FTSE 100 shares closed near their nadir of the session on Wednesday, after US markets were unable to offer any respite from sterling hitting a 168-year low on continued Brexit woes.
The blue-chip FTSE 100 closed down 0.7% at 7,024 and rather too close to breaking below 7000. The day’s low point, struck an hour before the close was 7,015.
According to a trade-weighted index measuring sterling against a basket of major currencies, the pound has now slumped to its lowest level on record – back to the 1800s in fact - according to data compiled by the Bank of England.
The pound’s effective exchange rate, which is weighted to reflect the UK’s trade flows, hit a low of 29.27 on Tuesday – weaker than the depths hit during the 2008-2012 financial crisis, Britain’s ejection from the European Rate Mechanism in 1992, and its decision to leave the Gold Standard in the 1930s.
The effective exchange rate has broken fresh ground as the pound has fallen to new 31-year lows against the dollar on the back of jitters about the possibility of a “hard Brexit”.
On Wednesday, British premier Theresa May said she would give Parliament a debate on the UK’s proposed exit proceedings from the European Union and signalled a willingness to maximise the benefits of continued membership of the single market for trade. That helped steady the pound.
The top faller on the FTSE 100 was housebuilder Taylor Wimpey (LON:TW.) which dropped 2.7% to 143.7p on no specific news.
The FTSE 250 index was down 0.7% to 17,956 as midcaps were not left out of the rout. Investors made a meal of Domino’s Pizza (LON:DOM) down 5.2% to 353.5p – in spite of broker Numis reiterating a 'buy' rating and target price of 446p after the fast food group reported a third quarter trading update.
In a trading update for 27 June to 25 September, Domino's said trading in the core UK business was strong, driven by continued investment in its digital platform and supported by the 21 new stores opened in the period, which brought the total year-to-date to 51.
There was better news among small-caps.
The FTSE AIM 100 Index ended up 0.1% at 3970 but the FTSE AIM All-Share Index edged lower by 0.1% to 826.
Mirada (LON:MIRA) was the top gainer in London overall, up 26% to 4.25p after reporting a strong first half.
Meanwhile, Synairgen (LON:SNG) was the top faller, by 33.8% to 22.5p after the pharma group reported that drugs giant AstraZeneca (LON:AZN) had decided to stop the clinical trial of asthma treatment drug AZD9412, or inhaled interferon beta-1a.
Synairgen said Astra halted the trial because of difficulty in determining primary endpoint as there were very low number of severe exacerbations overall. AstraZeneca will now review the data and study design before deciding on the best way forward for the program, the company added.
2.30pm - FTSE 100 becalmed; receives no help from across the pond
If the Footsie had been hoping for a leg-up from US markets it has been disappointed, as markets opened weaker stateside.
The FTSE 100 was off 17 points at 7,043, with Costa Coffee group Whitbread plc (LON:WTB), still the worst performing blue-chip, down 2.2%.
Royal Bank of Scotland Group PLC (LON:RBS) is the hardest hit of a soft banking sector after Alpha Value flip-flopped its position, moving from 'buy' to 'reduce'.
A quarterly production update has lifted Petroneft Resources PLC (LON:PTR) by 12% to 3.25p.
The oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, saw its share of barrels of oil produced per day rise to 1,658 in the third quarter from 1,230 in the second.
The similarly named Petrel Resources PLC (LON:PET) was also wanted, as it said details of its proposed work programme on the Tano acreage off the coast of Ghana had been submitted to the Ghanaian authorities in Accra.
The shares advanced 12% on the news.
Gunsynd PLC (LON:GUN) shares slumped by one-sixth to 0.06p as the natural resources investment company placed shares at 0.055p to raise £300,000.
Noon - FTSE 100 drops 17 points
London's blue chips are treading water after an early dip. FTSE 100 has shed 17 to 7,053.
Paddy Power (LON:PAP) is the best performer with a 3% gain to 143p. Glencore (LON:GLEN) is also in demand at 227p, up 2.3%.
Brewer and restaurant group Whitbread is propping up the index having shed 2% to 3,800p.
Among the small caps, Vela Technologies PLC (LON:VELA) is up 10% to 0.17p as Portr Limited, where it has a 3.9% stake, has just launched a service with British Airways where passengers can remotely check in their luggage .
Mirada Plc (LON:MIRA) has gained 13% to 3.8p. The roll-out of its interactive software platform with Mexican cable TV group izzi is going well.
On the downside, Premier Foods PLC (LON:PFD) has shed 14% to 45.2p as it revealed its grocery business was hit hard by warm weather in the Autumn, especially September, which knocked gravy and dessert sales.
Diamondcorp Plc (LON:DCP) slipped 29% to 2.94p as it said more funding was required due to slow development progress at its Lace mine at South Africa.
9.30AM - FTSE 100 outshone by smaller caps as pound rebounds
UK small caps were outshining FTSE 100 as the pound rebounded as fears over a so called 'hard Brexit" subsided.
Sterling has been on the slide in recent days, while FTSE100 climbed thanks to a large number of its constituents benefiting from a weaker pound in profit terms.
At the time of writing the pound is up 1.56% against the US dollar at around 1.23, while FTSE 100 is down over 19 at 7,051 following recent highs.
On Tuesday, the blue chip benchmark narrowly missed a new record high and closed at 7,070.88.
Today sees a parliamentary debate on Brexit with Labour calling for far more transparency and discussion about the plans the government has.
The pound has also been pushed upwards as a report in Bloomberg suggested Prime Minister Theresa May had accepted that a Commons vote would be needed on her plans to take the UK out of the EU, easing fears on hard Brexit -a process where the UK would exit the single market. Connor Campbell, analyst at spread better Spreadex, added on today's Brexit debate in the Commons. "It's not a formal vote on the issue, but it's better than nothing, and has momentarily put to bed the fears of a hard exit from the EU."
On FTSE 100 the low cost carrier easyJet (LON:EZJ) was the biggest riser, flying back after recent falls after an earnings report. The biggest loser was investment and pensions group Old Mutual (LON:OML), down 2.33% to 193.2p.
In small caps, resource focused Strategic Minerals (LON:SML) was top dog, adding over 34% to 1.09p. Yesterday, the group noted the recent rise in shares but said there was nothing further to update since the release of the interims on September 29.
Conversely, Vast Resources PLC (LON:VAST) was down over 10% to 0.29p after it struck a convertible loan deal with Bracknor Fund Limited for up to US$5mln, which provides it with sufficient cash to advance its resource assets in Romania and Zimbabwe.
TV equipment firm Mirada Plc (LON:MIRA) added over 22% to 4.13p as it revealed it was making good progress with its set-top box/interactive TV software roll-out in Mexico.
Falcon Falcon Oil & Gas Ltd (LON:FOG) gushed over 9% higher at 4.5p as it said its joint venture partner Origin Energy had officially declared Amungee as a new discovery.
It follows successful drilling. The most recent results, from the Amungee NW-1H well are encouraging and evaluation work continues.
8.30am - FTSE 100 in reverse gear, easyJet higher
Falls on Wall Street and in Asia overnight made for a rather dour start to proceedings in London early on.
The index of blue-chip shares was down 22.58 points at 8.30am at 7,048.3, led lower by a bout of profit-taking after the recent stellar run of the Footsie.
Anxiety over a hard Brexit continued to dog the pound, which went below US$1.21 overnight before mounting a recovery back up to US$1.23.
easyJet PLC (LON:EZJ) had one of its better days after sounding the earnings alarm last week.
The investing public's confidence in the low cost carrier was bolstered after easyJet was able to pull off a major bond issue, The shares flew 2.5% higher.
6.30am - fall predicted
London’s blue chips are set for a weak opening following heavy falls overnight in the US and on Asian markets.
Financial spread bet firms see FTSE 100 opening around five points lower.
The UK benchmark closed near to an all-time high yesterday at 7,070 but there were sharp drops for the Dow Jones Industrial Average and in Tokyo and Hong Kong.
The pound rallied overnight on a report that PM Theresa May has accepted a hard Brexit strategy may not be possible as any decision to leave the EU has to be ratified by parliament, where a majority of MPs are said to be remainers.
Overnight ,the Dow closed 200 points lower at 18,128 with larger percentage falls for both Nasdaq and the S&P 500.
A rise in the value of the dollar against a basket of competitor currencies to a seventh month high was blamed.
In Asia, the Hang Seng and Nikkei also declined by more than 1%.
Currencies/commodities
- Crude (WTI): US$50.93 up US$0.14
- Gold: US$1,227 up US$3
- Pound: US$1.227 up 1%
Headlines
- Theresa May's Government is "not backing away" from building the High Speed 2 rail link between London and the North, the Transport Secretary will insist, writes the Daily Mail.
- Japanese technology giant Fujitsu has announced plans to cut up to 1,800 jobs in Britain, more than a tenth of its UK workforce reports the Guardian.
- The larger Sainsbury’s outlets will look increasingly like department stores as they try to fight back against the rise of the discounters reports the Guardian.