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FTSE 100 fades despite demand for miners

The Footsie closed down on the day but up on the week
Traders
Big cap miners were making gains
  • FTSE 100 fades away at the end of the session

  • Royal Mail stumbles as unions give cool reception to pension proposals

  • Miners wanted as metal prices harden

The boost from Wall Street id not last long and the FTSE 100 tailed away at the death, closing at 7,378, down 35 points.

Mining stocks did their bit to limit Footsie’s fall, as metal prices improved.

Royal Mail PLC (LON:RMG) was one of the biggest blue-chip fallers, sliding 2.4% to 401p, following the postal union’s opposition to the latest proposal to sort out the former nationalised company’s pensions black hole.

The stock did fall below 400p at one point.

3.10pm - Wall Street provides a lift

FTSE 100 made up some ground in the afternoon session after Wall Street shares started higher.

The UK benchmark stands around 4 lower at 7,409 at the time of writing.

On Wall Street, the Dow Jones added 29 at 21, 561, while the Nasdaq gained 5.52 at 6,279. The broader based S&P 500 added over six points to 2,449.

Big miners made up the list of big gainers, with Anglo American (LON:AAL) ahead by 3.2% to 1,129p, and Fresnillo (LON:FRES) closely behind, up 3.02% to 1,502p.

It came as, consumer price inflation (CPI) in the US missed forecasts again and slipped, which added to doubts that there would be an interest rate rise this year from the Federal Reserve.

Barratt Developments (LON:BDEV) shares showed the biggest losses on Footsie, down 2.33% to 586p. 

2.45pm - Traders await US bell

FTSE 100  was down over 15 points as traders await the start of US trade and mulled the latest US inflation data.

The consumer price inflation (CPI) was  unchanged in June as the cost of petrol and mobile phone services declined further

The  figure, which strips out food and energy costs, edged up 0.1% in June, rising by the same margin for three straight months.

It shows the fairly unmoved state of inflation and throws ninto questioon whether the Fed will raise rates again this year.

Dennis de Jong, managing director at UFX.com, said:  "While inflation remains below the two percent watershed, Fed Chair Janet Yellen continues to stress that it is too early to conclude the long-term price growth trend is heading downwards.

"Caution has been the name of the game for Yellen, even if the consensus is that strong economic performance has been enough to alleviate concerns that consumers will be squeezed by rising costs."

US shares closed higher on Thursday, with the Dow Jones up over 20 points, and the Nasdaq ahead by over 13 points.

Today, futures trading points to the S&P 500 starting 0.25 ahead and the Nasdaq adding 15 points. The Dow Jones  futures are five points lower.

12-noon - FTSE 100 lower, with Royal Mail top loser

FTSE 100 was down almost 16 points at lunch, with Royal Mail Group (LON:RMG) and the strengthening pound weighing on the heavyweight index.

The UK benchmark index was down 15.91 at 7,391 at the time of writing while the now privatised postal giant was down 2.8% at 400.80p.

It comes after City broker Liberum repeated a 'sell' on the firm.

The broker reckons the firm, which will post a trading update next Tuesday,  will be unable to offset the decline in letter revenue with growth in parcel deliveries this financial year as competitive pressures continue to mount.

In European equities, the German DAX is 0.05% lower, while the CAC 40 in France is 0.13% higher.

US stock futures are pointing to a subdued start with the S&P500 down 0.03% and the Dow Jones down four points.

FTSE 250 is over 35 lower at 19,384.

 

11.30am - FTSE 100 still lagging

FTSE 100 is still lagging behind in negative territory as traders await any triggers from the much anticipated US bank earnings later.

The FTSE 100 is down 6.7 at 7,394 at the time of writing, while FTSE 250, more UK company focused, shed 22 to 19,371.

Bret crude - the UK oil benchmark - is up 1.38% to $48.37 a barrel.

Uncertainties over the Brexit process continue to swirl and news emerged this morning of another big firm making provisions already.

Budget carrier easyJet (LON:EZJ) revealed it will create a new airline so it can continue flying in the European Union after Brexit.

According to Sky news, it has applied for a new air operator certificate in Austria at a cost of £10mln - saying the application process was well advanced.

Elsewhere, emerging market fund manager Ashmore group PLC (LON:ASHM) shed 3.25% to 339.40p despite it unveiling a 5% jump in fourth quarter assets.

The total assets under management (AUM) metric increased to $58.7bn, with net inflows of $1.2bn and a positive investment performance of $1.6bn.

Having suffered bearish sentiment earlier in the year, the emerging markets sector is once more in trend, but Ashmore is now finding it harder to meet inflated expectations, suggests IG analyst Chris Beauchamp.

In smaller caps, mining group Botswana Diamonds (LON:BOD) was a standout gainer on the day, with shares up over 22% to 1.63p

It told investors that prospecting work on the Ontevreden licence in South Africa held by Vutomi had identified a group 2 kimberlite.

Initial indications show a size of 1.5 to 2.5 hectares in an area containing high interest garnets and further work will follow to see whether it contained commercial diamonds, the company said.

Pantheon Resources PLC (LON:PANR) was also bolstered to the tune of over 17% as it updated on operations, saying it had inked a gas processing facility deal for Texas.

Elsewhere Sphere Medical (LON:SPHR) shares slipped as it revealed a “number of parties” have expressed an interest in taking part in an equity fundraising.

The details of any placing, subscription or the like are still being discussed but initial “market soundings” from existing and potential new investors were positive.

The group is exploring various financing options to make sure it has enough money to allow it to realise the full potential of its Proxima blood gases monitor.

Milestone Group (LON:MSG) shares boomed over 26% higher at  0.265p  after it drew down £250,000 in the first tranche of a convertible loan note that it secured on Monday.

10 am - Traders in 'wait and see' mode

David Madden, analyst at CMC Markets, summed up: "European equity are broadly flat today as a lack of new macro-economic news has left traders in wait and see mode. 

"The positive session in New York last night slipped over to the Asian markets and that is why Europe is standing still this morning. Overall, things are quiet positive, as The Federal Reserve Chair, Janet Yellen, holds an upbeat outlook for the US economy but won’t be calling for interest rate hikes anytime soon."

9.30am - FTSE 100 drifts lower ..

FTSE 100 continued to drift lower as drugs giant AstraZeneca (LON:AZN) continued the descent started yesterday and traders await US big bank numbers.

The UK benchmark is down 9.57, or 0.13% to 7,403 at the time of writing, with Astra shares down 2.09% at 4,939.

It comes after a report that chief executive, Pascal Soriot, is to leave the company to take a job at Teva - the Israel-based pharma group.

It comes as Astra is already in the throes of a major upheaval.

Meanwhile, postal giant Royal Mail (LON:RMG) shares nudged 0.36% higher to 406.50p as news emerged it had proposed new two alternative pension schemes that will cost “materially lower” than its current plan after unions threatened possible strike action by workers.

FTSE 250 group Carillion PLC (LON:CLLN) was also making headlines again, and saw its shares rise a bit after seeing them plummeting this week.

READ - Carillion creeps higher as HSBC parachuted in ahead of possible £500mln fundraise

Its shares are up 6.4% today to 59p after the construction firm brought HSBC on board as its joint financial adviser and corporate broker as it looks to dig itself out of the hole it fell in earlier this week.

The hiring of HSBC comes as speculation mounts that Carillion will need to raise a significant amount of money to help rebuild, while the sale of its construction business has also been mooted.

Later today, the US economy will be back in focus with earnings reports expected from heavyweights Citigroup and Wells Fargo.

 

FTSE 100 starts modestly lower 

The FTSE 100 started modestly lower on the last day of the trading week, with little on the agenda to prompt investor interest.

The UK bluechip benchmark was down around 6 points at 7,407, while the FTSE 250 dropped 14 points.

Among the blue chip gainers was DCC Plc (LON:DCC), which nudged 0.07% higher at 7,080p after the group told investors its first quarter was in line with expectations and was upbeat on the full year.

Dixons Carphone PLC (LON:DC.) however, lost 1.06% in early deals to 261.70p as it told investors it had sold its Spanish business for €55mln to telecom group Global Dominion Access.

On the FTSE 250, recruiter Hays PLC (LON:HAS) gained 0.12% to 167.70p as it told investors it expects its full-year profit to beat market expectations.

Proactive News headlines:

Iodine producer Iofina PLC (LON:IOF) has revealed that production exceeded its expectations for the first half to end June, despite one of its plants being shut-in.The US -focused resource group said output was 235.5 metric tonnes (MT) of crystalline iodine from its Oklahoma-based IOsorb plants in the six months - bettering expectations for between 215 and 230 metric tonnes.

Ali Mortazavi, the boss of gene silencing specialist Silence Therapeutics PLC (LON:SLN), has been appointed as the non-executive chairman of artificial intelligence and healthcare firm, Ultromics. The group, which was spun out of the University of Oxford earlier this year, is a platform technology that extracts thousands of data points from a single image and then uses machine learning, a form of AI, to determine which data points are specific to a certain disease.

Point-of-care monitors and diagnostic devices company Sphere Medical Holding PLC (LON:SPHR) has said a “number of parties” have expressed an interest in taking part in an equity fundraising. The details of any placing, subscription or the like are still being discussed but initial “market soundings” from existing and potential new investors were positive.

Akers Biosciences Inc (NASDAQ:AKER, LON:AKR) has announced a raft of board changes that will be proposed at the group's forthcoming AGM. Three new non-exec directors will be nominated - Bill J. White, Richard C. Tarbox III and Christopher C. Schreib.

Under pressure Africa-focused oil and gas explorer Tower Resources PLC (LON:TRP) today launched its previously announced open offer to bring in up to £188,000. As reported last month, the firm pressed go on plans to raise up to £360,000 through a placing and open offer - both at 1p.

Avation PLC (LON:AVAP) has confirmed that it took delivery of its 29th new ATR 72-600 aircraft on June 30, from the factory in Toulouse, France. The aircraft is required to be fitted out and configured for a lessee airline and is anticipated to enter commercial service at the end of October 2017. Aviation's executive chairman, Jeff Chatfield, said: “The Company has eight further ATR 72-600 aircraft on order and the Company anticipates two further ATR 72-600 deliveries in late 2017."

6.30am - FTSE 100 seen higher 

The  FTSE 100 index is expected to push higher at the start on Friday, overcoming yesterday’s late wobble after US and Asian markets posted solid gains overnight supported by expectations rate rises by the Federal Reserve will be gradual.

Spread betting firm CMC Markets expects the UK blue chip index to open around 11 points higher at 7,424, having shed around 3.5 points yesterday after a late sell-off from earlier strong gains as Wall Street started cautiously.

But New York stocks rallied to post fresh record highs, with the Dow Jones adding almost 21 points at 21,553, and Asian markets rose for a fifth straight session after Fed Chair Janet Yellen gave another fairly dovish testimony to a Congressional committee.

Michael Hewson, chief market analyst at CMC Markets UK said: “US markets continued where they left off in the wake of further testimony from Fed Chair Janet Yellen to US lawmakers, which didn’t differ that much from her Wednesday remarks.

“The Dow Jones posted another record close, while the US dollar remained under pressure as markets adjusted to how the next moves on monetary policy might play out.”

He added: “The prospect that further interest rate rises may well be much more gradual, if they happen at all, shouldn’t have been entirely unexpected given the risks involved in trying to withdraw stimulus and raise rates at the same time, nonetheless judging by the market reaction it appears to have gone down fairly well.”

US economic data continues to be fairly unremarkable with inflationary pressures once again showing as fairly benign, and today’s June CPI numbers are expected to reinforce that, predicted to come in at 1.7%.

Hays to show post-Brexit resillience

There is no UK data due today and little scheduled on the corporate news front, but FTSE 250-listed staffing firm Hays PLC (LON:HAS) will issue a pre-close season trading update which should continue to show the resilience of the sector despite expectations for a Brexit worry recruitment slowdown.

Earlier this week, Hays’ peer Robert Walters PLC (LON:RWA) told investors it expects profits to beat full-year expectations after a record performance in the second quarter.

READ: Robert Walters surges as it upgrades full-year forecasts after record second quarter performance

In a third-quarter trading update in April, Hays had reported a 4% drop in third quarter like-for-like net fees in the UK and Ireland but that compared to a 10% decline in the previous quarter.

And it said its overall net fees rose by a record 10% on a like-for-like basis, boosted by solid trading in Continental Europe and the rest of the world.

Hays said then that it expects its full year operating profit to reach the top end of market forecasts of £199mln to £209mln.

Significant events expected on Friday July 14:

Trading Statements: Ashmore Group PLC (LON:ASHM), Hays plc (LON:HAS), NewRiver REIT (LON:NRR), Workspace Group plc (LON:WKP)

Economics: US June CPI inflation

Around the markets:

  • Sterling: US$1.2944, up 0.1%
  • Gold: US$1,214.80 an ounce, down 0.1%
  • Brent crude: US$46.07 a barrel, unchanged

City Headlines:

  • RBS share sale ‘was value for money for taxpayers despite £1.9 billion loss’ – The Times
  • Rupert Murdoch will not offer new Sky deal to culture secretary – The Guardian
  • Burberry fat cats suffer shareholder revolt over multi-million-pound share awards – Daily Mail
  • National Grid accused of failing to live up to Paris climate accord – The Times
  • Morrisons commits to selling only British fresh meat – The Times
  • WPP Boss Sir Martin Sorrell goes on buying spree as he seeks to scoop up Europe’s top advert firms – Daily Mail
  • The Axe man cometh for Panmure Gordon staff following Bob Diamond takeover – Daily Mail
  • Bupa data breach affects 500,000 insurance customers - BBC
  • Hard Brexit could be ‘catastrophic’ for the City of London and cost 70,000 jobs, say experts – Financial Times
  • Uber stages retreat in Russia as it merges with rival Yandex – The Guardian
  • Goldman Sachs relaxes dress code for tech staff – Financial Times
  • Vanguard Chief Bill McNabb to step down – Daily Telegraph
  • Electric cars to account for all new vehicle sales in Europe by 2035 – The Guardian

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