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FTSE 100 slips into the red; BP, Royal Dutch Shell buoyed by oil price rally

The UK blue-chip index gave back 20 points to 6,631

Oil
  • FTSE 100 falls 20 points
  • Oilers buoyed by crude rally
  • TikTok leases central London office building

5:10pm: Markets wane before the closing bell

The FTSE closed Friday down 20 points, 0.3%, at 6,631, crossing below the flatline in the afternoon. The FTSE 250 lost 335 points, 1.6%, to end the week at 20,961.

"...oil, mining and banking stocks are acting as a solid foundation for the British index," CMC Markets UK analyst David Madden wrote Friday. "The major eurozone indices are showing losses but they are off the lows of the day thanks to the well-received US non-farm payrolls report. 379,000 jobs were added last month and that hammered economists’ expectations of 182,000. It was a double victory because the January report was revised from 49,000 to 166,000."

BP PLC (LON:BP), Royal Dutch Shell (LON:RDSB) and Premier Oil PLC (LON:PMO) all improved after Brent Crude Oil prices hit a 14-month high, Madden noted. 

In the US, the Dow was up 59 points, 0.2%, at 30,983 around noon ET. The Nasdaq slumped 140 points, 1.1%, to 12,583, and the S&P 500 ticked down 3 points to 3,765.

"Equity markets were bouncing around but they are now lower," Madden wrote. "The US 10-year yield has pulled back from the new 1 year high that was set in the wake of the stellar jobs report. There seems to be a little unease in the market as the positive labour update is a double-edged sword. A healthier jobs market bodes well for the recovery but it will also probably bring about inflation pressure – which has a track record of pushing up yields and hurting stocks."

Friday would be the fourth losing day in a row for the S&P 500 if current trends hold. 

Among the laggards are Tesla Inc (NASDAQ:TSLA), which tumbled more than 9% to $563.27, and Peloton Interactive Inc (NASDAQ:PTON), which slid 5% to $99.45.

3.45pm: BP, Royal Dutch Shell buoyed by oil price rally

FTSE 100 trimmed more gains and was up only 16 points to 6,667 before close.

Blue-chip oilers enjoyed an uplift after OPEC triggered a further rally in crude with Thursday’s decision to keep output quotas unchanged in April.

This was despite market expectations for supply to notch up in order to meet demand as the world progresses COVID-19 vaccination campaigns.

Inside OPEC’s unchanged quotas is Saudi’s unilateral 1mln barrel per day cut in volumes, which is now effectively being extended for another month.

In Friday trading, Brent crude was priced above US$68 with West Texas Intermediate (WTI) holding above US$65 a barrel.

BP PLC (LON:BP.) shot up 4% to 324.1p while Royal Dutch Shell Plc (LON:RDSB) climbed 3% to 1,508.4p.

3.25pm: Proactive North America headlines:

Delta 9 Cannabis Inc (TSE:DN) (OTCQX:VRNDF) (FRA:V5D1) achieves final milestone in services agreement with cultivation partner Fourth Generation Cannabis

Versus Systems Inc (NASDAQ:VS) (CSE:VS) (FRA:BMVB) announces strategic partnership with experiential marketing agency Frias Agency

First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) (FRA:FMG) files its pre-feasibility study (PFS) for Springpole project in Ontario

DXI Capital Corp (TSE:DXI) (OCTQB:DXIEF) on the hunt for an "impactful tailwind business"; files 2020 financial statement

Predictmedix Inc (CSE:PMED) (OTCQB:PMEDF) completes C$1.1M equity financing to scale up its operations

The Valens Company Inc (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) closes C$24.9M deal for edibles manufacturer LYF Food Technologies

2.45pm: Wall Street opens in the green after positive jobs data

The Footsie trimmed its gains as the opening bell rang in Wall Street.

London’s leading index advanced 36 points to 6,687, the Dow added 210 points to 31,133 and the Nasdaq recovered earlier losses rising 22 points to 12,746.

According to economists at ING Economics, the strong jobs report for February is only the start as construction is set to rebound when the weather improves.

More state Governors are relaxing COVID-19 containment measures as the vaccine rollout continues at pace, meaning more businesses will start opening up again.

“Jobs growth will then accelerate from April onwards as more and more state Governors follow the lead of Gregg Abbot in Texas and Tate Reeves in Mississippi and re-open their states on the back of rising vaccination rates and falling hospitalization numbers,” chief international economist James Knightley commented.

“This doesn’t come without risks given the prevalence of more dangerous mutant strains and the fact we are a long way from herd immunity, but it is clearly the direction of travel for the economy.”

2.20pm: TikTok leases whole central London building owned by Helical 

FTSE 100 made a late afternoon jump and surged 50 points to 6,708.

Helical plc (LON:HLCL) was up 2% to 390.5p after announcing that popular video sharing app TikTok has leased the whole of Kaleidoscope, a 88,500 square feet office building in central London.

It is located in front of Farringdon station, which is part of the Crossrail Line.

The lease is for a 15-year term with a tenant option to break at year ten and a market rent free period has been granted.

The deal may mark a turning point for the capital’s office rental market, which has been draining over the past year as companies required people to work from home, with some moving to permanent remote arrangements.

Hammerson plc (LON:HMSO), which mostly owns retail locations, was the top riser in the development sector with a 3% jump to 33.19p.

1.45pm: US nonfarm payroll figures smash expectations

FTSE 100 was firmly in the green in the early afternoon, adding 18 points to 6,669.

Total nonfarm payroll employment in the US rose by 379,000 in February, much higher than the 210,000 forecast.

The unemployment rate came in at 6.2%, little changed from last month’s 6.3%.

The Bureau of Labor Statistics said most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, health care and social assistance, retail trade and manufacturing.

Employment declined in state and local government education, construction and mining.

12.30pm: Gains held as jobs data awaited

The FTSE 100 index held firm at lunchtime even though US stock futures pointed to opening falls on Wall Street, with much dependent on the latest US jobs data.

With an hour to go to the key data, the UK blue-chip index was up 18.66 points at 6,669.64.

Futures for the Dow Jones Industrials Average pointed 0.3% lower, while those for the broader S&P 500 shed 0.4% - the S&P 500 is on track for its third week of declines having closed on Thursday at its lowest level since the end of January. Futures for the technology-heavy Nasdaq-100 were the worst-off, however, down 0.6%, suggesting that the sector will continue to lead the retreat.

Stocks have stumbled in recent weeks as a climb in bond yields has called into question whether low-interest rates, which have propelled valuations higher for much of the past year, can continue for much longer as the economy recovers from the coronavirus (COVID-19) pandemic.

The yield on 10-year Treasury notes ticked up again on Friday, to 1.557%, from 1.547% on Thursday, the highest level for the benchmark borrowing cost since February last year. The latest climb in yields came after Federal Reserve Chairman Jerome Powell provided no sign the central bank would seek to stem the rise when he spoke at The Wall Street Journal Jobs Summit on Thursday

February US jobs report, due to be released at 8.30am ET, is expected to show that the economy created 210,000 jobs last month. That would add to signs of a slow improvement in the labor market, after initial weekly jobless claims on Thursday reached their lowest level in three months.

The jobs report may not sway bond yields much, however, because the data are unlikely to affect the progress of President Biden’s new stimulus package through the Senate or the roll-out of the coronavirus vaccine.

11.20am: Halifax says house prices to grow at slower pace in 2021 

The Footsie turned green in late morning and added 19 points to 6,669.

Halifax, the mortgage lender part of Lloyds Banking Group PLC (LON:LLOY), said it doesn’t expect the level of growth seen in house prices over the past year to be sustained throughout 2021.

It said an economic ‘bounceback’ from lockdown is likely as many people have boosted their savings while stuck at home but higher unemployment is likely to limit new buyer demand.

It also welcomed the extension of the stamp duty holiday and the new mortgage guarantee scheme announced by Rishi Sunak on Wednesday.

“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months,” said Russell Galley, Managing Director at Halifax.

House prices dipped 0.1% in February compared to January, but were 5.2% higher than the same period in 2020 with the average price sitting at £251,697.

10.05am: Former Deliveroo executives launch ten-minute grocery service Dija

The Footsie pared quite a bit of losses in mid-morning and was down only 19 points to 6,631.

Former Deliveroo executives Alberto Menolascina and Yusuf Saban have launched Dija, which joins the busy market of food home deliveries.

The startup says it features “brands you love and brands you will come to love” to stock “your freezer, fridge and cupboard” in just ten minutes from pressing the ‘order’ button.

It relies on mini-warehouses rather than convenience stores or supermarkets.

Dija raised US$20mln in a funding round last December to propel its expansion in London, which is the only city where the service is available as of Friday.

The name is inspired by the Italian ‘di già’, a colloquial phrase equivalent to ‘already?’.

“Amazon’s Prime Now isn’t really now, unless you believe that now is two to four hours. We guarantee ten minutes so people can buy what they want to eat now. People don’t want to plan any more. They are time-poor. That is the reality,” Menolascina told The Times.

9am: FTSE 100 opens in the red

FTSE 100 opened lower after Wall Street stocks suffered large losses overnight as higher inflation concerns have triggered a rise in government bond yields.

London’s leading index dropped 49 points to 6,601 in early trading.

“After Fed chair Jay Powell’s comments last night, that the Fed was focussed on its dual mandate of unemployment and inflation, and that the central bank was a long way from meeting either, would under normal circumstances, have been enough to assuage market concerns about a premature tightening of policy,” commented Michael Hewson at CMC Markets.

“By not specifically referencing or expressing concern over the recent move higher in longer term US yields, and looking to hold the markets' hand, it was perhaps not surprising that the bond sell-off continued, however whether the sell-off is sustained is a different matter entirely.”

The weakness in the tech sector is also acting as a drag on Scottish Mortgage Investment Trust (LON:SMT), which shed 5% to 1,034.06p, considering its relatively heavy weighting towards that sector. Its top holdings include Tesla, Amazon and Alibaba.

In UK company news, London Stock Exchange PLC (LON:LSE) said listed firms raised the most money in more than a decade over the past year as they battled the impact of coronavirus.

LSE shares dropped 5% after it admitting facing increasing competition from Europe, after trading in Amsterdam outstripped the UK for the first time in January.

Aggreko PLC's (LON:AGK) directors have agreed terms for a cash takeover from two private equity groups TDR and I Squared, valuing the mobile power generator supplier at £2.3bn and prompting a 1% rise to 902p.

Mike Ashley's Frasers Group PLC (LON:FRAS) said the new Budget allocations “will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created” and the £2mln rates cap on businesses from July 2021 to March 2022 is “a near-worthless support package for large retailers”. Shares were flat though.

Proactive news headlines

SDX Energy Plc (LON:SDX) has secured final approval from the Egyptian authorities to extend its Production Services Agreements for the Meseda and Rabul oil fields, both part of the West Gharib concession.

Touchstone Exploration Inc (LON:TXP, TSE:TXP) announced a jump in crude oil and natural gas reserves at its Trinidad exploration properties.

Innovative money firm Tally Ltd has described a pivotal year in the company’s development, as it releases a final results statement for the twelve months ended June 2020.

Kodal Minerals PLC (LON:KOD) is close to reaching an agreement with Riverfort Global Capital Ltd to receive up to US$2.5mln in funding.

FinnCap Group plc (LON:FCAP) chief executive Sam Smith and chairman Robert Lister have purchased shares in the company. Smith splashed out £39,650 on 130,000 shares at a price of 30.5p per share, while Lister purchased 65,450 at the same price. Smith's beneficial interest over 16.14mln shares represents 9.29% and Lister 0.04%.

Thor Mining PLC (LON:THR, ASX:THR) has hired WH Ireland as Nominated Adviser and joint broker to the company with immediate effect.

Horizonte Minerals PLC (LON:HZM, TSX:HZM) has appointed BMO Capital Markets as joint broker alongside Peel Hunt LLP, with immediate effect. This week the company attended the virtual 30th BMO Global Metals and Mining Conference and has made a replay of its presentation available on its website.

Personal Group Holdings PLC (LON:PGH) will announce its preliminary annual results for 2020 on Tuesday 23 March. Chief executive Deborah Frost and chief financial officer Sarah Mace will be hosting a webinar for private investors on Tuesday 30 March at 11.30am.

Guild Esports (LON:GILD) will hold its annual general meeting at 10am on Tuesday 30 March at Craven House, 16 Northumberland Avenue, London, WC2N 5AP, UK. The company will take questions and comments from shareholders submitted in advance of the AGM.  

6am: Market waits for US jobs report for February

UK equities are set to start the final day of the week on the back foot ahead of the US jobs report for February.

Spread betting quotes point to the FTSE 100 opening around 56 points lower at 6,595.

“Last night was heavy on surprises leading to plenty of drama. OPEC+ wrong-footed markets by leaving their production cuts intact for another month, delivering a 150,000 bpd [barrels per day] increase to Russia and Kazakhstan, with oil prices rocketing higher,” commented Jeffrey Halley at OANDA.

“Federal Reserve Chairman Jerome Powell chose not to dampen the inflation fires as well. Sticking to his previous guidance that the recent inflation was transitory, expressing comfort with present moves in the markets and that the Fed was very much focused on assisting the recovery in employment,” Halley added.

US markets took a tumble yesterday with the Dow shedding 346 points to close at 30,924 and the S&P diving 51 points to 3,768.

Red has been the predominant colour on traders’ screens in Asia as well, with Japan’s Nikkei 225 down 223 points at 28,707 and Hong Kong’s Hang Seng 96 points softer at 29,141.

China, which withdrew a target for gross domestic product (GDP) in 2020 during the coronavirus (COVID-19) pandemic, has unexpectedly set a GDP growth target, albeit at a fairly low level of “above 6%” compared to the consensus forecast of 8%.

More economic forecasts should come today as The National People's Congress is meeting to determine the next five-year plan.

In the US, it’s the first Friday of the month which means US non-farm payrolls, the first to cover a whole month under the Biden administration.

Depending on who you ask, the market consensus is for additions of between 170,000 and 195,000.

In London, Pearson PLC’s (LON:PSON) has already tipped the wink to the market ahead of its final results out today.

The FTSE 100 group said it expects adjusted operating profit for 2020 to be in the range of £310mln-£315mln, compared to £581mln in 2019, on sales down 10% compared to the previous year, so investors will be looking to see where exactly the final figure has fallen within this range.

Significant announcements expected for Friday, March 4

Finals: London Stock Exchange Group PLC (LON:LSE), Pearson PLC (LON:PSON), Essentra PLC (LON:ESNT), AIB Group PLC (LON:AIBG), ConvaTec Group PLC (LON:CTEC), Global Ports Investments PLC (LON:GLPR)

Economic data: US non-farm payrolls, US trade balance

6.50am: Early Markets - Asia / Australia

Stocks in the Asia-Pacific region were mostly lower on Friday as China’s Premier Li Keqiang said that the world’s second-largest economy would target a growth rate of over 6% for 2021.

The Hang Seng index in Hong Kong dipped 0.08% while the Shanghai Composite in China rose 0.06%.

In Japan, the Nikkei 225 slipped 0.23% and South Korea’s Kospi dipped 0.57%.

Shares in Australia fell, with the S&P/ASX 200 closing 0.74% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

ioneer Ltd (ASX:INR) (OTCMKTS:GSCCF) (FRA:4G1) has received firm commitments for its fully underwritten institutional placement to raise A$80 million to assist in accelerating construction of the 100%-owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA.

King River Resources Ltd’s (ASX:KRR) reconnaissance exploration at Kurundi Project in the Tennant Creek/Davenport region of the Northern Territory has returned high-grade gold, silver and copper rock chip samples.

Antipa Minerals Ltd (ASX:AZY) aircore drilling program at the Paterson farm-in project with IGO Ltd (ASX:IGO) (OTCMKTS:IPGDF) in WA's Paterson Province has extended Poblano gold-copper-silver mineralisation by 500 metres to 1.6 kilometres of strike.

Jindalee Resources Ltd (ASX:JRL) has received further drilling results from a 15-hole program completed late in 2020 which have extended the McDermitt lithium resource in southeast Oregon and confirmed substantial thickness and continuity of mineralisation from surface.

Lithium Australia NL’s (ASX:LIT) (FRA:3MW) (OTCMKTS:LMMFF) LieNA® pilot plant has been given the green light, with the company preparing to test its unique LieNA® spodumene conversion process.

Sipa Resources Limited (ASX:SRI) (FRA:SPO) is set to begin drilling at its recently acquired Murchison Gold Project in Western Australia, pending weather in the district.

Firefinch Ltd (ASX:FFX) (OTCMKTS:EEYMF) (FRA:N9F) has recommenced work at the Koting Deposit and received gold results described as “very positive” from Pit 5 Prospect, both at the operational Morila Gold Project in Mali.

AVZ Minerals Ltd’s (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) Manono Lithium and Tin Project in the Democratic Republic of Congo, Africa, is on the pathway towards construction with plans in place to submit one remaining ESIA proposal to the ACE in DRC for approval this quarter.

Andromeda Metals Ltd (ASX:ADN) has started drilling at the company’s 100% owned Mount Hope Kaolin Deposit on the west coast of South Australia’s Eyre Peninsula.

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