FTSE 100 closes lower
Eurozone stocks drop on prospect of Eurosceptic Italian government
British Gas owner Centrica shares up
G4S top Footsie loser
European indices went off the boil on Monday, and FTSE 100 closed over 13 points down at 7,710.
FTSE 250 fared better though closing out the first session of the week ahead by around 15 points at 20,800.
On Wall Street, stocks have started positively, and the Dow Jones Inbdustrial Index is up over 115 points at the time of writing, while the S&P 500 is ahead by around 12.
David Madden, at CMC Markets, said: "European markets drifted lower today as a lack of new positive news prompted traders to bank recent profits.
"Last week we saw multi-week highs on major European equity markets, so a bit of a pullback isn’t a surprise. Stock markets in Europe have snapped out of the negative trends they were in during March, and today’s nudge lower might attract fresh buyers."
Centrica plc (LON: CNA) shares added 1.36% to 149.15p as the British Gas owner said it was on track to meet its 2018 targets even as the ‘Beast from the East’ hit UK profits in the first half.
The severe weather in the UK in February and March saw the company have its busiest week for boiler repairs, it revealed.
Meanwhile, High Street stalwart Marks & Spencer Group plc (LON: MKS) shares plunged 1.26% to stand at 289.60P after HSBC cut its rating on the stock from to 'hold' from 'buy', and cuts its price target to 300p from 400p.
Marks' share price has been in decline for a year.
3.50pm: US court allows more states to legalise sports betting
The ruling permits sports betting at New Jersey casinos and horse racetracks and voided the federal Professional and Amateur Sports Protection.
"The legalisation of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own," Justice Samuel Alito wrote on behalf of the court.
UK gambling names (William Hill, Paddy Power) spiking higher after US Supreme Court says New Jersey can legalise sports betting— RANsquawk (@RANsquawk) 14 May 2018
3.45pm: The FTSE 100 is still in the red this afternoon on a stronger pound
"Sterling’s mild rebound against the dollar and the euro – almost imperceptible in the grand scheme of its recent losses – prevented the FTSE from building on its 16 week highs this Monday," said Connor Campbell, financial analyst at Spreadex.
"Instead the UK index fell 0.2%, a dip that nevertheless kept the FTSE the right side of 7700. The index might be able to wring some fuel out of Tuesday’s UK jobs report, however, if the pound takes the forecast slowdown in wage growth poorly."
3.30pm: New Look accused of imposing “fat tax”
British fashion retailer New Look has been criticized by shoppers for imposing a “fat tax” by charging more for its plus size clothes.
Maria Wassell, a retail supervisor from Kent, noticed that brand’s Curve range were being sold for 15% more than an identical pair in the store’s main collection, independent reports.
2.55pm: US stocks gain in early trading
US stocks have opened higher with the Dow Jones Industrial Average flirting with the 25,000 level as tensions between the US and China eased.
The Dow rose 108 points to 24,939 while the S&P 500 added 10 points to 2,738 and the Nasdaq increased 41 points to 7,444.
Market participants were upbeat on the prospect of easing trade tensions between the US and China after US President Donald Trump vowed to help ZTE Corp “get back into business, fast” after a US ban hurt the Chinese technology company.
In corporate news, Tesla Inc (NASDAQ:TLSA) shares edged higher even as senior executive Matthew Schwall reportedly left for rival self-driving car maker Waymo LLC, owned by Alphabet Inc (NASDAQ:GOOG). Schwall was Tesla’s main technical contact with US safety regulators.
2.30 pm: Burberry acquires leather goods business
CF&P employees, including the team of expert craftsmen who have worked closely with Burberry for more than a decade, will transfer to the company on completion of the transaction, expected later this year.
1.30pm: Facebook has suspended 200 apps as part of its investigation of misuse of people’s Facebook data
The company said large teams of internal and external experts are working to investigate these apps as quickly as possible. If the suspended apps did misuse any data, the company said it will ban them and notify people.
Mark Zuckerberg, CEO and founder of the company, said that any app that either refused or failed an audit would be banned from Facebook.
1.00pm: FTSE 100 holds above 7,700, Dow set to cross 24,900 for the first time in nearly 2 months
“Down 0.2% despite Brent Crude erasing it early losses, the FTSE is nevertheless still holding above 7,700, a level not seen since the end of January,” said Connor Campbell, financial analyst at Spreadex.
“Helping keep the FTSE muted this Monday is the pound’s latest attempt at a rebound against the dollar. Since the start of the month cable has been trapped between $1.35 and $1.36, with a brief foray to a 4 month low of $1.346 following last week’s Bank of England get-together.”
He added: “Rising 0.3% sterling is trading at the top end of May’s range, but without anywhere need the vigour needed to start to claw back the hefty losses incurred across the second half of April. Against the euro it’s almost as bad, stuck below €1.135 after last Thursday’s BoE-inspired relapse.”
10.45am: UK markets off to a slow start, Eurozone sluggish
Italian Eurosceptic populist parties Five Stars and the League have reached an agreement to form a government.
“While the UK markets can be forgiven for the slow start given that there’s not much on offer, the Eurozone’s sluggishness is more of a surprise. That’s because Italy is on the brink of a populist, eurosceptic government, with the Five Star Movement and League parties reaching an agreement together," said Connor Campbell, financial analyst at Spreadex.
"Eurosceptic government, with the Five Star Movement and League parties reaching an agreement together. Yet investors have greeted this development with a shrug, with the region’s indices are most drifting 0.2% lower."
On the company front, BT Group PLC (LON:BT.A) shares continue to fall after the company announced its cutting 13,000 managerial and back-office jobs and leaving its London headquarters, as part of restructuring. On Monday morning its shares fell 2.56% to 211.45p.
8.45am: FTSE 100 feels sterling drag; IWG boosted by bid approach triple
The FTSE 100 got off to a tentative but negative start to the trading week with the recovery of the pound exerting a drag on the top stocks index, which fell three points to 7,721.80.
"Given the pound is already up in early trade, the Footise is expected to struggle, lagging behind its European peers," said Jasper Lawler of London Capital Group.
The day's biggest mover was Regus owner IWG (LON:IWG), which rose 22% in early trade after it confirmed weekend reports that it had received a number of private equity-backed bid approaches.
The office rental specialist confirmed it Lone Star Europe, Starwood Capital and TDR Capital are in the running for the business.
Similarly, NMC Healthcare (LON:NMC) - also up 1.4% - was in demand after Jefferies International boosted its price target for the stock.
Proactive news headlines:
Harvest Minerals Limited (LON:HMI) said it has been informed by the Ministry of Agriculture in Brazil that it has conditionally approved the company's application to register KPfértil as a remineraliser, pending the submission of additional materials.
Trinidad focused Touchstone Exploration Inc (LON:TXP) told investors that first quarter production averaged 1,543 barrels of oil per day, representing a 21% increase compared to the same period in 2017. Output continued to ramp-up, with the rate rising to 1,669 bopd for the month of April and, currently, it measures around 1,772 bopd.
U.S. Oil & Gas PLC (USOIL), in a statement after Friday’s market close, told investors that the Eblana-3 well has now been drilled and the initial results are described as “highly encouraging”. The company said the well was drilled down to a depth of 8,200 feet.
SkinBioTherapeutics PLC (LON:SBTX) has filed a patent application for a potential treatment that could help skin conditions such as eczema. The AIM-listed skin health company said the application covered the use of its SkinBiotix technology for increasing filaggrin levels in the skin
United Oil & Gas PLC (LON:UOG) has confirmed the completion of a 3D seismic exploration programme at the Tullow Oil operated Walton-Morant licence offshore Jamaica. The survey captured data over 2,250 square kilometres, of the large 32,065 licence area, and it included the Colibri target, which was estimated at some 200mln barrels.
Directa Plus PLC (LON:DCTA) is to add its graphene enhancement G+ to the range of jeans made by Arvind, one of India’s top textile groups. Arvind makes six million pairs of jeans every year using 100mln metres of fabric for household name brands such as Levi’s, Tommy Hilfilger, Wrangler and Gant and has established a reputation for innovation.
Hay fever vaccine specialist Allergy Therapeutics PLC (LON:AGY) has published new data highlighting the effectiveness of its technology as an adjuvant compared to existing treatment. An adjuvant stimulates the body’s immune response to an antigen and helps it react quicker to the threat.
Eckoh PLC (LON:ECK), secure payment products and customer contact solutions provider, saw growth in revenues, margin and profit in the financial year just ended. In a trading statement covering the year to the end of March, the company said trading had been in line with market expectations.
ANGLE PLC (LON:AGL) has announced the appointment of leading NHS prostate cancer surgeon Greg Shaw as a scientific advisor to the company. The AIM-listed firm said joining its already established Scientific Advisory Board, Greg Shaw brings significant additional prostate cancer and UK NHS clinical experience.
StatPro Group PLC (LON:SOG) announced a top 10 global fund administrator is to migrate from StatPro Seven to the cloud-based StatPro Revolution. The conversion and extension contract is worth at least US$500,000 a year.
Shefa Yamim ATM (LON:SEFA) has completed a bulk sampling campaign at the Kishon Mid-Reach Zone 1. The Northern Israel-focused precious stones explorer said the latest samples, BS-1228 and BS-1208, marked the end of a 14-sample bulk programme at the area, totalling 249 tonnes and 123 tonnes of basal gravel respectively.
Caledonia Mining Corporation PLC (LON:CMCL) told investor that first quarter production, at 12,924 ounces of gold, was marginally higher than the same period of last year. A better gold price and better export terms, meanwhile, sees adjusted earnings some 51% higher year-on-year at 40.1 cents per share.
Savannah Resources PLC (LON:SAV) shares edged higher on Monday after the resource development company took a step closer to obtaining mining licences for its two high-grade copper deposits in Oman. The AIM-quoted firm received letters of approval from all eight government ministries for the Maqail South and Mahab 4 licence applications.
Circle Property PLC (LON:CRC) has agreed a new 15-year lease with BE Offices at its recently completed Somerset House redevelopment on Temple Street in Birmingham city centre. The AIM-listed firm said the agreement follows the recent letting of both ground floor restaurant units and this means the property is now at 100% occupancy, five months after the redevelopment completed.
Berkeley Energia Limited has appointed Sean Wade as its chief commercial officer, responsible for identifying and leading strategic business development opportunities for the mining company. The AIM-listed firm said Wade is an experienced corporate executive with a background in mining and emerging markets.
Mirada PLC (LON:MIRA) said it is sad to announce the sudden death of Javier Casanueva, the company's non-executive chairman, on Saturday 12 May. The group said a board meeting has been convened for early this week to appoint an interim chairman.
Base Resources Limited (LON:BSE) (ASX:BSE) advised that between 9 May 2018 and 11 May 2018 Diane Radley, a non-executive director of the company, acquired on market 500,000 ordinary shares in the group for consideration of A$0.25 per share. Following the acquisition, Radley holds 500,000 Base Resources ordinary shares in total, which are held indirectly by Skabenga Investments.
6.45am: Weak start predicted
The Footsie is seen starting a touch weaker on Monday in spite of gains by Asian and US markets with international stocks to be weighed by a firmer pound.
Spread betting firm IG expects the blue-chip index to open around 2 points lower at 7,722, having closed over 22 points higher on Friday.
US stocks rose pre-weekend, with the Dow Jones Industrials up over 91 points to end at 24,831, while Asian shares rose to near two-month highs on Monday amid hopes of a thaw in US-China trade tensions.
President Trump has pledged to help ZTE Corp “get back into business, fast” after a US ban crippled the Chinese technology company.
On currency markets, the pound was firmer versus both the dollar and the euro, rallying after falls at the end of last week after the Bank of England left UK interest rates on hold.
Jasper Lawler, Head of Research at London Capital Group commented: “The weaker pound lifted the FTSE which hit 7728, its highest level since January. The currency correlation between the FTSE and the pound has been notably strong over the last week.
“Given the pound is already up 0.2% in early trade, the FTSE is expected to struggle on the open, lagging behind its European peers.”
It is fairly quiet week for UK data, although the latest unemployment and average earnings data on Tuesday could provide important signs for a likely Bank of England rate hike before the summer break.
On the corporate front, it will be another busy week to come for blue-chip updates, with a wide variety of firms on the roster including drugs giant AstraZeneca PLC’s (LON:AZN), mobile phones operator Vodafone Group PLC (LON:VOD), and postal delivery firm Royal Mail Group PLC (LON:RMG).
Cooking on gas
Centrica shares have been going well since it announced full-year results in late February which laid to rest fears about the dividend.
Despite admitting it had a weak second half to 2017, primarily reflecting poor performance in energy supply to businesses and the struggles of its North America Business unit, the shares surged as it held its dividend and announced a new £500mln cost reduction programme.
Investors will likely be looking for updates on the cost savings performance of British Gas during the assault by “the Beast from the East” and news on company debt.
It is just over a month since British Gas announced tariffs would rise but as these increases do not kick in until the end of May, it is probably too soon to determine whether this will hit customer numbers, though as ever with British Gas “churn” - the proportion of customers switching to another energy supplier – will be a major concern.
Margin progression eyed for Victrex
Elsewhere, FTSE 250-listed speciality chemicals firm Victrex PLC will unveil its interim results on Monday and analysts at UBS expect it to report first-half sales of £149mln and underlying earnings (EBITDA) of £68mln.
After exceptional volume growth in Q1 of 30%, the Swiss bank’s analysts said Victrex does not require much in Q2 to hit targets but is up against a much tougher comparative and will be impacted by the timing of electronic volumes.
They added that gross margin progression remains key with its Invibio business still seeing weakness into the end of Q1.
Significant events expected on Monday May 14:
Around the markets:
- Sterling: US$1.3540, down 0.0%
- Gold: US$1,3220.80, an ounce, unchanged
- Brent crude: US$70.47 a barrel, down 0.3%
- WPP Chairman Roberto Quarta faces investor revolt over Martin Sorrell’s exit – The Times
- Shell Boss Ben Van Beurden facing a shareholder revolt over his £7.8mln pay packet – Daily Mail
- Shell and Eni in court over alleged corruption in US$1.1bn Nigerian oil deal – The Independent
- Rolls-Royce is forced to ban all but essential staff travel as it faces huge bill to fix faults in its airplane engines – Daily Mail
- Carillion had contempt for suppliers, Commons committee says – The Times
- Aviva backs ban on contingent fees for pension transfer advice – Financial Times
- Mothercare set to tap investors as high street's woes continue - Financial Times
- Court cases muddy the waters after Avast float – The Times
- Walmart shifts global strategy to battle Amazon – Financial Times
- Trump pledges to get ZTE back in business – Daily Telegraph
- Fujifilm shares rise after Xerox deal called off: - Financial Times
- Arm profits halve under Softbank ownership – Daily Telegraph
- Australia’s Telstra shares drop after profit warning – Financial Times
- Betfred managing Director urges employees to oppose cut to £100 FOBT stake – The Independent
- Adu Dhabi state-owned goup Adnoc plots US$45bn downstream investment boost – Financial Times
- Commonwealth Bank of Australia’s CFO resigns – Financial Times
- Torrid weather at start of year sends retail footfall down at quickest rate since 2009 recession - City AM