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FTSE 100 closes in positive territory, bolstered by weak pound

Footsie closed over 20 points higher at 7,348, benefitting as usual from the weaker pound.
Costa Coffee
FTSE 100 closed positively; FTSE 250 didn't
  • FTSE 100 closes around 20pts down at 7,348

  • Whitbread tops the FTSE 100 leader-board after Sachem Head Capital Management reveals 3.4% stake

  • FTSE 250 falls 42 to 19,828

 

FTSE 100 closed positively on Wednesday, but the FTSE 250 lagged as the Brexit debate rages on.

Footsie closed over 20 points higher at 7,348, benefitting as usual from the weaker pound, which was off 0.13% against the Euro and down 0.45% against the US dollar.

The mid-cap index however shed over 42 points, or 0.21%, to close at 19,828.

"European equity markets are off the lows of the session as the selling pressure that overflowed from the Asian session waned. The FTSE 100 is outperforming eurozone indices like the DAX and the IBEX 35 as the weakness in the pound is making the internationally exposed British market more attractive to investors, said David Madden at CMC Markets.

Whitbread plc (LON:WTB) remained the top performer, to close up 7.55% to 3,990p, after Sachem Head Capital Management announced it had a 3.4% stake in the company.

On the downside, property group Hammerson PLC (LON:HMSO) was the worst performing heavyweight, losing 6.17% to 501.50p following its agreed takeover of Intu Properties PLC (LON:INTU).

Whitbread leads Footsie higher

Costa Coffee and Premier Inns owner Whitbread plc (LON:WTB) was leading the Footsie higher into the final hour.

The FTSE 100 was up 32 at 7,359, with Whitbread the top performer, up 7.3%, after Sachem Head Capital Management announced it had a 3.4% stake in the company.

Elsewhere at the top of the Footsie leader-board, the weakness of sterling was giving a lift to big foreign currency earners in the fags and booze sectors, such as British American Tobacco, Imperial Brands and Diageo.

Insurers were out of sorts, with Legal & General Group PLC (LON:LGEN), Aviva PLC (LON:AV.) and RSA Insurance Group PLC (LON:RSA) all down by between 0.8% and 1%.

Among the small caps, tapping the market for funds stopped the upward momentum of Tertiary Minerals plc (LON:TYM).

The company placed 41.67mln shares at 1.2p, raising £500,000 in the process.

The company is planning to use the funds for project work on its fluorspar projects in Sweden, Norway and the US.

The shares have risen 170% in the last five days, but fell 4.8% today to 1.62p.

2.30pm: Stocks receive fillip from US rally

US markets opened lower, as expected, on Wednesday, but quickly moved into positive territory.

The S&P 500 was up a point at 2,630.6 and the Dow Jones 30 was up 24 at 24,204.

Round about the time US shares were rallying, London’s blue-chips kicked on some more, taking the rise on the FTSE 100 up to 25 points at 7,353.

An upgrade from ‘market perform’ to ‘outperform’ by BMO Capital Markets gave a lift to miner and commodities trader Glencore PLC (LON:GLEN).

The stock nudged up 3p to 337p, well short of the BMO target price of 400p, which has been raised from 300p.

In other broker action, Breedon Group PLC (LON:BREE) was down 0.9% after Peel Hunt abandoned its ‘buy’ position on the aggregates company and softened it to ‘add’.

12.45pm: FTSE 100 moves into the blue

Praise be, the FTSE 100 has moved into positive territory.

It’s only a two point gain at 7,330, but at one point it rose as high as 7,341, despite expectations of a soft start on Wall Street.

Spread betting quotes at around 12.30pm were pointing to the Dow Jones opening at around 24,140, after tumbling 109 points yesterday to 28,181, and the S&P 500 kicking off at around 2,625, after falling 10 points to 2,629.6 on Tuesday.

Among the UK small caps, Billing Services Group limited (LON:BILL) was enjoying a spell in the sun, up 9.5% at 2.6p, after it proposed to return up to US$5mln to shareholders by way of a tender offer at a price of 4.25 cents per share.

In all, the company intends to redeem up to 41.7% of the share capital of the company.

Following a presentation to analysts at its New Luika gold mine, Shanta Gold Limited (LON:SHG) advanced 7.1% to 3.75p.

Going the other way was another resource stock, Spitfire Oil Limited (LON:SRO), after its full-year results.

The group recorded a loss before tax for the year ended 30th June 2017 of A$3,759,741, after providing $3,376,906 (2016: $275,194) for a mar-down in the value of its Salmon Gums tenements. 

11.00am: Defensive stocks and dollar earners bolster the Footsie

The FTSE 100 has been lurking around last night’s closing level all morning like a schoolboy having a crafty smoke behind the bike sheds.

At 11.00am the top-shares index was down 3 at 7,325.

Talking of having a crafty smoke, fags makers Imperial Brands PLC (LON:IMB) and British American Tobacco plc (LON:BATS) were among the better Footsie performers, rising 1.3% and 1% respectively.

Sterling is having another bad day on the foreign exchange markets as traders wait for developments on Britain’s Brexit negotiations.

Meanwhile, David Davis’s appearance before parliament’s Brexit select committee is not going down too well in some quarters.

Although Brexit uncertainty is hampering sterling’s strength on the forex markets, a weak pound generally plays well for FTSE 100 stocks, many of which earn a considerable proportion of their revenues overseas.

 

9.30am: Mixed fortunes for REITs reflects wider trend

The Footsie has given back all of yesterday’s meagre gains, with Hammerson leading the retreat.

The FTSE 100 was down 11 points at 7,315, returning the blue-chips index more or less back to Monday night’s level.

Property group Hammerson PLC (LON:HMSO) was the worst performing heavyweight, shedding 2.2% at 523p following its agreed takeover of Intu Properties PLC (LON:INTU).

Hammerson is offering 0.475 Hammerson shares for each Intu share, which is the equivalent of about 253.9p per Intu share.

Intu shares shot up 20% to 238.3p. Sector peer British Land Company (LON:BLND) rose 1.5% to 647.5p in sympathy to top the Footsie leader-board, closely followed by Land Securities Group PLC (LON:LAND), up 1.3%.

Low-cost airline EasyJet PLC (LON:EZJ) advanced 0.9% to 1,439p on the release of passenger statistics for November and following an upgrade by Cazenove.

EasyJet could probably take a share of the blame for the collapse of Monarch Airlines, and the current shoeing being taken by Saga PLC (LON:SAGA), the insurance and travel firm serving the over fifties market.

The shares lost almost a quarter of their value as the company said the collapse of Monarch had affected its tour operations business.

READ Saga warns of more “challenging trading” in insurance broking, Monarch collapse impact on travel

8.30am: Mining shares weigh down the Footsie

The FTSE 100 took its cue from Wall Street and Asia’s main markets as it fell 23 points to 7,362.52 at the open.

The fall in the copper price hit Chilean producer Antofagasta (LON:ANTO), which retreated 1.9%, while Glencore (LON:GLEN) slid 2% after a downgrade by BMO Capital Markets.

On the up was EasyJet (LON:EZJ) after the influential JP Morgan Cazenove went to ‘overweight’ from ‘underweight’ on shares in the budget airline, lifting shares 1%.

It reckons the carrier will benefit from a better pricing environment and the addition of slots from the now-defunct Air Berlin.

Proactive news headlines:

Green Dragon Gas Ltd (LON:GDG) has detailed plans to spin-off its producing Chinese coal bed methane business which will IPO onto the Hong Kong Stock Exchange. The group’s exploration and appraisal assets will remain within the London-listed vehicle, which will be debt-free post transaction, and will be renamed as G3 Exploration Limited, Shareholders in Green Dragon will receive a stake in the new company via an in specie dividend.

Industrial fuel cell power company AFC Energy plc (LON:AFC) has been making solid progress in its collaboration with De Nora, having placed the first commercial order of cathodes with the Italian industrial technology firm as a prelude to initiating the mass manufacture of electrode capability.

Buoyant demand for its films and mandrels lifted sales at Plastics Capital Plc (LON:PLA) by almost a third in its latest half year. Revenues rose 31% to £36.6mln, with organic growth of 13.5%, though earnings were held back by a combination of heavy expenditure on plant upgrades, raw material price rises and adverse currency movements.

Summit Therapeutics PLC (LON:SUMM; NASDAQ:SMMT) is teaming up with several other biopharmaceutical companies and charities to host a Duchenne Muscular Dystrophy awareness day in London today.

Gfinity Plc (LON:GFIN) has added one of the most popular video games in the world, FIFA 18, to the line-up for the next season of its Elite Series esports competition.

Challenger Acquisitions Limited (LON:CHAL) said the first action film fan convention to be run by Star Sanctum - the private company it is backing - will be held in May of next year in London.

Stratex International plc (LON:STI) has updated investors on the operations of the Thani Stratex Resources (TSR) where a drill programme is underway to expand gold resources at the Anbat project in Egypt. Some 2,017 metres have been drilled in eleven holes, and it has now declared a maiden resource of 209,000 ounces of gold. Additionally, pit optimisation for a start pit sees 2.9 million tonnes of material grading 1.1 grams per tonne, to yield some 101,000 ounces.

Curzon Energy Plc (LON:CZN) told investors that operations are underway at the Coos Bay coal bed methane project, where it is advancing workovers and clean-outs on up to five existing wells. The clean-out work has completed the first well, 9-21, and the rig has now moved onto the next well.

Seeing Machines Limited (LON:SEE) increased the size of its planned fund raise after heavy over-subscription. The fatigue monitoring and driverless software group pulled in £35mln through a placing at 5p, compared an original £30mln target.

Philippines-based gold miner Medusa Mining Limited (ASX:MML) has raised its production forecast for the current year though financial guidance is unchanged as a new shaft is taking longer than expected. Output from the Co-o mine in 2017 is now forecast at between 85,000-95,000 ounces against the 80,000 to 90,000oz previously forecast.

Clinigen Group PLC (LON: CLIN)  the global pharmaceutical and services company announced that Chris Rigg has resigned with immediate effect as a director to seek a CEO role elsewhere. Shaun Chilton, Clinigen’s CEO, said: “I would like to thank Chris for his contribution in the first phase of the integration of Quantum Pharma. We wish him well for the future."

Shanta Gold (LON:SHG), the East Africa-focused gold producer announced that it will be hosting a site visit for analysts at its New Luika Gold Mine on December 5 and 6.

6.45am: FTSE 100 called lower

The  Footsie is seen sliding lower on Wednesday following falls showings overnight on Wall Street and in Asia on a fresh retreat by technology stocks and lower copper prices.

Spread betting firm CMC Markets expects the FTSE 100 index to open around 40 points lower at 7,287, having added 11.47 points on Tuesday.

Overnight on Wall Street, the Dow Jones closed 109 points lower last night at 24,180 as investors took some profits again in high flying tech stocks after recent record highs by US stock indexes.

On currency markets, sterling was weaker versus both the dollar and the euro unnerved by reports from Sky News that a plot to assassinate prime minister Theresa May had been foiled late last month.

Meanwhile, Bitcoin continued its recent relentless climb with the cryptocurrency hitting a new record high above US$12,000.

On the corporate front, it’s been a challenging period for transport operator Stagecoach Group PLC (LON:SGC), which is due to report its half-year results  on Wednesday.

The buses and trains operator, however, was given a recent boost after the government unveiled a raft of measures designed to improve and extend the UK’s rail network.

One of those plans is to replace Stagecoach’s loss-making East Coast franchise – which has weighed on the group for a while – earlier than expected in 2020, with the two parties looking to renegotiate the terms of the current onerous contract until then.

Analysts reckon there’s almost no way the new, short-term contract can be worse than the current one, so look out for some more detail and guidance with the results.

Luxury gap could be narrowing for Mulberry

A key European court ruling on luxury goods pricing will be delivered today while posh bags maker Mulberry Group PLC (LON:MUL) also delivers first half results.

Mulberry delivered a 21% increase in full year pre-tax profits back in June, supported by growth in online sales and the success of new products, and shareholders are hoping the luxury interims will also please.

Like-for-like retail sales were gained 1% in the 10 weeks to 3 June, with UK like-for-like sales up 2%, as an increase in tourist spending in London offset softer domestic demand, and this trend is likely to have continued with a push into Asia also eyed.

In July, Mulberry announced a joint venture to develop retail, digital, omni-channel and wholesale business in the Japanese market, having earlier this year unveiled joint ventures aimed at the China, Hong Kong and Taiwan markets.

Significant events expected on Wednesday December 6:

Interims: Mercia Technologies PLC (LON:MERC), Mulberry Group PLC (LON:MUL), Plastics Capital Plc (LON:PLA), Stagecoach Group PLC (LON:SGC), SysGroup PLC (LON:SYS), Tricorn Group PLC (LON:TCN)

Finals: easyHotel PLC (LON:EZH), Image Scan Holdings Plc (LON:IGE), Numis Corporation PLC (LON:NUM), Oxford Metrics PLC (LON:OMG), Redhall Group PLC (LON:RHL), RWS Holdings PLC (LON:RWS)

Economic data: BRC shop price index; US ADP employment report

Around the markets:

  • Sterling: US$1.3421, up 0.6%
  • Gold: US$1,265.70 an ounce, up 0.3%
  • Brent crude: US$57.39 a barrel, down 0.4%

City Headlines:

  • Royal Mail strike threat diminishes as warring parties edge towards accord – City AM
  • Glencore creates mining royalty JV with Canadian pension fund – Financial Times
  • Australian regulator to take GSK, Novartis to court – Financial Times
  • The Gym Group facing fresh criticism for failing to give workers a fair wage – Daily Mail
  • Apple acquires podcast search engine Pop Up Archive – Financial Times
  • General Electric is set to cut 4,500 jobs across Europe – The Times
  • Allegern shares sag on promising results for potential Botox rival – Financial Times
  • Statoil gives go-ahead to delayed Arctic oilfield – Financial Times
  • Deutsche Bank’s €710 billion asset management arm gets pre-IPO makeover – Daily Telegraph
  • BMW electric car advert banned for ‘misleading’ zero-emissions environmental claims – The Independent
  • Peer-to-peer lender Ratesetter loses £23mln after ad investment flops – The Times
  • Boom gets US$10mln boost from Japan to get superjet off the ground – The Times
  • Bitcoin may become the new gold says JP Morgan analysts – Daily Express
  • UK group adds bitcoin to cross-border payment service – Financial Times
  • Housebuilders issue Brexit plea as poll shows UK reliance on EU workers – The Guardian
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