FTSE 100, 250 end lower on the week
RBS drives downward pressure
Pound down 0.49% against the US dollar at $1.2495
Sterling falls 0.52% against the euro to 1.1807 euros
London’s FTSE 100 ended lower on Friday, dragged lower by heavyweight loser RBS (LON:RBS) after it reported a ninth straight year of losses.
What’s more, shares in RBS, which the UK government has acknowledged is nowhere near a return to the private sector following a bailout nearly a decade ago, fell 4.5% to 238.2p after the bank reported a £7bn loss for 2016, far worse than the £2bn deficit posted in the previous year.
Easier Wall Street shares also didn’t help give London much impetus to challenge higher levels.
The blue-chip FTSE 100 ended down 0.4% at 7243 and it was about 60 points lower than where it began the week.
Miners also came off, with second-placed Rio Tinto (LON:RIO), down 3% to 3315.5p, BHP Billiton (LON:BLT) off 2.9% to 1308p and Antofagasta (LON:ANTO) down 2.1% to 807.5p.
On the flipside, much-maligned educational publisher Pearson (LON:PSON) staged a recovery as investors reacted to its full-year loss of £2.6bn. After falling in early trade they rebounded to stand 1.7% higher at 657p.
The education services company has been hit by a downturn in sales of text books in the US, but Pearson said it had not seen any further deterioration in trading.
But the top riser was airline group IAG - which owns British Airways and Iberia. It sawits shares rise 4.5% to 527p after it reported pre-tax profits of 2.4bn euros, despite being hit by the weaker pound.
In the FTSE 250, which fell 0.3% to 18,588 and was about 130 points lower on the week, shares in property website Rightmove (LON:RMV) led the losers at it fell 5.8% to 4000p, despite it reporting an 18% rise in operating profit to £161.6mln.
Rightmove also announced that Peter Brooks-Johnson, currently the company's chief operating officer, would take over as chief executive when Nick McKittrick retires in May.
Smallcaps also sank on Friday. The FTSE AIM 100 Index was off 0.2% at 4353 and the FTSE AIM All-Share Index down 0.2% at 907.
Losers were in the vanguard on the London market as they totalled 37% while only 25% of stocks gained.
1510 GMT - FTSE 100 tumbles further as US stocks drop back
FTSE 100 sheds 50 points
US blue chips weak after record run
RBS among laggards in London
IAG flies high after results
3.10pm ... Extends drop ...
The Footsie dropped back to hefty session lows in late afternoon trading as US stocks opened lower putting in jeopardy New York’s record-breaking run.
Around 3pm, the FTSE 100 index was over 50 points lower at 7,220, holding off the day’s worst level of 7,192, but well below an early peak of 7,271.
In early trade on Wall Street, the Dow Jones reversed some its recent record gains, losing 45 points, with the broader S&P 500 and tech-laden Nasdaq composite both lower as well.
The declines followed comments with comments from the new US Treasury Secretary which tempered any hope markets had of an immediate economic benefit fro President Trump’s proposed fiscal policies.
Joshua Mahony, market analyst at IG, said: “Stephen Mnuchin made it clear that for the most part, the new policies Trump plans to implement will make little difference to the economy, thus lowering the near-term reflationary impact.”
1.30pm ... Dull progress ...
The FTSE 100 weakened into afternoon trading as US equity markets looked lower.
London’s blue-chip benchmark was off 60 points, 0.85%, changing hands at around 7,209 shortly after 13:00.
The Dow Jones, S&P 500 and Nasdaq were all in red ahead of the open in New York.
Wall Street’s negativity follows comments from Federal Reserve officials which have tempered expectations regarding a potential new fiscal plan.
“This change of tone makes next week’s speech by US President Donald Trump much more significant in the context of what we can expect to see in the next few months, with any disappointment likely to exacerbate some of the doubts that appear to be creeping in about the new administration’s ability to deliver on their promises,” said Michael Hewson, analyst at CMC Markets.
10.00am ... Drifts lower as banks weigh ...
London’s blue chips were heading for a disappointing end to the week with the banks again dominating the headlines.
FTSE 100 was 17 points lower at 7,255 dragged lower by a ninth straight year in the red for Royal Bank of Scotland (LON:RBS).
Losses were almost £7bn, up from £2bn, with the now usual list of provisions, charges and impairments.
Chief executive Ross McEwan tried to put a brave face on it and blamed his predecessors.
“This is a strong core bank getting masked by all the sins of the past," he said, adding that 2017 would "probably" be the last year of losses.
The UK taxpayer still owns 72% and analysts suggest there is little chance of a sale of any of this stake while trading is so difficult.
It was also a poor day for colonial bank Standard Chartered PLC (LON:STAN)., which dropped 5% to 714p.
Profits recovered to US$409mln in 2016, after a first loss in more than a quarter century in 2015 but there was no dividend as there is more restructuring work to be done said chief executive Bill Winters.
Other banks drifted with Lloyds Banking Group PLC (LON:LLOY) off a couple a pence at 69p, Barclays PLC (LON:BARC) down 1% at 227p and HSBC PLC (LON:HSBA) flat at 653.3p.
Leading the risers was British Airways owner International Consolidated Airlines (LON:IAG), whose financial performance was aided by lower fuel prices. Its shares were given a further boost as it was revealed it will launch a share buy-back. Shares rose 12p to 516.5p.
IAG’s performance gave a boost to shares in easyJet PLC (LON:EZJ), which rose 14.5p to 929p.
Gold rose to a three month high which put some zip into Africa-based miner Randgold Resources PLC (LON:RRS), up 64p to 7,659p.
Top of the list of losers was Micro Focus (LON:MCRO) after an underwhelming trading update. The company agreed to merge with Hewlett Packard Enterprise’s business software arm last year. Shares fell 2.8% to 2,178p.
Among the small caps, Cambridge Cognition Holdings PLC (LON:COG) has teamed up with Japanese pharma gaint Takeda Pharmaceutical to pilot the use of an Apple Watch app that monitors patients with major depression disorder.
Cognition Kit Limited, a joint venture between Cambridge Cognition and Ctrl Group Ltd, has partnered with Takeda’s US subsidiary to test the use of the app.
A study will be conducted on the app, involving 30 participants aged 18 to 65 who have been prescribed antidepressants for clinical diagnosis of mild to moderate depression. Shares rose 10% to 85p.
Health and fitness-focused wearable technology specialist CloudTag Inc (LON:CTAG) has raised £975,000 through a share subscription. The company issued 26mln shares at 3.75p each. After expenses have been deducted, CloudTag will receive £916,500.
The company is readying its flagship product, the Onitor Track device, for commercial launch but in the meantime it signalled it would need to conduct further fund-raising exercises in the short term. Shares dropped 33% to 3.24p.
8.40am ... Footsie listless; RBS among top losers ...
The FTSE 100 opened in listless fashion as it drifted seven points lower at 7,264.33 on an unusually busy end to the week for corporate news.
Royal Bank of Scotland (LON:RBS) was off 1.5% in early trade after the state-owned lender posted a wider than expected loss.
However, top of the list of losers was Micro Focus (LON:MCRO) after an underwhelming trading update.
Leading the risers was British Airways owner International Consolidated Airlines (LON:IAG), whose financial performance was aided by lower fuel prices. Its shares were given a further boost as it was revealed it will launch a share buy-back.
IAG’s performance gave a boost to shares in easyJet (LON:EZJ).
Proactive news headlines:
Advanced Oncotherapy PLC (LON:AVO) edged higher in early deals after telling investors it had drawn the first £1.3mln from its new financing facility with Bracknor, while it also updated on progress at its new Harley Street site. Shares were flat at 56.6p.
Rare Earth Minerals plc (LON:REM) posted some modest gains this morning after Macarthur Minerals (CVE:MMS, in which Rare Earth holds a 16.56% stake) raised A$1.4mln in an oversubscribed subscription for its Australian subsidiary. Shares eased 2.6% to 0.54p.
Junior miner Savannah Resources Plc (LON;SAV) is bullish on both copper and ilmenite prices for 2017. The junior hopes to start copper production in Oman later this year if permits come through. Shares were little changed at 5.68p.
Atlantis Resources PLC (LON:ARL) has already exported power to the grid from the tidal wave turbine installed at MeyGen on Monday. Four of the high tech generators are now installed and Atlantis is moving onto the next phase f the development work. Shares rose 7% to 54p.
Sound Energy PLC (LON:SOU) said that it had drilled down to the first casing point at its latest well on the Tendara licence in Morocco.
TE-8 has so far been sunk to a depth of 461 metres and a 13-3/8 inch casing is being set in cement in the Upper Lias formation. The second casing point is at 2,070 metres. Shares were 89p, unchanged.
PowerHouse Energy PLC (LON:PHE) said it will site its gasification unit in the north-west when it arrives here in the UK next month. The University of Chester’s Thornton Science Park will be host to the breakthrough technology. Shares rose 2.5% to 1.03p.
6.50am ... Lower start predicted ...
The Footsie index is expected to continue its cautious showing at the end of a dull week’s trading, despite modest overnight gains on US markets, with the focus squarely on the final batch of blue chip bank results, notably from Royal Bank of Scotland Group PLC (LON:RBS).
Spread betting firm CMC Markets expected the FTSE 100 index to open around 4 points lower at 7,266, having shed almost 31 points yesterday as resistance around the 7,300 level continues to prove a drag.
Although the Dow Jones in New York scored a 34 point gain overnight, Asian shares were lower today, slipping from 1-1/2-year highs with commodity stocks hit by falls in copper and prices, while investors also tried to assess Washington's stance on tax and currency policies.
Michael Hewson, chief market analyst at CMC Markets UK, said: "While US markets finished the day slightly higher, and the Dow made another record close on rather vague comments from new US Treasury Secretary Steve Mnuchin, about wanting to have significant tax reform in place by the end of the summer, it would appear that once again the rally is starting to look a little tired.
"Next week it will be three weeks since US President Trump promised something “phenomenal” with respect to tax reform and it is becoming clear that investors are starting to become a little restless." In London, RBS will be the main focus having already had a big boost this week after the majority taxpayer-owned bank confirmed on Monday that it has shelved plans to sell its Williams & Glyn chain, a move which some analysts think could pave the way for resumed dividend payments in the future. But for now the under-pressure lender is expected to report an annual loss of about £5bn for 2016, which would mark the ninth straight year of losses as it continues to grApple with restructuring the government-rescued business and struggles with legacy scandal issues.
Aside from the banks, 2016 results from troubled educational publisher Pearson PLC (LON:PSON) will also be a focus on Friday, although the firm already provided its headline numbers and 2017 guidance in a trading update in January.
In a preview, analysts at Liberum Capital said they expect the FTSE 100-listed firm’s results “to demonstrate the extent of how poor cashflow is at Pearson and to show a stretched balance sheet position, driven by the collapse in US Higher Education courseware in Q4.”
Significant announcements expected on Friday include:
Finals: Jupiter Fund Management PLC (LON:JUP), Pearson PLC (LON:PSON), Royal Bank of Scotland Group PLC (LON:RBS), Rightmove PLC (LON:RMV), Standard Chartered PLC (LON:STAN), Standard Life PLC (LON:SL.), William Hill PLC (LON:WMH)
Around the markets:
- Sterling: US$1.2560, up 0.06%
- Gold: US$1,250 an ounce, down 0.2%
- Brent crude: US$54.42 a barrel, down 0.6%
City Headlines:
- UK department store chain John Lewis to cut almost 400 jobs - Finncial Times
- Regulator rejects Vodafone merger with Sky in New Zealand - Financial Times
- Westfield eyes a bargain as it splashes out on UK mall owner - The Times
- Dominic Chappell's company to sue Sir Philip Green over BHS headquarters - Dailt Telegraph
- O2's £10 billion float plans hinge on spectrum auction rules - Daily Telegraph
- Disgraced former Barclays Boss Bob Diamond is buying a Greek bank - The Daily Mail
- Vauxhall job fears rise as Peugeot Boss mentions 'speedy' savings - The Guardian
- Another Brexit boost as Lidl creates 360 jobs at new regional distribution centre - Daily Express
- Sir Viv Richards daughter is behind a new athleisure range for online retailer Koovs - Daily Mail