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FTSE 100 closes firmly higher as metals prices, sterling help

FTSE 100 gained support from higher metals prices and a slide in sterling on Wednesday to close higher
mining trucks
The fall in the pound bolstered Footsie, which is dominated by dollar earning constituents
  • FTSE 100 closes up over 91 points

  • Inflation falls to 2.5% in March

  • Pound slides

  • Miners gain

FTSE 100 closed more than 91 points higher, or 1.26%, aided by miners and the weaker pound.

The UK index of premier stocks finished at 7,317, while FTSE 250 closed at 20,012 - up by around 182 points, or 0.92%.

"The FTSE 100 is being helped by the sell-off in sterling. The dip in the pound has made the internationally-exposed index more attractive to investors. Sterling slipped on the back of the fall in the inflation rate in the UK," said David Madden, at CMC Markets

"Adding to the FTSE’s gains are higher metal prices, thanks to the London index’s relatively high proportion of natural resources stocks."

Among top gainers was Glencore (LON:GLEN), up 7.65% at 374.10p and Anglo American plc (LON:AAL), up 6.15% to 1,802.60p.

Top loser on Footsie was British American Tobacco plc (LON:BATS), which shed 2.67% to 3,859.5p.

In the currency markets, sterling shed  0.60% against the Euro and 0.44% against the US dollar.

3.35pm: FTSE 100 set to close at two-month high

In late afternoon trading, the FTSE 100 is up 1.1%, or 78.4 points, to 7,304.3 – its highest level since the beginning of February.

The weaker pound – down to US$1.424 following this morning’s lower-than-expected inflation data – is one of the drivers as it boosts the blue-chips’ overseas earnings.

Miners were also pushing the index higher, with four of the top five risers all from that sector.

Glencore PLC (LON:GLEN) (up 5.9% to 367.8p), Anglo American PLC (LON:AAL) (up 4.9% to £17.81), Rio Tinto PLC (LON:RIO) (up 4.4% to £39.41) and Fresnillo PLC (LON:FRES) (up 4.4% to £13.09) were all boosted by the weaker pound and a bullish sector note from HSBC analysts.

Rio also had a production update out today, which showed a 5% rise in first-quarter iron ore shipments.

Top spot went to private hospitals group Mediclinic International Plc (LON:MDC) though, which has gained 8% to 674.8p after telling investors that full-year revenues will be “marginally” ahead of expectations.

There weren’t many heavy losers on Wednesday, with financial services platform Hargreaves Lansdown PLC (LON:HL.) the biggest faller, down 1.7% to £17.17 after results from fund manager Jupiter Fund Management PLC (LON:JUP) showed investors withdrew £1.3bn from its funds in the first quarter of 2018.

3pm: Capita wins contract extension from BBC

Capita PLC (LON:CPI) shares gained as the company said it has won a contract extension to provide audience services to the BBC.

The deal will extend Capita’s contract with the BBC for an initial five years with a possible option for a further two years.

The news is a welcome boost for Capita after the outsourcing firm announced a major overhaul under new chief executive Jonathan Lewis following a series of profit warnings. 

Lewis, who has been at the helm of Capita since last December, is trying to simplify by the business by selling off divisions after admitting the company was too widely spread across multiple markets. Shares are up 1.1% to 146.8p.

2.45pm: Morgan Stanley shares jump after record Q1 revenues

Shares of Morgan Stanley (MS:NYSE) surged at the opening bell in New York on Wednesday after it posted strong first-quarter results that topped analysts’ expectations.

The banking giant reported net income of US$1.45 per share vs. US$1.25 expected by Wall Street.

It also posted record revenue of US$11.1bn vs. calls for US$10.36bn as the bank's equity trading unit navigated renewed financial market volatility better than competitors like Goldman Sachs.

The stock is up 1.9% to US$54.29 in early deals.

2.35pm: US stocks open higher

As expected, US stocks opened in the black as they try to make it three consecutive days of gains.

Shortly after the opening bell in New York, the Dow Jones is up 40 points, to 0.2%, to 24,826.7, while the tech-heavy Nasdaq has gained 11.1 points, or 0.2%, to 7,292.2.

As for the broader S&P 500, that has made the biggest jump – up 28.5 points, or 1.1% to 2,706.3.

2pm: Spate of mining upgrades from HSBC analysts

HSBC has upgraded FTSE 100 miner Rio Tinto PLC (LON:RIO) to Buy from Hold as it made valuation changes to several London-listed mining companies.

The London-based bank said the quality of Rio Tinto’s Pilbara iron ore assets offset its lack of portfolio diversity, as well as anticipating share buybacks due to the company having “the sector’s strongest balance sheet”.

Rio wasn’t the only one seeing good news, as South32 Limited (LON:S32) was also moved up to Buy from Hold, with HSBC citing the company’s high exposure to positive movements in aluminium prices.

Aside from upgrades, the bank upped its target prices for both FTSE 100-listed companies Anglo American PLC (LON:AAL) to 1,690p from 1,660p, and BHP Billiton plc (LON:BLT) to 1,610p from 1,480p.

1.30pm: Miners boosting FTSE

Early in afternoon trading, the FTSE 100 is up 63.4 points, or 0.9%, to 7,289.5.

Lower-than-expected inflation data earlier in the day caused the pound to tumble, boosting the blue-chips as it makes their overseas earnings worth more when translated back into sterling.

The miners have also been on a tear, for a few reasons, including the pound’s fall against the dollar.

HSBC published a sector note on the diggers today, upgrading Rio Tinto PLC (LON:RIO) to ‘buy’ from ‘hold’ and hiking its price targets for Anglo American PLC (LON:AAL) to £16.90 from £16.60, and BHP Billiton plc (LON:BLT) to £16.10 from £14.80.

Glencore PLC (LON:GLEN) tops the miners though, up 4% to 361.4p, although Rio Tinto – which also posted a 5% rise in first-quarter iron ore shipments today – wasn’t far behind, up 3.9% to £39.25.

Private hospitals group Mediclinic International Plc (LON:MDC) is still the top blue-chip riser, up 7.8% to 673.2p, after telling investors that full-year revenues will be “marginally” ahead of expectations.

At the other end, Micro Focus International PLC (LON:MCRO), which jumped last week after activist investor Elliott Management took a stake, has given up some of those gains today, falling 2% to £12.65, making it the top blue-chip loser.

1pm: Dow Jones closes in on 25,000

US stocks are set to open higher once again, albeit without the kind of fervour we saw on Monday and Tuesday.

Spreadbettors have the Dow Jones opening 32.5 points higher at 24,822.9, leaving the index within touching distance of the 25,000 level.

As for the tech-heavy Nasdaq, that is expected to rise 25.1 points to 6,840.7 at the bell, while the broader S&P 500 is seen 10.8 points higher at 2,716.5

“Following Tuesday’s rocket-strapped showing the Dow Jones is set for a more staid start when the bell rings on Wall Street,” wrote Spreadex analyst Connor Campbell.

“The Dow is expected to open effectively unchanged, with little beyond the latest crude oil inventories to cause the needle to move.

12.15pm: London house prices ‘fall £10,000 in a month’

We’ve known for a while now that the once-hot London property market has been cooling.

That was evident again today when the Office for National Statistics said the value of the average home in the capital fell by £10,000 in February.

In the year to January, the average price was £481,981, but in the year to February that figure dropped to £471,986.

In a similar fashion to last year, prices across the UK as a whole rose 4.4% in the same period.

12pm: Dignity shows signs of life

Dignity PLC (LON:DTY) saw its shares surge in early trading Wednesday after saying it expects results for the full-year to be ahead of market expectations despite a potentially volatile trading year.

The group, famous for conducting Winston Churchill’s funeral, said its revenue for the first quarter of 2018 was around £95mln, up from £93mln previously with underlying earnings of £37.5mln, in line with the previous year but significantly ahead of its expectations.

Dignity added that the trend in higher deaths for the first part of 2018 had continued following its 2017 results announcement in March and was now up 8% to 181,000 compared to 167,000 the previous year.

11.45am: De La Rue drops passport contract appeal

De La Rue plc (LON:DLAR) has dropped its appeal against the UK government for its decision to award the new blue passport contract to a French firm.

The secure printer – which makes the passports for dozens of countries – kicked up a huge fuss after the government awarded the contract to Gemalto, which is reportedly charging considerably less.

De La Rue said the decision is expected to have “no impact” on its performance over the next 18 months, although it did note that it was “cautious” about the outturn for the full-year. Shares fell 4.6% to 469.5p.

11.25am: Housebuilder Countryside hits expectations in H1

Housebuilder Countryside Properties PLC (LON:CSP) said revenue and completions were in line with expectations in the first half of fiscal 2018.

Total completions in the six months to the end of March were up 15% to 1,655 units from 1,437 units in the corresponding period 12 months earlier.

The private average selling price was down 11% at £392,000 from a year earlier, consistent with the group's decision to move away from the dearer end of the market.

Current trading remains robust, with visitor levels, cancellations and net reservations all in line with expectations, Countryside revealed.

11am: Pret A Manger told to take down ‘natural’ ads

UK sandwich and coffee chain Pret A Manger has been told to remove the word ‘natural’ from some of its ads by the Advertising Standards Authority.

The regulator found the word to be misleading because it implied that there were no artificial additives in any of Pret’s food or drinks, which isn’t the case.

“It is misleading to use the term to describe foods or ingredients that employ chemicals,” concluded the ASA.

“We considered that because some of Pret a Manger’s foods contained E-numbers… those foods did not constitute ‘natural’ foods for the purposes of the guidance.”

10.35am: Footsie inspired by weaker pound

The bigger-than-expected fall in inflation last month has put a rocket up the FTSE 100, which has now recovered all of its losses from earlier in the week.

At 10.30am, the index of blue-chip shares was up 52.9 points, 0r 0.7%, to 7,279.1.

One of the main reasons for the surge was the pound, which stumbled after inflation data eased pressure on the Bank of England to hike interest rates next month.

A weaker pound is generally good news for the blue-chips as it makes their overseas earnings worth more when converted back.

Mediclinic tops blue-chip risers

Traders still reckon there’s an 80% chance that Mark Carney and co. will raise interest rates again next month, but sterling still slipped by more than a cent to US$1.418.

Some decent company news was also driving the FTSE 100 higher. Private hospitals group Mediclinic International Plc (LON:MDC) was the index’s top riser, up 5.6% to 659.8p, after telling investors that full-year revenues will be “marginally” ahead of expectations.

The South Africa-based group now expects revenues to rise around 4% this year to £2.9bn thanks to a “significant” pick-up in its Middle East business.

UK-listed Russian miner Evraz plc (LON:EVR) continued its decent run over the past couple of days, rising 3.1% to 401.5p as US-Russia tensions seem to be cooling.

A host of other big-name miners are also in the black: Rio Tinto PLC (LON:RIO) (up 2.7% to £38.80), Antofagasta PLC (LON:ANTO) (up 2.3% to 968.4p) and  Glencore PLC (LON:GLEN) (up 2.4% to 355.6p) – which generate a lot of their earnings in dollars – are all up this morning.

Intu slides as Hammerson abandons takeover

Micro Focus International PLC (LON:MCRO), which jumped last week after activist investor Elliott Management took a stake, has given up some of those gains today, falling 2.2% to £12.61, making it the top blue-chip loser.

Down on the FTSE 250, Intu Properties PLC (LON:INTU) was also in the red, down almost 8% to 200p, after fellow shopping centre owner Hammerson PLC (LON:HMSO) backed out of a £3.4bn takeover.

Intu has blasted Hammerson, claiming that its reasons for abandoning the deal were “unsatisfactory”. Hammerson investors seemed relieved that the takeover is no longer going ahead given the tricky UK retail market at the moment, with the stock climbing 2.3% to 504.8p.

10am: Sterling falls on inflation data

The pound has been on a roll in recent weeks, but it took a hit today following the lower-than-expected inflation data.

Central banks will sometimes hike interest rates to try to lower inflation, but if prices of things like clothing and alcohol aren't going up as fast as they were, then they might not need to do anything at all.

Sterling dropped more than a cent against the US dollar to fall below US$1.42 at US$1.148. Analysts estimated that the chance of a May rate rise dropped from around 90% to 80%, so it is still pretty nailed on.

9.45am: Inflation falls more than expected in March

UK inflation fell to 2.5% in March, the lowest rate in a year, according to the latest figures from the Office for National Statistics.

Analysts and commentators had been expecting inflation to hold steady at 2.7%.

The ONS said the slowdown was largely caused by clothing, tobacco and alcohol prices, which increased more slowly in March than they did a year ago.

9am: FTSE opens higher

The FTSE 100 opened 19 points to the good at 7,245.42 following Wall Street’s positive performance, which was supported by some fairly upbeat earnings reports.

The mood was also helped after China's central bank, the People's Bank of China announced a one percentage point cut in the reserve requirement ratio, applicable to most commercial and foreign banks, with effect from April 25.

The cut will allow banks to pay back about 900bn yuan of debts and free up an additional 400bn yuan, the central bank said in a statement on Tuesday.

Here in the UK all eyes will be on consumer price inflation data due later to see whether wages are indeed growing faster than prices.

Away from the macro, it has been a busy morning already for corporate news. In the property sector shares in the shopping centre specialist Intu Properties (LON:INTU) slumped 6% after Hammerson (LON:HMSO) shelved £3.4bn plans to acquire its rival, citing market uncertainty. Hammerson shares were up 3.5% early on.

“Retail businesses are already struggling with higher business rates as well as declining footfall so today’s news that Hammerson is pulling out of its bid for its rival Intu is quite a sensible move, particularly since some bigger shareholders were expressing disquiet about the deal,” said Michael Hewson of CMC Markets.

“There is also the fact that with retail profit warnings at seven year highs any deal is likely to be extremely high risk. Why double up on retail property when stores are closing and rental income is under threat. It would be akin to doubling up on a losing position, and as we know from historical precedent that rarely prompts a positive outcome.

“The market reaction is also quite telling with Hammerson shares higher in early trading. It would appear that investors feel the same way, and while Intu shareholders are likely to feel aggrieved the withdrawal of the bid makes perfect sense in the current difficult retail environment.”

Elsewhere, Rio Tinto (LON:RIO) rose 1.5% after results, dragging the rest of the sector with it.

CYBG (LON:CYBG), the owner of Clydesdale and Yorkshire banks, fell 6% after it raised its estimates for potential liabilities related to payment protection mis-selling.

Proactive news headlines:

Newmark Security PLC (LON:NWT) said its wholly-owned sUBSidiary Safetell Limited has received a formal contract extension for the supply of physical security equipment and preventative maintenance to the UK branch network of a leading worldwide supplier of retail banking services.

Mosman Oil And Gas Ltd (LON:MSMN)  has reported reserves for the Welch permian basin project, in Texas. Proved reserves (1P) amounted to 234,000 barrels gross for the field - it comprises 109,000 barrels classified as being ‘Proved Developed Producing’ or PDP reserves, while the field is also seen to have 102,000 barrels of proved un-developed reserves.

Be Heard Group PLC (LON:BHRD), the digital marketing services group, has seen business momentum pick up after some existing clients were slow out of the blocks in the first quarter.

Echo Energy Plc (LON:ECHO) said it exported its first cargo of oil produced at the Fraccion C and Fraccion D projects on 14 April 2018. The AIM-listed oil and gas company said its share of oil production in the first quarter of 2018 from the two sites was around 25,000 barrels, with a final realised sale price based on the average Brent crude price (currently US$71.6 per barrel) for the 5 days following cargo loading with a US$6 discount per barrel.

Greatland Gold plc (LON:GGP) shares rose on Tuesday as the precious and base metals explorer said it has commenced the first drilling campaign at its 100%-owned Havieron licence in the Paterson region of Western Australia.

Eland Oil & Gas PLC (LON:ELA) told investors it has restarted drilling at the Opuama-9 well, while also providing a reserves update for the whole Opuama field and releasing a financial results statement.

Immunotherapy specialist Scancell Holdings Plc (LONSCLP) has unveiled plans to raise up to £8mln – cash that will be used develop its three main drug candidates. A placing and sUBScription at 12 pence a share will account for £6mln of the total. The company also wants to include existing investors, so is planning a £2mln open offer of stock once the placing has been concluded.

Life sciences group OptiBiotix Health plc (LON:OPTI) is taking its heart health products into Pakistan after signing an exclusive five-year distribution agreement with Trigen Pharma.

Symphony Environmental Technologies plc (LON:SYM) said a YouGov survey commissioned by the company has revealed that 86% of UK adults would be happy to use ox-biodegradable plastic instead of their usual plastic.

Iofina plc (LON:IOF) maintained iodine production in its latest quarter even with exceptionally bad US winter and less plants in operation. The Oklahoma-based group extracts iodine from brine produced by onshore oil wells.

Jubilee Metals Group PLC (LON:JLP) said it has executed a processing agreement with Northam Platinum sUBSidiary Eland Platinum. The AIM-listed miner said the agreement involves Northam funding the refurbishment of its platinum recovery circuit, including an existing recovery plant, to which Jubilee would begin transporting platinum rich material for processing from June 2018.

Medical centres and doctors’ surgeries owner Primary Health Properties PLC (LON:PHP) has raised £115mln - £15mln more than it set out to. Primary originally set out to raise £100mln to help it add to its portfolio of healthcare centres but managed to exceed that target after strong support from both new and existing investors.

Active Energy PLC (LON:AEG), the London quoted international biomass based renewable energy and forestry management business, announced that it will be presenting at the EarthX Conference in Dallas, USA, between 20th and 22nd April 2018 EarthX is the world's largest annual exhibition and conference dedicated to the discussion of environmental issues and innovative solutions.

88 Energy Limited (LON:88E) (ASX:88E) confirmed that the company's April 2018 corporate presentation is now available on the 88 Energy website.

6.45am: Advance set to continue 

UK blue-chips were expected to continue yesterday's advance albeit without the vibrancy seen in US markets yesterday.

After rising 28 points to close at 7,226 yesterday, the FTSE 100 was tipped to open on Wednesday at 7,244.

US markets had a strong day yesterday on the back of decent corporate news flow and fading concerns about tensions in Syria.

The Dow Jones average rose 214 points, or 0.9%, to 24,787 while the broader-based S&P 500 surged 28.6 points (1.1%) to 2,706.

Boosted by a sharp rise in the Netflix share price, the tech-heavy Nasdaq Composite did better still, climbing 125 points (1.7%) to 7,281.

Asian markets picked up the baton this morning, with Japan's Nikkei 225 rising 314 points to 22,161 and Hong Kong's Hang Seng index putting on 223 points at 30,286.

In the UK today, investors will have an eye out for inflation data to see whether the Bank of England's interest rate setters might have to take action.

On the trading statements front, it's a slightly light schedule for a Wednesday.

Distribution and outsourcing giant Bunzl PLC (LON:BNZL) is set to release a brief trading update.

UBS expects Bunzl to report a steady start and is forecasting organic sales growth year-on-year of 2.2% for the first quarter.

“By region, we expect +2.0% organic growth in North America, +1.0% in the UK & Ireland, +2.5% in Continental Europe and +5.0% in Rest of the World,” UBS said.

A trading update from Countryside Properties will reveal whether the house-builder has kept up the cracking pace it set in the first quarter of its financial year, which runs to the end of September.

In the final 13 weeks of 2017, the number of completions rose 47% to 852 units from 581 units the year before, although the private average selling price was down 11% at £394,000, reflecting management’s decision to reduce exposure to the top end of the market.

Analysts will be keen to see how forward orders are progressing.

Asset manager Jupiter Fund Management is tipped to report first-quarter assets under management of £48.0bn by UBS, down 4.3% quarter-on-quarter. The bank has pencilled in outflows of £0.9bn during the period.

Significant announcements expected:

Trading updates: Bunzl PLC (Q1) (LON:BNZL), BHP Billiton plc (Q3) (LON:BLT), Countryside Properties PLC (LON:CSP), Hunting Plc (LON:HTG), Jupiter Fund Management PLC (LON:JUP), Primary Health Properties PLC (LON:PHP), RELX PLC (LON:REL), SEGRO PLC (LON:SGRO), Telford Homes plc (LON:TEF)

Finals: Be Heard Group PLC (LON:BHRD), GYG PLC (LON:GYG), Mercantile Investment trust PLC (LON:MRC)

Economic data: UK, CPI, RPI, PPI, HPI inflation; eurozone CPI; US Fed Beige Book

Around the markets:

  • Pound: US$1.4298, up 0.08 cents
  • 10-year gilt: yielding 1.438%
  • Gold: US$1,345.80 an ounce, down US$3.70
  • Brent crude: US$72.15 a barrel, up 57 cents
  • Bitcoin: £5,542.59, up £4.73.

Business headlines:

  • The Times

  • Former first lady Barbara Bush dies aged 92
  • Trump puts newly trumpeted Russia sanctions on ice
  • President Trump has delayed plans to impose new sanctions on Russia over its alleged support for Syria’s chemical weapons programme days after a senior adviser announced them.
  • Britain relegated to the lower tier as Brexit bites - Sterling rises to reflect rate-rise bet next month
  • Daily Telegraph

  • Europe's warning over Windrush as Brexit chief says scandal ‘deeply worrying’ for EU citizens
  • Facebook quietly stopped apps from harvesting users' private data just two weeks ago
  • Low wages are causing public to lose faith in governments, IMF warns
  • Tesla halts Model 3 production for second time this year
  • Lloyds boss wields axe again with 1,200 job cuts and 49 branch closures
  • The Guardian

  • WPP hires recruitment firm to help find Martin Sorrell successor - New York-based Russell Reynolds hired to aid search as ad firm tries to steady ship following departure
  • M&S to close distribution centre, putting 450 workers at risk - Retailer’s decision to close centre near Warrington brings total number of job losses this year to more than 1,300
  • Ousted AA boss launches £225m claim after sacking - Company says Bob Mackenzie is no longer entitled to bonuses after gross misconduct dismissal
  • Pret a Manger censured over natural sandwich ingredients claim - Advertising watchdog says ads on Facebook and fast-food chain’s website were misleading

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