FTSE closes up 13
Prince Philip retires, Buckingham Palace confirms
UK services PMI unexpectedly rises
HSBC, Shell, RSA and airlines top risers
Mining shares and Next under pressure
FTSE 100 joined other European indices to close higher on Thursday, as traders welcomed services data.
The Markit/CIPS Purchasing Managers' Index (PMI) of Britain's services industry rose unexpectedly to a four-month high last month and was above all forecasts, according to a Reuters poll.
FTSE 100 closed out at 7,248, a rise of over 13 points, while the FTSE 250 was down a tad - 2.58 points - at 19,680.
The big gainer was airline giant International Consolidated Airlines Group (LON: IAG), which flew almost 35 higher to 572p, on lower crude prices.
Next (LON:NXT) was the big laggard, down over 5% to 4,185p after the High street clothing and homewares retailer reduced the upper end of its full-year profit and sales guidance.
It came after the firm reported a drop in first-quarter sales at the bottom-end of its range of expectations.
In a trading update for the 13 weeks to 29 April, Next said its full price sales were down -3.0%, while total sales, including markdown sales, were down -2.5%.
3.46pm...FTSE struggles for direction, US stocks mixed
The FTSE is struggling for direction ahead of the closing bell. London’s top tier index has risen 6 points to 7,240.37 after slipping into the red briefly in afternoon trade.
$FTSE not happy around 7260, giving up gains as US session looms: pic.twitter.com/782xOWEyLN
— Chris Beauchamp (@ChrisB_IG) 4 May 2017
In the US, equities are mixed with the Dow Jones Industrial Average down 19 points to 20,938.25, the S&P 500 and Nasdaq both up 1 point to 2,389.47 and 6,073.48 respectively.
The market is weighing US data, including figures from the Commerce Department on factory orders. Factory goods orders rose 0.2% in March after an upwardly revised 1.2% increase in February, compared to forecasts for a 0.4% gain.
Initial jobless claims fell more than expected, according to the Labor Department (see 1.30pm)
3.00pm...FTSE reverses gains as mining shares tank
Approaching the close, the FTSE has changed direction, falling 4 points to 7,232,69
Mining shares are providing the biggest drag, including Anglo American, Antofagasta and BHP Billiton. The culprit: A slump in commodity prices.
Gold prices are down 1.67% on the Comex while silver and copper prices have dropped 1.55% and 1.75%, respectively.
Fawad Razaqzada of Forex.com said: “Copper has been hit the hardest, followed by silver. The metals have been weighed down in part because of the stronger US dollar, which has risen to its highest level since 21 March against the Japanese yen.”
Oil prices have also slumped on worries that OPEC’s efforts to curb production may not be enough to address the global supply glut.
Meanwhile, Next continues to be a top faller on the FTSE 100 after cutting its full year profit outlook as the fashion retailer reported a drop in first-quarter sales at the bottom-end of its range of expectations.
On the upside, airline stocks benefitted from the decrease in oil prices as it would mean cheaper fuel. International Consolidated Airlines and easyJet shares jumped.
RSA Insurance gained as it reported a 14% increase in first quarter net written premiums.
HSBC and Royal Dutch Shell also advanced following well-received first quarter results.
2.45pm.. Oil prices slip lower on supply glut worries
Oil prices have plunged after Russia said there has been no decision yet on extending an OPEC curb on supply.
OPEC is due to meet in Vienna on 25 May to decide whether to extend supply cuts through the second half.
Brent crude dropped 2.0% to US$49.75 per barrel and West Texas Intermediate declined 2.3% to US$46.74 per barrel.
David Morrison, senior market strategist at SpreadCo, said: "Both contracts trading at their lowest levels since late November last year, just after OPEC and other major producers agreed to their 1.8 million barrel per day output cut. Today’s sell-off accelerated after Russia said that there’s no decision to date on extending the production cut beyond June."
Also weighing on prices, the Energy Information Adminstration added to worries about the supply glut yesterday when it said crude output rose to 9.29 million barrels a day, the highest level since August 2015. US crude inventories fell less than expected last week, it also reported.
2.16pm....Purplebricks gains as it announces new CFO
Online estate agency Purplebricks shares have shot 6.84% higher to 339.75p after announcing James Davies as its new chief financial officer.
Davies, formerly CFO of William Hill Online and divisional CFO at Kingfisher, has replaced Neil Cartwright, who is stepping down at the end of June due to ill health. Davies started his new role at Purplebricks today.
1.30pm... US weekly jobless claims fall more than expected
US initial jobless claims fell by 19,000 to 238,000 last week, the Labor Department has revealed.
Economist had expected weekly jobless claims to fall to 248,000 from 257,000 the previous week.
The report comes ahead of tomorrow’s all-important US non-farm payrolls report, which is expected to show US employers added 190,000 jobs in April and the unemployment rate rose to 4.6% from 4.5%.
12.50pm...Hard Brexit fears remain rife, warns FXTM analyst
FXTM research analyst Lukman Otunuga has noted that while the pound has received a boost by postive PMI data on construction, manufacturing and services sectors, Brexit uncertainty still poses a risk.
Otunuga said: "With the construction, manufacturing and services sector in the UK all displaying signs of resilience against Brexit woes in April, sterling could be supported in the short term. With uncertainty still a dominant theme with regards to Brexit, investors may start to overlook the improving fundamentals with an increased focus on Brexit negotiations. Hard Brexit fears remain rife with the current dispute over the €100 billion “Brexit bill” acting as the first major obstacle of many. From a technical standpoint, the GBPUSD could appreciate towards 1.3000 if bulls maintain control above 1.2875. In an alternative scenario, repeated weakness below 1.2875 should encourage a decline towards 1.2775."
12.05pm... FTSE gains in midday trading
The FTSE 100 rose 36 points to 7,270.89 at noon, led by HSBC and Royal Dutch Shell.
HSBC shares jumped 2.86% to 670.20p after the lender reported a 12% increase in underlying profits in the first quarter.
Royal Dutch Shell advanced 2.90% to 2,076.50p as its profits surged in the first three months of the year, helped by rising oil prices.
On the downside, fashion retailer Next slumped 4.24% to 4,223.0p as it reduced the upper end of its full-year profit and sales guidance after reporting a drop in first-quarter sales at the bottom-end of its range of expectations.
In a lift to equities, UK services data came in stronger than expected. The Markit/CIPS services purchasing managers’ index rose to 55.8 in April from 55.0, beating forecasts of 54.5 and above the 50 level that indicates growth in the industry.
Report followed better-than-expected PMIs on manufacturing and construction this week, which economists said indicates that economic growth has revived after slowing sharply in the first quarter.
The pound strengthened against the dollar after the report, rising 0.13% to US$1.2884.
Elsewhere, investors were relieved after French election candidate Emmanuel Macron seemed more impressive than his rival Marion Le Pen, a Eurosceptic, in the final TV debate.
In the US, the Federal Reserve kept interest rates unchanged and said it expected economic growth to pick up after a slowdown in the first quarter.
11.25am... Gold demand falls in first quarter
Gold demand in the first quarter fell 18% compared to a year ago, according to the World Gold Council. However, spokesman Alistair Hewitt tells Proactive Investors that it wasn’t necessarily a weak first quarter, rather that it compared to strong first quarter in 2016.
He said the first quarter of 2016 was the "best first quarter we've had on record and indeed it's the second best quarter on record''.
10.54am....Pound strengthens against dollar afte services PMI
The pound is up 0.21% versus the dollar at US$1.2896 after the unexpected pick-up in UK services PMI data (see 9.30am).
“Solid data wet the appetite in the pound, which started the session on a negative note. The GBPUSD recovered to 1/2895, after trading at 1.2830 earlier,” said London Capital Goup analyst Ipek Ozkardeskaya.
10.34am... Prince Philip steps down from public life
Prince Philip will no longer carry out public engagements from the autumn of this year, the Buckingham Palace has announced.
Speculation over the health of the Duke of Edinburgh and of the Queen's was rampant earlier when the Palace called a meeting, which was said to involve all senior staff from across the UK.
The Palace said in a statement Prince Philip, 95, had made the decision to retire with the support of the Queen.
"His Royal Highness The Duke of Edinburgh has decided that he will no longer carry out public engagements from the autumn of this year. In taking this decision, The Duke has the full support of The Queen."
Must be rubbish having everyone think you're dead every time you get the lads round for a morning cuppa #buckinghampalace
— Jack Barrow (@Jack_Barrow1901) 4 May 2017
"They fell for it." #buckinghampalace pic.twitter.com/029sU9Ar0f
— Scott Fairbanks (@Sxottlan) 4 May 2017
10.12am... Mortgage approvals drop, BoE reveals
UK mortgage approvals fell to a six-month in March, adding to signs of a slowdown in the housing market amid uncertainty on Brexit and the general election.
The Bank of England said the number of approvals of loans for house purchases dropped to 66,837 from 67,900 the previous month, missing expectations of 67,300.
“March’s second successive drop in mortgage approvals to a six-month low reported by the Bank of England adds to the evidence that the housing market is being increasingly affected by the increasing squeeze on consumers and their concerns over the outlook,” said Howard Archer, chief UK and European economist at IHS Global Insight.
“We suspect markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios will weigh down further on housing market activity and house prices over the coming months. However, a shortage of supply is likely to put a floor under prices.”
10.06am...Proactive news headlines...
Winston North has jumped ship from IMI PLC (LON:IMI) to become group finance director and company secretary at Stadium Group plc (LON:SDM).
Deltex Medical Group plc (LON:DEMG) has launched a non-invasive High Definition Impedance Cardiography (HD-ICG) module in the UK to augment its CardioQ-ODM+ monitoring platform.
Sound Energy PLC (LON:SOU) is entering the final decisive stages of work on a potentially significant gas well in Italy. It has reached the fourth casing point at Badile, near Milan, at 3,379 metres in the Eocene Scaglia formation.
PowerHouse Energy Group Plc (LON:PHE) said it has shifted its waste-to-power unit to a new location at the Thornton Science Park, operated by the University of Chester. It follows the successful first-phase of re-commissioning G3-UHt system, which recently delivered the production of synthesis gas.
High-flying PhotonStar LED Group PLC (LON:PSL) has raised £465,000 through a placing of 37.2mln shares at 1.25p a throw.
Aggregated Micro Power Holdings plc (LON:AMPH) hit its £15mln revenue target in year to March. Shares rose 5% to 85p.
ID checking software specialist ClearStar (LON:CLST) is to supply its platform to MultiLatin, a background screening company that operates in thirty Latin American and Caribbean countries. ClearStar’s platform is configurable for all major languages and will enable MutliLatin to add seamless language translation and access to global records to its service.
Copper explorer Asiamet Resources LIMIted (LON:ARS CVE:ARS) is mulling going deeper at its BKM prospect in Kalimantan after it hit more thick mineralisation in the BK044 Zone. Moderate to high-grade copper mineralisation extended more than 100 metres below the base of the conceptual open pit design, said the junior, though further exploration will be needed along strike (north-south) and laterally to establish the continuity of this deeper domain.
09.38am....Buckingham Palace meeting not a cause for concern
Don't panic - a meeting of household staff called at Buckingham Palace is not about the health of either the Queen of the Duke of Edinburgh, the BBC reports.
The meeting, which will take place at 10am, is reported to involve all senior staff from across the UK but officials at the palace have not confirmed what it's about.
Earlier, The Sun landed itself in hot water after reporting that the meeting was called because Price Philip had died.
Hi @TheSun. Not sure that's supposed to have been published... pic.twitter.com/bBJHuA0iWl
— The Sun Apologies (@SunApology) 4 May 2017
According to Twitter Prince Philip has died, come back to life, bought a dog & congratulated Harry on his engagement. #BuckinghamPalace
— Laura Michelle (@misslaurashell) 4 May 2017
Just talked to #BuckinghamPalace press office. No comment on reports of urgent summit. "Her Majesty and Prince Philip are alive and well."
— Rosa Hwang (@journorosa) 4 May 2017
09.30am... UK services activity expands further in April
The UK services sector expanded more than expected in April, a survey showed.
The Markit/CIPS services purchasing managers’ index rose to 55.8 in April from 55.0, beating forecasts of 54.5 and above the 50 level that indicates growth in the industry.
Report followed better-than-expected PMIs on manufacturing and construction this week in welcome news for Prime Minister Theresa May ahead of the general election on 8 June.
"UK business activity growth gained momentum for a second successive month in April, with a hat-trick of faster growth signalled by the three PMI surveys. Order book and employment growth also accelerated," said Chris Williamson, chief business economist at IHS Markit.
"The improvement in the survey data indicates that economic growth has revived after having slowed sharply in the first quarter of the year."
UK PMI surveys running at level consistent with +0.6% GDP at start of Q2 after hat-trick of upside surprises from the 3 sectors pic.twitter.com/8PnwHvoCTR
— Chris Williamson (@WilliamsonChris) 4 May 2017
08.54am... FTSE rises at opening bell
The FTSE 100 got off to a confident start as the final election debate in France passed without controversy and the US Federal Reserve stood pat on interest rates.
The index of blue-chip shares rose 41 points 7,275.27 following a welter of positive announcement from market heavyweights.
HSBC (LON:HSBA) advanced 3.4% after what chief executive Stuart Gulliver described as a “great” quarter for its global banking operations.
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There were good news announcements also from Royal Dutch Shell (LON:RDSA) and William Morrison (LON:MRW).
The grocer stood out as it unveiled its sixth quarterly rise in underlying sales, suggesting the revival of the Bradford-based chain under boss David Potts has legs.
“Morrisons is now delivering against a tougher year-on-year comparative than last year so these figures are all the more impressive,” said Neil Wilson, analyst at ETX Capital.
Next (LON:NXT) topped the losers’ column after narrowing earnings guidance.
Dropping down a division, Gem Diamonds (LON:GEMD) was in sParkling form after digging up another big stone.
At 80-carats it isn’t a whopper. However it is one of the highest quality discoveries made at its Letseng Mine in Lesotho. The stock responded with an early 5% jump.
6.45am...all quiet on the macro-front
London’s FTSE 100 is tipped to start Thursday positively after it was all quiet on the macro-front, allowing investors to focus on today’s next batch of corporate news.
Potential shocks were swerved on Wednesday with the French face-off between Presidential candidates Marine Le Pen and Emmanuel Macron passing without any apparent changes to investor sentiment – leaving Marcon in a leading position – and with the US Federal Reserve leaving interest rates alone whilst maintaining a somewhat neutral view on the recently released weak Q1 economic data.
Later today comes services sector data for the UK and separately Europe, and as it is the first week of the month the attention will soon turn to Friday’s monthly US non-farm employment statistics.
“Attention will inevitably shift towards tomorrow’s payrolls numbers, as well as the latest wages numbers for evidence of a tightening in the labour market and upward pressure on wages in the wake of recent weaker than expected personal spending and inflation data,” said Michael Hewson, analyst at CMC Markets.
The employment stats will likely provide a meaningful marker in the Fed’s decision making over rates.
Wednesday saw a fairly steady close on Wall Street with the Dow Jones ending the session up just a few points, at 20,957 while the S&P 500 finished 3 points or 0.13% lower at 2,388. The Nasdaq lowered 0.37% to close at 6,072.
In Asia, Japan’s Nikkei was up 135points or 0.7% trading at 19,445 while Hong Kong’s Hang Seng dipped 0.43% at 24,591. The Shanghai Composite was more or less unmoved, down 0.06% at 3,133.
Australia’s ASX 200 was down 0.32% trading at 5,873.
Here in London, spreadbetting and CFD group IG Markets saw the FTSE 100 higher, calling the blue-chip benchmark up about 30 points at 7,255 to 7,259 about an hour before Thursday’s open.
Headlines
HSBC reports 19 percent fall in profit before tax, but beats estimates – CNBC
Advertisers' appetite lifts Facebook sales and earnings - Financial Times
Sainsbury's to be tested on resilience as a grocer – Telegraph
Tesla Q1 Loss Widens – Nasdaq
Adam Crozier will leave ITV looking a picture of health - The Guardian
JP Morgan to shift back-office roles to Dublin as Frankfurt nets traders - Irish Times
Australia blocks BHP offshore move, warns of crIMInal charges - Daily Mail
Key prices
GBP:USD – US$1.2897
Brent crude – US$49.53
Gold – US$1,227
Thursday’s scheduled announcements
Interim Result
Royal Dutch Shell Plc (LON:RDSA), Lancashire Holdings Ltd (LON:LRE), Inmarsat Plc (LON:ISAT), HSBC Holdings Plc (LON:HSBA)
Trading Statement
Morrison Wm Supermarkets Plc (LON:MRW), Next Plc (LON:NXT), RSA Insurance Group Plc (LON:RSA), Ladbrokes Coral Group PLC (LON:LCL), IMI Plc (LON:IMI), esure Group Plc (LON:ESUR), Fisher (James) & Sons Plc (LON:FSJ), G4S Plc (LON:GFS), ConvaTec Group PLC (LON:CTEC)