London’s top-share index opened around 20 points lower this morning and has been becalmed ever since.
The FTSE 100 index was off 24 points at 6,918, with the severity of the decline modified by the strength of miners, where even a US$6.2bn statutory full-year loss declared by mining giant BHP Billiton plc (LON:BLT) and a dividend cut failed to prevent market makers from pushing up the share price by 3.3%.
The mid-cap FTSE 250 was faring better, advancing 18 points to 1,947, led by precious metals miner Hochschild Mining PLC (LON:HOC), which moved back into the black at the half-year stage.
In-depth: A good day for miners to release results
Its much smaller sector peer, Ovoca Gold PLC (LON:OVG), was up 10% as the company said the recovery in the gold price had brought renewed attention to its Stakhanovsky project.
Ovoca’s loss before tax in the first half of the year widened to €2.16mln from €1.04mln the year before.
Low-cost African airline Fastjet PLC (LON:FJET) gain altitude, rising a penny to 26.25p as the company issued options, exercisable at 31.5p, to directors.
There was disappointment for shareholders of Aquatic Foods Group PLC (LON:AFG), as the shares fell 11%. A technical administrative issue has delayed payment of the 0.7p dividend that was due to be paid last week. The company expects the divi will now be paid next week.
Red Rock Resources Plc (LON:RRR) was also down 11%. Colombia Milling Ltd (CML) is apparently not keen on Red Rock converting its promissory note into CML shares, but the two parties are in discussion on a resolution.
London open
The strength of mining companies has tempered Footsie’s losses in what has been a quiet session so far.
Investors were in the mood to sit on their hands this morning, ahead of the meeting later this week of the US Federal Reserve’s policy makers.
The Consumer Prices Index (CPI) rose by 0.6% in the year to July 2016, compared with a 0.5% rise in the year to June. The annual inflation rate now stands at its highest level since November 2014 but is still well below the Bank of England’s target rate, so there is nothing to alarm the Bank’s monetary policy committee in the latest data.
The FTSE 100 was down 25 points at 6,916, having briefly flirted with the idea of dipping below 6,900 earlier in the day; Miners did much to prevent the top-share index from doing so, with the top seven performers among index constituents all coming from the sector.
In the wider market there was also enthusiasm for miners, most notably W Resources PLC (LON:WRES) and Armadale Capital PLC (LON:ACP).
The former was 19% higher after securing an off-take agreement for its La Parilla tungsten mine in Spain. An advance payment of US$200,000 will enable the company to speed up development of the mine.
Armadale, meanwhile, advanced 12% as it said mapping of its recently acquired graphite project, Mahenge Liandu, in Tanzania had backed up earlier findings from electro-magnetic surveys.
Software firm Cambridge Cognition Holdings PLC (LON:COG) was wanted after it unveiled results from a new technology feasibility study. The results demonstrate for the first time that consumer grade wearables can be used to accurately measure clinically relevant cognitive performance in everyday life using Cambridge's new Cognition Kit software.
On the down side, Tethys Petroleum Ltd (LON:TPL) disappointed with its second quarter numbers. Oil production averaged 965 barrels of oil per day (bopd) compared with 1,954 bopd in the second quarter of 2015, reflecting a natural decline in overall production as well as prolonged spring oil trucking disruption.
The annual general meeting statement from Castings PLC (LON:CGS), the iron casting and machining company, was short and not especially sweet. Since its last update in June, the company has seen a softening in demand from its main customers.
Snapshot at 8.20am
The FTSE 100 was down 30 points at open this morning to 6,912.
The top winner was Antofagasta (LON:ANTO), up 3% to 529.5p. Heavy cost-cutting lifted earnings to counter low copper prices.
The biggest loser was Marks & Spencer Group (LON:MKS), down 1.5% to 344p. Negative impact of Brexit continues.
Preview at 7am
The FTSE 100 is set to give back most of yesterday’s gains at the outset, despite US markets hitting new highs yesterday.
Spread betting quotes point to the top-share index opening its account at around 6,924, down some 17 points from last night’s close.
Overnight, indices on Wall Street advanced with the Dow Jones average climbing 60 points (0.3%) to 18,636, while the broader-based S&P 500 climbed six points (0.3%) to 2,190.
Sentiment was buoyed by a recovery in oil prices, which boosted energy plays.
Later this week, the central bank’s policy makers will hold their monthly meeting, sparking the usual market speculation over the timing of an interest rate hike.
In Asia, however, markets have mostly been lower although in Hong Kong the Hang Seng index was clinging on to a four point rise at 22,937. The Nikkei 225 in Japan, on the other hand, was 176 points, or 1.1%, lower at 16,693.
On the corporate news front, miner Antofagasta PLC (LON:ANTO) has weighed in with its half-yearly results, while drugs giant AstraZeneca PLC (LON:AZN) has revealed the completion of a global licensing agreement with LEO Pharma, a specialist in dermatology care, for the use of tralokinumab in skin diseases.
Stateside later today updates are expected from Home Depot, Dick’s Sporting Goods and Urban Outfitters.
Around the markets
- Brent crude for October delivery was of 28 cents at US48.07 a barrel in screen-based trading in London, as investors banked profits following recent gains.
- The most actively traded gold futures contract was US$11.10 (0.8%) higher at US$1,351.40 an ounce.
- On the foreign exchange market, sterling recovered a little ground against the greenback, climbing 0.1% higher to $1.2896.
Headlines
- Rothschild sell equities as fears of ‘deterioration’ grow
- Hedge fund bets against pound sterling hit record highs in wake of Brexit
- Warren Buffett boosts his Apple stake