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FTSE 100 closes in red as China manufacturing data sends chill

The UK's premier share index shed over 22 points at 7,418, while the FTSE 250 shed over 86 points at 19,824
Cityscape
Foostsie closed around 22 points lower on Tuesday
  • FTSE 100 closes in red

  • Equities pressured by sterling rally, China data

  • US tracks lower

FTSE 100 closed in the red on Tuesday as Chinese manufacturing data disappointed traders and big-cap miners weighed.

The UK's premier share index shed over 22 points at 7,418, while the FTSE 250 shed over 86 points at 19,824.

On Wall Street, stocks are trending lower, with the Dow Jones Industrial Average off over 28 points at 26,525 at the time of writing,  while the S&P 500 and Nasdaq are also lower.

China’s official purchasing management index fell to 50.1 April while forecasts had been for no change from March’s 50.5 or, indeed, an increase.

"European stock markets are in the red heading into the close as under whelming data from China overnight prompted selling," said David Madden,  analyst at CMC Markets, heading

into the close.

"The announcements indicates that China’s economy might not be enjoying the bounce back that other reports have suggested. In London, the mining sector has been hit hard, as China is a major importer of minerals. Rio Tinto, BHP Billiton, and Glencore are all in the red this afternoon."

3.55pm: FTSE 100 pushed lower into late-afternoon amid sterling rally

Entering the last hour of trading, the FTSE 100 was suffering from renewed pressures and had sunk 33 points to 7,407.

The downward pull on equities was increased by a rebound in sterling, which had rallied 0.73% higher to US$1.303 against the dollar, just a squeak above that psychologically important US$1.3 level.

The pound was also up 0.47% at €1.1615 against the euro despite the currency bloc’s better-than -expected GDP reading for the first quarter, which showed year-on-year growth of 1.2% compared to expectations of 1.1% growth.

Connor Campbell, financial analyst at Spreadex, said “a confluence of factors” may be behind the pounds rise.

“Lingering disappointment on behalf of the greenback regarding the underlying softness of last Friday’s better than forecast US Q1 GDP figure may be playing its part, ditto the increased chatter of a rate cut from the Federal Reserve at some point later this year.”

“On the sterling side of things, reports of ‘a new optimism about a change in tone’ regarding the cross-party Brexit talks may be boosting the currency – though there are those, like Jeremy Hunt, who appear keen to throw a spanner in the works – as well as the fact it has, all told, had a terrible April”.

“Regardless the reason, the pound’s gains…combined with the worsening state of its miners, and a downturn from all its non-Standard Chartered banks, caused the FTSE to fall half a percent. That leaves it barely clinging on above 7400 and on track for its worst close for nearly a month”, he added.

3.00pm: Wall Street ticks lower shortly after open

The US markets moved lower shortly after the open on Tuesday as traders digested a mixed bag of economic and earnings news while also looking ahead to the Fed meeting on Wednesday.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.07% while the S&P 500 was down 0.3% and the Nasdaq was 0.6% lower.

One of the early risers, however, was General Electric Co (NYSE:GE), which surged 6.2% to US$10.3 after delivering first quarter profits and revenues that were ahead of expectations.

On the economic data front, the latest Chicago PMI, an measure of the US manufacturing sector, dropped to 52.6 in April from 58.7 in March, its lowest level since the start of 2017.

Shaily Mittal, senior economist at financial news group MNI, said that the decline had been the result of firms “cutting back on both production and employment against a backdrop of softer domestic demand and the global slowdown”.

The FTSE 100 followed US’s lead and sank 39 points lower to 7,401 in late-afternoon.

1.40pm: Mixed start predicted in the US

Wall Street is expected to open on a mixed footing on Tuesday, complementing a fairly diverse bag of news and earnings.

Analysts at Axitrader are predicting the Dow to open 11 points higher while the S&P 500 is expected to begin the trading day down 4 points.

The Chinese data shortfall will be making an appearance while traders will also be digesting the disappointing numbers from Google parent Alphabet Inc (NASDAQ:GOOG), which has already seen US$800mln wiped from its market value after reporting the figures after the close on Monday.

However, the earnings train continues to roll on, with McDonald’s Corp (NYSE:MCD) up 2.8% at US$202.6 in the pre-market after reporting better-than-expected results for its first quarter.

General Electric Co (NYSE:GE) is also expected to report earnings before the opening bell, while traders will be awaiting results from tech giant Apple Inc (NASDAQ:AAPL) and Cadbury owner Mondelez International Inc (NASDAQ:MDLZ), both of which are scheduled to report after the close.

James Hughes, chief market analyst at Axitrader, said that economic data would also be in focus ahead of the Fed’s interest rate decision on Wednesday, with Monday’s stagnant inflation numbers giving the central bank “a little more headroom when it comes to monetary policy” and that any suggestion of rate rises were likely to “give equities yet more support”.

Meanwhile, in London the FTSE 100 was still hovering in the red and was down 9 points at 7,431.

11.50am: FTSE 100 dragged down by miners and Whitbread into lunchtime

As lunchtime approached the FTSE 100 had barely moved from its initial sink into the red and was down around 6 points at 7,434.

Miners were a key weight on the index after disappointing economic data from China, the world’s largest iron ore and coal consumer, caused jitters among investors as the country’s manufacturing PMI fell to 50.1 from 50.5 month-on-month.

“The latest look at Chinese manufacturing came in worse than expected overnight, with both an official and a private gauge of activity disappointing and suggesting that optimism around the recovery last month may have been premature”, said David Cheetham, chief market analyst at spread-better XTB.

“Aided by substantial stimulus measures, March saw the manufacturing sector return to growth after 5 consecutive months of contraction but even though the latest readings are once more above the 50 mark, and therefore in expansion territory, the levels of growth remain anaemic at best.”

In late-morning trading shares in blue-chip miner BHP Group PLC (LON:BHP) were down 1.1% at 1,809.8p while Rio Tinto PLC (LON:RIO) and Anglo American PLC (LON:AAL) sank 1.4% to 4,446p and 1.6%  to 1,980.4p respectively.

Glencore PLC (LON:GLEN), meanwhile, had a little extra pain after it cut its copper production target for the full-year after a drop in the first quarter, sending the shares tumbling 3.3% to 302.1p.

Elsewhere, Premier Inn operator Whitbread was also on the way down after its annual profits came in below forecast, with the shares sinking 3.5% to 4,587p in response.

The slumps offset a stronger performance from oil major BP PLC (LON:BP.), which was up 0.9% at 557.6p in late-morning after higher production helped it beat first quarter forecasts despite profits falling by nearly a third.

Standard Chartered PLC (LON:STAN) was also continuing its strong run after plans for a US$1bn share buyback sent shares 5% higher to 702.6p.

The currency markets were also causing issues for the FTSE 100 after sterling was given a much-needed boost after media reports that Brexit talks between teh Conservative government and opposition Labour party had improved.

Sterling was also helped by renewed pressure on the dollar after Larry Kudlow, the Director of the US's National Economic Council, once again talked up the chances of an interest rate cut ahead of the Federal Reserve's meeting on Wednesday.

The pound was up 0.43% at US$1.2991 agaisnt the dollar and 0.24% higher at €1.1589 against the euro.

10.40am: Sainsbury’s only ‘big four’ supermarket to see sales fall in last 12 weeks

FTSE 100 supermarket J Sainsbury PLC (LON:SBRY) was the only one among Britain’s ‘big four’ to see sales decline in the 12 weeks to 21 April, while all the major grocers continued to find themselves under pressure from the German discounters.

In the latest industry data from market research group Kantar, Sainsbury’s sales fell 1.2% in the period while fellow big four firms Tesco PLC (LON:TSCO), WM Morrison Supermarkets PLC (LON:MRW), and Walmart Inc (NYSE:WMT)-owned Asda reported rises of 1%, 0.6% and 0.3% respectively.

However, all of the major grocers continued to lose market share to discounters Aldi and Lidl, which reported sales rises of 11.6% and 8.6% respectively.

One saving grace for Sainsbury’s was that it reclaimed its second-place spot in terms of market share, having previously been overtaken by Asda in March.

Tesco was still the leading supermarket with 27.3% of market share, while Sainsbury’s, Asda and Morrisons were at 15.4%, 15.2% and 10.3% respectively.

All of the big four had lost share in the period while the German discounters had increased theirs to a combined 13.6% from 12.7% last year.

The decline in sales may make Sainsbury’s investors a little jittery ahead of its full year results tomorrow as the group attempts to re-orient its strategy following the blockage of its proposed merger with Asda by regulators last week.

In mid-morning trading, Sainsbury’s shares were down 0.6% at 221.1p, while Tesco was flat at 248.3p and Morrisons was up 1.3% at 219.6p.

The FTSE 100 was down 14 points at 7,426.

9.51am: UK consumer confidence stays flat in April

UK consumer confidence stayed flat in April, according to the latest data from market research group GfK.

The consumer confidence index stayed at -13 for the month, unchanged from March and February, however households appeared to have suffered a dip in optimism around their personal finances over the next 12 months, with the relevant index dropping to zero in April from 2 in the prior month.

Gfk client strategy director, Joe Staton, added that British consumers remained “unshaken” by the ongoing Brexit uncertainty and deadlock at Westminster, adding that a two point drop in the major purchases index to -1 from 1 in March suggested “more challenges in the near future at least for the retail sector”.

The index is closely monitored by the Bank of England, which is due to make its next interest rate decision on Thursday, as slowdowns in consumer confidence can often cause falls in retail sales and reverberate across the wider economy.

On the markets, the FTSE 100 had failed to pull any gains out of its flat start and was down 10 points at 7,429.

8.40am: Subdued start

The FTSE 100 opened the trading day less than 1 point lower at 7,440.61, with the drag on what was supposed to be a psotive start exerted by Asia, and in particular China, which issued another round of disappointing manufacturing data.

Stocks in the miners, which are effectively a proxy for the economic ups and downs of the world’s second-largest economy fell, with Glencore (LON:GLEN), off 2.4% and Rio Tinto (LON:RIO), down 1.2%.

Whitbread (LON:WTB) was sandwiched between the two diggers with a fall of 2.2% after it warned of weakness in the budget hotel market.

Enjoying its post-results day in the sun was Standard Chartered (LON:STAN). Shares in the London-listed, but Asia focused bank advanced 3.3% early as it used its quarterlies to punt its stock buyback programme.

Dropping down a division and there was no doubting the big news from the FTSE 250 – Sirius Minerals (LON:SXX) and its long awaited £2.9bn fundraiser.

The company, which is attempting to commercialise a huge potash project in North Yorkshire, lost almost a fifth of its value after it said it would be issuing £309mln of new shares as part of the process.

Proactive News headlines:

Sirius Minerals PLC (LON:SXX) has this morning launched a ‘markets-led’ Stage 2 project financing which aims to fund the Yorkshire mine development project to completion. The US$3.8bn financing will comprise a US$400mln equity raise, a US$644mln issue of convertible bonds, a US$500mln senior secured bond issue and a credit facility up to a maximum of US$2.5bn.

AFC Energy PLC (LON:AFC) has signed a deal with one of Europe’s largest manufacturers of electric vehicle (EV) charging points to create systems using AFC's fuel cell technology. It and Rolec Services hope to showcase the first demonstration product in the second half of the year.

Location verification specialist Location Sciences Group PLC (LON:LSAI) has partnered up with US group SITO Mobile Ltd (NASDAQ:SITO), which will become the first data supplier to use Location’s Verify platform.

MTI Wireless Edge Ltd (LON:MWE) has said it will deploy a tethered balloon system as part of a US$1.4mln deal for installation and integration support services.

Anglo African Oil & Gas PLC (LON:AAOG) told investors that it has received a letter formally offering a new licence to the company’s subsidiary Petro Kouiliou. The new licence will cover the producing Tilapia oil field.

C4X Discovery Holdings plc (LON:C4XD) confirmed it is in confidential discussions with “multiple” potential partners for a promising drug programme. Its NRF-2 activator that could help treat chronic obstructive pulmonary disease and pulmonary arterial hypertension as well as sickle cell disease.

Frontier IP Group Plc (LON:FIPP) has been selected as a partner in a major European project to boost research into the continent’s marine economy.

Diversified Gas & Oil PLC (LON:DGOC) is to carry out a share buyback programme over the next 12 months. The US-focused oil and gas group said the programme will allow it to buy a maximum of about 54.3mln shares while also maintaining its current dividend policy.

Australian gold giant Newcrest (ASX:NCM) has now begun work on the Havieron gold property owned Greatland Gold PLC (LON:GGP), after it signed a major earn-in deal earlier this year. Newcrest has the right to acquire up to a 70% interest in a 12 block area by spending up to US$65mln. Big Pic in March.

Chaarat Gold Holdings Ltd (LON:CGH) has appointed Darin Cooper as chief operating officer. Cooper has more than 30 years' experience in the metals and mining industry, most recently as head of mining at Fusion Capital, a Swiss investment firm.

European Metals Holdings Ltd. (LON:EMH) (ASX:EMH) ended the quarter to March with A$1.32mln cash in the bank. The company completed a significant amount of drilling on its Cinovec lithium project during the period.

KRM22 PLC (LON:KRM), the AIM-listed technology and software investment company focused on risk management for capital markets, has announces the appointment of Garry Jones as an independent non-executive director of the company. It noted that Jones has over 35 years' experience in financial services and has been CEO of three of the largest derivatives and OTC exchanges in Europe: BrokerTec, LIFFE and the London Metal Exchange. The group said Jones will replace David Ellis who is stepping down from the board with immediate effect to focus on other business commitments and a relocation to the United States.

discoverIE Group PLC (LON:DSCV) a leading international designer, manufacturer and supplier of customised electronics to industry, has announced the appointment of Clive Watson as a non-executive director with effect from 2 September 2019. It noted that Watson recently retired as group finance director of Spectris plc (LON:SPS), the FTSE 250 measurements and controls business.

Seeing Machines Limited (LON:SEE) said Tim Crane has resigned as a non-executive director of the company with effect from 30 April 2019 under the agreed term of appointment between Seeing Machines and Caterpillar Inc. The company pointed out that Crane will continue his relationship with Seeing Machines, becoming a member of the group's newly established Technical Advisory Council.

Sareum Holdings PLC (LON:SAR), the specialist small molecule drug development business, announced that its CEO, Dr Tim Mitchell, will give a company presentation at BioTrinity 2019 in London, which takes place from 30 April-1 May. The presentation, to be held today at 11:05am BST, will introduce Sareum and provide an overview of its lead programmes.

Ariana Resources PLC (LON:AAU), the exploration and development company with gold mining operations in Turkey, noted that, further to its announcement on 8 April 2019, its board will be hosting a shareholder update evening and presentation, followed by a Q&A session today, 30 April 2019, at 6:00 pm, at 1 America Square Conference Centre, 17 Crosswall Street, London EC3N 2LB.

Rose Petroleum PLC (LON:ROSE), the AIM-quoted natural resources business, announced that an updated version of its corporate presentation is now available on the company's website. https://rosepetroleum.com

Chagala Group Ltd (LON:CGLO) is to delist from the London stock exchange, citing demands on management time and the regulatory burden as the principle reasons.

6.45am: FTSE 100 seen ticking higher 

The FTSE 100 index is seen ticking higher on Tuesday, extending the modest gains made in the previous session after US blue-chips edged ahead overnight, although Asian markets were weaker after data showed Chinese manufacturing slowing.

Spread betting firm IG expects the blue-chip index to open around 6 points higher at 7,446 having added 12.5 points in a subdued session on Monday.

Overnight on Wall Street, the Dow Jones industrial Average closed just 11 points, or 0.04% higher at 26,554 as investors kept to the sidelines ahead of Wednesday’s US interest rate decision and with a deluge of company earnings due this week.

After-hours in the US, Google owner Alphabet Inc (NASDAQ:GOOGL) saw its shares drop after the tech giant’s first quarter sales disappointed.

In Asia today, news that both official and private manufacturing data showed a slowdown in the world’s second largest economy weighed on Chinese stocks, with Hong Kong’s Hang Seng down 0.5%, although Shanghai blue chips only lost 0.1% amid hopes for stimulus measures from Beijing. Japanese markers remained closed for the accession of the new emperor.

 On currency markets, the pound remained fairly flat against the US dollar and the euro as traders await the next twists in the Brexit saga as well the latest Bank of England interest rate decision due on Thursday.

Buy-backs sweeten StanChart Q1

On the corporate front, in early results released from Hong Kong, Standard Chartered PLC (LON:STAN) unveiled plans for an up to $1bn (£773.2mln) share buyback, its first such in at least 20 years, as it posted a 10% rise in first quarter profit, signalling the bank was seeing early success in its growth turnaround strategy.

The FTSE 100-listed lender said its pre-tax profit for rose to US$1.38bn in the January-March period, up from US$1.26bn a year earlier.

In addition to a US$900mln provision Standard Chartered made in 2018 for misconduct fines, it took a “further and final charge” of US$186mln in the first quarter of 2019.

Elsewhere, the UK energy sector’s first-quarter reporting season kicks off on Tuesday with numbers from BP PLC (LON:BP.), although the blue-chip oiler’s numbers will need to be mightily impressive to get investors any more excited, given that the shares have been particularly strong in recent weeks.

In a recent note, Deutsche Bank highlighted that BP’s first quarter volume growth should show some progress, helped by new project start-ups. But the German bank still expects the oil major to report a 1% decline in replacement cost pre-tax profit to US$4.178bn.

And Whitbread (LON:WTB) will announce its first annual results since selling its Costa Coffee chain to Coca-Cola for £3.9bn cash, which was announced last summer and completed in early January.

City analysts are, on average, forecasting revenue of £2.09bn, underlying profit before tax (PBT) of £477mln and EPS of 204.6p. A year ago, with Costa still included, the group reported underlying PBT of £591mln.

Significant events expected on Tuesday:

Trading update: BP PLC (Q1) (LON:BP.), Standard Chartered PLC (LON:STAN), Greene King PLC LON:GNK), Essentra PLC (LON:ESNT), St James’s Place Capital PLC (LON:SJT), Jupiter Fund Management PLC (LON:JUP), Weir PLC (LON:WEIR), Elementis PLC (LON:ELM), Glencore PLC (LON:GLEN), Hochschild Mining PLC (LON:HOCH), PPHE Hotel Group Ltd. (LON:PPH)

Finals: Whitbread plc (LON:WTB); Animalcare Group PLC (LON:ANCR), Atlas Mara Limited (LON:ATMA), Dillstone Group PLC (LON:DSG), Inspiration Healthcare Group PLC (LON:IHC), Proteome Sciences PLC (LON:PRM), Xeros Technology Group PLC (LON:XSG)

Interims: C4X Discovery Holdings plc (LON:C4XD), Image Scan Holdings Plc (LON:IGE)

Economic data: Nationwide UK house price index; UK consumer confidence; US pending home sales; US Case-Schiller home price index; US Chicago PMI

Around the markets:

  • Sterling: US$1.2939, up 0.1%
  • Gold: US$1,283.46 an ounce, up 0.2%
  • Brent crude: US$71.82 a barrel, down 0.1%

City Headlines:

  • Despite raking in sales worth £28.1billion during the first three months of 2019, shares in Google’s owner Alphabet slumped by more than 5% in after-hours trading – Daily Mail
  • British American Tobacco has been accused of shifting profits from developing countries to a UK subsidiary through “financial manoeuvring” and depriving them of hundreds of millions of dollars in tax – The Guardian
  • An influential advisory group Glass Lewis has recommended Metro Bank shareholders to vote against its founder Vernon Hill next month as the lender fights to restore its reputation in the wake of a major accounting blunder – Daily Telegraph
  • The AA's finance boss Martin Clarke has quit after five years so he can devote his time to anti-Brexit party Change UK – Daily Mail
  • Anadarko Petroleum is set to accept a $55bn acquisition offer from its US rival Occidental Petroleum over the previously agreed $50bn sale to oil major Chevron – Financial Times
  • Emirates, one of Boeing’s largest customers, has threatened to order aircraft from Airbus, amid crisis over the US plane maker’s 737 Max aircraft - Financial Times
  • Spotify has reached 100mln paying subscribers, in a landmark for the music streaming service – The Guardian
  • The future is looking worse for Deutsche Bank after the under-pressure German bank abandoned merger talks with rival Commerzbank, Goldman Sachs has warned – Daily Telegraph
  • In the latest twist in an EU antitrust investigation, Mastercard and Visa have both agreed to cut their fees on payments made with foreign-issued debit and credit cards in the European Union – Daily Mail
  • Car manufacturing in Britain declined by more than 14% in March, prompting the industry to call for political parties to agree a Brexit deal “urgently” - The Times
  • The Netherlands poached the top spot as the most attractive destination in Europe for foreign investment for the first time since 2015 after foreign direct investment into the UK slumped last year - The Daily Telegraph

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