LONDON AFTERNOON
London’s blue chips rallied after a weak start as interest rates dominated sentiment across Europe.
Footsie was 13 points higher at 6,349, with the decision by the Bank of England to keep interest rates on hold for another month giving a sentiment a lift.
Members of the MPC panel voted 8:1 in favour of no change at 0.5% with the one dissenter, Ian McCafferty, voting for a rise.
The pound fell on the decision, with the minutes suggesting that uncertainty over inflation or lack of it and the worsening tide of events outside of the UK had influenced the majority of the committee.
Investors had already been shocked by an HSBC note this morning suggesting that US and European bond yields are set to tumble over the next 15 months.
The forecast for US Treasuries now back at 1.5% for the end of 2016 compared to 2.8% previously, a level not seen for decades.
Dismal numbers from Deutsche Bank were largely ignored on the German market. One reason may have been a story doing the rounds that Lloyds Banking (LON:LLOY) and Barclays (LON:BARC) were both mulling bids for the German bank, but analysts were sceptical.
Precious metals specialists Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) did well after healthy gains for gold and silver since the US jobs number last week cast a dampener on US rate rises. Randgold rose 36p to 4,295p while Fresnillo added 21p to 697p.
Tesco had another good day as analysts decided yesterday’s interim results contained some glimmers of hope even though profits fell by more than 50%. The shares added 4p to 201p.
SABMiller was one of the fallers as it was urged to accept the US$100bn offer from ABInBev even though it said yesterday that the offer ‘very substantially’ undervalued the Guinness and Johnnie Walker owner. SABMiller shares fell 10p to 3,622p.
Marks & Spencer (LON;MKS) was also under pressure as Peel Hunt downgraded to ‘sell’ and cut its price target to 450p.
Marks’ clothing has been a problem child for some while, but despite better trading conditions and easier comparatives the broker is concerned it will not show any growth in the second half of 2015. Shares fell 9.5p to 489.6p.
Hays (LON:HAS) dipped 7% to 136p as the recruiter’s sales growth only just about met estimates for the third quarter.
Sales growth at homewares seller Dunelm's (LON:DNLM) bricks & mortar estate picked up in the first quarter of the company's new financial year. Shares rose 2% to 914p.
Anthracite miner Atlantic Coal (LON:ATC) jumped 7% as it unveiled a second bullish update in as many days. The AIM-listed anthracite coal mining company operating in Pennsylvania, said turnover in the first nine months of the year was up by around 26% year-on-year.
Africa-focused airline fastjet (LON:FJET) has signed a sales and distribution contract with global carrier Emirates. Shares rose 8% to 89p.
Sierra Rutile (LON:SRX) produced 33,960 tonnes rutile in its latest quarter, its second best ever.
Escher Group (LON:ESCH) is to deliver a digital communications platform for the London Local Enterprise Partnership. Shares rose 12p, around 6%, to 212p.
Machine-to-machine (M2M) communications leader Telit Communications (LON:TCM) is to out its modules in to smart meters in the Netherlands. Shares nudged 2p higher to 336p.
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LONDON OPEN
London’s blue chips drifted lower as some of froth blew off after a good run for share prices this week so far.
Footsie eased 7 points lower at 6,329 even though there were good gains for markets in the US and Shanghai where Chinese investors returned to the fray after the Golden Week break.
Precious metals specialists Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) led the risers following healthy gains for gold and silver since the US jobs number last week cast a dampener on US rate rises.
Tesco also rallied again as analysts reflected on whether there were some straws to clutch in yesterday’s interim results even though profits fell by more than 50%. The shares added 3p today to 200p.
Hays (LON:HAS) dipped as the recruiter as sales growth of 8% just about meet estimates for the third quarter.
Sales growth at home wares seller Dunelm's (LON:DNLM) bricks & mortar estate picked up in the first quarter of the company's new financial year. Like-for-like (LFL) sales at its stores in the 13 weeks to 3 October were up 4.4% to £171.8mln. Shares rose 7p to 902p.
Most of the major moves were among the small caps.
Anthracite miner Atlantic Coal (LON:ATC) jumped 17% as it unveiled a second bullish update in as many days.
The AIM-listed anthracite coal mining company operating in Pennsylvania, said turnover in the first nine months of the year was up by around 26% year-on-year to around US$17.8mln from US$14.1mln in the same period of 2014.
Also busy on the news front this week has been Africa-focused airline fastjet (LON:FJET).
Shortly after being awarded its licence in Zimbabwe, the airline has signed a sales and distribution contract with global carrier Emirates.
Passengers of the Gulf-based group will be able use its sales channels to book tickets for fastjet’s network using a link between the two airlines’ reservations system. Shares rose 4% to 85p.
Sierra Rutile (LON:SRX) said it is firing on all cylinders, and investors bought in, sending shares 8.4% higher to 18.5p..
The latest update, covering the third quarter, revealed it produced its second-strongest ever quarter with output of 33,960 tonnes rutile.
Escher Group (LON:ESCH) has secured a contract to deliver and operate a digital communications platform for the London Local Enterprise Partnership. Shares rose 12p, around 6%, to 212p.
Machine-to-machine (M2M) communications leader Telit Communications (LON:TCM) said its modules will be deployed in a significant roll-out of smart meters in the Netherlands. Shares nudged 2p higher to 336p.
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LONDON PREVIEW
London’s blue chips are set for a soft-to-steady start, with market called marginally lower on Thursday morning.
Equities have so far this week had a good run, though there was some concern that the move may be driven too much by commodities.
“The risk is that the rally has been strongly correlated with commodity prices, especially oil,” Jasper Lawler, analyst at CMC Markets said in a note.
He added: “Unless making the bold call that commodity prices have bottomed, a bear market rally in commodities is probably not the best foundation for a rally in equities.”
Last night, Wall Street closed positively despite news of a larger than expected increase in crude oil stockpiles – news that dampened the oil price rally.
The Dow Jones ended Wednesday at 16,912, some 122 points higher, while the S&P 500 and the Nasdaq both added just less than 1%.
In Asia this morning, Japan’s Nikkei was down almost 1% at 18,152 while Hong Kong’s Hang Seng fell 1.3%.
The Shanghai Composite, meanwhile, climbed nearly 3% to 3,139.
Australia’s ASX 200 moved around 0.25% higher to 5,210.
In London, an hour before the open, IG Markets called the FTSE 100 just a handful of points lower at 6,319 to 6,322.