London Close
London’s blue-chip stocks took a battering today as lower-than-expected US data put a spanner in the Federal Reserve’s decision to raise interest rates.
Connor Campbell at spread-betting firm Spreadex, said: “Whilst the headline figure, a non-farm payroll of 173k against the 215k expected, is at a glance a dovish number, the entire afternoon seems to have conspired against investors getting a clearer picture of whether a September rate-hike is on the cards or not.”
Though the non-farms missed expectations, there is a tendency for the August figure to be revised upwards in subsequent readings.
Indeed, both June and July were revised upwards, the former from 223k to 231k and the latter a big jump from 215k to 245k.
The news did little to excite investors, however. The Dow Jones opened almost 240 points lower at 16,138, while the tech heavy Nasdaq lost 45 points to head to 4,688 and the broader S&P500 index opened 25 points lower at 1,926.
Back on home soil, the FTSE 100 dropped more than 150 points, or 2.4%, to 6,042, dragged down by miners and oil stocks.
Mining stocks took the biggest hit, as all metal prices, except aluminium, fell.
Leading the way lower was Anglo American (LON:AAL), down 7.8% to 668p, followed by Glencore (LON:GLEN), which lost 6% to 123p and Antofagasta (LON:ANTO), which dropped 5.4% to 564p.
Away from the index it was a similar story, with Indian copper, aluminium and zinc miner Vedanta Resources (LON:VED) free-falling 12.4% to 511p.
Meanwhile, Brent crude fell 1.27% to US$50 while West Texas Intermediate (WTI) softened 1.3% to US$46.1. BP (LON:BP.) plummeted 5% to 334p while Shell (LON:RDSB) eased 3.3% to 1,611p.
On the corporate front, High Street bellwether Next (LON:NXT) suffered as the BDO High Street sales tracker survey for August showed the UK high street had its worst month since November 2008.
Poor weather was partly to blame, as British shoppers headed for warmer climates over the summer.
Just to add insult to injury, Broker Exane BNP Paribas cut its rating on the stock to ‘underperform’ from ‘neutral’. Shares lost 3% to 7,602p.
Elsewhere, 888 Holdings appears to have lost out in the takeover battle for Bwin.Party (LON:BP.Y) after a significantly higher bid from GVC Holdings (LON:GVC) was recommended.
The offer is 25p plus 0.231 GVC shares for each Bwin share, equating to just under 130p per share, valuing Bwin at £1.1bn.
Shares in GVC dropped 5.2% to 429p while Bwin lost 3.4% to 111p on the news. 888 Holdings nudged 0.5p higher to 162.5p.
In small caps, Goldplat (LON:GDP) said its core business remains “robust,” with sales expected to be around £4.2mln for the year, compared to £3.5mln in 2014, with pre-tax profit significantly ahead of market expectations. Shares jumped 9.7% higher to 2.5p.
Elsewhere, IS Solutions (LON:ISL) signed two new contracts with financial services firms, which are expected to be worth more than £4mln in revenue with over the lives of the contracts, and £350,000 per year after.
Sales in its Analytics range are “well ahead of management budget.” Shares rocketed 32% to 68p.
LONDON AFTERNOON
London’s blue chips fell further after a mixed US non-farm payrolls number.
FTSE 100 dropped 133 to 6,060 after the data showed 173,000 new US jobs were created in August.
That was about 50,000 below consensus forecasts, though unemployment fell to 5.1%.
Dennis de Jong, managing director at UFX.com, reckons it was enough to put off a rate rise this month.
"Global markets have been jittery all morning and weaker than expected non-farm payroll figures make it almost certain that a US interest rate rise now won’t be happening this month," he said.
Disappointing exports numbers from Germany also added to the market’s unease.
Here, company news was dominated by the seeming victory for GVC in the battle for online gaming group Bwin.party (LON:BP.Y).
Bwin.Party’s board has decided to switch its recommendation to a £1.1bn offer from Sportingbet owner GVC rather than the previously favoured 888 (LON:888) bid. The offer is worth around 130p per share. Bwin shares fell 1p to 114p, 888 though rose 2% to 165.5p.
A disappointing retail sales number hit shares in a number of the major high street chains.
August was the worst month for UK retailers since 2008 accountancy firm BDO reported, as poor weather sparked a rush for the sun from British shoppers. Retail sales fell by 4.3% on a year earlier, the sixth monthly fall this year.
High St bellwether Next (LON:NXT) was the worst performer on the FTSE 100, shedding more than 3% to 7,600p.
There were heavy falls also for electronics retailer Dixons Carphone (LON:DC.), down 13p at 418p, after department store John Lewis saw sales in this sector dive last week and fashion giant Burberry (LON:BRBY), which dropped 3% to 1,355p
Airlines, in contrast, are benefiting from the trend of people fleeing the UK weather.
Easyjet (LON:EZJ) raised its profit forecast yesterday and its share rose by slightly today to 1,763p, while British Airways’ owner IAG (LON:IAG) climbed 4p to 569p.
Among the small caps, IS Solutions (LON:ISL) rose 33% to 69.3p. The data analyser has signed two new contracts with financial services firm worth more than £4mln in revenue.
Antibody supplier Bioventix (LON:BVXP) rose 17% to 1,090p as it said its core business remains “robust,” with sales expected to be around £4.2mln for the year.
Coms (LON:COMS) rallied after early falls as it cautioned losses from getting rid of its telecommunications business will mean a substantial deficit in the first half of this year. Shares rose slightly to 0.58p.
LONDON LUNCHTIME
London’s blue chips were almost 100 points lower as investors waited nervously for the US non-farm payrolls number.
FTSE 100 dropped 93 to 6,100 ahead of the figures with disappointing exports numbers from Germany adding to the market’s unease.
Consensus forecasts are for the US economy to have created around 220,000 jobs in August, which may or may not be enough to prompt the US Federal Reserve to raise interest rates at its next interest rate meeting ion 16 September.
Connor Campbell at financial firm Spreadex said: “What was always going to be an important release has gained extra prominence in the last month; the Chinese market-mania has combined with intermittently impressive US figures to create an utterly baffling situation for investors in regards to trying to work out the Fed’s stance on a September rate hike.”
Here, company news was dominated by the seeming victory for GVC in the battle for online gaming group Bwin.party (LON:BP.Y).
Bwin.Party’s board has decided to switch its recommendation to a £1.1bn offer from Sportingbet owner GVC rather than the previously favoured 888 (LON:888) bid. The offer is worth around 130p per share.
Bwin shares fell 1p to 114p, 888 though rose 2% to 165.5p.
A disappointing retail sales number hit shares in a number of the major high street chains.
August was the worst month for UK retailers since 2008 accountancy firm BDO reported, as poor weather sparked a rush for the sun from British shoppers. Retail sales fell by 4.3% on a year earlier, the sixth monthly fall this year.
High St bellwether Next (LON:NXT) was the worst performer on the FTSE 100, shedding more than 3% to 7,600p.
There were heavy falls also for electronics retailer Dixons Carphone (LON:DC.), down 13p at 418p, after department store John Lewis saw sales in this sector dive last week and fashion giant Burberry (LON:BRBY), which dropped 3% to 1,355p
Airlines, in contrast, are benefiting from the trend of people fleeing the UK weather.
Easyjet (LON:EZJ) raised its profit forecast yesterday and its share rose by slightly today to 1,763p, while British Airways’ owner IAG (LON:IAG) climbed 4p to 569p.
Among the small caps, IS Solutions (LON:ISL) rose 33% to 69.3p. The data analyser has signed two new contracts with financial services firm worth more than £4mln in revenue.
Antibody supplier Bioventix (LON:BVXP) rose 17% to 1,090p as it said its core business remains “robust,” with sales expected to be around £4.2mln for the year.
Coms (LON:COMS) rallied after early falls as it cautioned losses from getting rid of its telecommunications business will mean a substantial deficit in the first half of this year. Shares rose slightly to 0.58p.
Plant Impact (LON:PIM) rose 10% to 56p. The agriculture firm said sales substantially increased last year and expects to report pre-tax profit ahead of market expectations.
LONDON OPEN
London’s blue chips were on the back foot again as Asian markets endured another tough session.
FTSE 100 shed 60 points to 6,133, after markets in Tokyo and Hong Kong fell sharply. China is closed for a four days of public holidays.
American markets were largely flat, though attention today will switch to the non-farm jobs figure for August due at 1.30pm UK time.
Consensus forecasts are for around 220,000 jobs to have been created.
The US Federal Reserve’s next interest rate meeting is on 16 September and a strong payrolls number may tip the central bank towards a rise in interest rates.
Craig Erlam, analyst at futures group OANDA, said: “It would appear we’re going to see risk aversion in the markets on Friday ahead of what is clearly a very important jobs report for the US, the final one before the September Fed meeting in under two weeks.
“This cautious approach prior to such a key release is quite common in the markets, especially when this release could determine whether we see a change in monetary policy, on this occasion the first rate hike in almost a decade.
Here, company news was dominated by the seeming victory for GVC in the battle for online gaming group Bwin.party (LON:BP.Y).
Bwin.Party’s board has decided to switch its recommendation to a £1.1bn offer from Sportingbet owner GVC rather than the previously favoured 888 (LON:888) bid. The offer is worth around 130p per share.
A disappointing retail sales number hit shares in a number of the major high street chains.
August was the worst month for UK retailers since 2008 accountancy firm BDO reported, as poor weather sparked a rush for the sun from British shoppers.Retail sales fell by 4.3% on a year earlier, the sixth monthly fall this year.
High St bellwether Next (LON:NXT) was the worst performer on the FTSE 100, shedding more than 3% to 7,600p while there were heavy falls also for electronics retailer Dixons Carphone (LON:DC.) and fashion giant Burberry (LON:BRBY).
Airlines, in contrast, are benefiting from the trend as people flee the UK weather.
Easyjet (LON:EZJ) raised its profit forecast yesterday and rose by 11p today to 1,773p, while British Airways’ owner IAG (LON:IAG) climbed 9p to 574p.
Among the small caps, IS Solutions (LON:ISL) rose 35%. The data analyser has signed two new contracts with financial services firm worth more than £4mln in revenue.
Antibody supplier Bioventix (LON:BVXP) rose 20% as it said its core business remains “robust,” with sales expected to be around £4.2mln for the year.
Coms (LON:COMS) fell 10% as it cautioned losses from getting rid of its telecommunications business will mean a substantial deficit in the first half of this year.
LONDON PRE-MARKET
Sell buttons are set to be worn out across the City this morning, as equities are expected to see more volatility and losses as investors take money off the table.
Indeed, it appears it is going to be a ‘risk off’ day in the market ahead of key American employment stats later this afternoon.
Craig Erlam, analyst at OANDA, in a note said: “It would appear we’re going to see risk aversion in the markets on Friday ahead of what is clearly a very important jobs report for the US, the final one before the September Fed meeting in under two weeks.
“This cautious approach prior to such a key release is quite common in the markets, especially when this release could determine whether we see a change in monetary policy, on this occasion the first rate hike in almost a decade.
“Ordinarily I would suggest that we don’t get too carried away with one release in isolation as alone, it’s unlikely to have a significant impact on policy makers decision making, but on this occasion it may.”
Wall Street had already seen this ‘risk off’ trading begin last night as the previous sessions big gains were pared and key benchmarks edged only slightly higher.
The Dow Jones added just over 20 points, 0.1%, on Thursday and the S&P 500 similarly added just 0.12%, whereas the Nasdaq gave up 0.3%.
In Asia - where Chinese markets are again closed for a public holiday – the asset risk aversion / selling was well underway.
Japan’s Nikkei shed more than 300 points, 2%, to 17,805 and the benchmark has seen seven-year lows. Hong Kong’s Hang Seng, meanwhile, gave up 0.6%. India’s Sensex was down 540 points, or 2%.
Australia’s ASX 200, however, was one of few major indices on the front foot, rising about 0.2%.
In London, IG Markets sees the FTSE 100 lower by about 90 points at 6,105 to 6,110.
Papers: Bwin turns to favour GVC’s takeover
The Telegraph says it ‘understands’ Bwin.Party’s board has decided to switch its recommendation to the £1.1bn offer from Sportingbet owner GVC rather than the previously favoured 888 bid. The decision was made at a meeting on Thursday, it said.
The Financial Times reports that Rosneft has sold a 15% in one of its largest oilfields to India’s stake owned oil company ONGC.
Bohai, a Chinese aviation and shipping firm, emerged as the winner of a takeover battle for Dublin based plane leasing firm Avolon, the FT also highlighted. A US$7.6bn deal clinched it, ahead of another Chinese group. And it’ll mean a payday for Avolon’s private equity backers such as CVC and Cinvin.
Elsewhere, The Times headlines that Britain’s first new nuclear power plant, at Hinkley, Somerset, has fallen further beyond schedule because developer EDF is sticking with plans to use what is described as a “troubled new reactor design” which would not be used for the first time in 2018 (at a plant in France). The UK station may not start generating power until 2023.
The Independent, meanwhile, reports that energy customers are deserting the ‘big six’ in what it described as a ‘great green energy switchover’. Tens of thousands of customers are now taking up ‘green’ tariffs at smaller, independent utilities, the paper said.
In The Guardian there news that restaurant workers at Pizza Express will get to keep all their tips after the chain reversed a controversial policy of pocketing 8% from service charges added via card payments. It comes amid pressure from unions and public campaigns.
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