FTSE 100 closes higher
Ocado top footsie gainer
20% off at Bonmarche - and that includes the share price
Global markets show 'risk-on' mood
FTSE 100 joined other global markets to head higher Tuesday, finishing up nearly 25 points.
The Footsie added 0.34% to close at 7,324, while US shares are also higher at the time of writing, with the Dow Jones Industrial Average ahead by 101 points.
In London, it was the first finish above 7,300 for five months.
David Madden, analyst at CMC Markets UK, noted: "Major equity benchmarks like the FTSE 100, DAX and CAC 40 have reached five month highs as traders are in risk-on mode. There hasn’t been any major macroeconomic or geopolitical news, dealers are looking ahead to the Fed’s two-day meeting, which starts today. The consensus estimate is that the Fed will keep rates on hold, and some traders feel the language the Fed will use will be neutral, and that has raised investor confidence today."
Online supermarket Ocado (LON:OCDO) was top Footsie riser, adding 5.36% to stand at 1,209p as it confirmed the fire at its Andover, Hampshire, fulfilment centre had hit revenue, but the impact wasn’t that bad. It said the blaze, which lasted four days, carved about 1.2% off sales in the quarter ended March 3 but retail revenue still rose to £404.0mln from £363.4mln a year ago.
3.45pm: The Footsie in line for first finish above 7,300 in five months
The FTSE 100 was scaling heights not climbed since last October in the final hour of trading on Tuesday.
The FTSE 100 was up 29 points (0.4%) at 7,328 while the mid-cap FTSE 250 was up 44 points (0.2%) at 19,531.
Among the third liners, Learning Technology Group PLC (LON:LTG) caught the eye with a 14.5% gain on the back of a surge in 2018 earnings.
In contrast, Bonmarche Holdings PLC (LON:BON) proved the old adage that profit warnings often come in threes as it updated the City with new guidance.
The company now expects an underlying pre-tax loss of between £5mln to £6mln, compared to a previous forecast for break-even to a pre-tax loss of £4mln.
The image used in Proactive’s coverage of the profit warning suggests “20% off everything” and that extended today to Bonmarche’s share price.
2.15pm: Flying start for US stocks
The Dow Jones smashed its way past the 26,000 mark when trading started in the US this afternoon.
The Dow was up 142 points (0.55%) at 26,056 while the broader-based S&P 500 was 12 points higher (0.43%) at 2,845.
IN the UK, the FTSE 100 was 45 points (0.62%) firmer at 7,345, despite being weighed down by steel-maker Evraz PLC (LON:EVR), which was 5.2% lower after a number of institutional investors – including Chelsea FC bankroller Roman Abramovich - placed around 25.4mln Evraz shares in the market.
Mid-caps, as measured by the FTSE 250, were also going reasonably well. The FTSE 250 was up 58 points (0.29%) at 19,545, with inter-dealer broker TP ICAP PLC (LON:TCAP) leading the way after it confirmed that Richard Berliand had now joined the board.
Berliand is a non-executive director and the chairman designate.
Shares in TP ICAP were up 6% at 321.7p.
Going the other way was Ferrexpo PLC (LON:FXPO), after it delayed releasing its financial results, as auditors continue to investigate discrepancies in the bank statements of Blooming Land, a charitable organisation at the heart of the company’s community and social responsibility programme in Ukraine.
READ Questions swirl around Ferrexpo’s charitable donations, as final results put on hold, and auditors circle
Ferrexpo shares were down 7.1% at 251p.
1.00pm: US indices expected to open higher
US markets were expected to open sharply higher this afternoon, adding a little extra impetus to UK blue-chips.
The FTSE 100 was up 42 points (0.57%) at 7,341.
In the US, the Dow Jones was expected to open its account at around 26,044, having closed yesterday 65 points to the good at 25,914.
“Wall Street indices posted modest gains during yesterday’s session and futures prices suggest that the trend will be maintained at the opening bell. Optimism that the Federal Reserve will maintain its cautious tone over monetary policy and possibly provide further clarity over the timing of any move in interest rates is lending support, although markets do seem to be looking for that Goldilocks zone once again. There’s a meaningful risk that if the Fed lays down too cautious a picture, US equities will be rattled by the accompanying fall in domestic demand,” suggested James Hughes at Axi Trader.
11.00am: Leading shares mostly firmer
The Footsie has been hugging the 7,325 level since mid-morning as economists pick over the latest UK jobs and earnings data.
The FTSE 100 was up 30 points (0.41%) at 7,329.
“UK labour data looks astonishingly strong for an economy that is supposedly slowing on most other measures. If the government gets a long Brexit extension, a Bank of England rate hike is clearly on the table for the summer,” suggested James Knightley at ING Economics.
Howard Archer, the chief economic advisor to the EY ITEM Club said the labour market was much stronger than expected in January.
“The latest strong jobs data is somewhat surprising as some surveys had indicated that a growing number of employers are now adopting a 'wait and see' approach on employment given the current heightened uncertainties,” Archer said.
“Earnings growth sustained its recent firmer tone in the three months to January, after trending up through the second half of 2018 when the tight labour market appeared finally to be having some upward impact on pay,” Archer added.
Away from the macroeconomic scene, Standard Life Aberdeen PLC (LON:SLA) was wAnted after it won a victory in its dispute a dispute over a contract to manage the pension assets of Lloyds Banking Group PLC (LON:LLOY).
Standard Life's shares were up 2.7%; Lloyds was up 0.9%.
9.45am: Average weekly earnings nudge up by 1.4% (after adjusting for inflation)
The Footsie has come off the top but is still in credit, with the latest UK jobs report having little impact.
The FTSE 100 was up 26 points (0.35%) at 7,325.
The UK employment rate over the November-January period was estimated at 76.1%, up from 75.3% a year earlier (75.3%) and the highest figure on record.
The UK unemployment rate was estimated at 3.9% - its lowest level in 45 years.
Excluding bonuses, average weekly earnings for employees in Great Britain were estimated to have increased by 3.4%, before adjusting for inflation, and by 1.4%, after adjusting for inflation, compared with a year earlier.
With bonuses included, average weekly earnings rose 3.4% or by 1.5% on an inflation-adjusted basis.
“The employment rate has reached a new record high while the proportion of people who are neither working nor looking for a job – the so-called ‘economic inactivity rate’– is at a new record low. The unemployment rate has also fallen below 4% for the first time since early 1975,” observed Matt Hughes, the senior statistician at the Office for National Statistics (ONS).
Naeem Aslam at thinkmarkets.com noted there was no change in the basis wage growth, in line with forecasts and hence of little interest to forex traders/
“The focus remains on Brexit chaos. The length of the Brexit extension is going to be the main denominator for Sterling and this would drive the price,” Aslam said.
While sterling was an even keel, Fiona Cincotta noted that the dollar was lower ahead of the start of the Federal Reserve’s two-day rate-setting meeting.
“Wall Street is already reflecting some of the rising caution about the state of the US economy with stock markets showing much smaller increases than earlier in the year.
"The expected resolution of the US China trade talks still has the potential to give US industrials a major jolt, but without it some of the spectacular gains in the second part of last year may become a thing of the past,” she suggested.
The FTSE 100 was up 32 points (0.44%) at 7,331, with copper miner Antofagasta PLC (LON:ANTO) leading the way with a 4.0% rise after the dividend announced in the preliminary results proved to be more generous than expected.
Grocery deliveries specialist Ocado PLC (LON:OCDO) was on many investors’ shopping lists after a trading update covering the 13 weeks to 3 March – a period that included the big fire at its Andover customer fulfilment centre,
Total sales growth slipped to 11.2% with the Andover fire slowing growth by 1.2 percentage points.
Ocado shares were up 3.7%.
Investors were less receptive to the 2018 results from oilfield support services provider Wood Group (John) PLC (LON:WG.); the shares tumbled 8.2% to 549.6p after exceptional costs of US$183mln tipped the company into the red.
8.15am: Ocado delivers the goods and marches the Footsie higher
The Footsie has eked out meagre gains in early trading as the market gets to grips with the spanner thrown in the Brexit works yesterday.
The FTSE 100 was up 11 points (0.2%) at 7,311.
“With markets still eyeing the Fed decision on Wednesday, risk assets remain pretty well bid,” declared Neil Wilson at markets.com.
“Sterling recovered its poise to trade above US$1.3260, having earlier spiked lower after Commons Speaker John Bercow poured cold water on the government’s plans to hold further meaningful votes on Theresa May’s Brexit deal.
"As detailed last night, this marks a significAnt blow for the government, effectively closing off another vote this week unless May can pull off a miracle. The Speaker will only allow a third vote if the proposition changes significAntly – which seems rather unlikely ahead of the European Council meeting this week.
“Although there was a sharp move lower initially, cable [US/£ exchange rate] quickly pared those losses and you must say the sanguine reaction in currency markets reflects the fact that no one really knows where this leaves the Brexit story. This remains too tough to call either way,” Wilson said.
The shares were up 2.6% at 1,177p with Richard Hunter, the head of markets at interactive investor, saying “the fire at the Andover centre appears to have done little to quell Ocado’s rampant growth”.
“It is estimated to have taken the equivalent of 1.2% of sales in the quarter, but given that revenues rose 11%, the effect has been contained. Repairs to the centre will of course be a diversion, but the site was fully insured and it is with some irony that the company will be able to build an improved replacement which is fully state of the art. This is synonymous with Ocado’s future ambitions and also underlines the importance of contingency planning, as the CFC [customer fulfilment centre] in Erith is being ramped up alongside a temporary site in Andover,” Hunter noted.
Proactive news headlines:
Learning Technologies Group PLC (LON:LTG) shares jumped in early deals on Tuesday after it hiked its final dividend by 67% on the back of an earnings surge in 2018.
ITM Power PLC (LON:ITM) has confirmed that Toyota Australia is its first customer in the Antipodean country, with the group purchasing a 0.25 megawatt (MW) rapid-response PEM (polymer electrolyte membrane) electrolyser from the company. The AIM-listed energy storage and clean fuel company said this is one of the first four sales in Australia it announced on 14 January.
Hurricane Energy PLC (LON:HUR) shares nudged higher on Tuesday as UK oil field developer confirmed that, after failed previous attempts, it has now hooked up the Aoka Mizu floating production vessel to the Lancaster field’s infrastructure.
Mobile advertising specialist Taptica International Ltd (LON:TAP) boosted sales by almost a third in 2018, while underlying earnings were 29% better. All the improvement came from the brand advertising arm, where a strong performance and first-time contribution from Tremor Video DSP saw revenues more than doubled at US$146mln.
AFC Energy PLC (LON:AFC) has made UK-based Advanced Plastics its preferred choice as the manufacturer of flow plates for its alkaline fuel cells. The flow plate regulates the flow of gases and liquids within the AFC Energy fuel cell system.
BigDish PLC (LON:DISH) shares jumped in early trading on Tuesday after it partnered up with award-winning digital advertiser Loud Mouth Media to help drive brand awareness and app usage across the UK.
NetScientific PLC (LON:NSCI) said following completion of the merger of its investee company PDS with Edge Therapeutics, its ownership of the enlarged PDS Biotechnology Corporation on a fully-diluted basis is 8.15%, which at the listing price on 18 March 2019 of US$10 a share values its holding in PDS at £4,081,451. The company added that it is its intention to hold the shares and to make a decision on its position in due course.
INTOSOL Holdings PLC (LON:INTO) has signed a management contract for the SOUL Rainbow’s End luxury hotel in South Africa, which its executive chairman said could be its “most spectacular property yet”.
An expert gemmologist, Dr Gavrielov Gila, has valued cut and polished blue sapphire from the Kishon Mid Reach deposit owned by Shefa Yamim (ATM) LTD (LON:SEFA) at US$7,000 per carat. Natural moissanite from the same project was valued at US$10,000 per carat.
Mosman Oil And Gas Ltd (LON:MSMN) told investors that drilling has now kicked off for the Stanley-2 well in Texas. The company said the programme would run for around 14 days, including evaluation, and it is being funded from existing cash resources.
Photonstar LED Group PLC (LON:PSL) has conditionally raised £200,000 via a placing to provide further funds to support its search for a reverse takeover and also announced that a key existing shareholder is maintaining his stake in the shell company. The AIM-listed firm said it has placed 1,666,666,666 new ordinary shares with new and existing shareholders at a price of 0.012p each.
Oriole Resources PLC (LON:ORR) said its remuneration committee has today granted shares options to its chief executive officer, Tim Livesey, its chief financial officer, Bob Smeeton, and members of the management team. The group added that the options over 20,700,000 ordinary shares have an exercise price of 0.37p each.
6.30am: Top-shares index tipped to open cautiously
The FTSE 100 index is expected to retreat on Tuesday, giving back some of Monday’s gains with US and Asian markets mixed and all eyes on what happens next on the Brexit deal after the Bercow bombshell, as well as UK jobs data.
Spread betting firm IG expects the blue-chip index to open around 7 points lower at 7,292 having jumped 70.91 points on Monday.
Overnight on Wall Street, the Dow Jones Industrials Average closed 65 points, or 0.3% higher at 25,914 lifted by gains from technology stocks and showing no nerves ahead of the latest US interest rate decision due tomorrow.
However Asian stocks were more cautious on what the US Federal Reserve might signal, with Japan’s Nikkei 225 index slipping 0.1% lower to 21,559, while Hong Kong’s Hang Seng index also lost 0.1% to 29,391.
On currency markets, sterling steadied against both the US dollar and the euro after falls on Monday on the Brexit conundrum and with the key UK data awaited.
A “meaningful” third vote by parliament on Theresa May’s Brexit deal had seemed possible on Tuesday until the Speaker of the House of Commons John Bercow yesterday surprisingly ruled that the prime minister cannot reintroduce the deal again without making substAntial changes, creating a constitutional impasse.
Economists at ING commented: “Making sense of this verdict isn’t easy, but we aren’t convinced it makes ‘no deal’ more likely, and in fact, it may even help focus minds in parliament to settle on an alternative Brexit option.”
UK jobs and wages in focus
Although the focus will continue to be on the ongoing Brexit shenanigans, there will also be the latest UK jobs data to contend with on Tuesday.
UK unemployment is currently at historic lows, so any uptick in the jobless rate will no doubt have a Brexit focus
The main interest, however, will be on wage growth which is still coming through slowly, although the previous month’s average weekly earnings rise at 3.4% was comfortably above the headline inflation rate which last month fell below 2%.
Fire impact eyed at Ocado
During the period, the FTSE 100-listed firm has had to deal with a massive blaze at its Andover warehouse and investors already know there will be an impact on sales from that: the question is, how much of an impact?
Could ASOS upgrade its recently downgraded guidance?
The company, one of the biggest on AIM, shocked the market in December when it issued profit warning following a “significAnt deterioration” in November trading, which analysts believed was down to a cock-up in its Black Friday strategy.
Earlier this year, Peel Hunt said the warning was more a “trading misstep” and claimed that ASOS could even raise its guidance in the upcoming update.
Significant announcements expected on Tuesday March 19:
Finals: Antofagasta PLC (LON:ANTO), John Wood Group PLC (LON:WG.), Mears Group PLC (LON:MERG), TP ICAP PLC (LON:TCAP), Bango PLC (LON:BGO), ECSC Group PLC (LON:ECSC), Learning Technology Group PLC (LON:LTG), Taptica International Limited (LON:TAP), Applegreen PLC (LON:APGN), Elcosoft PLC (LON:RLCO), Judges Scientific PLC (LON:JDG), JPJ Group PLC (LON:JPJ), Kape Technologies PLC (LON:KAPE), Mortgage Advice Bureau Holdings PLC (LON:MAB1), NAHL Group PLC (LON:NAH), Ocean Outdoor Limited (LON:OOUT), Team17 Group PLC (LON:TM17), Zotefoams Plc (LON:ZTF)
Economic data: UK labour market data; US housing starts; US building permits
Around the markets:
- Sterling: US$1.3068, up 0.1%
- Gold: US$1,300.30 an ounce, unchanged
- Brent crude: US$67.57 a barrel, up 0.1%
- Speaker John Bercow has said that he would not allow Theresa May to bring back her plan for a third vote in the House of Commons without substantial changes in the agreement – Financial Times
- Lloyds Banking Group staff has criticised António Horta-Osório for being the only employee at the company who is entitled to a pension based on his final salary – The Times
- Scandal-hit Metro Bank is said to face increasing pressure from the City watchdog to shake up its board after an accounting error – Daily Mail
- Outsourcing firm Interserve is hoping to prevent a client exodus as rivals seek to cherry-pick parts of the business, which was bought out of administration by its lenders last week – The Guardian
- Struggling Moss Bros has appointed Joules boss Colin Porter as chairman. – Daily Mail
- Boeing Co. lost a further US $4bn off its market value yesterday after it emerged that American prosecutors and government officials were investigating the safety of its 737 Max jet – The Times
- Ride-hailing company Lyft is looking to raise up to US$2.1bn at a valuation of almost US$23bn in the biggest US technology listing in two years – Financial Times
- Warner Bros chairman-CEO Kevin Tsujihara has resigned after allegations of sexual impropriety – The Guardian
- Travelodge, the UK budget hotel chain, plans to open 100 hotels by 2024 despite warning of short-term economic challenges – Financial Times
- The Serious Fraud Office has arrested four people over the collapse of London Capital & Finance – Daily Telegraph
- The Office for National Statistics has launched a new system to monitor growth and spot signs of danger which can track the next recession in close to real time and give advance warning about the health of the economy – Daily Telegraph