FTSE 100 closes at 7,413, FTSE 250 up 150 at 19,418
BT Group plc biggest gainer
Investors sit on their hands as they wait on Fed chief's testimony
Carillion back in the dog-house on yo-yo day
FTSE 100 closed a tad down on Thursday with BT Group plc (LON:BT) the big gainer, with housebuilders in support.
Shares in the telecoms titan were in demand after industry watchdog Ofcom unveiled its plans to monitor BT’s Openreach business, which is to be run as an autonomous unit within BT.
Shares in the group added almost 4% to end at 301.60p, while FTSE 100 as a whole closed down 0.05%, or 3.49 points to 7,413.
Meanwhile, FTSE 250 went the other way, adding over 150 points, at 19,418.
On Footsie, house builders Persimmon (LON:PSON) and Taylor Wimpey (LON:TW.) added 2.13% and 3.33% respectively, despite news from the Royal Institution of Chartered Surveyors (RICS) that house price inflation slowed in June.
High Street stalwart Marks & Spencer (LON:MKS) gained 3.42% to 327p.
Sterling gained 0.42% against the Euro and 0.22% against the dollar, after Bank of England policymaker Ian McCafferty gave hawkish remarks over tapering quantitative easing.
The biggest laggard on FTSE 100 was drugs giant AstraZeneca (LON:AZN), which lost 3.45% at 5,013p.
3.30pm - FTSE 100 clinging to previous level
Heading towards the final half hour of trading and the Footsie was still clinging to last night’s closing level like a limpet.
The index was down 1 at 7,416, so at least it kept above the 7,400 level.
What a contrast to the mid-cap FTSE 250, which was up 136 at 19,404, despite another wretched day for Carillion, which fell another 3.1%.
2.30pm ... It's better to travel than arrive; Footsie has done neither
US markets have opened moderately firmer, but the Footsie is not taking the hint.
The Dow Jones was up 16 at 21,548 and the S&P 500 up 3 at 2,467, but back in Blighty the FTSE 100 was down 3 at 7,414, pretty much where it was an hour earlier.
BT Group, up 3.5%, was the best performing blue-chip, and Astra, down 3.7%, the worst.
Oil stocks fell in line with the weaker oil price and mining stocks also lost some of their shine, as mineral prices dipped, despite the slide in the US dollar following Federal Reserve chief Janet Yellen’s comments yesterday, which were interpreted as being dovish in terms of interest rate policy.
While the FTSE 100 has sleepwalked its way through the day, the mid-cap FTSE 250 got its skates on, rising 124 to 19,392, despite Carillion’s share price currently being in a down phase.
The stock has yo-yoed all day, but was down 2.5% in late afternoon trading.
The heroically named Thor Mining PLC (LON:THR) thundered 8.1% higher to 1p after it completed the acquisition of 25% of US Lithium Pty Limited, a private Australian company with interests in lithium focused projects in Arizona and New Mexico.
The acquisition was flagged about a month ago.
Solar panel components maker PV Crystalox Solar PLC (LON:PVCS) has bitten the bullet and announced the closure of its UK manufacturing operations.
Most of the jobs in the UK’s trading subsidiary will be lost but the market, being a soulless beast, cheered the news, pushing the shares up 7.8% to 20.75p.
1.30pm ... Footsie rooted to the spot
FTSE 100 remains disinclined to stray far from last night’s close, though it has ebbed back into the red.
The Footsie was down a couple of points at 7,415 as investors await for the next set of cryptic clues on US interest rate policy from Federal Reserve chair, Janet Yellen.
“A key take away from the first round of the testimony was concerns raised over softening inflation, which may encourage market participants to re-evaluate the pace of monetary tightening this year,” suggested Lukman Otunuga, at FXTM.
“With no fresh clues offered on the timings and magnitude of the balance sheet reduction on Wednesday, markets will closely scrutinize Yellen’s second appearance today for clarity. If doves make an appearance once again and nothing new is brought to the table, the dollar is likely to find itself under renewed selling pressure, as traders reduce their bets on an additional interest rate hike this year,” the analyst added.
The FTSE 250 hit an intra-day peak a bit before noon but surrendered some of its gains for most of the lunchtime session,
The mid-cap measure was up 83 at 19,351, with crisis stock Carillion PLC (LON:CLLN), up 8.6%, leading the way.
There has been no new news flow on Carillion, other than brokers rushing out their revised price targets, but it does appear that short sellers are beginning to close their positions – i.e. buy back the shares they sold (which they never owned in the first place).
“Carillion (U/R) remains the most shorted stock in the FTSE 350, though we do note a 3% reduction in shares out on loan, possibly a partial explanation for the staggered fall over the last three days (CLLN was down a further 27% yesterday),” noted Liberum Capital Markets in a note this morning.
In all the drama over Carillion’s collapse, the shellacking taken by Marks and Spencer Group Plc (LON:MKS) shares earlier this week got somewhat overshadowed.
The shares were rallying today, up 2.8% at 325.1p.
House builders reacted stoically to news from the Royal Institution of Chartered Surveyors (RICS) that house price inflation slowed in June.
The RICS monthly house price index reading eased to +7 in June – the month of the General Election – from +17 in May. The June reading was the lowest in 11 months and below market forecasts.
“Political uncertainty is always going to give people pause for thought when considering big transactions, so it’s not a huge surprise to see that fewer people have bought and sold houses over the summer. Beyond the political dimension, rising inflation and slowing wage growth are also dampening the purchasing power of aspiring homeowners, something which looks like it could be hitting demand, taking the edge off house price growth,” said John Goodall, of buy-to-let specialist Landbay.
11.30 ... Carillion stages a revival as short-sellers close out their positions
The annual general meeting (AGM) of FTSE 100 engineering support specialist Babcock International PLC (LON:BAB) has started, and might be a slightly twitchy affair.
It sits in the same sector as basket case Carillion but, touch wood, this morning’s trading statement released ahead of the AGM probably eased any concerns shareholders might have had about Babcock going the same way as its highly geared peer.
“Visibility has continued to improve with around 82% of revenue in place for the current financial year and 55% for the next. The order book remains strong at £19bn and investors should appreciate that the pipeline is looking attractive with a current value of £10.5bn,” noted Helal Miah, an investment analyst at retail investor-focused broker, The Share Centre.
“During the period, there has been various contract wins including a £500m contact for the Norwegian Health Service to operate a fleet of fixed wing aircraft, a Helicopter Emergency Services contract in Australia and further works for the UK MoD and nuclear submarine decommissioning,” Miah added.
The shares, rather like the Footsie, have traded all morning in a narrow range above and below last night’s close, and were up 3p at 872.5p at around 11.30am.
Carillion, meanwhile, was staging a mini-revival, possibly as a result of some short-sellers closing their positions.
The shares were up 8.9%, contributing to a 91 point rise on the FTSE 250 to 19,361.
The FTSE 100 was up 8 at 7,425.
11.05 ... Waiting on Janet Yellen
The Footsie was as dead as Andy Murray’s Wimbledon singles’ trophy hopes this morning as it waited for part two of the Janet Yellen show.
Yellen, who heads the US central bank, appeared to dampen the hopes of hawks hoping for an interest rate hike soon in her testimony to a Congressional panel yesterday.
She’s due to make another appearance in Congress today, and it will be interesting to see whether she backtracks, given the market reaction to her comments yesterday.
Until she makes her appearance, London’s blue chips look likely to remain subdued.
At just gone 11.00am, the FTSE 100 was up 7 at 7,424. It had been range-bound all morning, clanking along between 7,404 and 7,426.
The FTSE 250 was a bit more lively; the mid-caps benchmark was up 75 at 19,343, helped by a recovery by Carillion PLC (LON:CLLN), which was up 4%.
Admittedly, the recovery had every appearance of a boxer still throwing punches on his way down to the canvas for the ten-count, but after the week Carillion’s shareholders have had, they’ll probably take that.
JP Morgan Cazenove joined the army of brokers this morning queuing up to stick the boot in, even though it meant admitting that not so long ago it was recommending its clients be overweight in the stock.
Now, after the stock has lost around two-thirds of its value in a single week, the recommendation is ‘neutral’; the price target is slashed from 292p to 64p – so, not exactly a “we told you so” note from Caz, there.
10.30 ... BT prods Footsie in the right direction
As one Footsie stalwart – Astra – faltered, so another (BT) stepped forward to keep the top-shares index’s forward momentum going.
The FTSE 100 was up 6 points at 7,422, in large part because of a 3.3% rise by BT Group plc (LON:BT).
The telecoms titan was wanted after industry watchdog Ofcom unveiled its plans to monitor BT’s Openreach business, which is to be run as an autonomous unit within BT to make sure the former state-owned company does not abuse its dominant position.
READ BT rallies on regulator's plans to monitor broadband arm Openreach
Some might suggest that the positive share price reaction is a sign that Ofcom’s proposals are on the benign side.
The morning’s top riser was Proxama PLC (LON:PROX), a specialist in proximity marketing.
Shares surged 13.3% to 0.0425p on the back of a contract renewal. The Norwich-based tech firm, which recently raised around £1.5mln through a share placing, said a major North American bank has renewed its contract to use Proxama's location technology for a further 12 months.
The bank is using Proxama's mobile location technology to enable their banking customers to directly download their mobile payment app.
10.00am ... Footsie off to a slow start, weighed down by Astra
London’s leading shares remain becalmed, despite a positive reaction yesterday to yesterday’s comments from Federal Reserve boss Janet Yellen.
The FTSE 100 index was up just 3 at 7,420 and in the shadow of the mid-cap FTSE 250, which was up 47 at 19,315.
“Fed Chair Janet Yellen has given her first day of testimony to Congress and caused the equity markets to jump to yet more record highs as she hinted that rate hikes would now be more gradual; however, it was a case of the market deciding which way it wanted to move as Yellen balanced her more dovish comments on rates with hawkish comments around the reduction of the Fed’s giant balance sheet,” according to James Hughes, the chief market analyst at foreign exchange platform operator GKFX.
Footsie’s rise would look a bit healthier were it not for a 4.5% decline in index heavyweight AstraZeneca PLC (LON:AZN) on reports that company boss Pascal Soriot is on his bike and off to choice Israeli rival Teva Pharmaceutical.
READ AstraZeneca plummets on reports that CEO Pascal Soriot is set to join Israeli competitor Teva
The unbelievable part is that anyone, even $TEVA, would want to pay $20m for Soriot on the basis of his $AZN performance https://t.co/nFOMHGaD2Z
— David Grainger (@sciencescanner) July 12, 2017
Energy stocks were also weighing on the blue-chip index, as the price of Brent crude drifted 33 cents lower to US$47.41 a barrel.
Royal Dutch Shell PLC (LON:RDSB) and BP PLC (LON:BP.) were both 0.6% lower.
Conversely, mining shares were benefiting from China’s strong trade data. Imports rose by 17.2% while exports were up 11.3% in June. The market was expecting imports to rise 13.1% and exports to climb 8.7%.
Away from the blue-chips, struggling computer games retailer GAME Digital PLC (LON:GMD) powered up after it was revealed that Sports Direct International PLC (LON:SPD) had taken a 25% stake.
Shares in the gaming consoles and computer games seller took a battering at the end of June after a profits warning, but were up 10.6% this morning.
8.55 ... Someone did not get the memo about the Yellen speech
The FTSE 100 has failed to build on yesterday’s gains, opening little changed.
The FTSE 100 was down 10 at 7,407, but there was better news from the mid-cap benchmark, the FTSE 250, which was up 9 at 19,277, despite Carillion PLC (LON:CLLN) – down 4.2% - continuing its slide.
Corporate news flow from the blue-chips was thin on the ground, leaving Babcock International Group PLC (LON:BAB) with the stage largely to itself for its trading update.
The engineering support services company banished any fears that it might be another Carillion by assuring investors the new financial year has started well, with the group trading in line with expectations.
The shares nudged up 1% to 878.5p.
Proactive News Headlines:
Europa Oil & Gas Holdings PLC (LON:EOG) has confirmed that an appeal is being made against a second refusal of planning permission for the Wressle field, in North Lincolnshire. The junior oil firm noted that project operator Egdon Resources had announced its intention to appeal the most recent decision by the North Lincolnshire Council planning committee.
Union Jack Oil PLC (LON:UJO) has welcomed the news that Wressle project operator Egdon Resources Ltd intends to appeal the second refusal of planning permission for the Wressle oil field development. UJO has a 15% stake in the project, which could be brought into production following exploration and testing successes.
Base Resources Limited (LON:BSE) told investors it had record fourth quarter revenue driven by its Kwale mineral sands operation in Kenya. The company, in its activity report for the three months to June 30, highlighted production for the full year remained consistent for all products, whilst noting continued improvement in ilmenite and zircon prices which boosted the group’s performance.
Voice and data communications services provider AdEPT Telecom plc (LON:ADT) has racked up another year of strong growth, with underlying EBITDA increasing for the 14th year in succession.
Haydale Graphene Industries PLC (LON:HAYD) has appointed David Banks, a senior executive Investment banker who has been the firm’s corporate broker, as its non-executive chairman with immediate effect. In a statement, the global nanomaterials group said Bank is replacing John Knowles who, as previously announced, has decided to retire.
Digital media group Falcon Media House Ltd (LON:FAL) is to expand its footprint in South-east Asia and Africa through a collaboration with Media Nucleus, a well-established digital and broadcast technology products company.
Genedrive PLC (LON:GDR) has enjoyed a year of “good progress”, in which it saw revenues rise as its breakthrough rapid diagnostic for Hepatitis-C moved nearer to European regulatory approval. The molecular diagnostics specialist submitted its Genedrive HCV ID kit for CE IVD certification back in March and said today it expects to update the market on the outcome of this application in the “near future”.
Accesso Technology Group PLC (LON:ACSO) has completed a £58.8m fund raise to pay for its latest expansion, US theme park software specialist The Experience Engine (TE2).
Sunrise Resources Plc (LON:SRES) is set to start the first phase of drilling at its CS pozzolan project in Nevada with a trenching programme now complete. Eleven trenches were excavated within an area over 1.3 km long by 700m wide to expose and sample bedrock.
Capital Network has issued a note on Correro Network Security PLC (LON:CNS) concluding that if the firm “continues to deliver on milestones, there is still everything to play for here for investors.”
Capital Network has issued a note on BB Healthcare Trust PLC (LON:BBH) concluding that the group offers “an attractive opportunity for the generalist investor who wishes to gain exposure to the best opportunities in the healthcare sector.”
Market Preview
London’s FTSE 100 is set to start Thursday’s positively, even if only by a few points.
The view is that British investors aren’t going to get too carried following yet another record high on Wall Street, thanks to the latest comments from the Federal Reserve.
Fed chair Janet Yellen surprised markets by leaning back from the prospect of multiple rate hikes in the coming months, according to Michael Hewson, analyst at CMC Markets.
“Her focus of appearing to lean more towards reducing the size of the Fed’s balance before the end of this year was always the more likely outcome given recent comments from other senior Fed officials and this belief was reinforced in yesterday’s comments with some speculating that we could see action as soon as the September meeting,” Hewson said in a note.
He added: “Altogether it would seem that for now the Fed’s focus is likely to be on balance sheet reduction where they seems to be more of a consensus amongst FOMC policymakers.”
In New York, the Dow Jones ended Wednesday some 123 points, 0.57%, higher finishing the day at 21,532. The S&P 500 meanwhile climbed 0.73% to close at 2,443 and the Nasdaq had a stronger session, closing up 67 points or 1.1% at 6,261.
In Asia, Hong Kong’s Hang Seng was the standout benchmark, up just over 1% trading at 26,308.
Japan’s Nikkei was only slightly higher, at 20,108, whereas the Shanghai Composite rose 0.66%.
Australia’s ASX 200 rose 1.1%, trading at 5,740.
Here in London, IG Markets sees the FTSE 100 around 8 points higher – calling the blue-chip benchmark at 7,425 to 7,429 just over an hour before the start of trading.
No FTSE 100 stocks are trading ex-dividend today though on the second line Halma PLC, Safestore PLC, Supergroup PLC and WH Smith Plc are among the FTSE 250 stocks trading without entitlement to their latest payouts.
Thursday’s agenda
Final results: Dart Group Plc (LON:DTG), AdEPT Telecom plc (LON:ADT)
Trading statements: Premier Oil PLC (LON:PMO), Babcock International Group Plc (LON:BAB), ASOS plc (LON:ASC)
AGMs: RedT Energy Plc (LON:RED), Land Securities Group Plc (LON:LAND), Babcock International Plc (LON:BAB), Atalaya Mining Plc (LON:ATYM)
Headlines
- Brexit: Repeal Bill to be published by the government - BBC News
- Electric cars forecast to create extra 18GW demand for power in UK - Financial Time
- Number of homes on the market falls to a new low – Telegraph
- Google wins challenge against 1.1 billion-euro French tax bill - Reuters
- Havaianas flip-flop brand sold in $1bn deal -BBC News
- £30m train manufacturer to create 300 jobs - BBC News
- Burberry shelves plan for Yorkshire factory as uncertainty weighs - Financial Times