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FTSE 100 closes in red as market awaits US jobs report

UK stocks could do with a catalyst and tomorrow's US jobs numbers might provide it
Tumbleweed
FTSE 100 closed 27 pts lower at 7,320
  • FTSE 100 closes in red - down 27

  • ValiRx puts in late surge

  • Miners take a hit

  • UK gov't close to Brexit breakthrough?

 

 

FTSE 100 finished lower as any earlier momentum ran out of steam and investors awaited the non-farm payroll numbers tomorrow.

The UK index of leading shares closed down over 27 points at 7,320, while FTSE 250 was also lower, down over 18 points at 19,810.

On the Brexit front, stress levels were perhaps lessened as it emerged that the British government said it could be close to a deal ahead of the crunch EU summit next week.

Earlier this week, the Northern Irish DUP, which UK Premier Theresa May, relies on for her minority government, scuppered plans.

In currency markets, the pound was up 0.47% against the Euro, and it was up 0.35% against the US dollar.

In stocks, top dog on Footsie was publisher Pearson (LON:PSON), which added 2.22% to 737p, while on the losing front, Babcock International Group (LON:BAB) was the biggest laggard, losing 3.27% to 654.5p.

Big cap miner Rio Tinto (LON:RIO) was also lower, shedding 1.66% to 3,440.50p as the sector was under pressure.

Iron ore futures and coke futures in China fell by 7.5% and 8% respectively as traders were concerned about declining demand during the winter. 

Investors sit on hands..

Investors largely sat on their hands today ahead of tomorrow’s US jobs data.

The FTSE 100 was down 14 at 7,335 heading into the last half-hour of trading.

At the time of writing, 53 of the FTSE 100 constituents were lower and 47 were higher.

The top riser on London today was ValiRx Plc (LON:DEC), up 51% at 2.61p, recovering all of yesterday’s losses – and then some.

The company sent out a shareholder circular yesterday to convene a meeting on 21 December at which shareholders will vote on resolutions to allot shares and waive shareholder pre-emption rights.

3.00pm: Downward drift continues

US stocks opened firmer but UK blue-chips declined to follow their lead.

The FTSE 100 was down 9 at 7,339; across the pond, the Dow Jones was up 40 at 24,181 and the S&P 500 was up 2 at 2,632.

House-builders reacted phlegmatically to the latest Halifax house price index, which showed house prices increased by 0.5% month-on-month in November.

Economists had expected a 0.2% increase, but as Pantheon Macro’s chief UK economist Samuel Tombs pointed out, the Halifax’s measure “conflicts with virtually every other indicator we track”.

“Halifax reports that house prices were 2.4% higher in the three months to November than in the previous three months. The equivalent growth rates for Nationwide’s measure and our seasonally adjusted version of Rightmove’s data are just 0.6% and 0.1%, respectively,” Tombs said.

Alex Gosling, chief executive officer of online estate agents HouseSimple.com, said: "These figures suggest a housing market in remarkably good health, but low supply levels continue to distort the real picture.

"The property market's not on its knees by any means, but it needs a spark from somewhere. 

"Market activity has dropped off, which it tends to do the closer we get to Christmas, but it's definitely dropped off earlier than normal this year”.

The builders in the Footsie had mixed fortunes, with Taylor Wimpey PLC (LON:TW.) up 0.1%, Persimmon PLC (LON:PSN) up 0.2% and Barratt Developments PLC (LON:BDEV) down 0.2%.

Listed estate agent Foxtons Group PLC (LON:FOXT), meanwhile, was up 0.4%. 

1.30pm: Stocks drift lower

With US stocks expected to open lower, UK investors lacked any incentive to push the Footsie back into positive territory.

Spread betting quotes suggest the Dow will open at around 24,111, down 30 points, and the S&P 500 will start little changed at around 2,629.

The FTSE 100 was down 5 points at 7,343, with weak miners largely to blame for the decline.

Costa Coffee owner Whitbread plc (LON:WTB), which perked up yesterday on news of stake-building by a US hedge fund, was the top blue-chip faller, giving back 91p of yesterday’s gains at 3,899p.

Among the small caps, struggling Israeli tailoring company Bagir Group Ltd (LON:SMDS) shot up 29% to 2.57p after it entered into an agreement with Israeli body measuring app Sizer to combine the expertise of both businesses to produce "made to measure" suits and other tailored garments for customers who provide their measurements online via the Sizer app.

Despite today’s surge, Bagir shares have still lost more than a third of their value this year. 

11.30am: Gambling sector provides spark in mixed market

The Footsie was practically back to Square one late in the morning, with dollar earners weakened by sterling’s minor rally.

The FTSE 100 was up 3 at 7,351, while the FTSE 250 climbed 21 to 19,850.

The gambling sector was all abuzz after GVC Holdings PLC (LON:GVC) revealed it was prepared to have another bash at acquiring Ladbrokes Coral Group PLC (LON:LCL).

GVC had tried to win over the Ladbrokes board in the summer, but the two parties could not agree on a price.

They are having another stab at it now, and in fact have pencilled in a figure of £3.9bn.

GVC’s shares rose 6.2% to 965.5p while Ladbrokes Coral’s shares surged 26% to 170.45p, valuing the company at  £3.27bn.

The big loser was Playtech PLC (LON:PTEC), the gaming industry-focused software platform developer that counts Ladbrokes Coral as a key licensee; its shares fell 4.8% to 805p.

DS Smith PLC (LON:SMDS), which is set to join numerous other Smiths in the FTSE 100 next year, edged a penny lower to 538p after solid interim results.

Revenue rose 14% on a constant currency (cc) basis to £2.8bn in the six months to the end of October, but profit before tax fell 5% (on a cc basis) to £144mln.

“Volume growth has been driven by structural shifts including changes in consumer preferences, the increased relevance of packaging at the point of sale and the continued growth of e-commerce. The group has also benefitted from the improvement in paper prices while integration of acquired businesses is ahead of expectations with cost synergies expected,” said Helal Miah, a research investment analyst at The Share Centre.

10.30am: Equities in a holding pattern

London’s blue-chip equities were in a holding pattern, awaiting further developments on the Brexit negotiations.

The FTSE 100 was up 17 at 7,365, with pay-TV and internet service provider Sky PLC (LON:SKY) leading the way on hopes the Walt Disney Company will pick up the baton from Twenty-First Century Fox Inc (NASDAQ:FOX) and launch a bid.

Sky shares were up 2.2% at 1,010p.

Also going well was Ashtead Group PLC (LON:AHT), the US-focused tool and plant hire group.

Ahead of results next Wednesday, Numis Securities upgraded the stock to ‘buy’ from ‘add’ and whacked up the price target to 2,500p from 2,000p.

“The Senate's passing of its tax reform bill brings the prospect of a cut to corporate tax rates another step closer. While the timing and magnitude of these cuts remains as yet unclear, Ashtead would be a clear beneficiary,” Numis opined.

Ashtead’s shares rose 1.5% to 2,000p on the upgrade.

Open: Subdued mood as City waits on outcome of negotiations between the Conservative Party and the DUP

The mood in the Square Mile was subdued ahead of a mooted Brexit deal that could break the uneasy pact the Tories have with Northern Ireland’s DUP.

The uncertainty unsettled the pound, although the downward move in sterling was not particularly pronounced as it traded at just under US$1.34 against the dollar. The FTSE 100 rose 5 point gain to 7,353.31.

On the markets the miners came under pressure after the International Monetary Fund queried levels of debt in China, which is a major importer of raw materials from the international diggers.

Rio Tinto (LON:RIO) led the list of fallers, posting a 2% fall. Not far behind were Anglo American (LON:AAL) and BHP Billiton (LON:BLT).

The big move of the day came from Ladbrokes Coral (LON:LCL), which advanced 25% in early trade after it said it was in detailed talks to be taken over by rival GVC (LON:GVC) in deal valuing the former at £3.9bn.

Proactive news headlines:

Advanced Oncotherapy PLC (LON:AVO), the developer of next-generation proton therapy systems for cancer treatment, has secured £37.4mln of financing with £30mln of this coming from a new Chinese investor. The injection will bankroll the continuing technical development of the firm’s first LIGHT system and its installation at the Harley Street Proton Therapy Centre.

Wishbone Gold PLC (LON:WSBN) said its operations in Honduras are getting back in the swing of things now the wet season is over. The weather has now improved and the buildings are expected to be completed in the next couple of weeks, wishbone said.

Investors in Brave Bison Group PLC (AIM: BBSN), the digital media and social video specialist, will be heartened by the news its net revenues for the year will come in ahead of forecast at around £9.1mln. “The group continues to move up the value chain, with an increased focus on production and branded content deals, resulting in higher-margin revenues,” it said in a trading update.

Fox Marble PLC (LON:FOX) has taken out an unsecured £500,000 loan with non-executive director Roy Harrison so it can invest in expanding its production facilities.

HemoGenyx Pharmaceuticals PLC (LON:HEMO) is making good progress in the laboratory on its two pioneering new treatments for blood cancer sufferers, it told shareholders at its annual meeting. The biotech, which listed on AIM in October, is developing two therapies to improve the chances of survival of people requiring a bone marrow transplant.

Hurricane Energy PLC (LON:HUR) told investors it has now hired executive search recruiter Spencer Stuart to source the company’s new chairman. The UK offshore oil company said in a statement that once a new chairman is in place it will seek to appoint additional independent non-executive directors to the board in order to make it fully compliant with corporate governance guidelines.

88 Energy Ltd’s (LON:88E) well programme may be on winter layover, but, that doesn’t mean the group’s interest in its Alaskan shale project has cooled – today, the oil and gas junior confirmed it is expanding its footprint. Named as the high bidder for two parcels of land, spanning a combined 32,800 gross acres, the explorer’s base has increased in Alaska’s North Slope region.

Ariana Resources plc (LON:AAU) has announced its latest new gold discovery at the Salinbas project, in Turkey. The exploration company told investors it has unearthed a significant anomaly, a 500x150 metre zone of precious metal and base metal, in the Salinbas North area.

Metal Tiger PLC (LON:MTR) said initial results from a mining study of the T3 copper project in Botswana have been “encouraging”. The company said the study of the joint venture project with MOD Resources Limited supports the start of a 30-hole resource drilling programme targeting high-grade veins with underground mining potential.

Macarthur Minerals Limited (CVE:MMS) has signed a strategic alliance with 3PL Operating to explore its Reynolds Springs lithium brine prospect in Nevada’s Railroad Valley. Cadence Minerals Plc (LON:KNDC) owns a 15.2% stake in Macarthur.

Stratex International plc (LON:STI) has said its investee company, Thani Stratex Resources, might need to make a few tweaks to the maiden resource estimate it published on Wednesday for the Anbat gold project in Egypt.

Xtract Resources PLC’s (LON:XTR) Mozambican subsidiary Explorator Limitada has negotiated a “significantly enhanced” deal with the contract alluvial miners at the Manica gold project.

Stobart Group Limited (LON:STOB)  said dividends of 4.5p per share were paid on 6 October 2017 and the board has now declared a further interim dividend of 4.5p per share which will be paid on 19 January 2018 to shareholders on the register as at 22 December 2017. It added that, subject to board approval, further quarterly dividend payments of 4.5p per share will be made on 13 April 2018.

6.45am: Small gain predicted

London’s FTSE 100 is expected to start Thursday positively, albeit only by a fairly small margin.

The British pound remains softer, largely because of heightened fears over Brexit, the stalling negotiations and the uncertain economic impact that the European divorce may have on the UK.

Whilst a weaker pound has recently meant good news for most of the FTSE 100, which largely comprises international earners, the Brexit worries also weigh on broader investor sentiments.

“Fears growing over a Brexit deal not being reached before next week’s deadline, are weighing on sentiment for sterling,” said Jasper Lawler, analyst at London Capital Group.

“Whilst the pressure is on Theresa May to find a solution to the Irish border dispute, her own political stability is also looking increasingly questionable, with suggestions she could be toppled as soon as next week.

“With little in the way of influential economic data, Brexit headline are expected to drive sterling price action.”

Positive commodity prices are a source of some FTSE 100 encouragement, providing a boon for some of the benchmark's miners.

Wall Street indices were mixed at Wednesday’s close. The Dow Jones was around 40 points, 0.16%, lower finishing the session at 24,140 and the S&P 500 dipped 0.11% to 2,629 whereas the Nasdaq went 0.2% better to 6,776.

In Asia, Japan’s Nikkei strode 320 points or 1.45% higher to 22,498 while Hong Kong’s Hang Seng moved slightly higher to 28,239. The Shanghai Composite moved almost 1% lower, changing hands at 3,261.

Australia’s ASX 200 gained 32 points, 0.54%, to trade at 5,977.

In London, CFD and spreadbetting group IG Markets sees the FTSE 100 starting positively. With just over an hour until the open it is calling the benchmark 15 points higher, making it 7,358 to 7,362.

The briefed schedule sees a relatively quiet start to the day on the corporate news front.

Significant events expected on Thursday December 7:

Interims: Clipper Logistics PLC (LON:CLG), DS Smith PLC (LON:SMDS)

Finals: CareTech Holdings PLC (LON:CTH)

Trading update: S&U PLC (Q2) (LON:SUS)

Economic data: US weekly jobless claims; US Challenger jobs report; US consumer credit

Ex-dividends: To clip 0.46 points off FTSE 100 - Babcock International Group PLC (LON:BAB), Mediclinic International Plc (LON:MDC), Next Plc (LON:NXT)

Around the markets:

  • Sterling: US$1.3373, down 0.15%
  • Gold: US$1,257 an ounce, down 0.4%
  • Brent crude: US$61.29 a barrel, down 2.5%

City headlines:

  • IMF calls on China banks to boost capital after credit boom - Financial Times
  • Bitcoin surges above $14000 to new high - BBC News
  • Australian stock exchange to move to blockchain - BBC News
  • China rejects tonnes of UK's waste plastic prompting fresh environmental fears - Sky News
  • Former Volkswagen manager gets 7 years in diesel emissions cheating scandal - USA TODAY
  • Break-up talk comes to head at Whitbread as Sachem Head declares its holding -The Times
  • Air New Zealand grounds flights after engine problems - BBC News

 

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