FTSE 100 stocks closed sharply lower on Friday – with losers topping 50% of the market for the first time this year - as US election jitters came to a head, non-farm payrolls Stateside did little to bolster global markets, and sterling rose sharply.
Only 14% of London’s stocks gained, another first for 2016. The rump of 36% was unchanged on the day.
While the S&P 500 was rescued from a nine-day drop – the longest since 1980 – by the US Employment Report, the figures had minimal positive impact on UK stocks where a high court block on government plans to rush through Brexit have given sterling a huge lift this week, but saddled stocks with a deficit on the week.
UK shares also came under pressure amid a narrowing of Hillary Clinton's lead in the polls over her rival Donald Trump for the White House this week.
The blue-chip FTSE 100 index ended down 1.4% - nearly 100 points – at 6693. That was down more than 300 points from the 7000 mark where it began the week.
The top loser on the index was Hikma Pharmaceuticals (LON:HIK), down 6.8% to 1628p, after broker Numis upgraded its rating on Hikma to 'buy' from 'hold' - but cut its target price to 2,350p from 2,660p. Hikma's shares have fallen 35% over the past three months. Brokers at HSBC also cut their price target on Hikma.
Another faller was British Airways owner IAG (LON:IAG), down 3.6% to 434.7p, after the airline group cut its long-term earnings forecast.
Since the Brexit poll on June 23 the top two indices have often rowed in opposite directions. If the FTSE 100 was higher, the mid-cap FTSE 250 was lower. That was repeated on Thursday over the impact of the High Court’s decision to demand the UK government gives the decision to trigger Article 50 to parliament.
But on Friday, the FTSE 250 fell even more sharply than the blue-chips, falling over 300 points, or 1.8% to 17,271.
The fall by FTSE 100 was at least understandable. The pound extended its advance against the US dollar this session, stemming the likely earnings that internationalised stocks gain from overseas assets. The sterling ascent gave the UK currency its largest weekly rise since 2009.
Sterling was up 0.6% at $1.2533, the highest level since October 7. The currency received a shot in the arm after the UK High Court Brexit ruling on Thursday.
The biggest mid-cap faller was discount furniture store DFS Furniture Plc (LON:DFS), down 9.6% to 238.5p after it was announced that investor Advent International Corporation had sold half of its holdings in the firm, leaving it with 12.1% of the stock.
The FTSE AIM 100 Index nursed a 1.1% loss to 3817 and the FTSE AIM All-Share Index ended down 0.9% - the lightest loser among the aggregate indices - at 801.
Late trading
15.15...
Prospect of a Trump presidency sees FTSE falls to 6,687
Big shake-up in the pipeline at Marks & Sparks
Best of the Best close to living up to its name
Deltex sees signs of pick-up in UK market
Today's US non-farm payrolls data proved a bit of a non-event in terms of shifting Footsie, which continued to nurse a triple digit decline.
The market had been expecting the US economy to have added 174,000 jobs in October, whereas it only added 161,000, although ameliorating the effect somewhat was an upward revision to the previous month's number, while the unemployment rate eased back to 4.9%.
“On balance, these results remain within the FOMC’s range for full employment and indicate the labour market continues to tighten. Hurricane Matthew may be partially to blame for the drop in participation, with the number of workers reporting they were unable to work due to bad weather the highest for any October in 40 years,2 noted Wells Fargo.
The FTSE 100 was down 103 at 6,687, with Hikma Pharmaceuticals PLC (LON:HIK) still the biggest faller ahead of a trading update expected next week.
The maker of generic versions of branded drugs has been dragged down along with its peers by reports that the US Department of Justice is planning an investigation into whether there has been pricing collusion in the sector.
Shares in knickers and pants seller Marks & Spencer PLC (LON:MKS) were down 1.9% at 344.6p on reports that new boss Steve Rowe is planning to close a significant number of the group's retail outlets.
Sky News reports that M&S, as well as closing a number of shops, will stop selling clothes in many others. In recent years it has been the performance of the retailer's foods division that has provided what little sizzle there has been in performance.
Though not quite living up to its name, Best of the Best plc (LON:BOTB) was among the high flyers, rising 8.2% after it raised profit expectations for the full year.
Ironridge Resources PLC (LON:IRR) climbed 8.1% as it revealed drilling had intersected significant gold and copper grades at its May Queen prospect in Queensland, Australia.
12.03...
The FTSE 100 has fallen below 6,700, regarded as a support level by technical analysts.
The top-share index was off 100 points at 6,690 shortly after midday, with house builders among the high-profile bits of ballast around Footsie's hull.
Persimmon PLC (LON:PSN) was down 4.5%, Taylor Wimpey PLC (LON:TW.) 4.4% lower and Barratt Developments PLC (LON:BDEV) 3.7% easier, as investors calculated that another interest rate cut might not be as inevitable as previously thought, following yesterday's comments from the Bank of England.
Inter-dealer broker Tullett Prebon PLC (LON:TLPR) brought some cheer to the mid-caps this morning with its trading statement.
The shares hardened 4% as the company said revenue in the third quarter was up 4% year-on-year on a constant currency basis.
Liberum Capital Markets helped the shares along, reiterating its view that the stock is a “conviction buy”.
At the other end of the FTSE 250 index, DFS Furniture Plc (LON:DFS) was knocked out of its seat by news that US private equity firm Advent International Corp has slashed its stake by half.
Advent was DFS’s largest shareholder this time last year, but it has since cut its stake twice. The shares lost 11% I the morning session.
Among the tiddlers, Cluff Natural Resources PLC (LON:CLNR) was getting the treatment normally meted out to small companies when they raise money through a share issue.
The shares lost around a quarter of their value at 2.675p, as the natural resources investing company flagged up plans to raise £1.8mln by placing shares at 2.5p a pop.
Going the other way was medtech firm Deltex Medical Group plc (LON:DEMG), which rose 8.1% to 4.5p on the back of its largest National Health Service (NHS) order in two years.
A huge market exists for Deltex's CardioQ-ODM+ monitors and oesophageal probes in the UK, but the maddeningly slow pace at which some parts of the NHS work has encouraged the company to redirect its focus to overseas markets of late, especially the US.
Apparently, doctors put their foot down and insisted administrators bought a replacement for kit ordered in 2013.
11am...
The FTSE 100 slipped further as it approached the midway point on Friday.
It is down more than 1% this morning to sit at 6,711 as nervous traders to continue to bite their nails ahead of next week’s US elections.
Like the blue chip index, shares in International Airlines Group PLC (LON:IAG) continued to fall throughout the morning as well, down more than 4% after it cut its growth forecast on Brexit fears.
The luxury car competition host Best of the Best plc (LON:BOTB) was one of the morning’s main risers in the small cap world.
Shares revved more than 12% higher as management told investors that it expects profit before tax for the six months to October to come in ahead of forecasts.
In other news, UK car registrations saw a modest year-on-year rise of 1.4% last month, according to official industry figures.
Over 2.3mln cars have been registered in 2016 so far, some 56,000 more than at the same point last year, although diesel registrations continue to fall in the wake of last year’s emissions scandal.
9.45am...
Donald Trump continued to cast an orange shadow over London, while local issues such as the parliamentary vote to ratify the EU referendum decision were making the natives restless.
The FTSE 100 was down more than 1%, off 73 points at 6,717. According to charts guru Zak Mir the 6,700 mark is regarded as a support level, so if the Footsie falls below that the week could end on a real sour note.
A report in the Wall Street Journal suggesting the US Jutice Deparment could bring criminal charges against several generic drugs makers on the grounds of alleged pricing collusion hit Hikma Pharmaceuticals PLC (LON:HIK).
The company was the biggest faller on the Footsie, down 6.3% at 1,636p.
Barely a handful of blue-chips were in the blue. Defensive stand-by favourites SSE plc and National Grid PLC are holding their own in the utilities sector, while in the defence sector Rolls-Royce Holdings PLC and BAE Systems PLC eke out small gains.
Bookmaker Paddy Power Betfair plc (LON:PPB) was an early front-runner, up 3.3%, after raising full-year profit guidance.
The company had a strong third quarter, plus it is seeing synergy benefits from the merger between Paddy Power and Betfair feeding through faster than it had expected.
For the market as a whole, Windar Photonics PLC (LON:WPHO) was the top performer, rising 30% to 110.5p on a repeat order for five of its WindEYE units from a North American wind farm owner.
9am...
The FTSE 100 has been Trumped. With The Donald gaining momentum in the polls investors fretted over the prospect of the billionaire and his haircut taking charge of the world’s largest economy.
The index of blue-chip shares fell 65 points to 6,725.15. The day’s big and potentially market moving news emanates from the US in the form of jobs data (see our preview below).
Here in the UK, the shares in International Airlines Group PLC (LON:IAG) fell 2% in early trade after it downgraded its long-term profit forecasts.
The owner of British Airways and Iberia said it expects earnings before interest, tax, depreciation and restructuring to average €5.3bn in the period to 2020.
At the time of writing there were only four risers – Paddy Power Betfair plc (LON:PPB), which was up 3% after it posted better than expected third-quarter results, BAE Systems PLC (LON:BA.), Lloyds Banking Group PLC (LON:LLOY) and SSE plc (LON:SSE).
6.30am...UK market primed to fall
The FTSE 100 looks set to open on a low, making it a week to forget for investors.
The index of blue-chip shares will fall around 24 points to 6,766.51 when trading begins, according to the spread-betters. Thus far this week it has lost around 3% of its value.
Overnight, Asia stocks were down as investors continued to fret over a Trump presidency.
On Wall Street, the Dow Jones closed off around 0.2%, while the broader based S&P 500 declined 0.4% - its eighth straight down day and the index’s worst losing streak since the financial crisis.
Facebook shares lost more than 5% after it warned advertising revenues would “come down meaningfully”.
The US will continue to drive market sentiment later with the publication of non-farm payrolls.
The world’s largest economy should have added 150,000 new jobs in October, compared with 156,000 a month earlier, according to Deutsche Bank.
“The labour market is expanding but at a slower pace, which is consistent with historical record,” said Deutsche US chief economist Joseph LaVorgna
“Consequently, an upward surprise should be treated as an outlier.”
Around the markets
- Brent crude 13 cents higher at US$46.48 a barrel.
- Gold trading US$3.60 an ounce lower at US$1,299.70.
- Pound worth US$1.246.
Business headlines
- British Land is preparing to sell its 50% stake in the Cheesegrater skyscraper in the City of London for £500mln – FT.
- Google is digging in for a protracted fight with the European Commission, describing allegations that it abused its dominance in the online search business as wrong in “fact, law, and economics” – Times.
- M&G, one of Britain’s biggest fund managers, has become the first UK financial institution to take steps to restructure its business in the light of Brexit, announcing that it had applied for a licence to sell products from Luxembourg in case Britain lost its passporting rights – Times.
- Marks & Spencer is set to shut some of its international stores as part of a major cost-cutting drive – Daily Mail.