FTSE 100 ends lower
Fed’s Yellen and WPP in focus
Pound down 0.12% against the US dollar at $1.2251
Sterling falls 0.59% against the euro to 1.1606 euros
FTSE 100 shares closed lower on Friday, cautious ahead of comments from the US central bank chief, and beaten down by advertising behemoth WPP (LON:WPP) after it signalled a cautious outlook for 2017 which even spin could not conceal.
The blue-chip FTSE 100 ended down 0.1% at 7374.
WPP shares fell by 8% to 1759p after it said 2017 had got off to a slow start, citing "tepid economic growth".
The comments overshadowed news of record annual revenues of £14.4bn, which were helped by last year's fall in the value of sterling. The nearest next big faller in the index was far behind in percentage terms, miner Fresnillo (LON:FRES) down 2.9% at 1414p mostly on technicals.
Markets were cautious ahead of Fed chair Janet Yellen’s 1800 GMT speech in Chicago which may offer more ammunition on the case for a US March rate hike.
The mid-cap FTSE 250 ended down 0.4% at 18,882 and led by Acacia Mining plc (LON:ACA) down 13.5% to 461p after the Tanzanian Ministry of Energy and Minerals imposed a ban on exports of gold/ copper concentrate.
Last year, gold/ copper concentrate amounted to almost a third of the gold miner’s total revenues.
Small-caps had a better day. The FTSE AIM 100 Index ended up 0.3% at 4419 and led by Xeros Technology Group plc (LON:XSG0 up 14.2% to 260p. Its news was that it had appointed Karen Mignone as Group Director, Sustainability and Environmental Affairs.
The FTSE AIM All-Share Index closed up 0.2% at 915.
London gainers were in a minority of 30% and losers 36% across the bourse this session.
1558 GMT - FTSE 100 set to end record-breaking week on a low
FTSE 100 down 14 points to 7,366
Fed chair Janet Yellen to give speech at 6pm UK time
Ofcom might investigate Sky/21st Century fox deal
Acacia plummets on Tanzanian export ban
There was a brief rally from the blue chips just after 2.30pm, with the FTSE 100 threatening to break back above yesterday’s close.
It got to within a point or so of moving into the black but has fallen back in the 30 minutes since and now sits 14 points down to 7,366.
That’s pretty much where it was at before it went on its very mini run and it looks set to end a record-breaking week on a downer.
It seems the markets are in limbo as they wait for a speech from Federal Reserve chair Janet Yellen, who may give some hints as to the future of US interest rates.
Yellen is due to take the stand at the Executives Club of Chicago at 6pm UK time, along with a number of other Fed speakers.
The likelihood of a rate hike has increased dramatically in recent weeks as data out of the States continue to show an improving economy, while the Fed has been fairly bullish with its rhetoric as well.
The Dow Jones and Nasdaq were both up ahead of those speeches in early trading across the pond, although not by any meaningful amount.
FTSE 250-listed Acacia Mining plc (LON:ACA) was one of the biggest losers on Friday afternoon after the Tanzanian Ministry of Energy and Minerals imposed a ban on exports of gold/ copper concentrate.
Last year, gold/ copper concentrate amounted to almost a third of the gold miner’s total revenues.
The group said it had ceased exports of gold/ copper concentrate as a result of the ban, adding that it is “urgently seeking further clarification” from the Tanzanian government. Shares slumped 13% to 465p.
The US$14bn takeover of Sky PLC (LON:SKY) by 21st Century Fox (NASDAQ:FOXA), agreed back at the end of last year, looks set to rumble on for a little while longer yet.
UK culture secretary Karen Bradley said she is “minded” to order an Ofcom investigation into the deal, with competition and broadcasting standards among her key concerns.
She’ll decide whether to intervene later this month after asking both parties for evidence, although it’s important to remember that an intervention wouldn’t necessarily block the takeover.
In the small caps, it was a strong finish to the week for Harvest Minerals Ltd (LON:HMI) after its house broker fired up the fertiliser group with a bullish update and a price target of 32p, or three times its current value.
The core of Beaufort Securities’ valuation is the Arapua licence in Brazil, where there a si9zeable upgrade at its Maximus project this week. Shares rose 20% today to 13.5p.
A positive outcome to its phase III trial of fruquintinib in 416 patients with locally advanced or metastatic colorectal cancer (CRC) in China sent Hutchison China MediTech Limited up by 11% to 2,325p.
The drug is for patients who have failed at least two prior chemotherapies, including fluoropyrimidine, oxaliplatin and irinotecan.
The trial showed a clinically meaningful and a statistically significant increase in overall survival in the intention-to-treat (ITT) population of patients.
1.15pm...Dreary day all around as FTSE 100 heads lower
It’s been a dull, dreary day here in London and that seems to have been passed on to the markets.
The FTSE 100 has been in the red from the get-go and is currently down 18 points to 7,364.
It’s been on a record-breaking run this week in the wake of Donald Trump’s speech in the early hours of Wednesday morning, so who can blame it for an uninspiring day of trading?
Advertising and PR giant WPP PLC (LON:WPP) continued to weigh on the blue chip index, sinking another couple of percentage points as the markets headed into the afternoon.
Shortly after 1pm, the company’s shares were down more than 8% to £17.48.
Don’t feel too sorry for WPP’s investors though. Up until yesterday, the share price had gained 25% over the past year so some form of correction was overdue according to analysts.
As for chief executive Martin Sorrell’s 1.6% stake in WPP; don’t worry, that’s still worth a cool £500mln, so he won’t be going hungry tonight.
After initially trading lower this morning, International Consolidated Airlines Group (LON:IAG) moved back into the black after a bullish note from Barclays.
The banking giant upgraded its price target for the “underappreciated” British Airways owner by 9% to 600p, citing an “improved trading environment”.
“We believe the inbound UK market, especially from US-point-of-sale, has strengthened given the strong US dollar and weak pound, while outbound UK leisure remains resilient,” said Barclays analyst Oliver Sleath.
IAG shares recovered from their initial fall to trade a penny up at 545p shortly after 1pm.
Even if it’s lost some of its appeals among the big boys, lithium still has the junior market in its thrall.
A routine statement from Kodal Minerals PLC (LON:KOD) that drilling is set to start at its Bougouni project in Mali added 24% to its market value.
Four new potential targets have been identified, although the shallow drilling programme will focus on Ngoualana, which has been drilled in the past.
Another ‘wonder product’ specialist, Graphen NanoChem plc (LON:GRPH) was also one of the big gainers in London this morning on news of a contract in Turkmenistan for tis oil well cleaning additive.
Shares soared by 20% to 0.27p when the company revealed it had inked a US$119,000 deal just for one well. The interesting part for investors is that the unnamed customer also has a further 110 wells in the country.
Elsewhere, the big story in the exciting world of Forex was the news that digital cryptocurrency Bitcoin is more valuable than gold.
In a sign of the times, a unit of Bitcoin closed at US$1,268 on Thursday, while an ounce of gold stood at US$1,233.
Bitcoin’s surge in value so far this year caps a major turnaround for the currency after it plummeted in value in 2014 following the collapse of the largest exchange.
11am...WPP leads FTSE 100 lower with cautious outlook
FTSE 100 drifted lower as services sector data and a downbeat outlook statement from ad giant WPP unsettled investors.
Footsie was 16 points lower at 7,366, with WPP (LON:WPP) the worst performer.
Shares in the advertising and marketing group tanked 7% to 1,775p despite record annual revenues as it cautioned growth this year might be a struggle.
Like-for-like sales rose by 3.1% in 2016, while profits came in at £1.9bn, a 12.5% rise.
But Martin Sorrell, chief executive, added that January net sales were only up 1.2%, against stronger comparatives last year.
“Given continued tepid economic growth and recent weaker comparative net new business trends, the budgets for 2017, on a like-for-like basis, have been set conservatively at around 2% for revenue.
Services sector activity in UK meanwhile fell for a second month running.
Weaker consumer spending growth was highlighted in the survey as a key cause of the softening activity.
“On a more positive note, the survey’s activity balance remained above the 50 ‘no-change’ mark which separates expansion from contraction,” said Martin Beck, senior economic advisor to the EY ITEM Club.
London Stock Exchange PLC (LON:LSE) was flat at 3,127p as chief executive Xavier Rolet reiterated he was still keen to merge with German peer Deutsche Borse despite the recent regulatory hurdles thrown up by Europe.
If the issues over the merger can be overcome, the HQ of the new company would be in London he said.
That is not likely to go down with EU officials who reportedly do not want such a powerful financial organisation located outside of the European Union.
Textile rental group Berendsen (LON:BRSN) chose a bad day to issue a poor trading statement.
Profits in 2016 rose by 4% but margins dipped and the company said this year will be weighted towards the second half with legacy issues still an issue.
Shares fell 17% to 770p.
Among the small caps, TechFinancials PLC (LON:TECH) rose strongly for a second day.
The shares were the best performers in London on Thursday rising 30% on receipt of a US$1.53mln dividend from its 51%-owned subsidiary, DragonFinancials.
That’s on top of the US$2.55mln TechFinancials received from its subsidiary at the interim results stage.
Shares rose by a further 8% to 10.22p.
9.46am ...WPP leads FTSE 100 lower with cautious outlook
FTSE 100 dropped as some cautious forward looking statements sapped investor confidence.
WPP (LON:WPP) was the main offender as the blue chip index slipped 24 points lower at 7,357.
Shares in the advertising and marketing group tanked 6% to 1,799p despite record annual revenues as it cautioned growth this year might be a struggle.
Like-for-like sales rose by 3.1% in 2016, while profits came in at £1.9bn, a 12.5% rise.
London Stock Exchange PLC (LON:LSE) was flat at 3,123p as chief executive Xavier Rolet reiterated he was still keen to merge with German peer Deutsche Boerse despite the recent regulatory hurdles thrown up by Europe.
Textile rental group Berendsen (LON:BRSN) dropped 17% to 770p on a downbeat statement.
6.46am ...FTSE 100 set to follow US stocks south
UK stocks are set to open lower after US markets retreated yesterday, and in the wake of some soft manufacturing data from China.
Spread betting quotes indicate the FTSE 100 will open around 16 points down from last night's close of 7,379.
The Caixin China services purchasing managers' index in February pulled back to 52.6 from 53.1. A value above 50 still indicates an expansion in activity, but it is the second month in a row that the index has declined.
The news was not received well in Hong Kong, where the Hang Seng was 120 points in the hole at 23,608 heading towards the close of the trading session.
Elsewhere in Asia, Japan's Nikkei 225 was rallying towards the end of the day, but was still 96 points lower at 19,469.
US markets overnight were weak, with the S&P 500 down 14 at 2,382 and the Dow Jones average 113 points lower at 21,003, as investors ponder the possibility that the US central bank will kick on faster than previously expected with interest rate rises.
On the home front there are some interesting results scheduled to be released today, including updates from London Stock Exchange Group PLC (LON:LSE), where the focus will be on the faltering merger with Deutsche Boerse, and advertising behemoth WPP PLC (LON:WPP), where there will be the usual long analysis of the health of national economies across the globe.
Around the markets
- Sterling: US$1.2262, down 0.06 cents
- Gilts: 10-year gilt is yielding 1.212%
- Gold: US$1,232.30 an ounce, down 60 cents
- Oil: Brent crude for May delivery was up 10 cents at US$55.18 a barrel
Headlines
- Caterpillar raided by Federal agents as part of tax probe – Financial Times
- Kurdish protest disrupts northern Iraqi oil flows – Financial Times
- Sports Direct buys lingerie brand Agent Provocateur- Financial Times
- Brexit without trade deal would open Pandora’s box, says CBI chief – The Guardian
- Shale gas firm Cuadrilla brands anti-fracking activists ‘irresponsible’ - The Guardian
- Regulator has ‘caved in’ by setting 2019 PPI deadline – The Times
- Carlos Slim could run for Mexican President after Trump cost him $16 billion – The Independent
- Fears Quorn mince contains ‘small pieces of metal’ - The Independent
- Football Pools sale: Sportech agrees £83 million deal with Opcapita - City AM