FTSE 100 closes 11 lower
Pound loses ground on dollar and euro
Retailers weigh
US stocks open higher;
FTSE 100 closed the day below 7,500 on a subdued trading day in the aftermath of a suicide bomb at an Ariana Grande concert in Manchester.
Twenty two people died, many of them children, and the suicide bomber has reportedly been identified as 23-year-old Salman Abedi. It is the worst terrorist attack in the UK for over a decade and has been condemned around the globe.
FTSE 100 closed down around 11 points at 7,485, while the FTSE 250 was up a shade at 19,920 - up 7.57 points.
The biggest gainer on Footsie was Babcock International Group PLC (LON:BAB) after big hitter Deutsche Bank published an upbeat note on the firm.
Babcock is due to report its full-year result tomorrow and the German bank said that a “solid” performance coupled with a “supportive” outlook could see the shares jump.
Easyjet PLC (LON:EZJ) flew 2.52% higher after the budget carrier was on the end of a bullish broker upgrade from RBC Capital Markets.
The bank said it was “increasingly probable easyJet has reached its profit nadir” as it upgraded its price target to £13.25 from just £8.75.
Retailers were dragging today, with Marks & Spencer (LON:MKS) losing 1.97% to 387.7p after yesterday's highs and the good show over the last few days. Kingfisher (LON:KGF) also shed 2.42% to stand at 359.20p.
US stocks off to a bright start..
As expected, the markets across the pond got off to a bright start as they continued their recovery following last week’s bout of turbulence.
In New York, the S&P 500 gained 0.1% to sit at 2,396 – leaving it just short of the 2,402.32 record peak it hit a couple of weeks ago. The Dow Jones also added .1% to break through the 29,000 barrier to 20,920.
Before the US markets opened, traders at the New York Stock Exchange held a minute’s silence for the victims of the bomb attack in Manchester last night.
Those events have understandably dominated the news agenda here in the UK.
As you’re likely to have seen already today, 22 people were killed and a further 59 injured after a suspected suicide attack in Manchester following an Ariana Grande concert last night.
Greater Manchester Police have said they believe a lone male attacker, who died in the blast, detonated a homemade explosive device which he was carrying.
The FTSE 100 got off to slow as the nation got to grips with the deadliest attack on British soil since 2005, although it has managed to keep its head firmly above the 7,500 mark.
At one point this morning, the blue chip index was threatening to reach a new record high as it jumped up to the lofty heights of 7521, just a point or so short of the current intraday record.
It’s fallen back since though and is currently at 7,508 shortly before close; a gain of 12 points for the day so far.
easyJet flying high on broker upgrade
Easyjet PLC (LON:EZJ) was the top riser among the big boys, up almost 3%, after it was on the end of a bullish broker upgrade from RBC Capital Markets.
The Canadian bank told clients in a note this morning that it was “increasingly probable easyJet has reached its profit nadir” as it upgraded its price target to £13.25 from just £8.75.
Defence firm Babcock International Group PLC (LON:BAB) was another dragging the Footsie higher after Deutsche Bank published an upbeat note on the stock.
Babcock is due to report its full-years tomorrow and the German bank said in a note to clients that a “solid” performance coupled with a “supportive” outlook could see the shares jump.
FTSE 250-listed home repairs group Homeserve PLC (LON:HSV) was the biggest riser on the second tier.
It’s up 12% to 785p – its highest level for almost seven years – after it saw revenues more than double to £785mln in the year to the end of March, with pre-tax profits up rising 19% to £98.3mln.
Investors seemed to take heed, with shares up almost 3% to 968p.
‘Fred the Shred’ unlikely to have his day in court
It seems the chances of seeing disgraced former Royal Bank of Scotland Group PLC (LON:RBS) boss Fred Goodwin in the dock are rapidly receding, with reports suggesting the bank is close to reaching an out-of-court settlement.
The hearing had been due to start yesterday but was postponed after RBS bosses upped their offer to shareholders who claim they were lied to over the bank’s health in the run-up to the 2008 financial crisis.
The new offer is thought to be around 82p per share, which would cost RBS in the region of £200mln; an offer which has reportedly been accepted by most of the 9,000 claimants.
RBS case adjourned for another day. Majority of claimants prepared to accept 82p per share.
— Simon Jack (@BBCSimonJack) May 23, 2017
News of the possible settlement helped to buoy RBS shares, which gained almost 2% today. Should the £200mln compensation deal be formally accepted, it will be a lot less than what many had thought it would cost RBS given that claimants had originally wanted a pay-out in excess of £800mln.
Pound drifts lower
On the currency markets, the pound lost some ground on both the dollar and the euro, although it’s faring much better than it was this morning.
Sterling is currently down 0.02% versus the euro to €1.157, while it is 0.12% down on the dollar to US$1.298.
“The pound’s drift downwards against the euro continues, having lost more than 3% from its May highs above €1.19 which preceded the Bank of England’s policy meeting less than a fortnight ago,” said Hargreaves Lansdown senior analyst Chris Saint.
Shoppers holding back
Data from the Confederation of British Industry has suggested that shoppers have reined in their spending this month after a surge in April.
The organisation estimated retail sales only grew by +2 in its monthly measure. That compares to the +10 expected by City analysts and the +38 recorded in April.
“It's clear that households are increasingly feeling the pinch, as rising inflation pushes down on real earnings,” said CBI economist Alpesh Paleja.
Uncertainty surrounding the election and Brexit has also contributed to retailers putting investment plans on hold, the CBI added.
1.05pm...FTSE steady; US stocks set for bright start
Like the rest of the country, the City has been in a sombre mood today following last night’s attack in Manchester.
Trading in London got off to a quiet start, although it has picked up slightly and the FTSE 100 has remained in the black for all of the day so far despite the events up north.
Aside from when it briefly threatened to set a new intra-day record, the blue chip index has by and large remained stuck in a range somewhere between 7,505 and 7,510.
That’s exactly where it finds itself as traders head out to lunch; up 12 points to 7,508.
Defence firm Babcock International Group PLC (LON:BAB) was the top riser among the blue chips after Deutsche Bank published an upbeat note on the stock.
Babcock is due to report its full-years tomorrow and the German bank said in a note to clients that a “solid” performance coupled with a “supportive” outlook could see the shares jump.
Investors seemed to take heed, with shares up 2.5% to 965p.
Another of the big boys dragging the FTSE 100 higher was Midlands water supplier Severn Trent PLC (LON:SVT), which gained more than 1.5% after it reported an 8% rise in pre-tax profits to £554mln last year.
The UK’s biggest listed water company added it had identified another £100mln in savings taking the total expected cuts to £770mln, while chief executive Liv Garfield praised Severn’s operational performance last year.
Royal Bank of Scotland Group PLC (LON:RBS) was on the rise as well. The troubled bank was up more than 2% as it edged closer to settling a lawsuit from shareholders outside of court.
Marks and Spencer Group Plc’s (LON:MKS) mini run came to an end today as the food and clothes retailer slipped by 1.8%.
Over the past week or so Marks’ has added almost 4% to its share price ahead of its prelims which are due out tomorrow.
On the currency markets, the pound lost some ground on both the dollar and the euro, although it’s faring better than it was a couple of hours ago.
Sterling is currently down 0.06% versus the euro to €1.156, while it is 0.15% down on the dollar to US$1.298.
“The pound’s drift downwards against the euro continues, having lost more than 3% from its May highs above €1.19 which preceded the Bank of England’s policy meeting less than a fortnight ago,” said Hargreaves Lansdown senior analyst Chris Saint.
“Signs the euro zone economy is hitting a purple patch have boosted the euro’s fortunes, with the latest PMI readings suggesting activity across the bloc continued to expand in May at the fastest pace since 2011.”
Across the Channel in mainland Europe, European stocks have been making steady gains on the back of positive economic data in the Eurozone.
The Dax in Germany is up 0.6% and France’s Cac 40 index is up by 0.7%, while the euro has hit a six-month high against the dollar.
Over in the States, the US markets are set to open in positive territory once again, with the Dow Jones is tipped to continue to recover some of last week’s losses and open 57 points higher at 20,950.
Similarly, the S&P 500 is also seen as opening 4.4 points higher at 2,398.2 when the bell rings later on.
Investors across the pond will no doubt be listening to what two voting Federal Open Market Committee members, Neel Kashkari and Patrick Harker, have to say when they address the markets later on.
“Markets remain rather convinced that we’ll see a rate hike in June, with it currently 78% priced in according to Fed Funds futures, although traders appear less so that we’ll see a second by the end of the year, with it currently only priced at 42%,” said Oanda senior market analyst Craig Erlam.
11.35am...RBS nears settlement as court case adjourned for second day
Royal Bank of Scotland Group PLC (LON:RBS) moved another step closer to settling out of court with 9,000 disgruntled investors after the court case was suspended for another day.
The hearing had been due to start yesterday but was put back by a day after RBS bosses upped their offer to shareholders who claim they were lied to over the bank’s health in the run-up to the 2008 financial crisis.
The new offer is thought to be around 82p per share, which would cost RBS n the region of £200mln. Although still a sizeable amount, it’s a lot less than the £800mln or so the shareholders were initially claiming.
If both sides finally reach an agreement – which reports suggest could be the case – it could mean no appearance in court for RBS’s former chief executive Fred Goodwin.
Yesterday marked the seven-year anniversary of the very first transaction carried out using the digital cryptocurrency, Bitcoin.
On 22 May 2010, programmer named Laszlo Hanyecz spent 10,000 bitcoin on two Papa John’s pizzas, which cost US$30.
Back then, Hanyecz thought the bitcoin to be worth about 0.003 cents apiece.
Fast forward to today and those 10,000 bitcoin would be worth a cool US$22.5mln as prices broke through the US$2,200 mark on Monday.
If you bought $100 of #bitcoin 7 years ago, you'd be sitting on $72.9 million now https://t.co/dbP6bNQBJz $BTC pic.twitter.com/UiBK99ccnS
— Arjun Kharpal (@ArjunKharpal) May 22, 2017
That means if you bought US$100 worth of bitcoin this time seven years ago, your investment would now be worth close to US$73mln.
Compare that to the FTSE 100, where the same investment would be worth around US$150.
Amazon.com Inc. (NASDAQ:AMZN) is adding pay TV-channels to its Prime Video streaming service in the UK, threatening to disrupt traditional broadcasters such as Sky plc (LON:SKY), BT Group (LON:BT.A) and Virgin Media Inc. (NASDAQ:VMED).
The e-commerce giant has created a new venture called Amazon Channels, which will offer individual subscriptions to more than 40 channels without a fixed contract.
The channels will be offered to Amazon Prime customers at an extra cost of between £1.49 and £9.99 for on-demand video or £79 a year.
While the BBC, Channel 4 and Channel 5 aren't involved in the venture, ITV is one of the broadcasters to have been lured in. It will offer its live TV and ad-free catch-up service for £3.99.
And government borrowing rose unexpectedly last month to its highest April level since 2014, according to the latest figures from the Office for National Statistics.
Public net sector borrowing, excluding public sector banks, jumped to £10.4bn, up by £1.2bn from April 2016. Economists had originally predicted a slight fall.
Treasury revenues were held back by flagging VAT receipts, which climbed by just 0.2%, another sign that consumer spending growth has slowed, said analysts.
Public sector debt also rose to £1.72tn, equivalent to 86% of GPD, an increase of more than £110bn compared to last year.
There was a cheer for the Chancellor though, as borrowing for the 2016/17 year was revised down to £48.7bn meaning the government beat the target set by the Office for Budget Responsibility, rather than narrowly missing it.
10.40am...FTSE nudges higher
At one point about an hour ago, the FTSE 100 was threatening to reach a new record high as it jumped up to the lofty heights of 7521, just a point or so short of the current intraday record.
The blue chip index has since fallen back slightly though and is currently at 7,506 – a gain of 10 points for the day so far.
However, the country’s focus has primarily been fixed on Manchester following last night’s attack in Manchester.
Police have confirmed that 22 people were killed and a further 59 injured after a suicide bomber detonated an explosive device shortly after an Ariana Grande concert last night.
Trading in Asia was cautious following the attack, which is the worst on British soil since the 7/7 attacks in 2005, while trading in London also got off to a fairly slow start.
Despite the terrible news, the FTSE 100 has been in the black all of the morning.
It has been led higher by Royal Bank of Scotland Group PLC (LON:RBS) which is up 2% to 267p, as reports suggest it is close to agreeing a £200mln-plus settlement with investors which would avoid a court trial.
Given that the 9,000 disgruntled shareholders are claiming more than £800mln between them, the deal on the table represents a better-than-expected possible outcome for the bank.
Easyjet PLC (LON:EZJ) was another flying high after it was on the end of a bullish broker upgrade from RBC Capital Markets.
The Canadian bank told clients in a note this morning that it was “increasingly probable easyJet has reached its profit nadir” as it upgraded its price target to £13.25 from just £8.75.
The blue chips are also likely to have received a little boost from the weaker pound, which has recovered some of the ground lost earlier this morning but is still down slightly versus the dollar and the euro.
Sterling is still just below US$1.30, while it’s fallen a bit further against the euro to € 1.154.
The leading riser in London though was FTSE 250-listed home repairs group Homeserve PLC (LON:HSV) which is up 12% to 787p – its highest level for almost seven years.
Revenues more than doubled to £785mln in the year to the end of March, with pre-tax profits up rising 19% to £98.3mln.
The growth was mainly due to a “transformational year” across the pond said bosses, where it now services 50mln homes.
Elsewhere, the UK’s budget deficit widened at the start of this current financial year. In April, the deficit came in at £10.4bn, 13% higher than the same month last year, the Office for National Statistics said.
#Pound #GBP falls as UK budget deficit widens more than expected; Eurozone growth holds steady at six-year high. #GBPUSD. pic.twitter.com/2Qj1D9UzGg
— Marc-Andre Fongern (@FongernCIO) May 23, 2017
That was largely down to flat VAT receipts, which only grew by 0.2% in annual terms. The consensus estimate was for borrowing (excluding public sector banks) of £8.7bn
Still, the ONS revised down its estimate of borrowing in 2016/17 to £48.7bn from £52.1bn previously.
8.45am...News of Macnhester bombing dominates
It was a fairly subdued start for the FTSE 100 which was to be expected after last night’s tragic events in Manchester.
As you’re likely to have seen already today, 22 people, some of whom were children, have been killed and a further 59 injured following what police suspect was a suicide attack in Manchester following an Ariana Grande concert last night.
Greater Manchester Police have said they believe a lone male attacker, who died in the blast, detonated an explosive device which he was carrying.
There has been an outpouring of support from around the world, including messages from Apple chief executive Tim Cook as well as President Trump.
BREAKING: President Trump offers condolences to victims of Manchester attack, calls those behind attack ‘losers’
— Fox News (@FoxNews) May 23, 2017
Back to the markets, and the FTSE 100 managed to eke out some early gains despite the terrible events up in Manchester.
The blue chip index broke back above the 7,500 mark, gaining 12 points to 7,508 shortly after the opening bell.
Low-cost airline easyJet PLC (LON:EZJ) was one of the big movers on the FTSE 100 as it gained almost 2.5% following a bullish broker note from RBC Capital Markets.
Marks and Spencer Group Plc (LON:MKS) was up for sale, with the stock losing more than 1% to trade at 391p.
The retailer had enjoyed a rare day in the sun on Monday ahead of tomorrow’s prelims although it gave back some of those gains this morning.
On the second line, sandwich maker Greencore Group PLC (LON:GNC) added 7% to its share price after it saw half-year revenues rise 46% to £1.01bn.
Boss Patrick Coveney said the impressive growth was down to customers’ increasing appetite for food on the go, a market which has grown 7% over the past 12 months.
On the currency markets, the pound slipped to its lowest price in nearly eight weeks versus the dollar and the euro.
Sterling slipped back below US$1.30, while it also shed 0.2% against the euro, with investors’ confidence seemingly shaken by the explosion in Manchester and the Tories’ election wobble.
“The precious few things on the UK’s economic calendar will likely keep sterling in focus,” said Spreadex analyst Connor Campbell.
“The inflation report hearings are the main event, and with the latest CPI reading hitting 2.7%, Mark Carney and co. can expect a grilling about if, when and how they are coming to combat the country’s rapidly rising prices.”
Among the small caps, Shanta Gold Limited (LON:SHG) gained almost 10% after it told investors it has produced first stope ore from its new underground operation at the New Luika gold mine in Tanzania.
Likewise, Mosman Oil And Gas Ltd (LON:MSMN) jumped 14% after it agreed a deal to take a stake in the Arkoma Stacked Pay project in Oklahoma.
Proactive news headlines...
Back office workforce optimisation software pioneer eg solutions PLC (LON:EGS) has continued the strong trading of the second half of 2016 into 2017. At today’s annual general meeting (AGM) chairman Nigel Payne will tell shareholders that contracted revenues for the current financial year are already in excess of the revenues for the previous financial year.
Sound Energy PLC (LON:SOU) is preparing to assess the untapped potential of two wells at Sidi Moktar – its second licence in Morocco. Work on the previously-drilled Koba-1 and Kamar-1 is expected to kick-off by the end of the month.
Base Resources Limited (LON:BSE) is to ramp up production at its Kwale mineral sands project in Kenya to offset declining grades. The plan will save US$60mln in fixed costs and also reduce average operating costs, the miner said.
IronRidge Resources Limited (AIM:IRR) has reported some stellar lithium grades from “first-pass” exploration of its Cape Coast Project in Ghana. Trenching work uncovered 100 metres grading 1.57% lithium oxide (Li2O), including 40 metres at 1.93% Li2O, and 15 metres at 2.18% Li2O. Whole-rock bulk surface rock-chip sampling results returned grades above 2.4% Li2O.
Security systems firm Newmark Security PLC (LON:NWT) is eyeing an increase in recurring revenue through a partnership with US-based UniKey Technologies. The two companies have agreed to collaborate on the development of the US company’s access control technology and the creation of new products using the technology.
Companies-backer Amphion Innovations Plc (LON:AMP) is to draw down an additional US$1.5mln from its loan facility, bringing the total amount drawn down up to US$6.15mln.
Office productivity software developer BOS GLOBAL HOLDINGS (LON:BOS) has completed its acquisition of a 40% equity interest in Call Design Pty for £280,000 plus 5mln BOS shares.
Greatland Gold plc (LON:GGP) said its drilling campaign at its Bromus project in southern Western Australia has extended the strike. The company drilled two holes, testing downhole electromagnetic (EM) targets, and intersected silver, zinc and other elements consistent with volcanogenic massive sulphide (VMS) style systems.
Virtual queuing and ticketing group accesso Technology Group PLC (LON:ACSO) has landed a significant new contract in Mexico for its accesso Siriusware product. The contract is with Experiencias Xcaret, which has a network of seven popular experiences, parks, and attractions in Mexico.