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FTSE 100 closes higher as pound firms; Shire top riser

Last updated: 17:30 16 Nov 2017 GMT, First published: 06:52 16 Nov 2017 GMT

walmart
  • FTSE 100 closes up 14

  • UK retail sales rise 0.3% in October, ahead of forecasts

  • US stocks open in the black; Wal-Mart surges

 

FTSE 100 closed higher, as US stocks headed north and drugs titan Shire Plc (LON:SHP) was the biggest riser.

Britain's blue-chip benchmark closed up around 14 points at 7,386, while FTSE 250 raced up over 156 points at 19,850.

Sterling firmed too, adding 0.23% against both the Euro and the US dollar.

The rise was attributed to UK retail sales data, which were stronger than expected last month.

Sales in October rose 0.3% month-on-month after a sharp fall the previous month that was revised up to 0.7% from 0.8%. Consensus had been for a 0.1% rise at most.

On Wall Street, the Dow Jones is up around 190 points at the time of writing, while the S&P 500 is up over six points.

In stocks,  Shire was the biggest gainer on Footsie, while engineer GKN plc (LON:GKN) fell the most- down 4.76% to 296p.

It came after the chief executive-in-waiting, Kevin Cummings, and former boss at the aerospace division, has been ousted a month before he was due to take over from outgoing boss Nigel Stein.

GKN also warned it will likely have to take another hefty write-down from its US operations.

 

 

3.30pm...FTSE 100 up 11 points as markets head towards close

Shortly before market close here in London, the FTSE 100 is up 11.4 points, or 0.15%, to 7,383.7.

Drugmaker Shire Plc (LON:SHP) made some good gains yesterday afternoon and it was in demand again on Thursday, up 4.7% to £36.95 making it the top blue chip riser.

Retailers were also being snapped up by traders after the latest data from the ONS showed retail sales rose 0.3% in October, with analysts suggesting that the underlying trend is “one of growth”.

That eased some of the concerns about a plunge in consumer spending, with J Sainsbury plc (LON:SBRY) (up 2.2% to 229p) and WM Morrisons Supermarkets PLC (LON:MRW) (up 1.8% to 210.7p) the biggest beneficiaries.

British Land Company PLC (LON:BLND) also surged on Thursday on the back of solid interim results and confirmation that it will start a new project near Euston early next year. Shares are up 3.9% to 620p.

Despite the wealth of risers, a stronger pound – which makes companies’ foreign-denominated earnings worth less when translated back into sterling – was reining in the blue chips.

The pound is up 0.4% against the euro to €1.121, while it has advanced 0.2%versus the dollar to US$1.319.

Engineering group GKN PLC (LON:GKN) was by some way the index’s biggest faller and another reason for Footsie’s modest rise, down 4.8% to 295.9p.

The firm’s chief executive-in-waiting, Kevin Cummings, has been ousted a month before he was due to take over from outgoing boss Nigel Stein, while GKN also warned it will likely have to take another hefty writedown from its US operations.

Private hospital group Mediclinic International Plc (LON:MDC) saw its shares drop 1.5% to 585.5p as it reported a fall in first-half profits, hurt by weakness in its Middle East and Swiss businesses.

News that the company is considering reviving its interest Spire Healthcare Group PLC (LON:SPI) was met with a shrug of the shoulders as well.

Also heading lower was Oil giant Royal Dutch Shell PLC (LON:RDSB) which saw 2% wiped from its value (to £23.87) as its shares went ex-dividend.

 

3pm…Wal-Mart leads Dow Jones higher

Wal-Mart Stores, Inc (NYSE:WMT) has helped to drive the Dow Jones 0.6% higher in early deals to 23,407.3.

The retail giant, which also owns Asda, saw like-for-like sales rise 2.7% in the third quarter and told investors it was upbeat about its prospects for the rest of the year.

The S&P 500 also climbed higher, rising 0.4% to 2,575.9, while the Nasdaq made it a clean sweep – rising 0.9% to 6,766.7.

 

2.35pm…Manchester United revenues jump

It seems Manchester United’s improves fortunes on the pitch this season are starting to pay dividends in the boardroom.

The football giants – currently second in the Premier League – saw revenues jump 17.3% to £141mln in the three months to October.

Broadcasting and match day revenues leapt more than 30% as the club returned to the lucrative European Champions League in September after missing out last season.

Commercial and sponsorship income also grew in the quarter, although income from retail, merchandising, sportswear and product licensing slipped by 0.4% on the previous year.

 

2.20pm…Cash Converters warns about potential data breach

It seems we can’t go a week these days without at least one company warning customers that their data may have breached.

This week’s culprit seems to be high street pawnbroker Cash Converters which has told customers who have used its online store about a potential cyber hack.

CC said customers’ usernames, passwords and addresses had potentially been accessed by a third party, although it added that no credit card information had been hacked.

"Our customers truly are at the heart of everything we do, and we are disappointed that they may have been affected," the company said in a statement.

"We apologise for this situation and are taking immediate action to address it."

 

2pm...Norway’s US$1trn wealth fund to dump its oil and gas shares?

Norway’s US$1trn sovereign wealth fund – the largest in the world – is reportedly considering selling off its various holdings in oil and gas companies.

According to Reuters, should the plans be accepted by the Norwegian finance ministry then the fun would, over time, divest billions of dollars from oil and gas stocks.

Such holdings represent around 6% or US$37bn of the fund’s benchmark equity index.

Deputy central bank governor Egil Matsen told Reuters: "That would mean all companies that the FTSE has classified with the sector, should be removed from our reference index."

 

1.25pm…US stocks to open higher ahead of several data releases

Over in the US, there’s no shortage of economic data and central bank speakers on the agenda today, with jobless claims, the Philly Fed manufacturing survey, industrial production and capacity utilisation data all being released.

Ahead of those data points, spread bet firms reckon it will be a positive start on Wall Street, reversing the bearish attitude seen earlier in the week.

The Dow Jones is expected to open 78 points higher at 23,354, while the broader S&P 500 is tipped to kick off Thursday trading 8.9 points in the black at 2,573.7.

As for the tech-heavy Nasdaq, that is forecast to register a gain of 29.4 points at the opening bell to 6,287.4.

 

1.10pm...Pound holds FTSE back

The FTSE 100 was in the red early on Thursday but a surprise jump in retail sales volumes last month breathed some life into the blue chip index.

The Office for National Statistics said sales rose 0.3% in October compared with September, better than the 0.1% growth economists had expected.

Retailers boosted by sales data

On a quarterly basis sales volumes were up 0.9% compared to the same three months in 2016, although they have fallen 0.3% over the past 12 months – largely due to a strong October last year.

The ONS said the underlying pattern “is one of growth” though, which eased concerns of a plunge in consumer spending and confidence.

Unsurprisingly retailers got a little boost from the data, with Next Plc (LON:NXT) (up 1% to £43.19), Debenhams PLC (LON:DEB) (up 0.7% to 39.3p) and Marks and Spencer Group Plc (LON:MKS) (up 0.8% to 304p) all making solid gains.

Two of the ‘big four’ supermarkets were the biggest beneficiaries though.

J Sainsbury plc (LON:SBRY) added 2% to 228.5p, while WM Morrisons Supermarkets PLC jumped 1.6% to 210.2p. The UK’s largest grocer, Tesco PLC (LON:TSCO), also rose 0.5% to 184.6p.

Away from the retailers, British Land Company PLC (LON:BLND) was also in demand with investors, gaining 2.9% to 613.5p on the back of solid first-half numbers and confirmation that it will start work on a new development near Euston station in March.

FTSE up but strong pound limits growth

They all helped to push the FTSE 100 into the black (just), and it is currently up 3.3 points to 7,375.9, with a stronger pound on the back of the upbeat sales data stopping the index from climbing higher.

Engineering group GKN PLC (LON:GKN) was by some way the index’s biggest faller and another reason for Footsie’s modest rise, down 6.4% to 290.9p.

The firm’s chief executive-in-waiting, Kevin Cummings, has been ousted a month before he was due to take over from outgoing boss Nigel Stein, while GKN also warned it will likely have to take another hefty writedown from its US operations.

Private hospital group Mediclinic International Plc (LON:MDC) saw its shares drop 1.9% to 583p as it reported a fall in first-half profits, hurt by weakness in its Middle East and Swiss businesses.

News that the company is considering reviving its interest Spire Healthcare Group PLC (LON:SPI) was met with a shrug of the shoulders as well.

Oil giant Royal Dutch Shell PLC (LON:RDSB) saw 2% wiped from its value (to £23.86) as it went ex-dividend.

 

12.10pm…Tesla to unveil its semi-truck this evening

Elon Musk and his Tesla Inc (NASDAQ:TSLA) are set to unveil their latest electric vehicle in Los Angeles tonight: an 18-wheel class 8 truck.

Musk – well-known for hyping up his ventures – said last week that the truck “will blow your mind clear out of your skull”.

We got a brief look at what the truck might look like when Musk tweeted a silhouette of its front, but other than the fact it will be electric, we don’t really know what else to expect.

The guys at Wired are expecting Tesla to use the same batteries used in their cars to power the truck, but just more of them.

Aerodynamics is likely to be a key feature as well, with rumours that the new truck will have active spoilers that adjust their angle to reduce drag as much as possible.

As for things to look out for, Wired wants to know how much the truck will cost, how long it’ll take to charge and how Tesla will avoid the same production issues it’s had with the new Model 3 car.

 

11.35am ... Pound’s strength weighs on Footsie

On the back of some encouraging retail sales data earlier this morning, the pound has strengthened against both the euro and dollar.

Against the greenback it is currently up 0.2% to just shy of US$1.32, while it has gained 0.4% versus the euro to €1.124.

That has weighed on the FTSE 100, whose constituents generate a large chunk of their earnings in foreign currencies.

Shortly after 11.30am London time, the FTSE 100 is up 1 point to 7,373.

 

11.25am … Talktalk walks lower on RBC downgrade

On the FTSE 250, Talktalk Telecom Group PLC (LON:TALK) shares headed lower for the second day in a row, this time because of a downgrade from RBC Capital.

On Wednesday, the telecoms firm slumped after it swung to a half-year loss and timed its outlook on “investment” costs.

RBC – the mid-ranked Canadian bank not normally associated with moving stocks – has cut its recommendation to ‘sector perform’ on the back of yesterday’s numbers.

It has also chopped its price target from 225p to 190p – although that’s still comfortably above 172.1p which is where the shares currently sit (3.3% down on the day).

“With profitability unlikely to return before the first fixed low price plan subscribers start to come off contract (early 2018) and leverage remaining high, we now feel risks outweigh the limited upside,” RBC said in a note to clients.

 

11.10am … Premier Oil on track to hit production forecasts

Premier Oil PLC (LON:PMO) is on-track to hit its recently increased production forecast for the full year, with third quarter output averaging 76,000 barrels oil equivalent per day.

The company aims to produce between 75,000 and 80,000 bopd for the year.

In a third quarter update Premier said the Catcher oil field is due to achieve first oil in December and it highlighted that an agreement has been signed to extend floating production vessel to extend the life of the Huntington field.

It is preparing for a likely four well appraisal programme on the large Zama oil discovery offshore Mexico, where work is expected to start in late 2018.

 

11am ... 'Rapid fire musical chairs at GKN'

“As we feared, the unexpected write-downs and charges in October have been followed by more nasties,” says Hargreaves Lansdown equity analyst Nicholas Hyett.

“Working capital write-downs happen from time to time, but when they come in waves of ever increasing size investors start to get worried, and with good reason. If US aviation is broken, what about the rest of the business?

“The board have taken drastic action. But while losing one CEO is unfortunate, effectively losing two at once starts to suggest carelessness. Hopefully whoever takes over from last minute substitute Anne Stevens, gets to kick a ball before they’re unceremoniously hauled off the pitch.”

 

10.35am ... Retailers jump on solid sales data

A surprise jump in retail sales volumes last month breathed some life into the FTSE 100 in mid-morning trade on Thursday.

The Office for National Statistics said sales rose 0.3% in October compared with September, better than the 0.1% growth economists had expected, and partially reversing the previous month’s 0.7% fall.

Retailers, supermarkets boosted by sales data

On a quarterly basis, sales volumes were up 0.9% compared to the same three months in 2016, although sales have fallen 0.3% over the past 12 months – largely due to a strong October last year.

The ONS said the underlying pattern “is one of growth” though, which eased concerns of a plunge in consumer spending and confidence.

The data immediately gave a little boost to UK retail stocks, including Next PLC (LON:NXT) (up 0.7% to £42.05) and Marks and Spencer Group PLC (LON:MKS) (up 0.5% to 303.1p).

The supermarkets were the biggest beneficiaries though, with Tesco PLC (LON:TSCO) (up 1.1% to 185.7p), J Sainsbury PLC (LON:SBRY) (up 1.9% to 228.3p) and WM Morrisons Supermarkets PLC (LON:MRW) all making decent gains.

They all helped to propel the FTSE 100 into the black, and it is currently up 12.3 points to 7,385.

Away from the retail stocks, Easyjet PLC (LON:EZJ) is the biggest flier, up 3.5% to £12.95, although drugmaker Shire PLC (LON:SHP) isn’t too far behind – up 2.8% to £36.30.

British Land Company PLC (LON:BLND) was also in demand (up 2.2% to 609.5p) as its interims revealed net asset value edged higher in the period, while the property developer also confirmed it is to start work on a new development near Euston station in the New Year.

GKN, Mediclinic weigh

Engineering group GKN PLC (LON:GKN) was by some way the index’s biggest faller, down 6.3% to 291.2p after its chief executive-in-waiting stepped down as the company warned it will likely have to take another hefty writedown from its North American operations following its profit warning earlier this year.

Private hospital group Mediclinic International PLC (LON:MDC) saw its shares drop 2.9% as it reported a fall in first-half profits, hurt by weakness in its Middle East and Swiss businesses.

Not even news that the company is considering reviving its interest in Spire Healthcare Group PLC (LON:SPI) could lift the stock.

 

9.45am … Retail sales rise 0.3% in October

UK retail sales continued to grow in October, easing fears of a plunge in consumer confidence and spending.

The Office for National Statistics said sales volumes rose 0.3% in October, better than the 0.1% growth economists had expected and partially reversing the previous month’s 0.7% fall.

On a quarterly basis, sales volumes were up 0.9% compared to the previous three month period.

Over the past year, sales have actually fallen slightly though (down 0.3% compared to the 12 months to October 2016) – the first annual fall since 2013 – but this was largely due to a strong October last year, the ONS said.

“We are continuing to see an underlying picture of steady growth in retail sales," said the ONS’s Kate Davis.

 

9.15am … Just Eat gets all clear to gobble up Hungryhouse

Online takeaway ordering platform Just Eat Group PLC (LON:JE.) has had its merger with Hungryhouse unconditionally passed by the competition watchdog.

The Competition and Markets Authority gave the £240mln deal the provisional green light last month and after this full approval, Just Eat expects it to formally complete on 31 January.

In the provisional ruling, regulators said: “We found that Hungryhouse was a weak competitor to Just Eat and so competition is unlikely to be substantially reduced by this merger.”

 

8.40am ... Markets say 'meh' to Carney's TV appearance

Comments by Bank of England Governor Mark Carney were met with a collective ‘meh’ as FTSE 100 opened down 3 points at 7,375.46.

ITV’s Good Morning Britain isn’t normally the forum you’d expect to be setting the day’s economic agenda – but there Carney was circa 7.20am spouting forth on Brexit, which he thinks has depressed the UK economy.

“We have not done as well in the short term as we would have done if the vote had gone the other way,” he said.

WATCH: Carney on .... Megan Markle (we kid you not)

He also promised economic security in the face of uncertainty. “We will do whatever we can to support the economy during the transition, whether there is no deal or a comprehensive deal.

“We can provide support by keeping prices low and stable and by making sure banks can withstand whatever shock that might come whatever deal we have.”

There was no doubting what the big corporate story of the day was – GKN (LON:GKN) and more specifically the exit of the chief executive-designate Kevin Cummings amid more financial woes in the US. The shares fell almost 9%.

6.45am ... muted start expected

London’s FTSE 100 is expected to get off on the front foot when the stock market opens later this morning, albeit the improvement will be quite slight.

The market fundamentals remain relatively benign though with December now coming into sight, reflective traders may well be taking their foot of the gas.

Stock market analyst Michael Hewson highlighted that some valuations now appear stretched and some profit taking has started to come into the market.

“So far this year both these markets have made gains in excess of 12%, beating the expectations of even the most optimistic of forecasters at the start of 2017,” the CMC Markets analyst said in a note.

“With concerns about high yield credit prompting some profit taking along with a recent survey that showed investors underweight in cash, it wouldn’t take much more of a push for markets to fall even further as portfolio managers start to lock in profits as we head towards year end.”

Wall Street benchmarks closed Wednesday’s session lower. The Dow Jones gave up nearly 140 points, 0.6%, to finish at 23,271 while the S&P 500 dipped 0.55% to 2,564. The Nasdaq, meanwhile, ended the day down 0.47% to 6,706.

Japan’s Nikkei rose, however, rising 322 points or 1.47% to change hands at 22,351. Elsewhere in Asia, Hong Kong’s Hang Seng was up 0.65% at 29,040 and the Shanghai Composite was practically unmoved for the session at 3,402.

Australia’s ASX 200 moved slightly higher to 5,943.

In the UK, CFD and spreadbetting firm IG Markets sees the FTSE 100 starting around 19 points higher – calling the blue chip benchmark at 7,383 to 7,387 just over an hour before the open.

British investors will have a keen eye for monthly retail sales data due later today, particularly after Wednesday’s lacklustre employment and wage statistics.

In terms of corporate news, Royal Mail will be in the spotlight as it reports at 7:00am.

Proactive news headlines

Iofina plc (LON:IOF) said production from its iodine recovery facilities could exceed expectations after bumper third quarter as it gave an update on progress building its latest plant. IO#7 is on time and within budget, the company said.

IXICO Plc (LON:IXI) has landed another contract to support wrist-worn activity monitors being used by psychiatric patients taking part in a late-stage clinical trial. The deal, the second of its kind, is with an unnamed leading biopharmaceutical and is worth £750,000 over two years.

Oil and gas drilling services provider ADES International Holding Ltd (LON:ADES) has been awarded a new contract for its ADMARINE III offshore jack-up rig from one of its original customers.

The deal with General Petroleum Company is for an initial two-year period, although there is an option to extend that for another two years.

Myanmar-language social media, entertainment and payments platform MySQUAR Limited (LON:MYSQ) has appointed Stephen Chong as chief operating officer with immediate effect.

Aircraft lessor Avation PLC (LON:AVAP) has expanded its aircraft options pipeline to 30 new ATR72-600 aircraft over the next five years. Previously it had 27 options over new ATR72-600 turboprop planes.

Plexus Holdings Plc (LON:POS) chief executive Ben van Bilderbeek has described the drop in the group’s financial results as inevitable. In Thursday’s release, which comes after the announcement that Plexus is selling its jack-up exploration services business, the company reported annual revenue of £4.75mln for the twelve months ended June 30, down from £11.2mln.

Kibo Mining PLC (LON:KIBO) has persuaded Tanzania’s state power company Tanesco to speed up the finalisation of a power purchase agreement for the Mbeya (MCPP) project. An updated memorandum of understanding for the thermal power station has been submitted to Tanzania’s energy ministry and Attorney General for final sign off.

OPG Power Ventures (LON:OPG) said the scrip dividend reference price for the ordinary shares to be issued to shareholders will be 26.023p per share. The shareholders elected to receive the scrip dividend alternative for the company's final dividend of 0.72p per share.

Green Dragon Gas Ltd. (LON:GDG) said it continues to progress negotiations of the inter-creditor terms with its bond holders, as noted in its debt maturity extensions update on 30t October 2017.

Medical device company Belluscura Limited, part-owned by Tekcapital PLC (LON:TEK), has announced its intention to float on the London Stock Exchange’s junior market AIM. Belluscura is seeking to raise £7.5mln to £10mln in the placing and expects to begin trading in December.

Greka Drilling Ltd (LON:GDL) has confirmed it has now entered into a three-year drilling contract in India. The Oil and Natural Gas Corporation (ONGC) has contracted Greka to the Bokaro CBM asset, where it will provide drilling and mud services.

Highlands Natural Resources Plc (LON:HNR) has told investors of a significant step-up in flow back from the two new wells at the East Denver project. The operations at the Wildhorse and Powell wells yielded a combined flow rate of 1,022 barrels oil equivalent per day, in the 24-hour period ending 10pm November 15. It marks a 60% increase in production rates since November 10.

Belvoir Lettings PLC (LON:BLV) said it will not proceed with a merger offer for The Property Franchise Group PLC (LON:TPFG). The company had announced a possible bid on Tuesday and a number of common institutional shareholders had publicly stated their support for talks.

Brady Plc (LON:BRY) said Kestrel Partners LLP has raised its stake in the company to 27.02% from 26.04%.

Metal Tiger PLC (LON:MTR) had advised the issue of a further 256,735 new shares in respect of 5,000 of warrants. The warrants have been converted at an issue price of 1.95p. It added that the number of warrants extended by an agreement to 28 February 2018 is 199,500 and not 204,500 as originally stated on 6 November.

Eco (Atlantic) Oil & Gas Ltd (LON:ECO) said the subscription of shares by Africa Oil Corp (AOC) has been completed. AOC has received 29,200,000 new common shares in Eco and now holds an interest of about 19.77% in the company.

Thursday’s significant announcements

Interim results - Young & Co's Brewery PLC (LON:YNGN), Royal Mail PLC (LON:RMG), TBC Bank Group PLC (LON:TBCG), Mediclinic International PLC  (LON:MDC), 3i Group PLC (LON:III), Dart Group PLC (LON:DTG), Assura Group Ltd (LON:AGR), British Land Co PLC (LON:BLND), Investec PLC (LON:INVP), Medica Group Plc (LON:MGP), QinetiQ Group PLC (LON:QQ.), Norcros PLC (LON:NXR)

Final results - Nanoco Group PLC (LON:NANO)

AGM / EGM - Nextenergy Solar Fund Ltd (LON:NESF), Record PLC (LON:REC)

Headlines

Dyson sues ex-chief executive over leaked secrets claim – Telegraph

Rightwing group calls for Greggs boycott over sausage roll nativity - The Guardian

UK average wage growth remains below inflation, confirming fall in real incomes - The Independent

LSE cancels meeting with investor TCI as dispute deepens - Financial Times

Koch Brothers Back Meredith Bid to Buy Time Inc – Bloomberg

FCC Plans December Vote to Kill Net Neutrality Rules – Bloomberg

Mattel rejects Hasbro's initial offer - USA TODAY

Amazon Prepares to Launch Its Physical Store With No Cashiers - Fortune

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