FTSE 100 closes lower
Wall Street plummeting
UK PMI shows growth struggles
Redrow results dispel housebuilder Brexit worries
The FTSE 100 closed in the red on Tuesday as Wall Street shares tanked and traders fretted over geopolitical tensions.
The UK index of leading company shares closed out at 7,372, down over 38 points, but the more UK focused FTSE 250 added almost 29 to close at 19,726.
"Investors aren’t in a major panic about the North Korean situation but it is certainly on their minds. The fact the move higher today in the FTSE 100, CAC 40 and IBEX 35 couldn’t be sustained for the session indicates it was mostly short covering that propped up the market," said David Madden, analyst at CMC Markets.
Bolstering the FTSE 250 was housebuilder Redrow plc (LON:RDW) whose shares hit a fresh record high today after the company registered a 20% jump in revenue and a 26% rise in profits.
Shares ended the day 4.35% higher at 647p.
The biggest gainer on FTSE 100 was Merlin Entertainments (LON:MERL) after a positive broker note from heavyweight Morgan Stanley.
The top laggard was Provident Financial (LON:PFG), which shed 6.54% to 800p on the day.
In the US, the Dow Jones is down 242 points at 21,747, while the pound firmed 0.67% against the US dollar after dovish comments from the US Central bank and UK service sector data.
3.30pm
The FTSE 100 was dragged towards a lower close on Tuesday as Wall Street’s Dow Jones index fell as much as 100 points in the session’s early deals on North Korea worries.
London’s blue-chip benchmark was down 12 points, 0.16%, changing hands at 7,399 at around 15:15pm.
In New York, the Dow Jones was down 95 points, 0.43%, trading at 21,891 while the S&P 500 dipped 0.25% to 2,470 and the Nasdaq was 0.19% lower at 6,422.
14:15 - FTSE 100 holding positive ground, but early indicators point to lower Wall Street open
Wall Street is set to start Tuesday on the back foot, with the Dow Jones down 64 points to 21,916 about half an hour before the opening bell.
In Europe, investors had temporarily eased their fears during the lull between North Korea weapon tests and Western threats, though, by early afternoon there were new headlines to react to.
The latest turn in the missile row with North Korea has seen Donald Trump promise to arm Japan and South Korea with "sUBStantially increased amount of highly sophisticated military equipment".
In London, meanwhile, the FTSE 100 was still in positive territory as it held onto a gain of nearly 10 points or 0.13%
13:53 - Attention focussed on housebuilders thanks to Redrow results
Redrow’s results suggested the house builder is somewhat insulated from the Brexit uncertainty, helped by the UK government’s ‘Help to Buy’ scheme that makes it easier for first time buyers to get on the property ladder.
The results boosted Redrow’s shares, which were up 26.5p or 4.3%, and investors are now looking to housebuilder peers.
ETX Capital analyst Neil Wilson said: “In terms of market conditions, overall it remains highly favourable.
“True political uncertainty and stamp duty rises have affected the volume of transactions.
“However, the underlying fundamentals remain firmly in favour of housebuilders, at least while the government continues to supply the Help to Buy support.”
Barratt Developments PLC (LON:BDEV) has its financials tomorrow, so there’ll be plenty of eyes on tomorrow’s RNS.
12:41 - Everything is not awesome at Lego
The brick building toy maker revealed it is culling 1,400 workers as half year revenue fell 5% to £1.8bn, and profits dipped 3%.
Lego chairman Jorgen Vig Knudstorp said the toy business was now an "increasingly complex organisation" and it now needed a ‘reset’.
12:20 - FTSE 100 holding positive ground, but early indicators point to lower Wall Street open
London’s FTSE 100 was holding positive territory at Tuesday lunch, meanwhile, early indications from New York suggests Wall Street will return from the long Labor Day weekend to find stock benchmarks in the red.
Standing at 7,420 the FTSE 100 was up about 9 points or 0.13%.
In pre-market the Dow Jones was seen some 69 points lower at around 21,911 while the S&P 500 and Nasdaq are also seen on the back foot.
11:10 - Woodford backs Seedrs as crowdfunding continues to mature
The emerging crowdfunding sector has hit another notable marker in its continue maturation, with famed and closely followed City fund manager Neil Woodford backing funding platform Seedrs for £4mln.
At the same time, Seedrs is unsurprisingly opening the book up to the ‘crowd’ allowing registered investors to also participate in a funding round.
We're always asked if people can invest in @seedrs and now you can! Pre-register your interest today https://t.co/3iNWhn6dkq Capital at risk pic.twitter.com/tt01GBAWga
— Seedrs (@Seedrs) September 5, 2017
“At Seedrs we strongly believe in letting our community of investors, partners and colleagues invest in us and be a part of our success,” the crowdfunding platform said in a statement.
10:23 - FTSE 100 rises despite North Korea fear, but is it just short covering?
The FTSE 100 was up 18 points, 0.24%, changing hands at 7,429 as investor fears over North Korea again appear to have eased.
Oil stocks were among the benchmark’s chief support, as Brent crude traded higher at US$52.53 per barrel. BP PLC (LON:BP) shares were up 3p or 0.67% at 449.5p and Royal Dutch Shell PLC (LON:RDSB) gained 12p or 0.58% at 2,165p.
UK housebuilder Redrow PLC (LON:RDW) was among the initial stock market winners, up 3.3% in opening trades, changing hands at 655.86p after hiking its dividend by 70% and telling investors that it was confident of another strong performance in the next financial year despite the challenges facing the housing market.
The housebuilder touched an all-time high this morning.
Halfords Group PLC (LON:HFD), meanwhile, rose 1.67% on a trading update for the 20 week period to August 18, showing a 4.8% rise in revenue (2.7% like-for-like) and guiding that full year group profit will be in line with expectations. It was boosted by a “staycation summer”, with more Britons opting to holiday at home due to the weaker pound.
Consumer products group Reckitt Benckiser Group PLC (LON:RB. was among Tuesday Morning’s notable losers, down just over 2%.
Despite the apparent robustness, CMC Markets analyst David Madden noted that the market may just be seeing some ‘short covering’ or ‘bargain hunting’.
“We have seen this scenario before where tensions rise and stocks fall, followed by no new developments, and then equities bounce back. The situation is still ongoing,” Madden said in a note.
He added: “not many investors would buy into the market for the long haul.”
9:46 - PMI stats suggest Britain is struggling to grow
The pound continued to languish, as a result of data rather than Brexit sentiment, with PMI services sector stats indicating the British economy having a tough third quarter, with the metric reaching an eleven month low.
Commenting on the PMI print of 53.2 for August (versus 53.8 in July) Capital Economics' Paul Hollingsworth described the economy as “struggling to pick up the pace” with the figure suggesting overall economic growth of 0.4% for the quarter – which is only slightly better than 0.3% marked for the prior three month period.
Christopher Williamson, chief business economist at HIS Markit, meanwhile, highlighted: “The pace of economic growth slipped to its lowest in six months in August, according to the latest PMI survey data, as an improved performance in the manufacturing sector failed to fully offset slower rates of expansion in services and construction.
“While robust manufacturing performance suggests the economy may be rebalancing towards goods production, aided by the weaker currency, the slowdowns in services and construction send warning signals about the health of the domestic economy.
“The survey data also showed employment growth hitting a 22-month high, though the combination of slower output growth and faster hiring points to lower productivity.
“Business confidence meanwhile perked up somewhat but remained historically subdued, highlighting downside risks to the outlook.”
8:20 - FTSE 100 makes positive start, investors tentatively regain confidence
London’s FTSE 100 was slightly higher in Tuesday’s opening deals, up 11 points or 0.16% to 7,423, as the market again tentatively regained some confidence after the latest North Korea concerns.
The FTSE 250, meanwhile, gained 63 points or 0.32% to trade at 19,761.
UK housebuilder Redrow PLC (LON:RDW) was among the initial stock market winners, up 5.8% in opening trades, changing hands at 655.86p after hiking its dividend by 70% and telling investors that it was confident of another strong performance in the next financial year despite the challenges facing the housing market.
Retailer Halfords Group PLC (LON:HFD), meanwhile, rose 1.67% on a trading update for the 20 week period to August 18, showing a 4.8% rise in revenue (2.7% like-for-like) and guiding that full year group profit will be in line with expectations.
Proactive news headlines:
EG Solutions PLC (LON:EGS) is set to be taken over by US data analytics giant Verint Systems Inc (NASDAQ: VRNT) after the back-office workforce optimisation specialist’s board accepted a £26.3mln offer. That works out at 112.5p a share; a 53% premium to the average price of 73.5p over the past six months but 11% below yesterday’s close of 126.5p.
Life sciences group OptiBiotix Health PLC (LON:OPTI) has signed a manufacturing agreement with India-listed food ingredients giant Tata Chemicals. It is an expansion of a deal the two inked last December and gives Tata, part of the Tata Group, the exclusive rights to produce a sugar from OptiBiotix’s LP-LDL probiotic strain.
Richland Resources Ltd (LON:RLD) told investors that it has raised £450,000 of new capital by issuing 64.28mln of new shares, priced at 0.7p each. Chairman Edward Nealon, in a stock market statement, highlighted that the share sUBScription was oversUBScribed.
Galileo Resources PLC (LON:GLR) told investors that its joint venture partner has agreed to complete the acquisition of Star Zinc in a deal worth US$1mln. Enviro Processing Zambia Limited, a subsidiary of Galileo’s partner BMR Group, agreed to pay Bushbuck Resources a total of US$1mln in cash to acquire Star Zinc.
C4X Holdings PLC (LON:C4XD) has told investors it is continuing to make progress towards its aim of becoming “the world’s most productive drug discovery and development company”. In a brief business update this morning, the AIM-quoted firm said it has advanced its key drug discovery programmes in addiction and inflammation.
Gold miner Shanta Gold Limited (LON:SHG) has launched a US$5mln cost cutting programme to offset increases in royalties and tax in Tanzania. The government in the African country has passed new mining laws and a finance act recently that has increased royalty payments on gold exports to 6% from 4% and imposed a 1% clearing tax.
Ariana Resources PLC (LON:AAU) has completed an initial exploration programme across the Hot Gold Corridor within its wholly-owned Salinbas gold project in Turkey. The Hot Gold Corridor is named after the 4 mln ounce Hot Maden deposit located approximately four kilometres south of the project licences.
IXICO PLC (LON:IXI) announced today that it has signed an extension and expansion to its largest existing contract for a Phase II/III clinical trial contract in Alzheimer's Disease. In a statement, the AIM-listed neuroscience digital technology firm said that consequently the total value of the contract - which was awarded in August 2015 - has increased from US$6.8mln to US$7.7mln, of which US$1.0mln has been recognised to date.
Ormonde Mining (LON:ORM) is pressing ahead with development at the Barruecopardo tungsten project, with major items of equipment now in the manufacturing stage and more on order. Work on the ground has already begun.
Strategic Minerals PLC (LON:SML) has set a new record for iron ore sales from its New Mexico tailings business. Its subsidiary, SMG, sold US$999,000 (13,897 tons) worth of magnetite from the Cobre operation in August against US$487,000 (7,206 tons) in July.
IronRidge Resources PLC (LON:IRR) has completed the acquisition of 100% of Tekton Minerals, which owns a number of gold mining licences in Chad. Tekton's technical and logistics team will join IronRidge, while the minority shareholders have also taken their consideration in shares.
Harvest Minerals LTD (LON:HMI) continues to deliver promising results from tests of its fertiliser product on coffee plants. The company is now shifting its focus to securing licensing and sales.
Sound Energy PLC (LON:SOU) told investors it has appointed JJ Traynor as the company’s new chief financial officer. The Morocco-focussed gas firm highlighted that Traynor will he finance, commercial, business development and investor relations functions.
6:50am: FTSE 100 to edge higher, with Asia stocks mixed as North Korea tensions continue
The FTSE 100 is seen edging higher at the open today, following mixed showings from Asian markets amid ongoing North Korean nuclear tensions and the lack of a lead from US markets, closed yesterday for the Labor Day holiday.
Spread betting firm CMC Markets expects the FTSE 100 index to open about 7 points firmer at 7,418, having shed around 27 points yesterday.
Overnight in Asia, Chinese stocks found some support but Toyko's Nikkei 225 index fell by around 0.5%, while US stock futures were also lower today following the fresh nuclear test and missile launch by North Korea over the weekend.
The White House declared on Monday that "all options to address the North Korean threat are on the table" and the US ambassador to the United Nations urged the "strongest sanctions" on the south-east Asian country.
There will be little else to provide much alternate direction in London today although the latest UK services PMI report will be released, completing a trio of leading indicators on the economy following mixed surveys on construction and manufacturing.
Retail reports mixed
Overnight a report from the British Retail Consortium showed UK retail sales grew by an annualised rate of 1.3% in August as shoppers increased their spending at the fastest pace so far in 2017, excluding Easter.
Although conversely another report, from credit card provider Barclaycard showed UK consumers increased their spending at a slower pace in August, and remained cautious about their finances.
Staying on the high street, on the corporate front, the latest trading update from bicycles to car parts retailer Halfords Group plc (LON:HFD) will attract attention on Tuesday.
The FTSE 250-listed firm’s performance is expected to be pretty good, although there may be some worry over the group’s future strategy with no news yet on who will replace current CEO Jill McDonald - who announced in October that she would be leaving to head up the Clothing, Home & Beauty division of Marks & Spencer Group PLC (LON:MKS).
READ: Halfords up as 7.5% drop in annual profits proves touch better than expected
Analysts at UBS expect Halfords to report a strong first-quarter, benefitting from a late Easter boost, forecasting growth in like-for-like sales of 4.5% for its Retail business.
The analysts noted that the weather has been mixed over the period with sunny spells at the beginning of the period helping cycling but high rainfall in August likely being unhelpful , although given the weak pound there may have been a bigger benefit from UK ‘staycations’.
Redrow resilient
The UK housing market is set to come under close scrutiny this week with a slew of earnings due from housebuilders, kicking with full-year results from mid cap player Redrow plc (LON:RDW) today.
In its last trading update, Redrow unveiled a record order book and said it saw a further increase in legal completions and average selling prices.
Liberum forecasts the FTSE 250-listed group reporting full-year pre-tax profit of £315mln, compared to £250mln last year, on an increase in sales to £1.6bn from £1.3bn.
Significant news expected on Tuesday September 5:
Trading update: Halfords Group PLC (LON:HFD), DS Smith PLC (LON:SMDS)
Finals: Craneware PLC (LON:CRW), A&J Mucklow Group PLC (LON:KLW), Mattioli Woods plc (LON:MTW), Redrow plc (LON:RDW)
Interims: 888 Holdings PLC (LON:888), Alpha Fx Group PLC (LON:AFX), Cairn Homes PLC (LON:CRN), Dalata Hotel Group Plc (LON:DAL), EU Supply PLC (LON:EUSP), Gamma Communications PLC (LON:GAMA), Lighthouse Group PLC (LON:LGT), Stadium Group PLC (LON:SDM), Spectra Systems Corporation (LON:SPSY), Vipera PLC (LON:VIP)
Traffic figures: International Airlines Group PLC (LON:IAG); Ryanair PLC (LON:RYA)
Economics: UK services PMI report; US factory orders
Around the markets:
- Sterling: US$1.2953, down 0.03%
- Gold: US$1,325.10 an ounce, up 0.7%
- Brent crude: US$47.43 a barrel, up 0.3%
City Headlines:
- Loss-making NatWest owner RBS could be hit with a £4bn fine from the US Department of Justice – Daily Mail
- Lloyds set for fresh consumer credit push as it promotes Boss of MBNA to take charge of all its cards business – Daily Mail
- Royal Mail facing prospect of Christmas shutdown as CWU prepares to ballot on strikes – City AM
- Sports Direct rebels gain Fidelity votes in revolt against chairman – The Times
- Exodus of bosses at scandal-hit Durex firm Reckitt Benckiser as it struggles with weak sales in wake of crippling cyber-attack– Daily Mail
- EasyJet travellers stranded in Paris after scorpion found on plane – The Guardian
- Opitbiotix biotech company signs sweet deal with Tata Chemicals – The Times
- Aveva set to unveil merger with Schneider’s software division – Daily Telegraph
- Barclays’ clients upset at delay in exiting stockbroking website – Financial Times
- Uber faces challenge from car-booking app backed by Chinese – Financial Times
- Boeing claims victory in long-running battle with Airbus over state sUBSidies – Daily Telegraph
- Citi poaches senior UBS banker as it builds industrials team – Financial Times
- United Technologies in US$30bn deal for Rockwell Collins – Financial Times
- Chicago Tribune owner Tronc buys New York Daily News – Financial Times
- VW and its China ventures recall 1.8mln cars over fuel pump issue – The Independent
- Mercedes-Benz plans to launch ride-sharing rival to Uber in London – The Independent
- Bell Pottinger expelled from PR trade body after South Africa racism row – The Guardian
- Three’s legal bid threatens 5G timetable – The Times
- Neil Woodford turns to crowd funding after Provident disaster: Fund Boss invests another £4 million in Seedrs – Daily Mail
- Value of classic cars and fine art plunges as photographs soar – The Guardian
- London developer to allow rental tenants to pay deposits in bitcoin – The Guardian