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FTSE 100 closes below its opening benchmark as trade war concerns cloud market sentiment

The UK blue-chip index ended 7.78 points lower at 7,265.98, just off the day's worst level of 7,263.80 after a topsy-turvey session which saw it hit a session high of 7,314.85 early on
London bus
Traders might as well have extended the long bank holiday weekend after a dull session
  • FTSE 100 closes nearly 8 points lower

  • Trade war worries drag

  • Pound holding up well

 

5.30pm: The FTSE 100 loses earlier gains

The FTSE 100 closed lower on Tuesday, falling back below the 7,300-point benchmark, unable to hold early session gains above that level as Wall Street's early promise started to fade.

The UK blue-chip index ended down 7.78 points at 7,265.98, just off the day's worst level of 7,263.80 after a topsy-turvey session which saw it hit a session high of 7,314.85 early on.

Neil Wilson, chief market analyst for Markets.com commented: “US equity markets retuned from the Memorial Day holiday on the up, although trade war worries are the main drag and continue to rein in animal spirits, capping the upside. “

But, he added: “It’s been a mixed session for European equities with a fair bit of red and the odd spot of green after an optimistic open fizzled. US-China trade worries aren’t going away, but we have some more upbeat noises on the possibility of a US-Japan deal.  News here, rumours there – not a lot for markets to really hang their hats on right now.”

3.30pm: The FTSE 100 back above 7,300

It has been a mixed session for European equities today but London looks like it might finish in credit.

Entering the last hour of trading, the FTSE 100 was up 23 points (0.3%) at 7,301.

“Italian assets are under pressure a touch with markets eyeing heightened risk of a prolonged and damaging confrontation between the EU and Rome following the success of the League in the European elections,” noted Neil Wilson of markets.com.

“Salvini’s talk of a ‘fiscal shock’ is the sort of rhetoric that gets investors worried, even if fiscal loosening may be exactly what Europe needs,” he added.

In the UK, the political focus is more on the bunfight to become the next Conservative Party leader.

“The pound was stubborn in its resistance to the political news dump of the last few days, failing to react to either the Brexit Party victory in the European elections, or the various Tories crawling out of the woodwork to throw their name in the ring to be the party’s next leader. Instead it trickled 0.1% lower against both the dollar and the euro, exhausted from a month of near-inescapable losses, and without a clear path forwards until, arguably, the Tory leadership field starts to narrow down,” suggested Connor Campbell of Spreadex.

3.00pm: The Footsie's gains are pared despite strong start on Wall Street

US indices got off to a very healthy start, exceeding expectations.

The Dow Jones industrial average was 113 points (0.4%) to the good at 25,699 and the S&P 500 was 13 points (0.5%) higher at 2,839.

Back in Blighty, the FTSE 100 was up 15 points (0.2%) at 7,293, with its relatively anaemic performance down in part to sterling showing a small gain today against the US dollar.

Proton Power Systems Plc (LON:PPS) remained one of the day's best performers, up 22%, after the delivery of a stack manufacturing robot that will increase the fuel cell developer and producer's output.

Another minnow lighting it up was Integumen PLC (LON:SKIN), the company behind the Labskin technology.

The shares rose 18% after the company revealed it had landed three contracts for its new product worth £290,000.

2,15pm: Change of heart on futures market over US benchmarks lifts the Footsie

With US benchmarks now expected to open modestly higher, the Footsie has perked up.

Spread betting quotes indicate the Dow Jones industrial average will open 46 points higher at 25,632 while the broader-based S&P 500 is tipped to start just over 4 points to the good at 2,830.5.

In the UK, the FTSE 100 was up 34 points (0.5%) at 7,312, despite sterling being up a smidgen against the US dollar.

12.45pm: US stocks set for a quiet return from the long weekend

Expectations of a soft opening on Wall Street have contributed to a feeling of ennui in London.

The FTSE 100 index was up just 9 points (0.1%) at 7,286 and, but for the likes of miners such as Rio Tinto PLC (LON:RIO), Fresnillo plc (LON:FRES) and Antofagasta PLC (LON:ANTO) – all up 2% or more, the index would probably be in deficit.

“As Wall Street readies itself a return to work after the long weekend break, index futures are suggesting there will be little change seen from Friday at the opening bell,” reported James Hughes of Axi Trader.

“Markets had found some limited support off the back of positive sentiment surrounding Donald Trump’s visit to Japan, but with no Chinese trade deal forthcoming – and still likely a while off – there’s little worth cheering right now,” he added.

Axi Trader is expecting the Dow to open 11 points lower and the S&P 500 down 2 points.

On a thin day for news from the blue-chips, Bunzl PLC (LON:BNZL) hogged a bit of the limelight with the announcement of its new chairman designate.

The next man in the hot seat is set to be Peter Ventress when current Bunzl chairman Philip Rogerson steps down next year.

Ventress is already chairman of Galliford Try so he certainly knows how to sit in a chair – or two.

Bunzl shares were up 0.3% at 2,096p.

11.30am: Blue-chips index makes it back into positive territory

London’s leading shares have been on a slow-motion switchback ride this morning.

The FTSE 100 briefly slipped into the red as sterling rallied but was back in positive territory as the pound’s revival fizzled out. The index was up 7 points (0.1%) at 7,285; sterling was down about one-sixth of a cent at US$1.2664.

“The pound seems desperate to wrap up an utterly exhausting May in the quietest way it can, despite the political whirlwind either side of the weekend – a whirlwind that is going to stretch well into June as the Tories try and pick a new leader. Against both the dollar and euro sterling fell 0.1%, keeping it near, if not quite at, the 4-month-plus lows struck at the end of last week,” commented Connor Campbell at Spreadex.

NMC Health plc (LON:NMC) was probably the difference between the Footsie being in positive territory and it being in the red.

The shares rose 3.4% to 2,521p after the Middle East-focused private healthcare operator upgraded its revenue guidance for the current year to reflect the impact of its NMC KSA joint venture.

Housebuilders were mixed, despite UK Finance surprising the market with news that mortgage approvals for house purchases rose markedly in April to the highest level since February 2017.

Mortgage approvals totalled 42,989 in April, up from 40,564 in March.

“April’s marked rise in mortgage approvals suggests that housing market activity may well have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March. It may very well also be that the housing market has benefited from recent improved consumer purchasing power and robust employment growth,” speculated Howard Archer, the chief economic adviser to the EY ITEM Club.

 

 

 

10.30am: Sterling's rally takes the wind out of the sails of London's blue-chips

The FTSE 100 has lurched into the red after sterling rallied on foreign exchange markets.

London’s index of heavyweight companies – many of which are big dollar earners – was down 12 points (0.2%) at 7,265.

On the foreign exchange markets, sterling has more or less wiped out today’s losses against the greenback.

On the company news front, chain and gears maker Renold PLC (LON:RNO) shifted 10% higher to 32p after it revealed growth in its core chain division boosted operating profits.

READ Renold shifts up as chain division contributes to surge in operating profits

Going the other way was artificial intelligence-driven advertising analytics outfit Albert Technologies PLC (LON:ALB) after a trading update.

Market makers did not need the assistance of a trading algorithm to mark the shares down 43% as the company issued a profit warning.

Contracts are taking longer to land, as a result of which it does not expect to hit its target of doubling revenues in 2019 though there should still be a significant improvement over 2018's turnover of US$4.6mln.

9.30am: Steady as she goes as the Footsie glides above 7,300

UK blue-chips extended their initial gains as pundits got to work reading the tea leaves after the European elections.

The FTSE 100 was up 24 points (0.3%) at 7,301, helped by solid demand for mining and retail stocks.

According to Daiwa Capital Markets, “a broadly positive day for European equities yesterday as the results from the European Parliament elections provided no major surprises – with, for example, the nationalist parties overall performing no better than had been expected”.

Marshall Gittler at ACLS Global noted that “In the EU election in Britain, the ‘Remain’ and the ‘Leave’ sides both did well, with the middle-of-the-road people – what could be considered the ‘soft Leave’ supporters – losing ground.”

“According to the betting site Oddschecker (https://www.oddschecker.com/politics/british-politics), the appalling Boris Johnson is in the lead to become the next Prime Minister, although his lead has diminished somewhat in recent days. There’s no clear trend to his opponents, however. Soft-Brexit advocate Michael Gove and hardliner Dominic Raab are basically tied,” Gittler added.

On the equities scene, there is precious little news flow from the big-caps to get excited about but the mid-cap FTSE 250 – up 37 points (0.2%) at 19,165 – has come up trumps with strong moves from Amigo and Galliford Try.

Consumer credit specialist Amigo Holdings PLC (LON:AMGO) was 6.3% higher after its full-year results revealed a sharp increase in profit before tax to £111.0mln from £66.1mln the year before,

Housebuilding and regeneration specialist Galliford Try plc (LON:GFRD) climbed 5.6% to 568.5p after it confirmed media speculation that it had knocked back a bid approach from Bovis Home PLC (LON:BVS).

Bovis shares were up a penny at 995.5p.

8.45am: Subdued but positive return post-bank holiday

The FTSE 100 opened in positive territory – but only just – with a rise of 9 points to 7,286.69.

The index of blue-chips took its cue from Asia’s main markets, essentially ignoring the Brexit uncertainty caused by the European elections and the Tory leadership race.

The prospect of a no-deal departure from the EU kept the pound under the cosh - and below US$1.27 - but provided some momentum to the businesses that earn most of their income overseas.

Feeling the foreign exchange rate benefits most were the miners, with Anglo American (LON:AAL) leading the pack higher with a rise of 2.9%. Not far behind were Antofagasta (LON:ANTO), up 2%, and BHP Billition (LON:BLT), ahead 1.9%.

In among them was Marks & Spencer (LON:MKS), which bounced 2.2% higher after a sell-off in the wake of the retailer’s recent cash call.

Among the mid-caps, Galiford Try (LON:GFD) advanced 6% after it was revealed the construction firm had rebuffed an approach from rival Bovis Homes (LON:BVS) for its housebuilding business.

Falling 80% was Witan Investment Trust (LON:WTAN), but for a purely technical factor - this being its recently-announced share split coming into force. Holders will now own five shares for every one they had prior to change. Actions such as splits are designed to aid liquidity (the increased buying and selling of stock).

Proactive News headlines:

The commercial traction is building under Integumen PLC’s (LON:SKIN) Labskin AI, with the company landing three new contracts worth £290,000 in total. To accommodate the new business announced on Tuesday, and the pipeline of potential orders, Integumen is increasing its laboratory capacity by 50%.

Berkeley Energia Ltd (LON:BKY)(ASX:BKY) has told the Australia Securities Exchange it knows of no reason why its shares rose significantly in trading on 28th May. The company did make reference in its response to the query from the Securities Exchange to recent municipal elections in Retortillo, Spain, where the People's Party now hold four of the five council seats.

Silence Therapeutics PLC (LON:SLN) has been given access to part of a genetic database as it bids to find treatments for rare diseases and ailments. Genomics England has whole sequencing data on 100,000 genomes.

Sativa Investments PLC (NEX:SATI) has inked a commercial offtake agreement with Portuguese cannabis oil supplier, MeridianTulip – Empresa Medicinal Lda, for the UK manufacture of cannabidiol (CBD) products.

Frontier IP Group PLC’s (LON:FIPP) portfolio firm, Fieldwork Robotics, has completed initial field trials of its raspberry-picking robot system at a farm owned by leading soft-fruit grower Hall Hunter.

Highlands Natural Resources PLC (LON:HNR) has appointed chemist Stephen Goldman as a consultant to develop and file patents on behalf of the company’s cannabis subsidiary Zoetic.

Gaming platform group Nektan PLC (LON:NKTN) has expanded its partnership with BetVictor and will create a new set of branded slot games for the bookmaker.  The games are being developed in collaboration with ReelFeel Gaming and will be accessible via Nektan's Open RGS platform where BetVictor already has games integrated.

ADES International Holding PLC (LON:ADES) has highlighted a strong start to the year, with the oil and gas services business performing in line with expectations. "We delivered a strong operational performance in the first quarter of the year, significantly accelerating revenue growth which increased by almost threefold compared to Q1 2018,” said Dr Mohamed Farouk, ADES chief executive.

Bluejay Mining PLC (LON:JAY) has reached agreement with Rio Tinto Iron and Titanium Canada for the further analysis of ore from the Dundas project in Greenland. Rio Tinto and Bluejay are currently in talks about a commercial agreement relating to Dundas, although there is no guarantee at this stage that a deal will be done.

Canadian Overseas Petroleum Limited (LON:COPL) has topped up its working capital with a £497,000 share placing, as it continues to progress field development and financing planning for the OPL 226 project in Nigeria. The company will be issuing 497mln new shares priced at 0.1p each to investors via the placing arranged by Shard Capital.

Asiamet Resources Ltd (LON:ARS) is raising US$2mln via a placing of shares to key shareholder ASIPAC, a diversified investment group based in Melbourne. The shares are priced at 4.25p each.

AfriTin Mining Ltd (LON:ATM) has commenced a phased commissioning process for the pilot processing plant at its Uis tin mine in Namibia. At the same time, the mining contractor has been mobilised, water and power infrastructure has been put in place, and resource validation drilling has been completed.

Albert Technologies PLC’s (LON:ALB)  revenues have been on par with 2018 in the first four months of the current year. The AI-based advertising analytics group said while it was seeing its pipeline of opportunities grow, ramping up activity with larger clients was taking longer than expected.

OptiBiotix Health PLC (LON:OPTI) has appointed former DuPont executive Stephen Prescott as chief executive officer (CEO) of its wholly-owned subsidiary, ProBiotix Health.

ClearStar Inc (LON:CLSU) has appointed its interim finance chief, Jennifer Balleza, as its permanent chief financial officer with immediate effect.

Baker Steel Resources Trust Limited (LON:BSRT) announced, late on Friday, the appointment of David Staples as an independent non-executive director of the company, and said he has been elected chairman of its Audit Committee. The firm pointed out that Staples worked for PWC for 25 years, including 13 years as a partner.

ValiRx Plc (LON:VAL) said it is now in advanced discussions with European High Growth Opportunities SF to terminate the entire subscription agreement that was announced on 26 April 2019, following a delay to the issue of the Tranche 2 shares, and enter into a new convertible bond facility with the investor.

The company formerly known as SDX Energy Inc has confirmed the completion of its re-domicile transaction which saw an exchange of shares and a subtle renaming to SDX Energy PLC (LON:SDX).

Thor Mining PLC (LON:THR) (ASX:THR) said an updated presentation for shareholders has been uploaded to the company's website.

6.45am: FTSE 100 expected tp push higher

The FTSE 100 index is expected to push higher on Tuesday’s return from the UK late May Bank Holiday, extending Friday’s gains as a rally by Asian markets sees worries over Brexit, the EU election results and the Tory party leadership battle pushed aside - for now.

Spread betting firm CMC Markets UK expects the blue-chip index to open around 30 points higher at 7,307, having rallied by 46.69 points on Friday after a sharp drop in the previous session.

Wall Street was also closed on Monday for the Memorial Day holiday, with the Dow Jones industrial Average having ended Friday’s session 95 points higher at 25,585 as worries over President Trump’s ongoing trade war with China eased a touch.

But European markets were open and moved higher on Monday as the results from the European-wide elections provide no worse than feared, with the rise of populist parties at the expense of the traditional rulers as predicted, while news of a potential merger between Fiat Chrysler and Renault boosted auto stocks.

In Asia today, Shanghai’s composite index rose 1% amid hopes for further economic stimulus measures from Beijing after more weak Chinese manufacturing data. Meanwhile, Hong Kong’s Hang Seng index added 0.5%, and Japan’s Nikkei 225 index gained 0.4%.

David Madden. market analyst at CMC Markets UK, commented: “Overnight in Asia, stocks traded higher as dealers are hopeful the US and Japan will strike a trade deal. President Trump said there is a ‘tremendous’ trade imbalance between the two nations, and he is keen to rebalance the relationship. Yesterday, Mr Trump claimed the US are not ready to make a deal with China, and he reminded Beijing that tariffs could go up.”

On currency markets, sterling stayed cautious after the EU election results and as traders await the next twists in the Conservative Party’s Brexit saga following news on Friday of Theresa May’s departure as leader on June 7, though she will remain as prime minister until a new party boss is elected.

Will Amigo results prove friendly or friendless?

There is little news due on the corporate front this week, with the main interest on Tuesday being maiden finals from guaranteed loans provider Amigo Holdings PLC (LON:AMGO), which has had a somewhat chequered first year on the London Stock Exchange.

The firm, which floated last June at premium and gained promotion to the FTSE 250 index almost immediately given its £1.3bn initial valuation, has seen its share price go through the wringer since, currently trading at 213p well below the 275p IPO price.

A report by the Financial Conduct Authority (FCA) in March this year raised concerns over the effectiveness of affordability checks carried out by lenders, with the company also having seen significant negative commentary from the media after a series of articles in the Times that had questioned Amigo’s historical business practices.

This culminated in news at the end of April of the surprise resignation of the lender’s CEO, Glen Crawford, who is to step down in the summer to undergo medical treatment and will be replaced by Hamish Paton, the former CEO of rent-to-own firm Brighthouse, who had initially planned to join the company as its chief commercial officer in May.

However, analysts at Numis Securities still expect Amigo to report strong growth in customers (up 22.5%), and see loans and advances up 17.5%, income ahead 29.5%, and profit increasing by 33.5%.

Significant announcements expected on Tuesday:

Finals: Amigo Holdings PLC (LON:AMGO), Altitude Group plc (LON:ALT), Kainos Group PLC (LON:KNOS)

Interims: Oxford Biodynamics PLC (LON:OBD), AFI Development PLC (Q1) (LON:AFRB)

Economic data: UK BBA mortgage lending; US Case-Shiller house price index; US consumer confidence

Around the markets:

  • Sterling: US$1.2673, down 0.04%
  • Gold: US$1,283 an ounce, down 0.1%
  • Brent crude: US$70.12 barrel, up 0.01%

City Headlines:

  • European markets climbed across the board on Monday after the EU’s election results showed that pro-European parties have held their own against a rise in Euroscepticism - The Daily Telegraph
  • Fiat Chrysler has pitched a €32.6bn merger with Renault to create the world’s third-largest carmaker that will produce more than 8.7mln vehicles a year and aim for €5bn in annual savings – The Guardian
  • Astral Health, an arm of ECH Group, has formed a joint venture with a pharmacy wholesaler Miller & Miller in the hope of improving patient access to medical marijuana - The Daily Telegraph
  • AstraZeneca is preparing to unveil encouraging trial data from two of its most promising cancer drugs at the world’s biggest oncology conference next week - The Daily Telegraph
  • Rolls-Royce is seeking a start-up technology firm to help it build the world's first electric-powered passenger plane engines - Daily Mail
  • Premier Foods is thought to be planning to review options for its business, including ditching Mr Kipling, after coming under pressure from shareholders - Daily Express
  • Bombardier is set to win a £3.9bn contract to build trains for a new light railway in Egypt The Times
  • Steel makers are calling on the Government to cut power prices for the energy-intensive industry as 25,000 jobs hang in the balance with British Steel last week being placed in compulsory liquidation ­- The Daily Telegraph
  • ITV and the BBC are in a face-off over their joint streaming service BritBox, with commercial network ITV committing more fully than the publicly funded rival Financial times
  • Nasdaq has scrapped its £615mln bid to buy Norway’s main stock exchange after failing to win enough approval from shareholders in the Norwegian securities market - The Times
  • Sir Philip Green is to close Miss Selfridge’s flagship London store in July as staff fear for the future of the fashion brand - The Guardian
  • Garth Ritchie, the head of Deutsche Bank's investment banking arm, could quit over plans to shrink the business ­- Daily Mail
  • Revolut is the most complained-about small online bank, with 171 claims made against it between 2015 and 2018, Financial Ombudsman Service figures show - Daily Mail
  • Drax has joined hands with Norway’s state energy giant and National Grid to develop Britain's first 'carbon negative' power plant and carbon-free gas by the mid-2020s ­- The Daily Telegraph
  • Agustín Carstens, the former finance minister and head of Mexico’s central bank, has ruled himself out of Bank of England’s governor race, limiting the choice of the Treasury - The Guardian
  • The founder of Cobra beer, Karan Bilimoria, is being lined up to be the next president of the Confederation of British Industry - The Guardian

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