FTSE 100 closes at 7,413
London still world's most attractive financial centre
Apple to launch 'iPhone X' tomorrow
US stocks higher
FTSE 100 kept its head above the 7,400 level on Monday and closed almost 36 points ahead at 7,413 as US shares were on the up.
"The lack of hostilities in relation to North Korea and the downgrading of Hurricane Irma to a category one storm has prompted traders to buy back into the market.," said analyst at CMC Markets, David Madden.
Meanwhile, the mid-cap index FTSE 250 was up over 83 points to close at 19,694.
Brent crude lost ground and the cost of a barrel of the black stuff eased 1.38% to US$53.75.
In the currency markets, the pound was up 0.45% against the Euro and down 0.11% against the US dollar.
Top riser on Footsie was Provident Financial (LON: PFG), which gained 3.77% to 825p, while low cost carrier easyJet (LON:EZJ) flew 3.37% higher at 1,195p as news from the US suggested the storm damage was not as bad as feared.
Top loser was Primark owner Associated British Foods plc (LON:ABF), which shed 4.96% to 3,103p.
It comes despite investors in today’s pre-close update that its full-year results would beat what it posted in 2016.
Worries over cost pressures in ABF’s grocery business and expectations for currency tailwinds to reverse in the coming months offset the raised guidance, however.
3pm - US markets start on front foot
As expected, the US markets started the week on the front foot thanks to cooling tensions with North Korea and less-than-expected damage from hurricane Irma.
Financial stocks helped to lift the Dow Jones index back towards the 22,000 mark as it opened 182 points higher at 21,979.
Kura Oncology Inc (NASDAQ:KURA) was still shining after Friday’s successful trial results for its lead cancer candidate. The biopharma helped to propel the Nasdaq 72.9 points, or 1.1%, higher to 6,433.2.
The S&P also opened higher; up 19.8 points, or 0.8%, to 2,481.4.
FTSE 100 gives up some gains as pound strengthens
Back in London, the FTSE 100 gave up some of the morning’s gains once the US markets opened with a weaker dollar boosting sterling.
A stronger pound is generally bad news for the blue chips as it makes their foreign currency-denominated earnings worth less when translated back into sterling. It also makes exports more expensive to overseas buyers.
The blue chip index is currently up 26.3 points to 7,403.5.
AstraZeneca PLC (LON:AZN) has been towards the top of the leaderboard for most of the day after it announced positive results from two separate Phase III trials of a couple of its key lung cancer drugs.
The pharma giant is currently up 2.6%, or 125p, to £49.
Downgrading of Irma helps travel companies, insurers
Elsewhere, the downgrading of hurricane Irma to a category one storm and the fact that the damage hasn’t been as bad as initially feared has helped the travel companies today.
British-American cruise operator Carnival PLC (LON:CLL) is 2.5% higher to £51.65, while budget airline Easyjet PLC (LON:EZJ) has gained 2.2% to sit at £11.81.
Insurers were also liking the news that claims from the hurricane are likely to be lower than originally thought.
Aviva PLC (LON:AV.) (up 0.7% to 510p), Legal & General Group PLC (LON:LGEN) (up 1.3% to 257p) and Prudential PLC (LON:PRU) (up 1.4% to £17.87) were all boosted.
AB Foods and gold miners out of favour
Primark owner Associated British Foods plc (LON:ABF) has been out of favour despite telling investors in today’s pre-close update that its full-year results would trounce what it posted in 2016.
Worries over cost pressures in ABF’s grocery business and expectations for currency tailwinds to reverse in the coming months offset the raised guidance and shares fell 5% to £31 making it the biggest blue chip casualty.
Gold miners were also nursing losses today as the ‘risk-on’ attitude of the markets signalled a slide in the price of gold, which is traditionally viewed as a safe haven. Fresnillo PLC (LON:FRES) and Randgold Resources Limited (LON:RRS) both slipped by almost 1.5% to £16 and £80.10 respectively.
2.15pm...New plastic tenner to come into circulation this week
After the recent introductions of a plastic £5 note and a 12-sided £1 coin, the new £10 note is set to come into circulation later this week.
It will be shinier and smaller than the current tenner and feature the face of Pride and Prejudice author Jane Austen. Oh, it will also contain traces of animal fat.
The official release date is this Thursday and most bank branches are expected to have the new notes within a couple of days.
If the introduction of the new fiver earlier this year is anything to go by, keep any eye out on the serial numbers. Some of the early batches or notes with particularly significant numbers (such as AA01444444) sold for thousands on eBay.
The #NewTenPoundNote featuring Jane Austen: coming 14 September 2017. https://t.co/VMGsueavyh pic.twitter.com/f6PF9DWglM
— Bank of England (@bankofengland) July 18, 2017
1.20pm...US stocks to open higher
The FTSE 100 has enjoyed a strong start to the week so far, up 26.5 points to 7,404.1. It had been as high as 7,430 earlier on.
Airlines were flying high today, with the news that the damage from the US is likely to be not as bad as had been feared coupled with a seeming cooling of tensions between the US and North Korea boosting sentiment.
Easyjet PLC (LON:EZJY) rose 2.5% to £11.85, BA owner International Consolidated Airlines Group PLC (LON:IAG) added 1.4% to trade at 602p, while Wizz Air Holdings PLC (LON:WIZZ) also gained 1.1% to £29.
On the FTSE 250, doorstep lender Provident Financial PLC (LON:PFG) got a little bounce as it started life on the second tier, with shares up 3.8% to 824.9p. That said, the stock is still down more than 50% since it shock profit warning last month.
Among the small caps, UP Global Sourcing Holdings PLC (LON:UPGS) ran out of steam as it warned revenues were unlikely to grow until next year as consumers’ spending power comes “under pressure”. Shares slipped by 47.5% to 110.2p.
Looking ahead to market open in the United States, the strong trading seen in Europe looks set to continue.
Spread betting firms see all three major exchanges opening higher. The Dow Jones is expected to rise by 124 points at the opening bell to 21,925, while the tech-heavy Nasdaq is seen as opening 41.8 points in the black at 5,656.2.
Completing the sweep is the S&P 500, which is seen 12.8 points higher at 2,475.2.
12.50pm...Apple investors not deterred by latest leak
Apple Inc’s (NASDAQ:AAPL) 10th anniversary iPhone will be called the iPhone X and will feature facial recognition technology, a leak has revealed ahead of its official launch tomorrow.
The leak, reported by Apple-based publications 9to5Mac and MacRumors, revealed the company is planning on unveiling three new devices, including the iPhone X, the iPhone 8 and the iPhone 8 Plus.
The iPhone X is Apple’s premium version and is rumoured to be priced at close to US$1,000.
Apple's new IPhone X is apparently going to cost more than a grand. For that money I'd expect airplane mode to take me on friggin' holiday!
— Tony Shepherd (@tonysheps) September 11, 2017
The iPhone 8 and 8 Plus will be basic upgrades to the 7 and 7 Plus models and will feature wireless inductive charging, glass back panels and a new micro-processing chip, 9to5 Mac reported.
The leak is said to have come from a disgruntled Apple employee who wanted to sabotage the company.
Investors didn’t seem too bothered about the leak, with Apple shares rising 1.2% to US$160.60.
12.30pm...Reports: China to ban cryptocurrency exchanges
After months of scrutiny, Chinese authorities are reportedly planning on shutting down domestic bitcoin exchanges.
Only last week China’s central bank warned that, in its view, initial coin offerings were illegal and that any such activity should be blocked immediately.
According to press reports, the People’s Bank of China has taken it one step further and has led a draft of instructions that would ban Chinese platforms from providing virtual currency trading services.
The price of bitcoin is down 1.4% today at US$4,183 per coin.
Shiller says bitcoin is the best example of a bubble in the market today pic.twitter.com/2Lm5Ey1BKL
— Business Insider (@businessinsider) September 11, 2017
12.15pm…Kim Jong-Un the reason for Monday’s bullishness
“On a day that is largely devoid of any major economic releases of note, it is Kim Jong-Un who provides the unlikely source of bullish sentiment evident throughout global markets this morning,” said IG’s Josh Mahony.
“With North Korea celebrating the anniversary of the nation’s formation over the weekend, it has come as a surprise that we did not see a third consecutive weekend test from Kim Jong-Un.
Given that North Korea has provided one of the main drivers of volatility in recent weeks, today’s UN meeting over the potential implementation of further sanctions on the country will be crucial in gauging how likely we are to see further tests in the near future.
“With the US pushing for an oil embargo on North Korea, the Chinese and Russian decisions will be key, where their cooperation would be a kick in the teeth for Pyongyang leadership, sparking a likely military response.”
11.50am...London still the financial centre of the world
London has kept its crown as the world’s most attractive financial centre, despite fears that Brexit would see it drop down the rankings.
The City extended its advantage over its nearest rival New York, although Frankfurt and Dublin have narrowed the gap slightly.
The Z/Yen global financial centres index – which ranks cities on things such as financial infrastructure and jobs – said the gap between London and New York was as its widest since the survey began ten years ago.
Breaking #Brexit uncertainty leads to London retaining No 1 position as financial centre. Frankfurt in 11 & Paris no where to be seen #shock pic.twitter.com/Gm7CBI4NYD
— Steven Woolfe MEP (@Steven_Woolfe) September 11, 2017
11.30am...Hornby on the rails as CEO set to depart
Steve Cooke, the boss of Hornby PLC (LON:HRN), has become the first victim of the model train maker’s strategy review after just over a year at the helm.
No official leaving date has been set and Cooke will carry on chief executive for a short while yet, but both parties have mutually agreed to part ways once the transition period is over.
Hornby has been trying to reverse falling sales in recent years without much success and recently said that trading so far this year has been even weaker than expected.
The firm announced earlier this year that it was reviewing its strategy after its largest shareholder Phoenix Asset Management increased its stake.
"The position of Phoenix as Hornby's majority shareholder represents a new chapter in the development of the group and the board is working closely with Phoenix to set the direction of the business going forward.”
Shares in the toy manufacturer fell 4% to 27.4p.
11.05am ... Primark shows UK consumer 'tightening their purse strings'
“The UK has been singled out as performing particularly strongly, which would normally have positive read-across for the rest of the clothing sector,” said Hargreaves Lansdown analyst George Salmon.
“However, this probably isn’t the case this time. We feel Primark’s good domestic performance is more a sign the UK consumer is tightening the purse strings and moving down the value chain as inflation outstrips wage growth.
“At the moment, over a million square feet of sales space is being added every year, and this roll-out story means ABF shares trade on a more premium rating than many of its peers.
“The US is particularly important. Progress here looks good, but investors should remember that many other UK retailers have tried and failed to crack the notoriously competitive market across the pond.”
11am ... Insurers rally as hurricane Irma downgraded
British insurers are on the up thanks to the news that hurricane Irma isn’t likely to hit the US as badly as had been feared last week.
Aviva PLC (LON:AV.) (up 1.2% to 512p), Legal & General Group PLC (LON:LGEN) (up 2% to 259p) and Prudential PLC (LON:PRU) (up 1.9% to £17.96) were all boosted as Irma was downgraded to a category one storm.
The weakening of the storm – which made landfall in Florida over the weekend – means that the number of insurance claims is likely to be less than investors had been pencilling in.
“The damage caused will surely be costly, but the devastation wasn’t as bad as investors were bracing themselves for.”
Hurricane #Irma becomes a category one storm over Florida, with maximum sustained winds of 85 mph pic.twitter.com/yBjHMr1EIQ
— Jack Quann (@jqbilbao) September 11, 2017
10.45am ... British Land buoyed by Deutsche Bank upgrade
The FTSE 100 continues to bubble away nicely on a dreary morning here in London.
The blue chip index is currently up 47.8 points, or 0.7%, to 7,425.4 with drugs giant AstraZeneca PLC (LON:AZN) still leading the way.
Not too far is UK property developer British Land Company PLC (LON:BLND) after it was upgraded by Deutsche Bank.
Analyst at the German banking giant said it was reversing its bearish view of the UK real estate sector, adding that it sees the “best risk/ reward” in British Land, which it has moved to a ‘buy’.
“The portfolio is now weighted towards the less volatile West End and the near-term development pipe adds meaningful portfolio income.
“Recent disposals above book value and subsequent buybacks highlight good capital management and we increase our forecasts to reflect our positive outlook.”
After a strong run in recent weeks off the back of goings on in North Korea, the gold price gave up some of those gains today as it fell back by 0.6% to US$1,338.5 an ounce.
Unsurprisingly that weighed on gold miners Fresnillo PLC (LON:FRES) and Randgold Resources Limited (LON:RRS), which shed 1% and 1.5% respectively.
There was more trouble in Tanzania, this time for FTSE 250-listed Petra Diamonds PLC (LON:PDL).
The Tanzanian government accused Petra of under-declaring its mineral exports and blocked it from shipping a parcel of diamonds worth almost US$30mln.
As you’d expect, the miner denied any wrongdoing and said that government officials oversee its production and that is the government who determines the value of the stones and not the company.
That denial wasn’t enough to reassure shareholders and the stock is the worst performer on the second-tier; down 8.5% to 82.4p.
Perhaps investors are concerned that Petra might suffer a similar fate to Acacia Mining PLC (LON:ACA) which was also recently banned from exporting gold and copper concentrate from its Tanzanian mines.
8.40am ... AB Foods upgrades full-year outlook but investors aren’t buying it
Primark owner Associated British Foods PLC (LON:ABF) has upped its full-year guidance, thanks as ever to the continued strong performance of its value fashion chain.
On top of that, the group’s food business is also performing well in its fourth quarter. As a result, ABF said it expects to “report good growth in adjusted operating profit and adjusted earnings per share for the group for the full year.”
It added that full-year sales should be 13% ahead of last year on a constant currency basis, with like-for-likes up 1%.
There was also news of an acquisition after AB Foods announced it had signed an agreement to snap up leading Italian vinegar producer, Acetum.
All of that wasn’t enough for investors who were obviously hungry for more; shares dipped 1.2% to £32.28 on Monday morning.
Proactive news headlines:
ANGLE PLC has established a co-marketing agreement with QIAGEN NV, a world-leading provider of molecular testing solutions. The AIM-listed liquid biopsy firm said the partnership will “seek to leverage the advantages of combining ANGLE's world leading Parsortix system for harvesting circulating tumor cells (CTCs) with QIAGEN's liquid biopsy solution portfolio".
North Sea focused Jersey Oil & Gas PLC (LON:JOG) has revealed that the Statoil operated Verbier exploration has been unsuccessful, finding the target reservoir to be water bearing and deeper-than-expected.
Mosman Oil And Gas Limited (LON:MSMN) has unveiled its latest acquisition in North America, picking up the Welch Permian basin project in West Texas in a US$310,000 deal. The company said the project, located about 550 kilometres from Dallas, comprises ten existing production wells plus ten shut-in wells and seven injectors. It presently produces around 34 barrels of oil per day.
Rose Petroleum PLC (LON:ROSE) has announced that a binding stock purchase agreement (SPA) has now been signed with Magellan Gold Corporation in relation to the previously proposed deal for Rose’s metal processing operation in Mexico.
Tlou Energy Limited (LON:TLOU) boss Tony Gilby has handed in his annual report card on what he called a “phenomenal year” for the company.
Michael Travia, managing director of fast-growing office productivity software group BOS GLOBAL Holdings (LON:BOS), has quit the company.
Atlantis Resources Limited (LON:ARL) noted that, as expected, its MeyGen Limited subsidiary was not awarded a 2071 contracts for difference allocation for renewable energy projects by the UK Department for Business, Energy & Industrial Strategy (BEIS). However, the AIM-listed tidal power generation firm it has commenced a dialogue with BEIS officials to “recognise the benefits of either a bi-lateral CfD discussion or the reintroduction of a marine energy sub-category in the next allocation round, either of which would be welcomed by Atlantis.”
Be Heard Group PLC (LON:BHRD) saw “exceptional revenue growth” in the first half and expects the growth rate to pick up in the second half.
Genedrive PLC (LON:GDR), the molecular diagnostics company, said its Genedrive HCV ID kit has achieved CE certification under the EU Medical Devices Directive.
Seeing Machines Limited (LON:SEE) saw like-for-like revenues soar once again last year and the eye-tracking technology specialist has now set its sights on turning over US$100mln by the end of 2019. Like-for-like sales more than doubled in the year ended 30 June to A$13.6mln (2016: A$6.1mln), driven by another strong performance from its Guardian fleet division.
Allergy Therapeutics PLC (LON:AGY) has strengthened its clinical research team with two senior appointments. Pieter-Jan de Kam joins as clinical director, while Simon Piggott will become head of clinical science.
Diversfied Gas & Oil PLC ‘s (LON:DCOG) production surged in the half year to June as the recent package of 1,300 wells in the US contributed for the first time.
Ortac Resources Ltd (LON:OTC) has announced that from henceforth it will focus on two gold projects in Africa held as investments, Casa Mining and Zamsort. The move follows the appointments of Nick von Schirnding and Brian McMaster to the board and the passing of all resolutions at an AGM last week.
8.20am ... AstraZeneca leading the way for the blue chips
The FTSE 100 has started the week in steady fashion, up 31.6 points to 7,409.2.
AstraZeneca PLC (LON:AZN) is currently leading the way after it announced positive results from two separate Phase III trials of a couple of its key lung cancer drugs.
The Pacific trial of Imfinzi showed an improvement in progression-free survival by 11 months compared with standard of care in patients with locally-advanced unresectable lung cancer.
In the Flaura trial, Tagrisso reduced the risk of progression or death in patients with and without brain metastases by more than half.
Shares in the pharma giant jumped 3.1% shortly after the opening bell to £49.20 as Astra’s stock continues to recover from the disappointing Mystic study results in July.
On the second tier, Carillion PLC (LON:CLLN) took another bashing after its finance director Zafar Kahn, along with a slew of other top executives, stepped down.
The boardroom shake-up comes just a couple of months after the construction and support services group initiated a strategic review following a shock profit warning.
AIM-quoted Jersey Oil and Gas PLC (LON:JOG) was struggling down in the minor leagues after striking out with its Statoil-operated exploration well.
The North Sea-focused explorer said drilling had showed the target reservoir to be water bearing and deeper-than-expected.
Investors had pinned a lot of hope on this particular target and shares collapsed by more than 80% as soon as the market opened to sit at 42p.
6.45am ... FTSE 100 seen higher at open
The FTSE 100 is seen opening higher following overnight gains in Asia as an easing of worries over the nuclear threat from North Korea offsets concerns about the impact of Hurricane Irma on the US state of Florida.
However some caution is also likely as investors await a key batch of UK data and the latest Bank of England policy meeting later this week.
Spread betting firm CMC Markets expects the FTSE 100 index to open around 28 points higher at 7,405 having closed 19 points lower on Friday.
On Friday, US markets ended mixed and fairly subdued, with the Dow Jones Industrials adding just 13 points at 21,797, while the broader S&P 500 index and tech-laden Nasdaq both ended modestly lower as investors waited to see what impact Hurricane Irma will have on Florida.
But Asian markets managed more substantive gains today as North Korea's leaders choose to party this weekend rather than launch more missiles. Japan's Nikkei 225 added over 1.3% helped also by a weaker yen versus the dollar which boosted exporters.
No important UK economic data will be released today – although inflation numbers come tomorrow and unemployment and average earnings will be released on Thursday – so the main focus will be on the week’s early corporate news.
Primark sales eyed
Associated British Foods PLC (LON:ABF) should attract the most attention with blue chip food to clothing retail conglomerate issuing a fourth quarter trading update.
Conditions at the group’s high street discount fashion chain Primark, as always, will be the main focus.
In a preview, analysts at JPMorgan said they expect Primark to deliver fourth quarter like-for-like sales growth of +2%, which would take the chain’s full-year like-for-like increase to +1%.
Overall, they are forecasting Primark’s full-year constant currency sales to grow by +13%, in line with the 9-month trend.
The analysts said: “We expect management to reiterate its full year expectation for ‘good growth’ in group adjusted operating profit & EPS and forecast +20% & +17% yoy, respectively “.
They said they also expect AB Food’s management to highlight some upside risk to Primark profitability if current euro strength is maintained.
And the analysts think recent currency moves should also be favourable for the firm’s British Sugar business, although they added that they are mindful that, given a decline in the world sugar price, it is possible this simply offsets some underlying downside risk to current sugar forecasts.
Significant events expected on Monday September 11:
Trading update: Associated British Foods PLC (Q4) (LON:ABF)
Finals: Abcam PLC (LON:ABC), K3 Capital Group Plc (LON:K3C), 1pm (OPM)
Interims: Be Heard Group PLC (LON:BHRD), Cloudcall Group PLC (LON:CALL), Crossrider PLC (LON:CROS), Deltex Medical Group PLC (LON:DEMG), EKF Diagnostics Holdings PLC (LON:EKF), John Laing Intrastructure Fund PLC (LON:JLIF), Luceco PLC (LON:LUCE), Pennant International PLC (LON:PEN), Restore PLC (LON:RST), XLMedia PLC (LON:XLM)
Around the markets:
- Sterling: US$1.3173, down 0.2%
- Gold: US$1,346 an ounce, unchanged
- Brent crude: US$47.86 a barrel, up 0.8%
City Headlines:
- Carillion finance chief set to quit troubled company – The Times
- Shell strikes Nigerian gas pipeline infrastructure deal – Financial Times
- Barclays’ email raises questions on banks’ ‘no-poach agreement’ – Financial Times
- Noel Edmonds says litigation funder will bankroll his £300mln battle with Lloyds – The Guardian
- Robot tank concept from BAE raises questions about computers controlling weapons – Daily Telegraph
- Deltic nightclubs steps up its bidding for Revolution Bars – The Times
- JD Sports on track to post sales jump – City AM
- French DIY website raises €6mln to take on B&Q – Financial Times
- Apple tests customer loyalty with US$1,000 iPhone – Financial Times
- Goldman Sachs to take on UK retail banks – Financial Times
- Bell Pottinger Middle East bids to split from parent firm as administration nears – The Guardian
- Leaving EU customs union to cost UK businesses £4bn a year, study shows – The Independent
- Banks warned to play fair on PPI mis-selling claims – The Times
- European private banks suffer first profits drop since 2009 – Financial Times
- China mulls going electric with aim to ban petrol and diesel cars – Daily Telegraph
- Bitcoin value falls as China plans to close local exchanges – The Times
- Half a million face hikes of up to £400 on their energy bills as fixed tariff deals come to an end – Daily Mail