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FTSE 100 ahead at the close as investor appetite returns

The premier UK share index finished around 33 points higher at 7,469
Statue of a bull
Investors appear more bullish

FTSE 100 joined other global indices to head higher on Tuesday as investor appetite returns.

The premier UK share index finished around 33 points higher at 7,469. The FTSE 250  was also up - adding over 116 points at 19,923.

"Fresh six month highs were achieved on the FTSE 100, DAX and CAC 40 today as the bullish sentiment continues," said market analyst David Madden, at CMC Markets.

"The fact that Brexit has been delayed, and the European Central Bank are willing to launch another round of targeted lending later this year has helped investor appetite. US-China trade talks have been moving in the right direction recently, and that has been a factor too."

Financial stocks topped the Footsie board on Tuesday with St James's Place (LON:STJ) top riser, up 2.76% to 1,117p.

 

3.00pm: US stocks open modestly firmer

The FTSE 100 was coasting in the afternoon session after US benchmarks opened moderately firmer.

The Dow Jones 30-share was up 63 points (0.2%) at 26,448 while the S&P 500 was 7 points (0.2%) better at 2,913.

Back in Blighty, the FTSE 100 was 35 points firmer at 7,472.

READ: Gold as an investment

Away from the big caps, Coro Energy PLC (LON:CORO) headed higher after it confirmed it had complied with its obligation to gain a 15% working interest in the Duyung production sharing contract.

The shares were up 14.3%.

Another minnow on the march was Advanced Oncotherapy PLC (LON:AVO), which was up 10.1% on the back of some senior appointments in its US business.

READ Advanced Oncotherapy appoints a chief commercial officer and president for its US division

https://www.proactiveinvestors.co.uk/companies/news/218660/advanced-oncotherapy-appoints-a-chief-commercial-officer-and-president-for-its-us-division-218660.html

1.15pm: Footsie struggling to rise above 7,474

The FTSE 100 seems to get nervous every time it approaches 7,475, suggesting there may be something in this “resistance levels” malarkey spouted by chartists.

The top-shares index was up 37 points (0.5%) at 7,474, its high point for the day and the second time it has reached that pinnacle.

READ: Gold as an investment

The mid-cap FTSE 250 was keeping pace with its bigger brother, rising 92 points (0.5%) at 19,889, despite Galliford Try plc (LON:GFRD) – down 19.2% - acting as a dead weight on the index after its profit warning this morning.

“Can you even make a profit at construction any more?” asks Russ Mould, rhetorically.

“Always a fairly low margin activity, the number of disappointments from this industry just continues to build up.

“Cut throat competition in the sector resulted in a lack of discipline and low-ball bids for contracts which made turning a profit nearly impossible.

“Galliford appears to be acknowledging the need for a more disciplined approach with its plan to scale back its construction arm – which faces spiralling costs on some projects particularly the Queensferry Crossing joint venture,” Mould observed.

“Shareholders are entitled to be somewhat disturbed by the fact that as recently as February it was happily expressing its confidence in full year guidance.

“At least Galliford is taking its medicine now with the aim of enjoying a healthier future, underpinned by its higher return regeneration and housebuilding businesses,” he added.

One might also ask, rhetorically, whether it is possible to make an acceptable profit in retailing any more, and the answer appears to be “yes” based on JD Sports Fashion PLC (LON:JD.), which was up 4.5% after posting record profits for 2018.

READ Billion-pound Finish Line boost spurs JD Sports to record annual profit

Sector peer Card Factory PLC (LON:CARD), up 6.0% after its full-year results, also cheered the market with what it termed “a robust performance in a challenging consumer environment”.

12.15pm: US stocks expected to open on the front foot

The FTSE 100 bucked its ideas up in the final hour of the morning session, buoyed by indications of a firm start on Wall Street.

The UK's benchmark index was up 28 points (0.4%) at 7,465 after showing signs in mid-morning of relinquishing its early morning gains.

Spread betting quotes suggest that US stocks will come quickly out of the stalls, with the Dow pegged to open at around 26,518, up 133 points, and the broader-based S&P 500 set to open at 2,915, up almost 9 points.

Back in the UK, the Footsie received a small boost from the 70p gain to 4,942p notched up by London Stock Exchange PLC (LON:LSE).

The bourses operator rose 1.6% after Deutsche Bank increased its price target to 4,600p from 4,400p.

In other broker action, Holiday Inns operator Intercontinental Hotels Group PLC (LON:IHG) advanced 1.7% to 4,919p after Mainfirst initiated coverage with an 'outperform' rating and 5,600p price target.

11.00am: UK jobs market adopts seventies vibe

The FTSE 100 was gently subsiding back towards last night's closing level ahead of tomorrow's eagerly awaited Chinese gross domestic product update.

Having scaled the heights of 7,475 earlier in the day, the index of heavyweight shares had slipped to 7,447, up 10 points (0.1%) on the day.

Sterling was holding relatively steady following the release of jobs and earnings data this morning.

 

“GBP/USD had a muted reaction to the solid jobs data from the UK today. Unemployment held steady at 3.9%, meeting forecasts, and average earnings excluding bonuses grew by 3.4%, meeting expectations, and the January report was revised up to 3.5%. Today’s figures were further proof that the UK jobs market is in good health,” said David Madden at CMC Markets.

READ: Gold as an investment

ING Economics reckons it is now unlikely the Bank of England will hike interest rates later this year.

“The key takeaway from the latest UK jobs report is the continued strength in wage growth,” ING said.

“At 3.4%, regular pay is growing close to its fastest rate since the financial crisis, and this comes as firms in certain sectors are finding it harder to attract/retain staff. Surveys indicate that skill shortages are particularly acute in the construction, IT and hospitality industries, and this has seen rates of pay outpace other sectors.

Rising wage growth should offer some extra impetus to consumer spending, for the time being, the forecasting house said, but ING is not expecting a substantial rebound in economic growth over the next few months.

Supermarket group J Sainsbury PLC (LON:SBRY) was the Footsie's weakest stock, sliding 1.2% to 231.2p after broker Bernstein cut its price target to 250p from 310p.

9.45am: Jobless rate unchanged at 3.9%

Leading shares gave up a small portion of its gains following the release of UK unemployment data.

The blue-chip index was up 22 points (0.3%) at 7,459.

The jobless rate in the three months to February was unchanged at 3.9%.

 

Pay, including bonuses, was up 3.5% year-on-year in the first quarter of 2019, unchanged from the November-February period.

Basic pay rose by 3.5%, down from 3.5% the month before.

9.15am: Blue-chips continue to make steady progress

The FTSE 100 continued to make sedate progress with a little bit of help from mining stocks.

The index of blue-chip shares was up 32 points (0.4%) at 7,469.

READ: Gold as an investment

Although not setting the pace, there were enough miners in positive territory to drive the top-shares index higher. Antofagasta PLC (LON:ANTO) was the sector's top performer, rising 1.5%.

Just seven Footsie stocks were in the red, among them oil titan BP PLC (LON:BP.), which was 0.1% lower at 569.5p after RBC Capital Markets cooled a little on the stock.

“The shares have performed well versus the sector in recent months, and we see less valuation upside now, and downgrade from Top Pick to Outperform,” RBC said, while leaving its 625p price target unchanged.

8.45am: Firm start for Footsie

The FTSE 100 nudged 17 points higher to 7,453.44, the modest gain reflecting the trajectories of Asia’s main stock markets.

There was radio silence on the two key issues directing market sentiment – Sino-American trade talks and Brexit – leaving traders to focus on the corporate and economic news of the day.

Investors will be provided with the first of three barometer measures later with UK unemployment numbers foreshadowing inflation and retail sales data on Wednesday and Thursday respectively.

Turning to the big company news of the day, Rio Tinto (LON:RIO) sailed on serenely – even after cutting iron ore production guidance. The shares opened flat to slightly higher.

Dropping down to the FTSE 250 but sticking with the extractive industries, gold digger Acacia Mining (LON:ACA) saw its shares bounce 4% after Monday’s sell-off, which was inspired by its rather insipid production update.

Buyers also came in for bombed out Indivior (LON:INDV), which nudged 3% higher. US legal worries have seen around 60% wiped from the drug maker’s value the past week.

Galliford Try (LON:GFD) saw its shares tumble 17% after the construction group sounded the earnings alarm.

Finally, recruiter Hays (LON:HAS) fell 5% after it succumbed to a bout of profit-taking following its quarterly update.

Proactive news headlines:

ECSC Group PLC (LON:ECSC), the provider of cyber security services, has bagged three managed services contract wins. Two of the contracts are with two household name retailers (with a combined revenue of more than £2.5bn) and the other is with a technology services provider.

Motif Bio PLC (LON:MTFB, NASDAQ:MTFB) has delivered new data on its lead drug, iclaprim, at the European Congress of Clinical Microbiology and Infectious Diseases, in Amsterdam. The presentation provided a drill-down into the results from the company’s REVIVE Phase III study of people with skin and skin structure infections.

Asiamet Resources Ltd. (LON:ARS) has reported its final assay results from additional infill drilling completed as part of the ongoing bankable feasibility study for the Beruang Kanan Main copper deposit in Central Kalimantan, Indonesia.

Customised electronic components maker discoverIE Group PLC (LON:DSCV) plans to raise £29mln by placing shares at 400p each and has made two bolt-on acquisitions.

BATM Advanced Communications Limited (LON:BVC) has been awarded the first joint contract for its cybersecurity and networking services by a new armed forced customer.

StatPro Group PLC (LON:SOG) has increased its financing facilities to around £49.1mln through an agreement with Wells Fargo Capital Finance.

Internet of Things enabler Telit Communications PLC (LON:TCM) said it returned to cash profit in the second half of 2018.

Autolus Therapeutics PLC (NASDAQ:AUTL), a portfolio company of biotech investor Arix Bioscience PLC (LON:ARIX), has raised more than expected from its recent public offering.

Braveheart Investment Group PLC (LON:BRH) has disposed of its fund management arm Viking. Payment is in stages, with £110,000 upfront and up to £170,500 to follow once a performance fee for an outstanding fund management contract is agreed. Loans of £650,000 payable to Viking by Braveheart have also been forgiven.

Thor Mining PLC (LON:THR) (ASX:THR) has commenced a drilling programme at the Bonya tungsten deposits adjacent to its Molyhil project in the Northern Territory of Australia.

Ariana Resources PLC (LON:AAU) has seen another strong quarter at its Kiziltepe gold mine in Turkey. Production at the mine eased to 7,296 ounces in the three months to January from 7,517oz in the preceding quarter, but this was still 17% ahead of annualised guidance said Ariana. Big Pic in November.

Bould Opportunities PLC (LON:BOU), the cash shell which this week changed its name from Photonstar LED Group, has confirmed it is considering other funding strategies so it can deliver on its new strategy approved at a recent general meeting. It added that any such fundraise, if concluded, may be at a material discount to the current market price.

Union Jack Oil PLC (LON:UJO) has exited the Holmwood project through a deal with UK Oil & Gas PLC (LON:UKOG), selling its 7.5% stake for £112,500. It is a cash deal, although as part of the transaction UJO has committed to investing the entirety of the proceeds into UKOG, subscribing for new shares.

Europa Oil & Gas Holdings PLC (LON:EOG) has also agreed to sell its 20% stake in the Holmwood project to UK Oil & Gas PLC (LON:UKOG) for £300,000, paid in cash.

Tlou Energy Ltd (LON:TLOU) has raised the equivalent of £1.6mln (or AUS$2.9mln) through a share sale in Botswana. Sophisticated investors in Botswana have subscribed for 29mln new Tlou shares at the equivalent price of 5.5p (or 10 Australian cents) – specifically, the investment comes from a long-term existing shareholder as well as a new Botswana based fund manager.

Caledonia Mining Corporation PLC (LON:CMCL)(TSE:CAL) produced 11,948 ounces from the Blanket mine in Zimbabwe during the quarter ended 31 March. The company maintains its 2019 full year production guidance of between 53,000 ounces and 56,000 ounces, and is still on track with progress towards its target of 80,000 ounces by 2022.

W Resources PLC (LON:WRES) has commenced the commissioning of the jig and mill plant at its La Parrilla tungsten project in Spain.

Highlands Natural Resources PLC (LON:HNR) has announced the appointment of an experienced corporate finance adviser, Nick Tulloch as its finance director and company secretary.

Silence Therapeutics PLC (LON:SLN) has appointed industry veteran Giles Campion as head of research and development and as the company’s chief medical officer. He occupied the same roles at Prosensa, which was acquired by Biomarin in 2015 for US$680mln and, in his 20-year career, he also held senior R&D roles at the Swiss giant Novartis. He holds a medical degree and doctorate from Bristol University.

Advanced Oncotherapy PLC (LON:AVO) has announced the appointment of Moataz Karmalawy as its chief commercial officer and president of its US division with immediate effect.  The group pointed out that the appointment is a non-board appointment.

6.45am: FTSE 100 seen pushing ahead

The FTSE 100 index is seen pushing ahead first thing this morning after a flat performance on Monday, tracking overnight gains from Asian markets amid US-China trade talks optimism.

Spread betting firm IG expects the blue-chip index to open around 16 points higher at 7,452 having ended 0.2 points lower on Monday.

Overnight on Wall Street, the Dow Jones Industrials Average closed well off earlier lows, but still lost 27 points, or 0.1% at 26,384 impacted by some underwhelming earnings news from US banks.

However in Asia today, Japan’s Nikkei 225 index managed to gain 0.3% and Hong Kong’s Hang Seng index added 0.6% as worries over the health of the global economy continued to ease helped by hopes for the key trade negotiations between China and the US.

On currency markets, sterling was slightly easier against the US dollar and the euro as traders continue to await the next twists in the Brexit saga and eyed the first of this week’s batch of key UK data.

Ahead of inflation numbers on Wednesday and retail sales on Thursday, the latest UK jobs data could see the unemployment rate tick higher after dipping to new historical lows below 3.9% last month, although more focus is likely to be on the rate of wage growth which the previous month stood at 3.4%.

Rio Tinto cuts production guidance

On the corporate front, a first-quarter production update from mining blue-chip Rio Tinto PLC (LON:RIO), released overnight in Australia, saw the FTSE 100-listed firm cut its 2019 iron ore production guidance due to the impact from a tropical cyclone that crashed into Western Australia’s coast and affected its operations at Pilbara.

The mining giant said iron ore shipments are now likely to be 333mln to 343mln metric tonnes and cautioned that a recovery in the second quarter remained subject to weather conditions.

Corporate news Easter bunny delivers to Hays

On the second line, Hays PLC’s (LON:HAY) third-quarter results will benefit from an extra trading day due to a later Easter this year.

With its interims in February, the recruitment firm said Easter will fall in its fiscal fourth quarter, which will give net fees a 1% boost in the third quarter.

However, conversely, it will have a negative 1% impact in the final three months of the year.

The group also warned that movements in sterling, impacted by Brexit uncertainty, have carved £2bn off operating profit since it reported its second-quarter update in January.

Plenty to talk about in JD’s results

JD Sports Fashion PLC (LON:JD.) has been one of the few bricks-and-mortar retailers managing to shrug off slow trading on UK high streets, so investors will be hoping for more of the same from Tuesday’s full-year results.

The FTSE 250-listed firm recently bought struggling rival Footasylum PLC (LON:FOOT) on the cheap and the market will be also interested to hear what management’s plans are for that business.

Perhaps JD’s biggest potential is abroad though, having completed a £400mln deal for US peer Finish Line last summer.

Significant announcements expected on Tuesday:

Trading updates: Rio Tinto PLC (LON:RIO), Hays PLC (LON:HAS), Ashmore PLC (LON:ASHM)

Finals: JD Sports Fashion PLC (LON:JD.), Card Factory PLC (LON:CARD), Telit Communications PLC (LON:TCM), Parity PLC (LON:PTY), Flowtech Fluidpower PLC (LON:FLO)

Economic data: UK jobs, average earnings; US retail sales; US industrial, manufacturing production; US NAHB housing market

Around the markets:

  • Sterling: US$1.3088, down 0.1%
  • Gold: US$1,193.71 an ounce, down 0.1%
  • Brent crude: US$70.99 a barrel, down 0.1%

City Headlines:

  • Rio Tinto cuts 2019 iron ore guidance after cyclone hits first-quarter shipments - Reuters
  • Edward Bramson, the activist investor targeting Barclays, has got the duration of his financing extended from Bank of America that helped him build his stake - Financial Times
  • Fashion chain Monsoon Accessorize has joined other struggling high street retailers to close stores and seek rent reductions in a bid to mend its finances – The Guardian
  • Sports Direct is to close a warehouse in Wigan, Greater Manchester, with the loss of 300 jobs - The Guardian
  • Getlink, the operator of the Channel tunnel, has shrugged off pre-Brexit jitters and a work-to-rule by French customs officers to record its best month for lorries travelling on Le Shuttle - The Times
  • Legal & General Investment Management voted against a record number of companies last year, taking aim at firms over sky-high pay, incompetent auditors and a lack of women in the boardroom - Daily Mail
  • Goldman Sachs has delayed an eagerly anticipated strategic update after revealing 21% decline in net earnings in the quarter - Financial Times
  • Best Buy’s chief executive Hubert Joly is stepping down after a near seven-year run - Financial Times
  • German prosecutors have charged former Volkswagen boss Martin Winterkorn with fraud and other criminal offences alongside four others, over their alleged role in the diesel emissions scandal - Financial Times
  • Ineos, the petrochemicals giant run by Britain's richest man Jim Ratcliffe, has warned the Government it could ditch plans for fracking mining in England - Daily Mail
  • RSM, the auditors of Tanfield, has been sanctioned and fined by the Financial Reporting Council, more than a decade after the electric vehicle maker’s shares collapsed amid allegations of incompetence and malpractice - The Times
  • Citigroup has warned that the election of Jeremy Corbyn as prime minister would be just as bad for UK banks as a no-deal Brexit - The Daily Telegraph
  • The UK economy lost momentum in the first quarter of the year, according to a new early warning system using “big data” - Financial Times
  • World trade volumes slumped 1.8% in the three months to January compared to the preceding three months, the biggest collapse since the financial crisis, according to new figures from the Dutch government – Daily Telegraph
  • The UK has reclaimed the top spot in an EY survey that ranks how attractive countries are as investment destinations over the coming year, despite Brexit uncertainty - The Daily Telegraph

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