Small cap stocks opened little changed on balance, taking a sanguine view on the whole Brexit recession storm in a tea-cup.
The media continues to work itself into a lather over comments by Mark Carney, the governor of the Bank of England, about the prospect of a vote in favour of Britain leaving the European Union causing a technical recession.
A fairly straight bat response to a leading question at the press conference hit blue chips yesterday, and the FTSE 100 was on the down-path again this morning, down 33 points, or 0.5%, at 6,072.
“Carney spoke yesterday and there wasn’t much very surprising in what he said,” Observed Jamie Constable at N+1 Singer.
“If the UK were to vote for Brexit there would likely to be a 'technical' UK recession and sterling would likely fall and that could trigger a rise in short term interest rates,” Constable continued.
In other news, the Pope has been confirmed as a Catholic and bears disappearing into the woods like to take a roll of Andrex with them.
Things were better on Aim, where the FTSE Aim 100 was a smidgen higher at 3,388 while the FTSE Aim All-Share climbed 0.4 to 725.5.
The market's top performers were all minerals plays. Kodal Minerals PLC (LON:KOD) topped the tree, up 37% at 0.06p, though there was no news flow to explain the rise.
Likewise, Strategic Minerals PLC (LON:SML), up 23%, has not made any announcements to the market since an update on May 6 about the maiden drill programme at its Hanns Camp prospect, but the shares had recently seen a bit of profit taking having tripled in the space of three weeks, and it seems the upward march has now recommenced.
Quarterly results from Serabi Gold PLC (LON:SRB) were received well. The shares climbed 17% to 5.125p as the Brazil-focused miner reported a profit before tax of US$1.5mln for the first three months of 2016, up from US$191,398 the year before.
Sector peer Arian Silver Corp (LON:AGQ) was also wanted. Shares climbed 8.1% to a penny a pop as the Mexico-focused mine developer said it is making progress on detailed metallurgical test work at the Noche Buena, the tailings project over which it is running the rule.
Resource companies also feature prominently among the big losers, with Circle Oil PLC (LON:COP), down 17% at 1.875p, the heaviest faller after a financial update.
The up-for-sale oil and gas firm said its backer, the International Finance Corporation, has agreed to extend the suspension period in respect of repayments of borrowings by Circle.
Aureus Mining Inc (LON:AUE) continues to be dragged down by the problems that caused processing at the New Liberty mine to be suspended last week.
The shares were off almost 12% as the company said in its latest update that it continues to discuss with its lenders the possibility of rescheduling its debt repayments and that it is monitoring its working capital position closely.
Early snapshot
The FTSE 100 dipped 36 points at open today, down 0.6% to 6067.5p as investors took on board Bank of England governor Mark Carney's recession warning.
The biggest winner of the morning was Smith & Nephew up 0.3% or 4p to 1151p. The artificial knee and hip maker had been upgraded by analysts this week which seems to be paying off for the group.
The biggest faller was Inmarsat down 28p, or 3.5% to 766p. The telecoms satellite firm told investors earlier this month to take a step back after it warned profits were likely to fall shy of estimates.
Germany more than doubled its economic growth rate according to official figures, driven by mild weather which helped to increase construction.
Meanwhile Tesco chief executive Dave Lewis received a bonus of almost £3mln for helping return the UK's biggest supermarket to profit, it was revealed this morning.
Tesco share have dropped by almost a third in the past 12 months and was down slightly this morning to 155p.
Preview 6.45am
The FTSE 100 is expected to make a muted start to the last day of the trading week, with investors still digesting the comments of Bank of England governor Mark Carney.
He was widely criticised yesterday as he warned that a vote to exit the EU raised the risk of recession.
His comments on the referendum were seen as overtly political and allying him to ‘in’ campaign.
“It is not hard to feel some sympathy for Mr Carney given his position, but one can’t help feeling that his position couldn’t have been a little more nuanced,” said Michael Hewson, analyst at CMC Markets.
“The fact is given recent data there is the possibility that parts of the economy are already sliding into recession - the manufacturing sector for example - and there are no guarantees that a vote to remain wouldn’t prevent a deeper slowdown, a scenario that wasn’t even covered.”
According to spread betting firms the index of blue chip stocks is expected to open six points lower at 6,098.19.
Wall Street closed Thursday just about flat, while the major Asian markets were in reverse gear. The Nikkei 225 was down almost 1% as the exporters were hit by a rise in the value of the yen.
Hong Kong’s Hang Seng and Shanghai Composite were off 1% and 0.3% respectively.
It is expected to be a quiet day for corporate news here in the UK.
Over in the States a British footballing institution will report its quarterly results, with the fate of manager Louis Van Gaal likely also to be a talking point with analysts as well as sports pundits.
*Crude Oil – Brent is trading down 0.64% at US$47.77 a barrel.
*Gold – The yellow metal was off around 0.13% at U$1,269.60.
*Market rumour - Former EE chief executive Tom Alexander is in talks with financial institutions to create a consortium to mount a bid for O2 in the UK, just days after a proposed £10.5 billion merger with rival Three was blocked in Brussels (FT).
City Pages
*General Atlantic has emerged as the front runner in an auction to buy a controlling stake in Argus Media, which would value the energy reporting company at around £950mln – FT.
*Former Royal Bank of Scotland boss Fred Goodwin will not face criminal charges after a five-year investigation found “insufficient evidence” to prosecute managers over the bank’s near-collapse – FT.
*The Bill and Melinda Gates Foundation had sold its US$187mln holding in BP in the latest move to divest its fossil fuel assets – Times.
*A plan to overcome the £500mln pensions deficit that is proving a massive hurdle to the sale of Tata’s UK steel business is set to fail, according to a leading pensions expert – Telegraph.