Utilities hit as May pledges to cap price rises
Image Scan wanted after lifting guidance
Glaxo dips after price target is cut by Liberum
FTSE 100 more or less unchanged
FTSE 100 finished little changed on Wednesday - down 0.53 points at 7,467.
It may have been a day of some drama at the Conservative Party conference in Manchester, where Prime Minister Theresa May made her speech, but London stock markets were unmoved.
Even better than expected data on the UK service sector did not shift the needle.
The Markit/CIPS services purchasing managers' business activity index rose to 53.6 from 53.2 in August, which was better than expectations that it would remain unchanged.
FTSE 250 did, however, manage some movement, but it was still downwards, and it shed 5.93 points at 20,029.
Brent crude dropped 1.60% to US$ 57.65 a barrel.
In stocks, advertising giant WPP (LON:WPP) was top dog on Footsie, up 2.86% to 179.30p, bouncing back from yesterday's 2.1% decline.
British Gas-owner Centrica PLC (LON:CNA) was the top faller, dropping over 6% to 179.30p on fears over Mrs May's plans for a draft bill for an energy cap next week.
Supermarket supertanker Tesco PLC (LON:TSCO) was also a notable casualty, losing 3.21% to 183.95p on the day, after a disappointing trading update.
3.30pm - FTSE 100 tethered on short leash
The FTSE spent the entire day tethered on a short leash to last night's closing value of 7,468.
Three stocks were unchanged on the FTSE 100, while 46 were lower and 52 were higher.
Plumbing products supplier Ferguson Plc (LON:FERG), up 2%, added to yesterday's gains which were prompted by an upbeat trading update.
Hellenic bottling company Coca-Cola HBC AG (LON:CCH), one of yesterday's laggards after it announced the demise of its chief executive officer, recovered today, advancing 1.5%.
Drugs giant GlaxoSmithKline plc (LON:GSK) retreated 7p to 1,513p after Liberum Capital cut its price target to 1,760p from 1,900p.
2.10pm: Nothing, it seems, can galvanise the Footsie
US markets were expected to open barely changed, after a good run.
Spread betting quotes pointed to the Dow opening at 22,647, up 6 points, while the S&P 500 was seen opening down a point or so at 2,533.
The private sector payrolls report from ADP – at best, a patchy guide to US non-farm payrolls (due out on Friday) – indicated the private sector added 135,000 jobs in September, down from 228,000 (revised) in August.
In the UK, despite utilities getting it in the neck from Theresa May at today's Conservative Party conference, the blue-chip index was more or less unchanged.
Among the small caps, Image Scan Holdings Plc (LON:IGE) rose by more than a fifth bucked the trend of announcements about orders by reporting one that had been placed earlier than expected; the norm is for companies to announce that orders have been delayed.
"September has been an exceptionally busy month for the company,” said Bill Mawer, chairman chief executive officer of Image Scan.
“I am also particularly pleased by the strength of the order book with which we start the new financial year. Demand for our new systems remains strong," he added.
The trading statement from publishing group Future PLC (LON:FUTR) sparked a 16.4% gain in the share price to 370p.
Overall trading for the year has been positive and it is anticipated that results for the full year will be ahead of the board's expectations.
12.30pm: PM Theresa May puts the heat on gas and electricity suppliers
If the conference speech of Theresa May was intended to have a dramatic effect, it has yet to do so on London's leading shares.
May's speech was interrupted, first by comedian and prankster Lee Nelson and then by a coughing fit, but she battled on but nothing she said had any impact on the FTSE 100, which remained mired a few points below last night's closing level – down 9 at 7,459.
Prankster Lee Nelson (real name Simon Brodkin) interrupts PM Theresa May's speech at the #CPC17 with a note that says "P45" #5liveDaily pic.twitter.com/homyY1SAiN
— BBC Radio 5 live (@bbc5live) October 4, 2017
That being said, British Gas-owner Centrica PLC (LON:CNA) was the top faller on the Footsie, down 6.4%, on expectations that May would adopt a former Labour leader Ed Miliband's idea of putting a cap on energy price rises.
Sector peer SSE plc (LON:SSE) was also friendless, down 1.8%.
UK PM May: UK To Publish Draft Law Next Week To Cap Energy Bills
— LiveSquawk (@LiveSquawk) October 4, 2017
At the other end of the Footsie, Greek bottling company Coca-Cola HBC AG (LON:CCH) clawed back 39p of yesterday's losses incurred after it announced the death of its chief executive officer.
The stock currently trades at around 2,560p.
11.00am: Leading shares were marking time
Leading shares remain mixed, with a slight improvement in sentiment in the UK's services industries providing little impetus.
The FTSE 100 was down 3 points at 7,466.
“The September services purchasing managers’ survey slightly improved but it was still pretty lacklustre activity. Specifically, the PMI edged up to 53.6 in September from an 11-month low of 53.2 in August,2 noted Dr Howard Archer, whose typing seems to have improved since he became chief economic advisor to the EY ITEM Club.
“Services activity was reported to have been limited in September by relatively subdued domestic demand. In particular, weak business-to-business sales and delayed decision-making on large projects in response to Brexit-related uncertainty. Consumer demand for services picked up modestly from a weakened performance in August,” he added.
The markets could be marking time ahead of the prime minister's speech at the Conservative Party conference that, according to Theresa May herself, “will show how and why my Government must fulfil our duty to Britain”.
In my speech tomorrow, I will show how and why my Government must fulfil our duty to Britain pic.twitter.com/vOp8HRgoag
— Theresa May (@theresa_may) October 3, 2017
Not long now til Theresa May's big speech to Tory conference. Excitement building in the main hall. pic.twitter.com/jx3N5O7Vkw
— David Singleton (@singersz) October 4, 2017
If the prospect of listening to Theresa May speak drives you to drink then the latest broker note from Berenberg might be of interest; the German bank has cast its eye over pub groups and served up good news for JD Wetherspoon PLC (LON:JDW) shareholders.
Spoons has been upgraded to 'hold' from 'sell' while the price target has been cranked up to 1,150p from 750p.
The rating for Greene King PLC (LON:GNK) goes the other way (from 'hold' to 'sell') with the price target crashing to 450p from 700p, while Hobgoblin ale brewer Marston's PLC (LON:MARS) is downgraded to 'hold' from 'buy', with the target price cut to 120p from 175p.
The Spoons share price rose 4.2% to 1,285p on the upgrade, while Greene King fell 3% to 532.4p and Marston's sank 2.8% to 150.56p.
10.00am: Supermarkets weigh on sentiment
Supermarkets dragged the Footsie lower in early deals.
Tesco PLC (LON:TSCO), down 2.4%, was the top faller among FTSE 100 index constituents, after its half-year trading update.
Reaction to the figures, which included the resumption of dividends, was initially favourable but that did not last, and soon sector peers J Sainsbury plc (LON:SBRY), down 1.6%, and Wm Morrison Supermarkets PLC (LON:MRW), down 1%, were falling in sympathy.
As a result, the FTSE 100 was marginally lower, down 5 at 7,463.
“Resuming the divi means more money in the hands of shareholders and a symbolic return to form three years after the accounting scandal. The jump in profits is thanks to fewer one-off costs and continuing sales growth as customers respond to price cuts made in recent years. Sales did slow to 2.1% q/q in the second quarter, down from 2.3% in the first. We would expect higher food inflation to mean falling sales persist,” said Jasper Lawler at LCG.
Elsewhere in the retail sector Topps Tiles Plc (LON:TPT) hit the skids after its trading update.
The UK's largest tile specialist said revenues for the 12 month period just ended are expected to be in the region of £211.6 million (2016: £215.0 million). Like-for-like (LFL) revenues decreased 2.9% on the prior year (2016: +4.2%).
Like-for-like revenues in the 13 weeks ended 30 September 2017 decreased by 3.0%.
“Whilst we have seen a moderate improvement in trading in our final quarter, market conditions remain challenging and the group expects adjusted pre-tax profits for the 52 week period ended 30 September 2017 will be at the lower end of the current range of market expectations,” the company said.
On the macroeconomic front, the headline seasonally adjusted IHS Markit/CIPS Services Purchasing Managers' Index Business Activity Index rose to 53.6 in September, up from an 11-month low of 53.2 in August.
“Looking at Q3 as a whole, growth has eased slightly since the previous quarter (the index averaged 54.3 in Q2, compared to 53.5 in Q3),” noted IHS Markit.
8.45: It's quiet, Carruthers ... perhaps too quiet
The words ‘dead quiet’ best described the market ahead of Prime Minister Theresa May’s speech to the Tory Party conference later Wednesday with the FTSE 100 up just three points at 7,471.53.
Not even the return of Tesco (LON:TSCO) to the dividend list could raise spirits, although shares in the grocer were up 1.7% early on.
“The 1p-a-share interim dividend is not massive but it’s a start and shows management is happy with where things are,” said Neil Wilson of ETX Capital.
A downgrade to ‘underperform’ by the US broker Jefferies led to a 4% fall in the value of Tullow Oil (LON:TLW).
The morning’s big riser came out of the junior ranks with Motif Bio (LON:MTFB) soaring more than 30% on the back of success with its second, crucial phase III clinical trial.
It will now make a new drug application for its next-generation antibiotic iclaprim, a product with blockbuster potential.
Proactive News Headlines:
Shares in Motif Bio Plc soared 31% in opening deals after its lead drug, a next generation antibiotic, successfully negotiated a crucial final-stage clinical study. The REVIVE-2 phase III trial pitted Motif’s iclaprim treatment against vancomycin in patients with acute bacterial skin and skin structure infections (ABSSSI).
AdEPT Telecom plc (LON:ADT) is to hike its interim dividend by 13.3% to 3.75p, signifying confidence in current trading and the future of the information technology group.
Landore Resources Limited (LON:LND) has received its final assay results from its summer drill programme and they confirm that the company continued to hit wide zones of gold mineralisation. The mineralisation was encountered within the inferred resource area of the BAM East gold deposit, at the Junior Lake Property, in Ontario.
Learning Technologies Group (LON:LTG) says results this year will come in better than expected due to changes in the financial terms of a major contract.
Fuel cell developer Ceres Power PLC (LON:CWR) hailed its most successful year to date as revenues more than doubled. Phil Caldwell, chief executive, said the group was ahead of expectations financially, which has enabled it accelerate the technical development of its SteelCell technology.
OptiBiotix Health plc (LON:OPTI) has launched its SlimBiome and LP products in the US at Supply Side West trade show. Both products recently received FDA registration and the presentation at Supply Side West was the first in a number of steps to attract food, beverage, consumer healthcare and pharmaceutical partners for distribution and sale into the US market.
Avacta Group Plc (LON:AVCT), a pioneer of Affimer technology, said the past year had been one of significant progress – both for the development of a potential drug based on its platform and its use by other customers in research and diagnostics. Affimers are small, engineered proteins.
Lupus drug developer Immupharma PLC (LON:IMM) has raised £600,000 more than expected from its equity sharing agreement Lanstead Capital, banking £5mln instead of the £4.4mln originally estimated.
IXICO Plc(LON: IXI), the pioneer of digital technologies used in neuroscience, has landed a two-year contract worth £500,000 with a top-15 pharma company to deploy its wrist-worn sensors in a phase II clinical trial. It is the company’s first commercial agreement using the devices. They will be used along with artificial intelligence data analytics algorithms to monitor sleep disturbance in around 300 people.
Vast Resources PLC (LON:VAST) said results of the first phase of drilling at the Carlibaba prospect have confirmed its suitability as a second open pit mine within the Manaila Polymetallic project in Romania The AIM-listed mining company said preliminary results from first 1,000m of the 2,200m drilling programme support the development of a second open pit operation together with the construction of a metallurgical processing facility on site, which would reduce Manaila opex costs by up to 25%.
Base Resources Ltd (LON:BSE,ASX:BSE) has announced an updated resource estimate for its Kwale South Dune deposit in Kenya, with a 29% increase in mineral resource tonnes and a 13% increase in contained in situ heavy minerals.
Rainbow Rare Earths Ltd (LON:RBW) expects run of mine ore production at its Gasagwe asset will be in the range of 3,000 to 4,000 tonnes.
Green Dragon Gas Ltd (LON:GDG) has detailed three new supplementary agreements between its subsidiary Greka Energy and China United Coalbed Methane Corporation (CUCBM) which confirm that exploration activities can begin for three blocks in China.
Sound Energy PLC (LON:SOU) has detailed a new three-well drill programme planned in Eastern Morocco, where it intends to follow up recent successes at the Tendrara project.
Echo Energy Plc (LON:ECHO) highlighted what it described as a very active period for company development. Fiona MacAulay, chief executive, in Echo’s quarterly update, said: "This quarter has been one of continued progress for Echo in South America, we have continued to assess multiple opportunities in the region and I look forward to updating shareholders in due course.”
6.45am: Market set to mark time
The Footsie index looked set to give up some of yesterday's gains despite a strong showing overnight on Wall Street.
Spread betting quotes point to the FTSE 100 index opening at around 7,459, down 9 points from last night's close.
US indices once again broke new ground on Tuesday, with the S&P 500 rising 5.5 to close at 2,534.5 and the Dow Jones advancing 84 points to 22,641.
The situation was more mixed in Asia this morning, with the Hang Seng index in Hong Kong knocking on the door of a 10-year high, with a 213 points gain to 28,386.
In contrast, the Nikkei 225 in Tokyo was down 14 at 20,600.
On the domestic front, the prime minister, Theresa May, will be making her speech at the Conservative party conference, and traders will be looking for clues over how the Brexit negotiations are expected to proceed.
As for company news, retailers will be in focus.
Supermarkets have been seeing a recovery as the revival of food price inflation, following the post-Brexit vote drop in the value of the pound, which has helped to lift margins, and Britain’s biggest retailer Tesco PLC (LON:TSCO) should confirm that trend when it reports first half results.
Analysts at Jefferies are expecting the FTSE 100-listed stores giant to publish a set of “upbeat interims”, with James Grzinic and co looking for “improved cash generation, good Q2 UK like-for-like delivery and a reiteration of the 3.5% to 4% margin ambition”.
However, the revival of inflation has been countered by stagnant wage growth meaning the public has less spare money in its collective pocket, which Grzinic thinks could weigh on the outlook for retailers. Understandably then, investors will want to hear from Tesco about current trading and its thoughts on the UK economy.
Earlier this year Tesco also hinted that it was ready to reinstate the dividend, so shareholders will be keeping their eyes peeled. The interims might come too soon for that though, with most analysts expecting the dividend to return at the end of the year instead.
Elsewhere on the high street, struggling tiles retailer Topps Tiles Plc (LON:TPT) will issue a pre-close season trading update, with the group having already warned with first half numbers in May that its full-year results will be at the lower end of expectations.
The retailer saw a sharp decline in its like-for-like sales in the third quarter, albeit with the comparative period a year earlier having benefited from an increased level of housing transactions resulting from Stamp Duty changes kicking in April 2016.
Even so, the market was disappointed in a 4.7% slide in like-for-like quarterly revenues, which was much worse than the 1.9%, decline seen in the first half, and does not bode well for the final quarter of its financial year.
Significant announcements expected
Finals: Future PLC (LON:FUTR), Walker Greenbank plc (LON:WGB)
Interims: Avacta Group Plc (LON:AVCT), Ceres Power Holdings PLC (LON:CWR), Tesco PLC (LON:TSCO)
Trading update: Topps Tiles Plc (LON:TPT)
Traffic figures: International Consolidated Airlines Group PLC (LON:IAG)
Economic data: UK services PMI report; BRC UK shop price index; US ISM non-manufacturing report
Around the markets
- Sterling: US$1.3272, up 0.33 cents
- 10-year gilt: yielding 1.355%
- Gold: US$1,279.00 an ounce, up US$4.40
- Brent crude: US$55.74 a barrel, down 26 cents
Business headlines
Financial Times
Richard Smith, former boss of Equifax, spills the beans on data breach
Senator Elizabeth Warren calls on Wells Fargo boss to take next stagecoach out of town
Ford’s new boss, Jim Hackett, plans to increase the car-maker's focus on electric vehicles
Uber board moves to dilute controversial founder's influence, paving way for Softbank investment
The Daily Telegraph
Philip Hammond tells business to stand up for free markets: The Chancellor has called on big business to help defend the market economy from the “existential challenge” posed by Jeremy Corbyn’s Labour Party.
EU to hit Amazon with huge bill for back taxes: The European Commission will hit Amazon with a bill for hundreds of millions of euros of back taxes in the latest example of the EU’s crackdown on tax avoidance by multinational companies.
South African regulator speeds up KPMG probe into Gupta scandal: South Africa’s audit regulator has fast-tracked its probe into KPMG over the work it did with the controversial billionaire Gupta family, who are accused of buying influence with President Jacob Zuma.
Lift Sharm El-Sheikh travel ban to prevent further airline collapses, MPs urge: A parliamentary group has warned more UK airlines could be at risk of collapse if a travel ban over holiday destination Sharm El-Sheikh is not lifted.
Scottish decision to ban fracking beggars belief, says Ineos: The Scottish government has dashed Ineos’s plans to become Britain’s biggest shale gas player by effectively banning fracking due to the strong local opposition to the controversial extraction process.
Glencore tightens grip on Peruvian zinc miner with deal worth up to US$1 billion: Mining giant Glencore is looking to tighten its grip on a Peruvian zinc miner with a deal worth up to US$1 billion.
Starling takes on the big banks with business lending play: Digital challenger bank Starling is making a move for business customers, opening up a new front in the battle between start-ups and Britain’s largest lenders.
The Guardian
Ryanair pilots face HMRC investigation over airline’s employment structures: Ryanair pilots are being investigated by HM Revenue & Customs over complex employment structures imposed on them by the no-frills airline.
2 Sisters admits ‘other areas of concern’ at West Bromwich chicken plant: The 2 Sisters Food Group has admitted it has found “other areas of concern”, centred on food hygiene standards, at its scandal-hit West Bromwich chicken processing plant, which was shut down at the weekend.
Royal Mail workers vote for industrial action: Postal workers are on the verge of a strike in a dispute over pensions, pay and conditions.
Force India F1 boss Vijay Mallya re-arrested over money-laundering: Vijay Mallya, the flamboyant multimillionaire co-owner of the Force India Formula One team and self-proclaimed “King of the Good Times”, was arrested on Tuesday over allegations of supporting his F1 team with money-laundered cash.
UK construction in contraction for first time since Brexit vote aftermath: Britain’s construction industry has contracted for the first time since the immediate aftermath of the Brexit vote, as rising political uncertainty leads to a sustained drop in new work.
Betting shop staff not trained to spot problem gamblers, says report: Betting shop staff are not properly trained to spot problem gamblers and are even encouraging customers to chase losses or adopt useless strategies, according to a report described as a “wake-up call” to the industry.
Daily Mail
Unilever ‘to axe’ historic Colman’s factory in Norwich after 200 years: Colman’s is leaving its historic site in Norwich as the mustard-maker’s owners Unilever prepare to pull the plug on a factory that has been producing the condiment for more than two centuries.
Fund-raising website Seedrs raises £6 million from more than 2,000 savers in just five days: Fund-raising website group Seedrs has raised £6million from more than 2,000 savers in just five days. The so-called crowd-funding business – which allows ordinary people to invest directly in private companies – was also given £4million by fund manager Neil Woodford.
Revolt over plans to cut pensions of 80,000 steelworkers under deal between Tata and Thyssenkrupp: Steelworkers are calling for billionaire Ratan Tata to step in to help thousands of vulnerable pensioners they believe are at risk of poverty under a new pension scheme.
Fidelity to drop fixed fees for actively managed equity funds amid claims they reward lazy and under-performing managers: Fidelity – which looks after £233.4 billion of clients’ money – will next year shift away from fixed fees for its actively managed equity funds, where experts pick specific stocks which they hope can beat the wider market.
City AM
Almost half of the UK’s top fund managers will absorb the cost of investment research post-Mifid: A large chunk of the UK’s top asset managers have agreed to bear the cost of investment research themselves, rather than passing it on to clients from next year, according to consultancy Alpha FMC.
Xavier Rolet bets the UK can create an £100 billion company in the fintech sector in 10 years: Xavier Rolet, chief executive of the London Stock Exchange, reckons Britain will build a fintech firm worth £100 billion in the next decade.
Time Out on Oakley Capital’s fund-raise as the private equity firm pulls in €800 million for new investments: Time Out owner Oakley Capital, the private equity firm headed by entrepreneur Peter Dubens, has raised its largest ever fund raking in a total of €800 million (£710 million).
Fast-growing IT company Roc which serves Tesco, BAE Systems and the BBC grabs £10 million funding: Roc Technologies, the young IT company which already serves names such as Tesco, BAE Systems and the BBC, has nabbed a £10 million cheque from the Business Growth Fund (BGF).
Ashish Thakkar to leave the board of Atlas Mara, the African banking group he co-founded with Bob Diamond: Former Barclays chief executive Bob Diamond is to be left as the sole Founder on the board of African financial services group Atlas Mara, as it was announced that co-Founder Ashish Thakkar would be leaving.
Shop prices teeter on the verge of inflation in first time in four years says British Retail Consortium: British shop prices are on the verge of returning to inflationary territory for the first time in four years, according to a closely followed index, adding to pressure on households.
The Times
Tesco staff ‘quit as fears of accounts fraud grew’: Two Tesco employees resigned amid concerns about accounting practices at the retailer, the trial of three former Executives was told.
Steve Jobs’s widow Laurene Powell Jobs to buy stake in NBA team Washington Wizards: Laurene Powell Jobs, the widow of Apple Co-Founder Steve Jobs, is to become one of the few women with an ownership stake in America’s “Big Four” professional leagues when she buys a stake in the company that owns the National Basketball Association’s Washington Wizards team.
Greggs rolls with punches of lower pound and higher costs to lift sales: It may still be best known for its sausage rolls and steak bakes, but Greggs’ launch of healthier foods has helped the bakery chain to achieve a strong increase in sales.
IMF spells out dangers of increasing household debt: A sharp increase in household debt can boost growth in the short term but risks jobs, prosperity and financial stability in the medium term, the International Monetary Fund has warned.
Profits mean SCS is sitting comfortably: The furniture chain said that pre-tax profit had risen by 9.9% to £12 million on a 4.4% increase in sales to £349.5 million in the year to the end of July.
‘Green belt swaps’ can ease housing crisis, says Savills: More land needs to be released in south-eastern England, including parts of the green belt, if Britain is to get near to solving the housing crisis, Savills has claimed.
L&G backs ‘social purpose’ start-up Salary Finance: Legal & General is taking a stake in a financial technology start-up specialising in lending to those on modest salaries.
Libor dependence poses risk, says Bank: The dependence of markets on Libor poses a “financial stability risk”, the Bank of England has conceded for the first time.
‘Government link’ in RBS scandal: The investigators who led the review into Royal Bank of Scotland’s scandal-hit restructuring division were asked to consider what role, if any, the government played in its mistreatment of small companies, The Times can reveal.
Ovo Energy warns of curate’s egg price cap for households: A proposed energy price cap for vulnerable households will result in leading suppliers raising charges even further for other customers on the poorest value tariffs, one of the energy providers intent on challenging the industry’s Big Six has claimed.
The Independent
One in three car buyers consider switching to electric, survey reveals: More than a third of British car-buyers would consider owning an electric vehicle, according to a new poll.
South Western Railway workers vote ‘overwhelmingly’ to strike: South Western Railway workers have voted “overwhelmingly” in favour of strike action in a dispute over the role of guards on trains.
Monarch Airlines CEO set up new company days before its collapse: The chief executive of Monarch reportedly pocketed a six-figure salary and set up a new company just days before the airline collapsed into administration.
Ryanair adds fewest customers since March after rota fallout: Ryanair added the fewest number of passengers in six months in September as the first of more than 20,000 flight cancellations prompted by a pilot shortage began to weigh on growth.
Feelings about finances key predictor of Brexit voters, not age: People’s feeling about the state of their own finances were a key predictor of whether they would vote for Britain to leave the EU, according to new research.
Coca-Cola ‘increases production of plastic bottles by a billion’: Coca-Cola produced a billion more plastic bottles last year compared to the previous 12 months, according to new analysis.
GoCompare’s first overseas investment is in Middle Eastern firm: Price comparison site GoCompare has announced its first overseas investment with the acquisition of a stake in a Middle Eastern firm.
Amazon criticised for sellers’ hoddie downplaying eating disorders: Amazon has been criticised for allowing a hoddie emblazoned with a line that critics say downplays the seriousness of eating disorders to be sold on its site.
Mobike and Ofo investors in talks to merge bike-sharing start-ups: Mobike and Ofo investors are in early talks to push China’s two largest bike-sharing start-ups into a merger, aimed at ending a costly competitive battle and creating a single dominant player in the fast-growing business, according to people familiar with the matter.