London’s blue chips ambled higher this morning, with small gains on the oil giants marginally offsetting modest losses on the mining titans.
The FTSE 100 was up 11 points at 6,927, with bulls drawing a modicum of comfort from a poor Japanese gross domestic product report for the second quarter, which raised hopes that central banks will be in no mood to take the proverbial punch bowl away any time soon.
There is not much corporate activity among the blue-chips, but in the mid-cap space Bovis Homes Group PLC (LON:BVS) and Petrofac Limited (LON:PFC) dragged down the FTSE 250, as they lost ground following announcements this morning.
The FTSE 250 was down 23 at 17,899, with Bovis topping the losers’ list, as it revealed house purchase reservations had slowed since the EU referendum vote.
Bovis tumbled 3.7% to 805.5p, while Petrofac shed 3% as non-executive director Tim Wller jumped ship to become the new chief executive officer of security solutions provider G4S PLC (LON:GFS), up 1%.
Among the growth companies, Edenville Energy PLC (LON:EDL) led the field with a 50% increase as its shares reacted to news that the Tanzanian government is expected to introduce a ban on coal imports, which would provide a big boost to Edenville’s Rukwa coal project.
Thor Mining (LON:THR) thundered higher as it kicked off a new drilling campaign close to its Molyhil tungsten deposit in the Northern Territory of Australia.
The company said the time was right to resume drilling as interest in the tungsten sector is picking up.
The share rose 18%.
AFC Energy plc’s (LON:AFC) new brand identity got the thumbs-up from investors.
The shares shot 15% higher as it has launched a new brand identity reflecting its ongoing transition from an R&D-focused technology company to a commercial company providing large-scale industrial applications.
Snapshot at 8.15am
The FTSE 100 was down four points to 6,913, falling shy of the 7,000 mark some had anticipated.
The top winner was Persimmon (LON:PSN) was up just under 2% to 1,741p. Brokers upgrade its rating after £210mln housing plan.
The biggest loser was Sage Group (LON:SGE) was down almost 2% to 726.5p, after it was hit by a massive data breach last week. The group said yesterday that it was investigating “unauthorised access to customer information using an internal login”.
Preview at 6.50am
Will this be the week the FTSE 100 breaches 7,000 once again – a level last achieved in May 2015?
Perhaps the feel good factor after Britain’s Olympic super Sunday will push the index of blue-chip shares over the line.
According to the spread betting firms the milestone is unlikely to be achieved in the early hours of London trading. The Footsie expected to make a subdued start, adding just 7 points to open at 6,923.02.
Overnight in Asia the upward momentum was stalled by some pretty dire economic numbers out of Japan, which showed the world’s third-largest economy failed to grow in the second quarter.
At the same time business spending slid 0.4% when it was expected to grow 0.2%, reinforcing the impression that Prime Minister Shinzo Abe’s attempt to resuscitate Japan is failing.
“[This] followed on from last week’s disappointing US and Chinese data and it would appear that the global economy slowed down quite markedly in the second quarter,” pointed out Michael Hewson of CMC Markets.
The Nikkei 225 was down 0.2%, though the other main Asian equity markets staged rebounds with the Shanghai Composite leading the way with a 2.6% gain.
Back in the UK and looking ahead, it is expected to be a reasonably busy week for corporate news.
Builder Bovis and retailer Kingfisher lead the way, followed by updates from drillers Premier Oil and Cairn Energy.
BHP Billiton will give some insight into the state of the mining industry when it delivers prelims on Tuesday, while fellow diggers Antofagasta and Hochschild are also reporting.
On the data front we have jobs and retail sales figures later this week that should provide a fuller picture of how the UK is faring post the Brexit vote.
*Brent crude trading 31 cents higher US$47.28.
*Gold US$8.50 higher at US$1,335.80 an ounce.
*Pound worth US$1.2928.
City Headlines
*The buyout giant behind Toys “R” Us is among a handful of suitors eyeing a bid for the owner of the hit cartoon Peppa Pig, which last week rebuffed a £1bn approach from ITV – Sunday Times.
*Sky is secretly preparing a major expansion of its European empire by launching its online streaming service Now TV in Spain as the first stage of a plan to challenge Netflix and Amazon across the continent – Sunday Telegraph.
*Gold and silver miners are increasingly looking to raise or resume dividend payments, highlighting the renewed confidence in the sector driven by this year’s rise in precious metal prices – FT.
*Supermarket sales have dipped below £100bn for the first time since 2010 as a vicious price war with discounters Aldi and Lidl continues to eat away at the money they make from shoppers’ baskets – Telegraph.