FTSE 100 closes up around four
Prime minister's Brexit address to the Commons proves a buzzkill for equity bulls
Oil price receives shot in the arm from OPEC's output cutback in January
FTSE 100 ended Tuesday marginally ahead as Wall Street shares were higher as markets were boosted by hopes of a US, China trade deal.
The UK's premier blue-chip index added around four points at 7,133.
The FTSE 250, however, lost ground, shedding seven points to stand at 18,824.
David Madden, at CMC Markets UK, noted that Footsie made a strong start to the day, but gains were tempered by declines in consumer and industrial stocks.
"Eurozone equity markets have managed to hang onto most of the gains that were made on the back of optimism over US-China trade talks. Delegates from the US and China are in talks in Beijing, and sentiment is buoyant," he added.
Among the big losers on Footsie were housebuilders while travel group TUI AG (LON:TUI) was the top loser, crashing 7.45% to 886.80p after it posted a first-quarter net loss of €111.9 million, compared to a loss of €68.3 million last year.
The company blamed the unusually warm summer in Europe and weak pound for the loss.
3.45pm: Gains ebb away after Theresa May's statement to the House of Commons
London's top-share index was back to square one entering the final hour of trading.
The FTSE 100 was up 1 point at 7,130, with supermarkets, housebuilders, utilities and travel companies largely responsible for the afternoon swoon.
“Already lagging behind during the morning session, the UK index gradually saw its mild growth ebb away after Theresa May’s Commons statement. That the FTSE doesn’t need to make up the same kind of recent losses as its UK and US peers likely has informed its Tuesday performance, though it doesn’t [sic] mean it has failed to make the most of BP and Shell’s Brent Crude-led rise,” said Connor Campbell at Spreadex.
2.35pm: Oil price rallies after OPEC reports sharp cut in output
US markets opened on the front foot but a fat lot of good that has done the Footsie.
The Dow was up an impressive 247 points (1%) at 25,300 while the broader-based S&P 500 was 23 points (0.9%) higher at 2,733.
The FTSE 100, meanwhile, had relinquished all but five points of its earlier gains, at 7,134.
Oil giants BP PLC (LON:BP.) and Royal Dutch Shell (LON:RDSB), up 0.3% and 0.7% respectively, were hanging on in positive territory, helped by the strength of the oil price; Brent crude for April delivery was up US$1.61 (2.6%) at US$63.15 a barrel.
“The US West Texas Intermediate (WTI) crude benchmark has fared much worse than Brent lately. Over the past seven days, the WTI marker is down 3.9% while Brent is only down 1.6% - there has been a tremendous bearish sell-pressure on the WTI benchmark which has dragged Brent crude along lower as well,” commented Bjarne Schieldrop, the chief commodities analyst at Nordic corporate bank, SEB.
That was all before oil cartel OPEC revealed its crude output fell by 797,000 barrels a day in January to 30.81mln barrels a day.
12.30pm: Blue-chips in cruising mode
A softer sterling exchange rate and the expectation of a firm start on Wall Street were both bolstering London's performance.
The FTSE 100 was up 18 points (0.3%) at 7,148.
“After Monday’s uninspiring session, US index futures are suggesting meaningful gains will be seen at the open after news that a deal had been struck to avert another US government shut down broke,” commented James Hughes at Axi Trader.
“The agreement hasn’t, however, been finalised and there’s also the matter of Trump’s border wall with Mexico, which remains unanswered. Whilst funding border security, the agreement doesn’t include money for a physical barrier, but the President is vowing that it will be built regardless. An escalation of this could well prove negative for stocks,” Hughes suggested.
Spread betting quotes point to the Dow Jones opening at around 25,238, compared to last night's close of 25,053.
As for sterling's weakness, the currency fell to three-week low against the US dollar, “although a fair chunk of these declines can be attributed to a persistently strong buck,” according to David Cheetham.
11.15am: Footsie remains in consolidation mode
Approaching midday the FTSE 100 was continuing to meander sideways having established higher ground early on.
The top-share index was up 28 points (0.3%) at 7,157, about midway between its high and low points for the day.
The FTSE 250 was having an even more sedate time of its, up 31 points (0.2%) at 18,862, although its rise was tempered by the eye-popping 33% fall on contracts for difference platform operator, Plus500 Limited (LON:PLUS).
Elsewhere among the mid-caps, Indivior PLC (LON:INDV) fell back to 104.15p from 107.05p overnight after the failure of its latest legal attempt to thwart the release of generic versions of its star drug, Suboxone.
Indivior $INDV Court of Appeals for the Federal Circuit Denies Motion to Stay Issuance of the Mandate, mandate to be issued on 19/02 (allowing DRL & Alvogen to sell their Suboxone generics)https://t.co/Na6xCxy8RA— Biotech Radar (@BiotechRadar) February 12, 2019
10.15am: Footsie rises in line with European indices
In line with European indices and following a decent showing overnight by Asian indices, the Footsie was making modest headway.
The FTSE 100 was up 27 points (0.4%) at 7,157.
Low-cost airlines easyJet PLC (LON:EZJ) was not participating in the advance after SocGen slashed its target price to 1,270p from 1,800p.
The stock was down 22p at 1,265p while sector peer, British Airways owner International Consolidated Airlines (LON:IAG) was also losing altitude, down 10p at 653.6p, completing a lose-treble for travel-related stocks, as package tour operator TUI AG (LON:TUI) remained the worst blue-chip performer after its fiscal first-quarter update; the shares were down 38p at 919.4p.
#TUI #AG - Q1's. No change to update given on Thursday. Operating loss at group level more than doubled to €83.6m. Blames hot UK summer & devaluation of £. Growth strategy remains intact & TUI reiterates that the company is well positioned.— Robert Barron, MCSI (@RobBarronInvest) February 12, 2019
9.15am: Sentiment boosted by tentative deal on seven US spending bills to avert government shut-down
Blue-chips added to yesterday's gains as hopes rose (yet again) that a US government shut-down might be averted.
The FTSE 100 was up 32 points (0.5%) at 7,161,
“Since Wall Street closed, US equity futures have rallied about ½% and the 10Y Treasury yield has increased a further 3bps to 2.68%. These moves came after US Senate Appropriations Committee Chair Richard Shelby said that a tentative deal had been reached on seven spending bills required to avert a further government shutdown at the end of this week,” reported Daiwa Capital Markets.
“In particular, the plan would give President Trump just under $1.4bn to progress his much-desired border wall with Mexico, rather than the $5.7bn that he has been seeking.
“In other seemingly-positive news, in contrast to what had been indicated by last week’s reports, Trump was reportedly upbeat about China at a rally in Texas, stating that he would 'make great deals on trade', with those remarks following comments by one of his advisers that he was keen to meet Xi 'very soon', reigniting hopes that an accord might be struck soon,” Daiwa added.
Switching to company results, Pluys500 Ltd (LON:PLUS), one of the stock market stars of 2018, lost around a third of its value after releasing its full-year results.
Plus500 issues FY19 revenue and profits warning due to impact of ESMA regulations. This is in spite of a positive start to FY19, with new trades ahead of last year. FY’18 revenue +65% after strong cryptocurrency trading, EBITDA +95%, ARPU +72%, final dividend +18.4%.— Mike van Dulken (@Accendo_Mike) February 12, 2019
The company said that following its latest assessment of the impact of the European Securities and Markets Authority (ESMA) regulatory measures, revenue in 2019 is expected to be lower than current market expectations; combined with the company's intention to maintain its marketing spend, this is likely to result in 2019 profit being materially lower than current market expectations, the company warned.
For the share price, it was less of a case of Plus500 and more minus 500 – 504p to be precise, or down 30.8%, at 1,132p.
8.40am: Footsie finds gains
The FTSE 100 opened slightly more strongly than the spread betting firms had been predicting as the index moved 25 points higher to 7,153.90.
Traders took their cue from Asia’s reasonably buoyant markets rather than Wall Street, which closed in the red Monday.
The mood music ahead of Sino-American trade talks will continue to drive sentiment, while Theresa May’s Brexit update to MPs later is more likely to affect the pound than equities.
“The worry is that Debenhams is now living hand to mouth,” said Neil Wilson from Markets.com.
“Nevertheless, this is an important step towards that refinancing deal and should help management to navigate what is going to be a very tricky few months.”
However, TUI (LON:TUI) shares led the Footsie losers as the Anglo-German tour operator bared the financial scars from the heatwave and the weak pound.
After the company’s earnings alert last week there weren’t too many surprises on the outlook and current trading, but the stock still gave back Monday’s gains as it fell 3.6%.
On the FTSE 250, the broker Plus500 shed more than a third of its value after sounding the profit alarm.
There was better news for tech tiddler mPorium (LON:MPM) after the company said it had seen a significant ramp-up in revenues after inking a lead generation deal. The shares advanced 20%.
Proactive news headlines:
Kodal Minerals PLC (LON:KOD) has received the final assay results from drilling completed at the Bougouni lithium project in Southern Mali. Highlights from the Sogola-Baoule prospect on Bougouni include 31 metres at 1.33% lithium oxide (Li2O), 27 metres at 1.06% Li2O, and 30 metres at 1.06% Li2O.
Iofina plc (LON:IOF) has gained a bit of wiggle room on the financing side by extending the expiration dates of its convertible loan notes and bank facility.
Echo Energy Plc (LON:ECHO) told investors it has completed the stimulation programme for the EMS-1001 well at the Fracción C licence, onshore Argentina. Initial results indicate that the EMS-1001 location is not commercial, and, no further testing is planned.
Redx Pharma Plc’s (LON:REDX) chief executive Lisa Anson said she was “encouraged” by pre-clinical data from a fibrosis drug set to enter human trials next year. Three independent studies assessed the potential efficacy of the company’s lead ROCK2 compound in animal models of lung, kidney and liver fibrosis.
Tlou Energy Ltd (LON:TLOU) told investors it has completed its first development pod for the Lesedi coal bed methane project, advancing the project closer to production. The company, in a stock market statement, said that the Lesedi 3A and Lesedi 3B lateral wells both intersected with the vertical well Lesedi 3P, to complete the development pod.
Cabot Energy PLC (LON:CAB) has conditionally raised £2.08mln with a share sale to existing major shareholders, High Power Petroleum and City Financial Investment Company. It intends to raise a further £770,000 through an additional share sale to other qualifying shareholders. Big Pic in August.
Connemara Mining Company PLC (LON:CON) is proposing to change the name of the company to ‘Arkle Resources PLC’. The firm says its board believes that the change of name, while reflecting the company's heritage as an Irish-based exploration company established to focus on zinc assets, will better reflect its diversified position in both gold and zinc exploration and resource development.
Greencoat UK Wind PLC (LON:UKW), the leading listed renewable infrastructure fund, invested in operating UK wind farms, said it intends to accelerate the closure of the placing it announced on 1 February 2019 following material investor demand. The group said the bookbuilding process will close no later than 4:30pm London time on 12 February 2019.
Afarak Group PLC (LON:AFRK) announced that it has completed three transfers totaling 500,000 ordinary shares from treasury to its CEO, Guy Konsbruck, The group said the shares form a part of the CEOs service contract.
Personal Group PLC (LON:PHG), a leading provider of employee services in the UK, said its first dividend for 2019 of 5.825p per share will be paid on 29 March 2019 to members on the register on 22 February 2019. It added that the dividend, the first of four expected to be announced this year, represents a 1.3% increase over the equivalent period last year.
BlueRock Diamonds PLC (LON:BRD), the AIM-listed diamond producer, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa, said that a new corporate presentation can be viewed on the company's website.
ECR Minerals PLC (LON:ECR), the precious metals exploration and development company, announced that Hallgarten & Company have produced an Initiation of Coverage report on the group which is available on the company’s website.
6.30am: FTSE 100 set for a subdued start
The FTSE 100 looks set to make a subdued start to proceedings on Tuesday with the index of blue-chips expected to advance just 12 points to 7,141.11.
Wall Street ended in negative territory, reflecting caution ahead of renewed US-China trade talks later this week. The mood was a little more upbeat in Asia, with the main markets there posting gains.
Here in the UK Theresa May will update the Commons later about Brexit talks as she seeks support for her deal.
Last week she visited Dublin and Brussels seeking EU changes to the backstop. However, she looks no closer to winning concessions or finding a Parliamentary consensus than the last time she addressed MPs on the issue.
“Further delay is unlikely to be welcomed by business; however the Prime Minister appears determined to push her deal to the wire, given the lack of a parliamentary majority for any other options,” said Michael Hewson of CMC Markets.
“This continued brinkmanship has seen the pound slip to a three week low against the US dollar.”
Sterling was trading at US$1.2865.
Significant events expected on Tuesday:
Economic data: US NIFB business optimism
Around the markets:
- Gold changing hands for US$1,312.20 an ounce (+US$1.20);
- Brent trading at US$61.83 a barrel (+32cents).
- Financial Times
- May to plead for more time to overhaul Brexit deal
- Treasury accused of ignoring SMEs under no-deal Brexit - senior bankers say those responsible have gone ‘Awol’ over pleas for emergency funds
- Online news needs ‘code of conduct’, says review
- Food and drink producers urge Gove to stall reforms
- IAG Brexit warning to non-EU shareholders
- Smallbone’s collapse hits wealthy clients
- Investor warns Just Eat to seek merger, not new chief
- Karren Brady, chairman of Sir Philip Green’s retail empire, says she has ‘sense of duty’ to his employees - including her daughter
- Amazon takes latest step into the smart home with deal for Wi-Fi system company Eero
- AI venture capital firm InReach Ventures launches new €53mln fund
- Google warns rise of AI may backfire on company
- Debenhams to announce £40mln short-term cash injection
- Philip Hammond’s claim that Britain can reap an economic dividend from Theresa May’s Brexit deal has been flatly rejected by MPs, as official figures confirmed the UK has suffered its worst year for GDP growth since 2012
- The government is facing calls for a new regulator to protect consumers’ access to cash, following several bank IT failures