FTSE ends lower on Trump travel ban order
Vodafone among risers on India merger news
Tesco-Booker tie-up usurps share value on competition fears
Pound falls 0.5% against the dollar to $1.2484
Pound gains 0.4% against the euro to 1.1682 euros
FTSE 100 shares ended lower on Monday, following falls in Asia and Europe after President Donald Trump's decision to impose a travel ban on seven Muslim-majority countries.
The FTSE 100 ended down by 0.9% at 7,118.
The losers were led by Tesco (LON:TSCO) down 4.2% at 197.8p, giving up some of Friday's gains when the stock surged in the wake of news of its planned tie-up with food wholesaler Booker (LON:BOK).
Booker, which owns cash n carry outlets Makro also fell, by 3.5% to 204.86p in the FTSE 250 midcaps index.
Over the weekend, press reports suggested the deal faced a lengthy investigation from competition regulators.
Among the gainers, Vodafone (LON:VOD) rose by 1.3% to 195.95p after the mobile phone company said that its Indian unit was in merger talks. A combination of the two companies would create India's biggest telecoms firm.
On the FTSE 250, which closed down 0.% at 18,081, shares in
WS Atkins jumped 6% to 1484p following a report in the Times that the engineering company had been approached by US employee-owned company CH2M over a possible merger.
Flybe (LON:FLYB) shares dipped 1.1% to 45p after the airline said it had seen a "slow start" to trading since the start of the new year, blaming "uncertain consumer confidence and poor weather".
That was despite the carrier reporting "solid" trading for the final three months of 2016, with revenues boosted by extra capacity. Flybe said passenger revenues rose 13.5% in the quarter, compared with 5.7% in the previous six months.
But smaller cap tickers had a better day.
The FTSE AIM 100 Index closed up 0.2% at 4213 and the FTSE AIM All-Share Index closed flat at 881.
Overall, just 26% of stocks gained in London and 40% fell.
1530 GMT - Footsie falls as Trump's US travel ban hits global markets
Trump immigration embargo hits FTSE 100
Wall Street also in negative territory
DCC Group top riser in London's blue-chip index
On a grey day for investors, there was one bright spot on the FTSE 100.
DCC Group PLC (LON:DCC), the Irish conglomerate listed here in the UK, was up 3.4% and topped the risers’ column after Goldman Sachs promoted the stock to its ‘buy’ list.
The Wall Street bank’s price target of £74 a share (up from £70) suggests there is around 16% further for the price to go before it is fully valued.
On the debit side, Tesco PLC (LON:TSCO) was the day’s major casualty amid worries the grocer’s £3.7bn takeover of cash and carry firm Booker PLC (LON:BOK) may be de-railed by the regulators. Tesco slid 4% as Booker reversed 3.3%.
Premier African Minerals PLC (LON:PREM) put an end to funding worries earlier Monday and in the process sent its shares rocketing 33%.
Not far behind was Symphony Environmental PLC (LON:SYM), which advanced 25% after it said sales and profits would exceed forecasts.
It also revealed it had inked a deal with retailer Wilko, which will sell Symphony’s range of anti-microbial kitchen gloves.
Looking at the wider market, Donald Trump’s plans to curb travel and immigration hit the Footsie hard as it fell 60 points to 7,124.74.
Wall Street also opened in negative territory with the Dow Jones, NASDAQ and S&P all down.
FTSE 100 down around 60 points
Markets digest Trump's latest executive order
Barclays weak after Berenberg downgrade
Lloyds lower as government stake shrinks
1.30pm … Global furore …
The FTSE 100 stayed lower as investors cautiously eyed Wall Street’s restart, with the Dow Jones seen surrendering the hard-fought 20,000 level as global markets dropped today after Donald Trump’s move to ban travellers from a number of mainly Muslim countries.
US investors were also preparing for a heavy week of data, a Federal Reserve policy meeting and plenty of important company results.
In early afternoon trading, the FTSE 100 index was down around 60 points at 7,124, just holding off the day’s low of 7,117.
David Cheetham, chief market analyst at XTB.com, said: “Stock markets have started out in a defensive mode this morning with the FTSE 100 falling more than 60 points. Donald Trump is in the headlines once more as his latest executive order signed late on Friday has caused a furore around the globe.
“However it is unlikely that the weakness seen in the markets is a direct result of this, with a more plausible explanation being some profit taking after strong recent rises.”
In London, Torotrak plc (LON:TRK) shares shifted dramatically into reverse, plunging 45% to 1.0p after the vehicle fuel-efficiency technology group said the industry‘s focus on electric vehicles has led it to suspend development of its V-Charge supercharger product.
Torotrak said it is switching its strategic focus to concentrate on kinetic energy recovery systems (KERS) products.
10.30am … Trump travel impact ...
The Footsie remained weak as the morning session progressed, dropping back with global markets as US president Donald Trump’s move to ban travellers from a number of mainly Muslim countries from entering the ‘Land of the Free’ raised geopolitical worries.
Around mid morning, the FTSE 100 index was off 62 points at 7,122, just above the session low of 7,117.
Connor Campbell , financial analyst at Spreadex, said: “Pretty much everything slipped into the red this morning, the markets reacting to the fresh bout of instability brought on by Donald Trump over the weekend.
“Though the Trump rally may have lifted the markets to their current peaks, the global outrage that has greeted the President’s first week in office, the most recent instance being the well-placed disgust at his Muslim travel ban, is now beginning suppress investors’ appetites especially since, as mentioned, the indices are trading so high.”
However, he added: “To be fair to the fake-tanned Commander in Chief, the week’s cluttered economic calendar is likely also contributing to the negative start.
“Wednesday sees the first Trump-era Fed meeting, something that is expected to tee up a March rate-hike, while Thursday brings with it a Bank of England get-together.
“All this before Friday completes a trifecta of heavy-hitters with the latest US non-farm jobs report. That’s going to be a lot for the markets to process in the back end of the week, explaining why things might be a bit jittery this morning.”
In the absence of much corporate news today, broker comment provided a number of movers.
Barclays PLC (LON:BARC) was a big FTSE 100 faller, shedding over 2.5% at 224.5p as German broker Berenberg cut its rating for the banking giant to ‘sell’ on valuation grounds, saying: “No party lasts forever.”
In a note to clients, Berenberg’s analysts said: “The US and UK consumer credit cycles are nearing a crescendo and structural headwinds to investment banking (IB) remain, despite elevated event-driven activity during H2 2016.”
Discount airline easyJet PLC (LON:EZJ) also suffered, losing nearly 1% at 965p as Cantor Fitzgerald cut its stance to ‘hold’ from ‘buy’ after mixed signals in an update last week.
And temporary power provided Aggreko PLC (LON:AGK) dropped 3.5% to 1,022p as Deutsche bank downgraded its rating to ‘hold' from ‘buy’.
09.06 am ... Trump's latest twist ...
The FTSE 100 was lagging over 65 points behind in early deals as markets try and digest the latest twist in President Trump's administration, and his ban on admitting people from Muslim countries.
The UK benchmark was down 65.15 points at the time of writing to stand at 7,119. The FTSE 250 was also lower - down 118 points, or 0.65% to 18,071.
Financial stocks were getting a hammering, with Old Mutual Group (LON:OML) down over 3.3% to 206.10p and banking giant Lloyds (LON:LLOY) off 1.32% to 65p as it emerged the government had trimmed its stake to now less than 5%.
On the winning front, Vodafone Group plc (LON:VOD) was up 2.82% to 198.75p as it confirmed that it was in talks over merging its Indian business with rival Idea Cellular - part of the Aditya Birla Group.
6.50am ... FTSE 100 set to open in red ...
The FTSE looks set to open its weekly account in the red, with the stock market nervous about the ramifications of President Donald Trump’s immigration policy.
The spread betting firms are predicting the index of blue-chip shares will fall 33 points to 7,154.49 when trading gets underway later.
Those Asian markets open Monday reacted badly to Trump’s executive order suspending refugee admissions from seven Muslim-majority countries.
“As far as businesses are concerned the fallout has been negative, the ban receiving criticism from all over the business community including the CEOs of Google and Netflix, amongst others,” said Michael Hewson of CMC Markets.
The US Federals Reserve is likely to stand pat on interest rates when it meets Tuesday and Wednesday, although it should provide some insight on how chair Janet Yellen and her team view the outlook for the US economy. The Fed issues its measure of inflation later Monday.
Here in the UK, it is set to be a quieter week for scheduled corporate news, with Thursday the key day for updates with full-year results from FTSE 100 giants Shell and AstraZeneca.
Markets
- Brent crude 22 cents lower at US$55.30 a barrel.
- Gold US$7.60 higher at US$1,196 an ounce.
- Pound worth US$1.2546.
Business Headlines
- Royal Dutch Shell is preparing to introduce battery charging points at some European petrol stations and Total is working on a similar move as the region’s biggest oil groups react to rising sales of electric vehicles – FT.
- BlackRock, the world’s largest asset manager, is warning bondholders that Brexit remains a major risk event for investment portfolios this year as the U.K. prepares to negotiate its exit from the EU – FT.
- Goldman Sachs’ chief Executive has emerged as a thorn in the side of Prime Minister Theresa May, warning that European financial centres could challenge London unless her government gives more priority to the City in Brexit negotiations – FT.
- Apple is expected to return to revenue growth when it reports quarterly results on Tuesday, having recorded its first decline in full-year sales in more than a decade – FT.
- The vote to leave the European Union appears to have unshackled public spending, with data from government procurement revealing a sharp rise in the value of work put out to tender – Times.
- Tesco’s One Stop convenience chain is expected to be a key area of scrutiny for competition regulators poring over the details of the merger between Booker and Britain’s biggest retailer – Telegraph.
- Spire Healthcare is planning to set up its own network of GPs at its hospitals and clinics across the country to address a growing demand for primary care services in the UK – Telegraph.