London close
The top-share index was back on the slide today ahead of the weekend referendum in Greece and a shake-out overnight in China.
The FTSE 100 closed at 6,586, down 45 points on the day and 168 points on the week.
The retreat came after the Shanghai Composite posted its third consecutive week of losses, and registered the deepest three-week fall in 22 years.
China’s main index fell 127 points to 3,786 despite government attempts to ease investor sentiment meaning about US$2.8trn wiped off the Composite in three weeks.
Not surprisingly, Fidelity China Special Situations (LON:FCSS), down 3.4%, was one of the bigger fallers among FTSE 350 stocks.
Investors were also happy to take money off the table in the oil sector, where Hunting (LON:HTG), Tullow Oil (LON:TLW) and Premier Oil (LON:PMO) all fell by more than 3%.
It wasn’t all doom and gloom, however, as Ashtead (LON:AHT) led the FTSE 100 risers, climbing 1.4% to 1,074p.
Shares were back on the up after falling yesterday following a note from Merrill Lynch which suggested that United Rentals (Ashtead’s main competitor in the US) would likely have to cut capital spending in reaction to the strong dollar and its impact in US manufacturing.
Away from the index, Optimal Payments (LON:OPAY) revealed trading to end-June remained strong ahead of its move to London's main market and the FTSE 250. Shares jumped 15% to 251.25p.
In small cap news, troubled software group Ubisense (LON:UBI) issued another profit warning after more contract delays in its solutions arm. Shares lost 11% to 98p.
Meanwhile, secure payments expert Eckoh’s (LON:ECK) proposed £88mln takeover of customer service provider Netcall (LON:NET) has fallen through. Netcall’s shares dropped almost 9% to 50.25p.
Conversely, Phorm (LON:PHRM), the targeted Internet advertising firm, rose almost 30% to 2.75p as investors hailed second quarter results, which showed higher revenues in Russia.
The company, which previously attracted criticism in the UK from privacy advocates, seems to have found acceptance in the US and Russian markets for its advertising platform.
Plant Impact (LON:PIM), the crop productivity firm had a growth spurt of its own after announcing the launch of BANZAI, a new product that improves cocoa yields under stressful growing conditions. The product was developed in conjunction with Arysta LifeScience.
Shares rose 9.4%.
Lunchtime Report
London’s blue chip stocks were on the way down again today as investors worried were quick to de-risk ahead of the Greece referendum and big overnight losses in China.
The Shanghai Composite posted its third consecutive week of losses, and registered the deepest three-week fall in 22 years.
China’s main index fell 127 points to 3,786 despite government attempts to ease investor sentiment meaning about US$2.8trn wiped off the Composite in three weeks.
Bernard Aw at IG said: “Besides a slew of official initiatives, including rate cuts and loosening of margin trading rules, the Chinese government has been buying into A-Share this week, in a bid to stabilise the domestic markets.
He said, however, that steps to shore up the equity markets appeared to have done little to stem the bearish tide.
At the heart of the recent sell-off is deleveraging.
Since much of the China bull-run was driven by a surge in margin trading, the unwinding of margin loans saw the unravelling of the bull market.
This, Aw said, is why the government eased margin rules late Wednesday, allowing brokers to ‘reasonably’ rollover margin debts.
However, “For now” Aw said “the mood is verging on panic.”
As a result of the worrying events in China, miners led the way lower on the FTSE 100.
Anglo American (LON:AAL) and BHP Billiton (LON:BLT) were the biggest fallers, easing 2.5% to 895p and 1,241p respectively, while Rio Tinto (LON:RIO), down 2% to 2,580p, was also languishing near the bottom of the index.
Unsurprisingly then, the FTSE 100 was 25 points lower at lunch to 6,604 as news from China, coupled with uncertainty, as Greek citizens get ready for a referendum, hurt the index.
The vote, which takes place on Sunday, will decide on whether to accept bailout terms and is too close to call according to reports.
It wasn’t all doom and gloom however as Ashtead (LON:AHT) led the risers, climbing 1.4% to 1,074p.
Shares were back on the up after falling yesterday following a note from Merrill Lynch which suggested that United Rentals (Ashtead’s main competitor in the US) would likely have to cut capital spending in reaction to the strong dollar and its impact in US manufacturing.
Away from the index, Optimal Payments (LON:OPAY) revealed trading to end June remained strong as it continues to head to London's main market and FTSE 250. Shares jumped 16% to 254p.
In small cap news, troubled software group Ubisense (LON:UBI) issued another profit warning after more contract delays in its solutions arm. Shares lost 11% to 98p.
Meanwhile, Secure payments expert Eckoh’s (LON:ECK) proposed £88mln takeover of customer service provider Netcall (LON:NET) has fallen through.
Shares in Eckoh only lost 1.8% on the news to 39p, however, Netcall’s shares dropped almost 10% to 49p.
Conversely, Phorm Corp (LON:PHRM), the global Internet technology firm, rose over 13% to 2.4p as investors hailed second quarter results, which showed higher revenues in Russia.
The company, which previously attracted criticism in the UK from privacy advocates, seems to have found acceptance in the US and Russia markets for its Internet ad-targeting platform.
Most followed
The US is on holiday today, preparing for the fireworks and brouhaha that always accompanies its Independence Day celebrations.
There are expected to be a few fireworks in Greece over the weekend too, albeit of the figurative kind. The outcome of the nation’s referendum on whether it should accept the EU’s bailout terms remains too close to call.
Since the referendum was announced, things have moved on and, as many pundits have observed, the Greeks will probably be voting on a set of a set of proposals that are no longer on the table.
German chancellor Angela Merkel has said there will be no further debt negotiations with Greece until the outcome of the referendum is known, but the International Monetary Fund has muddied the waters somewhat by saying that Greece needs debt relief of around €50bn - €60bn; had it made this pronouncement earlier, debt negotiations could have taken a very different course.
Meanwhile, in China, the securities regulator has launched an investigation into suspected stock market manipulation.
The regulator is investigating whether parties have been mis-selling financial products, the state news agency Xinhua reported.
It is almost as if China is following the blueprint for Western capitalism a little too closely.
Corporate news flow in London is on the light side, leaving the field clear for some or the smaller companies to grab a bit of attention.
When a quarterly report on iron pellet production is one of the most heavily viewed stock market news items, you know it is a slow news day.
Having said that, iron ore producer Ferrexpo (LON:FXPO) did enjoy a record month, with the output of premium 65% Fe pellets reaching 89% of volumes.
A little bit more glamorous is Golden Saint’s (LON:GSR) quarterly operational update, where the focus is on a girl’s best friend: shoes.
No, make that diamonds.
The company revealed that in June it recovered the following diamonds: one 2.25 carat white diamond; one 2.62 carat white diamond; one 4.41 carat diamond; one 3.12 carat white diamond; eighty-nine carats of small diamonds under 0.5 carat.
To make that news even more interesting, you can try singing it to the tune of “Twelve Days of Christmas”.
The company has the shareholder perk to top all shareholder perks, which is the chance to buy diamonds from the company at a discount through its Diamond Club.
The company said its Diamond Club event in Perth – that’s the one in Western Australia, rather than the one in Scotland – generated A$32,600 in confirmed sales, with several expressions of interest in purchase still being pursued.
London Open
London’s blue chip stocks opened pretty flat this morning as the much-anticipated Greece referendum takes place this weekend.
With US markets shut today for Independence Day, Greece is still very much the focus following Tuesday's missed IMF payment.
The vote, which takes place on Sunday, will decide on whether to accept bailout terms and is too close to call according to reports.
Stan Shamu at IG said: “In a nutshell, both the yes and no vote seem to bear significant risks for global markets.
“A yes vote risks seeing Greece plunge into fresh political chaos. Even if we get a yes vote, this means the country must go back to the negotiation table and try to knock something together again.”
Meanwhile, Asian markets saw red overnight with the Shanghai Composite Index in China falling 127 points to 3,786 despite Government attempts to ease investor sentiment.
The fall means the Shanghai Composite is heading for its biggest three week drop since 1992 with about US$2.8trn wiped off the index over the period.
Meanwhile in the UK, the FTSE 100 was 8 points lower to 6,622 as investors continue to flee risk ahead of the Greece referendum.
Leading the way higher was BP (LON:BP. as uncertainty was removed as it reached a £12bn settlement over the disastrous 2010 Gulf of Mexico oil spill.
The agreed sum, to be spread over 18 years, is with the US Department of Justice and is reportedly the largest amount paid by a single company in US history.
The oil giant’s shares were near the top of the index today, climbing 1.2% to 443p.
Meanwhile, Royal Bank of Scotland (LON:RBS) was a big faller after reports surfaced that the bank is facing a US$13bn claim for its actions before the 2008 financial crisis. Shares dropped 1.4% to 361p.
Elsewhere, Optimal Payments (LON:OPAY) revealed trading to end June remained strong as it continues to head to London's main market and FTSE 250. Shares jumped 10% to 241p.
In small cap news, Provexis (LON:PXS) revealed it has raised £280,000 of new capital through crowd funding.
The AIM quoted group sold 62.2mln new shares via PrimaryBid.com, priced at 0.45p each, a 22% discount to Thursday’s closing price. Shares eased 14.5% on the news to 0.5p.
Elsewhere, troubled software group Ubisense (LON:UBI) issued another profit warning after more contract delays in its solutions arm. Shares lost 13% to 96p.
London Preview
FTSE 100 is called to join other global indices and go lower on Friday as investors continue to flee risk.
The UK benchmark kept its head above water on Thursday , bolstered by a BP (LON:BP.) share rise, and closed up 21 at 6,630, but today financial spread betters are calling it to open around four points lower, after Asian markets saw red overnight.
The Shanghai Composite Index in China fell 127 points to 3,786 despite Government attempts to ease investor sentiment and Japan's Nikkei 225 lost 35 at 20,488.
In the US, where markets are closed today, ahead of July 4 tomorrow, the Dow Jones closed down 28 at 17,750 as investors were non-plussed, it seemed, by the non-farm payrolls for June.
Non-farm payroll figures, which show the number of jobs created in a month, showed 223,000 jobs were created in June, 10,000 shy of analysts’ predictions.
Economists suggested June’s number may persuade the Fed to put off a hike until the end of the year.
Greece is still very much the word and the focus turns now to a referendum on Sunday following Tuesday's missed IMF payment. The vote on whether to accept bailout terms is too close to call.
Bernard Aw at IG said: "While Greek PM Tsipras is advocating a ‘no’ vote, he has stated that he will respect the wishes of the people if the outcome is a ‘yes’, while his finance chief Yanis Varoufakis said he will resign if the public does not side with them.
"Grexit remains a real possibility and, with several commercial debt repayments coming up over the next week or so, a clear Greek default (instead of being ‘in arrears’) is on the horizon."