FTSE 100 closes up around 19 at 7,454 - a new closing high
US blue chips gain
Oil majors lifted by firmer crude prices
Cybersecurity firms get 'ransomware' boost
FTSE 100 closed at a new record high with miners bolstering the blue chip exchange along with firmer oil prices.
The UK's index of leading shares finished almost 19 points higher at 7,454.
Big gainers on the day were commodities giant Glencore plc (LON:GLEN) up 3.16% to 294p, while Anglo American (LON:AAL) was also up 3.22% to stand at 1,074p.
TUI (LON: TUI) was the biggest laggard, down 4.8% to 1,133p, after the travel firm posted a loss for the six months to March 31, although it was better than last year's figure.
Chris Beauchamp, at spreadbetter IG Index, summed it up thus: "The FTSE 100 hit an all-time high of 7460 at around 8.30am this morning, and has spent all day trying to get back there.
"Eurozone markets have joined in as well, clawing back their losses while US markets have started the week on the front foot as well."
In the US, the Dow Jones is up 78 points at the time of writing.
3.15pm: US stocks advance but FTSE 100 steady
The Footsie stayed off this morning’s record highs in mid-afternoon trading, holding more modest gains as US stocks opened higher buoyed by strength in crude oil prices.
Around 3.15pm, the UK blue chip index was nearly 15 points higher at 7,450, below the new all-time peak of 7,460.20, but just above the previous high of 7,447 hit in March, and on course for a fresh closing record.
In early deals on Wall Street, the Dow Jones gained around 78 points, or 0.4% at 20,975, with both the broader S&P 500 and tech-laden Nasdaq composite higher as well as oil prices rallied after Saudi Arabia and Russia called for an extension to the OPEC cartel’s production-cut deal.
Oil commentator Malcolm Graham-Wood said that “little confirmation on the detail of the agreement has yet been announced but if this is a genuine agreement then I would expect the price to rise more as these two heavyweights will carry the rest of the group with them.“
He added: “Having said that, the usual large dose of cynicism will undoubtedly exist and proof of the pudding will be demanded by the market.”
Malcy's blog today: on Oil price, Premier Oil, Echo Energy, Ophir Energy, And finally... - https://t.co/t8aqzHOmuz
— Malcolm Graham-Wood (@mgrahamwood) 15 May 2017
In London, banks were higher led by emerging markets-focused Standard Chartered PLC (LON:STAN), up 2.8% to 766.3p which got a boost from an upgrade by Shore Capital.
The broker’s analyst Gary Greenwood has raised his rating for StanChart to ‘buy’ from ‘hold’ pointing out that the lender’s recent first-quarter results “were better than we and the market had expected”.
Meanwhile, small cap Galileo Resources PLC (LON:GLR) soared in late afternoon trading, jumping 31% higher to 9.38p after the explorer announced it has completed its initial drilling programme at its Concordia copper project in the Northern Cape Province of South Africa.
And Summit Therapeutics PLC (LON:SUMM) gained nearly 8.5% to 192.5p after it revealed it has triggered a US$22mln milestone payment under its licence and collaboration deal with Sarepta Therapeutics Inc, after completing enrolment in a phase II trial.
2.25pm: Online salary tool
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This tool shows how your salary compares to the rest of the world https://t.co/NvR9pjkysR
— Daily Mail Online (@MailOnline) 15 May 2015
2.15pm: Dublin's fair City
JP Morgan Chase & Co (NYSE:JPM) is making good on its post-Brexit planning and buying an office building in Dublin which will be able to house 1,000 staff – double the number of personnel the US bank currently employs in the Irish capital.
The US bank is reportedly paying €125mln for the building at the flagship Capital Dock development in Dublin’s docklands, which is due to be completed in the latter part of 2018.
The US bank said earlier this month that Dublin would be used as one of three main bases in the EU from which it will carry out the activities it used to carry out in London.
JP Morgan to buy office block on Dublin Docklands that can accommodate 1,000 workers https://t.co/Hj0L9UXFWD
— TheJournal.ie (@thejournal_ie) 15 May 2017
In pre-market trade in New York, JPMorgan shares were 0.25% higher at US$87.25, with the Dow Jones itself on course for an opening gain of 45 points.
In London, about 2.15pm, the FTSE 100 index was around 13 points higher at 7,448, remaining below the all-time peak of 7,460.20 hit this morning.
1.00pm: Retreat from all-time peak
The FTSE 100 maintained its modest gains in early afternoon trading having spiked up to an all-time peak in early deals, with US stocks also seen opening higher today buoyed by strength in crude oil prices.
Around 1pm, the UK blue chip index was up about 6 points at 7,441, retreating from that new record of 7,460.20, and below the previous peak of 7,447 hit in March, although it remained on course for a fresh closing high.
US stock futures were also pointing higher, with the Dow Jones seen up around 37 points as oil prices rallied around 2% higher after Saudi Arabia and Russia called for an extension to the OPEC cartel’s production-cut deal.
Naeem Aslam, chief market analyst at Think Markets UK Ltd, said: “Interesting times ahead for oil traders, as OPEC and US continue to play cat and mouse. Should OPEC push harder, we will see some painful decisions from its members.
“But even if that turns out to be the case, don’t expect the US to sit back and watch. No matter what OPEC does after all, the one thing oil traders had better track is the US shale supply.“
Commodity stocks continued to get a boost in London as Brent crude held above $50 a barrel, but even pumps manufacturer Weir Group (LON:WEIR) felt the benefit too, up 1.9% to 1,884p, with many of its customers in the oil & gas segment.
Among the blue chip fallers, however, Europe's largest tour operator TUI Group PLC (LON:TUI) dropped over 4% lower to 1,141p after it said "challenging" conditions had driven it to a wider loss in its second quarter.
The company maintained full-year targets, however, saying travel to Spain, Greece and the Caribbean was offsetting a slowdown in Turkey and North Africa, and its summer trading was in line with expectations.
Among the small caps, miner Lonmin PLC (LON:MIN) missed out on sector gains today, shedding 5% at 106.5p after reporting a first-half operating loss, hit by higher costs and lower production.
Shares of cyber-security companies were in demand, however, following the “Wannacry” computer virus attack over the weekend, which was reportedly disseminated with the aid of software developed by the US National Security Agency.
As a Linux user, I would be feeling smug about the weekend's PC crisis, only a power surge fried my motherboard :(. https://t.co/z1VOfeXGzV
— John Harrington (@JournoJohnH) 15 May 2017
Mid-cap cybersecurity services firm Sophos PLC (LON:SOPH) jumped 7% higher to 366.2p with the ‘ransomware’ attack hitting hospitals and schools which it numbers as customers.
The stock was also helped by a price target hike from Deutsche Bank today to 350p from 290p in a preview of upcoming results.
Among the small cap cyber security players, the big gainer was Ecsc Group PLC (LON:ECSC), up nearly 22% at 482.5p, while Corero Network Security PLC (LON:CNS) jumped nearly 13% higher to 8.75p, and NCC Group PLC (LON:NCC) gained 3.6% at 143p.
11.45: Election result no investment strategy
Asset manager Fidelty International has concluded that it is “a mug’s game to base your investment strategy on who leads the UK government.”
With just over three weeks to go until the UK general election on June 8, analysis conducted by Fidelity International of UK stock market returns since Edward Heath was elected as Prime Minister in 1970 shows that, at first glance, UK equities have tended to perform better under a Conservative government.
But, they added, that while the analysis may seem to support the view that stocks and shares perform better under a Conservative government, the reality is that economic and market factors have a far bigger influence on UK equities than the political party in power.
Fidelty International thinks it's "a mug’s game to base your investment strategy on who leads the UK government" pic.twitter.com/dIwYniqe9m
— Jonathon Hopkins (@jonhoppo) 15 May 2017
Tom Stevenson, investment director for personal investing at Fidelity International, comments: “While many people believe that the outcome of the upcoming snap general election is a dead cert, it’s far harder for anyone to predict how the market will perform during a Prime Minister’s tenure.”
He added: “For investors, the lessons are clear. Time in the market is far more important than timing the market and it is far more sensible for investors to ignore the short-term noise created by the election and instead focus on their longer-term investment goals.”
Here is Fidelity's table on stock market returns under UK prime minsters since 1970 - James Callaghan is tops pic.twitter.com/FWJN7JkB5U
— Jonathon Hopkins (@jonhoppo) 15 May 2017
But despite that, the FTSE 100 raced up to an all-time high in early trade this morning at 7,460.20, but approaching lunchtime had fallen back to notch up gains of just 7 points at 7,442.
10.15am: FTSE 100 drifts back from all-time peak
The Footsie retreated further from the all-time peak hit in early deals as the morning session progressed as oil prices also slipped from highs, while a firmer pound weighed on exporters.
By 10.15am, the FTSE 100 index was only around 5 points higher at 7,440, falling back from the new record of 7,460.20, and dipping below the previous peak of 7,447.
Chris Beauchamp, Chief Market Analyst at IG, pointed out: “What should worry FTSE bulls is that the index is exhibiting similar characteristics to the S&P 500 – namely that the rally is being powered by smaller and smaller numbers of rising stocks each day; this doesn’t mean a correction is around the corner, but it does raise the prospect of a reckoning that could be ugly.
“The last time we saw this was in October, when a spike to 7120 was followed by a swift 6% fall.
“Latecomers to this rally should tread carefully, lest they find themselves holding the bag. While we have seen a new high on the open, a second failure to break 7450 should be taken as a warning sign.”
Beauchamp added: “A new record high for the FTSE 100 this morning was driven in no small part by oil firms, which have been boosted by further talk among oil ministers that more production cuts will be necessary.
“OPEC and its allies have been on manoeuvres once more, repeating their view that more production cuts are necessary in order to avoid another supply glut.
Saudi Arabia, Russia push to extend oil output cuts until March 2018 https://t.co/lOKuvc2CnY pic.twitter.com/GYjwTrercT
— Reuters Top News (@Reuters) 15 May 2017
The IG analyst said: “This has helped oil prices to move higher once more, but the cartel appears to get diminishing returns each time it announces a reduction in output. They will need to go big on the cuts theme at their May meeting in Vienna, to avoid a sense of disappointment creeping in.”
With the blue chips, oil majors were still strong as Brent crude held above $50 a barrel, with Royal Dutch Shell PLC (LON:RDSB) seeing its B shares gain 1.1% at 2,217.5p, while BP PLC (LON:BP.) also added 1.1% at 465.2p, and FTSE 250-listed explorer Tullow Oil plc (LON:TLW) took on 2.8% at 200.6p.
Among the small cap movers, AIM-listed Bilby PLC (LON:BILB) jumped nearly 16% higher to 67p as the building services provider upgraded its forecasts for the year just gone after getting to work on several contracts earlier than expected.
READ: Bilby booms as it upgrades forecasts for year just gone
That meant the revenues generated from those jobs was realised in the year just gone as opposed to the current year.
And Galantas Gold Corp. (LON:GAL) rose 8.9% to 6.13p after the firm said the Police Service of Northern Ireland (PSNI) has agreed to supervise transportation and the use of certain rock-breaking materials and explosives in relation to the development of its Omagh mine for three days a week, two hours per day.
The firm said this will be enough to allow underground development at Omagh to get underway, although Galantas does caution that more PSNI man-hours will be required for a longer-term and more sustainable development programme.
8.30am: Blue chips jump to record high
The FTSE 100 index jumped to an all-time high in opening deals this morning, extending Friday’s record closing peak as commodity stocks enjoyed a boost from firmer oil prices.
After half an hour of trading, the UK blue chip index was up 21 points to 7,456, just slipping back from that record level of 7,458.62 which exceeded the 7,447.0 peak it reached in March.
Connor Campbell, financial analyst at Spreadex, said: “The main thrust of the FTSE’s growth is coming from the commodity sector, itself led by Brent Crude’s recovery.
“The black stuff surged 2% after the bell – and now sits just under $52 per barrel – having been lifted by reports that both Saudi Arabia and Russia are willing to support an extension of the current output-capping agreement. “
He added: “Interestingly the FTSE’s early gains comes despite a decent morning for sterling, the currency ignoring recent claims that it is set for a months-long decline. The pound jumped 0.4% against the dollar and 0.3% against the euro, leaving it back above $1.29 and €1.18 respectively.”
Among the biggest blue chip gainers, miners stood out, with Glencore PLC (LON:GLEN) up 2% to 290.9p, BHP Billiton plc (LON:BLT) ahead 1.9% at 1,186p, and Antofagasta PLC (LON:ANTO) up 2.2% to 791p.
Elsewhere, Lloyds Banking Group (LON:LLOY) rallied 1.5% higher to 69.7p having been weak on Friday on worries over further mis-selling compensation moves.
But on the second line, oil services firm Petrofac (LON:PFC) was a big FTSE 250 faller again, down 2.7% to 681p, extending Friday’s slide which followed news of a Serious Fraud Office probe into the group.
The biggest FTSE 250 gainer, however, was funerals group Dignity PLC (LON: DTY) which jumped over 6.5% higher to 2,698p after revealing a near 15% jump in revenues due to a higher death rate.
Among the small caps, Redx Pharma Plc (LON:REDX) was in demand, adding 6.6% at 32.25p after confirming it will make a clinical trial application and investigational new drug application for its RXC005 leukaemia treatment later this year.
7.00am: Opening gains predicted
The UK’s top-share index is expected to open modestly firmer, continuing last Friday’s trend which saw the index end at a closing high.
Spread betting quotes point to the FTSE 100 opening at around 7,446, a little more than 10 points higher than Friday’s close.
The UK’s top-share index is expected to open modestly firmer, continuing last Friday’s trend, despite concerns about cyber-attacks and North Korean missile tests.
Spread betting quotes point to the FTSE 100 opening at around 7,446, a little more than 10 points higher than Friday’s close.
Asian markets were mixed heading towards the close, with the Nikkei 225 in Tokyo down 25 at 1,860 and the Hang Seng index in Hong Kong up 138 at 25,300.
Over the weekend reports emerged that North Korea tested a new type of missile while networked computers around the world suffered cyber-attacks.
On the UK corporate front, package tour giant TUI AG (LON:TUI) said current trading for the summer season remains in line with expectations.
Results for the six months to the end of March – the quieter half of the year for holiday firms – saw the company make an underlying loss (EBITDA) of €82.1mln, compared to €45.6mln the year before.
Among the FTSE 250, instrumentation specialist Diploma PLC (LON:DPLM) reported a half-year adjusted profit before tax £37.1mln, up from £30.4mln the year before.
Funerals group Dignity PLC (LON:DTY) started the week on a cheerful note, reporting that the number of deaths in the first quarter of 2017 that it did the funeral arrangements for rose to 167,000 from 156,000 the year before.
Revenue rose to £93.3mln from £81.2mln the previous year, while underlying operating moved up to £37.4mln from £31.1mln.
Proactive news headlines:
Sirius Minerals PLC (LON:SXX) has started detailed discussions with a number of new offtakers for its polyhalite fertiliser it told analysts at a visit to its site in Yorkshire last week. Richard Knights, at house broker Liberum and one of the those that visited the site, said Sirius is now undertaking multiple, detailed conversations with major potential offtakers.
Lithium explorer Bacanora Minerals Ltd (LON:BCN) has strengthened its board as it pushes ahead with feasibility studies at key projects, Sonora in Mexico and Zinnwald in Germany. Joining as non-execs are Andres Antonius, based in Mexico City and a country specialist and former government adviser, while Junichi Tomono is head of the Japanese trading giant Hanwa Co, which recently signed an offtake deal with Bacanora.
Shares in Redx Pharma Plc (LON:REDX) jumped more than 7% on Monday morning after it confirmed it will make a clinical trial application (CTA) and investigational new drug (IND) application for its RXC005 leukaemia treatment later this year. The confirmation comes after the drug researcher and developer presented further “potent efficacy data” at the prestigious 17th International Workshop of Chronic Lymphocytic Leukaemia (iwCLL) in New York over the weekend.
Haydale Graphene Industries PLC (LON:HAYD) has bought out the outstanding minority of US subsidiary Haydale Technologies Inc from InVentures for US$513,500. The price for the 13.5% interest stake was determined by an independent valuation conducted on HTI, which included the acquired nanomaterials business, Advanced Composite Materials.
Caledonia Mining Corporation PLC (LON:CMCL TSE:CAL) has reported a fatality at the Blanket gold mine in Zimbabwe. Mining at Eroica ore body, which contributed 10% of production in the last quarter, was briefly suspended
Peter Hambro will not stand for re-election as chairman of Petropavlovsk PLC (LON:POG), after the company decided as development continues the appointment of an independent chairman would be more appropriate for corporate governance purposes. Under existing proposals from the company, Hambro would remain as a director and Andrew Vickerman, a director with Trafigura, would become chairman.
The Police Service of Northern Ireland (PSNI) has agreed to supervise transportation and the use of certain rock-breaking materials and explosives in relation to the development of Galantas Gold Corp’s (LON:GAL) Omagh mine for three days a week, two hours per day. This will be enough to allow underground development at Omagh to get underway, although Galantas does caution that more PSNI man-hours will be required for a longer-term and more sustainable development programme.
Newspaper headlines:
- Businesses must brace for further cyber attacks this week on a potentially “significant scale”, British intelligence officials warned on Sunday, reports the FT.
- Current data show more than 1.3m computer systems are still vulnerable to infection by WannaCry, which has hit hospitals, transport networks and businesses around the world.
- Microsoft, meanwhile, has hit out at the US government’s “stockpiling” of cyber weapons for facilitating attacks such as the WannaCry ransomware that has run rampant in recent days.
- “The governments of the world should treat this attack as a wake-up call,” Brad Smith, Microsoft’s general counsel, wrote, reports the FT.
- Theresa May has promised the “greatest extension of rights and protections for employees by any Conservative government in history”, writes the FT,
- One of the energy companies’ main arguments against a price cap has collapsed after the competition watchdog’s alternative plan to help consumers was shelved indefinitely.
- The industry has argued that reforms proposed by the Competition and Markets Authority last year should be allowed to work before the government intervenes further in the market, the Times reports.
- Meanmwhile, SSE, Britain’s second largest energy company has warned the regulator that a price cap for standard tariffs must be based on robust methodology if it is to avert serious consequences for the retail market, reports the Times.
- One of Britain’s highest-profile technology entrepreneurs has taken a significant stake in Finncap and has been lined up to become its deputy chairwoman. Vin Murria also will become a strategic adviser to the City stockbroker, reports the Times.
- No more petrol or diesel cars, buses, or trucks will be sold anywhere in the world within eight years. A report by Stanford University economist Tony Seba, Rethinking Transportation 2020-2030, has gone viral in green circles, reports the Telegraph.
- Glaxosmithkline could face a bruising run-in with investors after an £8bn takeover plan was revealed. The pharmaceutical giant has reportedly told shareholders to expect it to buy out Swiss rival Norvartis’s 36.5%stake in GSK Consumer Healthcare.
Around the markets:
- Sterling: US$1.2916, up 0.29 cents
- 10-year yield on gilts: 1.089%
- Gold: US$1,231.40 an ounce, up US$3.60
- Brent crude: US$51.60 a barrel, up 76 cents