FTSE closes up 5 points at 7,017
Pharma stocks lead gains
Pound falls 0.6% against dollar to $1.2414
FTSE shares held onto its 7,000 levels for a second successive session on Monday ahead of a key speech from Federal Reserve chief Janet Yellen.
While the market waited for a steer on 2017 US monetary policy from Yellen at 1830 GMT, the blue-chip FTSE 100 ended up 5 points, or 0.08%, at 7,017. At one point the FTSE dipped below 7,000 this session but most of the legwork to get it above 7,000 came soon after mid-session. After 1445 GMT, the FTSE 100 was just holding onto those levels, integer for integer.
The recovery was helped by a mixed range of stocks, with Hikma Pharmaceuticals (LON:HIK) leading the board with a 3.9% gain at 1861p. The pharma extended gains it had made on Friday in the wake of reports that France’s Sanofi was in advanced talks to acquire Switzerland’s Actelion.
Healthcare stock Reckitt Benckiser Group Plc (LON:RB.) was right behind it, up 2.7% at 6794p
Shares in oil giant BP (LON:BP.) were up 0.7% at 493.02p after the company announced that it was investing nearly $1bn in the Tortue gas field off the coasts of Mauritania and Senegal in west Africa.
BP has struck a deal with Kosmos Energy (NYSE:KOS) under which it will take a 62% stake in Kosmos's Mauritanian business and 32.5% of the Senegalese unit. Meanwhile, Kosmos shares were up 11% at $6.37 on Wall Street.
The mid-cap FTSE 250 ended flat at 17,782, while the small-cap FTSE AIM 100 Index ended up 0.2% at 3974 and the FTSE AIM All-Share Index up 0.2% at 826.
A total of 33% of London stocks gained on Monday while 30% fell.
14:45 GMT - FTSE 100 holds modest gains as Dow starts slowly
FTSE 100 up 5 points at 7,017
Dow gains meagre as Yellen speech awaited
Hurricane Energy whips up a storm
BP gets busy with deals in UAE and west Africa
2.45pm ... Santa Yellen a focus ....
The Footsie remained fairly moribund in late afternoon trading as US stocks failed to open with much of a festive bang as investors awaited a speech from Federal Reserve boss Janet Yellen.
At 2.45pm, the FTSE 100 index was up just 5 points at 7,017, while on Wall Street the Dow Jones added only 38 points at 19,881.
Craig Erlam, Senior Market Analyst at Oanda said: “The Dow has come close to breaching 20,000 on multiple occasions over the last four days but each time the index has fallen just short. “
He added: “The Trump rally has stalled a little in recent sessions but so far, I’m seeing few signs that we’re going to see the year out on a negative note.”
Yellen’s speech at the University of Baltimore today on ‘The State of the Labor Market’ will be scrutinised for any additional Santa or Scrooge-like guidance on monetary policy,
It marks the last of the speeches from central bank members before the Christmas break and comes less than a week after the Fed raised US interest rates for only the second time in about a decade and indicated a faster pace of rate hikes in 2017 than had previously been expected.
11.30 am ... Modest rally after slow start ...
London’s blue chips rallied from a slow start as oil companies in particular rushed to get out news before the year’s end.
FTSE100 was down 2 points at 7,009 but that was a big improvement on the start of the day.
BP (LON:BP.) was FTSE 100’s headline maker unveiling a deal to take a bigger share of the production from Abu Dhabi and secondly to take a big stake in a field offshore Africa.
If nothing else, it suggests management are finally getting some of their mojo back after the Macondo/Gulf of Mexico disaster and shares rose 1% to 494p.
Elsewhere in the sector, Hurricane Energy (LON:HUR) continued to demonstrate there is life in the North Sea.
A second major oil discovery in the waters to the north of Scotland sent its shares rising 15% to 48.5p. They started the year at around 10p.
Alas for Canadian Overseas Petroleum Limited (LON:COPL) its highly-anticipated exploration well offshore Liberia proved to be a duster.
The recent drill tests carried out at the Mesurado-1 well by owner and oil super major ExxonMobil failed to find any hydrocarbons. Shares crashed 75%.
Cruise group Carnival PLC eased 1.7% to 3,999p as German broker Berenberg cut its rating.
Berenberg lowered its recommendation on Carnival to hold from buy and reduced its price targets to £40 and $50, implying 4% downside.
“Recent trends in the cost of fuel, a further strengthening of the dollar and an increase in interest rates create headwinds that we think will be tough for Carnival to offset.”
9.00am ... FTSE 100 falls on investment fears in post- Brexit Britain ...
The prediction of a positive start to the last week before the Christmas break was thwarted by a large ladle of bah-humbug served up the Confederation of British Industry.
For the mouth-piece of big business commissioned a survey which showed that most employers deem the UK a less attractive place to invest post-Brexit.
The FTSE 100, which was predicted to open around 40 points higher, fell 22 points to 6,990.07.
The miners and banks dominated the list of fallers early on, with direction of the latter dictated by discussions to save Italy’s oldest bank, Monte dei Paschi di Siena.
A big riser among the small-caps (although at £574mln it’s not that small these days) was Hurricane Energy (LON:HUR).
Its shares were boosted by a second major oil discovery in the waters to the north of Scotland.
Up 14% in early deals, an investor who ploughed £1,000 in to Hurricane stock at the start of the year would now be sitting on £4,800.
How many oil investments have done that in the past year?
6.45am ... Strong start? ...
Matters geo-political are expected guide the FTSE 100 Monday.
The return of an American underwater drone, found by the Chinese in the South China Sea, steadied markets in Asia overnight.
The relaxation of tensions between the People’s Republic and in-coming Trump administration is expected to have a similarly calming effect here in the UK.
London’s leading spread betting outfits are predicting the index of blue-chip shares will rise 42 points on open to 7,053.44.
With four-and-a-half trading days before traders sign off for Christmas, there is a chance the Footsie could push into record territory before the festive break.
The closing high of 7,103.98 was hit last April, while intra-day summit was 7,129, which was achieved in October.
Whether we get there or not may depend on a resolution to the Italian banking wobble and specifically a speedy bail-out of Monte dei Paschi de Siena, the country’s oldest bank.
That probably won’t happen, according to Michael Hewson, analyst at CMC Markets.
“While the political picture at the top of Italian government has become a little clearer there is no reason that this particular attempted restructuring package is likely to be any more successful than the previous three, given the continued weakness of the Italian economy, which is probably why so far there has been so little investor interest,” he said.
- Brent Crude 38 cents higher at US$55.59 a barrel.
- Gold US$5.40 higher at US$1,140 an ounce.
- Pound worth US$1.2487.
Business headlines
- US industrial group Praxair and Germany’s Linde are set to announce preliminary terms of their $65bn merger as early as Wednesday in a deal that will create the world’s largest supplier of industrial gas, four people familiar with the talks said – FT.
- ICAP is preparing to process thousands of foreign exchange trades on blockchain technology amid signs the emerging standard is encroaching on global markets – FT.
- Two former UBS traders caught up in the Libor-rigging scandal have brought a case against the City watchdog alleging that it suppressed key evidence in its investigation into them – FT.
- The state of Abu Dhabi is set to become one of the largest shareholders in BP after a deal that gives the FTSE 100 group a portion of the emirate’s oil production until 2054 – Times.
- Apple is set for a fight with the European Commission over a ruling that it must pay the Republic of Ireland more than €13bn in tax, describing parts of the judgment as having “no basis in law” – Times.
- A housing association is teaming up with a Chinese-state owned company to build 25,000 pre-fabricated homes over the next five years. As part of the £2.5bn deal, which has the support of the government, the China National Building Material Company will build six factories in Britain, creating 1,000 new jobs – Times.
- The UK arm of Nissan has posted a jump in annual profits just weeks after the Government controversially intervened to ensure the Japanese car-making giant would keep investing in its major Sunderland factory following Brexit – Telegraph.