FTSE 100 ends higher on Unilever
FTSE 250 sags
Pound falls 0.3% against the US dollar to $1.2435
Sterling steady against the euro at 1.1842 euros
FTSE 100 shares ended higher on Wednesday, as Unilever talked up a review to show more shareholder value and Lloyds Banking posted its highest profit in a decade.
The blue-chip FTSE 100 closed up 0.4% at 7302 and led by Unilever (LON:ULVR) up 5.7% at 3791p. Although US foods behemoth Kraft Heinz (NASDAQ:KHC) walked away from a merger with Unilever on Monday, the Anglo-Dutch group has been provoked into a “comprehensive review” of options to deliver value to shareholders.
The company said that “the events of the last week have highlighted the need to capture more quickly the value we see in Unilever”.
It expects the review to be completed by early April.
Early frontrunner Lloyds Banking (LON:LLOY) ended up third top riser with a 4.4% advance to 69.7p after announcing that its profit for last year was up 158%.
The figures were helped by a reduction in payment protection insurance provisions.
Meanwhile, the mid-cap FTSE 250 had a rougher day, ending down 0.5% at 18,677 and led by Serco Group plc (LON:SRP) down 19.8% at 119.3p after a mixed bag from its full-year earnings.
The outsourcer reported a drop in trading profit for the year to the end of December as revenue declined, but it swung to a pre-tax profit and reiterated its guidance for 2017.
Underlying trading profit fell to £82.1mln from £95.9mln, with discontinued operations - the exit of its private sector business process outsourcing operations - reducing profits by £19mln.
The FTSE AIM 100 Index ended up 0.1% at 4361 and the FTSE AIM All-Share Index flat at 909.
London gainers amounted to just 28% while the losers were 35%.
1230 GMT - FTSE 100 up but off highs as New York retreat seen
FTSE 100 index up 12 points
Lloyds' higher with investors pleased by special dividend
Sterling lower despite UK growth lift
Blue Prism shines amongst small caps
12.30pm … Off highs as US start eyed …
The FTSE 100 index drifted off earlier highs as lunchtime as investors eyed an expect retreat from record highs today by US stocks, although solid UK economic growth data and a post-results jump from Lloyds Banking Group PLC (LON:LLOY) keep the market positive.
Around 12.30pm, the UK blue chip index was about 12 points higher at 7,287, easing further below the session peak of 7,303.
On currency markets, the pound was 0.3% lower against the dollar at US$1.2434 as investors awaited US Federal Reserve meeting minutes, due this evening, and remained flat against the euro at €1.1840.
There was only a small boost from news the UK economy grew by a faster than expected 0.7% in the second reading for the final quarter of 2016, marginally higher than the consensus forecast for a 0.6% increase which would have been in line with the preliminary estimate.
Connor Campbell, financial analyst at Spreadex, “Looking ahead to the US open and there is little on offer to challenge the GDP data for dominance, at least not until the latest Federal Reserve meeting minutes are released this evening.
“The Dow Jones is set to fall 25 points after the bell, taking it back under 20700, though the US index has been known to find a second wind later in the session.”
In London, on the small cap front, robotics and artificial intelligence specialist Blue Prism (LON:PRSM) gained 6.6% at 476.5p after it said it expects revenue this year will be materially ahead of expectations after a rash of new orders.
But Beowulf Mining plc (LON:BEM) dropped 16% to 10.375p on news the Swedish mining inspector has invited it to supplement its existing Environmental Impact Assessment (EIA) for the Kallak North iron ore deposit should it wish to do so.
And cyber security and risk mitigation software provider NCC Group PLC (LON:NCC) today warned on trading at the arm and instigated a strategic review, sending its shares 23% lower.to 96.25p.
10.15am … Stays strong as GDP beats …
The Footsie held firm as the morning session progressed, helped by solid UK growth data, while Lloyds Banking Group PLC (LON:LLOY) remained a good gainer after its 2016 results pleased investors, although other banks fell back.
Around 10am, the FTSE 100 index was up about 22 points at 7,297, just below the session peak of 7,303.
There was a small boost from news the UK economy grew by a faster than expected 0.7% in the second reading for the final quarter of 2016, marginally higher than the consensus forecast for a 0.6% increase which would have been in line with the preliminary estimate.
David Cheetham, chief market analyst at XTB.com, said: “This is clearly a positive sign for the UK economy but hasn’t seen too big an impact in the markets possibly due to an accompanying decline in business investment.
“Overall this reading serves as further evidence that the UK economy is chugging along nicely and showing little by the way of ill effects due to the impending Brexit.”
On currency markets, sterling remained 0.2% lower against a stronger dollar at US$1.2449 as investors were more keenly awaiting Federal Reserve meeting minutes, due this evening. Against the euro, the pound was flat at €1.1844.
Lloyds continued to be a positive focus among the blue chips, adding nearly 3% at 69.25p as it announced plans for a special dividend after its full-year results more than doubled.
But global banking giant HSBC Holdings PLC (LON:HSBA) was again the biggest FTSE 100 faller, shedding another 5.9% at 670.5p following yesterday’s 2016 results disappointment, with negative broker comment continuing to flow.
Both Deutsche Bank and Barclays Capital downgraded their price targets for HSBC shares today.
Meanwhile, Barclays PLC (LON:BARC) and Royal Bank of Scotland PLC (LON:RBS) both gave back earlier gains, off 0.3% at 236.8p and 3% at 251.3p respectively, with the two lenders set to report their latest results over the next two days.
On the second line, outsourcing group Serco PLC (LON:SRP) was the biggest FTSE 250 faller, dropping 14% to 127p after disappointing the market with an 11% organic decline in 2016 revenues.
But refocused events and exhibitions organiser UBM PLC (LON:UBM) was a top mid cap gainer, up 4.6% to 760p as the firm reported a solid set of full-year results which “beat at all levels”, according to analysts at Liberum Capital..
Among the small caps, retail software specialist OneView PLC (LON:ONEV) jumped 70% to 5.75p on news of a multi-million dollar agreement with existing client Discount Tire Corporation, the world's largest independent tyre and wheel retailer.
And Lombard Risk Management plc (LON:LRM) rose 3.1% to 8.25p as it revealed increasing success in North America for its COLLINE collateral management system.
8.45am ... Positive start ...
The FTSE 100 kicked off in positive territory thanks to another record session on Wall Street and a boost from Lloyds Banking Group (LON:LLOY).
At 8.40am the index of blue-chip shares was up 20 points at 7,295.11.
Where HSBC Holdings PLC's (LON:HSBA) earnings undershoot acted as a day-long depressant on the stocks iindex, Llodys numbers had the opposite effect.
The results themselves actually undershot expectations. However, sentiment was buoyed by a 13% hike to the ordinary dividend and the pledge to make a special, one-off payout.
The shares advanced 3.6%.
"The capital cushion remains strong, the cost-to-income ratio is leading edge and the special dividend is representative of confidence in the outlook," said Richard King, head of research at Wilson King Investment Management of the Lloyds full-year results.
"Indeed, a projected yield for the stock of over 5% is not far from the halcyon days when the bank was the bellwether of high and stable dividend income."
Barclays PLC (LON:BARC) and Royal Bank of Scotland PLC (LON:RBS) were also given a boost.
Just behind Lloyds on the leader board was Barratt Developments PLC (LON:BDEV), up 3% after first-half figures beat expectations.
There was some profit-taking among the miners after Tuesday's gains with Anglo-American PLC (LON:AAL) leading the losers, while sellers of Mediclinic International PLC (LON:MDC) were out in force for a second day after yesterday's profit warning
Proactive news headlines:
Lombard Risk Management plc (LON:LRM) rose 3.1% in early deals as it revealed increasing success in North America for its COLLINE collateral management system.
South Africa-focused gold miner Pan African Resources plc (LON:PAF) boosted earnings and said it would pay a record dividend even after a fall in production and small rise in costs in the first half. Shares rose 1.5% to 17p.
Renewable energy and forestry management firm Active Energy Group PLC (LON:AEG) said its wood fibre business in the Black Sea region had seen a slow-down in activity as a result of the military coup in Turkey in July 2016. AEG indicated revenues for this division in 2016 were down year-on-year though gross profits are expected to be up on 2015's levels.
Advanced Oncotherapy PLC (LON:AVO) has secured financing of up to £52mln to help fund the development of its LIGHT proton therapy system.
The agreement with Dubai-based Bracknor Investment Group will see AVO issue a minimum of £13mln in convertible loan notes in tranches of £1.3mln each over the next 24 months. Shares eased 5% to 65p.
NetScientific PLC (LON:NSCI) investee company Vortex Biosciences has begun the commercial launch of its VTX1 Liquid Biopsy System. The fully-automated technology offers a breakthrough in early cancer detection in that it is able to collect circulating tumour cells (CTC) from the bloodstream that provide the tell-tale sign of the killer disease. Shares flat at 59.5p.
Mobile live video streaming specialist Servision Plc (LON:SEV) has raised US$2mln and at a significant premium. A New York-based group of private investors – Cascade SVP – has agreed to subscribe for 14.1mln shares at 11.4p each; a 280% premium to yesterday’s close. Shares jumped 130% to 6.32p.
Radiation detection specialist Kromek Plc (LON:KMK) has unveiled a new five-year contract to an unnamed US customer described as being in the homeland security marketplace. It is an existing customer, and the company said the contract is worth at least US$3.1mln. Shares rose 5% to 22.5p.
Ariana Resources (LON:AAU) PLC is now regarding its Tavsan gold deposit in Turkey as more of a standalone heap leach mining operation after analysing the latest exploration programme.
Savannah Resources Plc (LON:SAV) has raised approximately £2.24mln through an oversubscribed placing with a further £1mln pledged by its largest shareholder.
Private investment trust Al Marjan intends to maintain its shareholding of 29.99% through a subscription at the placing price of 5.25p.
6.45am ... Out of reverse gear ...
After US stock indices reached new highs yesterday, the FTSE 100 looks like it has rediscovered forward gear.
Spread betting quotes point to the top-share index opening around 10 points higher than last night's close of 7,274.
Having enjoyed their breather on Monday, US stocks got back on the trail heading north on Tuesday, with the Dow Jones racking up a triple-digit gain of 119 points to close at 20,743, while the broader-based S&P 500 was 14 points to the good at 2,365.
In Asia, Hong Kong's Hang Seng index followed the US lead, and was up 94 at 24,158 shortly before the close, but in Japan the Nikkei 225 was little changed.
After HSBC Holdings PLC (LON:HSBA) kicked off the UK banks' fourth-quarter reporting season by disappointing investors on Tuesday, it will be the turn of part-state owned lender Lloyds Banking Group (LON:LLOY) to attempt to rescue the sector picture next.
Lloyds is forecast to report a jump in 2016 pre-tax profits to around £4.4bn, up from £1.6bn a year earlier when it was hit by a huge bill for PPI scandal provisions.
Investors will also be closely watching any news on a special dividend, which could be scrapped given Lloyds is spending £1.9bn on buying MBNA’s credit card business.
Recruitment firm Hays plc (LON:HAS) is issuing its interims today, which will give the usual insight into the health of economies across the globe.
Around the markets
- Sterling: US$1.2491, up 0.19 cents
- 10-year gilt: yielding 1.325%
- Gold: US$1,234.80 an ounce, down US$4.10
- Brent crude: US$56/89 a barrel, up 23 cents
Headlines
- Hammond set for £12 billion budget windfall – The Tmes
- British Gas lines up £100 million reward – The Times
- Peugeot may get sweeteners from government to keep Vauxhall plants in the UK – Daily Telegraph
- Government ‘closely’ monitoring LSE’s merger with Deutsche Boerse – Daily Telegraph
- City watchdog investigating HSBC over potential financial crime, bank reveals – The Guardian
- EE balloons and drones to help fix mobile blackspots – The Guardian
- London Mayfair’s cheapest house is on sale for just £500,000 – The Independent
- Big pharma bets billions on ‘silent’ liver disease – Financial TimesUK boosts position as largest investor in India as the government looks to step up trade deals outside Europe – City AM