FTSE 100 stocks ended higher on Wednesday after a see-saw session, after recovering from a bout of downside this week on the fate of Germany’s biggest lender Deutsche Bank when commodity-related shares advanced.
The blue-chip FTSE 100 was up 0.6% at 6849 and led by Sky PLC (LON:SKY) for whom the sky was the limit. Shares ended up 4.1% at 882.5p. On Tuesday, Sky got a boost as Kepler Cheuvreux upgraded the stock to 'buy' from 'hold' saying its discounted cash flow-based fair value of 1,100p suggests nearly 30% upside from current levels, which is the highest in its large-cap media universe.
Rio Tinto was one of the big FTSE 100 winners, the third biggest riser, of 2.7% to 2525.5p as it lapped up commodity gains.
Meanwhile, steel, mining and vanadium company Evraz dominated the mid-cap risers for the same reason, up 4.4% to 164p. The FTSE 250 mid-caps were 0.9% higher, at 17,792.
Brent Crude Oil was up 1.6% at $46.69.
But there was no good news for retailer Sainsbury's (LON:ABRY) whose shares fell 3.9% to 241p after it reported a second quarter of falling sales.
The FTSE AIM 100 Index gained 0.7% to 3912 and the FTSE AIM All-Share Index was up 0.3% to 817.
On Tuesday, banking stocks took fright after Berlin said it would not commit to supporting ailing Deutsche Bank which was landed with a $14bn fine from US regulators this month.
Midsession
For much of the morning the top-share index has traded within a band ranging from 6,840 to 6,875, as concerns over Deutsche Bank fade a little.
The FTSE 100 index was up 57 points at 6,864 at 12.30pm, after the German finance ministry denied it had been working on a rescue plan for Deutsche Bank, just in case the lender would be unable to raise the dosh to pay for potential litigation pay-outs.
Away from the world of tottering titans, a number of minnows were swimming upstream with gusto.
Graphite specialist StratMin Global Resources PLC (LON:STGR) added one-sixth to its market capitalisation as it took out a loan facility, using its hefty stake in Aussie firm Bass Metals as collateral.
StratMin became the largest shareholder in Australian Stock Exchange-listed Bass Metals Ltd after it sold its Graphmada investment to the Aussie firm.
The loan will be used to fund StratMin's investment commitment to the Tirupati Resources Mauritius joint venture and for general working capital.
Allergy vaccine developer Allergy Therapeutics plc (LON:AGY) was wanted after finance director Nicolas Wykeman bought 150,000 shares at 17.75p a pop, pushing the price up 1.5p to 19.25p.
Sector peer Clinigen Group PLC (LON:CLIN) hardened 4.9% to 710.5p as it announced an orderly change-over at the top. Peter George has decided to hand over the reins at the pharmaceuticals services group but judging by the interim results the company is in good nick.
Buoyed by acquisitions (notably Idis and Link Healthcare), but also helped by organic growth, revenues advanced 84% in the year ended June to almost £340mln.
This boosted underlying earnings (EBITDA) by 73% to £56mln, while Clinigen appears to have become a ‘cash machine’, generating £49.4mln in the 12 months under review (a rise of more than 200%).
Investors will be rewarded with an 18% hike to their dividend payment, which moves to 4p a share.
On the gloomy side of the street, Aquatic Foods Group PLC (LON:AFG) was one minnow that was struggling against the tide.
Shares ebbed from 17.5p to 13.5p as the Chinese marine foods and seafood processor and producer’s interim results proved a bit too salty for investors’ tastes.
Revenue fell 5.6% from a year earlier and profit before tax halved.
Also sinking was Malaysia-focused Mobilityone Limited (LON:MBO) after its interims. The e-commerce infrastructure payment solutions and platform provider saw profit before tax edge up to £207,546 from £130,185 the previous year.
Open
Taking their lead from the US, blue-chips opened on the front foot this morning.
The FTSE 100 was up 58 at 6,866 after an hour of trading, helped by the strength of miners and a return to favour of house builders.
The rise would have been greater had it not been for an adverse reaction to the trading update from supermarket group J Sainsbury PLC (LON:SBRY), which the market decided was one sandwich short of a picnic.
The shares shed 2.1% as like-for-like sales fell again in the second quarter, which the company put down to food price deflation.
Read Sainsbury's sales fall as multi-buy cutbacks hit home
Read Royal Bank of Scotland reaches £845.2mln mortgage mis-selling deal and Could RBS go the way of Deutsche Bank?
Taxpayer-owned bank Royal Bank of Scotland Group PLC (LON:RBS) looks to have got off relatively lightly in an £845mln settlement to resolve two US lawsuits.
The shares rose 1.3% as it settled allegations that it sold toxic mortgage-backed securities, though it is worth noting more claims are set to follow.
The top performer among Footsie stock was travel firm Tui AG (LON:TUI), which provided some much needed cheer to the travel sector with its trading update.
The firm’s summer 2016 season is almost fully sold, it revealed, sparking a 3.1% hike in the shares. The winter season is trading in line with expectations, it added.
For the market as a whole, UK Mail Group PLC (LON:UKM) was the biggest riser, up 43% to 440.25p as Deutsche Post delivered a knock-out bid worth 440p per share in cash. The agreed merger appears to have stamped down the share price of rival Royal Mail PLC (LON:RMG), down 0.7%.
Independent Resources PLC (LON:IRG) charged 29% higher as a joint venture of which it was part reached agreement with TransGlobe Petroleum over a loan note. Nostra Terra Oil and Gas Company PLC (LON:NTOG), also part of the joint venture, advanced 17%.
On the subject of joint ventures, Armadale Capital PLC (LON:ACP) hardened half a penny to 2.375p as it entered into a binding heads of agreement with African Mining Services to form a joint venture to develop and operate the Mpokoto gold project in the Katanga Province, in the Democratic Republic of Congo.
The half-year report from zinc recovery specialist ZincOx Resources PLC (LON:ZOX) was not pretty on the numbers side, with a loss from continuing operations of US$5.2mln inflated by a US$3.9mln impairment charge, though close followers of the company would not have been surprised by this level of losses.
Of more concern is the ticking clock, with the cash shell needing to find a major project by 31 October, otherwise its shares will be suspended from trading on Aim.
Opening snapshot at 8.20am
The FTSE 100 was up 40 points at open this morning at 6,848.
The top winner was TUI Group (LON:TUI) up 3% to 1,116p. The holiday operator raised its profit guidance.
HSBC Holdings (LON:HSBA) was the biggest loser, down just under 0.5% to 575p.
Preview at 6.59am
London is set for a flat start after conflicting overnight indications from overseas.
Financial spread bet firms see FTSE 100 opening up around ten points higher but with US markets up and Asia markets down, it’s likely to be an uncertain start.
Footsie closed Tuesday down ten points at 6,807.
Apart from betting on the next England manager, oil prices will have an influence today.
Crude prices were volatile overnight as Saudi Arabia said there was little chance of a cap on production from the meeting today in Algiers sending crude down at first, though it rallied later.
US markets shrugged it off with the Dow Jones Industrial average closing up 133 at 18,228 and similar percentage gains for the other two main indices.
Asia was not so fortunate, with losses in Tokyo, Hong Kong and Shanghai.
Headlines
Royal Bank of Scotland has paid US$1.1bn to settle one of its outstanding cases in the US of mis-selling mortgage securities but that still leaves it on the hook for a lot more reports the FT.
Urgent action is needed to reverse a slowdown in trade and stop low inflation from triggering a downward spiral of weak growth, job cuts and higher debt, the International Monetary Fund has warned, reports the Telegraph.
Commodities
Oil up US$0.08 at US$44.75
Gold down US$1 at US$1,325
Silver flat at US$19.01