FTSE 100 index rises 19 points
Dow Jones up 0.88%
JP Morgan kicks off US banking results season
The FTSE 100 clocked some gains to end the day in positive territory, boosted mainly by events off its shores. Taking the cue from the Dow Jones, boosted by results from JP Morgan Chase & Co, which kicked off the earnings season with better-than-expected numbers while Wells Farog & Co was not far behind.
Walt Disney shares were also a big attraction after it unveiled a new streaming service that is cheaper than rival Netflix.
The markets were also lifted by the trade data from China which showed that exports rose 14.2% year-on-year. The issuance of new bank loans in China, at 1.7trn yuan, was far above market expectations, a clear indication that the Chinese government's moves to stimulate credit growth is paying off.
And the latest on Brexit news: Nothing. But on the sidelines, ex-UKIP leader Nigel Farage has launched a new party called the Brexit Party.
"We are lions led by donkeys"— BBC News (UK) (@BBCNews) 12 April 2019
At the launch of his new Brexit Party, former UKIP leader Nigel Farage says politicians are taking the country on a path to "managed decline"https://t.co/6Q3BefzV7r pic.twitter.com/y9nfLwXdIy
The FTSE 100 closed up 19.11% or 0.26% at 7,437.06, with all indices also closing in the black. The FTSE 250 was up 90.53 points or 0.46% at 19,711.71.
Standard Chartered was top of the FTSE 100 leaderboard, closing up 3.51% at 672.20 while Schroders gained 2.33% at 3,068.00.
Indivior PLC (LON:INDV), which was slapped with with 28 fraud charges by US prosecutors on Wednesday, staged a strong rebound, closing up 12.74% at 35.23p, but still a long way below Tuesday’s close of 106p.
Plus500 Ltd’s (LON:PLUS) was a major loser, closing down 31.19% at 495.00 after a profit warning in the morning while Pets at Home Group PLC (LON:PETS) was not far behind, on the loser board, down 14.22% at 140.00p after a Canadian pension fund decided to exit its near 11% position in the retailer.
2.45pm: London flatlines while Wall Street gets off to a flyer
The FTSE 100 drew little encouragement from a stonking start by US stocks on the back of some decent earnings announcements from banks.
In London, the Footsie was clinging on to a 5 point (0.1%) gain at 7,423, but in the States, the Dow Jones was up 264 points (1.0%) at 26,407 and the S&P 500 was 20 points (0.7%) better at 2,908.
12.15pm: The Footsie shifts into consolidation mode
The FTSE 100 was in consolidation mood entering the lunchtime session.
At 7,444, the index of blue-chip shares was up 27 points (0.4%), having briefly topped 7,450 in mid-morning trading.
The catalyst, if it can be called that, appears to have been the Chinese trade figures, which have engendered support for the heavily weighted mining sector.
“Exports jumped on seasonal factors while imports continued to shrink, with less demand for US goods compared to a year ago. In coming months, we expect modest export growth as the base effect fades. The yuan is more likely to depreciate due to its role as a negotiation tool in the trade talk,” said ING Economics.
The message from ING’s economist for Greater China, Iris Pang, seems to be: enjoy it while it lasts.
“Exports for the coming months don't seem to be as promising,” she declared. “Early signs from China's official manufacturing PMI's export order showed an up-tick in March to 47.1 from 45.2 in February, but the reading was still below 50, i.e. still shrinking, which suggests that exports will only improve slightly in the near future.
“A potential trade deal with the US probably wouldn't help China's exports because the trade talks are focused more on the increase in China's imports from the US. Meanwhile, global growth has been downgraded by the IMF and the World Trade Organization says the conflict over tariffs will hit global trade growth this year. This should be reflected in more moderate export growth from China in the coming months,” she predicted.
Holger Schmieding at German bank Berenberg reckons, however, that the Chinese stimulus “is in the pipeline”.
“Some data (credit flows, March PMIs) are showing early signs that it is reaching the real economy; however, as the multi-stage stimulus is focused more on the local level and on consumers rather than big infrastructure projects, the timing and extent to which it will raise China’s demand for imports remains unclear,” he said.
Away from macroeconomic data, in the equities world most of the excitement was coming from the mid-caps, where Plus500 Ltd’s (LON:PLUS) loss was around 200p at 520p after the trading platform operator’s profit warning this morning and Pets at Home Group PLC’s (LON:PETS) decline was 13.3% at 141.5p after a Canadian pension fund decided to exit its near 11% position in the retailer.
Fighting the good fight was fantasy and SF miniatures war-games designer Games Workshop PLC (LON:GAW), up 391p at 3,701p, after it continued its tradition of generous returns to shareholders with a special divi of 35p per share.
10.35am: Mining stocks lead the index higher
The FTSE 100 has barely got out of second gear this morning, despite the heavily weighted mining sector putting in a positive contribution.
The leading shares index was up 26 points (0.4%) at 7,444, about 10 points off its high.
“The improvement in the trade surplus massively exceeded expectations, widening to US$32.6bn from US$4.1bn previously,” reported Daiwa Capital Markets Europe.
“The pickup in part reflected much stronger exports in March, up 14.2%Y/Y [year-on-year] in dollar terms (and an even more impressive 21.3%Y/Y [year-on-year] in yuan terms). In contrast, imports posted the fourth consecutive year-on-year decline, and by a steeper 7.6%Y/Y (down 1.8%Y/Y in yuan terms). Of course, Chinese figures at this time of the year are often distorted by the timing of the Lunar New Year. So, when looking at the first quarter as a whole, the improvement was somewhat less impressive,” it added.
“So, on balance, ahead of next week’s Q1 GDP release, today’s figures suggest that net trade might well have provided modest support to growth in Q1 having subtracted from growth in each quarter of 2018,” Daiwa concluded.
Sector peer Rio Tinto PLC (LON:RIO) advanced 70.25p to 4,783.25p after Barclays nudged up its price target to 4,150p from 4,100p, while Anglo American PLC (LON:AAL) was 19p heavier at 2,212p after Barclays cranked up the price target to 2,000p from 1,875p.
9.40am: Blue-chips index back on the front foot
The FTSE 100 was in positive territory after briefly returning to par in the wake of some mixed Chinese data.
The index of leading shares was up 15 points (0.2%) at 7,433, with the packaging sector leading the way – which is not a phrase you hear every day.
“A concerning drop in Chinese imports last month ensured another weak start in what has been a momentum-sapping week,” said Connor Campbell at Spreadex, in an assessment of early trading in European markets.
“While exports rose 14% year-on-year in March, imports tumbled 7.6%, nearly 6 times worse than the 1.3% decline estimated by analysts and the fourth negative reading in a row. The tariff war with the US is responsible for part of it; however, what has people worried are the signs that China’s domestic economy itself is in trouble,” Campbell said.
If UK investors are worried about China they are hiding those concerns fairly well this morning. There has been some selling of tobacco stocks, with British American Tobacco (LON:BATS) and Imperial Brands PLC (LON:IMB) down 1.5% and 0.6% respectively while utilities Centrica PLC (LON:CNA), National Grid PLC, SSE PLC (LON:SSE) and Severn Trent PLC (LON:SVT) friendless, with losses ranging from 1.1% to 0.3%.
8.50am: Subdued start for Footsie
The FTSE 100 made a flat start to proceedings with the game of Brexit jeopardy put on hold as MPs headed off for their Easter break.
In the first half hour of trade, the UK blue-chip index was off 1.15 points at 7,416.80 with traders keeping their powder dry ahead of the kick-off of the US banks’ earnings season.
With large-cap news at a premium, all the action was taking place on the FTSE 250, seen as a proxy for the health of UK PLC because it is made up predominantly of domestic firms.
That said, the main talking point of the morning was Plus500 (LON:PLUS), a Haifa, Israel-based broker, which told investors that subdued markets had led to a more than 80% collapse in revenues. The shares tanked 42%.
Games Workshop (LON:GAW), the weekend retreat for pasty-faced and/or bearded Game of Thrones wannabes, was the top riser on the FTSE 250 after it announced plans to release surplus funds, pushing the shares up 8%
Proactive news headlines:
ANGLE PLC’s (LON:AGL) (OTCQX:ANPCY) ground-breaking liquid biopsy system will be incorporated into a clinical study to provide an early warning of relapse among patients being treated for non-small cell lung cancer. The Partsortix system will be used in research being carried out by the Hellenic Oncology Research Group and will be deployed to track circulating tumour DNA, fragments of dead cancer cells and circulating tumour cells (CTCs).
Arc Minerals Ltd (LON:ARCM) has kicked off its exploration programme at the Zamsort project in north-western Zambia. Infill soil sampling has commenced over the new target areas, and 1,200 samples have already been grabbed.
Oil and gas rig contractor ADES International Holding PLC (LON:ADES) has secured two onshore contracts in Algeria with state-owned oil group Sonatrach. The ADES 2 contract comprises one firm well and four optional wells worth up to US$8mln in total.
Life sciences group Integumen PLC (LON:SKIN) has agreed to buy scientific data management specialist RinoCloud for £3mln as it looks to build out its Labskin AI platform. AIM-quoted Integumen had been using RinoCloud’s technology in its development of Labskin AI – an extension of Integumen’s laboratory-grown skin product which provides real-time test results to skincare, wound care, pharma, healthcare and personal care companies.
AFC Energy PLC (LON:AFC), the alkaline fuel cell power company, has raised money through a share subscription and entered into a convertible bond facility. The company has conditionally raised £813,000 before expenses by way of a subscription for 27.1mln shares at 3p a pop; AFC’s shares closed at 3.775p last night.
Europa Oil & Gas Holdings PLC (LON:EOG) is looking forward to a potential third-party exploration catalyst offshore Ireland, with China’s CNOOC idue to drill a well to test the Iolar prospect. Exploration success in the South Porcupine basin would be significant for all companies with interests in Ireland’s Atlantic frontier, while for Europa it would specifically benefit the Kiely East (estimated at 280mln barrels) and the Edgeworth (225mln barrel) targets.
Yellow Cake PLC (LON:YCA) is raising £25.9mln, increased from £22.9mln, through a share placing in order to fund the purchase of at least 1mln pounds of uranium. The company, a vehicle specifically set up to acquire and own physical uranium as an investment strategy, upgraded the funding after the original offer (announced yesterday) saw strong investor demand.
Rose Petroleum PLC (LON:ROSE), the AIM-quoted natural resources business announced that, on 11 April, Matthew Idiens, its chief executive officer purchased 2,000,000 ordinary shares in the company at an average price of 1.75p each, taking his holding up to 2.52% of the existing ordinary share capital. The group added that, on the same date, its chief financial officer Chris Eadie purchased 945,600 ordinary shares at an average price of 1.67p each taking his holding to 1.20%. In addition, it said, Tom Reynolds, a proposed non-executive director of the group purchased 731,694 ordinary shares at an average price of 1.715p each also on 11 April.
IXICO PLC (LON: IXI), the data analytics company delivering insights in neuroscience, has announced the appointment, with immediate effect, of Cenkos Securities as its nominated adviser and sole broker.
6.45am: Footsie to shake off indecision
The FTSE 100 looks set to shake off yesterday’s indecision and open on the front foot despite a mixed showing overnight in the US.
Spread betting quotes suggested that the UK’s index of leading shares would open around 15 points higher at 7,433 after shedding 4 points yesterday to close at 7,418.
US benchmarks were mixed yesterday with the S&P 500 up just a smidgen and the Dow Jones down 14 points at 26,143.
The situation in Asia this morning has been similarly fuzzy with Japan’s Nikkei 225 up 152 points at 21,863 and Hong Kong’s Hang Seng index down 90 points at 29,749.
US earnings season is underway and the big banks are lining up to publish their results.
“The outlook is not that great, and it is getting worse,” according to Jasper Lawler at LCG.
“Q1 earnings are expected to decline -4.2% year on year, worse that -3.9% decline forecast just a week earlier. This will be the first time that earnings have declined since 2016. Wells Fargo and JP Morgan kick off earnings today. With an earnings decline on the cards, the big banks, more so than ever, will be used as bellwethers for the rest of the S&P 500.
“Whilst earnings will of course be watched closely, this is, of course, a backward-looking measure; forward guidance will be key. This is the information that will tell us whether Q1 negative earnings are just a bump in the road, or whether this is the start of a far more sinister trend,” Lawler said.
In the UK, we have our own – or Hong Kong & Shanghai’s – banking giant in the form of HSBC taking to the stage in glamorous Birmingham for the company’s annual general meeting.
HSBC will be able to introduce shareholders to its new group chief financial officer, Ewen Stevenson, previously chief financial officer of Royal Bank of Scotland Group PLC (LON:RBS) who in January succeeded Ian Mackay, after his retirement.
Stevenson’s appointment finished a complete reshuffle of the top jobs at the bank, with John Flint have become its group chief executive in February 2018, and Mark Tucker appointed non-executive group chairman in October 2017.
The event usually includes statements from the chairman and chief executive officer reviewing the year just gone and some wishy-washy talk about future ambitions; for hard numbers, shareholders will have to wait its first-quarter 2019 update on Friday 3 May
Significant announcements expected on Friday|:
Economic data: US import, export prices; US University of Michigan consumer sentiment index
Around the markets:
- Sterling: US$1.3066, up 0.17 cents
- 10-year gilt: yielding 1.15%
- Gold: US$1,295.80 an ounce, up US$2.50
- Brent crude: US$ 71.08 a barrel, up 25 cents
- Bitcoin: US$5,021.53, down US$36.38
- Clothes retailer Primark is edging towards its first online shopping offering and a trial of a click-and-collect service.
- Cryptocurrency exchange Coinbase and Apto Payments are to jointly launch a new Visa debit card in the UK.
- Theresa May and Jeremy Corbyn agreed last night to press on with Brexit talks as the prime minister spelt out a change of approach to make it happen.
- Airline stocks were boosted yesterday after Brussels agreed to extend Brexit by six months, easing fears of disruption during the summer holiday season.
- Superdry is being targeted by the activist investor Oasis Management Company, which has built a 3.3% stake in the fashion chain.
The Daily Telegraph
- Documents filed with the Securities and Exchange Commission show that Uber continues to be heavily loss-making despite its significant growth and expansion into new businesses.
- Barclays has urged investors to snub activist investor Ed Bramson’s move to elect him on to the bank’s board next month.
- Jeremy Wright, the Culture Secretary, has told Rupert Murdoch to overhaul independent oversight of The Times and The Sunday Times to win government approval for newsroom cuts.
- New energy companies will face tougher tests before they can supply homes with gas and power after a wave of costly company collapses.
- WH Smith registered a 21% decline in operating profit to £65 million after splashing cash on its acquisition of US-based airport retailer In Motion.
- Netflix is planning to launch its own print magazine and buying a historic Los Angeles cinema to showcase its productions.
- Philip Green’s Arcadia Group has appointed two restructuring specialists on to its board as it prepares to launch a company-wide overhaul.
- Reckitt Benckiser has been dragged deeper into the Indivior scandal after two of its bosses, current chief Rakesh Kapoor and predecessor Bart Becht, were accused of making 'fraudulent' claims about opioid addiction drugs.