FTSE 100 closes up 13
Trump's tax announcement in focus
Croda and StanChart shares gain
FTSE 100 posted a positive finish as markets awaited President Trump's big announcement on tax.
The blue-chip benchmark closed up over 13 points, or 0.18% at 7,288.
The FTSE 250 index of mid-cap stocks was also higher at 19,678 - up over 96 points.
Earlier, Treasury Secretary Steve Mnuchin confirmed in an interview that Trump was planning on cutting corporation tax to 15%.
The biggest gainer on Footsie was Asia focused bank Standard Chartered (LON:STAN), which added over 4% to stand at $758.40p, after its quarterly numbers cheered.
Pre-tax profit for the three months was up 94% to $1bn as revenue grew 8% to $3.6bn.
The biggest laggard was drugs titan GlaxoSmithKline (LON:GSK), which saw shares sink 2.06% to 1,566p even though it remains on track to deliver financial targets for 2017 under new boss Emma Walmsley as it reported slightly better than expected first-quarter results.
The FTSE 100-listed firm saw its adjusted earnings per share rise by 31% to 25.0p in the quarter to March 31, beating forecasts for 24.5p.
READ - GlaxoSmithKline shares weak despite being on track to deliver its financial targets for 2017 under new boss Emma Walmsley
3.51pm...FTSE inches higher, US stocks mixed
The FTSE 100 has risen 16 points to 7,291.37 as the closing bell draws near, turning around losses earlier in the session.
Treasury Secretary Steve Mnuchin confirmed in an interview with CNBC that President Donald Trump was planning on cutting corporation tax to 15%. He promised that the ‘biggest tax cut’ and ‘largest tax reform in US history’.
US equities were mixed on his remarks, with the Dow Jones up 0.12% and the S&P 500 up 0.15% but the Nasdaq down 0.3%.
“The fact investors failed to react to the Treasury Sec’s headline tax cut announcement suggests that they are looking for more detail, especially the red flags that may cause any proposed bill to go the same way as Trump’s healthcare reforms,” said Spreadex analyst Connor Campbell.
“There is also every chance that the bulk of the tax plan’s market-boosting juice was used up yesterday, leaving little room for extra growth following the Mnuchin/Cohn press conference later this evening. “
Meanwhile, the pound fell 0.3% versus the dollar to US$1.2838 and rose 0.41% against the euro at €1.1802.
Oil prices recovered after official data showed a fall in US weekly crude inventories. Brent crude rose 0.28% to US$52.25 per barrel and West Texas Intermediate climbed 0.70% to US$49.91 per barrel.
On the company front, mining shares were among the biggest fallers, including Anglo American and Glencore.
GKN continued to slump after warning that it may lose momentum after a good pace of growth its first-quarter.
On the upside, Standard Chartered gained on well-received first quarter results and Croda International was a high riser after saying its sales were improving and profit margins were holding fast.
3.25pm... Weekly US crude inventories fall, official data shows
US crude inventories fell by 3.6mln barrels to 528.7mln barrels in the week to 21 April, according to the Energy Information Administration.
The report contrasts with earlier data from the American Petroleum Institute, which showed crude oil stocks rose by 897,000 barrels in the week to 21 April.
Oil prices dropped with Brent crude down 1.06% to US$51.55 per barrel and West Texas Intermediate down 0.81% to US$49.16 per barrel.
2.54pm... FTSE and banks claw back gains
The FTSE 100 has regained strengthen after spending most of the day in the red, rising 6 points to 7,281.92. The pound is up 0.20% against the euro to €1.1778 but down 0.15% versus the dollar at US$1.2823.
Banks have also recovered from any earlier slump, with shares in Barclays, Lloyds and HSBC slightly higher. However, mining shares continue to decline on the back of a drop in precious metal prices. Anglo American, Glencore and Fresnillo are among the top fallers.
2.45pm...Be wary of Trump hype, says analyst at AJ Bell
Ahead of Donald Trump's announcement, AJ Bell warned investors to be "wary of the hype" surrounding expected plans to cut taxes.
"First, it is unclear whether any of the President’s proposals will pass through Congress unmolested, especially as the November 2015 Bipartisan Budget Act, which suspended America’s debt ceiling, lapsed on 15 March. America’s federal debt stands at nearly $20 trillion, a record high, or 105% of GDP," said Russ Mould, investment director at AJ Bell.
"Second, this makes it clear that Trump has a lot less room for manoeuvre than Ronald Reagan, to whom he is regularly compared for his tax-cutting and deregulating zeal. Whereas when Reagan took office in 1981, inflation and interest rates were falling, federal debt was low and US stocks were cheap after a vicious bear market, Trump is taking control at a time when interest rates and inflation look to be rising (albeit slowly), federal debt stands at record levels and US stocks look expensive relative to their history after an eight-year bull run...
"Finally, US corporations are already paying historically low amounts of tax. According to Federal Reserve data, American companies’ tax bills represented just 7.5% of pre-tax profit and 3.4% of sales in 2016."
1.55pm...US Treasury Secretary confirms corporation tax cut
The US Treasury Secretary, Steven Mnuchin, has confirmed that President Donald Trump plans to cut the corporate income tax rate to just 15% from 39.6%.
Speaking to CNBC ahead of Trump's official announcement on his tax policy, Steven Mnuchin said the move would stimulate growth and job creation.
Treasury Secretary @stevenmnuchin1 says tax proposal will be "biggest tax cut and largest tax reform" in history. pic.twitter.com/2bjK4HpbMd
— Peter Cook (@PeterCCook) 26 April 2017
1.19pm...Sports Direct employment agency prepares to enter administration
The temporary employment agency that was caught up in Sports Direct’s scandal over the ill treatment of staff at the retailer is preparing for insolvency.
Transline has submitted to a court in Leeds a “notice of intention of appointing administrators”.
The company was one of two employment agencies that supplied Sports Direct with temporary workers when it emerged that the sportwear retailer failed to pay them the minimum wage.
Transline was also axed last month from supplying temporary staff to Amazon. Colin Beasley, who was the majority shareholder when the group founded, has left the board.
A Transline spokesperson said: “The company has suffered as a result of a continued move to tighter margins in the recruitment industry. We are close to securing inward investment that will allow us to drive forward with continued growth and infrastructure development, and have lodged the ‘notice of intention’ to protect the business, our employees and our customers as we complete this process.”
12.59pm...Twitter's shares jump in pre-market after quarterly results
Shares in Twitter are up 11.87% to US$14.66 in US pre-market trade after reporting better-than-expected quarterly results.
The social media company said average monthly active users increased 6% percent to 328 million in the first quarter from a year earlier. Analysts had expected 321 million active users.
Its net loss narrowed to US$61.6mln in the three months to 31 March from US$79.7mln in the year-ago period.
Earnings per share fell to 11 cents from 15 cents but it was ahead of forecasts of 1 cent.
Revenue fell 7.8% to US$548.3mln, the first decline since its initial public offering, though it beat analysts’ expectations of US$511.9mln.
11.57am...FTSE dragged lower by miners and banks
The FTSE 100 is in the red, down 7 points to 7,269.01, led by banks and mining shares.
“While that’s not a severe drop, it does put another hurdle in the way of the index’s hopes to recover all of its post-snap election announcement losses by the end of the week,” said Connor Campbell, financial analyst at Spreadex.
“Contributing to the FTSE’s sluggish performance was the pound’s (very mild) recovery against the euro, with sterling taking 0.3% off the Macron-boosted currency. That has just about lifted it away from its two-week low, though still means the pound has shed all of its UK election growth in light of France’s own electoral news.”
The pound is up 0.22% versus the euro at €1.1780.
Royal Bank of Scotland, Lloyds Banking Group and Barclays are among the biggest fallers, reversing gains over the past two sessions when the market cheered news that French Centrist leader Emmanuel Macron was through to the second round of the presidential election.
Mining shares, including Anglo American, Rio Tinto and Glencore, are under the cosh, as gold prices edge lower.
“The renewed appetite for risk has left safe-haven investments in the dust with Gold losing some of its safe-haven glimmers this week. Sellers have exploited the risk-on trading environment to install heavy rounds of selling on the yellow metal with prices hovering around $1260 as of writing,” said FXTM research analyst Lukman Otunuga.
11.00am...GKN's shares plunge, StanChart advances
GKN plc (LON:GKN) is among the biggest fallers on the FTSE 100 after the automotive and aerospace parts manufacturer warned that the good pace of growth seen in its first-quarter may not last. Shares are down 1.58% to 360.30p.
Nicholas Hyett, equity analyst at Hargreaves Lansdown said: “GKN put in another steady performance in the first quarter, but despite the glamour of building parts for the F-35 fighter jet, it remains a Mondeo rather than a Ferrari.
#proactive GKN cautions that encouraging growth rate achieved in the year to date may not be sustained https://t.co/POibnHUSN2
— Proactive Investors (@proactive_uk) 26 April 2017
Swinging the other way, Standard Chartered PLC (LON:STAN) shares are up 3.35% to 752.50p after saying first quarter profit almost doubled as its restructuring paid off. First quarter profit before tax was US$990mln compared to US$500mln the same period a year earlier.
Better than expected numbers sees STANDARD CHARTERED BANK'S SHARES UP 3.9%
— David Buik (@truemagic68) 26 April 2017
10.28am... Potential for dividend growth at UK banks, says analyst
First quarter results from Lloyds Banking Group plc (LON:LLOY), Royal Bank of Scotland Group (LON:RBS) and Barclays plc (LON:BARC) are due on Thursday and Friday.
This is what Michelle McGrade, chief investment officer of TD Direct InvestingAhead, had to say ahead of the results: “The UK banking sector is still out of favour with investors as it is still dealing with the gremlins of the financial crisis and investors still don’t trust bankers. However, the sector is returning to stronger financial health and as the economy continues to grow comfortably and in a rising interest rate environment, we expect banks to provide solid long-term capital and dependable dividend growth for shareholders.”
“It’s the potential for dividend growth which is the exciting aspect because this growth isn’t priced into the shares right now, and when confidence returns to the sector the shares will no longer be as cheap as they are today. Out of favour banks today will be our trusted dividend source in future.”
09.41am... FTSE struggles for direction
The FTSE 100 is up 2 points to 7,277.90 after an initial dip at the opening bell and the pound is down 0.18% versus the dollar and flat against the euro.
Croda Interntaional is leading the charge after the company's first quarter results were well received by analysts. AJ Bell said it thinks "Croda remains on track to deliver continued profitable progress throughout this year".
Today's attention is firmly on Donald Trump's tax plan to be revealed later today.
Connor Campbell, financial analyst at Spreadex, said: "Investors will also be looking for the possible roadblocks that Trump could face in trying to pass his proposals, especially following his healthcare humiliation a couple of months ago. A press conference between Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn is currently scheduled for 6.30pm GMT, meaning that the markets may be in a state of stultifying anticipation for most of the day."
09.15am...Credit Suisee bolsters capital buffer amid regulatory pressures
Credit Suisse said it plans to raise 4bn Swiss francs from shareholders to strengthen its capital base.
The bank’s announcement comes as Swiss lenders come under pressure from regulators to bolster their capital buffers to shield them from a financial crisis.
Credit Suisse raised about 6bn francs from shareholders in 2015.
The group has also put a plan to sell its shares in its domestic banking business on hold. It reported a first quarter profit of 596m Swiss francs, compared to 302m Swiss francs a year earlier.
Q1 discussion with @CreditSuisse CEO Thiam @CNBCi pic.twitter.com/vbDyJ4GBNL
— Carolin Roth (@CarolinCNBC) 26 April 2017
08.49am... FTSE reverses two-day rally
The FTSE 100 marked time ahead of President Trump’s big announcement on tax reforms slated for later Wednesday with the index of blue-chip shares off six points at 7,270.14.
According to the New York Times, the plan doesn’t include the promised US$1trn of infrastructure investment, while the administration has rejected calls for an import levy.
Trump is expected to introduce a cut to corporation tax to 15% from 35%, while income tax will also fall to 15% from almost 40%.
Turning to the market’s movers and shakers, Croda (LON:CRDA), the speciality chemicals group, was up 3.8% after the company told the market its sales were improving and profit margins were holding fast.
Precious metals miner Fresnillo (LON:FRES) tracked the gold price lower as it fell 1.5%, while the utility stocks continued their slide in the wake of an election pledged of tighter price regulation.
CLICK HERE: For a daily round-up of all the Proactive news
The junior market’s stand-out star was gold exploration group Mariana Resources (LON:MARK), which rose 47% after accepting a takeover bid tabled by a larger Canadian rival.
It caps a stupendous year for investors, with stock over 300% in that time.
Proactive news headlines...
BOS GLOBAL HOLDINGS Limited (LON:BOS), a specialist in productivity software, is forming a global project management office (PMO) based in Hong Kong.
The new operation will have the ability to handle single transactions worth more than US$20mln within three years, including acquisition, innovation partnerships and large reseller agreements.
Gold explorer KEFI Minerals (LON:KEFI) and the government of Ethiopia have triggered resettlement arrangements for the community around the company’s Tulu Kapi gold project. Consultations are taking place at a national, regional and local level which would allow the construction of the mine to begin in the second half.
Medical imaging software company Feedback plc (LON:FDBK) has tapped the market, placing shares at 2.75p a pop to raise £750,000.
Shares in Stadium Group plc (LON:SDM) were on a surge in early deals after the electronics firm reported a healthy rise in its order book. Shares rose
Russian gold producer Petropavlovsk PLC (LON:POG) returned to profitability in 2016, helped by the gold price rally and lower than projected cash costs.
Arian Silver Corp (LON:AGQ) has lapsed its option over the Noche Buena gold and silver tailings project to focus on its lithium assets in Zacatecas State, Mexico. Metallurgical testwork showed Noche Buena’s tailings are highly refractory and include minerals that would inhibit extraction of the silver and gold and incur smelting penalties, said the junior.
Concepta PLC (LON:CPT) remains on track for the launch this year of its fertility treatment myLotus. The first step for myLotus, which is targeted at women with the condition known as unexplained infertility, will be a European standard CE mark, following which the product will be launched both there and in China.
6.45am... a modest rise on the cards
UK stocks were set to open modestly higher on the day when President Trump is expected to announce a raft of tax cuts.
Spread betting quotes pointed to the FTSE 100 index opening some 7 points higher at 7,282.
US stocks last night finished higher ahead of Trump's big day. The Dow Jones rose 232 to 20,996 and the S&P 500 put on 14 points at 2,389.
The Nasdaq Composite, meanwhile, rose above 6,000 for the first time and kept on going, closing at 6,025, up 42.
Ipek Ozkardeskaya, senior market analyst at LCG, sounded a note of caution over Trump's initiative.
“An announcement highlighting the tax cuts without mentioning how to finance the multi-billion dollar deficit it would add to the government’s budget could dampen the mood. Therefore, it is worth mentioning that the downside risks on the stock markets prevail due to an eventual lack of details, as it has often been the case over the first 100 days of Trump’s presidency,” Ozkardeskaya opined.
Heading towards the end of the trading day in Asia pacific, most indices were on the march.
In Tokyo, the Nikkei 225 was up 182 at 19,261 while in Hong Kong the Hang Seng was 175 points firmer at 24,631.
Back in Blighty, on the corporate front drugs giant GlaxoSmithKline plc (LON:GSK) issues interims while mining giant BHP Billiton plc (LON:BLT) reveals its first quarter production numbers.
Around the markets
- Sterling: down 0.03% at US$1.2838
- Gold: down US$2.50 at US$1264 an ounce
- Brent crude: up 6 cents at US$52.16 a barrel
City headlines
- Wikipedia co-Founder Jimmy Wales exits Guardian board over conflict of interest with Wikitribune news site - The Daily Telegraph
- Tyrie’s resignation to trigger battle to chair influential Treasury Committee - The Daily Telegraph
- Flying taxis will be cheaper than driving a car, says Uber - The Daily Telegraph
- Trump levy on imports sparks fears of trade war - The Times
- RBS toxic debt settlement is delayed - The Times
- McDonald’s offers workers switch from zero-hours contracts - The Times
- Poundworld faces £500,000 fine for ‘selling food covered in mouse urine and droppings’ - The Independent
- Luxury brand LVMH to snap up Christian Dior for £10 billion - The Independent
- BHP indicates US gas field sale as it responds to activist investor - Financial Times
- Costco unveils special dividend at cost of US$3.1bn - Financial Times
- Nestlé to axe 300 UK jobs and move Blue Riband production to Poland - The Guardian
- UK government borrowing at lowest level since 2008 financial crisis - The Guardian