FTSE 100 closes higher
FTSE 250 also up
European consumer confidence is higher, but stalling Brexit could undermine
Positive US GDP stats revealed
FTSE 100 glided to a positive finish on Wednesday as North Korea fears appeared to abate and traders digested economic data.
The UK bluechip benchmark closed up almost 28 points at 7,365, while the more UK company focused FTSE 250 finished over 88 points higher at 19,616.
David Madden, at analyst at CMC Markets, put it thus: "Stock markets in Europe are strong today in the wake of the sever-sell yesterday.
"Dealers are bargain hunting and those who were short are closing out those positions, as they are less fearful today.
"The standoff with North Korea is far from over, but for now, the immediate fear has slipped away. There are always pockets of quiet during a political storm, and this is one of those days."
Bank lending figures issued from the Bank of England made for mixed reading, as consumer credit waned but mortgage approvals increased after a weaker few months, showing a fairly resilient housing market.
In the US, gross domestic product (GDP) was revised upward amid faster than expected second quarter growth, marking the star-spangled economy’s quickest upturn in over two years.
Meanwhile, in the US, the ADP private payroll numbers, ahead of Friday's main event (non-farm payrolls) showed hiring across the pond picked up to a 237,000 pace in August.
On FTSE 100 the biggest riser was Ashtead Group (LON:AHT), up 4.83% to 77p, while the top loser was budget airline easyJet (LON:EZJ), which shed 1.99% to stand at 1,182p.
15:15: US GDP revised upwards
United States gross domestic product (GDP) was revised upward amid faster than expected second quarter growth, marking the star-spangled economy’s quickest upturn in over two years – but, such is the present market the upgrade didn’t really register with investors.
GDP growth increased by 0.4 percentage points, to 3%, meaning the economy grew by a rate of 2.1% in the first half.
“The US economy posted its best quarter of growth since Q1 2015 in Q2 2017,” Berenberg Capital Markets highlighted in a note.
“It should not be taken at face value, the US is not a 3% economy – some of it is due to a rebound from the quirky Q1 GDP estimate.
“But a confluence of factors, including a rebound in business fixed investment - growing by 7% in the first half of the year after a decline in 2016 - and synchronized improvement in global growth are supporting the US economy.”
Upgrade notwithstanding, the Dow Jones was negative territory - down 14 points, (0.07%) at 21.851 - while the S&P 500 and Nasdaq held positive at 2,448 and 6,326 respectively.
In London, the FTSE 100 held much of the morning’s earlier gains, up 34 points or 0.47% at around 15:15.
13:56 - FTSE 100 stays steady, consumer stocks trade higher
The FTSE 100 stayed steady into afternoon dealing, changing hands at 7,370, up 38 points or 0.52% for the session.
Without much more global drama, that has driven recent sessions, it feels a little bit more like a typical and somewhat listless end of summer trading day – albeit with the benchmark moving in a positive direction.
The session was not entirely without drivers, however. Consumer facing stocks such as Paddy Power Betfair plc (LON:PPB), ITV plc (LON:ITV) and British Gas owner Centrica Plc (LON:CNA) were among those trading higher – up 2%, 1.8% and 1.1% respectively.
Retailers including Primark Owner Associated British Food Plc (LON:ABF) along with grocers Sainsbury Plc (LON:SBRY) and Morrison (Wm) Supermarkets Plc (LON:MRW).
Marks and Spencer Group Plc (LON:MKS), up 2.67%, revealed it had started talks with its franchise partner Al-Futtaim for the potential purchase and franchising of the UK firm’s retail business in Hong Kong and Macau.
In a statement on the FTSE 100 listed group’s corporate website, M&S said if the discussions conclude successfully, Al-Futtaim would become the new sole franchisee for M&S in Hong Kong and Macau.
The FTSE reshuffle, which comes into effect after today, puts two crisis-hit stock in the relegation zone, with Provident Financial dropping down into the FTSE 250 and Carrillion dropping out of the blue-chip ranks down into the FTSE Small Cap Index.
Shares in Provident have fallen about 68% in year to date, while Carillion plummeted around 80%.
On Wednesday, a further 2.3% was shaved from Provident Financial which was changing hands at 880.2p before its expulsion.
Mediclinic International Plc (LON:MDC), EasyJet Plc (LON:EZJ) and Informa Plc (LON:INF) all traded between 1.5% and 2.2% lower.
In the small cap market, Berkeley Energia Ltd (LON:BKY) shares advanced around 9% to 49.62p on the news that the European uranium mine developer had landed a US$120mln funding deal with Oman’s sovereign wealth fund.
12:08 - FTSE 100 up 30 points at midday, Wall Street expected to open positively
At lunch, London’s FTSE 100 was up around 30 points or 0.4% at 7,367 with attentions turning toward the United States for direction.
It remains to be seen whether it is short covering or genuine bullish buying, nonetheless, Wall Street’s pre-market indicators point to a positive start.
New York’s main benchmarks are all seen higher with more than two hours to go until opening bell, albeit the market is not expected to start a lot higher.
Apple is likely to be among those in focus, particularly for the horde of retail investors that follow its every move, as the iPhone maker’s value is now closing in on 1 trillion dollars.
READ TOP MOVERS: Empyrean Energy and Highlands Natural Resources among Wednesday’s top risers
Tuesday brought news of Apple’s next product launch – the next iPhone (that’s #8) – which is due out next month.
Elsewhere, yesterday’s after-hours dealing saw the news that Warren Buffet’s Berkshire Hathaway had become Bank of America’s largest shareholder.
At the same time a sliver of quarterly financial results provided trading catalysts with AeroVironment Inc (NASDAQ:AVAV) and Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI) moving in opposite directions – the former gained around 10% while the latter was down more than 3%.
10:56 - FTSE 100 gains narrowing, was the early positivity anything more than short covering?
The morning’s early positivity had waned somewhat as the session progressed, with the FTSE 100 up just 15 points at 0.22% at around 7,353 near 11:00am.
Indeed, the green screens in the City may in fact simply be short covering rather than legit share buying, according to CMC Markets analyst David Madden.
“Tensions surrounding North Korea are still running high, but as far as traders are concerned, no new negative news is good news.
“In tense situations like this, traders are cautious about buying back into the market, and the positive move this morning feels more like short covering than renewed bullish sentiment.
Madden then cautioned: “The bounce back today could well attract a fresh wave of selling and political uncertainty is looming over the equity markets.”
For those looking past the North Korea missile spectre there wasn’t a great deal of comfort for UK investors, as the pound continues to struggle amid Brexit related-uncertainties and European confidence is generally higher.
European consumer confidence is seen to be rising, meanwhile, the negotiations over Britain’s divorce with the European Union have yet to make real progress.
“Despite today’s consumer confidence figures remaining on par in comparison to the previous month, alarm bells will be ringing across the UK as the pound hovers at an eight-year low against the euro,” said Dennis de Jong, UFX managing director.
“EU Chief Negotiator Michel Barnier’s comments this week on the lack of progress on Brexit negotiations continue to leave Britain in a state of economic uncertainty, and if there is little positive movement in the coming months then people in the UK will begin to worry.”
9:53am - FTSE 100 off on the front foot as global markets ‘get over’ North Korea missile drama
The FTSE 100 consolidated the morning’s early gains, marking a 24 point lead to stand at 7,362 just before 10:00am.
Following steadier US markets and trading in Asia it would appear that UK investors are cautiously thinking past yesterday’s panic over the latest North Korea missile tests.
London’s natural resource heavy benchmarks also saw some support from better gold prices, which have risen on ‘safe-haven’ buying, and higher oil prices squeezed somewhat by the impacts of Hurricane Harvey (which has taken offline around 16% of US refining).
Plant equipment firm HSS Hire Group Plc (LON:HSS) was sinking in Wednesday’s early deals, down almost 20% trading at 45.66p after revealing higher first half losses and materially lower sales growth.
Elsewhere, news of a senior management exit dented homewares retailer Dunelm Group Plc (LON:DNLM), down 2.45% to 582.5p, with chief executive John Browett stepping down for personal reasons with immediate effect. Chairman Andy Harrison will fill the role on temporary basis while the company searches for a successor.
FTSE 250 constituent Diploma PLC (LON:DPLM) rose more than 7%, to 1,101p, after the business services group gave investors a bullish trading update giving expectations for 17% revenue growth in upcoming financial results (for period ending September 30).
Two small cap winners, meanwhile, stood out clearly with a new US$120mln funding deal with Oman’s sovereign wealth fund sending Berkeley Energia Ltd (LON:BKY) up more than 10% in early deals and the latest positive update for Empyrean Energy Plc’s (LON:EME) Dempsey gas well in California sending it about 13% higher.
8:15am: FTSE 100 gets off on the front foot
London’s FTSE 100 got off on the front foot on Wednesday as global equities continue to ‘get over’ the latest North Korea missile tests.
It comes as US markets made gains despite another bout of strong condemnation of North Korea’s actions by both US President Donald Trump and Japanese PM Shinzo Abe, who called the test “reckless”.
Gold climbed to a ten month high of US$1,327 on the political tensions, though the weakness of the dollar was another feature, pushing up the price of the metal. Meanwhile, Hurricane Harvey which knocked out around 16% of US oil refinery capacity, helped oil prices higher.
The FTSE 100 rose 32 points, about 0.44%, in Wednesday’s early transactions.
Early City news headlines saw European uranium mine developer Berkeley Energia PLC (LON:BKY) unveil a US$120mln funding deal with Oman’s sovereign wealth fund, which will become a substantial shareholder and have the opportunity to become an offtake partner.
Homewares retailer Dunelm Group PLC (LON:DNLM) revealed that chief executive John Browett is stepping down for personal reasons with immediate effect, and, chairman Andy Harrison will fill the role on a temporary basis while the company searches for a successor.
High-street bookseller and newsagents WH Smith PLC (LON:SMWH), meanwhile, maintained its full year guidance as it cut costs at its high street stores following sluggish sales. In a trading update on its results for the year to 31 August, the UK books and stationary retailer said its travel stores continued to deliver a strong performance with good sales across its channels.
Proactive news headlines:
Bezant PLC (LON:BZT) announced today that gold- platinum sampling is now underway at the HGE-082 licence area located approximately 4km from its current mining operations at the Choco Project, Western Colombia.
Amryt Pharma PLC (LON:AMYT) has announced the appointment of Kieran Rooney as its Vice President of Strategic Alliances and Licensing. The AIM-listed biopharmaceutical company focused on treatments for rare and orphan diseases said Dr Rooney has over 25 years of experience in the biopharmaceutical industry, with significant expertise in business development and commercial strategy.
Amphion Innovations PLC (LON:AMP) has reduced its stake in its partner company, Motif Bio PLC (LON:MFTB) with the sale of 1.7mln shares. Following the disposal, AIM-listed Amphion still holds around 41.45mln ordinary shares in Motif Bio, representing a15.8% stake.
Pantheon Resources PLC (LON:PANR) shares dropped 10% as it said Hurricane Harvey has disrupted its oil and gas operations in Texas. Pantheon said in a statement that all of its operations were suspended ahead of the storm and its locations were secure but it has no information on whether any of its wellheads or associated facilities have been affected by the high rainfall.
Strategic Minerals Plc (LON:SML) has announced that its wholly-owned subsidiary, Central Australian Rare Earths has commenced the first phase of the 2017 Hanns Camp drilling programme.
Highlands Natural Resources Plc (LON:HNR) told investors that the Powell well, its first at the East Denver project, has now completed drilling. The well was targeting the East Denver niobrara shale, and was drilled down to a depth of 18,230 feet. Setting and cement casing was completed on August 29.
Vast Resources PLC (LON:VAST) is hopeful mining will start by the end of the year at the Baita Plai mine at Romania following the grant of a right to mine licence. Baita, the holder of the head licence at the site, chose Vast’s subsidiary African Consolidated Resources after a competitive process.
Sunrise Resources Plc (LON:SRES) has disposed of its Junction Gold project in Humboldt County, Nevada as it focused solely on the CS Pozzolan-Perlite project, also in Nevada. Patrick Cheetham, executive chairman, said this was the first of what it hopes will be a number of project disposals following the decision to focus on CS.
Pre-revenue explorer Tethyan Resources PLC (LON:TETH) confirmed it remains liquid as it continues to advance its gold interests in eastern Europe. Operationally, the company expects to release results from recently drilled holes in early September, and a large geophysical survey programme is due to start in 'late August'.
Metal Tiger PLC (LON:MTR) has raised its stake in MOD Resources Ltd, its joint venture partner in the T3 exploration project in the Kalahari copper belt in Botswana. The group bought an additional 3,748,720 shares in MOD Resources for AU$0.06157 each or a total of AU$230,808, bringing its total shareholding to 5%.
Berkeley Energia Limited (LON:BKY) has arranged the finance to bring its Salamanca uranium project into production through a US$120mln convertible loan and option package with Oman’s sovereign wealth fund.
Thor Mining PLC (LON:THR) has reported more encouraging core samples from its Desert Scheelite deposit at the Pilot Mountain tungsten project in Nevada.
OptiBiotix Health plc (LON:OPTI) said its interim results charted a period of "significant” commercial progress, including product launches and sales agreements. The life sciences company is developing pro-biotic compounds that tackle obesity, high cholesterol and diabetes.
BATM Advanced Communications Limited (LON:BVC), a provider of real-time technology for networking and lab systems, said it is seeing the financial rewards following a period of investment, new product launches and bolt-on acquisitions. It also confirmed it expects growth for the full-year to be in line with market expectations.
OPG Power Ventures PLC (LON:OPG), the developer and operator of generation plants in India, said it expects full-year earnings and dividends to be line with market forecasts as it updated on progress in the first quarter of the new financial period. In the three months to June 30, total generation was 1.25bn units, up 27%, while the plant load factor was 78% for its Chennai facility and 79% for Gujarat.
6:55am: FTSE 100 to bounce back as overseas markets shrug off North Korea missile test
Markets have around the world steadied after the wobble sparked by another ballistic missile launch from North Korea and London is expected to rally as well.
Financial spread bet firms see FTSE 100 opening up to 30 points higher and reversing much of Tuesday’s 64 point loss at 7,337.
US markets made gains despite another bout of strong condemnation of North Korea’s actions by both US President Donald Trump and Japanese PM Shinzo Abe, who called the test “reckless”.
The Dow Jones Industrial Average rose 56 to 21,865 with the S&P 500 and Nasdaq also both higher.
Gold climbed to a ten month high of US$1,327 on the political tensions, though the weakness of the dollar was another feature pushing up the price of the metal.
The euro was the main beneficiary of the US currency's dip and is now at an eight-year high against a basket of its rival currencies.
Oil prices rose as Hurricane Harvey took a heavy toll on US refinery capacity, with 16% now shut down due to the impact of the flooding and high winds in Texas.
In Asia, both Tokyo and Hong Kong made strong gains though Shanghai was a little off the pace.
Significant events expect on Wednesday August 30:
Trading updates: Diploma PLC (LON:DPLM), WH Smith PLC (LON:SMWH)
Interims: BATM Advanced Communications Ltd (LON:BVC), The Gym Group PLC (LON:GYM), HSS Hire Group PLC (LON:HSS), IFG Group PLC (LON:IFG), Petrofac Ltd. (LON:PFC), Pure Tech Health PLC (LON:PRTC)
Economic data: UK consumer credit, M4 money supply; second reading US second quarter GDP
In the Markets:
- Gold US$1,312.50, down 0.1%
- Brent crude US$46.31, down 0.3%
- Sterling US$1.2925, up 0.1%
City Headlines:
- Marks & Spencer set to lose retail crown to upstart online rival Asos - The Times
- Ocado becomes first UK supermarket to launch an app on Amazon’s popular Alexa device – Daily Mail
- Sky stops broadcasting US channel Fox News – Daily Telegraph
- Smith & Williamson attracts fresh interest in takeover battle from Tilney BestInvest – Financial Times
- Brexit set to drive up cost of shopping, says British Retail Consortium - The Times
- Apple Boss Tim Cook handed £70mln bonus as he prepares to unveil iPhone 8 – Daily Mail
- Amazon closed its takeover of Whole Foods faster than any other big public retail acquisition on record - CityAM
- UTC close to $20bn Rockwell takeover – The Times
- Uber to offer drivers in India free life and accident insurance – Financial Times
- Google launches augmented-reality camera platform for Android – Financial Times
- Saudi Aramco oil float aids jihad, says 9/11 widow Kristen Breitweiser – The Times
- LVMH gives it a whirl as it jazzes up jardin – The Times
- Statoil draws a blank in highly anticipated Arctic field – Financial Times
- Diamond mine sale helps Lukoil to 121.0% jump in profits – Financial Times
- Total Harvey cost could be as high as $100bn, says insurance expert – The Guardian
- Pension deficit now equals 70% of UK companies’ entire annual profits fuelling retirement fears – The Independent
- Pret A Manger to offer 25p discount to customers who bring their own reusable cups – Daily Express
- BrewDog pledges to give staff and charities 20% of profits – The Scotsman