Copper price exerting its sway on Footsie
Antofagasta and KAZ upgraded
China manufacturing growth boosted
Royal Mail shock relegation from blue-chip benchmark
Frankie and Benny’s owner lifted on results day
FTSE 100 joined in the rest of the global equity market rise to finish higher on Thursday.
The UK blue-chip benchmark added 65 points to finish at 7,430, while FTSE 250 gained 187 on the day to close at 19,803.
In France, CAC 40 was up 29, while the German DAX finished over 53 higher.
Brent crude is down 2.18% as the Texas hurricane chaos continues to affect the oil market, while the North Korea missile issue is still live.
David Madden, at CMC Markets, said: "Equity markets in Europe are extending yesterday’s rally as the nervousness surrounding North Korea has waned for now. Make no mistake, the standoff between Pyongyang and Washington DC is still ongoing, but while tempers are somewhat at a standstill, the bullish sentiment will continue.
"Traders are using the halt in hostilities as an opportunity to pick up stocks, but how long will the buying momentum last?"
Mediclinic International (LON:MDC) was the biggest riser on Footsie, while the big loser was security giant G4S (LON:GFS), which lost 3.21% to 293.50p after UBS downgraded it to 'neutral' from 'buy' and cut the price target.
Conversely, Serco plc (LON:SRP) raced up almost 9% to 117.99p as the Swiss bank upgraded the outsourcer and FTSE 250 group to 'buy' from 'neutral'.
2pm
It’s time to go off piste with a look at the day’s hot stock – Antofagasta (LON:ANTO), which is up 3.7%.
While the mining sector generally is basking in the warm afterglow of some unexpectedly strong Chinese manufacturing data, the push for ‘Fags’ (as old boys used to call it) is the copper price.
Copper is like Arsenal’s Per Mertesacker crossing the halfway line with ball still at feet – in nose-bleed territory, or at least at levels last seen three years ago.
Belatedly, the US investment bank Jefferies has upgraded its forecasts for the red metal as a supply squeeze and an uptick in demand continue to be supportive.
Jefferies also raised its recommendation on Antofagasta to ‘buy’ and has done the same for KAZ Minerals (LON:KAZ), which was up 2.3%.
“We have been bullish on copper due to a combination of structural supply constraints and growing global demand,” said analyst Christopher LaFemina.
“The electric vehicle revolution now also provides a major new source of additional secular demand growth. “We expect a multi-year period of growing deficits in the copper market to lead to a higher copper price.”
Turning to the wider market, investors appeared to be ignoring the deadlock in Brussels, focusing instead on the positives with the FTSE 100 up 54 points at 7,418.76.
In fact that stalemate between the negotiating teams of Messrs Barnier and Davis, may actually have had a tangentially positive impact on the index of blue-chip shares.
With the pound on the slide the exporters were given a bit a boost.
The level of share trading activity was described by one market commentator as derisory, reflecting the fact the Square Mile is still in holiday mode.
12:18: ISA stats show Britons want to invest rather than save
Britons want to invest not save, that’s according to new ISA statistics from HMRC which show a collapse in cash ISA subscriptions with almost £20bn less going into accounts.
Conversely, more money than ever has gone into stocks and shares ISAs (£22.3bn last year) with nearly 2.6mln people holding accounts.
“Low interest rates and the new personal savings allowance have precipitated a collapse in cash ISA saving,” said Danny Cox, chartered financial planner at stockbroker Hargreaves Lansdown.
He added: “Stocks and shares ISAs by comparison have enjoyed their biggest year ever in terms of the amount of money subscribed, despite Brexit causing a dip in an otherwise buoyant stock market.
“In a positive development the number of stocks and shares ISA investors also increased, reversing the trend of recent years and suggesting that more people are now turning to the stock market with their long term savings.”
Those investors that are now holding blue chip stocks will today be pleased to see the apparent positivity in the City, as equities continue to get over the week’s earlier North Korea missile panic.
At Thursday lunch, the FTSE 100 was up around 53 points or 0.72% trading at 7,418.
11:12: FTSE 100 holding gains thanks to China boost
The FTSE 100 has held the morning’s earlier gains as investor sentiment has steadied and Chinese economic starts supported London’s big miners.
The blue-chip benchmark shares gained just shy of 50 points, about 0.66%, to stand at 7,414 by around 11:00am.
David Madden, analyst at CMC Markets, in a note, said: “it feels like the strong close in US markets last night has spilled over to this side of the Atlantic.
“Even though the North Korean tensions are still bubbling away in the background, traders are keen to move back into equities while the sense of panic has evaporated.”
11:10 - FTSE 100 off to a positive start as China boosts miners
FTSE 100 got off to a positive start on Thursday, rising 42 points or 0.58% to 7,407, thanks in part to the strength of the benchmark’s big mining stocks.
Antofagasta Plc (LON:ANTO) was the top of the mining pile, up 2.2% to 1,056p, while Glencore Plc (LON:GLEN), Anglo American Plc (LON:AAL), BHP Billiton plc (LON:BLT) and Rio Tinto Plc (LON:RIO) were all also in the top 10 - rising between 1.4% and 1.9%.
It comes as good news emerged for the Chinese economy, with manufacturing growth in the People’s Republic accelerated unexpectedly in August. As ever, Chinese growth becomes short-hand for global metal demand.
The latest FTSE indices quarterly review took place last night and saw the shock demotion of privatised mail delivery firm Royal Mail Group PLC (LON:RMG) alongside the expected one of profit warning wracked consumer credit firm Provident Financial Group PLC (LON:PFG).
The two departing blue chips will be replaced by housebuilder Berkeley Group PLC (LON:BKG) and Middle East hospitals group NMC Health plc (LON:NMC) from the start of trading on Monday September 18.
Elsewhere, Frankie and Benny’s owner Restaurant Group Plc (LON:RTN) advanced more than 8% to 337.8p in even though the group’s financial metrics weren’t particularly appetising in themselves - like-for-like sales were down 2.2% and (adjusted) operating profits were off almost 30%.
The Restaurant Group’s repositioning continues and the company told investors it is starting to see early signs of improvement and better volumes.
9:00am: FTSE 100 given Chinese boost as investors tuck into Restaurant Group
The FTSE 100 opened in positive territory as good news on the health of the Chinese economy outweighed lingering concerns over North Korea’s missile obsession.
The index of blue-chip shares rose just under 20 points to 7,385.11 as manufacturing growth in the People’s Republic accelerated unexpectedly in August.
Just emerging as we went to press with this post was commentary from Bank of England interest rate setter Michael Saunders.
He is calling for an immediate interest rate rise as he predicts inflation will hit 3% soon – a full percentage point above target.
The miners were in demand first thing with the list led by Chile-focused copper specialist Antofagasta (LON:ANTO), which was up 3%.
Natural resources play are sensitive to the ebbs and flows of China, a huge and still growing market for them.
Interim results from Frankie & Benny’s owner Restaurant Group PLC (LON:RTN) went down as well as one of its classic double-decked burgers as its shares advanced 13%.
Proactive news headlines:
Amur Minerals Corporation (LON:AMC) said drilling this summer has confirmed the presence of another massive nickel deposit at its Kun-Manie licence in Far East Russia. A 20,000m drill campaign showed that the Ikenskoe/Sobolevsky and Kubuk targets are in fact a single deposit of more than 4km in length and possibly as much as 5km.
Katoro Gold PLC (LON: KAT) has reported continuing significant progress being made on the Imweru resource development program in Tanzania, which is ahead of schedule and within budget. In a statement, Katoro’s executive chairman Louis Coetzee, also noted that the group has been “one of the first, if not the very first company “ to successfully export geological /metallurgical samples under Tanzania’s new mining legislation.
Atlantis Resources Limited (LON:ARL) said that production from Phase I of its MeyGen project in the Pentland Firth set a new world record for monthly production from a tidal stream power station of over 700 MWh (Megawatts per hour) in August.
Life and pensions consolidator Chesnara Plc’s (LON:CSN) interims revealed the transformational impact of its latest acquisition as it unveiled a leap in profits and cash generation. Powering that momentum was Legal & General Nederland, renamed Sclidon and bought earlier this year for £137.5mln.
Minds + Machines Group Limited’s (LON:MMX) has received a significant boost in China, where its top level domain (TLD) .vip is gaining huge commercial traction. It has received the green light in Beijing to start selling the hugely popular internet signature.
Internet of Things (IoT) specialist Telit Communications Plc (LON:TCM) has received certification for its long term evolution (LTE) wireless communication module for operation on AT&T’s LTE network in the US. The ME910C1-NA module is the first of its LTE Category M1 products to be certified for the US telecommunications company’s LTE nationwide network.
Satellite Solutions Worldwide Group PLC (LON:SAT), which specialises in rural and last-mile super-fast broadband, said it is on target to reach 100,000 customers by the year-end as it revealed the financial boost given by the recent round of acquisitions.
Tlou Energy Limited (LON:TLOU) has confirmed some of the material details of its recently awarded mining licence that will allow it to advance its coal bed methane project in Botswana.
Rose Petroleum PLC (LON:ROSE) told investors that the design for an upcoming seismic survey, in the Paradox basin in Utah, has now been completed and the operations are expected to start within a matter of days.
Base Resources Ltd (LON:BSE) has announced the departure of director Michael Anderson, who has resigned with effect from August 31. It comes as the company works through broader succession planning which is expected to include greater independence and diversity.
Wolf Minerals Limited (LON:WLFE ASX:WLF) has reported a double boost from improvements in both its operating performance and the price of tungsten. The Plymouth-based miner has received a further £5mln in bridging finance from Resource Capital, making £45mln in total it has received from its major shareholder, but added plans to turn round its performance are starting to bear fruit.
Tharisa PLC (LON:THS) has taken over the operation and sales and marketing functions of Lonmin’s (LON:LMI) K3 UG2 chrome plant at the Marikana mine in South Africa. Subsidiary Arxo Metals will run the plant and aims to boost metal recoveries to levels seen at Tharisa’s own operations, where 68% chrome was recovered in the half year to March.
Premier African Minerals Limited (LON:PREM) has confirmed it will exit from timber in Mozambique as it focuses on its tungsten and lithium in Zimbabwe and potash in Ethiopia.
Redx Pharma Plc (LON:REDX) has announced it will present a poster on their planned first-in-human clinical trial for its RXC004 colorectal cancer treatment at the European Society for Medical Oncology (ESMO) Annual Meeting in Madrid on September 9. The positive news comes with Redx’s shares remaining suspended on AIM as it continues to be administration, although an exit is expected in the future after the firm struck a deal at the end of July to sell its Bruton’s tyrosine kinase (BTK) inhibitor technology and drug development programme for US$40mln.
Kin Group Plc (LON:KIN) today confirmed the appointment of administrators to Kin Wellness, turning the suspended stock into a ‘cash shell’ on AIM as discussions continue with potential investors to raise new equity funds for the group via a placing
6.45am: FTSE 100 set for positive start
London’s FTSE 100 is expected to start Thursday with a small lead after the week’s earlier risk-off activity has eased. With the summer holidays now nearing a close, investor participation will likely pick up again in coming sessions.
In the meantime, the market is keeping at least half an eye on the North Korea situation.
“While European markets managed to post a modest recovery yesterday the rebound was still a pretty mediocre one when set against the declines of the previous day, as some cautious buyers returned to the market, as tensions around North Korea subsided temporarily,” said Michael Hewson, analyst at CMC Markets.
“US investors remained more exuberant, with the S&P500 closing higher for the fourth day in succession with tech stocks helping drive gains, as US economic data continued to surprise to the upside, while in Asia a better than expected Chinese manufacturing PMI number for August also kept spirits up.”
The Dow Jones added 27 points, 0.12%, to end Wednesday’s trading at 21,892 while the S&P 500 gained 0.49% to 2,457 and the Nasdaq advanced just more than 1% to 6,368.
In Asia, Japan’s Nikkei rose 0.8% to 19,662, but, Hong Kong’s Hang Seng and the Shanghai Composite were both on the back foot, falling 0.79% and 0.48% respectively.
Here in London, CFD and spreadbetting firm IG Markets sees the FTSE 100 slightly higher, calling the blue-chip benchmark at 7,375 to 7,379 just over an hour before the open.
The latest FTSE indices quarterly review took place last night and saw the shock demotion of privatised mail delivery firm Royal Mail Group PLC (LON:RMG) alongside the expected one of profit warning wracked consumer credit firm Provident Financial Group PLC (LON:PFG).
The two departing blue chips will be replaced by housebuilder Berkeley Group PLC (LON:BKG) and Middle East hospitals group NMC Health PLC (LON:NMC) from the start of trading on Monday September 18.
Ex-dividend factors will clip 1.2 points off the FTSE 100 index, with Croda International PLC (LON:CRDA), G4S PLC (LON:GFS), Hammerson PLC (LON:HMSO), International Hotels Group PLC (LON:IHG), and St James’s Place PLC (LON:STJ) all trading without entitlement to their latest payouts.
Thursday’s agenda
Interims: Alfa Financial Software Holdings PLC (Q2) (LON:ALFA), Arrow Global Group PLC (LON:ARW), Churchill China PLC (LON:CHH), Jimmy Choo PLC (LON:CHOO), Chesnara PLC (LON:CSN), Eddie Stobart Logistics PLC (LON:EXL), Exova Group PLC (LON:EXO), Grafton Group PLC (LON:GFTU), Ladbrokes Coral Group PLC (LON:LCL), Restaurant Group PLC (LON:RTN), Satellite Solutions Worldwide Group PLC (LON:SAT), STV Group PLC (LON:STVG), Total Produce PLC (LON:TOT)
Economic data: GfK UK consumer confidence; US weekly jobless claims; US personal income, spending; US Chicago PMI; US pending home sales
In the Markets:
- Gold US$1,301.70, down 0.5%
- Brent crude US$45.91, down 0.1%
- Sterling US$1.2921, down 0.02%
City headlines:
- Royal Mail leaves the FTSE 100 in quarterly shake-up - BBC News
- UK retailers warn of Brexit-related price jumps and 'gaps on shelves' - Financial Times
- UK consumer confidence rises in August despite gloomy economic outlook - The Independent
- Harvey shuts down major fuel pipeline supplying East Coast – CNNMoney
- Best Buy "deeply sorry" for overpriced bottled water in Houston - CBS News
- Toshiba misses own deadline for chip unit sale, increasing future risks - Reuters