FTSE 100 weighed down by Wall St
Randgold shines with small-caps
Pound falls 0.31% against the dollar to $1.2445
Sterling gains 0.21% against the euro to 1.1596 euros
FTSE 100 stocks ended lower with sombre Wall Street shares on Monday although gold miner Randgold Resources (LON:RRS) was the stand out gainer while small-caps scaled record highs.
The blue-chip ticker closed down 0.2% at 7172 and led jointly by British Airways owner International Consolidated Airlines Group SA (LON:IAG) down 2.2% at 474.6p.
Low-paid cabin crew at British Airways have begun six days of industrial action, as the airline takes an increasingly hard line on strikes by employees. Members of the mixed fleet at London’s Heathrow Airport were set to walk out for most of this week from Sunday in a dispute over what the union, Unite, describes as poverty pay.
Alongside IAG in terms of percentage declines was grocer Tesco (LON:TSCO) down 2.2% at 193.05p with Sainsburys (LON:SBRY) losing 1.8% to 260p in sympathy.
On the upside, Randgold's shares closed 4.2% higher at 7145p after fourth-quarter profits climbed 22% to $94.3mln, and it raised its dividend by a half.
Meanwhile, the FTSE 250 midcaps closed down 0.2% at 18,377 led by JD Sports Fashion (LON:JD.) down 3.7% at 351.2p.
Housebuilders Taylor Wimpey (LON:TW.), Barratt Developments (LON:BDEV) and Persimmon (LON:PSN) were down between 1.6% and 1.7% ahead of the expected launch on Tuesday of the government's housing strategy. In the FTSE 250, Bellway plc (LON:BWY) was down 2% at 2516p.
Housing minister Gavin Barwell said on Sunday the property market was too dependent on large homebuilders.
The FTSE AIM 100 Index closed up 0.2% at 4295 and the FTSE AIM All-Share Index up 0.3% at 896 - a fresh record high.
London bourse gainers amounted to 32% and losers 33%.
1500 GMT - FTSE 100 stays weak with lacklustre US stocks
FTSE 100 sheds 9 points
Dow Jones off 5 points, buy holds 20,000 level
Broker downgrade hits Reckitt Beckiser
Randgold Resources up after strong results
3.00pm … Falls back with US stocks lacklustre …
The FTSE 100 dropped to fresh session lows in late afternoon trading as US stocks eased back in early deals, although the Dow Jones managed to hold on to the psychologically-important 20,000 level.
Around 3.00pm, the FTSE 100 index down about 9 points at 7,179, near the day’s lows, having fallen back from a session peak of 7,208.
In early New York trading, the Dow Jones edged lower, down 5 points at 2,066 as Friday’s euphoria over better-than-expected January jobs-data euphoria faded amid mixed earnings and uncertainty surrounding new US president Donald Trump’s controversial policies.
Among the fallers in London, consumer products giant Reckitt Benckiser PLC (LON:RB.) was a top FTSE 100 faller, down almost 2% at 6,987p as broker RBC Capital Market downgraded its rating to 'underperform' and cut the price target to 6,300p from 7,000.
The move followed the company's confirmation last week that it is in advanced talks to buy US baby milk company Mead Johnson for around $16.7bn.
1.15pm … Rally reversed …
The Footsie saw all of its mid morning rally reversed, drifting flat to lower again as investors looked to an expected weak open today on Wall Street amid a lack of fresh trading incentives.
Around 1.15pm, the FTSE 100 index was down around 2 points at 7,186, back near the day’s lows, having fallen back from a session peak of 7,208.73.
Dow Jones futures pointed lower with signs that markets could struggle to hold on to the 20,000 level as politics continues to hold sway.
Craig Erlam, senior market analyst at Oanda, said: “It’s been mixed start to trading at the beginning of the week as Friday’s jobs data continues to sink in and investors wait to see what Donald Trump does next.
“The new US President has been extremely active since his inauguration which has kept investors on their toes given the combination of market friendly and unfriendly policies that got him elected.
He added: “The unpredictable nature of Trump though makes it very difficult to anticipate what his next moves will be, as evidenced by his actions a week ago on immigration.
“This may ensure for now at least that while markets have remained volatile, a more cautious approach will be adopted during the bedding in period. It’s a rather quiet week from the perspective of central bank decisions and economic data which will likely feed into this as well.“
10.30am … Banks, gold miners lead rally…
The FTSE 100 index sprung to life in mid morning trading, recovering from a flat start thanks to further strength in banking stocks and a boost for heavyweight precious metal miners.
Around 10.30am, the UK blue chip index was ahead about 15 points at 7,203, just below the session peak of 7,208, having rallied from a low of 7,184.
Joshua Mahony, market analyst at IG, said: “The FTSE is resuming the rally that was instigated in the second half of last week, with financials and gold producers in particular forming the backbone of today’s gains.
“President Donald Trump has proven to be one of the biggest influences on global markets since winning the US election and Friday’s comments regarding a wish to reduce financial regulations provides yet another batch of winners, with banks rallying sharply.
“The Dodd-Frank act aimed to reduce the risks banks take, and it disproportionately affected investment banks. It’s was not surprising therefore to see the likes of Morgan Stanley and Goldman Sachs rallying strongly in Friday’s US session.”
In London, Barclays PLC (LON:BARC) led the UK banking sector higher, adding 1.6% to 232.45p on reports the lender will overhaul its back office operations under a restructuring to help it comply with new post-crisis rules.
Barclays was also helped by a price target hike HSBC in a review of the banking sector, while Lloyds Banking Group PLC (LON:LLOY) gained 1.2% at 66.62p as the same broker raised its rating to ‘buy; from ‘hold’ after hiking its target as well.
Randgold Resources Limited (LON:RRS) remained the top FTSE 100 riser, however, gaining 3.6% at 7.105p after the African gold miner reported a 76% jump in fourth-quarter profit and said it would increase its annual dividend by 52% .
Blue chip precious metals peer Fresnillo PLC (LON:FRES) was also in demand, up 1.2% to 1,486p supported by a rising gold price, which was up for a third straight session.
But among the fallers, housebuilders were under pressure ahead of the publication tomorrow of UK government's new housing strategy, with Taylor Wimpey PLC (LON:TW.) shedding 1.7% at 169.7p, and Barratt Developments PLC (LON:BDEV) down1.6% at 493.6p.
08.35am ... Edging back ...
The Footsie was fairly flat in opening trade, just edging lower as investors seek fresh direction at the start of a new week despite gains by some heavyweight mining stocks.
Around 8.35am, the FTSE 100 index was down 3.5 points at 7,185, slipping back from an opening peak of 7,195.70.
Connor Campbell, financial analyst at Spreadex, said: “The UK markets shuffled into life this Monday morning, with little in the way of news to generate any action from investors.
He added: “Beyond that, investors may end up grasping at straws this Monday and indeed the rest of the week.
“After the Federal Reserve/Bank of England/non-farm jobs report triple-whammy that compromised last Wednesday to Friday, this first full week of February is looking pretty threadbare, something that isn’t going to help with the FTSE’s lack of momentum.“
African gold miner Randgold Resources Lmited (LON:RRS) was the top blue chip gainer, up 3.6% at 7,110p after it hiked its 2016 dividend by over 50% as its full–year profits jumped as a result of higher gold prices and lower costs.
06.45am ... Lower start expected ...
London’s FTSE 100 is predicted to open the week on the backfoot as the macroeconomic train keeps rolling.
In Europe, the Germans fired a warning shot at the European Central Bank with the country’s finance minister blaming its trade surplus on the Eurozone’s loose monetary policy.
“The timing of the comments is no coincidence given last week’s broadside by Peter Navarro, Donald Trump’s chief trade advisor, and are clearly an attempt to try and deflect some of that criticism,” said Michael Hewson, analyst at CMC Markets.
Here, in the UK political efforts continue to move towards the Article 50 trigger to start Brexit proceedings.
In Asia, equity markets got off positively. Japan’s Nikkei gained 0.3% to 18,976 while Hong Kong’s Hang Seng notched 0.64% higher to 23,279. The Shanghai Composite rose 0.34% to 3,151/
Australia’s ASX 200 meanwhile was negative, dipping 0.1% to 5,615.
In the City, spreadbetting and CFD provider IG Markets called the FTSE 100 about 12 points lower ahead of Monday’s open, at 7,185 to 7,189.
City Headlines
- Business is already suffering from Brexit, according to some of Britain’s biggest companies, lending weight to a cross-party effort by MPs this week to avert the risk of the UK crashing out of the EU without a deal, reports the FT.
- But The Times reports that a hard Brexit could boost the pharmaceutical and aerospace sectors by more than £200 mlon, according to a study that reveals a surprise silver lining to leaving the single market.
- Furious institutional investors in Sports Direct are considering calling for tighter listing rules to prevent dominant shareholders flouting boardroom standards. One option is to increase the minimum proportion of a company’s shares that must be freely held to qualify for a premium listing, from 25% to 50%
- The battle for Britain’s poshest tonic is fizzing up as Fentimans prepares to take on Fever-Tree with a range of upmarket mixers, reports the Mail.
- Booker bosses will launch a charm offensive this week in an attempt to convince Britain’s shopkeepers of the merits of its shock £3.7bn Tesco merger, amid rising concerns that the deal will strangle competition in the convenience store market, the Telegraph reports.
Commodities/currencies
£/$: $1.283 pound rises
Gold: US$1,222 up US$2
OIl (WTI): Flat at US$54
Significant announcements expected
Finals: Randgold Resources PLC (LON:RRS)
Trading update: Gem Diamonds Limited(LON:GEMD)