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FTSE 100 closes positively as Wall Street rebounds, but Russian stocks hit

Last updated: 18:00 09 Apr 2018 BST, First published: 06:39 09 Apr 2018 BST

Asian markets managed to creep higher today as US stock futures recovered amid some easing in the trade war rhetoric.
  • FTSE 100 closes 11 pts up

  • Rolls-Royce rallies on deal to sell L’Orange

  • Russia exposed stocks hit by US sanctions 

 

FTSE 100 closed in positive territory, despite earlier losses as investors came back to buying shares and US stocks were higher.

The UK blue chip benchmark closed around 11 points higher, at 7,194.

FTSE 250 though, the more UK company focused index, was lower though, plunging almost 46 points at 19,484. 

Big cap commodities stocks were the big laggards on the day though, with Evraz, Evraz plc (LON:EVRE), the Russian steelmaker, plunging over 14% to 385.4p on the back of the US sanctions.

Glencore PLC (LON:GLEN) also slipped 3.42% to 339.15p.

Fiona Cincotta, Senior market analyst at City Index, summed it up thus: " Russian stocks were decimated after the US announced the most punitive set of measures yet against a number of Russian businessmen, companies and government officials in response to an alleged Russian chemical attack in Syria.

"US indices traded higher Monday, rebounding after a sharp selloff on Friday as the market interpreted the latest Trump administration comments about China as the softer version of the previous full frontal trade war attack."

The Dow Jones is up over 400 points at the time of writing, at 24,336, while the Nasdaq is up over 162 points.

3.40pm: WPP set to unveil findings of probe into allegations against CEO

WPP PLC (LON:WPP) could publish the findings of its investigation into a claim of personal misconduct against chief executive Martin Sorrell as soon as next week, Reuters reported, citing sources.

Sorrell’s future at WPP was put in doubt after the advertising giant last week said it was looking into an allegation of misconduct against its boss. Media reports also said Sorrell was accused of improperly using company funds but he said he rejects any wrongdoing “unreservedly”.

In its annual report, the media giant suggested it had processes in place to find a successor, if necessary. It said it constantly refines a list of possible external candidates for the job while internal possibilities attend board meetings.

2.40pm: US stocks open in positive territory

US stocks have opened higher, reversing sharp losses on Friday, as traders shrugged off persistent worries about a trade war between the US and China.

The Dow Jones Industrial Average added 212 points to 24,149, the S&P 500 gained 15 points to 2,619 and the Nasdaq rose 58 points to 6,973.

US President Donald Trump alluded to hopes that an agreement could be reached with China over the weekend.  However, on Monday he complained on Twitter over unfair car tariffs between the two nations.

China’s foreign ministry spokesman Geng Shuang blamed the US for the trade tensions and said his country would not negotiate in the current situation, Reuters reported.  

1.50pm: Xi's speech set to be closely eyed

Chinese president Xi Jinping’s speech on Tuesday will be closely followed by market participants after US counterpart Donald Trump predicted Beijing would ease trade barriers.

Oanda market analyst, Craig Erlam, said the speech is one of the most important events for markets this week.

"China has been gradually opening up its markets for a long time now and there is a hope that Tuesday’s speech may contain some commitments that will help kick start negotiations between the world’s two largest economies," he said.

"The message from Larry Kudlow and Peter Navarro – White House Senior Economic Advisor and Director of the White House National Trade Council, respectively – in recent days has been that, while US President Donald Trump is willing to embark on tariffs, he is open to negotiations in order to avoid this. This very much supports the view that this is simply a tactic to get China to the negotiating table and perhaps we can start to see less confrontational talk and more willingness to find a diplomatic solution."

Erlam added: "Many expect announcements on further opening of the Chinese economy, the question is how far he’ll go and whether it will be enough to satisfy the US administration, at least to the point that it takes on a less provocative approach. Any indication that this is the case could provide some reprieve for markets and lift investor sentiment."

12.40pm: US stocks set to rebound from sharp losses 

US stock futures are pointing to a higher open after upbeat remarks from President Donald Trump on China soothed concerns about a trade war between the two nations.

Dow Jones Industrial Average futures rose 147 points to 24,073, S&P 500 futures increased 18 points to 2,624 and Nasdaq futures shot up 42 points to 6,497.

Worries about a US-China trade war sent US stocks sharply lower on Friday.

These fears eased after Trump suggested an agreement could be reached with China.  “China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property,” he wrote in a tweet.

On the company front, shares in AveXis Inc (NASDAQ:AVXS) jumped 82% after Novartis AG (NYSE:NVS) said it would buy the clinical-stage gene therapy company for US$8.7bn.

First quarter earnings season begins today with JPMorgan Chase & Co (NYSE:JPM), BlackRock Inc (NYSE:BLK) and Wells Fargo & Co (NYSE:WFC) among the companies reporting. 

12.00pm: FTSE drops in lunchtime trade

The FTSE 100 reversed earlier gains to fall 10 points to 7,172 at the midday mark as US sanctions on Russian companies hit several Russia exposed stocks on the UK index.

The US has imposed sanctions on seven Russian oligarchs, 12 companies they own or control, as well as 17 Senior government officials on accusations they profited from a country engaged in "malign activities" around the world.

Russian steelmaker Evraz PLC (LON:EVRE) was the biggest faller on the top tier index with shares down 14% to 384p.

Glencore PLC (LON:GLEN) also slipped 3% to 340p and mid-cap Polymetal International (LON:PLYP) dropped 9% to 656p.

On the upside, Rolls-Royce Holdings PLC (LON:RR.L) gained 1.6% to 882p after agreeing to sell parts maker L’Orange to US engineering group Woodward Inc for €700mln.

Meanwhile, worries about a trade war between the US and China eased after US President Donald Trump said he expects there would be concessions from China.

11.30am: Standard Chartered yet to make decision on Bank Permata stake

Standard Chartered PLC (LON:STAN) said it has not made a decision on its stake in Indonesia’s Bank Permata after the Kontan daily newspaper reported that a team led by Farallon Capital Management wants to take a 44.56% holding in the lender.

Bank Permata is jointly owned by StanChart and Indonesian conglomerate PT Astra International, with each holding a 44.56% stake.

“With regard to our stake in Permata Bank, the Bank (Standard Chartered) has not reached a decision. Having been operating in Indonesia for more than 150 years, we maintain our longstanding commitment to the country,” Standard Chartered said in a statement.

11.00am: UK house price growth accelerates in March

UK house prices rose 1.5% in March compared to a month ago to an average £227,871, Halifax data revealed.

It marked the biggest monthly gain since August and was the highest recorded price. In February, house prices climbed 0.4% month-on-month. 

Prices in the three months to March increased 2.7% on a year earlier, accelerating from the 1.8% growth recorded in February.

The figures follow months of subdued growth and declines in December and January. However, Halifax said the monthly changes could be volatile.

Russell Galley, managing director at Halifax, said: “Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year. This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in Halifax’s measure of house prices in March just looks like volatility, rather than the start of a strong upward trend. Halifax’s index is prone to large swings; the standard deviation of month-to-month growth since 2010 has been twice as high as for Nationwide’s measure.”

Nationwide posted a 0.2% drop in house prices for March to £211,625, the second monthly fall in a row.

10.10am: FCA suspends EN+Group listing 

Mining and energy company EN+Group PLC said the financial watchdog has temporarily suspended its UK listing after the US imposed sanctions against the group and its Russian owner Oleg Deripaska.

The Trump administration has accused Deripaska of benefiting from the regime of Russian President Vladimir Putin and playing a key role in advancing its “malign activities”.

The White House said Deripaska “directly or indirectly" acted on behalf of the Kremlin, along with six other tycoons and 17 officials.

The US imposed sanctions on 12 companies in total, including Deripaska’s aluminium company Rusal.

En+, which manages the assets of Deripaska, said the sanctions were likely to materially affect its business and prospects in an adverse way.

9.30am: Deutsche Bank sacks CEO

Deutsche Bank has fired its chief executive John Cryan following a series of scandals and three years of losses at the German lender.

Co-deputy chief executive, Christian Sewing, will succeed Cryan with immediate effect.

Cryan was appointed chief executive in 2015 and his contract was due to run until 2020.

Sewing told staff on Monday that Deutsche Bank will review the structure of its struggling investment bank, which accounts for more than half of sales. He added that management will have to take tough decisions to avoid further setbacks.

“The time pressure is on and the expectations are high from all sides – our clients, our investors, the regulators, politicians and the media,” Sewing said in a letter to employees published on the bank’s website.

8.35am: FTSE 100 opens higher

The FTSE 100 opened the week in positive territory as the mood music on a potential trade war with China became a little more upbeat after a conciliatory tweet from President Trump.

Asia’s main markets nudged into positive territory, giving the UK’s index of blue-chip shares a helping hand as it rose just over 12 points to 7,196.06.

“US-China trade war fears, and poor US jobs report, which led to Friday’s sharp Wall St drop eased over the weekend,” said Mike van Dulken, head of research at Accendo Markets.

“Sentiment has been further boosted by more talk of North Korean willingness to discuss ‘de-nuclearization’, as well as hopes of a positive US earnings season on the horizon (JP Morgan, Citigroup and Wells report Friday) to give bulls a fillip.”

The Footsie’s biggest faller was Glencore (LON:GLEN) after Liberum repeated its ‘sell’ recommendation on the stock.

The broker reckons the copper sector that is heading into surplus, with the price of the red metal set to slide to US$2.50 a pound by the middle of next year.

“We prefer the re-rating upside in developers over the negative earnings momentum of the expensive producers,” it said in a note to clients.

Antofagasta (LON:ANTO) and KAZ Minerals (LON:KAZ) were also on the ‘sell’ list, while Indonesia-focused mine developer Asiamet (LON:ARS) is rated a ‘buy’, up to 20p a share. The stock was unchanged at 11.88p.

Rolls-Royce (LON:RR.), up 2.2%, topped the list of FTSE 100 risers after it announced plans to sell its fuel injection subsidiary L’Orange for £610mln to US firm Woodward.

Proactive news headlines:

Video games development services provider Keywords Studios PLC (LON:KWS) has hit the acquisition trail again, beefing up its music and audio offering. It has acquired Cord Worldwide and Laced Music from the Cutting Edge Group for £4.5mln and Maximal Studio from its owners for up to €500,000.

Directa Plus PLC (LON:DCTA) has completed the first phase of industrial field testing of Grafysorber, its graphene-based oil pollution treatment. Romanian group OMV Petrom said the quality of water improved using Grafysorber, which will now be tested on another contaminant.

Concepta PLC (LON:CPT) has achieved the certification necessary for manufacturing the myLotus fertility product at its facility in Doncaster. The AIM-listed firm said that ISO123485 certification allows the company to utilise the automated production lines recently installed at the Doncaster facility to begin manufacturing the diagnostic tests.

Bob Wigley, a non-executive director of Symphony Environmental Technologies PLC (LON:SYM) addressed the 2018 Economic and Social Council Partnership Forum last week on plastic pollution. Wigley noted that 11 countries have adopted oxo-biodegradable plastic technology, with the most recent convert being Saudi Arabia.

Solo Oil PLC (LON:SOLO) chairman Neil Ritson has described himself as “pleased” with the evident progress partner Aminex PLC (LON:AEX) is making in the preparations for an upcoming appraisal and exploration programme in the Ruvuma project area. Aminex, separately, this morning revealed that the Chikumbi-1 well (which was just renamed from Ntorya-3) will now be drilled deeper to test an additional exploration target.

Aminex PLC (LON:AEX) told investors it remains in “advanced discussions” with Zubar Corporation over a potential farm-out of the Ruvuma asset, including the Ntorya discovery and appraisal area. Meanwhile, it also updates on present operations in Tanzania. As part of preparations for the next planned drill programme, the company has agreed to a Tanzania government request to change the name of the proposed Ntorya-3 well, which will now be referred to as Chikumbi-1.

Columbus Energy Resources PLC (LON:CERP) chairman Leo Koot said that production growth at the Goudron field, in Trinidad, is “not without its challenges” as the company updated investors on its operations in its first quarter. Despite technical challenges, the company described its production base as “solid” whilst reporting that peak production measured 627 barrels of oil per day - which exceeded a ‘high case’ target for 600 bopd in February – though overall the quarter’s volumes were impacted by testing and monitoring work.

Sound Energy PLC (LON:SOU) confirmed that its divestment of Italian assets to Coro Energy PLC, previously named Saffron Energy, has this morning completed. As previously communicated, the Coro Energy consideration shares will be redistributed to Sound shareholders to hold directly. Shareholders on the record date of April 3 are entitled to the shares, which will be issued proportionately to their stake.

BlueRock Diamonds PLC (LON:BRD) saw grade and sales increases as it published results for the first quarter of 2018, while reiterating its guidance for the coming year. The AIM-listed, South Africa-focused diamond miner said grades from its Kareevlei diamond mine were 3.8 carats per hundred tonnes (cpht) for the first quarter, up from 1.92 cpht for the same period last year.

Frontier IP Group PLC (LON:FIPP) said it has agreed to acquire an increased stake in its portfolio company Fieldwork Robotics. The AIM-listed intellectual property investor said it had agreed to provide extra development and engineering support to Fieldwork in exchange for an increased stake in the company to 27.5% from 21%.

Halozyme Therapeutics Inc (NASDAQ:HALO) has told Abzena PLC (LON:ABZA) that it intends to stop using the latter’s ThioBridge linker technology in its antibody-drug conjugate products. Nasdaq-listed Halozyme had been using ThioBridge in some of its ADCs, including HTI-1511 which had shown promise in treating various tumour types in pre-clinical trials.

Ariana Resources PLC (LON:AAU) has boosted its resource base at the Tavsan project in Turkey to 3.98ml tonnes grading 1.32 grams per tonne gold. There’s also 4.46 grams per tonne silver. That gives a total of 168,900 ounces of gold and 571,000 ounces of silver, all within established pit shapes.

Gold producer Caledonia Mining Corporation PLC (LON:CMCL; NYSE:CMCL; TSE:CAL) has maintained its full-year production guidance after a solid start to 2018 at its 49%-owned Blanket mine in Zimbabwe. The company – which is listed in London, New York and Toronto – produced 12,924 ounces of gold in the first quarter of the year, in line with expectations and consistent with what it produced in the same period of 2017.

The mining team at Liberum Capital have singled out Asiamet Resources Ltd (LON:ARS) as its pick in a copper sector that is heading into surplus, with the price of the red metal set to slide to US$2.50 a pound by the middle of next year. “We prefer the re-rating upside in developers over the negative earnings momentum of the expensive producers,” the broker said in a note to clients.

Shanta Gold Ltd (LON:SHG) has hit more gold at its Singida project in central Tanzania. The company conducted exploration and resource infill reverse circulation during the first quarter of 2018 to test down-dip and down plunge continuity of high grade mineralized shoots below the current designed pits.

AfriTin Mining Ltd (LON:ATM) has announced the signing of a non-binding Memorandum of Understanding (MOU) with mineral and petroleum trading firm MRI Trading AG (MRI) for an artisanal buying operation for tin concentrate in Namibia. The AIM-listed firm said together with MRI, it intends to explore the possibility of sourcing cassiterite concentrate from local artisan miners and establishing a Buying Station, which would analyse the quality of tin concentrate.

Medical diagnostics group Genedrive PLC (LON:GDR) has appointed industry veteran Tom Lindsay to its board as a non-executive director. Lindsay has been involved in the diagnostics sector for 35 years, holding several Senior positions at Alere, which was bought out by Abbott Laboratories (NYSE:ABT) for US$5bn in 2017. “Tom has exceptionally strong experience in commercialising diagnostics in Africa and other low and middle income markets,” said Genedrive chairman Ian Gilham.

Bezant Resources Limited (LON:BZT), the AIM-quoted mineral exploration and development company, has announced the appointment of Novum Securities Limited as the company's sole broker with immediate effect.

Range Resources Limited (LON:RR.) has advised that today it has published an updated company presentation which can be accessed on its website.

6.45am: Positive start predicted

The FTSE 100 is expected to rally higher in early trade on Monday with the impact of modest gains today in Asia offsetting sharp pre-weekend falls from US markets.

Spread betting firm London Capital Group currently expects the UK blue chip index to open around 25 points higher at 7,208, having shed 15.86 points on Friday.

On Wall Street on Friday, the Dow Jones crashed 572 points lower to close at 23,932 as the lower-than-expected US payrolls, hawkish comments from new Federal Reserve boss Jerome Powell, and Trump trade concerns all took their toll.

But Asian markets managed to creep higher today as US stock futures recovered amid some easing in the trade war rhetoric.

Jasper Lawler, head of research at London Capital Group commented: “Trump tweeted over the weekend with respect to China that ‘Taxes will become reciprocal & a deal will be made on intellectual property.’ Trump’s softened stance offers some hope for calm in his trade dispute with China.

The next focus will be on a speech by Chinese President Xi at the Boao Forum on Tuesday.

On currency markets, the pound was fairly flat versus both the dollar and the euro with little important UK economic data due this week aside from the latest trade numbers on Wednesday.

The main economic focus this week, given the below-forecast US non-farm payrolls report on Friday, will be the release of minutes on Wednesday from last month’s Fed policy meeting, which saw new boss Powell signal another hike in US interest rates.

However, the US CPI inflation figures on the same day could be equally as important to give a steer on just how many times the Fed will hike rates this year.

Retail and staffing to come

There is almost nothing scheduled to excite on the UK corporate diary on Monday but the week will bring some gems later on, including updates from some big retailers and staffing firms.

Among the stores groups, full-year results from retail giant Tesco on Wednesday should include the first end of year dividend since its annus horribilus in 2014, according to Nicholas Hyatt, equity analyst at Hargreaves Lansdown.

The analyst thinks the 2017/18 results - the first numbers since the acquisition of wholesaler Booker - will likely mark a year of underlying progress for Tesco, with profitability rising.

He added that with wage growth catching up with inflation, investors will be hoping the supermarkets group not only confirms a strong end to the year, but delivers a more positive outlook as well.

Robert Walters PLC (LON:RWA) will the first recruiter of the week to update the market with a first quarter trading statement due on Tuesday, closely followed by peers PageGroup PLC (LON:PAGE), and Hays PLC (LON:HAS) on Wednesday and Thursday, respectively.

Significant events expected on Monday April 9:

Finals: Frenkel Topping Group PLC (LON:FEN), Northbridge Industrial Services PLC (LON:NBI)

Around the markets:

  • Sterling: US$1.4092, up 0.01%
  • Gold: US$1,333.70 an ounce, down 0.02%
  • Brent crude: US$62.31 a barrel, up 0.4%

City Headlines:

  • Royal Mail CEO Moya Greene could step down from role this year – City AM
  • Tesco on road to recovery as Lewis prepares to report £1.1bn profits – City AM
  • Facebook to notify on Cambridge Analytica data misuse Monday – New York Daily News
  • Investors not giving Alphabet enough credit for growth outlook - Barron's
  • CBS nominates former Time Warner CEO to its board amid Viacom talks – Reuters
  • Boeing wins American Airlines' widebody jet order - Reuters
  • Switzerland’s Novartis shells out US$8.7bn to buy AveXis – Reuters
  • Deutsche Bank picks retail specialist Christian Sewing as CEO – Reuters
  • Adidas to close stores in online push: CEO - Financial Times

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