FTSE 100 closes higher
Boris pressures May over Brexit plan
Marks & Spencer top Footsie gainer
FTSE 100 hung onto gains on Tuesday to finish higher, with food retailers doing well.
The UK blue-chip benchmark closed up 21.97 at 7,275, while FTSE 250 gained over 97 points at 19,535.
In the currency markets, sterling rose initially before losing 0.29% against the Euro and 0.07% against the US dollar.
In the UK, Kantar Worldpanel released data on the food retail industry showing sales had risen 3.6% in the 12 weeks to September 10 prompting a rise in retailers.
Marks & Spencer (LON:MKS) was top gainer on Footsie, up 3.47% at 340p, while Sainsbury (LON:SBRY) also did well - ahead by 2.57% at 243.10p.
Meanwhile, on the losing front, TUI AG shares (LON:TUI), the travel firm, dropped 2.20% to 1,287p.
Traders now turn attention tomorrow's Fed meeting start and US benchmarks are all in positive territory at the time of writing.
David Madden, analyst at CMC Markets, notes today's stability in stocks but sees potential negative headwinds ahead.
"The FTSE 100 is bouncing back from Friday’s major drop in value. Last week the British market crashed through the significant 7300 region, and if that mark isn’t re-taken, the wider bearish outlook could remain," he said.
3.30pm - FTSE 100 up nearly 25
The FTSE 100 was up just shy of 25 points, 0.33%, changing hands at 7,278 with just under an hour until Tuesday’s close.
On Wall Street, the Dow Jones started positively rising around 18 points or 0.08% to 22,355 while the S&P 500 and Nasdaq also edged slightly higher.
It marked the Dow’s latest new high at the open as the market weighs a clutch of corporate results, Communications giant Sprint Corp (NYSE:S) saw shares add over 7% to US$8.22 as reports emerged of possible merger talks between it and T-Mobile.
CNBC reported that according to sources the pair are in active talks on merging the two wireless companies. T-Mobile US Inc (NASDAQ:TMUS) shares added 2.54% to $63.41.
1:55pm: Boris Johnson Brexit row, Cable to call for new vote
Brexit may be becoming little more than an irritating background noise for many investors, nonetheless, the headline writers are being kept busy by London’s former mayor Boris Johnson who has threatened to resign if Prime Minister Theresa May doesn’t accept his ‘Brexit demands’.
On an admittedly quiet day’s trading, the political unrest nudged the British pound higher and took a sliver off equities. The FTSE 100 was up around 15 points or 0.22% at 7,268 at around 2pm.
“May will deliver a keenly anticipated speech in Florence on Friday where she is expected to provide more details on her Brexit goals,” said David Cheetham, analyst at online trading house Xtb.
“The latest news is a further ratcheting up of the pressure on the PM from Boris following an article in the weekend press from the foreign secretary which reaffirmed his opposition to a ‘soft’ Brexit.
Cheetham added: “The rise in sterling since the news is modest compared to recent rallies but it shows nonetheless that the markets are closely watching the latest political developments with a keen eye.”
Complete loss of authority for Theresa May. She should fire Boris Johnson on Monday morning or her credibility will be reduced to zero
— Vince Cable (@vincecable) September 17, 2017
Elsewhere, Liberal Democrat leader Vince Cable – who this weekend suggested May should fire Johnson - is reportedly preparing to call for a fresh Brexit referendum at the party’s conference in Bournemouth today.
12:50pm: FTSE 100 continues higher, attention on US market as Fed meeting kicks off
The FTSE 100 continued into positive territory after Tuesday lunch, up 27 points or 0.38% to 7,280, with attentions largely on the US where the Federal Reserve is kicking off a two day interest rate meeting.
In premarket, Wall Street’s Dow Jones and S&P 500 were both higher whereas the Nasdaq was slightly lower.
12:20pm: UK supermarkets rise as customers flock to own-brands
London’s listed supermarket retailers moved positively following the release of grocery sector data which showed that the sale of higher margin own-brand products is on the rise, amid continuing food price inflation.
Data from Nielsen indicated that own-brand sales were growing significantly faster, about five times, than the major consumer brands.
The trend was particularly evident for so-called ‘discount supermarkets’ like Lidl and Aldi, neither of which are listed in London.
Both Lidl and Aldi are also seen to be taking more market share from their more expensive rivals, according to a periodic industry study from Kantar Worldpanel, also out today. Kantar highlighted that the two German grocers now accounted for £1 in every £8 spent in supermarkets by UK consumers, compared to £1 in £25 a decade ago.
Some 63% of UK consumers shop with one of the two retailers in the past three months, up from 58.5%.
The Kantar data also indicated grocery inflation of 3.2% for the twelve weeks up until September 10.
Shares in Tesco Plc, J Sainsbury plc (LON:SBRY), Marks and Spencer Group Plc (LON:MKS), and WM Morrison Supermarkets Plc (LON:MRW) all traded between 1% and 3% higher, whereas e-commerce grocer Ocado Group Plc (LON:OCDO), meanwhile, slumped around 2% as it revealed in an update that it had seen a reduction in customer order size.
11:50pm: UK called on to intervene over problem debt
The government has been called on to help tackle a mountain of debt held by Britain’s most vulnerable consumers, that’s according to a report by The Guardian.
Citing figures from the Money Advice Service, The Guardian says the UK now has some 8.3mln with problem debts.
It also highlighted figures from debt charity StepChange which indicate that more than 40% of its clients were behind on payments in the first half of this year while the average amount owed increased.
The Financial Conduct Authority chief Andrew Bailey told the paper he was that he was concerned about the number of people that need loans to make ends meet, and particular mentioned the uncertainty for those in the so-called ‘gig economy’.
11:00am: FTSE 100 stays higher as investors await direction
The FTSE 100 stayed higher in late afternoon trading, up 20 points or 0.29% at 7,274, as investors continued to seek real direction from the market.
“European equity markets are a mixed bag today as there has been no major change to the global political or macro-economic environment,” said David Madden, analyst at CMC Markets.
The analyst added: “The Federal Reserve start their two day meeting today, and tomorrow we will get their decision. Traders are not expecting any change to the interest rate, but we are likely to hear about the balance sheet reduction.
“Opinion is still divided over whether the Fed will hike in December or not, and the statement and press conference tomorrow will hopefully shine some light on the situation.”
9.30am: Footsie pushes higher
The FTSE 100 was holding positive ground on Tuesday Morning, up around 14 points or 0.2% at 7,267, with investors keeping calm ahead of a US interest rates call later this week.
Last night, Wall Street managed a positive close whereas Asian trading was more mixed.
In London, there was a reasonable number of corporate updates – notably a US FDA approval for one of GlaxoSmithKline’s new drugs – but, no single stock really caught fire in early transactions.
As investors have likely come to expect, the volatility was in the junior AIM market.
Mongolia focussed oil explorer Petro Matad Ltd (LON:MATD) slumped more than 35% in Tuesday’s early deals after it told investors that a contracted drill rig won’t be certified and ready in time for the 2017 drill season and instead the planned three-well exploration programme will be delayed until spring 2018.
Petro Matad also announced that chief executive Ridvan Karpuz will be stepping down in October as the company implements a strategy to “re-structure the company's executive management to bring onboard senior executives with proven operational and commercial track record.”
The explorer’s shares were down 37% at 6.45p.
Elsewhere on AIM, junior drug discovery group ValiRx Plc (LON:VAL) moved lower, with its shares down 20% at 1.13p, following an issue of new equity with £500,000 brought in to help advance the clinical dose escalation of drug candidate VAL201 as well as other late preclinical development and working capital purposes.
Back in the main market, e-commerce grocer Ocado Group Plc (LON:OCDO) traded 5.2% lower at 286.3p following the release of its third quarter revenues.
Gulf Marine Services Plc (LON:GMS) shares were down 3.5% as it cautioned over its “tough environment” and revealed a drop in profits.
8.45am: FTSE 100 to marks time as minds focus on US interest rates
The FTSE 100 marked time as it resisted the pull from New York overnight, which made a foray into record territory, and stood pat as ahead of the start of two days of deliberations over US interest rates.
The index of blue-chip shares fell just two points 7,251.01 on negligible volumes.
The big Footsie riser early on was Ferguson (LON:FERG), the America focused building supplies company formerly known as Wolseley. The shares were up 2% ahead of results later in the week boosted by an upgrade from US broker Citigroup.
Trading from grocery delivery giant Ocoda (LON:OCDO) failed to impress the market as the shares were marked down 5% early on.
Proactive news headlines:
Myanmar-based social media group MySQUAR Limited (LON:MYSQ) will in future be able to access customers and subscribers on the Ooredoo telecoms network. In addition, MySQUAR will use Ooredoo's carrier billing service (purchases are made by deducting from the phone balance) for its mobile applications and games.
Mobile payments group Bango plc (LON:BGO) ended the first half of 2017 with enough cash to fund it through to profitability. Adjusted underlying losses, or LBITDA, for the first half of the year totalled £1.01mln versus LBITDA in the same period of last year of £1.64mln.
Rainbow Rare Earths LTD (LON:RBW) is shortly to commence mining and sales of rare earths from its mine in Burundi. The value of the basket of rare earths that the company will produce is up by 80% in the year-to-date.
Action Hotels PLC (LON:AHCG) said current trading remained “on track with current expectations” despite headwinds in some Middle East markets. “[The performance] underpins Action's resilient business model in the economy and midmarket hotel sector, with low break-even levels and the recently opened hotels delivering growth,” it added.
Trading in the second half of the year has been in line with expectations at video games services provider Keywords Studios PLC (LON:KWS).
OptiBiotix Health plc (LON:OPTI) is to launch an improved version of its hunger suppressant/weight loss product Slimbiome at a major US trade fair at the end of the month. The new formulation is a single homogenous product, a development that reduces separation in transport and makes it available in places such as in-store bakeries where previously it might have been difficult to blend or remix.
Adam Reynolds, chairman of the fertility specialist Concepta PLC (LON:CPT), said he expects the Chinese launch and CE marking in Europe of its lead product, myLotus, to occur in the first half of next year. The certification of its Doncaster plant, meanwhile, is expected to be complete by the end of 2017. The three landmarks will prime the business for commercial success.
Background checks specialist Clearstar Inc (LON:CLSU) achieved record half-year revenues in the first six months of 2017.
ValiRx Plc has raised £0.5mln through a placing of 50mln new ordinary shares at a price of 1p each. The AIM-listed biotechnology company said the funds raised will be used for “advancing the clinical dose escalation of VAL201 and for further progressing the late pre-clinical development of GeneICE and general working capital purposes.”
Brady Plc announced today that it has been awarded a contract by Gaelectric Trading and Market Services Limited (GTAMS), one of Ireland's leading energy trading and market services providers, for its I-SEM (Integrated Single Electricity Market ) Cloud solution product. No financial details of the contract were revealed .
ITM Power plc (LON:ITM) has sold a 1.1Mw hydrogen electrolyser to EnergyStock, a subsidiary of Gasunie, the Dutch gas transmission network operator. No details of the financial aspects of the contract were announced, but ITM said the sale was won in a competitive tender process and includes after-sales support.
US-based cell engineering technology firm MaxCyte Inc (LON:MXCT) said it continued to make progress in all areas as it lifted the lid on it financial and operational performance in the first half. Probably the highlight of the period was the US$27mln (£20mln) it raised from investors in April, which not only put the company on a firm financial footing, but provided its CARMA technology third-party validation.
Bezant Resources plc (LON:BZT) has produced its first platinum and gold from the Choco project in Colombia. The company will shortly move into higher value virgin gravels. It is a rare example of a platinum producing company outside of South Africa or Russia.
Asiamet Resources PLC (LON:ARS) has commenced drilling on the readily accessible BKZ prospect in Indonesia, a stand-alone high value polymetallic target, located less than 800 meters north of the feasibility-stage BKM copper deposit. A total five holes are planned and first assays are expected by end September.
Rose Petroleum PLC (LON:ROSE) has reached a new agreement which will see the group explore lithium as well as oil and gas in Utah’s Paradox basin. The company told investors that it is currently investigating the potential for the commercial extraction of lithium from the salar brines that exist within the Paradox basin.
Hurricane Energy PLC (LON:HUR) has told investors that its convertible bonds are now listed on the Official List of The International Stock Exchange. The issue, US$230mln of 7.5% bonds due 2022, has an International Stock Exchange symbol of HURCOVNT.
Columbus Energy Resources PLC (LON:CERP) confirmed in a stock market statement that it had issued some 20.3mln new shares in the company to Lind Partners in accordance with its revised convertible security agreement. It is expected that the admission of the new shares will become effective for trading on September 22.
6.45am: Slow start expected
The FTSE 100 is seen opening modestly higher today, consolidating yesterday's gains after further record closes overnight on Wall Street although Asian markets wobbled slightly today.
Spread betting firm CMC Markets expects the FTSE 100 index to open around 3 points higher at 7,256, having added 37.81 points yesterday.
Overnight in New York, the Dow Jones Industrials closed 63 points higher at 22,301, another all-time peak, while the broader S&P 500 index ended at records highs for a second straight session.
In Asia today, Japan's Nikkei 225 jumped 1.5% higher having been closed for a public holiday on Monday, but overall the mood was slightly weaker.
Investors welcomed an easing of tensions over North Korea's nuclear threat, but were cautious about the impact of another Hurricane, Maria which is further devastating islands in the Caribbean and the prospect of higher interest rates in the UK and the US.
Interest rates focus
The latest two-day Federal Reserve FOMC meeting kicks off today and a rate decision - due around 7.15pm London time on Wednesday - could see the US central bank unveil another hike in rates, although most commentators expect them to hold fire.
The US central bank has guided to three rate hike this year and so far it has managed just two, so another is due either at this meeting or at those in November or December.
However, the futures markets is putting a zero percent chance on a rate rise and a 1% chance on a rate cut this time out – so that means consensus is for no change, at 1.25%, Meanwhile the market is putting a 56% chance on the third hike occurring at the December meeting.
Meanwhile further hints yesterday from Bank of England governor Mark Carney have ratcheted up expectations for a UK rate by the year-end, helping keep sterling buoyant above the US$1.35 level.
Food price boost for Ocado
On the corporate news front, the ongoing recovery in food price inflation should have benefited online supermarket group Ocado PLC (LON:OCDO), which issues a third quarter trading update.
Deutsche Bank estimates Ocado reporting growth of 16% in its weekly orders for the 13 weeks to 27 August, driven by 1.8% growth in the average order size.
That should drive total retail sales growth of 18%, the German bank’s analysts think, an increase on the 13% growth in the first half when average order size had seen a 1.4% decline.
Back in early June, Ocado announced its first international licensing deal with an un-named regional player for software only, and any more detail, or further international deals are sure to be welcome
Significant events expected on Tuesday September 19:
Trading update: Ocado Group PLC
Finals: Eagle Eye Solutions PLC (LON:EYE), Purecircle Limited (LON:PURE))
Interims: Anpario Plc (LON:ANP), Augean PLC (LON:AUG), Bango plc (LON:BGO), DP Eurasia NV (LON:DPEU), Escher Group Holdings PLC (LON:ESCH), Flowgroup PLC (LON:FLOW), Gulf Keystone Petroleum Ltd (LON:GKP), Gulf Marine Services PLC (LON:GMS), Judges Scientific PLC (LON:JDG), Keywords Studios PLC (LON:KWS), MaxCyte PLC (LON: MXCT), NAHL Group plc (LON:NAH), Sinclair Pharma PLC (LON:SPH), Yu Group PLC:YU.)
Economic data: US housing starts, building permits
Around the markets:
- Sterling: US$1.3527, up 0.3%
- Gold: US$1,305.60 an ounce, down 0.1%
- Brent crude: US$49.89 a barrel, down 0.1%
City Headlines:
- RBS avoids forced sale of Williams & Glyn – Daily Telegraph
- Carillion’s former finance Chief quits board at Firstgroup – The Times
- Hotel giant IHG launches new brand in U.S. for ‘underserved’ $20 billion market – Daily Telegraph
- Kingfisher’s B&Q profits crash to be blamed on wet summer and property slow-down – Daily Express
- Cancelled flights land Ryanair with €25 million bill – Financial Times
- Daily Mail owner says no plans to sell Metro freesheet – Financial Times
- Monarch mulls short-haul restructuring and take-off for long-haul ambitions – City AM
- Toys 'R' Us files for bankruptcy ahead of holiday season - Reuters
- General Motors recalls 2.5 million cars over faulty Takata airbags – The Independent
- Google launches smartphone payments app in India – Financial Times
- Google and Facebook forecast to increase share of U.K. digital ad market to 55% next year – City AM
- Cisco Boss John Chambers to stand down after 27 years at the top – Daily Telegraph
- Rolling Stone for sale: Founder Jann Wenner is selling his magazine – The Independent
- CBS raises bid for Ten Network ahead of creditors’ meeting – Financial Times
- Gates Foundation invests $40 million into U.K. biotech firm Immunocore – City AM
- Household rubbish to be turned into jet fuel for British Airways under ground-breaking plans to cut carbon emissions – Daily Mail
- Pound sterling will not hit euro parity this year, says HSBC – The Independent
- South Africa’s tax authority threatens legal action against KPMG – Financial Times
- Mystery over shredded €500 notes in Swiss sewers – The Guardian