London Close
London’s blue-chip stocks ended the day with moderate gains as this morning’s momentum was lost as Asia stocks fell.
The calming words of People’s Bank of China chief Zhou Xiaochuan had a fairly short shelf-life.
He assured investors that the ‘correction in the stock market is almost done’, with more stability on the horizon.
David Madden at IG, said: “The overall sentiment is still sceptical, and China’s trade balance figures, due overnight, have prevented dealers from running with the rally.”
Connor Campbell at Spreadex said: “After the dust settled and the realisation that, despite what the central bank governor said, the Shanghai Composite still fell by 2.5%, investors were all of a sudden not as willing to lift the European indices as they were at the start of the day.”
While the European gains didn’t completely disappear like they had been threatening to, the lack of action on Wall Street today for Labour Day sapped meant there was little to work with.
The German Dax ended 70 points higher to 10,109 while the Cac40 nudged 25 points up to 4,549.
In the UK, the FTSE 100 ended 30 points to the good at 6,074 with miners storming ahead.
Near the top of the pile was Glencore (LON:GLEN), after it announced plans to tackle its debt mountain.
The company plans to raise up to US$2.5bn through an equity issue, suspend dividend payments until further notice and to raise US$2bn through the sale of assets. Shares gained 7.1% to 131p.
Standing at the very top of the index, however, was Antofagasta (LON:ANTO), up 7.5% to 607p.
The copper miner was higher after rival Glencore announced the suspension of two of its copper mines in Africa, cutting its copper output by a fifth.
Primark-owner Associated British Foods (LON:ABF) was a big faller, down 26p at 3,013p, after a pre-close trading statement that revealed the company’s full-year results will see a decline in adjusted operating profit for the group.
The group, which also owns British Sugar, said the expected decline was down to tough times in the sugar business and unhelpful exchange rates.
Away from the index, Lekoil (LON:LEK) gained more than 7% to 22p, as the Otakikpo field, in Nigeria, achieved first oil.
It started from two of four production strings in the Otakikpo-002 well and flowed at peak rates of 5,703 barrels of oil per day, significantly ahead of company expectations.
In other news, Audioboom (LON:BOOM) rose 11% to 5p on the news high profile property developer Nick Candy, had bought £480,000 worth of shares.
Central Rand Gold (LON:CRND) was also lower as the company said the progress of talks with one Asian investor group has slowed while talks with another have gone from them acquitting Central Rand Gold to making a “significant initial investment.”
Talks with both are on-going, having started in July and shares lost 18% to 9.5p.
London open
With US markets closed today, London has looked east for a lead, and has followed Asian markets higher.
The FTSE 100 was up 74 points at 6,117, with just three index constituents in the red: Associated British Foods, Admiral and Tesco.
The latter shed 0.2p at 185.75p after selling its Korean business, Homeplus, for an enterprise value of £4.24bn.
Primark-owner Associated British Foods (LON:ABF) was the biggest faller, down 2.2% at 3,070p, after a pre-close trading statement that revealed the company’s full-year results will see a decline in adjusted operating profit for the group.
The group, which also owns British Sugar, said the expected decline was down to tough times in the sugar business and unhelpful exchange rates.
Top of the Footsie tree is commodities trading and mining group Glencore (LON:GLEN), after it announced plans to tackle its debt mountain. The company plans to raise up to US$2.5bn through an equity issue, suspend dividend payments until further notice and to raise US$2bn through the sale of assets.
Among the mid-caps, the full-year results from Dechra Pharm (LON:DPH) have disappointed. Revenue rose 5.1% to £203.5mln while underlying earnings (EBITDA) was up 3.9% year-on-year.
Michael Redmond, chairman of the veterinary pharmaceutical specialist, said: “Current trading is in line with management expectations; however, the business continues to be exposed to exchange rate volatility.”
The shares were off 1.4% at 932p.
In the small cap space, Lekoil (LON:LEK) was flying high, after it confirmed the Otakikpo field in Nigeria has achieved first oil.
The shares gushed 17.7% to 25p as it revealed two of four production strings in the Otakikpo-002 well flowed at peak rates of 5,703 barrels of oil per day, which the company highlights as being significantly ahead of expectations.
KEFI Minerals (LON:KEFI) was wanted, rising 7.1% to 0.75p, as it revealed planned output from its Ethiopia project has grown significantly and said a winning bidder has emerged for the contract to mine the Tulu Kapi deposit.
Investors were dialling into proximity-marketing leader Proxama (LON:PROX) after it struck a new contract with the UK's largest provider of taxi advertising, which will allow passengers in London to receive content when they have hired a cab.
Advanced engineering materials Versarien (LON:VRS) revealed it has been granted US patent protection for its volume graphene platelet production process.
It adds to existing patent protection for the graphene production process which had already been granted in Europe.
The shares rose 4.6% to 19.75p.
Moving the other way was Minera IRL (LON:MIRL), after the company was forced to suspend operations at its Corihuarmi mine site.
Relationships with the locals have taken a turn for the worse in recent weeks, prompting changes in senior management, and things look to have come to a head, with around 100 locals occupying the mine and key installations.
Minera IRL said it remains committed to addressing the local community's concerns and restoring previously harmonious relationships. In the meantime, the shares were off a penny at 2.625p.
In the Papers….
The US shale industry is braced for a ‘wave of bankruptcies’, according to the Financial Times, as it assesses the potential for carnage posed by a round of redemptions Stateside.
On the front page, the Pink’un said David Cameron has told British Business to ‘shut up’ in the wake of a poll that suggests a majority of Brits want to quit Europe.
The Telegraph has a curious headline on the front of its business pages telling us Russia is ‘flirting’ with OPEC. Essentially, the Putin administration is keen to end the pain being inflicted by the Saudi-led oil cartel that has playing havoc with its hydrocarbons industry.
The FT and the Telegraph are torn about which way to go with impending launch of the iPhone 6s. The former says it will give the opportunity for a reboot, while the latter reckons Apple is preparing for the ‘end of the affair with the iPhone’. Make of that what you will.
Finally, all the papers have their take on the annual bonus-fest that has hit bumper territory last witnessed before the financial crisis.