FTSE 100 rises on Friday afternoon, as sterling falls
Theresa May asks Europe for two year 'transition period'
North Korea rhetoric ramping up again
Close: FTSE 100 consolidates gains in final hour
London's blue-chips received a fillip from the Prime Minister's address in Florence.
“The main takeaway for markets is a more formally expressed desire to pursue a transitional arrangement of ‘around two years’, from when the time limit following the triggering of Article 50 expires, presumably beginning from March 2019,” commented Tim Graf, EMEA head of macro strategy at State Street Global Markets.
“For the near-term, negotiations may likely be hampered by the lack of detail offered on the main items for discussion, namely the Irish border question, the ultimate financial settlement with the EU and the rights of EU citizens. European Commission Chief Negotiator Michel Barnier was not given much new to work with on these points. While the pound weakened and UK rates fell during the speech, these moves were quite muted, perhaps an appropriate reaction to a speech carrying very little new information,” Graf said.
The FTSE 100 closed at 7,311, up 47.
3:20pm: FTSE 100 strengthens as May asks Europe for two more years
London’s FTSE 100 strengthened through Friday afternoon as Prime Minister Theresa May addressed a crowd in Florence where she spoke of Britain’s plans for Brexit.
The blue-chip benchmark was up just over 40 points shortly after 3:00pm standing at 7,304.
In the speech, May asked Europe’s leaders to agree a “bold and ambitious” trade deal and set out what is being described as a two year "implementation period" immediately after Britain’s planned European exit in March 2019 ahead of permanent trade arrangements.
According to reports, May would be prepared to allow Britain to pay some US$20bn into the European budget during the proposed transition period.
In terms of over-hyped speeches, I'd say this is up there
— Mike van Dulken (@Accendo_Mike) September 22, 2017
2:00pm: J Sainsbury and Morrison cuts fuel prices
Good news for anyone planning to drive themselves once Uber shuts down in London, supermarket retailers J Sainsbury plc (LON:SBRY) and WM Morrison Supermarkets Plc (LON:MRW) are cutting prices on the forecourt.
Sainsbury’s is slashing 2p per litre for petrol and 1p per litre for diesel, according to reports, meanwhile, Morisons intends to reduce prices of both fuels by 2p per litres.
Wal Mart’s ASDA is also cutting prices, setting a cap of 116p per litre for petrol and 117p for diesel.
In London, on Friday, the capital’s transport authority blocked Uber form renewing its licence to operate - impacting some 3.5mln passengers that have used the service.
12:30pm: FTSE 100 turns higher ahead of May’s Brexit speech
FTSE 100 turned higher in Friday’s early afternoon deals, up 8.5 point or 0.12% at 7,273, despite an apparent ‘risk off’ attitude among investors.
While the London benchmark was higher, New York futures point to a lower open on Wall Street.
The Dow Jones is seen down 15 points at around 22,318 while the S&P 500 and Nasdaq were both also seen in negative territory.
Risk averse investors need not look too long to find reasons to be fearful.
There’s the apparent re-ignition of the public rhetoric between US President Donald Trump and North Korean leader Kim Jong-un, there’s another hurricane in the Caribbean, Prime Minister Theresa May is going to speak publicly about Brexit and Germany has an election over the weekend.
Oh, and if that wasn’t enough to factor into your portfolio, a Christian numerologist reckons the world is about to end!
The world could end TOMORROW claims Christian numerologist https://t.co/Zk70BJIJZ0
— Daily Mail Online (@MailOnline) September 22, 2017
Assuming the earth and the London Stock Exchange are still here on Monday, the market will be left with a fairly quiet corporate schedule for the final week of September.
READ: Tour operators TUI and Thomas Cook and utilities in week ahead
10:15am: FTSE 100 on the back foot with low risk appetite ahead of weekend
The FTSE 100 was on the back foot on Friday morning with risk appetite low heading towards the weekend.
Rhetoric continues to ramp-up between North Korea and the West, the forex markets have been digesting this week’s Fed’s guidance and Britons await May’s Brexit speech.
Standing at 7,256 London’s blue-chip FTSE 100 benchmark was down around 7 points or 0.1%.
Lamprell PLC (LON:LAM) was the morning’s notable faller, losing as much as 12.78% to 86.56p after investors saw interim revenues slump and the oil services company said it expected little improvement for eighteen months.
The small cap segment, meanwhile, provided some of the bigger losers with Intelligent Energy Holdings PLC (LON:IEH), Premier Veterinary Group PLC (LON:PVG), and IndigoVision Group PLC (LON:IND).
8:50am: FTSE 100 subdued early on after Trump rhetoric; gold in demand
The FTSE 100 kicked off Friday in subdued fashion with index of blue-chip shares off 20 points at 7,243.64 amid the ratcheting up of tensions between Washington and Pyongyang.
Haven investment gold was in demand. It rose US$5.40 an ounce and was dragged above the US$1,300 mark (it was trading at US$1,300.20 at 8.40am) following Donald Trump’s aggressive rhetoric at the UN General Assembly Thursday.
Randgold Resources (LON:RRS), a producer of the yellow metal, was among the early risers, but the field was led by B&Q and Screwfix owner Kingfisher (LON:KGF), which was up 1%.
The retailer was boosted by a trickle of earnings upgrades following Thursday’s results and trading update that wasn’t quite as bad as it could have been.
The fall in copper price following the Fed meeting on Wednesday finally worked its way through to the mining stocks with Chilean red metal specialist Antofagasta (LON:ANTO) off 2% alongside BHP Billiton (LON:BLT), Anglo American (LON:AAL) and Glencore (LON:GLEN).
Top of the fallers was engineer Smiths Group PLC (LON:SMIN), which reversed almost 4% after its annual earnings statement warned growth in the current year would weigh in the second-half.
Proactive news headlines:
Iofina PLC (LON:IOF) is confident it can improve profitability and revenue as it takes advantage of an improved iodine marketplace. Spot prices have risen 25% to US$24 per kg since the start of the year and continue to head north, and moving forward, the group will increase output but at lower unit costs.
Rose Petroleum PLC (LON:ROSE) is raising £3mln in new capital through an issue of shares, with the cash earmarked for programmes in the Paradox basin, Utah. It is issuing 75 mln new shares to new and existing investors at a price of 4p, compared to Thursday’s closing price of 5p.
VAST Resources PLC (LON:VAST) is aiming to re-open its Baita Plai Polymetallic mine in Romania in the middle of 2018, it said, posting full year results for the year to end March - a period, which saw output at its two existing mines rise. The group passed a major hurdle last month, when it received the right to mine at Baita Plai in Romania, where the firm also has the Manaila mine.
Westminster Group PLC (LON:WSG) said it had made “significant progress” on a long-term project in the Middle East and promised a further update “shortly”. At a reported £35mln a year, the airport deal would be transformational. It is one of several contracts currently under negotiation that are part of the security company’s increased focus on managed services.
Tharisa PLC (LON:THS) says it expects to produce 150,000 ounces of PGM (platinum group concentrate) and 1.4 Mt (million tonnes) of chrome concentrates in full year 2018, as it said its accquisition of MCC’s assets was now unconditional and effective from October 1. As reported previously, Tharisa will buy from MCC certain existing mining equipment, spare parts, as well as transfer employees currently on site and deployed at the Tharisa mine in South Africa
6.45am: Slow start predicted
The FTSE 100 is expected to start sharply lower after Asian and US stocks fell overnight as North Korea appeared to ramp up the nuclear threat.
Its foreign minister in New York, reportedly, said the country may consider a nuclear test of “unprecedented scale” in the Pacific Ocean, coming on the heels of strong warning comments from Kim Jong Un.
In Japan, the Nikkei 225 is trading 77 points lower at 20,270, while the Shanghai Composite Index lost 16.
Wall Street came off record highs to finish lower, the Dow Jones shedding 53 points, and the S&P 500 losing 7.64.
FTSE 100 was also slightly lower, closing around eight points off, but today, financial spreadbetters are calling the blue-chip index to start a further 20.5 point lower.
The eyes of the globe will also be firmly on Prime Minister Theresa May as she outlines her government's Brexit plans in Florence and reports say she will spell out a two year year transition phase to avoid a cliff-edge approach, which is likely to appease businesses.
Kathleen Brooks at City Index said yesterday the importance of the speech could not be "over-emphasized" and that it could be a key day for foreign exchange traders.
"... if May can swing the debate back to a soft split from the EU then it has the potential to further reduce the political premium on the pound and trigger another leg higher in the sterling rally," she said.
The corporate diary is not busy.
Significant events expected on Friday September 22:
Finals: Smiths Group PLC (LON:SMIN)
Interims: Saga PLC (LON:SAGA), Lamprell PLC (LON:LAM)
Economic data: CBI industrial trends survey
Around the markets:
- Sterling: US$1.3579 up 0.01%
- Gold: US$1,290.60 an ounce, unchanged
- Brent crude: US$50.63 a barrel, up 0.16%
City headlines:
- Capita shares slide again as bad news keeps on coming - The Times
- Pubs group caught out by sudden downpour - The Times
- Eon to scrap controversial standard variable energy tariff - The Times
- Chinese search engine Baidu sets up US$1.5bn self-driving car fund - Independent
- San Francisco sues Big Oil for billions over climate change - Independent
- Hard Brexit could lead to the next financial crisis, says Deutsche Bank - Independent
- Investors shy away from US$7.25bn Avantor deal - FT
- Drax boss Dorothy Thompson to step down after 12 years - FT
- Uber expected to find out London licence decision - The Telegraph
- Facebook releasing 3,000 Russian-bought adverts to Congress - The Telegraph
- Scandal-hit CBA sells life insurance unit to AIA for US$3bn as it mulls IPO of wealth unit: - The Telegraph