FTSE 100 shares came within a handful of points of marking a fresh record high close on Monday, but for all the gains of mining stocks the ticker just could not muster the umph to triumph.
The blue-chip ticker closed up 0.8% at 7,097. The current closing high for the index is 7,103.98, while the intra-day zenith is 7,122.74.
Top gainer was BHP Billiton (LON:BLT) was up 2.8% to 1267. Other miners included Fresnillo (LON:FRES), Anglo-American (LON:AAL), Rio Tinto (LON:RIO) and Glencore (LON:GLEN).
Mining firms have benefited from the fall in the pound since the Brexit vote, as they generate most of their revenues abroad. A weaker pound boosts overseas revenues in sterling terms.
Many travellers buying foreign currency at the UK's airports are now receiving less than one euro to the pound.
The continued fall in sterling's value means that the average rate available at 17 airport bureaux de change is now just 99 euro cents to the pound.
Another gainer on the FTSE 100 was Rolls-Royce (LON:RR.), which added 1.3% to 785.5p after JPMorgan Cazenove upgraded its price target on the stock to 890p from 835p as it took a look at the UK aerospace and defence sector.
Firms in the construction sector were the biggest losers, with Persimmon (LON:PSN) shedding 3%, Taylor Wimpey (LON:TW.) and Travis Perkins (TPK) each 2.6%.
The FTSE 250 midcap ticker ended down 0.1% at 17,978 and led by Moneysupermarket.com (LON:MONY) down 5.3% to 283p.
The FTSE AIM 100 Index was down 0.4% at 3960 and the FTSE AIM All-Share Index down 0.1% at 825.
London gainers just pipped losers by 33% to 32% while 35% of stocks were unchanged.
Midsession
- Brent crude hits 2016 high of US$53.50 a barrel
- Pound still changing hands for US$1.24
- Banks and builders under pressure
FTSE 100 was flirting with a new record as it moved 55.31 points higher to 7,099.71.
The current closing high for the index of blue-chip shares is 7,103.98, while the intra-day zenith is 7,122.74.
We are within spitting distance of both, with the jump in the oil price re-energising the energy stocks.
Wall Street’s positive open acted as an added propellant to the Footsie.
Royal Dutch Shell (LON:RDSA) lead the list of big hitters, followed miners Anglo American (LON:AAL) and BHP Billiton (LON:BHP). The banks and builders were under pressure mid-afternoon.
1.00pm - FTSE 100 moves into the blue ahead of expected firm US open
After a dull start the Footsie has sauntered into positive territory, with the bulls drawing encouragement from an expected bright start on Wall Street.
The top-share index was 20 points higher at 7,064 a little after 1.00pm, as spread betting quotes pointed to an eight point gain at the outset for the S&P 500 index.
Power systems developer Rolls-Royce Holdings PLC (LON:RR.) jetted to the top of the Footsie leader-board as sterling took another turn for the worse. The jet engine designer reports its results in pounds but much of its revenue is dollar-denominated.
Its shares were up 1.9% at 790.5p.
Bookmakers were in focus as Deutsche Bank upgraded Ladbrokes PLC (LON:LAD) from ‘hold’ to ‘buy’ while Ladbrokes’s perennial rival William Hill PLC (LON:WMH) confirmed it is in discussions with Canadian online gaming firm Amaya about a “merger of equals”.
Ladbrokes climbed 3.4% and William Hill climbed 2.5%.
In other mergers & acquisitions news, copper project developer SolGold plc (LON:SOLG) has spurned the chance to have mining titan BHP Billiton plc (LON:BLT) as a shareholder.
SolGold’s shares were 20% higher at 20p as the company revealed it was against a proposal for BHP Billiton to buy enough SolGold shares at 22 cents a pop to give it a 10% stake.
"We are very pleased to see BHP join a growing list of international mining companies that are interested in investing in SolGold; however, the current US$33 million financing with Maxit and Newcrest is the preferred option at this time as it leaves us in control of this very exciting project at Cascabel,” said SolGold executive director Nick Mather.
A bit more of a co-operative attitude was evident at Avocet Mining PLC (LON:AVM), which has formed a joint venture with Moroccan mining group Managem to develop Avocet’s Tri-K gold project in Guinea.
Avocet’s shares rose 9% on the news.
Noon - FTSE 100 and small cap update
FTSE 100 had rallied by lunchtime after an early bashing for the banks as more dubious practices surfaced at RBS.
At just gone noon FTSE 100 was up 12 at 7,057.
Away from the large caps it was Aussie firm Innodavderma PLC (LON:IDP) that was leading the way, notching up an impressive 270% gain to 275p on the back of buoyant sales of its skinny tan spray-on.
Scancell Holdings Plc (LON:SCLP) rose 18% to 129.7p as it said a new drug, called SCIB2, will be used in a phase I/II clinical to help patients with non-small cell lung cancer.
Ethiopia was a feature among the fallers, where a state of emergency has been declared for the next six months.
Pittards PLC ( LON:PTD) dipped 5% to 91.6p as the Foreign Office advised people not to travel to East Shewa where its tannery is located, while Kefi Minerals PLC (LON:KEFI) was marked down 6% to 0.43p even though the miner said its Tulu Kapi mine in the country was unlikely to be affected.
10.00am - FTSE 100: Gains on miners more than offset by weak banks, as RBS cops it again
Banks were dragging the top-share index down in early deals, offsetting rises seen on mining stocks.
At just gone 10.00, the FTSE 100 was down seven points at 7,037.
Royal Bank of Scotland Group PLC (LON:RBS) was off 2.8% in the wake of reports that it had in the past deliberately damaged businesses, or in some cases allowed business to go under, in order to boost its own revenues.
“The evidence now looks pretty damning against Royal Bank of Scotland, yet the irony is the taxpayer is going to end up carrying most of the can for any misconduct costs, as the Exchequer still owns around three quarters of the bank,” observed Laith Khalaf.
“The financial watchdog will give its verdict on the allegations facing RBS in due course, which could lead to yet another fine, and the prospect of a fresh wave of litigation. It’s a sad fact that despite the spectre of the PPI scandal beginning to fade away, conduct costs remain a material threat to the Royal Bank of Scotland,” Khalaf opined.
That being said, RBS’s losses were pretty much on a par with those being suffered by sector peers Lloyds Banking Group PLC (LON:LLOY) and Barclays PLC (LON:BARC) this morning.
At the other end of the Footsie leader board, sterling’s weakness continues to boost mining giants such as Anglo American PLC (LON:AAL), up 0.9%, and Rio Tinto PLC (LON:RIO), up 0.7%, while precious metals miners such as Fresnillo PLC (LON:FRES), up 2%, and Randgold Resources PLC (LON:RRS), up 1.4%, fare even better after last night’s US presidential debate.
The price of gold has headed higher after Democrat nominee Hillary Clinton failed to deliver a knock-out blow to Republican rival Donald Trump who, just as pertinently, avoided shooting himself in the foot.
“A more measured temperament than last time increases the risk that ‘the Donald’ could triumph, even if Hillary is leading in the polls,” commented Mike van Dulken, head of research at Accendo Markets.
BHP Billiton PLC (LON:BLT) was trailing most of its mining brethren after having a proposal to take a stake in SolGold PLC (LON:SOLG) rejected by the copper project developer’s board.
Read SolGold tells BHP Billiton to buzz off
The trading statement from hair-loss remedy provider and self-tanning products provider InnovaDerma PLC (LON:IDP) was a corker, sending shares soaring to 310p from 100p overnight.
The board said full-year profits for the year that ended 30 June would be significantly higher than the previous year.
News of a contract win hoisted Petards Group PLC (LON:PEG) to 18.375p from 15.5p at Friday’s close. The software developer won a contract to supply Great Western Railway with its eyeTrain systems.
Full-year underlying losses at Surface Transforms PLC (LON:SCE) widened to £640,000 in the year to 31 May from a loss of £418,000 the year before, sending the shares 8% lower.
The carbon fibre materials specialist said the increased loss was largely down to an increase in research costs to £1.25mln from £933,000 the previous year.
8.30am - Miners add a bit of shine to otherwise dull market
The FTSE 100 kicked off the week in quiet mood and at 8.30am was down 2 points at 7,042.
The main risers on the big board were the precious metal miners Fresnillo (LON:FRES) and Randgold (LON:RRL), followed closely by Polymetal (LON:POLY) and Anglo American (LON:AAL).
The banks and airlines, meanwhile, were on the sell list.
In the second division, William Hill (LON:WH) got off to a galloping start as it rode 5% higher after confirming it is in merger talks with Canada’s Amaya Inc.
The bookmakers were the focus of Deutsche Bank note with Ladbrokes (LON:LADB) the beneficiary of an upgrade to ‘buy’ from ‘hold’.
6.30am - Trump dominates market sentiment
The FTSE 100 is set to open the week in positive territory with the twists and turns of the America’s presidential campaign now exerting their influence on the markets.
The index of blue-chip shares is expected to advance 14 points to 7,058.39.
Donald Trump fared a little better against his Democrat rival Hillary Clinton in their second televised face-off.
But analysts said Trump’s deeply misogynistic remarks made over decade ago, but revealed at the weekend, have the potential to not just to derail his candidacy, but destabilise investor sentiment.
“The issue for markets is the growing defection from Republican ranks against Donald Trump and the growing calls for him to step down,” said Angus Nicholson, of the spread betting firm IG.
“It’s not entirely clear if Trump even could be replaced at this point, and he stated he would not be stepping down over the weekend.
“But the risk of Trump being replaced with another candidate adds a new element of uncertainty for markets.”
With Japan and Hong Kong closed for holidays it was as quiet session in Asia with the Shanghai Composite posting a 0.8% gain and the ASX up 0.2%.
Here in the UK the week’s big, scheduled news comes from Sky in the form of its first quarter results.
- Pound worth US$1.240.
- Brent crude down 1% at US$51.54 per barrel.
- Gold trading 1.2% higher at US$1,263.90 an ounce.
City Headlines
- Anheuser-Busch InBev will wake up to the reality of its Dream Big mantra on Monday when the Stella Artois brewer’s £79bn takeover of smaller rival SABMiller completes, and the hard graft of delivering the returns promised to shareholders begins – FT.
- Germany is considering changing its labour laws to make Frankfurt a more attractive hub for banks looking to move staff out of London after Brexit, in the latest attempt by EU countries to woo financial institutions from Britain – FT.
- Bets against the pound have hit record highs and are expected to rise further as hedge funds, investors and other speculators see the pound falling to some of its lowest levels against the US dollar – Times.
- Australian mining magnate Gina Rinehart has made a joint bid with a Chinese company to buy one of the country’s largest cattle producers, which has pastoral leases covering more than 600,000 square miles of outback – Times.
- Facebook's UK arm ended 2015 with an £11.3mln credit to offset against future tax payments just months after vowing to contribute more to the Exchequer – Telegraph.
- Gemfields, the emerald and ruby miner, is weighing a potential sale of its luxury jewellery business Fabergé after receiving interest from a number of suitors over the past few months – Telegraph.