FTSE 100 shares narrowly missed out on a record closing high on Tuesday after slipping back from record levels thanks to renewed Brexit fears which sent the pound below $1.23, as well as growing expectations of a US rate hike this year.
Earnings from stocks like Alcoa (NYSE:AA) added to the jitters.
The UK's benchmark index hit its highest ever level during trading at 7,129.83 shortly after midday. But it then fell back to finish the day 0.4% lower at 7,070.88.
Analysts said investors eased back after shares had been lifted by the pound falling on fresh worries about the economic impact of Brexit. Sterling was back at levels seen during last week’s “flash crash” for the currency. Former BoE governor Sir Mervyn King praised the belated weakness of the pound on Tuesday.
Firms with large foreign businesses, such as Burberry (LON:BRBY), were among the big winners on Tuesday. The fashion house’s shares ended up 2.5% at 1516p.
Shares in domestic companies, including housebuilders, were also doing well because of hints from the Bank of England that interest rates will remain low for a while. Building materials merchant Travis Perkins (LON:TPK) was a top 4 riser, up 3.2% to 1475p while builders Taylor Wimpey (LON:TW.) were in the top ten with a gain of 2.7% to 147.7p.
Media information group Informa (LON:INF) was the top FTSE 100 faller, of 9% to 665p after its shareholders approved the acquisition of Penton Information Services, an independent US-based Exhibitions and Professional Information Services group for £1.2bn.
Miners made up most of the rest of the top-10 fallers, including Glencore (LON:GLEN), Fresnillo (LON:FRES), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO).
The UK-centric midcaps FTSE 250 index – which usually suffers while FTSE 100 exporters gain on a fall in sterling, actually rose on Tuesday, by 0.5% to 18,073.
Clothes retailers were the top gainers. N Brown Group (LON:BWNG) ended up 16.5% to 205p after a solid half-year update and held dividend. Read more.
Meanwhile, Sports Direct (LON:SPD) were up 8.5% to 293.5p.
The FTSE AIM 100 Index was up 0.1% to 3966 while the FTSE AIM All-Share Index closed up 0.1% at 827.
Chicago Fed president Charles Evans overnight remarked that stable rates may be soon coming to an end, sending expectations of a December US rate hike higher, and further undermining sterling vs the dollar.
Late session
We obviously put the hex on the FTSE 100 (see our earlier post). Like the Grand Old Duke of York, it marched all the way to the top of the hill and all the way down again.
Mid-afternoon, the index of blue-chip shares got up above the all-time intra-day high set 18 months ago, only for Wall Street to spoil the party.
The Dow Jones fell more than 120 points, or 0.7%, as the oil price slid and US investors came down with a bout of the jitters ahead of third quarter earnings season.
So heading toward the close the Footsie was trading 19 points lower at 7,078.66. Earlier in the session it got up to a nose-bleed inducing 7,129.83 before vertigo set in.
UPDATE AT 2.15PM
The FTSE 100 is easing back in mid-afternoon after earlier hitting a new high.
The blue chip benchmark stands at 7,098, up 0.95 points having earlier been up over 28 at to 7,125.
That beat the previous landmark intra-day level, recorded in April last year of 7,124.
High Street bellwether Marks & Spencer (LON:MKS) was top dog - up 4.17% to 335p as it basked in the general upsurge in retailers as the British Retail Consortium posted a monthly update.
It showed High Street and online spending showed like-for-like sales were up 0.4% on the year in September - that was a turnaround from August’s 0.9% drop.
In small caps, Greatland Gold (LON:GGP) added over 24% to 0.18p as it kicked off drilling at the Ernest Giles gold project in Western Australia and expects the programme to take six weeks with assays to follow.
Other resource stocks on the up were Strategic Minerals plc (LON:SML),up over 18% to 0.74p and Prairie Mining Ltd (LON:PDZ), which added over 37% to 16.5p as it told investors it had acquired the Debiensko Hard Coking Coal Project, a fully permitted, "mine ready" project of significant global scale.
Midday...FTSE 100 at new intraday high
- Pound goes below US$1.23 amid ‘hard Brexit’ fears
- Brent crude off 1.2% at US$50.75 a barrel
- Gold at pre-referendum levels at US$1,253.25 an ounce
- RBS woes rumble on
12pm Break out the Kleenex, we are in nose-bleed territory.
The FTSE 100 hit a new intra-day high in early afternoon trade as it climbed 28.48 points to 7,125.98. That beat the previous landmark, recorded in April last year, of 7,124.69.
Leading the charge were retailers Next (LON:NXT) and Marks & Spencer (LON:MKS) after a cautiously optimistic monthly update from the British Retail Consortium.
Costa Coffee owner Whitbread (LON:WTB) also received a boost.
We had a rebound from the builders, which fell on Monday, while fund manager Old Mutual (LON:OML) and support services firm Capita (LON:CPI) topped the losers’ list.
The pound, meanwhile, fell below US$1.23 amid heightened fears over the potential economic fall-out from a hard Brexit.
After hitting a 2016 high on Monday, Brent crude fell back 1.2% to 50.75
9.28AM - FTSE 100 breaches previous highest close
FTSE 100 has breached its previous highest closing level and is nudging towards a new intra-day record.
The index of leading shares is at 7,118, up around 20 points, and nearly at 7,122 - the previous highest intra day level seen in April last year.
It is above the highest previous closing level set at the height of the tech boom in 1999 - of 7,104.
Driving momentum is the higher oil price and the continued weaker pound, which benefits the leading share index - 70% of which is made up of firms which derive foreign income.
Against the US dollar the pound is down 0.61% at the time of writing.
The more domestically focused FTSE 250 is also higher - up 18 points to 18,034 - while in small caps FTSE AIM 100 is up 0.11% to 3,965.
Low cost carrier EasyJet (LON:EZJ) was among the laggards as fuel prices continue to hit airline groups and after EasyJet announced a profit warning last week. Shares flew 0.79% lower at 868.61p, while the biggest gainer on the blue chip index was hospitality and hotel group Whitbread (LON:WTB), up 2.76% to 3,872p.
Fashion group Burberry (LON:BRBY) was also a gainer, adding 2.39% to 1,514p.
Closely watched online retailer N Brown Group plc (LON: BWNG) and FTSE 250 group saw shares surge over 14% to 201.30p as it reported strong growth in online sales.
In small caps, North Sea oiler Jersey Oil & Gas plc (LON:JOG) gained over 8% to 66.75p as it continues to enjoy the market response to its farm out with major Statoil.
Atalaya Mining plc (LON:ATYM, TSE:AYM), the Spanish mining group formerly known as EMED, added almost 6% to 89p a pop.
It told the market that output from its Proyecto Riotinto asset had doubled in the third quarter as ramp up operations continue.
The mine, in southern Spain, yielded some 8,752 tonnes of copper in concentrate in third quarter, the company said.
A total of 2.0 million tonnes of ore were processed.
The FTSE 100 opened up in positive territory, pulled higher by the natural resources sector.
At 8.40am, the index of blue-chip shares was 7,114.23, up 17.73 points, and just nine points shy of a new intra-day high.
Rio Tinto (LON:RIO) and Anglo American (LON:AAL) benefited from a more benign assessment of the mining sector by UBS.
The latter was upgraded by the Swiss house, albeit to an ‘on-the-fence’ neutral recommendation.
Costa Coffee owner Whitbread (LON:WTB) topped the Footsie risers’ list with a 2.8% gain, followed by other consumer-led stocks Burberry (LON:BRBY) and Next (LON:NXT).
6am...Spread betters pessimistic (and wrong)
The FTSE 100 index is set to open some 20 points lower, giving back some of yesterday’s gains, despite US indices advancing overnight. Spread betting quotes point to the top-share index opening at around 7,078. US markets moved higher yesterday, with the S&P 500 advancing just under 10 points to 2,164 and the Dow Jones average climbing 89 points to 18,329, as pundits mulled the outcome of Sunday night’s rancourous US presidential debate. As in the UK, oil stocks enjoyed a good day stateside, helped by the oil price heading north in the wake of comments by Russian leader Vladimir Putin. He was “Putin it about" at an energy congress in Turkey that Russia would be prepared to cut oil output if the oil cartel Opec did likewise. Asian markets were mixed this morning heading towards the final hour of trading, with the Nikkei 225 in Japan up by one percentage point, or 164 points, to 17,024 while Hong Kong’s Hang Seng index was down 1.2%, or 274 points, at 23,578. In the UK on the corporate front, investors will be keeping an eye out for interim results from fashion firm Ted Baker PLC (LON:TED), while the trading statement from recruitment firm Pagegoup PLC (LON:PAGE) might give some clue as to the health of the UK recruitment scene in the post-Brexit vote environment.
Around the markets
- Oil: Brent crude for December delivery was down 0.2% or nine cents at US$53.05 a barrel, paring some of yesterday’s gains.
- Gold: The price was 40 cents easier at US$1,259.90 an ounce
- Sterling: The pound was buying US$1.2314 and €1.1073
- Bonds: Laith Khalaf atr Hargreaves Lansdown noted yesterday that the yield on the benchmark 10-year gilt had risen above 1% for the first time since the UK’s EU referendum result was announced. US bond markets were closed yesterday.
Headlines
- Facebook gives the office its big thumbs up with the launch of Workplace – The Times
- William Hill's Amaya merger looks like a bad bet – The Independent
- Pound needs to fall further, says former BoE governor and currency guru – Daily Telegraph
- Uber’s main UK business paid only £411,000 in tax last year – The Guardian
- BP rises as boss vows to protect its 6% dividend while predicting oil price will stay around $53 over the year to come – Daily Mail