FTSE 100 jumps nearly 49 points, hits new closing high
AstraZeneca leads drugmakers higher
Lloyds weak on more mis-selling compensation fears
5.00pm: New closing peak for Footsie
The FTSE 100 index ended at a record closing high today after notching up a third-straight week of gains.
At the close, the UK blue chip index was up 0.7%, or 48.8 points at 7,435.4, not far below its all-time record of 7,447.0
A weaker performance from the pound versus the dollar following Thursday's mixed messages from the Bank of England was a boost to exporters once again.
Drugmaker AstraZeneca was the top performer, up 9% to 5,176p helped as well by upbeat news on a lung cancer treatment.
3.20pm: Footsie edges ever closer to fresh record high
The FTSE 100 was strong in late afternoon trading, holding near session highs close to its best-ever levels, in spite of opening falls by US stocks.
With around an hour and a quarter of trading to go in London, the UK blue chip index was up about 26 points at 7,413, not far below the session peak of 7,420, and well above the day’s low of 7,381, on course for a third-straight week of gains.
In early trade on Wall Street, however, the Dow Jones was down 40 points at 20,880, while the broader S&P 500 lost 6 points and the tech-laden Nasdaq composite was off 5 points, as some disappointing US data failed to cool expectations for a Federal Reserve rate hike.
Dennis de Jong, managing director at UFX.com, said: “It was thought at the time that March’s decline in US inflation was the exception rather than the rule, and the return to growth this month will ease any long-term shrinkage fears for Fed Chair Janet Yellen.”
He added: “Inflation was rising faster than many would have liked at the start of the year, and Yellen’s decision to hike interest rates in December and March appears to have pulled it back to a far more manageable level.
“Further interest rate raises could be on the cards for later in the year, but for now, Yellen and the Fed appear to have a handle on inflation – good news for US borrowers.”
Core CPI inflation (at least the 3m Annualised rate) is the lowest it has been since the Great Deflation Scare of 2010. #Fedproblems pic.twitter.com/8yLybM7aCI
— Capital Economics (@CapEconUS) 12 May 2017
The data, however, pulled the US dollar back from earlier gains, with the pound recouping earlier falls to turn flat versus the greenback at US$1.2886.
But the slightly firmer sterling performance failed to crimp gains in drugmakers, which were the main blue chips risers today, with AstraZeneca PLC (LON:AZN) the best performer, up 8.5% at 5,150p helped by news of a breakthrough for a lung cancer drug.
The main FTSE 100 faller remained Lloyds Banking Group PLC (LON:LLOY) which shed 2.2% to 68.15p on fears of another mis-selling compensation bill.
On the second line, Petrofac Ltd (LON:PFC) was the biggest FTSE 250 faller, dropping over 12% to 712p after the oil and gas services group revealed that it is being investigated by the UK Serious Fraud Office.
The company said it "believes" the investigation is related to the investigation being conducted into Unaoil, the company previously hired by Petrofac to provide consultancy services mostly in Kazakhstan between 2002 and 2009.
Meanwhile, small cap architecture and interior design company Aukett Swanke Group PLC (LON:AUK) was one of the market’s top fallers, plunging nearly 19% lower to 2.38p after it warned that it expects to book an interim loss for its first half, following unexpected reverses in its United Arab Emirates and Continental Europe businesses.
But at the opposite end of the market, UniVision Engineering Ltd (LON:UVEL) saw its shares nearly quadruple in value on news the closed circuit television and surveillance systems company has been awarded a contract by Hong Kong’s transportation service Mass Transit Railway Corp.
The AIM-listed group's shares leapt 386% higher to 4.5p on the contract, which will see it conduct replacement works of CCTV systems for all rail stations across 11 lines of MTR's rail network, as well as provide new CCTV for 47 stops on the Light Rail.
1.45pm: FTSE 100 shrugs aside expectations for weak US restart
The Footsie remained close to its highs for the day in early afternoon trading, buoyed by strength in drugmakers, shrugging aside expectations for modest opening falls today on Wall Street.
Around 1.45pm, the FTSE 100 index was up about 23 points at 7,409, just below the session peak of 7,410, and well above the day’s low of 7,381.
But US stock index futures pointed to small losses and the dollar edged lower after US inflation and retail sales data for April both missed expectations.
David Morrison, senior market strategist at SpreadCo noted that the headline US consumer price index, including food and energy, came in at +0.2%, a touch below expectations, while core CPI was also a bit softer than expected.
However, he pointed out that it is “worth noting that oil prices were around 20% higher this April when compared to the same period last year.”
But Morrison said that it’s fair to say traders were focusing more on the US retail sales data after a disappointing March number, and they “were expecting a sharp bounce-back of +0.6% in April, so the +0.4% reading is a disappointment. “
He concluded that the weak data suggests that estimates for US second quarter GDP could be revised downwards again.
US retail sales rose 0.4% in April, vs 0.6% increase expected https://t.co/9Y5hugx61c
— CNBC Now (@CNBCnow) 12 May 2017
10.45am: Exporters keep Footsie firmer
The FTSE 100 held gains in mid-morning trading, on track for its third successive week of gains helped by a weaker pound which continued to boost exporters.
By 10.45am, the FTSE 100 index was around 16 points higher at 7,403, just holding off the session peak of 7,408.
David Cheetham, chief market analyst at XTB.com, said: “The leading UK stock benchmark has enjoyed a rally in recent weeks following the positive outcome of the French elections and received a further boon yesterday as the pound pulled back off recent highs following the Bank of England meeting.
“The pound is lower across the board this morning and closed below the 1.29 handle against the US dollar for the first time this week last night.”
Among the blue chip gainers in London, broker upgrades also helped support gains in companies such as British Airways-owner International Consolidated Airlines PLC (LON:IAG), which was up 1.2% to 605p after French broker Kepler Cheuvreux upgraded its rating to ‘buy’ from ‘hold’.
Likewise shares in Standard Life also rose 1.2% to 389.7p after RBC Capital raised its rating on the insurer and fund manager to ‘outperform’.
RBC analysts said that, following the release of the prospectus for Standard Life's merger with Aberdeen Asset Management, they had greater conviction that the insurance business will be sold, which they expect would unlock value.
Away from the big players, Filtronic PLC (LON:FTC) was the top market gainer, jumping nearly 24% higher to 12.38p after the microwave electronics group said it now expects to report operating profit and revenue ahead of market expectations after strong trading in its fourth-quarter.
And Symphony Environmental Technologies plc (LON:SYM) was another good gainer on AIM, up 4.2% to 15.5p after it revealed it is benefitting from the recent decision by the Saudi Arabian government to make oxo-biodegradable plastic compulsory for a wide range of plastic products.
9:45am German GDP data helps support European markets
The FTSE 100 held firm as the morning session progressed, adding 13 points at 7,400, with European markets supported by news that German growth picked up speed in the first quarter of 2017.
Europe's biggest economy grew by 0.6% in the January-March period, after 0.4% growth in the final three months of 2016, Germany’s Federal Statistics Office said today.
That was in line with the consensus forecast and the strongest quarterly growth rate since the first quarter of 2016 when the German economy expanded by 0.7%.
Q1 #German #GDP #growth of 0.6%: robust investment, modest rises in consumer & govt spending, net trade +ve as exports up more than imports
— Howard Archer (@HowardArcherUK) 12 May 2017
The Federal Statistics Office said growth was driven by higher investment in construction, machinery and equipment, robust household and state spending as well as strong exports.
On currency markets, the solid German data gave a lift to the euro, which added 0.2% versus the pound to €1.1842, and also edged higher against the dollar.
8.45am: FTSE 100 defies expectations
The Footsie defied expectations for a fall and opened higher this morning, buoyed by strength in drugmakers, with AstraZeneca PLC (LON:AZN) the top blue chip performer .
After three-quarters of an hour of trading, the FTSE 100 index was nearly 15 points higher at 7,401, recovering after falls notched up yesterday following mixed messages from the Bank of England and a slide on Wall Street.
US stocks dropped over 120 points in early trade on Thursday, but had recovered by the close to post just a 23 point deficit.
In London, AstraZeneca shares gained nearly 5% to 4,981p after the big pharma group said it has achieved some success in the lung cancer space after revealing “positive results” for its Phase III PACIFIC trial.
The initial results show that Imfinzi - or durvalumab as some might know it - met one of its primary endpoints by showing “statistically-significant and clinically-meaningful” progression free survival.
The other primary endpoint evaluating overall survival will be assessed in due course, Astra added.
Other drugmakers were also strong as dollar earners were helped by a weaker pound versus the greenback, down 0.2% to US$1.2857.
GlaxoSmithKline plc (LON:GSK) was up 0.8% at 1,641p helped by a price target hike from Deutsche Bank, while Shire Plc (LON:SHP) added 0.5% at 4,704p.
Among the blue chips fallers, Lloyds Banking Group PLC (LON:LLOY) was the worst off, shedding 0.9% at 69.01p after the Times newspaper reported the lender is set to pay millions of pounds in compensation to thousands of customers who were mis-sold investment products as “low risk” that turned out to be highly complicated.
Meanwhile, fellow FTSE 100 lender Standard Chartered PLC (LON:STAN) shed 0.7% to 747.6p after Investec downgraded its rating for the emerging markets-focused firm to ‘sell’ from ‘buy.’
7.00am: Weak start predicted
London’s FTSE 100 is set to open 2 points lower this morning at 7,384, giving up the modest gains made on Thursday plus a little bit more.
That follows on from a disappointing 24 hours or so for global stocks more generally.
Across the pond, both the S&P 500 and Dow Jones slipped lower in Thursday trading to end the day at 2,394 (-0.2%) and 20,919 (-0.1%) respectively.
The recent rally over on the Japanese stock market has also come to halt, with the benchmark Nikkei 225 index down 0.5% to 19,873 on profit taking.
Australia’s ASX 200 index was also down 0.76% to 5,833 points.
China’s Shanghai composite was the exception to the rule, trading almost 1% higher at 3,089 after the Chinese central bank pumped a fresh US$67bn of funds into the financial system.
Michael Hewson, chief market analyst at CMC Markets UK said: “Stocks had a disappointing day yesterday with a weaker bias across the board, despite further gains in the oil price, as a lack of positive drivers weighed on sentiment.
“It would be ironic in the extreme now that the worst of the political fog appears to have cleared, that we could well see stock markets post their first negative week since early April.”
Proactive news headlines:
Mining royalty group Anglo Pacific Group plc (LON:APF TSX:APY) has re-jigged the composition of its board committees. Mike Blyth is the new chair of the remuneration committee, which also comprises David Archer and Robert Stan. Patrick Meier has stepped down from this committee but takes over as head of the nomination committee, which includes David Archer, Mike Blyth, Rachel Rhodes and Robert Stan.
Sula Iron & Gold PLC (LON:SULA) has hit its best grades yet at Ferensola in Sierra Leone and is more confident than ever that it hosts a major gold system. Roger Murphy, chief executive, said he was delighted with the results at the Sanama Hill hole, which included a grade of 3.65 g/t over an interval of 32.6m in one hole, FDD014, with several smaller very high grade zones.
Gfinity Plc (LON:GFIN) has revealed that its shares were in high-demand as it raised £6.25mln in new equity. A share placing to new and existing institutional and other investors was oversubscribed, the company said. The eSports promoter is set to issue 31.25mln new share, representing about 16.56% of the company, at a price of 20p per share.
Alecto Minerals PLC (LON:ALO) has told investors that its Mowana copper mine in Botswana is now in full-time production. That follows on from the first blast at the end of April and a successful trial period during which Aleecto produced saleable concentrate of up to 28% copper. So far, the company has produced more than 1,900 tonnes of copper concentrate which is being sold to its offtake partner, Fujax.
Hurricane Energy Plc (LON:HUR) boss Dr Robert Trice, in the UK offshore oiler’s financial results statement, told investors that the company continues to progress a range of financing discussions. It separately noted the issue of equity warrants, potentially for 25mln new shares, to its ‘house’ broker Stifel - this could see a moderate injection of capital to the company in the near term and may also add some additional liquidity for the AIM market listed shares.
Shares in Stobart Group Limited (LON:STOB) moved higher this morning after the infrastructure and support services unveiled details of a proposed share buyback scheme. Stobart is looking to buy back up to 3mln of its shares, which it will keep in treasury to be used for share awards granted to employees.
Symphony Environmental Technologies plc (LON:SYM) is benefitting first hand from the recent decision by the Saudi Arabian government to make oxo-biodegradable plastic compulsory for a wide range of plastic products. It’s very much ‘right time, right place’ for Symphony which has just received a quality mark for its oxo-biodegradable plastic additive, d2W, in the country.
BOS GLOBAL HOLDINGS Limited (LON:BOS) has accepted a conditional £500,000 cash offer for its 75%-owned subsdiary Copper Range, a mining junior with exploration tenements in the Olympic Dam mining precinct of South Australia. Copper Range's 25% minority holder will receive £114,000 of the consideration.
Tidal wave power specialist Atlantis Resources PLC (LON:ARL) has agreed a Strategic Partnership Agreement with Hyundai Engineering & Construction that will see them work together on projects in South Korea and elsewhere. The initial objective is to design and build a 100Mw tidal stream project in the south of Korea; to help deliver other tidal stream projects Atlantis is pursuing in South East Asia and to explore the potential collaboration in tidal range or barrage/ lagoon projects globally.
Savannah Resources Plc (LON:SAV) has lodged an Environmental Impact Assessment (EIA) for the Mahab 4 copper mine development, the final part of its permit applications for two copper mines in Oman. Mahab 4 (and Maqail South) are located in Block 5 and the EIA approval process is expected to take around three months assuming all goes smoothly.
Anglesey Mining plc (LON:AYM) is to assess whether an accelerated development is the best option for a development of its Parys Mountain prospect In Wales. A scoping study is currently ongoing but Anglesey is now mulling whether a throughput of 1,000 tonnes per day rather than 500 tonnes would be more economic.
Tower Resources PLC (LON:TRP) has requested that its shares are suspended from trading on AIM pending clarification of its financial position. It comes as the group’s efforts to close a farm-out deal for its Thali asset, offshore Cameroon, has stalled.
West African Minerals Corporation (LON:WAFM) is to look for partners for its Sanaga iron project in the Cameroon after a scoping study indicated it could be brought into production in two years. Sanaga is near the Port of Douala, Cameroon’s second city, and the study suggested an open pit iron ore mine and concentrator, using either transportation by barge down the Sanaga River or a slurry pipeline to a port at Yoyo, can payback back the up-front costs of US$194-298mln between 2.5-4 years depending on the route chosen.
Gemfields plc (LON:GEM) has decided to focus on opportunities that will deliver “considerably higher returns” as it withdraws from its Coscuez emerald mine transaction in Colombia and in operations in Sri Lanka. The company said will turn its attention to its portfolio of high quality assets in Africa and potential expansion opportunities in Zambia, Mozambique and Ethiopia.
Scotgold Resources PLC (LON:SGZ), the owner of the Cononish gold mine in Scotland, is to push ahead with further exploration at projects in Portugal and France as it looks to broaden its portfolio. Rock chip samples at Pomar in Portugal indicated high grades of goal and antimony, while at Vendrennes in France, Scotgold has been awarded an exploration permit and will now start to review the data from the historic antimony workings.
Business headlines:
- Lloyds Banking Group is set to pay millions of pounds in compensation to thousands of customers who were mis-sold investment products as “low risk” that turned out to be highly comple, reports the Times.
- Britain’s Big Six energy suppliers will cut thousands of jobs in response to the Conservatives’ price cap, a leading analyst has warned. The proposed cap is likely to wipe out profits for big energy providers, forcing them to cut costs, Deepa Venkateswaran, of the broker Bernstein, said, reports the Times.
- China will open its market to US credit rating agencies and credit card companies as well as resume imports of US beef, as part of a package hailed by the Trump administration as the first step in redefining the trade relationship between the countrties, writes the FT.
- The UK financial watchdog has had to delay a decision over its investigation into Barclays’ arrangements with Qatar at the height of the financial crisis after the bank belatedly turned over thousands of “significant” documents, reports the FT.
- SoftBank leads US$500mln investment in British start-up improbable – The Daily Telegraph
- Aldi plans UK supermarket for every 30,000 people – The Guardian
- Snapchat owner loses £1bn in just 45 minutes – Daily Mail
Friday’s City diary:
- Final: Hydrodec Group PLC (LON:HYR)
- Trading statement: Provident Financial PLC (LON:PFG)
Commodites/Currencies:
- Gold: US$1,228 up US$4
- Oil (WTI): US$47.97 up US$0.14
- £/$: 1.2887 - sterling up a little