5pm - CLOSE
FTSE 100 closed below the 7,000 level it had only managed to surpass this week, as markets look to Friday's US job creation number and after comments from the German Chancellor over Brexit.
Angela Merkel said the UK cannot access the single market unless it complies with rules over free movement of people.
The UK pound was also under pressure- down to USS1.26 against the US dollar.
The FTSE 100 closed down over 33 points at 6,999, with budget carrier easyJet (LON:EZJ) the big loser, plummeting almost 7% to 933.5p as the affect of the Brexit vote hit home.
The fall in the pound has cost the airline £35mln in “adverse exchange rate movements” since June 23, it revealed in a trading update.
Small caps were also lower with FTSE AIM 100 closing down 0.08% to 3,976. One notable standout however was North Sea junior Jersey Oil & Gas PLC (LON:JOG).
It shares rocketed almost 47% to 65.75p as it completed the farm-out of two North Sea blocks to Norwegian major Statoil.
The latter will take a 70% working interest in the UK Seaward Licence P.2170 (Blocks 20/5b and 21/1d) in the UK Central North Sea.
Jersey Oil will receive US$540,000 with the rest of a US$1.2mln cash consideration earmarked for its partners in the initial development.
READ - Jersey Oil and Gas rockets as Statoil completes farm-out
3pm: Tesco under pressure as JP Morgan remains bearish
The FTSE 100 was becalmed in afternoon trade with all the action going on in the foreign exchange markets with pound being pummelled once more.
Sterling was changing hands for U$1.2645 (down 0.8%) at 2.55pm amid comments by Germany’s Chancellor, Angela Merkel, suggesting Britain’s exit from the EU won’t be easy.
The index of blue-chip shares, meanwhile, was off almost 20 points at 7,013.66.
The banks were in demand as solvency fears eased, while Tesco PLC (LON:TSCO) succumbed to profit-taking after a stellar run post results on Wednesday, falling 2% to 202.2p.
JP Morgan Cazenove, in a note to clients, repeated its underweight recommendation and 135p a share price target.
Detailed analysis revealed the quality of the earnings “beat” was “rather low”, it said.
“We separately believe [chief executive] Dave Lewis has set himself challenging targets in the context of a very difficult industry backdrop, where all the different moving parts are not within his own control,” the American bank added in a note to clients.
“We believe the shares price in the higher end of an optimistic guidance.”
Noon: Wall Street casts a shadow but IGas shines a light
After a soft start losses lengthened a little ahead of an expected weak start on Wall Street.
The top-share index was down 23 points at 7,010, but thus far has kept its head above 7,000 today.
Spread betting quotes pointed to the S&P 500 opening its account some four points lower ahead of tomorrow’s market-moving jobs report for September.
“A really strong job creation figure could show the US economy is strong and the Fed may look to raise interest rates soon – something that could cause a wobble, if recent market action is any guide (not, of course that the past is by any means a guarantee for the future),” opined Russ Mould, the investment director at AJ Bell.
“A weak number could show the US economy is losing steam after a seven-year up-trend (albeit a modest one) and stock markets may decide bad news is good news, because it keeps interest rates lower for longer – something that has been driving money towards stocks relative to cash and bonds of late,” Mould added.
On the foreign exchange sterling could soon be worth about as much as the proverbial nine bob note – or 45 pence piece if you are of a post-decimalisation persuasion – as it has lost 0.3% against the US dollar today, although it is holding its own against the euro.
Low-cost airline easyJet PLC (LON:EZJ) remained the Footsie’s worst performer, down 6.3%, and its profit warning has done no favours for sector peers International Consolidated Airlns Grp SA (LON:IAG), down 2.8% and Ryanair Holdings PLC (LON:RYA), down 2.5%.
The malaise in the travel sector did not extend to cruises operator Carnival PLC (LON:CCL), which was up 1.1% after announcing yesterday it had signed a framework agreement with Shell that could see the oil company provide marine liquefied natural gas for two its brands.
Shares in IGas Energy Plc (LON:IGAS) gained more than a third at one point on Thursday as the UK government in Westminster gave the UK’s nascent shale gas industry a shot in the arm.
Communities secretary Sajid Javid has overturned a planning decision made by Lancashire County Council and as a result privately owned shale firm Cuadrilla has a green-light to test the potentially large gas resources in the Blackpool and Fylde area.
Today’s outcome has been described as a landmark decision, and significantly for IGas it comes less than 24 hours after a decision on one of its shale projects was deferred by Nottinghamshire County Council following an eleventh hour legal appeal by conservationists – due to alleged threats to wildlife, including a rare type of owl and a form of lichen.
While IGas was adding a third, South America-focused peer President Energy PLC (LON:PPC) was shedding it after it had been forced to quit drilling a well in Argentina as a problematic programme ran out of time – the rig has to be passed on to another operator as the lease has run out.
9.00am: Stocks becalmed; musical chairs at WANdisco
With half an eye on tomorrow’s US jobs report, investors were catching up on their thumb-twiddling this morning.
The FTSE 100 was down two points at 7,031, largely due to no-frills airline easyJet PLC (LON:EZJ) sliding 6.8% to 935p after a profit warning.
Read easyJet counts the full costs of Brexit
Read BAE reiterates guidance; expects more Typhoon orders
Supermarket giant Tesco PLC (LON:TSCO) was also a drag on the top-share index, as traders banked profits following yesterday’s surprisingly upbeat trading statement. The shares were off 2%, with sector peers Marks & Spencer PLC (LON:MKS) and Sainsbury (J) PLC (LON:SBRY) also lower, down 1.4% and 1.3%, respectively.
At the other end of the Footsie leader board, financials were going well, with taxpayer-owned bank Royal Bank of Scotland Group (LON:RBS) leading the way, up 2.8%.
Some pundits are saying hawkish comments from central bank officials point to an earlier rise in interest rates than had previously been expected, which would be good news for lenders’ margins.
Defence group BAE Systems PLC (LON:BAE) gained altitude, rising a couple of pence to 540p as it reiterated full-year earnings guidance.
As per usual, the big moves are to be found among the small caps, and none is bigger than the 154% increase on cash shell Tengri Resources (LON:TEN).
The shares advanced to 4p as the company revealed it had raised £100,000 placing shares at 5p a pop.
Investment company Red Leopard Holdings (LON:RLH) more than doubled after it was revealed Mark Jackson had snapped up 10mln shares in the company.
Ironveld PLC (LON:IRON), the owner of a high purity iron, vanadium and titanium project in South Africa received a lift from the Industrial Development Corporation approving a 244mln rand funding package for the project.
The shares stiffened to 5.2p from 4.5p overnight.
David Richards appears to have won a power battle at “Big Data” software company WANdisco PLC (LON:WAND). He’s back as chief executive officer (CEO) just days after chairman Paul Walker was issuing the usual platitudes about Richards’s “contribution over the years” in a statement announcing Richards was stepping down.
Now it is Walker who is stepping down, along with non-executive director Ian Duncan, after it emerged that some 58% of shareholders supported the reinstatement of WANdisco as CEO.
The shares shed 17.4% at 185p.
The half-year trading update from SRT Marine Systems PLC (LON:SRT) sent the wrong signals. The company, formerly known as Software Radio Technology, made a loss of £1.2mln on revenues for £2.7mln, sending the shares 9.6% lower.
8.30am: easyJet grounded
The FTSE 100 marked time on open with little in the way of macro news to stir sentiment.
The index of blue-chip shares was up just 1.8 points at 7,035.05, consolidating its position after the strong upward movement seen and Monday and Tuesday that took it above 7,000.
An easing of worries over over the general health of Europe’s financially threadbare lenders saw LON:BA.="" rel="8223">LON:BA.="" plc="" rel="2989">lon:ba.C), Lloyds Banking Group PLC (LON:LLOY) and Royal Bank of Scotland (LON:RBS) near the top of the Footsie risers’ list.
An early casualty was easyJet (LON:EZJ), which fell 6% after revealing it profits would be below already-downgraded guidance for the year.
Adverse foreign exchange rate movements are providing the major head wind for the budget carrier.
8.30: Preview. Little stirring
London’s FTSE 100 is expected to continue its consolidation above 7,000 as it opens Thursday’s trading narrowly higher.
Britain’s politics and the pending Brexit process remains a key feature for traders and investors, albeit currency and equity markets have steadied somewhat since the volatility at the start of this week.
Attentions are also turning more to US presidential election which is now just over a month away.
Central bankers remain in focus, both in Europe and the United States.
“It would appear that some investor angst surrounding a possible ECB tapering of its bond buying programme early next year, as well as hawkish Fed chatter contrived to push European stocks lower yesterday, along with gold prices, though after a positive finish in the US last night, we could well see a positive open today,” said Michael Hewson, analyst at CMC Markets.
Wall Street marked a positive session for Wednesday with the Dow Jones rising 112 points, 0.62%, to 18,281. The S&P 500 gained 0.43% to 2,159 while the Nasdaq added 0.5% to 5,316.
In Asia, Japan’s Nikkei was also on the up measuring a 0.6% rise to 16,918 on Thursday.
Hong Kong’s Hang Seng climbed 0.5% to 23,911 while the Shanghai Composite notched 0.2% higher to 3,004.
Australia’s ASX 200 added 0.55% to 5,483.
In London, CFD and financial spread betting firm IG Markets sees the FTSE 100 up slightly, calling the index at 7,039 to 7,043 about an hour before the start of trading.