FTSE 100 closes 19 down at 7,357
Hunting benefits from increased onshore drilling in the US
Worldpay in play, with JP Morgan and Vantiv confirmed as the suitors
FTSE 100 drifted to a lower close, like other European indices, as Brent crude sank over 2% and Wall Street was closed.
The bluechip benchmark finished down around 19, or 0.27% to 7,357.
The more UK company focused FTSE 250 was also down - almost 19 points- at 19,301.
Payments processing firm Worldpay Group PLC (LON:WPG) was the big gainer, finishing over 27% higher, at 408p.
It confirmed it had received preliminary bid approaches from Vantiv Inc and JPMorgan Chase Bank.
The biggest laggard was Provident Financial (LON:PFG), down 1.98% to 2,321p after the UK central bank handed lenders a deadline of September to prove they were adequately protected against consumer credit risks.
Brent crude is down 2.09% at the time of writing at $46.9 a barrel. BP (LON:BP.) shares fell 0.29% to 450p.
4pm - FTSE 100 back to square one
With just over half an hour of trading to go, the FTSE 100 was back to square one, while the FTSE 250 was modestly higher.
On a day when the US is celebrating its independence, the London stock market looked suspiciously like a dependency of Wall Street, with stocks hovering on or around last night’s closing levels.
The FTSE 100, which had fallen as low as 7,337 at one point today, rallied to 7,376, down less than a point on the day, largely thanks to solid demand for mining stocks.
The FTSE 250 was up 4 at 19,325.
12.40 Stocks drifting in absence of US lead
Round about now we’d normally be checking the spread betting sites to see how Wall Street is likely to open, but not today.
It’s Independence Day across the pond, which possibly explains why the UK market is as placid as underground pond.
At just gone noon, the FTSE 100 was down 6 at 7,371, having traded in a fairly narrow range of 7,337 to 7,377.
Payments processing firm Worldpay Group PLC (LON:WPG) was the star performer of the morning after it confirmed it has received preliminary bid approaches from Vantiv Inc and JPMorgan Chase Bank.
The shares soared 22% to 390.3p on the news.
That rise put the 1.1% gain by food retailer and Argos owner J Sainsbury plc (LON:SBRY) in the shade.
Sainsbury’s cheered the market with an increase in first quarter like-for-like sales but it is still the once derided acquisition of Argos that appears to be doing most of the peddling.
Among the mid-caps, the half-year trading statement from Hunting Plc (LON:HTG) gave the oilfield services prover’s shares a lift whereas the release of Wizz Air Holdings PLC’s (LON:WIZZ) June passenger numbers caused the airline’s stock to lose altitude.
Hunting's performance in the first half of 2017 was ahead of management’s expectations, as the company benefited from the increase in onshore drilling in the US, particularly in the shale oil regions such as the Permian Basin in West Texas.
Hunting shares rose 3.1%.
Wizz Air’s load factor – a measurement of how full its aircraft are – rose to 92.3% in June from 91.7% a year earlier, but the market was unimpressed, nudging the shares down 1.4%.
Great #client #coverage for our guys #Wizz Air last week - opened first UK base at Luton = BOOM https://t.co/4oWY966Vna via @telebusiness
— Oliver Kay (@olliekay10) July 3, 2017
10.40 ... Construction activity expands in June but not as much as expected
The FTSE 100 has rallied, despite a less than convincing construction report for June.
The FTSE 100 was down 6 at 7,371 while the FTSE 250 was off 24 points at 19,296.
Despite the fabulous weather, construction activity in June cooled off, according to the Markit/CIPS UK Construction Purchasing Managers' Index.
The index fell to 54.8 in June from 56.0 in May. A value above 50 still indicates expansion, but the number was a shade below the 55.0 expected by economists.
““Following on from a significantly weaker manufacturing survey, the softer construction PMI points to the economy faltering in June as heightened political uncertainties have fuelled business and consumer caution. Much attention will be focused on Wednesday’s release of the PMI for the key services sector, which has been finding life generally much more challenging in 2017,” suggested Howard Archer, who is now peddling his unique blend of wisdom and typographical errors at the EY ITEM club, where he is the chief economic advisor.
“June saw a slowdown in construction activity across all sectors, although housebuilding activity was still at the second highest level since December 2015.
“A slowdown in new orders growth to a three-month low pointed to construction activity losing momentum going into the third quarter and this was reflected in confidence in the sector relapsing to a 2017-low,” Dr Archer continued.
“While the construction purchasing managers’ surveys still point to the sector growing in the second quarter, despite June’s relapse, this looks very far from certain. The latest hard data show that construction output fell back 1.6% month-on-month in April, so there will have needed to be decent growth in both May and June for the second quarter to see an expansion. Construction output grew 1.1% quarter-on-quarter in the first quarter,” he added.
Worldpay a good old-fashioned uncomplicated takeover story
Zak Mir, a technical analyst occasionally of this parish, was rubbing his hands with glee at the prospect of a takeover development that could not be spoiled by management blocking a deal so they can keep their jobs, or “competition regulators trying to justify their jobs” or “politicians trying to win votes”.
Mir’s reading of the runes point to something afoot at Worldpay, with his chart musings suggesting a target of 380p over the next one or two months.
“The rumoured offer price for the company is 450p – 500p, and given the way that there were over 9.5 million shares traded in Worldpay, even the cynics would have to acknowledge there is something going on other than a positive read across from Net A/S’s announcement,” Mir said, referring to Worldpay’s sector peer Nets A/S, which confirmed a takeover approach yesterday.
“If there is no smoke without fire, we have heavy trading suggesting something is going on, or indeed, has already happened,” Mir concluded.
Shares in Worldpay Group PLC (LON:WPG) were trading at 389p, up 22% on the day.
Exclusive: @Worldpay_Global $WPG a takeover target - Part of a trend suggests @ZaksTradersCafe https://t.co/7FOROsaYD6 pic.twitter.com/5tlRdkYzOh
— Wall Street Wires (@WallStreetWires) July 4, 2017
Away from the blue-chips, investors piled into Magnolia Petroleum PLC (LON:MAGP) as it revealed it had landed a major new shareholder.
Privately owned Western Energy Development LLC is taking a 29% stake in Magnolia in return for putting a pile of business Magnolia’s way.
The two companies have a capital management agreement, whereby Magnolia will be responsible for acquiring oil and gas assets across 27 Oklahoma counties in return for certain fees and interests.
“For Western Energy to entrust us with the management of up to US$18.5 million of their clients’ funds, together with their agreement to receive shares in lieu of a cash fee for the deal, represents a major endorsement of the current board and management team,” said Rita Whittington, Magnolia’s chief executive officer.
The shares were up 31% in mid-morning trade.
08.30 ... Blue-chips mostly lower but Sainsbury's defies the trend
UK blue-chips opened lower on what could be a subdued day’s trading, what with the USA taking one of its rare days off.
The FTSE 100 was down 24 points at 7,353 after half an hour or so of trading, with base metal miners and fags makers among the high profile laggards.
In contrast to the base metals miners, precious metals diggers were wanted, with Fresnillo PLC (LON:FRES), up 1% at 1,480p and Randgold Resources Limited (LON:RRS), up 0.6% at 6,755p, both defying the trend.
The hot blue-chip in early trading, however, was Worldpay Group PLC (LON:WPG), which shot up 11% to 354.6p on reports of a takeover approach.
Supermarket group J Sainsbury plc (LON:SBRY) was also heading in the right direction after its first quarter trading update.
READ Sainsbury's rises as first quarter trading modestly beats forecasts, with grocery sales picking up
The shares were up 0.7%, or 1.7p, at 250.6p.
Up for sale graphics chip designer Imagination Technologies Group PLC (LON:IMG) did its sale prospects no harm by reporting a return to the black in the financial year just ended.
The shares rose 8.4% on the results and confirmation that the company is in preliminary discussions with potential bidders, but the UK technology firm also revealed that it had made no progress in its royalties dispute with iPhone maker Apple.
Preview: Soft start expected
London looks set to take its steer from Asian markets rather than Wall Street when trading gets underway this morning.
Markets in the Far East fell back after early gains as North Korea carried out another ballistic missile test and that nervy mood is set to spill over into the start here.
Financial spread bet firms predict FTSE 100 will shed around 26 points.
Footsie gained 64 to 7,377 Monday, boosted by a good performance from the miners and a rally by the oilers as the crude price picked up.
Wall Street had a good day with the Dow Jones Industrial Average closing 129 points higher at 21,479 though the session finished early ahead of the 4 July celebration today.
Nasdaq shed 30, with problems with prices also affecting some financial websites. The S&P 500 added a few points.
News headlines
Former Barclays chief executive, John Valey, appeared in court yesterday to face fraud charges over the way the bank raised billions of pounds from Qatar in 2008, the Guardian reports. He appeared at Westminster magistrates court along with former colleagues Roger Jenkins, Tom Kalaris and Richard Boath.
Brewing giant Carlsberg has bought London Fields Brewery, whose founded faces court charges over allegedly not paying taxes, The Telegraph writes. Carlsberg UK will own the Hackney-based business but the Danish business will run the company as part of a joint venture with Brooklyn Brewery.
US insurer AIG has become the sole seller of life insurance for Royal Bank of Scotland after ousting British company Aviva, according to The Times. AIG will sell life and critical illness cover, mainly alongside the mortgage business of RBS and its divisions Natwest and Ulster Bank.
Lloyds Banking Group was repeatedly warned about fraud at its HBOS Reading branch, the Financial Times reports.
The FT said it has seen documents which did not support the conclusion that there was a lack of evidence to suggest any criminality at HBOS for more than a decade.
City analysts have warned that UK household budgets are under sustained pressure from falling wages and rising inflation, The Times writes.The Bank of England is expected to publish measures today to address the weakness found in how banks have been giving credit to consumers at a rapidly growing pace.
Commodities/currencies
Gold: US$1,223 up US$4
Oil (WTI) US$46.83 down 24c
£/$: 1.2943 - pound higher