FTSE 100 closes down 15
US tech slump continues
Apple, Google, Amazon alll hit hard
17.30pm: FTSE 100 closes lower
FTSE 100 finished in the red as UK political uncertainty weighed on stocks, along with a tech sell-off across the pond.
The UK bluechip benchmark closed at 7,511 - down over 15 points.
On Wall Street, the Dow Jones is down over 61 at the time of writing to 21,211, while the Nasdaq is almost 57 off, as some of the biggest tech firms in the world continues to see shares sold off - a process, which started on Friday.
In the UK, the pace of election fall-out continues to be break-kneck. The Queens Speech has been reportedly pushed back from June 19 but a new date has not yet been annouced. Meanwhile, Prime Minister Theresa May was quoted on Twitter as having said she got us "into this mess" and will "get us out"...
The biggest laggard on Footsie was precious metals miner Fresnillo (LON:FRES), which fell 4.87% to 1.641p.
15.30: US tech slump outweighs political uncertainty for FTSE 100
Bad news is piling up for Theresa May, with the Queen’s speech apparently set be delayed for a week while the details of the power sharing agreement with the Democratic Unionists is thrashed out.
It may mean the Queen having to miss Royal Ascot.
London’s stock market though is proving resilient with a loss of just three points at 7,524 and was in the blue early in afternoon before Wall Street opened, where a far more worrying trend appeared in the shape of a slump in tech stocks.
Dow Jones Industrial Average dipped 38 to 21,232, but the tech heavy Nasdaq was in far worse shape, shedding over 1% to 6,140 as Apple (NASDAQ:AAPL) fell 3.2% to US$144, Google owner Alphabet Inc (NASDAQ:GOOGL) dropped 2% and Amazon (NASDAQ:AMZN) slipped 2.5%.
Neil Wilson at ETX Markets said: “For now it seems like this selling is confined to a handful of stocks that had rightly or wrongly been heavily bid up all year and further juiced by momentum traders piling in.
“It’s all come off the back of a Goldman Sachs report warning that some of the big tech stocks were looking a touch overvalued. That spooked investors and saw anyone hanging on the momentum play taking profits. True enough these stocks have been trading more like consumer staples rather than the growth stocks they are.”
UK stocks were also affected with MicroFocus International PLC (LON:MCRO) one of the worst performers shedding 3.5% to 2,411p, while accountancy software group Sage PLC (LON:SGE) dropped 2.4%.
A rally by the price of crude lifted Royal Dutch Sell PLC (LON:RDSB), up 2.3% to 2,200p and to the top of the risers along with BP PLC (LON:BP.) up 1.2%.
Tesco PLC (LON:TSCO) was also going well ahead of its trading update at the end of the week
FTSE100 attempts to rally as business leaders fret
Stocks have been calm so far over the political uncertainty, with the FTSE 100 rallying from early falls to a drop of just six points at 7,521.
But a report today showing a sharp fall in business confidence since the election result indicated the hard road that lies ahead for the embattled PM.
A survey of its members by the Institute of Directors found they wanted a quick deal on Brexit, especially the status of EU workers in the UK.
This must be the priority, said the business lobby group otherwise business con idence will crumble further.
US markets were set for a dull start with spread bet firms pointing to about a 20 point fall from its last close of 21,271 for The Dow Jones Industrial Average when trading gets underway.
10.45am. FTSE 100 in red as election Mayhem rumbles on
FTSE 100 was in the red as the future of Theresa May seemed to being hanging in the balance after another weekend of disastrous PR for the UK Prime Minister.
The blue chip index was eighteen points lower at 7,508 with gold miners weak and Royal Dutch Shell (LON:RDSB), up 1.6% to 2,186p, and Centrica PLC (LON:CNA) up 1.5% at 201.7p the best of the risers.
British Gas owner Centrica is to expand its boiler repair and maintenance service to rival Homeserve PLC (LON:HSV) after competition issues scuppered a possible £2.5bn bid last year.
Shares in Homeserve eased 1.1% to 739p.
8.45am: Footsie lower as uncertain drags
The FTSE 100 index fell back in early trading, reversing some of Friday’s post-election bounce as sterling steadied after its big drop on the hung parliament result which leaves prime minister Theresa May’s position precarious even though she has managed to form a new government.
Around 8.45am, the UK blue chip index was about 24 points lower at 7,503, having gained around 1% on Friday after international stocks benefited from sterling’s 1.5% post-election decline versus the dollar.
But on currency markets today, the pound ticked higher modestly versus the greenback at US$1.2739, although it lost another 0.2% against the euro at US$1.1360.
Craig Erlam, senior market analyst at Oanda said: “With Theresa May scrambling to repair the self-inflicted damage suffered as a result of the election, there remains a huge amount of uncertainty around her position and with only a week to go before Brexit talks with the EU begin, I feel there may be a few more twists to come yet.
“May has not delivered the strong and stable government she wanted and instead looks weak and vulnerable. I find it hard to see how she recovers from this.”
#GBP Pares Losses But Huge Uncertainty Remains - MarketPulse https://t.co/K0qUqhge0I #UK #TheresaMay #FTSE #Fed #BoE #BoJ pic.twitter.com/8UweJDtWjH
— Craig Erlam (@craig_forex) 12 June 2017
He added: “While the election result and upcoming Brexit talks will likely remain a key talking point this week, there’s also a number of other events that markets will be very focused on.
“The start of the week may be quiet but we’ll get monetary policy decisions from the Federal Reserve, Bank of England and Bank of Japan on Wednesday, Thursday and Friday, respectively.
“The Fed will be of particular interest with markets now fully pricing in a rate hike and instead more concerned with whether they’ll signal another this year or focus more on balance sheet reduction.”
Given all the uncertainty, and a lack of much corporate news around on Monday, broker comment provided some points of interest for the FTSE 100.
Equipment rental firm Ashtead Group PLC (LON:AHT) was a blue chip gainer, up 0.9% at 1.650p as HSBC upgraded its rating to ‘buy’ from ‘hold’.
Mobile phones giant Vodafone PLC (LON:VOD) also found support, up 0.9% at 223.1p as Berenberg raised its target price to 259p from 250p in a telecoms sector note, with BT Group plc (LON:BT.A) also higher, up 1% at 297.55p even though the broker trimmed its target price.
On the second line, however, TalkTalk shares suffered, losing 1.9% at 168.5p as Berenberg downgraded its rating to ‘sell’ from ‘hold’ and chopped its target price to 140p from 224p in the same note.
But the top FTSE 250 gainer was outsourcer Mitie Group PLC (LON:MTO) which saw its shares jump 7.3% to 264.8p as an improving pipeline and steady order book offset a hefty, but expected full-year operating loss caused by a big one-off accounting adjustment
Analysts at Liberum raised their rating for Mitie to 'hold' from 'sell' with an increased target price of 250p, up from 165p, highlighting the reduced risk the firm that will need a rights issue.
Proactive news headlines....
US revenues at Eckoh PLC (LON:ECK) now represent one third of the group's turnover, the company revealed as it unveiled an increased in adjusted underlying earnings (EBITDA) to £5.8mln for the year to the end of March from £5.4mln the year before.
Kromek Group PLC’s (LON:KMK) next generation standalone radiation detector, D3S-ID, was successfully deployed by the European Commission’s Counter Terrorism Unit of Directorate General for Home Affairs in Brussels on President Trump's recent visit, the company revea;ed.
Porta Communications PLC (LON:PTCM), the international communications and marketing group, formally implemented the revolving credit facility with Clydesdale Bank, details of which were disclosed last Thursday.
Sound Energy PLC (LON:SOU) has kicked off a new programme at the Sidi Moktar project in Morocco, where it is re-entering the Koba-1 well.
Europa Oil & Gas (Holdings) Plc (LON:EOG) has confirmed that it has raised £1.3mln through the issue of new shares via open offer.
As well as its stem cells services and insurance arms, WideCells Group PLC (LON:WDC) is intent on educating the masses about this potentially transformational technology through its WideAcademy division.
Adam Parker, a co-founder of Majedie Asset Management has been appointed to the board of Berkeley Energia PLC (LON:BKY) as a non-executive director. Parker joins the Company after a three decade career in institutional fund management in the City of London. During that time he co-founded Majedie Asset Management, which today has assets under management of approximately £14 billion.
IronRidge Resources Limited (LON:IRR) is poised to take full control of Tekton Minerals, which has a number of potentially high grade gold targets in Chad. The fast growing junior acquired an option for a 58% stake last year for US$3.5mln, since when its holding has risen to 64%. This latest deal covers all but 10% of the shares outstanding and will see IronRidge issues shares to Tekton’s shareholders, which includes two of IronRidge's directors, Nicholas Mather and Vincent Mascolo.
Mytrah Energy Ltd (LON:MYT) reported a jump in full year profit as the company increased its power generation capacity with the construction of further wind turbines.Shares gained 5.45% to 26.62p in morning trading as the group reported underlying pre-tax profit rose to US$4.6mln in the year to 31 December 2016 from US$2.15mln a year earlier. Revenue jumped to US$362.23mln from US$74.72mln, driven by 72% growth in power generation capacity.
7.00am: Weaker start predicted
The FTSE 100 is expected to open 35 points lower today as investors continue to digest the general election.
Theresa May’s plans to secure a larger majority in the House of Commons backfired on Friday as the election led to a hung parliament. The Prime Minister was forced to seek the support of MPs from the Northern Ireland’s Democratic Unionist Party to form a government after the Conservatives failed to secure a majority.
The pound plunged on the shock result and is likely to waver throughout the week as Brexit negotiations loom. Sterling rose 0.16% versus the dollar at US$1.2767 in Asian trading.
More positively, analysts anticipate a softer Brexit under a weakened Tory party but May's position has been called into question and is likely to cause political uncertainty. May will face the Conservative MPs today to discuss about the election outcome and could be asked to resign.
“With Theresa May scrambling to repair the self-inflicted damage suffered as a result of the election, there remains a huge amount of uncertainty around her position and with only a week to go before Brexit talks with the EU begin, I feel there may be a few more twists to come yet,” said Craig Erlam, senior market analyst at Oanda.
“May has not delivered the strong and stable government she wanted and instead looks weak and vulnerable. I find it hard to see how she recovers from this.”
Around the markets
Sterling: US$1.2766, up 0.23 cents
10-year gilt yield: 1.008%
Gold: US$1,268.90 an ounce, down US$2.40
Brent crude: US$48.36, up 21 cents