FTSE 250 marks record high above 19,000
Mining stocks and Scottish referendum power gains
Copper gains drive miners higher
FTSE 100 shares ended higher on Monday, dominated by gains among miners when copper prices surged, while mid-caps marked a record high above 19,000 after calls for a second Scottish independence referendum.
The blue-chip index ended up 0.3% at 7367 and was led by Fresnillo (LON:FRES) up 5.6% at 1436.
In second place was Antofagasta Holdings (LON:ANTO) up 4.9% to 784.5p. Others rising were Anglo American (LON:AAL) up 4% to 1186.5p, Rio Tinto (LON:RIO) up 4% to 3304.5p, BHP Billiton (LON:BLT) up 2.5% to 1275.5p and Randgold Resources (LON:RRS) up 1.8% to 6965p.
Separately, Anglo American also announced it will cap executive bonuses in the wake of last year’s shareholder revolt over high payouts. The mining giant will reduce maximum annual bonuses for chief executive Mark Cutifani to 300% from 350% of his basic salary.
Geopolitical factors reclined after reports that the UK government has decided not to rush ahead with triggering Article 50 to begin a 2-year deadline in which to leave the European Union on Tuesday.
It means the Bank of England will be determining rates – expected to be on hold – on Thursday without the additional market volatility that would accompany the Article 50 trigger. The government plans to trigger the start of talks with the EU in the next two weeks, just before the prime minister’s self-imposed deadline of by the end of March.
Meanwhile, a new political risk opened up, after Scotland’s First Minister Nicola Sturgeon’s decision to call a second independence referendum in light of the majority Remain in EU vote in that part of the UK last year.
The mid-cap FTSE 250 index gave the Dow Jones Industrial Average’s recent stellar records a run for their money, as it rose above 19,000 for the first time and peaked intraday at 19,048.96.
The ticker ended up 0.4% at 19,0929 on M&A activity and as the pound rose when Sturgeon called for second Scottish independence referendum.
But again as with the blue-chips, the top risers in the FTSE 250 were miners, led by Hochschild Mining (LON:HOC) up 11.7% to 265.9p
But some things didn’t go well in Scotland.
Shares in Standard Life (LON:SL.) tumbled towards the bottom of the blue-chip index, down 2.2% to 371.5p after Berenberg said its proposed “strategic merger” with Aberdeen Asset Management (LON:ADN) offered “little upside, but substantial risk”.
The broker downgraded the FTSE 100 stock to “hold” from “buy” and cut its price target to 400p from 416p, describing the proposed tie-up as a “bold gamble”.
Aberdeen shares ended lower too in the FTSE 250, by 2.1% to 278p.
The smaller cap FTSE AIM 100 Index closed up 0.6% at 4468 and the FTSE AIM All-Share Index finished up 0.4% at 919.
Gainers led losers by 34% to 30% across the London bourse.
1530 GMT - FTSE 100 stays strong, despite cautious US stocks
FTSE 100 advances 28 points to 7,371
US stocks cautious ahead of Fed; Dow sheds over 50 points
Miners higher on stronger metals prices
Pound firmer against dollar and euro
Scottish Independence vote pledge ignored
3.30pm … Gains retained …
The Footsie extended its gains in late afternoon trading, bolstered by strength in heavyweight mining stocks as a weaker dollar lifted metal prices, even though US stocks made a cautious start to a week dominated by the latest Federal Reserve policy meeting on Wednesday.
Around 3.30pm, the FTSE 100 index was up almost 28 points at 7,371, just below the day’s best level of 7,376, having only hit a low of 7,342.
Across the Atlantic, however, the Dow Jones Industrial was around 53 points lower at 20,850 after around two hours of trading - the US clocks having changed to Daylight Savings at the weekend – while the broader S&P 500 index was also easier, although the tech-laden Nasdaq composite found gains.
Wall Street investors were nervous amid expectations that the Fed will this week sanction the first US interest rate increase of the year this week, with commentators expecting at least three quarter point hikes this year.
On currency markets, sterling recovered some of its recent fall versus a cautious dollar, rallying 0.5% higher to US$1.2223. The pound also gained over 0.5% against the euro at €1.1461, unfazed by news that Scotland is to seek a second independence referendum.
Michael Stanes, Investment Director at Heartwood Investment Management, said: “Nicola Sturgeon’s announcement to seek a second referendum on Scottish independence does not really come as any surprise and highlights that Brexit will be a politically messy and divisive process.
He added: “If an independence vote goes ahead in Scotland it looks like it will not be until autumn 2018/spring 2019, so there is a long way to go”.
On the stocks front, Quadrise Fuels International PLC (LON:QFI) lost over a quarter of its value to 8.51p after shipping line Maersk, which is using a container ship unit to test the new product, prematurely halted the trial due to ‘operation reasons’.
These were not related to the fuel, Quadrise said, but the vessel needs to go in to dry
Concha PLC (LON:CHA) was another heavy faller, dropping over 20% to 0.475p as one of its principal investments, Ve Interactive, is facing a financial crisis and in urgent need of additional finance.
But Strategic Minerals PLC (LON:SML) jumped 23% higher to 0.925p on news it is close to signing a substantial new customer for its iron ore tailings business, Cobre, in New Mexico.
1.10pm ... Footsie, sterling higher ...
The FTSE 100 has been in the black since the first bell rang at 8am this morning.
It opened up 24 points higher before falling back down throughout the morning bit it’s since rallied to creep back towards that level.
The blue chip index is currently up 23 points, or 0.3%, to 7,366 meaning we’re not too far off the record highs it set a couple of weeks ago.
The miners were still the main driver behind the surge, with Fresnillo PLC (LON:FRES), Anglo American PLC (LON:AAL), Antofagasta PLC (LON:ANTO) and Rio Tinto PLC (LON:RIO) all up around 4%.
Their shares were boosted by a jump in the price of copper, which gained 1% on Monday on fears supply could be disrupted by a strike in Peru.
The only non-miner in the top five risers was Capita Group PLC (LON:CPI). The outsourcer continued its recent winning streak and was up a further 4% today to £5.68.
After a sharp rise on Friday following the agreement with Ofcom regarding its Openreach division, BT Group PLC (LON:BT.A) was the biggest faller among the big boys.
Shares I nthe telecoms giant were down almost 2%, following on from a 5% surge at the end of last week.
In the small caps, Fuel cell specialist AFC Energy plc (LON:AFC), jumped 4% as blue blood fund manager Schroders took an 8.4% stake.
Schroders was the largest single investor in a recent £6mln placing, stumping up £3.3mln of the money.
A delighted Adam Bond, AFC 's chief executive, said the investment signified confidence in the business and its strategy
Telit Communications Plc (LON:TCM) rose 5.5% to 326.7p as its prelims revealed sales increased by 11% in 2016 and profits by 20%.
The firm is positioning itself as a “global enabler” of the internet of things (IoT), where machines and devices are able to communicate with each other.
Away from companies, with Theresa May preparing to pull the Article 50 trigger (possibly as early as tomorrow), all eyes are on sterling and how that will react.
So far on Monday it’s done pretty well, and is up against both the dollar and the euro.
“In what was already going to be an eventful week for the UK, Nicola Sturgeon has thrown another, albeit expected, spanner in the works calling for another Scottish independence referendum,” said OANDA senior market analyst Craig Erlam.
“The pound, which had started the session well on hopes that parliament could have a vote on its on exit deal, saw some volatility immediately after the announcement but has since settled slightly higher.”
Sterling was up to US$1.222 against the dollar, and up to €1.146 against the euro.
10.00am ... FTSE 100 edges higher as miners get stuck in ...
It’s been a quiet start to the week for the FTSE 100, which is currently plodding away around the 7,352 mark, 9 points higher than where it finished last week.
The blue chip index was bolstered by the return of the miners, which weighed heavy last week.
Metals prices – which for obvious reasons have a significant effect on miners – across the board have picked up this morning, which has led to mining companies occupying the top five positions on the FTSE 100 risers table.
Anglo American PLC (LON:AAL) (up 4% to £11.88), Fresnillo PLC (LON:FRES) (up 5% to £14.23), Rio Tinto PLC (LON:RIO) (up 3% to £32.80), Antofagasta PLC (LON:ANTO) (up 3% to £7.71) and Glencore PLC (LON:GLEN) (up 2.5% to 318p) have all made decent gains so far today.
Domino’s Pizza Group PLC (LON:DOM) was down again following last week’s results which revealed a slowdown in like-for-like sales growth.
It wasn’t helped by Citi which downgraded the pizza delivery giant to ‘neutral’, commenting that the group’s “premium valuation leaves very little margin for error”.
Shares eased a further 2.5% this morning to change hands for 339p.
Another to be hit by a broker downgrade was Standard Life which fell 1.5% to 375p.
The investment group had rallied this time last week on news of a merger with Aberdeen Asset Management PLC (LON:AND), but Berenberg came out this morning and said the deal “offers little upside, but substantial risk”.
Elsewhere, German discount supermarket Aldi – which, along with Lidl, has been eating into the Big Four’s market share in recent years – has revealed a new logo.
Granted, it’s not radically different from the previous version but it does look a little bit sleeker.
Aldi revamps logo https://t.co/dqaSiZZtGh by @simongwynn
— Campaign: Brands (@MarketingUK) March 13, 2017
9.00am ... FTSE 100 off to a sluggish start; £2.2bn Amec deal lights up market ...
As predicted the FTSE 100 got off to a subdued start with the blue-chip index edging just 11 points higher to 7,353.44.
It depended on just what side of the natural resources trade you were as to how well the morning began.
If you were buying mining stocks, which were under the cosh most of last week, then you were probably a happy camper with Anglo American (LON:AAL), Antofagasta (LON:ANTO) and Rio Tinto (LON:RIO) up 3-4% early on.
Oil stocks led the losers with BP (LON:BP) off 1% after crude oil prices drifted overnight and West Texas Intermediate briefly dipped below US$48 a barrel.
The day’s main action came a division down where oil services specialist Wood Group (LON:WG) agreed the all-paper, £2.2bn takeover of Amec Foster Wheeler (LON:AMFW).
Amec’s shares shot up 18% on news of the offer, which would create a group worth around £5.3bn; so just about big enough to sneak into the Footsie.
Shareholders of Aberdeen-based Wood also liked the deal, marking the price 7% higher.
Top of the 250 fallers was Domino’s Pizza (LON:DOM), down 4% and still reeling from last week’s earnings alert.
Proactive news headlines:
Porta Communications PLC (LON:PTCM) shares rose 6.7% to 4p as it bagged a contract with clothing maker F&F Tesco.
Vast Resources PLC (LON:VAST) has appointed Craig Harvey, who has been working as its chief geologist since 2013, as its chief operating officer.
H&T GROUP PLC (LON:HAT) reported a sharp increase in profits for 2016, boosted by the rising gold price and increasing demand for personal loans.
Amur Minerals Corporation (LON:AMC) has built the ice road to the Kun-Manie in Far East Russia earlier than a year ago as it gears up for its summer drilling campaign.
ITM Power plc (LON:ITM) reported a sharp pick up in its order pipeline and received planning permission for four more sites. The potential revenue pipeline of £23.8mln compares to £18.4mln in January, when it raised £5.7mln through a placing at 17p. Shares eased a touch to 17p.
Scancell Holdings Plc (LON:SCLP) is trading on an enterprise value of £32mln, compared to a cumulative investment of £19mln to get the company where it is today, which is extremely low compared to its relevant peers, research house Hardman said today.
The last 12 months at Tissue Regenix Group PLC (LON:TRX) has been characterised by maximising availability of the Dermapure product in the US market, initially targeting Medicare coverage, which now stands at 93%, research house Hardman observed today. DermaPure enters fiscal 2017 on a very strong footing, it added.
6.45am ... Slow start predicted ...
The FTSE 100 looks set to start the week in positive territory – but only just with the index of blue-chip shares predicted to rise just 3.5 points to 7,346.38.
The brakes are expected to be applied by the oil stocks with the price of a barrel of West Texas Intermediate crude briefly dropping below US$48 a barrel overnight, while Brent was down at US$51.02.
Markets in Asia opened Monday in positive territory, with South Korea leading the way in spite of the corruption scandal that has led to the departure of the country’s leader, Park Geun-hye.
The KOSPI was up 1% towards the end of the trading day, while the Nikkei 225 added 0.3% and the Shanghai Composite was up almost 0.6%.
Looking ahead, Wednesday’s US interest rate decision appears to be a foregone conclusion with most commentators expecting Federal Reserve chair Janet Yellen and her colleagues to increase the overnight rate by quarter of a percentage point.
“A strong US jobs report on Friday reinvigorated debate over the probability of a full percentage point increase in the federal funds rate this year, above expectations Fed policymakers published last year,” said the Financial Times in an article previewing the Fed decision.
“But the lack of acceleration in wage growth has so far curtailed fears of rapidly higher inflation and a subsequently more hawkish US central bank.”
Back here in the UK it looks like it will be a quieter week for corporate news, although there are handful of big names reporting. Among them are the miner Antofagasta (LON:ANTO) and Hikma Pharmaceuticals (LON:HIK).
Markets
- Brent crude US$51.02, down 35 cents a barrel.
- Gold US$1,207.50 per ounce, up US$6.10.
- Pound worth US$1.2171.
Business Headlines
- Stuart Gulliver has told the HSBC board he will quit as Chief Executive next year, making the search for his successor a priority for Mark Tucker, who has decided to leave Asian insurer AIA to become the bank’s chairman – FT.
- Premier Oil is asking the Falkland Islands for a tax break to help to develop its Sea Lion field and deliver the area’s first oil. The company is struggling to make the project commercially viable because of low crude prices – Times.
- MPs will this week discuss whether the Bank of England’s new deputy governor should remain in her post. Charlotte Hogg is under growing pressure to consider her position after failing to disclose a potential conflict of interest – Times.
- Supply disruptions at two giant mines in Chile and Indonesia are spurring a global shortfall in copper concentrate according to the chairman of China’s second-largest copper refiner – FT.
- Bovis Homes was at the centre of £3bn bidding battle tonight after spurning competing merger offers from rival housebuilders Galliford Try and Redrow – Telegrapgh.