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FTSE 100 closes strongly higher as markets stabilise

The UK blue chip index closed up 138 at 7,279 - above the day’s peak of 7,255.
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Footsie strengthen late on to close higher
  • FTSE 100 closes 138 pts higher

  • Miners take brunt of selling

  • Eyes on Bank of England meeting tomorrow

 

 

FTSE 100 continued its winning streak in late afternoon trading to close up 138 points at 7,279 - well above the previous session peak of 7,255.

The mid-cap 250 index was also higher - up over 429 points, at 19,691 as some kind of stability returned to markets.

On Wall Street, shares are also higher, with the S&P500 up 2.68%, or 71 points and the Dow Jones 1.17% up, or 289 points.

Financial stocks were atop the Footsie, with the top gainer Scottish Mortgage Inv Trust (LON:SMT), which was up 6.58% to 450p.

Miners took the brunt of selling with gold titan Randgold Resources Ltd (LON:RSS) the biggest gainer, up 3.78% at 6,214p.

David Madden, at CMC Markets, said: "A combination of shorting covering and bargain hunting is helping the markets today. It has been a brutal week for investors, but some are keen to step in and take advantage of the fall in prices.

"There is still a sense we could be in for another leg lower, and for that reason some dealers are reluctant to get back into the market." 

3.00pm: Volatility reigns

The FTSE 100 index extended its rally in last morning trading, pushing up to triple-digit session highs as US stocks bounced higher again after an opening fall as bargain hunters again underpinned a recovery after recent sharp falls.

Around 3pm, the UK blue chip index was up 112 points at 7,254, just below the day’s peak of 7,255.

After half an hour of trading in New York, following an opening drop, the Dow Jones swiftly rallied once again to add 132 points at 25.048, with both the broader S&P 500 index and tech-laden Nasdaq composite also poking in to positive territory.

David Cheetham, chief market analyst at XTB.com commented: “In approaching nearly a decade old the global stock market rally is certainly long in the tooth by historical standards, but it appears unlikely that the recent drop will signal the beginning of its demise; rather the declines have simply let a little air out of over inflated valuations - albeit in a fairly dramatic fashion - and for the time being at least, the outlook going forward remains favourable for equities.”     

2pm: Hargreaves Lansdown's winner and losers

The FTSE 100 was stoic in the face of what looks likely to be another bumpy session on Wall Street with index of blue-chip shares up 73 points at 7,214.81.

Pre-market action suggests the Dow Jones will lose just over 100 points (or 0.4%) at open with futures trading of the broader-based S&P index suggesting a fall of around 0.5% at the open.

Back here in the UK, investment giant Hargreaves Lansdown has looked at the winners and losers following the current market turmoil.

It seems while the bond market was the source of the current malaise fixed income funds have fared the best over the past six trading days.

Japanese and emerging market focused vehicles have taken the biggest hits.

 

12.00pm: US restart nervously awaited

The FTSE 100 index remained higher in lunchtime trading, recovering after Tuesday’s sharp falls despite expectations for Wall Street to take another plunge at open following a choppy performance overnight.

Around 12pm, the UK blue chip index was up 61 points at 7,202, just below the session peak of 7,214.19 having dropped over 193 points lower on Tuesday.

New York’s rallied strongly on Tuesday, with the Dow Jones recouping around half of the previous session’s 1,100 point slide, albeit in very choppy trading, but the futures market is pointing to another 300 point drop by the US blue chips today.

James Hughes, chief market analyst at AxiTrader commented: “I think we have to look towards stock bargain hunters for yesterday’s moves as many came out look to pick up cheap stock after the last few days of downside.”

“However,” he added, “it wasn’t a simple session, with a huge range on the day that at one point had the Dow lower by over 300 points. The question everyone is asking is just where this leaves global equity indices, and my answer would be still risk off and incredibly nervous.

“Even though we have seen a big sell off the markets are still in line for a correction, which would be deeper than what we have currently seen.”

11.00am: Tesla car in space; FTSE closer to the ground

Elon Musk’s Tesla roadster, which launched on top of SpaceX’s Falcon Heavy rocket on Tuesday, is going farther out into the Solar System than originally planned, according to website The Verge.

The car was supposed to be put on a path around the Sun that would take the vehicle out to the distance of Mars’ orbit but, The Verge said, the rocket seems to have overshot that trajectory and has put the Tesla in an orbit that extends out into the asteroid belt between Mars and Jupiter.

Tesla Inc (NASDAQ:TSLA) customers waiting for delivery of the company’s electric vehicles will be hoping that their deliveries don’t do so far astray!

The US firm's in New York were indicated a touch lower in pre-market trading - with Tesla's latest earnings due after the market close tonight - mirroring expectations for an opening retreat by Wall Street after Tuesday's choppy trading session which saw around half of Monday's 1,100 point plunge recouped.

In London, the FTSE 100 index remained around 48 points higher at 7,189 also recovery after recent sharp falls.  

9.50am: House price falls pushes back rate rise expectations

UK house prices unexpectedly fell last month, according to the latest Halifax survey, pushing the annual rate of price increase to one of its weakest rates in more than four years

The mortgage lender said that average UK house prices fell by 0.6% in January, worse than forecasts of a 0.2% decline, lowering the annual rate of price growth in the three months to January to 2.2% from 2.7% in December.

That was the lowest year-on-year growth rate since July, when prices rose at their slowest rate in more than four years.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics commented: “Halifax’s measure of house prices has declined by 1.4% in the two months following the MPC’s November rate hike, underlining that the Committee has to stick to its commitment to raise rates only gradually in order to avoid a downturn in households’ spending.”

He added: “Admittedly, Nationwide’s similar index has increased by 1.2% over the last two months, so Halifax’s data might be misleading. Nonetheless, Halifax’s data chimes with recent RICS surveys, showing buyer demand falling at a faster rate than supply, and the collapse in mortgage approvals in December.”

Following the data, the pound edged lower on expectations that UK rate rises will be moderate, losing 0.2% versus the dollar at US$1.3926 and 0.1% against the euro at €1.1272.

Meanwhile, the FTSE 100 extended its early rally, adding 48 points at 7,188 as stock markets continued to recover following volatile showings in the past few sessions.

8.35am: Better than expected start

The FTSE 100 bettered expectations ahead of the bell by rising 72 points to 7,213.24 on what continues to be a turbulent period for world markets.

On Tuesday Wall Street recouped some of the losses endured over the previous two trading days, which had a knock-on positive impact on Asia.

It’s anyone’s guess what will happen next. Are the recent falls part of a long-overdue technical correction, or the precursor to a greater unravelling?

“Rising US Treasury yields were just the excuse money men needed to bank massive profits made since Donald Trump’s election victory,” said Lee Wild, head of equity strategy at Interactive Investor.

“However, just as markets cannot keep rising forever, they must also stop falling at some point, but it’s still unclear whether we’ve reached a level where buyers see value again.”

A strong end to the year lifted shares in packaging firm Smurfit Kappa (LON:SKG), which rose 4% after the release of full-year and fourth-quarter results.

Not far behind, with a 3.3% gain, was rat-catcher and linen services group Rentokil Initial (LON:RTO) in the wake of an upgrade to ‘outperform’ by the London arm of Credit Suisse.

Tesco (LON:TSCO) was down 1.6% after it emerged it faced potential legal action over equal pay.

Moving down a division to the FTSE 250, Capita (LON:CPI), down almost 6%,  fell after a downgrade to ‘hold’ by HSBC.

Proactive news headlines:

Touchstone Exploration Inc (LON:TXP) (CVE:TXP) has kicked off a new ten well drill programme in Trinidad. The first well, PS-602, is located in the Grand Ravine WD-4 Block. It was spudded on February 3 and it is being drilled down to around 5,500 feet, targeting two zones (the upper and lower Forest formations). These are the main producing formations at Grand Ravine, and the well is positioned in what’s seen as an ‘undrained’ portion of the property.

Highlands Natural Resources Plc (LON:HNR) told investors that the latest well to use its patented DT Ultravert well services solution has, as expected, protected against ‘bashing’. The process involves the injection of nitrogen gas into an existing well at the same time as a new nearby well is fracked. It is designed to prevent the older well from being damaged (known as bashing) by the new one.

Anglo Pacific Group plc (LON:APF), the royalty specialist, enjoyed a record year in 2017 as higher coal and vanadium prices combined with increased production on its land. Royalty income rose 90% to £37mln-£37.75mln with a further £4.7mln/£5mln to come from uranium operation Denison/McClean.

Next 15 Communications Group PLC (LON:NFC) has acquired Brandwidth Group, a UK based voice interface specialist for an initial £6.2mln in cash and shares. Tim Dyson, Next 15’s chief executive, said: “Brandwidth is a great addition to Next 15. It brings significant digital skills to the group, in particular we are excited to be able to offer clients its capabilities around the use of voice.”

Synairgen plc (LON:SNG) said the first patients have been dosed in a phase II clinical trial of its lead drug SNG001. Researchers are investigating whether the inhaled interferon beta treatment is able to protect sufferers of chronic obstructive pulmonary disease (COPD) from the exacerbating effects of illnesses such as flu and the common cold.

Belvoir Lettings PLC (LON:BLV), the UK's largest property franchise, traded in line with expectations in 2017.

Touchstone Exploration Inc (LON:TXP) (CVE:TXP) has kicked off a new ten well drill programme in Trinidad. The first well, PS-602, is located in the Grand Ravine WD-4 Block. It was spudded on February 3 and it is being drilled down to around 5,500 feet, targeting two zones (the upper and lower Forest formations). These are the main producing formations at Grand Ravine, and the well is positioned in what’s seen as an ‘undrained’ portion of the property.

Strategic Minerals Plc (LON:SML) (USOTC: SMCDY), the diversified mineral development and production company, has announced the appointment of experienced mining operations manager Jeffrey Harrison as a non-executive director. The group said Harrison's appointment will support execution of Strategic Minerals' strategy, particularly the planned development of the Redmoor tin/tungsten project in Cornwall into production.

HemoGenyx Pharmaceuticals PLC (LSE: HEMO), the biotechnology company announced that on 5 February 2018 Dr Vladislav Sandler, chief executive officer and co-founder of the company, purchased 26,800 ordinary shares at a price of 2.37p each. Following this transaction, Dr Sandler now holds 40,478,010 ordinary shares, representing approximately 11.37% of the company's issued share capital.

Aggregated Micro Power Holdings plc (LON:AMPH) announced that it  was notified on 6 February 2018 that on the same day its executive chairman, Neil Eckert, purchased a total of 5,000 ordinary shares in the company at an average price of 95.5p each. Following the Purchase, the firm said, Eckert's total beneficial interest in the company is 7,850,700 Shares representing approximately 18.2% of the issued share capital; plus £645,000 nominal worth of convertible loan notes.

Landore Resources Limited (LON:LND) has announced that a new copy of its corporate presentation is available to view on the company's website

6.45am: Markets pause for breath

The global sell-off may not be over, but it is certainly taking a pause for breath.

After plunging 194 points yesterday to close at 7,141, the FTSE 100 was expected to open around 56 points higher on Wednesday following Wall Street's rally yesterday.

The US markets had a roller-coaster day as one set of trading algorithms did battle with another, but ultimately the indices finished firmly in positive territory.

The Dow Jones average climbed 567 points (2.3%) to 24,913, having been 500 points or more down at one point, while the broader-based S&P 500 advanced 46 points (1.7%) to 2,695.

“Despite the extreme levels of volatility, trading patterns in the US session remained consistent with trading patterns which have dominated the market for the past year. In other words, investors were flocking to stocks that perform well in times of economic growth, such as technology stocks, banks and industrials,” noted Jasper Lawler at LCG.

“Bond yields also ticked higher on Tuesday hitting, 2.8% up from 2.7%. The increase in yields means high dividend stocks, which are seen as an alternative to bonds, became less attractive fuelling a sell off. High dividend stocks such as utilities and real estate were noticeable losers from Tuesday,” he added.

Asian markets were a bit slow to take the hint, however, with Hong Kong's Hang Seng down 78 at 30,517 and the Shanghai Composite down 54 at 3,316, although Japan's Nikkei 225 was up 35 at 21,645.

“Carry-through has been weak in Asia this morning – the best-performing markets are Taiwan and Malaysia, both up 1.48%. Tokyo’s TOPIX index is up only 1.0% after having been up as much as 3.4% during the day. So I’d say the rout isn’t over yet – while some people have bought the dips, others are taking advantage of the bounce to sell,” said Marshall Gittler at ACLS Global.

As is usual in times of volatility, gold was proving popular with the price of the yellow metal rising US$2.70 to US$1,33.20 an ounce.

In contrast, the punter's favourite, Bitcoin, took another bashing, plunging US$374 to US$7,381.

On the corporate front in London, a busy day is in prospect.

Mining giant Rio Tinto is expected to bring some cheer, possibly with more news of share buybacks, but drugs giant GlaxoSmithKline was expected in some circles to announce a decision to cut the dividend.

Mid-cap energy explorer Tullow Oil also has a balancing act to perform in terms of debt repayment and investing in exploration, while house-builder Redrow has a chance to settle shareholders' nerves with its half-year report after the recent share price slide.

READ Wednesday's market preview

Significant announcements expected on Wednesday:

Finals: GlaxoSmithKline plc (Q4) (LON:GSK), Tullow Oil plc (LON:TLW), Rio Tinto PLC (LON:RIO), Smurfit Kappa PLC (LON:SKG)

Interims: Redrow plc (LON:RDW)

Trading updates: Imperial Brands PLC (LON:IMB), Severn Trent PLC (LON:SVT), Grainger PLC (LON:GRI), Anglo Pacific PLC (LON:APF)

Economic data: Halifax UK house prices; US consumer credit

Around the markets

  • Sterling: US$1.3956, up 0.06 cents
  • 10-year gilt: yielding 1.523%
  • Gold: US$1,332.20 an ounce, up US$2.70
  • Brent crude: US$67.37 a barrel, up 51 cents
  • Bitcoin: £5,342.95, down £216.80

Business headlines

Daily Telegraph

Snapchat owner’s shares pop as user growth picks up: Shares in Snapchat’s parent company sky-rocketed on Tuesday night as it surpassed revenue expectations, a welcome relief for the messaging app after a trying first year on Wall Street.

EU regulators to assess Apple’s purchase of British music app Shazam: European regulators will assess Apple’s takeover of British song-recognition app Shazam, after seven countries argued the deal could limit competition.

Stagecoach shares plunge as boss hits out at ‘misleading’ East Coast comments: Stagecoach’s shares hit a nearly nine-year low as its chief executive railed against “misleading” comments about the premature demise of its control of the East Coast mainline.

Times

Ocado delivers surprise losses as it raises £144 million to expand: The retail group made the announcement yesterday as it revealed that it had slipped into the red again, making a pre-tax loss of £500,000 in the year to 03 December. This compares with a £12 million profit the year before and was well below the stock market’s forecast of about £7 million.

Exploration boost and oil price rise mean BP is ‘firing on all cylinders’: BP hailed its strongest annual results since before the Gulf of Mexico disaster yesterday, as higher oil prices, increased production and lower costs combined to deliver a surge in profits.

‘Babcock is not another Carillion’: Shares in Babcock slid to a seven-year low yesterday as the defence contractor admitted to a £100 million revenue shortfall and said that it had held meetings with Cabinet Office officials in the light of the collapse of Carillion.

Luxury yacht builder fights to stay afloat: Oyster Yachts, which also has a boatyard in Hoveton, Norwich, and offices in Ipswich, Majorca and the United States, is reported to be looking for adequate financial support to remain afloat. It is understood some of the staff have been sent home on unpaid leave.

Tesco fraud trial abandoned after defendant has heart attack: The trial of three former Tesco executives accused of fraud has been abandoned after one of the defendants suffered a heart attack and the judge ruled that it would be unfair to continue.

Independent

UK economy will expand by 1.9% in 2018 and 2019 if soft Brexit is secured, according to latest Niesr forecast: The UK economy will expand by 1.9% both this year and next, according to the latest forecast from the National Institute of Economic and Social Research (Niesr), but only if Ministers secure a soft Brexit.

Poundland ‘Elf Behaving Badly’ campaign banned and deemed ‘demeaning to women’: Poundland’s controversial “Elf Behaving Badly” campaign featuring a child’s elf toy in a series of sexualised poses has been banned for being irresponsible and likely to cause widespread offence.

Guardian

SpaceX: Elon Musk seeks to revive Apollo era with Falcon Heavy rocket test: The most powerful rocket to leave Earth in a generation is set for its maiden flight from Florida on Tuesday, its whimsical payload lending a touch of showmanship to a pioneering test mission that could have significant implications for the future of deep space exploration.

Network Rail boss Mark Carne to step down this year: The head of Network Rail is to step down later this year, with his position having come under increased pressure from government.

Daily Mail

Chinese tech giant Huawei to invest £3 billion in the UK after Theresa May meets with its chairman: China’s biggest smartphone supplier Huawei Technologies will invest £3 billion in the UK following a meeting between the firm’s chairman Sun Yafang and Prime Minister Theresa May.

Carillion bosses blame everyone but themselves... the next step should be a proper trial: Watching the former Carillion Directors explain themselves yesterday in their first public outing since the construction and outsourcing giant collapsed was toe-curling.

Brewdog to open brewery in Australia as value of Scottish craft beer maker reaches £1 billion in just over ten years: Brewdog is opening a brewery in Australia as it continues an expansion which has seen its price tag reach £1 billion in just over ten years.

Sandwich chain Eat to axe restaurants as it deals with pressures from rivals Pret A Manger, Itsu and Leon: Eat is considering axing a number of restaurants as it deals with pressures from rivals like Pret A Manger, Itsu and Leon.

Hollywood Bowl chief exec Stephen Burns handed £250k in shares: Hollywood Bowl Group’s boss was handed shares worth more than £250,000 yesterday. As part of a long-term incentive plan, Stephen Burns was awarded 130,256 shares.

Daily Express

Draghi calls out bitcoin as ‘high risk’ investment: THE President of the European Central Bank (ECB) has warned banks about the dangers of cryptocurrencies as he branded bitcoin a “high risk” investment.

World stock market collapse - the day the world lost US$4 trillion as stocks plunge: As the opening bell rang on Wall Street today, stock markets across the world were already reeling from a third day of chaotic trading which saw markets in Asia and Europe suffer dramatic losses.

City AM

Ryanair’s perception climbs again after winter turbulence: Ryanair has posted a 12% rise in profits after tax in the three months to December. YouGov brand tracking data indicates that following its difficulties in early autumn, the airline’s impression score (whether someone has a positive impression of the brand) dropped from negative 31 to negative 52 among the general public.

Warren Evans becomes latest casualty on the high street as it falls into administration: Warren Evans has become the latest UK retailer to fall into administration, underscoring the considerable pressures being felt by the industry.

New Look’s sales plunge on heavy discounting: New Look’s sales plunged in the third quarter after the chain offered heavy discounts to shoppers. For the 39 weeks ended 23 December, total group revenue slumped 6.3% to £1.1 billion. This represented a like-for-like sales fall of 10.6%. Website sales plunged 15%.


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