FTSE 100 index stays 11 points higher
Dow Jones pushed into positive territory as Apple hits new high on back of Buffett boost
Oil majors up, miners down
The FTSE 100 just about held on to some gains at the close, helped by a positive response to Centrica PLC's (LON:CNA) update.
The FTSE 100 closed at 7,301, up 3 points on the day. Centrica rose 1.9% on the day it held its annual general meeting.
The British Gas owner said it continues to make good progress on its cost efficiency programme.
“With mild weather hitting demand, falling oil and gas prices and analyst earnings concerns, we continue to recommend Centrica as a ‘hold’ for medium risk income seekers only,” suggested Graham Spooner at The Share Centre.
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Myanmar-focused social media company MySquar Ltd (LON:MYSQ) was the day's top performer, shooting up 47% to 2.75p.
The shares have more than doubled over the last week after the company appeared to sort its finances with a share placing that brought in £2mln.
3.15pm: Dull start in New York brings FTSE 100 back from highs
The Footsie held firm in late afternoon trading but came off the session high as New York stocks made a dull start following Friday’s post-US jobs data boost, with the as-expected French presidential election results providing little stimulus.
With around an hour and a half of trading to go in London, the FTSE 100 was up about 11 points at 7,308, holding off the day’s peak of 7,322.
In early trading on Wall Street, the Dow Jones was off around 30 points at 20,978, with the tech-laden Nasdaq composite down 6 points and the broader S&P 500 index losing about 3 points off the record close it hit on Friday.
Craig Erlam, senior market analyst at Oanda said: “The S&P failed to break above 2,400 at the third time of asking on Friday and a break below 2,380 now could signal some weakness to follow for the index.
“The next couple of days is looking quiet from an economic event perspective, leaving traders to focus on Friday’s jobs data and the French election result.”
Relief Rally Short-Lived After #Macron Victory - MarketPulse https://t.co/bNKzFLvCFE #France #EURUSD #US #SPX #Oil #OPEC pic.twitter.com/lcyqzkqsfZ
— Craig Erlam (@craig_forex) 8 May 2017
Among the blue chips, there was little news today to provide any direction although drinks giant Diageo plc (LON:DGE) found modest gains in the afternoon, adding 0.8% to 2,294.5p after reaffirming its medium term guidance ahead of an Investor Conference in London today.
In a statement, Ivan Menezes, chief executive, of the Guinness brewer to Johnnie Walker whisky firm said: “The year has continued well and our expectation of delivering stronger financial performance this year is unchanged.”
Strength in oil majors continued to be the main support in London after recent first-quarter results and as the crude price consolidated a rally made on Friday, with BP adding 0.7% at 454.4p and Royal Dutch A shares ahead 1.1% at 2,091.5p.
But weakness in mining shares remained a drag on the FTSE 100 after disappointing trade data from top metals consumer China today.
Miner and commodity trader Glencore PLC (LON:GLEN) down 2.2% at 282.6p even failed to be buoyed by an upgrade in rating from Australian broker Macquarie to ‘outperform’ from ‘neutral’.
Among the small caps, Faron Pharmaceuticals PLC (LON:FARN) saw a chunk of its recent strong gains reversed in late afternoon trade, with the stock losing 23% to 620p on profit-taking after an uninspiring report on ongoing phase III trials for its Traumakine respiratory disease product.
In a note to clients, analyst Julie Simmonds at broker Panmure Gordon said: “No negative or positive read through on the likely outcome of the trial can be made from the statement.”
READ: Faron Pharmacueticals' Traumakine study progress
She added: “Given the recent performance of the shares we expect a fall back in price today, though retain our expectation of long-term performance.”
Panmure Gordon reiterated a ‘buy’ rating and 663p price target on Faron shares, which was around a 20% discount on Friday’s closing price.
1.00pm: Wall Street seen lower, but Footsie holds firm
The FTSE 100 held firm at lunchtime despite expectations for early falls today on Wall Street as continued strength in oil stocks countered falls by miners in London.
By 1pm, the FTSE 100 index was up around 12 points at 7,309, just off the morning peak of 7,311, and above the day’s low of 7,285.
Connor Campbell, financial analyst at Speadex, said: “After a slow start the FTSE has managed to outperform its Eurozone rivals, rising 0.3% to re-cross 7,300.
“This growth comes despite a wave of losses in its copper-dragged mining stocks and sterling’s aforementioned gains against the euro. “
He added: “ Looking to the US open and it appears that the Dow Jones is going to continue to struggle to substantially break the 21,000 mark it rose to in anticipation of Trump’s tax plans back in April.
“The futures are forecasting the Dow will dip by 15 or so points after the bell, with little in the way of data, or positive vibes from Europe, to push it back over that landmark level.”
On the UK data front, house price growth remains at its weakest level for nearly four years, according to the latest report from mortgage lender Halifax, echoing other signs of a slowdown in the housing market amid uncertainty about the impact of Brexit on the economy.
House prices rose 3.8% in the three months to April compared with the same period a year ago, the same pace as in March which was the weakest increase since May 2013, but that beat forecasts for 3.6.% growth.
Housebuilders gained some support from the above-forecast Halifax number, with blue chip Persimmon PLC (LON:PSN) taking on 1.1% at 2,418p, while Taylor Wimpey PLC (LON:TW.) gained 0.5% at 197p, but Barratt Developments PLC (LON:BDEV) – which issues a trading update on Wednesday - was flat at 590.5p.
11.55: Visa says consumer spending slows
UK consumer spending growth slowed to one of its weakest rates in the past three years last month, credit and debit card company Visa reported on Monday, as higher inflation and weak wage growth squeeze households' disposable income.
Visa said consumer spending rose by just 0.5% in April after adjusting for inflation, down from 1.0% in March. It was the lowest rate since January and well below a historic average of 1.4%.
WATCH: Tip TV: UK online spending dips
Visa's managing director, Kevin Jenkins, said: "Consumers tightened their belts in the face of rising prices running up against stalling wage growth."
Despite the disappointing data, sterling stayed 0.2% lower against the US dollar at US$1.2959, but was 0.2% higher versus the euro at €1.1836.
On equity markets, approaching midday, the FTSE 100 index was about 8 points higher at 7,305, just below the session peak of 7,311, having recovered from an early fall to a low of 7,285.
10.15am: Oil gains counters miners weakness
The Footsie had ticked higher mid morning as gains by oil majors on rallying crude prices just outweighed weakness in the miners after dull trade data from China.
Around 10.15am, the FTSE 100 index was about 2 points higher at 7,299, recovering from an early fall to a low of 7,285, having jumped nearly 50 points higher on Friday following robust US jobs data.
A slight fall by sterling against the US dollar to US$1.2970 also provided underlying support for blue chips, although the pound was firmer against the euro, adding 0.3% at €1.1847 as the single currency saw some profit-taking after Emmanuel Macron’s election yesterday as French president.
Chris Beauchamp, chief market analyst at IG, said: “Emmanuel Macron’s win in the second round of the French election has generated nothing like the excitement seen in markets two weeks ago, when the young candidate topped the polling in the first round.
“With markets having rallied throughout last week in expectation of a Macron win, there was little upside left for equities and the euro."
And despite the recovery last week, the $FTSE still stuck below the downtrend line off the all-time high: pic.twitter.com/VZYJsjr4cb
— Chris Beauchamp (@ChrisB_IG) 8 May 2017
After recent falls, oil prices rose today as talk of further supply cuts by major OPEC exporters outweighed recent worries over the prospect of higher US. production as a drilling boom spreads across North America.
Following well-received third-quarter results last week as well, BP PLC (LON:BP) gained 0.7% at 454.4p, while Royal Dutch Shell PLC (LON:RDSA) A shares added 0.5% at 2,078p.
There was little blue chip corporate news around on Monday, although British Gas-owner Centrica PLC (LON:CNA) slipped 0.1% lower to 198.6p after a dull trading update.
Broker comment provided two fallers on the second line, with BBA Aviation PLC (LON:BBA) shedding 4% at 300.5p after Citigroup cuts its stance to ‘neutral’ from 'buy', while UDG Healthcare PLC (LON:UDG) shed 2% to 745p after Berenberg reduced its rating to ‘hold’ from ‘buy’.
Among the small caps, Intelligent Energy Holdings PLC (LON:IEH) surged almost 50% higher to 8p after the firm revealed it will be the technical lead on an EU-funded programme for the development of a blueprint for the mass manufacturing of fuel cell stacks for the automotive market.
And Europa Oil & Gas (Holdings) PLC (LON:EOG) was also a strong early gainer, jumping almost 9% higher to 7.625p after it detailed two additional new exploration prospects offshore Ireland that are estimated to have potential for 553mln barrels of oil.
Proactive news headlines...
Active Energy Group PLC (LON:AEG) is to sell off its WoodFibre operations in Ukraine as part of the new plan to refocus and reorganise its business which it unveiled today.
The AIM-quoted firm said it is shaking up its structure in order to focus more on the global roll-out of its CoalSwitch fuel product as well as the development of a forestry management business.
Hurricane Energy Plc’s (LON:HUR) Lancaster field in the West of Shetland region, offshore Scotland, is now deemed to host more than half a billion barrels of oil. A new competent persons report by RPS Energy has outlined a ‘best estimate’ for the field’s recoverable resources amounting to 523mln barrels, up 162% from the last CPR back in 2013.
Hurricane Energy reaches important milestone towards Lancaster start-up https://t.co/1MvLzCsd6S
— Ruth Gemmell (@ruth_proactive) 8 May 2017
Europa Oil & Gas (Holdings) Plc (LON:EOG) has detailed two additional new exploration prospects offshore Ireland that are estimated to have potential for 553mln barrels of oil. A new competent persons report (CPR), provided by ERC Equipoise, has confirmed two significant prospects – Ervine and Edgeworth – in the company’s wholly owned Licence Option (LO) 16/2 in the South Porcupine basin, in Ireland’s Atlantic Margin.
Eckoh PLC (LON:ECK) is on course to hit market forecasts this year thanks to a strong showing from its US operations. Revenue and margins at the secure payments specialist rose by over 20% for the fourth year in succession to March 2017 with the US seeing record sales and orders.
WATCH: Eckoh boss says 2016 trading update "an excellent result"
Faron Pharmaceuticals Ltd's (LON: FARN) has received another recommendation that its ongoing INTEREST trial for lead drug Traumakine can continue as planned with no changes. The independent data monitoring committee has now reviewed the trial data four times with the next scheduled review at 240 recruited patients and likely to be in the third quarter of 2017.
Sula Iron & Gold PLC (LON:SULA) has identified a potential new target at Ferensola in Sierra Leone through its latest drill programme. This "step out" drilled the underlying geological formation at the Kuwait artisanal mining area that lies to the west of the TZ2 (Eastern Target) anomaly.
WATCH: Zak Mir on Sula Iron & Gold
Canadian Overseas Petroleum Limited (LON:COPL) in its first quarter statement told investors it has engaged two investment banks for a potential funding for the group’s plans in Nigeria. Paris based COFARCO SAS and London’s Zeus Capital have been tasked to raise funds for drilling on the OPL 226 asset, offshore Nigeria.
Anglo Asian Mining Plc (LON:AAZ) has completed the second phase of its drilling campaign at the Ugur gold deposit in Western Azerbaijan, where first production is planned for the fourth quarter of this year.
Anglo Asian’s 2017 production target remains in the range of 64,000 to 72,000 ounces of gold, but the source of this production will temporarily change as Ugur comes on stream: mining operations at the Gedabek open pit will simultaneously be scaled back till the end of the year to allow for a greater focus on existing stockpiles.
Wolf Minerals Limited (LON:WLFE) has appointed interim managing director Richard Lucas to its board with effect from today. Lucas was appointed on 7 April as part of the leadership transition and the need for a greater onsite executive team commitment to ensure the long term successful operation of the Drakelands mine.
8.35am: Subdued reaction to Macron victory
The FTSE 100 wavered at the open, falling 6 points to 7,290.38, as investors digested Emmanuel Macron’s victory in the French presidential elections.
The centrist politician and former Rothschild banker won 65.8% of the vote in the second round of the election, beating far-right candidate and Eurosceptic, Marine Le Pen, to become the next President of France.
In terms of importance French election result made page 6 in The Daily Mail!
— David Buik (@truemagic68) 8 May 2017
FXTM chief market strategist, Hussein Sayed, said Macron's victory on Sunday is a "clear sign of a resistance to populism" after Donald Trump’s US presidential win and the Brexit vote.
“The euro appreciated by 2.5% since the first round of voting, suggesting that the good news was already priced in, and now it requires a fresh catalyst to determine the next move,” the Sayed said.
“The next challenge for Macron is going to be the parliamentary elections in June, and given that there’s a lack of significant support, it remains highly uncertain whether the President can build a parliamentary majority. However, I don’t think this is going to be a major concern to the euro.”
The next political risk event in the European Union is the Italian general election in March 2018.
Closer to home, the focus is on the 8 June UK general election, with the latest polls suggesting the Conservatives will win by a clear majority.
In company news, shares in Centrica plc (LON:CAN) fell 2.26% to 194.50p after the British Gas owner warned that warmer than average weather and lower energy prices in the UK have hurt results in the year to date.
READ: British Gas owner Centrica says warmer weather and lower prices hurt results
Mining shares were under pressure, including Rio Tinto (LON:RIO), Glencore (LON:GLEN), Anglo American (LON:AAL) and BHP Billiton (LON:BLT), as copper prices fell and Chinese trade data missed expectations.
Chinese exports rose 14.3% year-on-year in yuan terms in April, compared to forecasts of 16.8% and the previous month’s 22.3% growth. Imports gained 18.6%, below estimates of 29.3% and a slowdown from March’s 26.3% increase.
Heading the opposite direction, Premier Foods (LON:PFD) shares gained 3.16% to 44.36p after the company said it had renewed its licence deal with Cadbury’s parent Mondelez International until 2022.