-- UPDATES WITH CLOSING PRICES --
FTSE 100 index closed down 0.2% at 7,327 on Monday, as the 14-session record high winning streak crashed after shares in banks and oil companies slipped.
Financial firms were hit after reports suggested that the British Prime Minister would reveal her preference for a "hard Brexit" in a speech on Tuesday. Royal Bank of Scotland Group (LON:RBS) led the losers, down 2.8% to 214.9p.
Against the dollar, the pound fell 1.21% or 1.5 cents, to $1.204 and the losses were nearly as heavy against the euro. Sterling was down 0.9% against the euro at €1.136.
The FTSE 250 mid-cap index fell 0.4% to 18,307 and was led by Allied Minds plc (LON:ALM), down 4.5% at 403p.
Conversely, the FTSE AIM 100 Index added 0.08% to 4,195 and the FTSE AIM All-Share Index advanced by 0.2% to 875.
Overall, London gainers and losers were closely matched, 32% to 34% respectively.
Banks lead FTSE 100 lower
Traders twitchy ahead of Brexit speech
Pound remains under pressure
The FTSE 100 looked set to end a 14-day winning streak with a whimper as the index of blue-chip shares fell 14 points to 7,323.66 in the final half-hour of trade.
With the US closed for Martin Luther King Day, traders were left to fret about the exact content of Theresa May’s Brexit speech Tuesday.
Reports over the weekend suggest the Prime Minister will push for hard Brexit when Article 50 is triggered in the spring, which pushed the pound below US$1.20 overnight.
“Theresa May is caught between a rock and a hard place, where support for a soft Brexit is required for business confidence yet further talk of a hard Brexit helps strengthen our hand during trade negotiations,” said Joshua Mahony, analyst at the spread betting firm IG.
“Ultimately, May has to show a willingness to take the hard Brexit approach to avoid single market access becoming the EU’s number one tool within trade negotiations.”
A Goldman Sachs downgrade to Royal Bank of Scotland (LON:RBS), left the state-owned lender foundering, but also seemed to hit the rest of the sector.
The miners, meanwhile, were in demand after a rise in both the iron ore and copper price.
3pm...FTSE 100 marks time
FTSE 100 unchanged
US markets closed for Martin Luther King day
Innovaderma tanks as sales disappoint
The US is closed today and for all the change seen in the FTSE 100, the UK market might as well have closed as well.
The Footsie was virtually unchanged at the end of the lunchtime trading session, with losses on financials offset by gains on miners.
Among the small caps, InnovaDema PLC (LON:IDP) shed just over a quarter of its value after an innocuous looking trading update.
Half-year revenues are expected to show growth of just over 80% year-on-year on a constant currency basis to around £3.0mln.
Evidently, the market was expecting more., or maybe it was the absence of any indication of what sort of level of earnings the company had seen in the period.
Also down in the dumps was Global Energy Development PLC (LON:GED), which was 23% lower after announcing a reverse takeover.
The company has entered into two share purchase agreements to acquire a total of 11 offshore service vessels, a barge vessel and other related equipment through the purchase of 100% of the issued shares in vessel-owning companies.
Reflecting the change of business, the company is to change its name to Nautilus Marine Energy Services.
12.44 ... FTSE down a couple of points
FTSE 100 was treading water in the absence of any US lead due to Martin Luther King day.
London’s blue chip index was down two points at 7,345 but still nudging close to the record high seen last Friday.
Miners led the way with a rally by the precious metal stalwarts Randgold (LON:RRS), Fresnillo (LON:FRES) and Acacia (LON:ACA).
Tanzania-focused Acacia announced Friday it was in talks over a merger with Canada’s Endeavour that also operates in Africa. Analysts were excited and the shares rose 4% to 436.4p.
Among the small gold miners Orosur Mining Inc (LON:OMI) choose a good day to publish interims, with a more than US$6mln swing into profits of US$3.7mln at the San Gregorio mine in Uruguay. Shares ticked up 10% to 16.85p.
But fake tan group Innovaderma (LON:IDP) was less than golden and dropped by a quarter to 180.7p in spite of sales rising by 80% as this looked like a major slowdown from last year.
9.44am ... FTSE 100 little changed as market focuses on forex
With US markets closed for the Martin Luther King holiday and corporate news flow thin on the ground, UK equities could be rudderless today.
The FTSE 100 certainly got off to a placid start. Despite precious metals stocks posting solid rises, the index was down four points at 7,334 after about 90 minutes of trading.
Fashion firm Burberry Group PLC (LON:BRBY) was also doing its bit to bolster the Footsie, after it announced that Marco Gobbetti, who is set to become chief executive officer in July, will be getting a bit of hands-on experience a lot sooner than that, taking over as executive chairman of the luxury goods firm’s Asia Pacific and Middle East operations, reporting to group chairman Sir John Peace.
The shares were up 1.3%, helped by a slide in the value of sterling ahead of tomorrow’s speech by the prime minister, Theresa May.
“Expectations are that she could well drop access to the single market in order for the UK to take back control of its borders,” suggested James Hughes, the chief market analyst at GKFX.
Sterling’s slide was also doing a favour for other big dollar earners, such as cruises operator Carnival PLC (LON:CCL).
Broker comment lifted fags maker Imperial Brands PLC (LON:IMT) 36p to 3,626p. Jefferies has raised its price target to 4,400p from 4,300p.
Broker-wise, the banking sector was a curate’s egg. Lloyds Banking Group PLC (LON:LLOY), where the government is no longer the biggest shareholder, had its price target increased by 10p to 68p by Deutsche Bank, but the shares still tumbled 1.4% to 65.09p.
State-controlled lender Royal Bank of Scotland Group PLC (LON:RBS) was the worst performer among blue-chips, shedding 3.3% to 213.9p, as Goldman Sachs issued a note in which it said it was neutral on the bank.
Elsewhere in the banking sector, Barclays PLC (LON:BARC) was the top-share index’s second worst performer, falling 2.1% to 230.25p.
House builders were friendless, after Deutsche Bank suggested the government’s White Paper on Housing policy may be delayed until next month.
“We continue to believe that the White Paper will be largely planning focused, but while likely to be generally supportive to house builders may contain both positive and negative implications. The perception of risk from this event we believe is impacting investors timing in the sector,” the German bank said.
Taylor Wimpey PLC (LON:TW.), Barratt Developments PLC (LON:BDEV) and Persimmon PLC (LON:PSN) all fell back by 1.5% or a little more.
The small caps end of the market was a bit more lively, with Big Data software developer WANdisco PLC (LON:WAND) surging 21% after a trading update.
The volatile glamour stock secured a record number of contract wins in the fourth quarter, which helped reduce cash burn to US$200,000 or so, versus US$6.9mln in the same period of 2015.
Tethyan Resources PLC (LON:TETH) advanced 12% to 3.5p after it said the first test results from samples taken from its Suva Ruda project showed encouraging intercepts of copper.
08.44 ... FTSE 100 up 14 points
The FTSE 100 rose 14 points in early trade to 7,351, driven higher by the mining stocks.
Anglo American (LON:AAL) led the index of blue-chip shares, boosted by the rise in iron ore and copper prices.
The advance in the value of gold meant gains for Randgold Resources (LON:RRS) and Fresnillo (LON:FRES).
The banks, meanwhile, were on offer, possibly pre-empting the latest round of financial censure by the US Department of Justice over the mis-selling of mortgage-backed bonds.
Among the smaller stocks, Myanmar-focused social media group MySquar (LON:MSQ) rose 13% after it said it now had 7.5mln registered users.
Tethyan Resources (LON:TETH) topped the AIM leader board with a 16% advance after some encouraging drill results from Rudnitza copper-gold porphyry prospect in Serbia.
6.50am....Footsie to start week on positive note
Brexit and the political noise accompanying preparations for Donald Trump’s inauguration are likely to be most talked about items this week by the folks making markets here in the UK.
The prime minister has promised us more clarity on what happens once all the legal wrangling subsides and she triggers Article 50.
Already the pound has told us all we need to know about the potential for a hard exit as it went below the US$1.20 overnight amid reports Britain could turn its back on the single market.
We’ll get some insight as to Theresa May’s negotiating game-plan when she delivers her Brexit speech on Tuesday.
“The expectation is that the Prime Minister’s insistence on being able to better control immigration as well as the UK’s law making, will result in the UK announcing its intention to leave the single market and customs union, which most investors appear to assign as being exceedingly negative for the pound,” said Michael Hewson, analyst at CMC Markets.
Meanwhile, president-elect Trump, who will be sworn into office on Friday, is promising a quick-fire trade agreement with the UK, which should have helped calm nerves on the forex markets (but sadly didn’t).
And in an interview with Michael Gove over the weekend, he said: “Brexit is going to end up being a great thing.”
Turning to the stock market, the FTSE 100 looks set to open its weekly account in the black with a 14 point gain predicted, taking the index of blue-chip shares 7,352.
The scheduled corporate updates this week include statements from Burberry, Royal Mail, Halfords and Pets at Home.
READ: Preview of the week’s corporate action
- Pound worth US$1.2036.
- Brent crude up 21 cents at US$55.66 a barrel.
- Gold trading US$.6.60 higher at US$1,202.80.
Business headlines
- Genedrive, a small British company, has clinched a rare deal with the US armed forces, providing them with millions of pounds of kit to test for biological warfare agents – FT.
- O2 and Vodafone are renegotiating their billion-pound deal to share mobile masts in a bid to speed up the rollout of the networks and keep pace with BT’s coverage expansion plans – Telegraph.
- Deutsche Börse’s £22bn billion merger with the London Stock Exchange will trigger a huge grab of business by Frankfurt from the City, a study claims – Times.
- Gold miner Acacia has revealed it is in merger talks with Canadian rival Endeavour Mining – Daily Mail.
- Hybrid Air Vehicles, the maker of the world’s largest aircraft, is planning a London flotation as it seeks funds for its plan to bring about a new dawn for the airship – Times.
- Intertain, a Canadian online bingo operator, is poised to complete long-delayed plans to move its stock market listing to London after securing final approval from the U.K. Listing Authority – Times.
- The first shots have been fired in what could be another battle over boardroom greed, with BlackRock, one of the biggest investors in U.K. companies, warning directors over excessive pay – Times.