FTSE 100 closes up 66 at 7,438
easyJet tops the Footsie leader-board
Weak sterling boosts Footsie
FTSE 100 closed over 66 points ahead as the weak pound gave the premier UK index a boost.
The FTSE 100 closed up 0.90%, or 66.08 points, at 7,438, while FTSE 250 was up over 82 at 19,957.
Sterling lost 0.39% against the Euro, while it shed 0.86% against the US dollar.
Budget carrier easyJet PLC (LON:EZJ) was top dog on Footsie with shares pulling out of their recent dive to top the Footsie leader-board with a 5.18% rise to 1,280p as it appeared rival Monarch's bad news was a boost to other airlines.
Wizz Air Holdings PLC (LON:WIZZ) flew 4.86% higher, while BA owner International Consolidated Airlines Group PLC (LON:IAG) shot up 2.36% to 607.50p.
Mediclinic International (LON:MDC) was top loser on FTSE 100, down 1.08% to 643p.
Shares in Barclays (LON:BARC) and Lloyds (LON:LLOY) fell on the day after the Bank of England (BoE) said that banks headquartered in the UK must find a net £4bn to comply with new regulations. Banks will have to obey the new rules by 2022. Barclays shares lagged 0.94% at 191.52p and Lloyds fell 0.45% to 67.43p.
In small caps, AFC Energy plc (LON:AFC) saw its shares soar today after the fuel cell specialist said new initiatives undertaken by itself and its partner De Nora have the potential to slash the cost of hydrogen power.
There is “clarity over the roadmap to a power generation cost from the AFC Energy fuel cell stack of less than US$0.10/kWh,” said Adam Bond, chief executive.
Shares finished 30% higher at 13.875p.
3.30pm - FTSE 100 advances
The Footsie extended its advance past the 50 points mark, with sentiment boosted by a strong first hour on Wall Street.
The FTSE 100 was up 57 at 7,429, with around three-quarters of the index’s constituents in the blue.
Among those in the red was Hargreaves Lansdown PLC (LON:HL), the stockbroker and fund supermarket.
Co-founder Stephen Lawrence recently sold £190mln of stock in the company. The shares were off 0.6% at 1,44p.
Also heading south was supermarkets giant Tesco PLC (LON:TSCO) after Credit Suisse trimmed its price target to 140p from 145p.
According to the Swiss bank, the sector leader is most at risk from the continued growth of hard discounters Aldi and Lidl.
The shares dipped 0.19p to 186.96p.
FTSE 250 stock Greencore Group PLC (LON:GNC) had the stuffing knocked out of it by its US arm recalling some sandwiches because of a health risk.
The shares fell 6% to 184.47p on the news and were the biggest fallers in the FTSE 350.
2.45pm Airlines remain in favour
JP Morgan Cazenove was quick off the mark, bumping up its price target for Wizz Air Holdings PLC (LON:WIZZ) on the day Monarch Airlines went bust.
Wizz was 111p higher at 2,972p, putting it more than a couple of quid shy of Cazenove’s new price target of 3,250p; the previous price target was 2,950p.
The stock is just one of many airlines stocks going well in the wake of Monarch’s collapse.
No frills airline easyJet topped the Footsie leader-board with a 4.1% rise, contributing to a 46 point advance by the FTSE 100 to 7,418.
In contrast, DIY retailer Kingfisher PLC (LON:KGF) was down 0.2% at 297.8p, despite Davy Research upgrading the stock to ‘outperform’ from ‘neutral’.
Among the mid-caps, Premier African Minerals Ltd (LON:PREM) said it had raised £3.5mln via the PrimaryBid platform, and reassured investors that it does not intend to raise any more fund specifically for the RHA tungsten project.
The shares were issued at 0.3p a share, resulting in a predictable decline in the value of the shares to 0.3p from 0.375p.
2.00pm US stocks expected to open higher; firearms makers tending firmer in pre-market trading
US stocks were expected to open higher in the wake of last night’s horrific killing spree in Las Vegas.
The Dow Jones average was expected to open around 20 points up from Friday’s close of 22,405, while the broader-based S&P 500, which closed at 2,519 on Friday, was expected to open a couple of points higher.
Proving that the US is a very different place, gun makers were among the stocks advancing briskly in pre-market trading, on the assumption that the mass murder will not lead to tighter gun control, but instead to increased demand for firearms.
Back in the UK, the FTSE 100 was up 43 at 7,416.
11.45am: House-builders view with airlines to post biggest gains
Blue-chips were still flying high in the last hour of the morning trading session, with house-builders and airlines leading the way.
The FTSE 100 was up 39 at 7,412, with political stability in Catalonia apparently having little or no effect on the market’s “risk on” stance.
“The Catalan referendum looks set to start a new phase of political instability for the EU, with clashes between protestors and police unlikely to do anything other than strengthen the resolve of those seeking independence,” noted Joshua Mahony, at spread betting firm IG.
“Catalonia is the richest Spanish region and so there is good reason for the central government to want to quash any process which could lead to a breakup of the country. The outcome of this process will potentially have implications closer to home too, with backers of Scottish independence watching closely,” he added.
Among the mid-caps, NEX Group PLC (LON:NEX) took a bath after its trading update.
The shares of the company formerly known as ICAP fell 44.5p to 617.5p after it warned margins would be under pressure in the first half of the current financial trading year.
The company said the effect on margins would be temporary, and that it was related to increased investment in sales activities and marketing campaigns ahead of the introduction of MiFiD II in January of next year; MiFID – or to give it its full name, Markets in Financial Instruments Directive – is the EU framework that covers the organised trading of financial instruments.
Fellow FTSE 250 member Aggreko PLC (LON:AGK), the emergency heating and power provider, fell 4.2% to 899.5p after Berenberg moved from ‘hold’ to ‘sell’, trimming its target price from 800p to 770p in the process.
10.00am: Disappointing manufacturing PMI dampens the upbeat mood
London’s leading stocks made a flying start though disappointing manufacturing data took some of the wind out of the Footsie’s sales.
The FTSE 100 index was up 35 at 7,408.
The IHS Markit/CPS UK Manufacturing Purchasing Managers’ Index (PMI) eased to 55.9 in September from August’s four-month high of 56.7.
A value above 50, however, still represents expansion, and it was the fourteenth month in a row that manufacturing activity had expanded.
On the downside, economists had expected September’s value to be around 56.2.
“UK manufacturers are riding on the coattails of their counterparts in the booming Eurozone, but they increasingly are being held back by weak domestic demand,” suggested Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“For the 11th month in the last 12, the manufacturing PMI was weaker in the UK than in the Eurozone in September. The PMI was pulled down by a drop in the output index to 56.6 in September, from 58.1 in August. Overall in Q3, the output index points to quarter-on-quarter growth in manufacturing output of about 1%, much better than Q2’s -0.3% rate, but the slip in the new orders balance to 56.3, from 58.6 in August, points to a slight moderation in growth ahead,” Tombs said.
It’s an ill wind that blows nobody any good, and while more than 100,000 holiday-makers who flew out on Monarch Airlines wonder how they will get back now the airline has gone belly-up, easyJet PLC (LON:EZJ) shares pulled out of their recent dive to top the Footsie leader-board with a 3.9% increase.
“Usually what’s bad for one airline – higher fuel costs, terror attacks, air traffic control strikes – are bad for the sector,” commented Neil Wilson, senior market analyst at ETX Capital.
“Shares in the various players have a tendency to track each other with some consistency, but the failure of Monarch is good news for rivals,” he added.
IAG (LON:IAG), the owner of British Airways, was up 1.6% and even Ryanair Holdings PLC (LON:RYA) took a break from worsening its ongoing public relations disaster to advance 2.7%.
Among the small caps, Coal of Africa Limited (LON:CZA) rose a halfpenny to 3p after it finally offloaded the Mooiplaats Colliery it has been looking to sell since 2013.
If collectibles specialist Stanley Gibbons Group PLC (LON:SGI) was hoping for a similar boost after announcing it had sold off its struggling interiors division, it was brutally disappointed.
Traders were more interested in the full-year results, which showed revenues tumbled to £42.5mln from £59.1mln the year before, while trading losses more than doubled to £8.8mln (2016: £3.9mln), largely due to the loss-making interiors division.
Open: Stronger-than-expected start by the Footsie
The FTSE 100 made a stronger than expected start as it took its cue from Asia’s main markets, buoyed by Chinese manufacturing figures, and Friday’s strong showing on Wall Street.
The index of blue-chip shares was up 24 points early on at 7,396.48.
Budget carrier easyJet (LON:EZJ) was flying 3.7% higher as the competitive landscape got a little bit easier.
With its major rival Ryanair (LON:RYA) repeatedly shooting itself in the foot with a slew of cancellations and PR fumbles, at 4am Monarch Airlines threw in the towel.
This has left the Civil Aviation Authority to marshal the biggest ever UK repatriation in peacetime, which will no doubt mean more business for easyJet and possibly British Airways, which is owned by IAG (LON:IAG). Shares in the latter were up 1.9%.
Strong early buying activity boosted Barratt Developments (LON:BDEV), which could be a major beneficiary of an extension to the government’s Help to Buy initiative with details expected to be announced at the Tory Party conference later this week.
“Although there is little substance yet known on how this will all work or whether it is an extension or whether there is any material new resource for the house builders, it will almost certainly be taken positively by the sector,” said City broker Shore Capital.
“When there was talk of the scheme being withdrawn back in the summer the sector wobbled and fell 5% in a flash.”
Proactive news headlines:
Hurricane Energy PLC (LON:HUR) has updated on its progress towards ‘first oil’ production from the Lancaster oil field, in the West of Shetland region offshore UK. The company, in a statement, told investors that the Aoka Mizu floating production, storage, and offloading (FPSO) vessel has now arrived at Drydock World Dubai shipyard on September 30.
Lekoil Ltd (LON:LEK) announced the appointment of Lisa Mitchell as its new chief financial officer with immediate effect. Mitchell, formerly CFO at Africa focussed firms Fastjet and Ophir Energy, replaces Bruce Burrows who opted to pursue another opportunity described as a “better fit for family circumstances”.
Oil junior Canadian Overseas Petroleum Limited (LON:COPL, CVE:XOP) has announced a new £2.5mln funding, with new shares being issued at a price of 1p each. Cash raised in the equity funding is earmarked to cover on-going general and administrative expenses.
Healthcare software company Wanda, a portfolio company of NetScientific PLC (LON:NSCI), has been awarded a US patent relating to its core technology.
FairFX Group PLC (LON:FFX) has hired Ben Wynn, the founder of home repairs business DAD, as its chief product and marketing officer (CPMO).
Avacta Group PLC (LON:AVCT) said it has established a three-strong commercial team in the US, led by Dr Matthew Vincent, who has been appointed vice president, therapeutics business development. The company said the move would allow it to exploit the rapidly growing interest in its Affimer alternative to antibodies, and to “further grow the pipeline of evaluations and collaborations”.
The UK drugs watchdog appears to have spotted the potential of Faron Pharmaceuticals Ltd’s (LON:FARN) lead drug - Traumakine, for a condition called Acute Respiratory Distress Syndrome (ARDS). The Medicines and Healthcare Products Regulatory Agency (MHRA) has given it a Promising Innovative Medicines (PIM) designation.
Obtala Limited (LON:OBT) has raised US$2mln from a further and final subscription for preference shares in Argento Limited, the Africa-focused group’s 75% owned forestry subsidiary.
Hydrogen fuel cell specialist AFC Energy PLC (LON:AFC) said new initiatives undertaken by itself and its partner De Nora have the potential to slash the cost of hydrogen power.
Savannah Resources PLC (LON:SAV) has received a number of approvals for the first of its planned copper mine developments in Oman, Mahab 4 and Maquail South. Ground water analysis for a tailings facility has also been completed.
Niche plastics products group Plastics Capital PLC (LON:PLA) has told investors it enjoyed a solid first half, leaving it well-placed for the rest of the year. Plastics said trading in the six months to the end of September was ahead of the prior year, primarily driven by strong organic sales growth across the board.
Media group Falcon Media House PLC (LON:FAL) has signed a commercial licensing agreement with South African digital and broadcast technologies expert Africa Enterprise Media Group. The deal will see Falcon supply its patented Quiptel Q-Flow technology to AEMG as the latter launches an over-the-top (OTT) direct-to-consumer video service in Africa.
Premier African Minerals Limited (LON:PREM) has raised £3.5mln through PrimaryBid.com. The money raised ensures that the company is sufficiently capitalised to bring the RHA tungsten project into production.
China Nonferrous Gold Limited (LON:CNG) is progressing well with repair work at the Pakrut gold project in Tajikistan, following the district's worst snowfalls for 50 years earlier in 2017. Insurance assessors have been on site, and some payments have already been made. Gold production is expected to resume in 2018.
Anglo Asian Mining PLC (LON:AAZ) has completed the latest round of its JORC resource work at the producing Ugur gold deposit on the Gedabek licence. The JORC Mineral Resources Report and Ore Reserves Report reiterate the previously stated JORC resources and reserves of 199,000 ounces of gold and 1,049,000 ounces of silver for Ugur.
6.45am: Solid start predicted
The FTSE 100 looks set to make a solid if unspectacular start to the new trading week with the spread betting companies calling it to open 15 points higher at 7387.76.
Asia’s main markets were strong overnight with Chinese factory output for September at levels last seen five years ago.
The mood of optimism was further bolstered by the US, which ended last week on a high amid hopes that US President Donald Trump will enact long-awaited tax reforms.
Closer to home, the unfolding crisis in Spain which saw pitched battles at polling stations in Catalonia is likely to weigh a little on sentiment and possibly present another challenge to the European Union.
Monday sees the first day proper of the Tory Party Conference, although we already know that Prime Minister Theresa May plans to target the younger vote with concessions on tuition fees.
The City will likely have half an ear open on Brexit chatter, while the antics of BoJo (Boris Johnson) and other potential leadership candidates will be closely scrutinised by the watching media.
Looking at the City diary, we have results from Tesco PLC (LON:TSCO) on Wednesday, which looks likely to return to the dividend list as the case of former employees accused of fiddling the retailer’s sales plays out at Southwark Crown Court.
Slated for release Monday are figures from Daily Mail and General Trust (LON:DMGT), while baker Greggs (LON:GRG) has figures the next day.
- Pound worth US$1.3361
- Gold down US$8.30 an ounce at US$1,276.50
- Brent crude worth US$55.67 a barrel, down 22 cents
Business Headlines
- Saudi Arabia urges OPEC members to give production cuts time to kick in – Times
- Shell takes cautious approach to green energy transition – FT
- Beach Energy pops 21% on deal with Origin Energy – FT
- Asian warehouse owner GLP buys Gazeley for US$2.8bn – FT
- Stephen Lansdown sells £190mln chunk of stake in Hargreaves – FT
- Government to hand over HBOS papers ahead of trial – FT
- Apple beaten by Huawei in China smartphone survey – FT
- Bitter divisions over Uber board spill into public – FT
- Monarch Airlines braced for crunch Atol licence decision – FT
- Amazon’s quest to become the next Apple with web services – Telegraph
- Profits soar by 38% at British arm of activist investor Elliott – Telegraph Aviva is ramping up its push to have a more grey-haired workforce by pledging to hire another 1,000 employees older than 50 by 2022 - Telegraph
- Pressure mounts on Deutsche Chief as investors lose patience –Telegraph
- Twitter profits drop 21% in the UK – Telegraph
- Scandal-hit 2 Sisters suspends chicken production at West Midlands plant – Guardian
- Richard Branson to invest in Saudi Arabia’s tourism project – Guardian
- Salvage firm hopes to net gold worth £125bn sunk by German U-boats – Guardian