow. Pookie, very pookie, as my young son used to say.

11am...Royal Mail remains in the dog house

Is the FTSE 100’s apparent inactivity this morning an act of pre-Trump anxiety, or is it just a regular quiet Friday in London?

At around 11:00 the FTSE 100 was up just 6 points changing hands around 7,214.

Smurfit Kappa Group Plc (LON:SKG), Whitbread plc (LON:WTB) CRH PLC (LON:CRH), and BT Group Plc (LON:BT.A) were all among the blue-chip risers – each gaining between 1.9 and 1.6%.

Royal Mail Group Plc (LON:RMG), meanwhile, was the morning’s biggest FTSE faller, losing 2.5% to trade at 411p.

Tesco Plc (LON:TSCO), AstraZeneca Plc (LON:AZN) and Sainsbury Plc (LON:SBRY) followed, dropping between 1.8% and 1.7%.

On AIM, meanwhile, biopharma Abzena plc (AIM:ABZA) topped the list as it unveiled a US$300mln licence agreement for its ThioBridge technology.

That figure includes possible licence fees and milestone payments, but Abzena would also receive a royalty on sales of approved drugs incorporating its technology. Shares rose 77% to 63.5p.

Elecosoft (LON:ELCO) was another strong gainer as it notched up record sales in 2016 due to booming demand for its software for architects and engineering firms.

Conversely, toy maker Character Group PLC (LON:CCT) has been a victim of the pound’s drop.

In one of the few downbeat statements today it said UK gross margin had been adversely affected by the devaluation of sterling.

8:35 ... FTSE 100 marking time ahead of ahead of Trump's big day

The FTSE 100 marked time in early trade and ahead of the day’s main event – the inauguration of Donald Trump as president.

At 8.30am, the index of blue-chip shares was off seven points at 7,201.16 on paper thin volumes.

In the 73 days since Trump’s election the financial markets have rallied strongly, although over the past five trading days there’ve been signs of nerves.

“Having overdosed on the expectations of significant tax cuts and infrastructure investment the question now moves to whether the new President will be able to deliver on his campaign promises now that the time has come for action to replace all of the words,” said Michael Hewson of the spread betting firm CMC Markets.

“One thing that has become increasingly obvious is that the new President isn’t afraid to air what’s on his mind as a number of company CEO’s have found out in the past few weeks, coming under fire from his Twitter account as Mr Trump looks to hit the ground running.”

Royal Mail Group (LON:RMG) spent a second day in the dog house after Thursday’s less-than-stellar trading update. It led the Footsie list of losers with a 2.5% decline, followed by the miners where investors were once again in profit-taking mode.

Moving down a league or two and one of the early movers among the small-caps was discount fashion chain Bonmarche Holdings (LON:BON). It was up 10% after it said it had been able to increase its profit margins in a competitive market. 

6.45am ... It's all about The Donald

The prospect of Donald Trump being inaugurated as president of the USA looks unlikely to rouse the London stock market this morning.

Spread betting quotes indicate the FTSE 100 will open a couple of points down from last night's close of 7,220.

US markets offered no encouragement yesterday, with the main benchmarks falling by around one third of a percentage point.

The S&P 500 closed at 2,264, down eight points, and the Dow Jones shed 72 points at 19,732, despite some buoyant business activity data from the Philly Fed and lower jobless claims.

In Asian markets, the picture was mixed this morning.

The Nikkei 225 was up 66 points at 19,138 in Tokyo but in Hong Kong, the Hang Seng was down 95 at 22,955 as the trading session drew to a close.

Back home, retail sales data will add to the welter of information we have recently received about the health of retailers over Christmas.

According to Daiwa Capital Markets, the data should show that growth picked up further in December, having been only a touch below 6% year-on-year in November. 

On the corporate front, a trading statement from merchant bank Close Brothers Group PLC (LON:CBG) is about as good as it gets for scheduled trading statements.

“We would anticipate a positive update from Close, continuing the trends reported in November's update. This concluded that a good result was expected for the year to July,” said Peel Hunt, which is a slightly lukewarm fan of the stock with its 'add' recommendation.

“Underlying trends are likely to remain similar. The one change may be some change to the outlook for the property loan book given the change in capital requirements,” the broker said.

Around the markets

  • Sterling: US$1.2358, up 0.17 cents
  • Yield on 10-year gilt: 1.5%
  • Gold: US$1,207.10 an ounce, up US$5.60
  • Brent crude for March delivery: US$54.28 a barrel, up 13 cents

Headlines

  • Glaxo’s pharmaceuticals Boss walks away as new Chief prepares to take the helm – Daily Telegraph
  • Fresh doubts surface over £3 billion opening up of water market – Daily Telegraph
  • Strewth! Vegemite goes back down under – The Times
  • Toshiba seeks help as losses are revealed – The Times
  • BHP agrees date for mine settlement – The Times
  • Rolls-Royce lobbied Ministers to weaken anti-bribery proposals – The Guardian
  • New York ‘already a gainer’ from Brexit, says Goldman CEO Blankfein – The Independent
  • RBS considers accepting multi-billion-pound legal hit over mortgage bond mis-selling probe – The Independent
  • Barratt’s finance chief departs with immediate effect – Financial Times
  • Pearson chief faces shareholder unrest – Financial Times
  • Tesla avoids recall over fatal Autopilot crash – Financial Times
  • Owner of New York Jets to become U.S. ambassador to the U.K – City AM
  • JP Morgan Chase reveals chief executive Jamie Dimon gets $28 million pay package – City AM


 

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