FTSE 100 closes down 46 at 7,478
UK election in focus
Banks rally; Santander to take over Banco Popular
FTSE 100 closed below the 7,500 level as traders sit and wait it out ahead of tomorrow's UK election, and more importantly, its result.
That will dictate the actions of investors over the next few days.
The blue chip benchmark closed down over 46 points at 7,478. The FTSE 250 geared towards more UK- centric firms, was up 41 at 19,695 having tanked on Tuesday.
It comes as US shares had started well, but lost some ground as the session went on. Nevertheless, the Dow is up 16 points.
Housebuilders were on the winning side with Persimmon (LON:PSON), adding over 2% to stand at 2,393p as figures from Halifax showed house prices held up better than expected last month.
Elsewhere, drugs giant Shire (LON:SHP) shed 3.22% to stand at 4,376.5p and was top Footsie laggard.
Brent crude shed 0.94% to stand at $49.48 a barrel.
OPEN
FTSE 100 headed lower as UK investors hedged their bets ahead of tomorrow’s General Election.
A good start on Wall Street did little to lighten the mood with Footsie 44 points lower at 7,481.
The index dipped even though banks and miners had a good day.
A new chairman at Anglo American (LON:AAL) helped the diamond, copper and platinum giant rise 1.4% to 1,056p. Stuart Chambers is the new man, formerly of ARM Holdings and an industrial chemist through training.
RBS and Lloyds held on to their early gains with the two banks 3.2p and 0.72p higher at 254.8p and 69.6p respectively.
Ad giant WPP (LON:WPP) was the worst performer as investors again expressed their disquiet over chief executive Sir Martin Sorrell’s pay package.
Over 20% of investors voted against but this was the smallest revolt for seven years.
In total, 21.3% of WPP shareholders either voted against Sorrell’s £48m pay package or abstained at the company’s 45th annual meeting. Shares fell 2.5% to 1,678p.
Among the small caps, Mineral & Financial Investments Ltd (LON:MAFL) powered higher as its 49% associate, TH Crestgate, upped its stake in the Lagoa Salgada project in South Central Portugal to 100%.
Empresa Desenvolvimento Mineiro or EDM has sold TH Crestgate its 15% stake. Shares rose 28% to 18.5p.
Clontarf Energy PLC (LON:CLON) ran in to some profit taking after more than doubling yesterday on the award of a new oil licence off the coast of Equatorial Guinea.
That area of offshore West Africa has already seen huge discoveries in other territorial waters but David Horgan told Proactive that Equatorial Guinea is one of the few places yet to be fully explored.
Watch: Clontarf Energy's David Horgan 'delighted' with offshore Equatorial Guinea rights
Indeed, there has been not drilling yet on its licence. First steps will to acquire and re-asses existing seismic data and then to identify potential areas to drill.
A partner with experience of the area would also be sought, he said.
Shares dipped 5% to 0.664p.
FTSE 100 in red as dollar earners suffer from election jitters
Footsie fell into the red as investors turned their back on dollar earners on worries about a hung parliament in tomorrow’s election.
The index was 10 points lower at 7,514 but would have been even lower without a good showing by Lloyds Banking and RBS, which were up 1.2% to 69.7p and 2.6% to 258.3p respectively.
Fears for the pound if the Tories do falter were hanging heavily over the index.
Neil Wilson of ETX Markets said in the event of a hung parliament, the pound could plunge on increased political risks and a possible delay to Brexit negotiations.
But if the Conservatives increase their majority, the pound ought to rise part of a broader relief rally in UK assets.
Shire Plc (LON;SHP), WPP PLC (LON:WPP) and AstraZeneca PLC (LON:AZN) were propping up the Footsie.
All earn a large chunk of their earnings in the US or in foreign currencies.
Pharma groups Shire and Astra were down by 2.3% to 4420p and 1.6% to 5,270p, while ad giant WPP shed 2% to 1,687p.
11.20am: House price rise for first time in 2017
UK house prices have risen for the first time in five months even with the upcoming election and uncertainty over Brexit.
Mortgage lender Halifax average prices increased by 0.4% last month to £220,706, and by 3.3% year-on-year.
It was the first rise this year with marker forecasts beforehand suggesting another 0.1% fall was on the cards.
10.45am: FTSE 100 pushes on as banks spring back in to life
Banks and miners are giving the FTSE 100 a lift as attention focuses on tomorrow’s general election.
The blue chip index is 12 points higher at 7,536, with Royal Bank of Scotland PLC (LON:RBS) and Lloyds Banking PLC (LON: LLOY) leading the way alongside Glencore PLC (LON:GLEN).
A rescue of one Spain’s small and ailing banks by Abbey National owner Santander boosted the European banks. It's a sign of the commitment by the European Union to prop up the sector some nine years on from the financial crash, analysts said.
Lloyds and RBS shares have been also been troubled by the prospects of a Labour Government and a further clampdown on the bank sector. RBS rose 2.5% to 257.9p, while Lloyds added 1.9% to 70.2p as there was no further bad poll news today.
Miners rallied after heavy falls recently sparked by the drop in the price of copper. Glencore rose 1.5% to 286.9p.
Housebuilders also made decent ground as the latest house price survey from the Halifax showed prices rose for the first time in five months.
“UK house prices rose by 0.4% on a monthly basis, and by 3.3% on a yearly basis, while the consensus was for a decline of 0.1% and a rise of 3% respectively,” said David Madden at CMC Markets.
Persimmon PLC (LON:PSN) rose by 2% to 2,391p and Taylor Wimpey PLC (LON:TW. 1.5% to 181.5p.
AstraZeneca PLC (LON:AZN) was the worst performer as it sold the global rights, outside of Japan, to its Zomig treatment for migraines and cluster headaches to Grünenthal.
It raised US$200mln and following on from yesterday’s US$2bn bond issue, speculation has been growing that the UK pharma may be building up a war chest either for possible deals or else as defence in the event its ongoing round of cancer drug trials don’t pan out as well as hoped.
Shares fell 1.4% to 5,278p.
8.45am: Footsie touch higher
The FTSE 100 index ticked higher in early deals, supported by slight weakness in the pound, with investors unwilling to take any new positions on the last day of campaigning in the UK general election, with polling day tomorrow.
Around 8.45am, the UK blue chip index was about 9 points higher at 7,533, having ended almost flat yesterday, with global markets fairly mixed overnight.
On currency markets, sterling was 0.1% lower versus the US dollar at US$1.2891, but added 0.1% against the euro at €1.1456.
Connor Campbell, financial analyst at Spreadex, said: “With the election tomorrow, and precious little on the economic calendar, the markets may be in for another somnolent day of trading."
He added: ” So far the only polling news has come from Opinium, giving the Tories a 7 points lead over Labour; given that this is the last day of campaigning, however, the pound could be in for some more movement as the final surveys are released.”
Among equities, a rally by banks led the FTSE 100 higher, with the sector helped by news that Spanish bank Santander is to take over its troubled peer Banco Popular after the European Central Bank said the lender is "failing or likely to fail".
Royal Bank of Scotland PLC (LON:RBS) stood out adding 1.6% or 4.0p at 255.7p after yesterday's £200mln settlement with investors suing the taxpayer-owned bank over its 2008 rights issue which came ahead of its rescue by the government.
DIY stores group Travis Perkins PLC (LON:TPK) was the top blue chip gainer, adding 1.7% or 27p at 1,593p boosted by reports of an upgrade in rating to 'buy' from 'hold' by Canaccord Genuity.
Away from the big players, Providence Resources PLC (LON:PVR) was a top AIM gainer, adding 7.5%, or 1.12p at 16.12p after unveiling two “truly transformative” commercial deals with French oil giant Total SA, bringing another “super-major” on board and giving a clear programme for its oil and gas exploration programme offshore Ireland.
Proactive news headlines...
Marble quarries operator Fox Marble PLC (LON:FOX) expects its processing factory in Kosovo to start production next month, it revealed as it posted reduced losses of €2.76mln for 2016 from losses of €3.03mln n 2015.
Minds + Machines Group Limited (LON:MMX) said renewal rates for its .VIP top level domain (TLD) in China have been above the industry norm.
Providence Resources PLC has unveiled two “truly transformative” commercial deals with French oil giant Total SA bringing another “super-major” on board and giving a clear programme for its oil and gas exploration programme offshore Ireland.
Office productivity software specialist BOS GLOBAL HOLDINGS Ltd (LON:BOS) has drawn down £116,000 from its convertible note agreement with Innovation Corporation.
Alecto Minerals PLC (LON:ALO) has issued £800,000 worth of convertible loan notes to help fulfil the working capital requirements at its recently-acquired Mowana copper mine in Botswana.
Drug developer Midatech Pharma Plc (LON:MTPH; NASDAQ:MTP) has teamed up with Swiss pharmaceuticals giant Novartis to help it in its quest to identify new brain cancer treatments.
Midatech has signed a global licensing agreement with Novartis for panobinostat which will allow the AIM-quoted firm to develop the oncology compound as a possible treatment for Diffuse Intrinsic Pontine Glioma (DIPG).
6.50am: Wait-and-see-mode
With just a day to go to the General Election, UK investors appeared to be in wait-and-see mode.
Spread betting quotes indicated the FTSE 100 would open little changed.
“From the way the FTSE 100 is trading, you wouldn’t think that there was a big election just hours away in the UK,” suggested Chris Beauchamp at IG.
“London seems quite resilient, which perhaps tells you something about how markets view the outcome – the polls might have narrowed to a remarkable extent, but the view is emerging that the national view, much like in the US election, does not really provide the entire picture. Instead, it is the marginal that will count, and here we only have on-the-ground reports from canvassers, and anecdotal evidence from party insiders,” he continued.
“It seems the Labour surge in the polls is not being replicated on the ground; if the pollsters are wrong this time around, it could signal the start of yet another period of introspective soul-searching for the industry.
“The IG general election seat market suggests the Conservatives will gain around 30 seats, still an improved majority. It looks like there is all to play for.”
US markets finished lower for the second day in a row yesterday and Asian markets were mixed this morning heading into the last hour of trading.
The Dow Jones fell 48 points to 21,136 and the S&P 500 shed 7 points at 2,429.
In Asia, while the Nikkei 225 was up 30 at 20,010 in Tokyo, the Hang Seng in Hong Kong was off 22 at 25,975.
Around the markets
- Sterling: US$1.2907, down 0.05 cents
- 10-year yield on gilts: 0.983%
- Gold: US$1,294.50 an ounce, down US$3.00
- Brent crude: US$49.48 a barrel, down 47 cents
Headlnes
- Tesco faces investor revolt over chief’s £140,000 relocation deal - The Times
- Aldi and Lidl to take £1 in every £7 spent at supermarkets - The Independent
- BrewDog takes on pollsters and offers free beer to anyone who votes - The Independent
- UAE imposes port ban on Qatar - Financial Times
- Exxon says Middle East row has not hit its Qatar natural gas exports - The Daily Telegraph
- British Airways’ human error admission fuels questions about airline’s systems - Daily Telegraph
- Average UK rents fall for first time in more than seven years - The Guardian
- Vodafone to stop its ads appearing on fake news and hate speech sites - The Guardian
- Bungling Burberry boss to trouser £14 million despite presiding over 5% fall in profits and sales decline - The Daily Mail
- Another exec forced out from troubled oil explorer Genel Energy after major shareholder rebellion - The Daily Mail
- Dementia tax to stop one in three over-50s saving for the future, poll shows - Daily Express
- Saudi Arabia has now revoked Qatar Airways’ licence as diplomatic row rages on - City AM