FTSE 100 closes down over 40
US benchmarks tumbling
Apple pulls plug on Imagination
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FTSE 100 closed down over 40 points at 7,282 on Monday as Brexit worries continue and the Dow Jones plummeted 10 points in New York.
Traders stateside have been rattled by disappointing new car sales figures for March from the major makers.
Also emerging is a bomb blast in the subway of St Petersburg in Russia, which has killed ten people.
An anti-terror investigation has reportedly begun but other possible causes are still being investigated.
UK manufacturing stats didn’t do much to improve the mood and dipped to a four-month low in March and fell short of the consensus forecast and was the third month in a row that the index has fallen.
Sterling has fallen 0.58% against the US dollar at 1.2479 but this has not proved a boon to dollar earning Footsie constituents.
The biggest loser was retailer Next (LON:NEXT), which shed 3.56% to 4,166p. Also down was ITV (LON:ITV) which dropped 2.56% to stand at 213.30p.
The former, retailer Next received a downgrade in its rating from the French broker Exane BNP Paribas.
In a note on the UK general retail sector, Exane cut its stance on the FTSE 100-listed firm back to ‘underperform’ from ‘neutral’ and reduced its target price by 5% to 3,700p after its recent “bounce” in shares.
3.30pm..A poro start on Footsie....
A poor start on Wall Street knocked the stuffing out of Footsie, sending it 30 points lower to 7,293.
The Dow Jones Industrial Average was 87 points lower at 20,576. A set of disappointing quarterly sales figures from the traditional car makers unnerved investors, though new kid on the block Tesla soared as it racked up record deliveries.
15.30...Small cap movers
Juridica Investments Limited (LON:JIL) was under the cosh after it reported a drop in net asset value (NAV) and another full year loss. NAV per share fell to US$0.2541 at the end of 2016 from US$1.1432 the prior year, which Jurdica said reflected the payment of dividends of US$0.5461 per ordinary share and a total comprehensive loss of US$37.8mln, or $US0.3430 per ordinary share. Shares have fallen 23.89% following the announcement.
Shares in Altyn plc (LON:ALTN) have plunged more than 12% after the gold mining and development company said it expects a drop in full year production. The company predicts gold production of 10,970 ounces (oz) in 2016, compared to 15,535 oz in 2015, while silver output is forecast to fall to 16,520 oz from 26,608 oz.
On a more positive note, ProPhotonix Limited shares have jumped 26.67% after the manufacturer of LED illumination systems said its RGB IR LED line light was recognised at the annual Vision Systems Design Innovators Awards programme.
14.00...FTSE 100 flat and US markets set to follow
US shares are seen opening in muted fashion as the trading week begins, after what has been a strong quarter.
The main indexes have rallied strongly in the first three months, but recently ran out of steam.
On Friday, the Dow Jones fell 65 points to close out at 20,663 on the day but ended the quarter 4.55 points higher than it started it.
Today, Dow futures are seven points ahead but the S&P 500 is down 0.5 and.75 points.
In London, the FTSE 100 was one point to the good at 7,324.
11.15am ...FTSE 100 holds its own as manufacturing data softens
The FTSE 100 was modestly higher despite a below–par showing by the manufacturing sector in the latest purchasing managers’ survey.
The index reading came in 54.2 for March, down from 54.5 last month and below consensus forecasts of 54.6.
“Since the manufacturing PMI reached a two-and-a-half-year high last December, the story has been one of a gentle decline in the index,” said Martin Beck, senior economic advisor to the EY ITEM Club.
“March continued that trend, with the PMI running at a four-month low.”
The Purchasing Managers’ Index, compiled by Markit, is a sentiment barometer. A reading over 50 means respondents are optimistic on the outlook for the sector and the long-term average is 51.6.
Anyway, the latest economic data had little sway over the blue-chip index as it nudged up 8 points to 7,333.43 with the big City traders and investors keeping their powder dry ahead of Sino-US talks later this week.
The bottom fell out of the world of Imagination Technologies (LON:IMG) after Apple Inc (NASDAQ:AAPL) unveiled plans to ditch the chip designer. The shares tanked two-thirds.
The bid speculation that fuelled buying of ITV (LON:ITV) shares on Friday petered out as it fell 2.3% late morning.
The losers’ list was led by silver miner Fresnillo (LON:FRES), which was affected by the fall in precious metal prices.
9am....FTSE 100 edges higher
The FTSE 100 defied the slightly gloomy predictions before the open to move into positive territory early on (though only just) as the index of blue chip shares nudged four points higher to 7,327.06.
The lack of conviction by City traders reflected a nervousness ahead of trade talks between the US and China, analysts said, which have the potential to unsettle the markets.
Top riser was Micro Focus (LON:MCRO), which advanced 2% after it provided greater clarity on the financial impact of its acquisition of Hewlett Packard Enterprises.
Dollar earners and miners were in demand early on, while ITV (LON:ITV) was the top faller.
One of the leading small-cap risers was Redx Pharma (LON:REDX) as the market continued to re-rate the stock in the wake of significant financial backing for its development of a new generation of antibiotics.
Proactive news headlines
Cloud-based portfolio analytics services provider StatPro Group PLC (LON:SOG) has bagged a three-year contract extension worth C$6.0mln (£3.6mln).
Avacta Group Plc described as “excellent” results from the latest study of its Affimer technology, which it said is now at an “inflection point” as a therapeutic platform. Researchers looked at immunogenicity - assessing whether Affimer provoked an unwanted immune response – and compared with Avastin, an antibody used to treat cancer.
Collagen Solutions PLC (LON:COS) has taken another step into the US$4bn wound healing product market after signing a development and manufacturing agreement with Smart Matrix.
The two will work together to develop and manufacture an advanced wound care scaffold which encourages the growth of skin cells and blood vessels in deep wounds where the deepest layer of skin is lost.
Bushveld Minerals Limited (LON:BMN) will complete its acquisition of a 78.8% stake in Strategic Minerals Corporation from Evraz Corp on Friday after receiving clearance from South African authorities. The company’s wholly-owned Bushveld Vametco Limited will pay a total US$14.8mln for the shareholding in Strategic Minerals.
ANGLE PLC’s (LON:AGL) breakthrough cancer diagnostic is better than the existing technology in harvesting head and neck cancer cells, according to work carried out in Greece. The results of the study by the University of Athens and Attikon University Hospital will presented at the American Association for Cancer Research conference later. ANGLE calls them “highly encouraging”.
Hydrogen fuel cell developer AFC Energy (LON:AFC) has revealed that tests with conducted by its Italian partner gives confidence that commercial life expectancy of its fuel cell stack may exceed its initial target of twelve months.
Research specialist Ergomed Plc (LON:ERGO) said a partner company successfully concluded a phase IIa clinical study, paving the way for a commercial collaboration on the next trial. Denmark-based Asarina Pharma is pioneering a treatment called Sepranolone for a severe and disabling form of premenstrual syndrome, which affects 5% of women with periods.
Minerals explorer and developer Bezant Resources plc (LON:BZT) has told investors it is targeting first production at its Choco alluvial gold-platinum project this quarter. Mine development, plant acquisition and commissioning are also scheduled to be carried out over the coming 12 weeks or so at the Western Colombian project.
LGO Energy PLC (LON:LGO) confirmed a £2.5mln funding, and revealed it has started drilling its next new at the Goudron field in Trinidad.
Providence Resources PLC (LON:PVR) flagged an 'imminent' new 3D seismic programme on the Dunquin South exploration prospect offshore Ireland. The project is being led by majors ENI and Repsol.
Lekoil Ltd (LON:LEK) has dealt General Electric's oil and gas arm into the Ogo oil field development, meanwhile, negotiations continue with other potential partners ahead of new appraisal drilling in either late 2017 or early 2018.
Iofina plc (LON:IOF), which extracts iodine from brine water, said a cut in supply to one of its plants, IO#3, will only have a marginal impact on overall production from its facilities. It sources the raw material from the onshore oil and gas producers in the US. One of its partners said volumes of salt water would be reduced.
6.45am...Footsie predicted start on the back foot
The FTSE 100 looks set to the start the new quarter the way it ended the last – in the red.
For the index of blue-chip shares is tipped to open 10 points lower at 7,312.92 with some nervousness ahead of a meeting between President Trump and Xi Jinping later this week.
The pair will sit down together at Trump’s lavish Mar-a-Lago golf resort, in Palm Beach, Florida, on Thursday and Friday.
Clubs are likely remain in the bag as the Chinese premier doesn’t play.
Instead trade is likely to be on the agenda and it will be another test for the Trump presidency after his recent embarrassing climb down on healthcare.
“Despite the solid gains seen so far this year there is some evidence that the rally in US markets is looking a little tired given President Trump’s trials and tribulations in Congress,” said Michael Hewson of CMC Markets.
“The reflation trade is likely to face a new test this week when President Trump entertains the Chinese leader Xi-Jinping at his Mar-a-Lago golf course in Florida, which in the words of President Trump himself could be a little ‘difficult’.”
Asia’s main markets enjoyed a solid start to the trading week, largely ignoring another bout of the jitters on Wall Street Friday.
Here in the UK it is set to be a quieter week for corporate news after the flurry of last minute statements ahead of the March 31 reporting deadline for companies with a December year-end.
The big news comes on Tuesday from online fashion retailer ASOS (LON:ASC), which while listed on AIM is actually large enough to join the FTSE 100.
A company that once had aspirations of joining the top-flight but now languishes among the small-cap also rans after a painful refinancing is Gulf Keystone (LON:GKP). Its prelims on Thursday will reveal whether its recapitalisation has had any impact on the bottom line.
- Pound worth US$1.2547
- Gold worth US$1,249.60 an ounce, down US$1.60.
- Brent crude US$53.40 a barrel, down 13 cents.
Business Headlines
- Tesla delivered 25,000 cars during the first quarter of this year, higher than analysts expected, heralding a strong start to a year that will be make-or-break for the electric carmaker led by Elon Musk – FT.
- Sterling will climb back to levels not seen since the Brexit vote by the start of next year, according to analysts who believe the currency is “significantly undervalued” – Telegraph.
- Brexit is set to hit Ireland much harder than any other remaining EU country and may harm its economy even more than Britain’s, according to a study drawing on six previous estimates – Times.
- Twitter is seeking to ink deals with pay-TV companies that would let subscribers watch live channels over the social network as part of a major video push – Telegraph.
- A significant number of British businesses are sitting on pension schemes that could represent a “material risk” to their business, a retirement consultancy has warned – Telegraph.
- Virgin Money is expected to make a bid for the ailing Co-op Bank. The smaller lender is poised to show its hand in the first round of bidding which closes this week, it is understood – Guardian.
- One of the largest transactions in the U.K.’s booming purpose-built student accommodation sector has taken place after Liberty Living bought a portfolio of almost 6,500 beds for £460mln – Times.