FTSE 100 lower
FTSE 250 resilient
Miners count their losses
Pound falls 0.4% against the US dollar to $1.2247
Sterling little changed vs the euro at 1.1567 euros
FTSE 100 stocks were dragged lower by miners on Monday, despite some exciting news from investors themselves after Standard Life and Aberdeen Asset Management agreed to merge.
The blue-chip FTSE 100 ended down 0.3% at 7350 and led by miners Glencore (LON:GLEN) down 3.5% at 326.5p and Anglo American (LON:AAL) down 2.7% at 1238p.
Mining companies sank on the index as the price of copper fell. Copper has seen its prices pushed higher in recent months by supply shortage fears from the biggest mines in Latin America as well as expectations that Chinese demand will drag prices further north.
Banking shares across Europe came under pressure after Deutsche Bank announced plans to raise 8bn euros through a share sale to bolster its finances. Shares in Deutsche were down 3.8% in Frankfurt.
RBS was one of London’s losers, and the third biggest faller on the FTSE 100, down 2.6% to 240.6p. Barclays (LON:BARC) was another, down 1.9% to 226.95p.
But another part of the financial markets was boosted by news of a potential tie-up.
Topping the gainers was insurance behemoth Standard Life (LON:SL.) up 5.7% to 400p while Aberdeen jumped by 5.8% to 303.01p after they confirmed they had agreed a tie-up, creating a company overseeing assets worth £660bn.
The mid-cap FTSE 250 index ended flat at 18.881. Aberdeen was its second-highest riser after Ultra Electronics Holdings (LON:ULE) up 4.8% to 2078p after strong cash generation and order intakes helped Ultra Electronics drive full-year bottom-line growth despite delays to a small number of export contracts.
The FTSE AIM 100 Index was down 0.1% to 4415 and the FTSE AIM All-Share Index ended up 0.06% to 915.
Gainers and losers in London were almost evenly matched with 32% gaining and 34% losing.
1515 GMT - FTSE 100 drifts lower as banks and miners struggle
FTSE 100 down 32 points to 7,342
Banks lower as Deutsche Bank asks investors for €8bn
Miners slide as copper and gold prices fall
ITV on the up as it wins court case
The mining and banking sectors have weighed heavy on the FTSE 100 all day today, with the index unable to poke its head above Friday’s close.
The blue chip index was down 32 points, or 0.4%, to 7,342 less than an hour before the close of play here in London.
Weak copper and gold prices were still hurting the mining sector as the London markets started to wind down on Monday.
Glencore PLC (LON:GLEN) (down 2.9% to 328p), Fresnillo PLC (LON:FRES) (down 1.9% to £13.87) and Anglo American PLC (LON:AAL) (down 2.9% to £12.36) were all down this afternoon.
Similarly, the banks have also been in the red for most of the day in the wake of the Deutsche Bank cash call over in Germany, and the sector has shown no signs of life this afternoon.
Royal Bank of Scotland PLC (LON:RBS) (down 2.1% to 242p), Barclays PLC (LON:BARC) (down 1.6% to 228p)and Lloyds Banking Group PLC (LON:LLOY) (down 1.4% to 67.5p) were all off today.
WPP group PLC (LON:WPP) also continued its mini-slump after the advertising giant reported a slowdown in sales growth and was cautious in its outlook when it reported its 2016 results last week.
The shares lost 8% on Friday following the bleak statement, a downtrend that’s continued into this week, with the share price shedding another couple of percentage points to trade at £17.24.
On a more positive note, the market responded well to the news that Standard Life PLC (LON:SL.) and Aberdeen Asset Management PLC (LON:ADN) look set to merge, with shares up 5.6% (to 400p) and 4.3% (to 299p) respectively.
“Consolidation is expected to be an increasingly common feature of sector, as companies look for cost savings from scale to offset the challenge from lower cost passive investments,” said Hargreaves Lansdown senior analyst Nicholas Hyett.
With the trend tipped to continue, it’s unsurprising to see fellow emerging markets asset manager Ashmore group PLC (LON:ASHM) add almost 3% to its share price at 370p.
ITV PLC (LON:ITV) was also one of the top risers amongst the big boys on Monday after it won a court case against services that retransmit its broadcasts without permission, such as TVCatchup.com.
The ruling removes a potential hurdle for ITV as it attempts to charge Virgin Media, and possibly Sky, to carry its main channel.
Both Virgin and Sky currently enjoy a copyright exemption that allows them to rebroadcast ITV1 free of charge.
If ITV is successful with charging operators, Liberum analyst Ian Whittaker reckons it could boost its earnings by as much as £140mln a year. Shares gained more than 2% on the back of the news to trade at 208p.
To the small caps now and it’s a markets curio that shares listed in Australia suspended from trading pending an announcement can still be dealt on AIM.
Thor Mining PLC (LON:THR) was one such example today. The dual-listed miner halted dealing on the ASX due to an imminent update on exploration at the Pilot Mountain Project in Nevada.
Draw your own conclusions as to what it might say, but shares rose 48% to 1.3p, which suggests more than a few investors were betting its good news.
Trading services group Arcontech Group PLC (LON:ARC) was another handy riser as profits nudged higher in the half year to December.
Recurring revenues rose by 21% to £2.3mln and results for the full year will be ahead of current market expectations said the chairman.
Shares gained 12% throughout the day to exchange hands for 53p a piece shortly after 3.15pm.
1.15pm...Now it's the miners' turn to weigh on the footsie
It’s been a difficult day so far for the FTSE 100 which, truth be told, hasn’t really shown any signs of life.
It dropped to 7,347 immediately after the opening bell had been struck and since then it’s traded in a tight range between 7,347 and 7,355.
The blue chip index is currently down 26 points, or 0.35%, to 7,348 shortly after 1pm.
As mentioned earlier, banking shares are coming under pressure after Deutsche Bank announced plans to raise €8bn through a share sale to bolster its finances.
Miners were also dragging the FTSE lower as the markets moved into the afternoon.
Glencore PLC (LON:GLEN) (down 2.6% to 330p), Fresnillo PLC (LON:FRES) (down 2.4% to £13.79) and Anglo American PLC (LON:AAL) (down 2.6% to £12.39) were all down on a stronger dollar and a fall in metals prices.
The pound followed the FTSE lower, with sterling down 0.3% against the dollar to US$1.226, although it rose 0.1% against the euro to €1.159.
Ahead of his first budget on Wednesday, Chancellor Philip Hammond took to Twitter to give an insight into his thinking behind some of the decisions he’s going to take.
Preparing for my first Budget, which will help make the most of the opportunities ahead and build a country that works for everyone.
— Philip Hammond (@PHammondMP) March 6, 2017
While the tweet was fairly vague, reports are suggesting that the NHS is going to get a much-needed £1bn boost, which could be funded through tax increases for self-employed workers who currently pay less in national insurance contributions than employees.
In the small caps, Futura Medical PLC (LON:FUM) was on a tear after market research group Ipsos predicted it may be able to generate over US$600mln in revenues from an over-the-counter version of its erectile dysfunction treatment.
The 400 men surveyed said the MED2002 gel worked much faster than current treatments such as Viagra and Cialis and as a result they might be prepared to pay more for it.
Shares were up more than 20% to 61p.
11.30am...FTSE 100 dragged lower by banks
The sun may be out in London today but things are looking bleak for the FTSE 100, which is still well down on Friday’s close.
The blue chip index was down 26 points, or 0.36%, to 7,349 midway through Monday morning.
The main reason for the slow to the start to the morning was the banks (it’s always their fault isn’t it?).
The likes of Royal Bank of Scotland PLC (LON:RBS), Barclays PLC (LON:BARC) and Lloyds Banking Group PLC (LON:LLOY) have all been hit by the news from Germany that Deutsche Bank is planning to raise a further €8bn from investors.
Assuming the fundraise is completed, the troubled bank will have raised about €30bn since 2010 – more than its current market value.
Investors are seemingly worried that UK banks might follow suit and come to them cap in hand asking for some more money.
Investment company Standard Life PLC (LON:SL.) was one of those trying to drag the index back towards the black this morning.
Shares were up 6% to £4 after the group announced it had agreed terms with fellow fund manager Aberdeen Asset Management PLC (LON:AND) for an all-share merger.
The move will create one of the largest investment companies in the UK, overseeing assets worth some £660bn.
A couple of airlines were also leading the way this morning.
Easyjet PLC (LON:EZJ) and International Consolidated Airlines Group (LON:IAG) were both up in early deals after reporting rises in passenger numbers last month.
Low-cost carrier Easyjet was also boosted by top French broker Kepler Cheuvreux, which moved the stock from ‘hold’ to ‘buy’, saying it now prefers the orange outfit to that of Ryanair Holdings PLC (LON:RYA) for the first time since it started covering them.
Shares in Easyjet gained the best part of 2% to trade at £9.75, while IAG added a little more than 1% to £5.50.
UK telecoms giant BT PLC (LON:BT.A) made some early gains after it won the exclusive rights to broadcast Champions League football matches for another three seasons.
BT will pay UEFA a massive £1.2bn to secure the rights and enat off competition from rival broadcaster Sky Plc (LON:SKY).
In the small caps, Independent Resources plc (LON:IRG) rocketed more than 200% as the team behind Sound Energy PLC (LON:SOU) took three board seats and a 29.9% stake.
An open offer will raise up to £1.5mln, while small cap specialist Greenberry will invest £650,000 in new shares at 0.065p and provide a £1mln loan.
A name change reflects the change of ownership, with Echo Energy PLC (not a million miles from Sound) to be the what the company is called going forward.
9am...FTSE 100 drifts 30 points early on; investors mull Scots fund management merger
The FTSE 100 fell more than 30 points to 7,344.16 early on with investors spooked by the latest posturing by North Korea.
Premier Kim Jong-un is said to have personally overseen the firing of four ballistic missiles into the Sea of Japan that have cranked up tensions between allies and adversaries of the rogue state.
The big corporate news, meanwhile, was the confirmation by investment firms Standard Life (LON:SL.) and Aberdeen Asset Management (LON:AND) of talks over an £11bn merger.
Ryan Hughes, head of fund selection at the investment firm AJ Bell, said the deal makes “strategic sense” for both businesses.
“Aberdeen has been overly reliant on Asian and emerging markets for a long time and this has created significant volatility in its business performance, while Standard Life will see those Asian and emerging market assets as very complimentary to its fixed interest and UK asset base,” he explained.
“If the merger goes ahead, investors can expect a long period of fund range consolidation as the combined group looks to cut costs. This could create a period of uncertainty but until more news becomes available investors would be wise to stay patient.
“This merger is a continuation of consolidation in the asset manager industry and I would expect to see more as the market appears to move towards huge combined groups or small specialist boutiques.”
Standard Life was up 7% early on, while Aberdeen nosed 5% higher.
The advertising and marketing group WPP (LON:WPP) was the Footsie’s biggest casualty, down a further 3% early on after its less than stellar update on trading Friday.
Independent Resources Group PLC (LON:IRG) rocketed more than 650% to 0.49p as the team behind Sound Energy PLC took three board seats and a 29.9% stake.
An open offer will raise up to £1.5mln, while small cap specialist Greenberry will invest £650,000 in new shares at 0.065p and provide a £1mln loan.
A name change reflects the change of ownership, with Echo Energy PLC (not a million miles from Sound) to be the what the company is called going forward. .
“We see the current environment as one of genuine opportunity for growth focused exploration and production companies.
“The changes announced today establish the initial platform from which the company will grow very significantly, in terms of hydrocarbon, human and financial resources,” said James Parsons, the new non-executive chairman.
Bowleven PLC (LON:BLVN) and Victoria Oil & Gas plc (LON:VOG) have agreed a farm-out deal for the former’s Bomono gas asset that gives it access to the local market of Douala in Cameroon.
A complex tie-up will see VOG subsidiary take an 80% stake in the Bomono production sharing contract (PSC), with Bowleven keeping the remainder and continuing as operator.
Gas from Bomono will be sold to VOG minus a tolling fee for use of the pipeline.
Shares in VOG rose 11% to 67.3p.
Futura Medical LC ((LON:FUM) rose 16% to 58.15p as market research group Ipsos predicted it may be able to generate over US$600mln in revenues from an OTC version of its erectile dysfunction treatment.
The 400 men surveyed said the MED2002 gel worked much faster than current treatments such as Viagra and Cialis and as a result they might be prepared to pay more for it.
Proactive news headlines
Amryt Pharma PLC (LON:AMYT) said it will begin phase III clinical trial on a drug for people a rare skin disorder following the completion of discussions with the US Food & Drug Administration and European Medicines Agency over the design of the study. Shares rose 8% to 19.7p.
88 Energy Ltd (LON:88E) unveils oversubscribed A$17mln share placing, ahead of hotly anticipated Icewine-2 drilling programme in Alaska (due to start in Q2).
LGO Energy PLC (LON:LGO) has started drilling its first well of a new programme in Trinidad, marking a significant milestone in the company's recovery.
Union Jack Oil PLC (LON:UJO) has agreed to acquire more of two key assets, the undeveloped Wressle field and the Broughton North exploration project. It now has 15% in both, up from 11.67%.
AFC Energy plc (LON:AFC) is to sell a hydrogen fuel cell system to Powerhouse Energy PLC (LON:PHE) as the two firms ramp up plans for gasification collaboration.
Atlantis Resources PLC (LON:ARL) has received full accreditation for Phase 1A of the MeyGen tidal power project from regulator Ofgem under the Renewables Obligations (Scotland) Order.
6.45am...cautious start predicted
The FTSE 100 looks set to make a cautious start to the week against a backdrop of rising political tension sparked by North Korea’s firing of four ballistic missiles into the Sea of Japan.
The muscle-flexing by Kim Jong-un sent most of Asia’s main markets into reverse gear.
The exception was China where Shanghai Composite and the Hang Seng were up 0.3% and 0.2% respectively after the People’s Republic issued its latest batch of economic data.
And while the estimates pointed to slowdown in growth, it appears analysts had been expecting worse.
Back on these shores the index of blue-chip shares is expected to open seven points lower at 7,367.26.
The week’s big event is likely to be the Budget.
Chancellor Philip Hammond’s team appeared to spend the weekend briefing anyone who would listen that there would be few giveaways in this fiscal review.
He told the Sunday Times "massive borrowing to fund huge spending sprees" were "reckless, unsustainable and unfair on our young people who would be left to deal with the consequences".
- Pound worth US$1.228
- Brent crude down 28 cents at US$55.62 a barrel
- Gold up US$6.70 at US$1,233.20 an ounce
Business Headlines
- Premier Oil is approaching oilfield services companies about helping to fund its next major projects, including a $1.5bn development off the Falkland Islands, as the heavily indebted UK oil and gas producer seeks alternatives to bank finance – FT.
- Repsol has agreed a deal with Amazon that will allow people to pick up parcels at its filling stations in the latest signs of oil companies widening the range of services available through their retail networks – FT.
- PSA will on Monday announce an agreement to buy General Motors’ lossmaking Opel division for cash and shares, to make the Peugeot and Citroën owner the second-largest carmaker in Europe – FT.
- As many as 1,000 jobs could be at risk as Standard Life and Aberdeen Asset Management pursue their £11 billion all-share mega-merger, prompting the Scottish government and local MPs to demand urgent clarity from both sides – Times.
- Deutsche Bank taps market again to raise €8bn – Times.
- The OPEC oil cartel is waking up to an unpleasant surprise. Shale output from the Permian Basin in Texas is expanding faster than the world thought humanly possible – Daily Telegraph.