FTSE 100 closes 64 down
North Korea latest missile test fires over Japan
Euro strength compounds equities struggle
What will Trump say?
FTSE 100 closed Tuesday 64 points off at 7,337 as traders fret over North Korea tensions after its missile launch last night.
"The standoff between the US and North Korea never went away, and as of last night it is back in the forefront of traders’ minds," said David Madden, at CMC Markets.
"Tensions have shifted up a gear, and dealers are dumping stocks as they don’t want to remain long while the political situation plays out."
US stocks started in the red but have recovered somewhat as trade got underway, with the Dow Jones adding almost nine points at the time of writing.
However in London, the FTSE 100 followed the downward script all day, while the FTSE 250 fared even worse, ending 146 points lower at 19,524.
As often the case in times of volatility, resource stocks gained ground and Randgold Resources (LON:RRS) was the top riser in London on Footsie, adding 4.56% to 7,915p.
In second place, silver miner Fresnillo (LON:FRES) gained 2.59% at 1,621p.
On the losing front, broadcaster ITV plc (LON:ITV) shed 4.91% to 153p and was top laggard.
In Germany, the DAX lost 177 points, while in France, CAC 40 shed almost 48 points.
4pm - FTSE 100 recoups some losses
The FTSE 100 was heading towards the Tuesday’s close in better shape, recouping some of the morning’s losses.
With just more than half an hour to go until the end of the session the UK’s blue-chip benchmark was down around 55 points, 0.73%, trading at 7,347.
The recovery (of sorts) came after Wall Street began the day’s trading in better shape than initially feared.
Down around 33.5 points or 0.15%, the Dow Jones was changing hands at 21,774 whereas the S&P 500 dipped 0.26% to 2,437 and the Nasdaq was 0.14% lower at 6,273.
FTSE 100 and Wall Street benchmarks in red as Donald Trump says “all options are on the table” for North Korea
London’s FTSE 100 and Wall Street benchmarks were seen in the red as Donald Trump says “all options are on the table”
Responding to North Korea’s latest missile test, in a statement, Trump said: “Threatening and destabilizing actions only increase the North Korean regime's isolation in the region and among all nations of the world."
"All options are on the table."
The markets attentions had been trained on the Twitter for the more informal response that the public have come to expect from the US president, but, Trump’s first tweet of the day revealed that a domestic crisis (namely the devastating impact of Hurricane Harvey) was on the agenda.
Leaving now for Texas!
— Donald J. Trump (@realDonaldTrump) August 29, 2017
In London, the FTSE 100 was down around 80 points, 1.08%, at 7,321. The Dow Jones, meanwhile, was pointing around 100 points lower just over an hour before the start of Tuesday’s session.
12:16pm - FTSE 100 recoups some of early losses, but markets await US response
The FTSE 100 had recouped some of the morning’s losses by lunch, down 84 points or 1.14% to 7,316 by 12:10, albeit the inevitable US response looms.
Dow Jones futures point to a 105 point drop just under two and a half hours from Wall Street’s opening bell, meanwhile, the S&P 500 and Nasdaq are also indicated to start lower.
Markets are, however, awaiting a response from US President Donald Trump - after China said the Korean peninsula is at ‘tipping point’ while South Korea carried out missile drills near the border.
Gold punches through US$1,300 as reality of North Korean missile attack is brought home - @proactive_uk https://t.co/A7GsFARAJj
— Proactive Investors (@proactive_uk) August 29, 2017
FTSE 100 takes triple-digit hit, investor wait for Trump to tweet after latest North Korea missile test
Investors are waiting for Donald Trump to hit the (Twitter) button in response to North Korea’s latest missile test, which shot over Japan before dropping into the sea – so says IG Markets analyst Chris Beauchamp.
“North Korea’s dramatic escalation last night prompted some impressive risk-off moves in Asia, with the European session naturally following suit,” he said in the note.
“US futures are under pressure, although everyone is waiting for the first tweet on the subject from the Commander-in-Chief before hitting the sell button too hard.
“Hurricane Harvey is hitting insurers hard, as investors try to price in the potential costs of the devastation in Texas, while a drop in US Treasury yields is prompting a mini-rout in bank stocks.”
Beauchamp added that forex matters were also impacting the weakness in equities, particularly in the UK were the continued strength of the Euro is eating into sterling-tied blue-chips as well as being detrimental to European equities.
FTSE 100 marks triple-digit loss as North Korea missile fears escalate
London’s FTSE 100 had given up more than 100 points by 10:00am as global markets continue to be unsettled by the evident escalation of North Korea fears.
The latest missile test, which saw the weapon fly over Northern Japan, causing panic and ramping up tensions in the region.
It was predicted, pre-market, that the FTSE 100 would drop 40 points, but, the blue-chip benchmark backed off considerably more – at 7,300 it was down 1.37%, over 100 points by mid-morning.
TUESDAY MOVERS: Imagination Technologies shares on the front-foot thanks to bid talk
Blue-chips ITV plc (LON:ITV), down 2.8%, and Morrison Supermarkets Plc (LON:MRW), down 2.7%, were on the back-foot.
Paddy Power Betfair plc (LON:PPB), 2.6% lower, and Centrica Plc (LON:CAN), down 2.5%, were also trading lower.
8.45am: FTSE 100 falls after North Korea missile test
The FTSE 100 fell more sharply than anticipated after Kim Jong-un’s latest missile test, which saw the weapon fly over Northern Japan, causing panic and ramping up tensions in the region.
Predicted to drop 40 points at the open, the index of blue-chip shares saw 75 points wiped from its value as it sank to 7,326.87.
Gold, a haven in times of trouble, pushed above £1,300 an ounce, giving the miners of the precious metal a boost.
Randgold Resources (LON:RRS) and Fresnillo (LON:FRES), which actually digs for silver (which tracks the gold price), were at the vanguard with rises of 3.8% and 3% respectively.
The rebound in the fortunes of Provident Financial (LON:PFS) continued in spite of the wall-to-wall panning it and its former boss received in the weekend press.
Its shares led the Footsie with a rise of 4.2%.
On the downside, Asia-focused Standard Chartered (LON:STAN) was off 2% in the wake of North Korea’s latest antics.
Catching the eye early on was Mirada Plc (LON:MIRA), whose shares were up as much as 27% in the wake of significant new contract win.
Proactive news headlines:
Chariot Oil & Gas Limited (LON:CHAR) has decided to not to proceed into the first renewal period for Namibia blocks 2714A and 2714B, otherwise known as the Southern Blocks. It means that the explorer foregoes its 85% stake in the exploration area in the Atlantic Margin, albeit the company has made an agreement for a ‘back-in’ for a 10% interest in the blocks.
Mirada Plc (LON:MIRA), which develops and sells the software used to power digital TV, has won a significant new contract for its Iris multiscreen product. The customer is NASDAQ-listed ATN International Inc (ATNi), which operates in the US and Caribbean under trade names such as Comnet, Choice and GT&T. Big Pic in August.
Orosur Mining Inc (LON:OMI) produced 35,371 ounces of gold from its Uruguay operations in the full year to May 31 2017, following a significant increase in production in the fourth quarter. The average gold price received was US$1,258 per ounce.
Scancell Holdings Plc (LON:SCLP) said a study has shown that using Oncimmune Holdings PLC's autoantibody technology can successfully predict the recurrence of disease in patients undergoing its SCIB1 treatment for malignant melanoma. The study, which included a team at the University of Nottingham, developed used a panel of seven tumour associated autoantibodies to predict disease recurrence in patients with resected stage III/IV melanoma treated with Scancell's SCIB1.
Highlands Natural Resources Plc (LON:HNR) has launched an over-subscribed placing of 7.818mln new ordinary shares at 20p each to raise a gross amount of £1.5636mln, adding to previous funding moves to enlarge its shale project in Colorado.
KEFI Minerals plc (LON:KEFI) has received £2.5mln in VAT refunds and is now beginning preliminary field development work at its Tulu Kapi gold project in Ethiopia.
Base Resources Limited (LON:BSE) boosted revenues from its Kwale mineral sands mine in Kenya by 29% to US$215.5 during the year to June 2017. Kwale remains comfortably in the lowest cost quartile of mineral sands operations globally.
Horizonte Minerals Plc (LON:HZM) (TSX:HZM) has completed 60% of the feasibility study at the Araguaia nickel project in Brazil and expects to finish the work by early 2018. Jeremy Martin, chief executive, also noted the rise in the nickel price over the past eight weeks.
Bakery and sugar decoration specialist Real Good Food PLC (LON:RGD) has revised down its forecasts for underlying profits this year by £1mln following a review by its new finance director. Previously the group predicted underlying profits [EBITDA] of approximately £2mln for the year to March, but now, and following audit adjustments for inter-company trading and consolidation, the outcome is expected to be about £1mln.
Kibo Mining PLC (LON:KIBO) has concluded the final bid clarification with regard to the construction of the transmission line that will take power from the Mbeya Power Plant (MCPP) in the Songwe District of Tanzania to the TANESCO Mbeya sub-station.
Hummingbird Resources PLC (LON:HUM) has commenced mining operations at Yanfolila in Mali. Ore will be stockpiled while plant is completed and ahead of a planned first gold pour in the fourth quarter of this year.
Strategic Minerals Plc’s (LON:SML) managing director, John Peters has doubled his holding in the minerals production and development company to 20mln shares after he exercised a portion of his currently vested options. In a stock market statement, the AIM-listed firm said Peters has provided a notice that he wishes to exercise options over 10,000,000 shares in the tranche, expiring 30 June 2018, at a price of 1p per share for a total of £100,000.
Empyrean Energy PLC (LON:EME) has reported ‘significant gas shows’ have been detected in multiple zones in the Dempsey 1-15 well, in the Sacremento basin onshore California. Drilling continues, but, a project update has informed investors that zones of significantly higher than background gas shows have been encountered during the programme.
6.45am: London set for a down day
The FTSE is expected to drop almost 40 points in opening trade to 7,441.46, aping the movement seen in Asia, with the markets spooked by the latest missile launch by North Korea.
The weapon flew over Northern Japan, triggering the government’s J-Alert text system, which urged people in the area to take precautions such as move to a “sturdy building or basement”.
Japanese Prime Minister Shinzo Abe said: “We will make utmost efforts to firmly protect the lives of the people.”
The country's chief cabinet secretary, Yoshihide Suga, described Kim Jong-un’s actions as an “unprecedented, grave threat”.
Gold, a haven for investors in times of turmoil, rose to a nine-month high of US$1,322.10 an ounce.
“The metal spent a lot of time in 2017 being trapped in a range between the low US$1,200’s and just shy of US$1,300, and now that it has made a clear break beyond the range we could see further gains,” said David Madden, analyst at CMC Markets.
Oil prices held steady after Hurricane Harvey, which wrought a huge amount of flood damage to Houston, was downgraded to a tropical storm.
Looking ahead, there could be a change in market sentiment if, as expected, Donald Trump spells out his plans for tax reforms in a speech scheduled for Wednesday.
Returning to the UK, it is expected to be a dull end to the month for scheduled corporate news with announcements from WH Smith, Hays and Bunzl unlikely to set the market on fire.
- Gold up US$6.20 an ounce at US$1,322.10
- Brent crude US$52.10, up 21 US cents.
- Sterling worth US$1.2933
Business headlines:
Share prices of UK’s supermarkets are set to come under renewed pressure after Amazon enacted a swathe of large price cuts at the Whole Foods grocer it now owns, reports the Telegraph. The American firm stated last week it would slash prices at the upmarket grocer it bought for £10.7bn earlier this year.
Uber has appointed Dara Khosrowshahi, the boss of online travel agency Expedia, as its new chief executive two months after the departure of former CEO Travis Kalanick, who bowed to shareholder pressure and stepped down after months of chaos at the online cab app firm, reports the Telegraph.
AstraZeneca has confirmed it will expand its biggest British site in a major vote of confidence amid concerns that Brexit will hit pharmaceutical firms.
Andy Evans, head of Astra’s Macclesfield operations, said the FTSE 100 firm will increase capacity at the site as part of an ongoing multi-million-pound investment in the business, the Mail reports.
The European Union’s chief negotiator has warned Britain to start “negotiating seriously” as the stand-off over the Brexit divorce bill intensified, reports the Times. Speaking before the latest round of talks began in Brussels today, Michel Barnier voiced frustration at the government’s “ambiguity” and the failure of ministers to publish a position paper on the UK’s potential financial liabilities. A senior UK government source described Mr Barnier’s attack as “ill-considered and unhelpful”, the paper reports.
The National House Building Council (NHBC), the organisation that provides warranties for most new-build homes has been criticised by the competition regulator for a “lack of transparency” over payments to leading housebuilders totalling millions of pounds a year, according to the Times.