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FTSE 100 closes firmly ahead as it puts dismal October to rest

The FTSE 100 closed up around 92 points at 7,182. FTSE 250 also gained..
london skyline
The City at night
  • FTSE 100 index closes higher

  • Global stocks face October slump     

  • Bank of England meeting in view    

FTSE 100 closed the day higher, joining global equities higher as investor sentiment improved.

Footsie closed up around 92 points, or 1.31% higher, at 7,182.

FTSE 250  was also up - adding over 249 points at 18,917.

On Wall Street at the time of writing, the Dow Jones Industrial Average is up over 333 points at 25,206, and the S&P 500 is ahead by around 41 points.

Top riser on FTSE 100 is NMC Health (LON:NMC), which added over 5% to 3,532p.

Top loser was  National Grid plc (LON:NG.) which plunged around 20% at 829.20p

3.55p: Footsie poised for daily advance 

UK stocks drove toward a winning finish in late afternoon action Wednesday, set to end what’s been an ugly month for global equities on an upbeat note.

The FTSE 100 claimed a rise of 115 points, or 1.6%, to 7,151, but sectors considered defensive in nature trailed the broader market, with the utility and tobacco groups trading lower.

The benchmark was still poised to fall 4.8% in October, deepening its year-to-date decline to about 7%.

Other stock markets are also in the red for the month, with analysts pointing to worries about trade tensions and expectations for higher US interest rates among reasons for the downfall. In the US, the Dow Jones Industrial Average was facing a roughly 6% slide in October. In Europe, Germany’s DAX 30 was veering toward a more than 6% pullback.

“It is going to be REAL interesting to see how the first few days of November pan out,” said Connor Campbell, financial analyst at Spreadex.

He added: “Not a single geopolitical and economic issue that caused such haemorrhaging in October – Brexit, the US-China trade war, China’s slowing economy, the Italian budget, take your pick – has been resolved, while the new month quickly brings with it the US mid-term elections, and takes the markets that bit closer to December’s likely rate-hiking Fed meeting.”

Investors will hear what the Bank of England will say about interest rates and the UK economy on Thursday. The BOE is expected to hold its key rate at 0.75%. It will also release minutes from the meeting and publish its Quarterly Inflation Report.

READ: No change expected from Bank of England on 'Super Thursday' despite Budget optimism

Around the UK market, GlaxoSmithKline PLC was off 0.2% at 1,534p even as the drug maker raised its full-year earnings forecasts on sales of Shringrix shingles vaccine

READ: GSK ups full-year earnings view Shringrix vaccine sales

Shares of Inchcape PLC (LON:INCH) revved up 7.5% to 548.25p following a double ratings upgrade of the car and car parts distributor to “overweight” at Barclays.

READ: Inchcape's rating bumped up at Barclays 

 

2.40p: Standard Chartered shares shine 

Shares of UK blue-chips were firmly higher in afternoon trade Wednesday, buoyed partly by a jump in shares of lender Standard Chartered PLC, while US stocks surged as trading there got underway.

The FTSE 100 was up 103 points, or 1.5%, at 7,156. The move puts the benchmark in line for a third consecutive session of gains.

On Wall Street, the Dow Jones Industrial Average jumped 380 points in the starting minutes of trade, and the Nasdaq Composite zoomed up 2.7%, meeting indications for gains at the open.

Back in London, Standard Chartered shares (LON:STAN) bulked up by 4% to 554.4, among the top performing stocks after the bank said underlying pre-tax profit rose to US$1.1bn in the three months to September 30, above analyst expectations for US$978mln.

But the lender did note there was a third-quarter income decline of 1% on a quarter-over-quarter basis, primarily because of weakness in Asia and the Middle East regions. US/China trade tensions have hurt its wealth management business, the company said.

“Standard Chartered bank kept its focus straight, getting more out of Asia. The bank’s competitive edge only comes when it is able to squeeze more growth from China, Hong Kong and Singapore. Operating cost is mostly the key concern for investors and the bank showed that it has tightened its belt on this aspect,” said Naeem Aslam, chief market analyst at Think Markets UK.

But if “the trade war continues at its current pace, we do think that the bank would see more adverse results,” Aslam added.

READ: Standard Chartered third-quarter profit beats expectations, bank cautiously optimistic 

Checking on other bank stocks, Asia-focused HSBC PLC (LON: HSBA) rose 1.6% to 646p, and Barclays PLC (LON: BARC) was up 1.8% at 173p. Royal Bank of Scotland PLC (LON:RBS) moved 1.6% higher to 236p.

In small-caps, shares of GYG PLC (LON:GYG) dropped 39% to 39.95p after the superyacht painting and maintenance group warned of a loss this year.

READ: GYG bemoans rich and famous sunning it up in the Caribbean as it issues huge profit warning

 

1.05p: FTSE 100 sticks around intraday high

The FTSE 100 hovered near intraday highs early Wednesday afternoon, while Wall Street looked ready to open higher after monthly figures on US private-sector jobs beat expectations.

The FTSE 100 gained 112 points, or 1.6%, to 7,148, supported by industrial, oil and gas and bank stocks. The rise slightly whittled down the benchmark’s potential October loss to 4.8%.

In New York, futures for the Dow Jones Industrial Average climbed 212 points. Futures for the S&P 500 were up 1% and those for the Nasdaq-100 index picked up 1.6%. Premarket shares of General Motors Company (NYSE:GM) soared more than 8% after the automaker’s third-quarter earnings outstripped analyst expectations.

Before the bell, payrolls processor ADP said private employers created 227,000 jobs in the US in October, above expectations for 189,000 jobs.

US stock futures held to gains even as the ADP report could reinforce expectations for another interest-rate hike by the Federal Reserve in December.

While Wednesday’s session may bring gains for global equities, those markets are suffering their worst losses in six years, said online trading firm XTB.

David Cheetam, chief market analyst at XTB, said: “Ongoing US-Chinese trade tensions, slowing global growth and rising US interest rates all have contributed to the sell-off and the question going forward now is whether the worst of it is over or if there’s another wave of selling into year-end.”

He added: “The recent stabilisation is a pleasing development at least and with positive seasonality often seen in US stocks following the Midterms this latest rise could yet be more than a dead cat bounce and may well lead to a sustained recovery.”

In individual UK movers, Standard Chartered PLC (LON:STAN) surged 4.5% to 556.90 after the lender’s third-quarter profit beat expectations.

READ: Standard Chartered's profit beats expectations, bank cautiously optimistic on outlook

In AIM trading, Concepta PLC (LON:CPT) shares leapt 11% to 4.10p as the company said it will soon launch its myLotus product range, which helps women monitor their fertility levels, at the Fertility Show in London in November.

READ: Concepta to launch myLotus in UK at Fertility Show in November

11.30a:  Next shares underperform the Footsie   

Large-cap stocks moved higher in late morning trade Wednesday, but Next PLC was a standout decliner after the apparel retailer issued a trading update.

The FTSE 100 advanced 105 points, or 1.5%, to 7,141, on track for its best finish since October 9.

Next, however, was among the biggest losers on the benchmark, as its shares dropped 3% to 5,146.00p. As part of a trading update, Next posted a 12.7% jump in third-quarter online sales which offset an 8.0% decline at Next’s retail stores, resulting in full-price sales of products rising 1.3%.

“The high street remains the one consistent area of decline in the UK economy, with Next earnings proving once again that the future is online rather than in physical stores,” said Joshua Mahony, market analyst at IG.

“With online sales outstripping those in-store for the first time, investors will wonder whether this will be the next company to streamline their physical presence given the additional costs involved,” he added.

READ: Next says sales at retail stores fall further in third quarter

This week, the UK’s Chancellor of the Exchequer, Philip Hammond in his autumn budget presentation, said the high street has been facing unprecedented pressure. The budget included a cut in business rates by a third for all retailers with a rateable value of £51,000 or less. The government is also planning a £675mln “future high street fund” to aid councils in improving their retail areas. 

In Wednesday trade, shares of department store operator Marks & Spencer PLC (LON:MKS) fell 2% to 293.80p.

In small-cap moves, Fastjet PLC (LON:FJET) shares slid 29% to 1.65p as the struggling African budget airline said it is still in funding talks with its major shareholders and creditors. Fastjet is majority owned by easyJet PLC (LON:EZJ).

10.05a: Footsie steps higher  

UK blue-chips extended their advance in Wednesday morning trade, but the market still faces a sharp loss in October.

The FTSE 100 picked up 96 points, or 1.6% to 7,131, aided by gains for miners, banks, and industrial companies during the last day of trading for the month. Continental European stocks were also higher, with Germany's DAX 30 up 1.5% and France's CAC 40 up 2.2%.

"Positive momentum has been gathering throughout the Asian and European sessions in what investors will be hoping is a sign that the worst of the sell-off is behind us. October has truly lived up to its reputation this year, with the major indices in the US wiping off all gains for the year and entering correction territory along the way," said Craig Erlam, senior market analyst at Oanda.

But the FTSE 100 is heading for a 4.8% fall in October, and for a 7% slide for 2018.

"The way markets have traded recently, I wouldn’t exclude the possibility that October has one more trick in store, but the start to trade today has certainly been encouraging. Volatility remains high and with it, anxiety, but if we can get through the next couple of days relatively unscathed, investors may start to smell opportunities and bargains and the tide could turn back in favour of the bulls," said Erlam.

Among individual stocks, Smurfitt Kappa Group (LON:SKG) rose 3.4% to 2,638p after the packaging maker said group revenue rose more than 7% year-on-year during the first nine months of the year, and that it has purchased a Serbian packaging business for €133mln. Shares of rival packaging producers DS Smith PLC (LON:SMDS) and Mondi PLC (LON:MNDI) jumped 4.8% and 2%, respectively.

FTSE 100 decliners included apparel retailer Next PLC (LON:NXT), down 3.8% to 5,106p, and telecommunications company BT Group PLC (LON:BT.A), off 2% at 238.85p.

READ: Smurfit Kappa logs nine-month revenue growth, acquires Serbian operations for €133mln

In the AIM market, Defenx PLC (LON:DFX) surged 14% to 800p on Wednesday after the cyber-security firm said it now has a platform to rebuild shareholder value and implement its strategic plan.

8.35am: Chipper mood for Footsie

Buoyed by a more than 400-point jump in the Dow Jones Industrial Average, the FTSE 100 began the session in chipper mood, adding 80 points to 7,115.96.

“The major US indices had a strong finish last night as some of the fear that has been circulating Wall Street evaporated,” said David Madden of CMC Markets.

However, he countered this with a note of caution ahead of the ADP figures on the US jobs market.

“A strong number could renew fears about monetary tightening from the Federal Reserve,” he explained.

Shares in Next (LON:NXT) fell by 3.6% after its sales momentum faltered. That said, the retailer is sticking by its full-year profit forecasts.

Pets at Home (LON:PETS) was as unloved as an ageing moggy at Goldman Sachs, which cut its recommendation to ‘sell’, prompting a 7% fall in the value of the business.

Restaurant Group (LON:RTN) received similar treatment from Citi, which rates the stock ‘neutral’ (down from ‘buy’). The change of stance comes in the wake of the Frankie and Benny owner’s swoop for noodle chain Wagamama.

Proactive news headlines:

Sunrise Resources PLC (LON:SRES) has discovered further extensive areas of perlite at its NewPerl pozzolan-perlite project in Nevada.

Europa Metals Limited (LON:EUZ) has hailed the results of the said Phase I drilling programme at its Toral project in Spain. The reverse circulation (RC) drilling programme performed at the eastern end of the Toral deposit successfully confirmed both the extension of the deposit and the continuity of the mineralised structure at the eastern margin of the resource.

Futura Medical PLC (LON:FUM) said it has dosed the first patient in its Phase III clinical study of MED2002, a gel used to treat erectile dysfunction. Headline data from the trial is expected next year.

hVIVO PLC (LON:HVO) said its vaccine for mosquito-borne diseases “warrants further development”. The company made the assertion following the release of partial data from a Phase I trial related to safety and humoral response (which relates to the drug’s potential to induce immunity).

Concepta PLC (LON:CPT) will launch its myLotus product in the UK at the Fertility Show in London, to be held on the 3rd and 4th of November.

Coinsilium Group Limited (NEX:COIN) has updated on the establishment of its private crypto investment fund, Flowstone Capital Limited (FCL).

Lighting group PhotonStar LED Group PLC (LON:PSL) is considering selling off or closing down its struggling light-emitting diode (LED) fixed lighting business.

Horizonte Minerals PLC (LON:HZM) (TSX:HZM) saw its shares bounce higher on Wednesday after the firm announced the appointment of Endeavour Financial, a leading financial advisor in the mining sector, to advise on the arrangement of the project financing for the Araguaia Ferronickel Project.

Chaarat Gold Holdings Limited (LON:CGH) has withdrawn its proposed offer to buy Centerra Gold, the owner of the Kumtor mine in Kyrgyzstan.

Cradle Arc PLC (LON:CRA) has raised £396,000, before expenses, via a conditional placing to help complete the rehabilitation and improvement of the current processing facilities at the Mowana copper mine in Botswana.

i3 Energy PLC (LON:I3E) has provided a financial and operational update in which it confirms that, contrary to rumours in the market, it is not planning an equity financing.

Metal Tiger PLC (LON:MTR) has increased its stake in Kalahari Metals Limited to 34% from 18% after exercising an option to do so at a cost of US$500,000 in cash.

Higher vanadium and coal prices again boosted mining royalty specialist Anglo Pacific Group PLC (LON:APF). Income rose 27% to £12.1mln in the three months to September for a nine-month total of £32.9mln (£28.9m).

Alba Mineral Resources PLC (LON:ALBA) shares rose on Wednesday morning after the explorer identified “significant areas” of polymetallic mineralisation at its Inglefield project in Greenland.

Thor Mining PLC (LON:THR) has switched its efforts to financing its Molyhil tungsten project following the recent definitive feasibility study (DFS) upgrade.

European Metals Holdings Limited (LON:EMH, ASX:EMH) saw its shares rise in early trading Wednesday after it updated on its Cinovec project in the Czech Republic. The miner said in an update for the third quarter that additional roast optimisation testwork had been completed and sustained improved recoveries meant lithium carbonate production was predicted to increase to 22,500 tonnes per annum (tpa) from 20,800 tpa previously.

WideCells Group PLC (LON:WDC) said that, following the convertible bonds financing agreement entered into with the European High Growth Opportunities Securitization Fund, it has now received a third notice of exercise of its conversion rights from the investor for the principal amount of £5,000.00, resulting in the issue to the Investor of 2,000,000 new ordinary shares in the company.

appScatter Group PLC (LON:APPS), the intelligent app management platform, has announced the appointment of finnCap Ltd as its nominated adviser and broker with immediate effect.

Motif Bio PLC (LON:MTFB) (NASDAQ:MTFB), a clinical-stage biopharmaceutical company specialising in developing novel antibiotics, has said it will participate in the Jefferies London Healthcare Conference on 14-15 November 2018, hosting one-on-one meetings.

Bushveld Minerals Limited (LON:BMN) has said it will host an Energy Storage 101 interactive webinar for the investment and media community on Tuesday, 13 November 2018 at 12:00 GMT. The group said investors can pre-register, access the webinar and submit questions on the following website link: http://webcasting.brrmedia.co.uk/broadcast/5bd2eae5b01efb6b20c2f9eb

6.30am: FTSE 100 expected to jump higher at the open 

UK stocks were expected to start higher in the wake of upbeat comments from President Trump about a trade deal with China.

After eking out a 10-point gain yesterday to close at 7,036, the FTSE 100 was expected to open its account this morning at around 7,095.

Across the pond yesterday, the Dow Jones Industrial Average jumped 432 points or by 1.77% to close at 24,874 while the S&P 500 was up 1.57% to settle at 2,682.

The tech-heavy NASDAQ Composite matched the percentage gain of the S&P 500, advancing 111 points to 7,162.

In after-hours, Facebook Inc (NASDAQ:FB) cheered the market as it reported higher third quarter earnings per share (EPS) and revenue as the number of users increased by at least 10%, even though the social media giant had been rocked by privacy scandals over the last few months.

READ: Facebook reports higher 3Q EPS and revenue, with daily and monthly users up 10%

Investors will have an eye on the October jobs report from payrolls processing firm ADP. The report on the private sector jobs market is not always a reliable indicator to the official non-farm payrolls figure but it can give some clues to this market-moving number, which are due out this Friday.

“Asian stocks moved higher overnight despite underwhelming data from China,” noted David Madden, market analyst at CMC Markets.

“The manufacturing PMI reading was 50.2, and traders were anticipating 50.6. The non-manufacturing PMI reading was 53.9, and that compares with the previous reading of 54.9. The manufacturing report was the weakest reading since July 2016, and it highlights the slowing growth in the Chinese economy. The Bank of Japan kept their policy unchanged, and cautioned about the rise in protectionism,” he added.

In Japan, the Nikkei 225 was up 463 at 21,920 while in Hong Kong, the Hang Seng index was up 230 at 24,813.

Back in Blighty, another day of big company results will allow opportunities for journalists to wheel out their hoary Hallowe’en references.

A strong showing from its Vaccines division last time out meant second-quarter results from GlaxoSmithKline PLC (LON:GSK) were reasonably robust, and investors will be hoping for more of the same from the pharma group’s third-quarter results.

Asia-focused lender Standard Chartered closes the batting in the banking results season, and a major concern will be the risk of a further slowdown in China’s economy as the nation continues to bump heads with the US over trade.

UBS reckoned StanChart's third-quarter results will show weaker revenues with market volatility hurting wealth and corporate finance income.

It estimates revenue falling to US$3.68bn in the quarter from US$3.61bn last year and underlying pre-tax profit declining to US$900mln from US$1.04bn in 2017.

Expect cautious optimism from Next’s (LON:NXT) trading statement, with the fashion firm known for under-promising and, at least in happier times, over-delivering.

UBS forecasts full price sales growth for Next Brand of 2% in the third quarter.

Significant announcements expected on Wednesday:

Interims: GlaxoSmithKline PLC (Q3) (LON:GSK), Standard Chartered PLC (Q3) (LON:STAN), Smurfit Kapa Group PLC (LON:SKG), Just Group PLC (Q3) (LON:JUST)

Trading updates: Next PLC (LON:NXT), ConvaTec PLC (LON:CTEC), Gem Diamonds PLC (LON:GEM), PPHE Hotel Group Ltd (LON:PPH), Computacenter PLC (LON:CCR)

AGMs: Maxcyte PLC (LON:MXCT), Rainbow Rare Earths Ltd (LON:RBW)

Economic data: UK GfK consumer confidence; US ADP employment change; US Chicago PMI

Around the markets:

  • Sterling: US$1.2715, unchanged
  • 10-year gilt: yielding 1.256%
  • Gold: US$1,219.10 an ounce, down US$6.20
  • Brent crude: US$76.38 a barrel, down 47 cents
  • Bitcoin: US$6,280.28, down US$1.34

City headlines:

The Times

  • Fears over Brexit lead to rush for Irish passports
  • Facebook misses user targets after spate of scandals
  • WH Smith finally realises its American dream

Daily Telegraph

  • Mike Ashley buys Evans Cycles out of administration
  • Teething problems with baby formula unit knock sales at Reckitt Benckiser
  • Alarm as businesses are told they will have to check EU workers’ status if there is a no-deal Brexit

The Guardian

  • No-deal Brexit would trigger lengthy UK recession, warns S&P
  • Amazon’s “try before you buy” fashion service launched in the UK
  • Tech giant Apple investigates Chinese factory using forced student labour

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