FTSE 100 closes nearly 15 down at 7,507
US stock markets quiet on Columbus Day
Pound up against dollar, euro
FTSE 100 closed the day almost 15 points lower as the pound strengthened and US volumes were low due to the Columbus day holiday.
The UK blue- chip benchmark finished down 14.98 at 7,507, recouping some losses having been 23 points lower an hour earlier.
FTSE 250 was also lower, shedding almost 64 points at 20,102.
David Madden, at CMC Markets, said: "The FTSE 100 came under pressure as sterling rallied on the back of the speculation that Theresa May will reshuffle her cabinet in order to reassert her authority on the party.
"Mrs May position has been weakened in the wake of the Conservative party conference, and the move could embolden her."
Sterling was up 0.38% against the Euro, and up 0.34% against the US dollar.
In stocks, consumer goods titan took the podium on Footsie, gaining 1.49% to 6,938p. Mining giant Anglo American plc (LON:AAL) shed 3.38% to 1,431p to be the biggest laggard, along with other big miners, which fell.
In the US, stock markets are open, but the bond markets are closed due to the holiday, which started in 1792 and declared a federal day off in 1937 by President Franklin D. Roosevelt.
3pm: FTSE 100 dull as US stocks retreat
The Footsie drifted further back in late afternoon trading, weighed by a rally from the pound and after US stocks failed to hold onto modest opening gains as the recent record-breaking run stalls again.
Around 3pm, the FTSE 100 index was about 23 points lower at 7,498, just off the day’s low of 7,496.14, and well below the opening high of 7,523.65.
On Wall Street, after starting higher, the Dow Jones Industrial Average slipped 7 points lower to 22,766 after half an hour of trading, with trading very thin on the Columbus Day holiday in the US.
Ten years ago, the S&P 500 hit its last record before the financial crisis https://t.co/Z19rrNU2Lo
— Wall Street Journal (@WSJ) 9 October 2017
With currencies, sterling was off its best levels but still up around 0.7% versus the dollar at US$1.3150, and was 0.6% higher against the euro to €1.1208.
Lukman Otunuga, research analyst at FXTM commented: “While the current optimism may fuel the Pound’s appreciation in the short term, political risks at home and Brexit uncertainty, are likely to limit upside gains.
“With round five of the Brexit talks beginning today in Brussels and no clear plan on how the UK will break away from the EU, Sterling remains vulnerable to downside risks.”
He added: “It could get very messy for Sterling this quarter, especially if the ongoing Brexit drama and soft economic fundamentals, prevent the Bank of England from raising UK interest in November.”
1.40pm: Posties dispute to go to High Court
Royal Mail (LON:RMG.L) has said it will lodge a High Court injunction application after the Communications Workers Union failed to withdraw its intention to strike over a pensions dispute.
In a tweet, the FTSE 250 company said: “Royal Mail will today lodge an application with the High Court for an injunction to prevent industrial action so that the contractual external mediation process can be followed.”
Royal Mail will today lodge an application with the High Court for an injunction to prevent industrial action > https://t.co/rLBoPMXObu pic.twitter.com/5AEhONPh7B
— Royal Mail (@RoyalMail) 9 October 2017
The company added that a date for a hearing would be arranged with the High Court.
CWU said last Thursday that its members would start a 48-hour strike on October 19, after they opposed the company’s move to replace its defined benefit pension scheme.
In afternoon trading, Royal Mail shares were 0.3% at 379.6p, bucking the trend on the FTSE 250 index which was over 58 points lower at 20,108.
Meanwhile, the FTSE 100 index was off 19 points at 7,503.
12.45pm: US stocks seen up, but Footsie still down
The FTSE 100 index stayed weak in early afternoon trading, reflecting a rally by the pound today, in spite of expectations for US stocks to resume their record-breaking rise after a pause on Friday.
Around 12.40pm, the FTSE 100 index was about 17 points lower at 7,505, just off the day’s low of 7,499.20, and well below the opening high of 7,523.65.
US stock futures edged higher Monday, putting the Dow Jones Industrial Average on track to resume its advance to fresh peaks, although given the Columbus Day holiday in the US volumes are likely to be fairly thin.
On currency markets, sterling extended its gains against the dollar to nearly 0.9% at US$1.3175, and rose 0.8% versus the euro to €1.1224.
Connor Campbell, financial analyst at Spreadex said: “A lack of real news seemed to be sterling’s best friend this Monday, allowing the currency to settle last week’s nerves and attempt a comeback.”
He added: “The ongoing situation surrounding Theresa May, Boris Johnson and the rest of the Conservative party remains the dominant driver of trading.
“The latest twist was a leaked message from the Foreign Secretary to the Tory MPs’ WhatsApp group, stating he was ‘sick to the back teeth’ of his ‘so-called friends and allies’ briefing papers against the Prime Minister.”
Campbell concluded: “While this intervention perhaps further undermines May by placing Johnson in the role of disciplinarian, for now it takes a bit more steam out of this (umpteenth) plot to get rid of the PM, in the process further reassuring the pound.”
easyJet flies lower
On the corporate front, discount airline easyJet PLC (LON:EZJ) was the biggest FTSE 100 faller, losing 1.9% at 1,239p amid reports that talks about the purchase of up to 30 planes from between the insolvent German carrier Air Berlin are at risk of falling apart.
In addition, global bank HSBC has trimmed its price target for easyJet to 1,500p from 1,550p following last week’s trading update.
Meanwhile, broker comment impacted mid cap metals group Ferrexpo PLC (LON:FXPO), with its shares down 3.4% to 286p after Deutsche Bank downgraded its rating to ‘hold’ from ‘buy’.
But FTSE 250-listed fashion firm Ted Baker PLC (LON:TED) gained 4.7% at 2,848p after Panmure Gordon raised its stance to ‘hold’ from ‘sell’ ahead of the group’s first half results due tomorrow.
11.45am: Sound as a pound
Thousands of shops are likely to ignore the Royal Mint’s deadline of midnight on Sunday October 15 to stop accepting old £1 coins, the Guardian has reported.
It cites a trade organisation representing 170,000 businesses which has advised its members to continue taking the coins, because the changeover period with the new coins has been so short.
Small businesses can still bank old pound coins for a short period after this Sunday’s switchover, FSB’s @AlanSoady tells @BBCBreakfast pic.twitter.com/CcSaYUhLrA
— FSB (@fsb_policy) 9 October 2017
Mike Cherry, the national chairman of the Federation of Small Businesses, said :“While no business is obliged to accept the old coins beyond the deadline, it would help if small firms knew they were allowed a short transition period to collect the old coins if they wish to, and are willing to bank them, but not give out to customers.”
Poundland has said more than 850 of its UK stores would continue accepting the coins until 31 October, the newspaper added.
11.15am: Inflation issues
Ahead of UK inflation data due next week, the Times today reported that pressure on the Bank of England to raise interest rates may be building more rapidly than first thought after a mistake by the Office for National Statistics led to domestic inflation being understated.
The newspaper said, on Friday, the ONS published an error in one of the critical data points used by the BoE to gauge domestic price pressures.
Nice catch by the Times: more people paying themselves dividends means the ONS have had to revise up unit labour costs https://t.co/G8pVMgVOXJ
— Gavin Jackson (@GavinHJackson) 9 October 2017
It added that in a correction to be released today, the nation’s official statisticians are expected to reveal that companies’ employment costs have been rising faster than previously believed.
Unit labour costs, which show the overall cost of employment per person, are watched closely by the Bank for evidence of inflation creeping into the domestic economy.
Around 11.15am, the FTSE 100 index was down 15 points at about 7,507.
10.40am: Political uncertainties weigh
The Footsie extended its falls to over 14 points in mid-morning trading at around 7,508, losing almost all of Friday’s gains, with political worries a factor.
Chris Beauchamp, Chief Market Analyst at IG said: “UK markets are trading slightly lower this morning as investors await a speech to the Commons by the Prime Minister on that ever-popular topic, the Brexit negotiations.
“Her speech in Florence failed to open the door to the expansive negotiations the UK hoped would follow, and with her position in the party undermined by that speech to the party conference last week, Mrs May is now looking to shore up her position with a less-than-subtle threat to walk away from talks.”
In spite of all their evidence Theresa May pillories the 'doomsayers'(experts) that say Brexit will be a disaster #BrexitShambles #ToriesOut pic.twitter.com/cAGPY43Gkj
— Not So Strong (@StrongerStabler) 9 October 2017
Beauchamp also added: “The Catalonia crisis rumbles on, as Madrid and Barcelona warily eye each other as they mull their next move.
“Given the notable lack of international support, Catalonia seems to have overplayed its hand, and as businesses desert Barcelona the central government seems to hold almost all the cards.”
9.40am: Sterling gain keeps Footsie down
The FTSE 100 index stayed modestly lower as the morning session progressed, reversing some of last week’s gains as sterling recovered from recent weakness, knocking internationally-focused stocks.
Around 9.30am, the UK blue chip index was down around 5 points at 7,517, while on currency markets, the pound was up 0.4% versus the dollar at US$1.3114, and 0.3% against the euro at €1.1179.
No official UK data was released today, but overnight a survey from credit cards provider Visa showed that UK consumer spending jumped in September, though not by enough to halt a year-on-year decline.
UK consumer spending spikes up in Sept, but trend gloomy: Visa https://t.co/I4PCTbJll0 pic.twitter.com/oNwtBOdqt8
— Reuters Top News (@Reuters) 9 October 2017
Visa said UK consumer spending - adjusted for inflation and seasonal effects - rose by 1.4% last month, after falling 0.4% month-on-month in August, based on its credit and debit card data.
That was the biggest monthly rise since November, but still left overall spending in real terms 0.3% below last year’s level.
8.45am: FTSE 100 eases back
The Footsie slipped slightly in opening deals, weighed by weaker miners after a disappointing China PMI Services data sapped an otherwise decent start to the week in Asia and after Wall Street ended its record run on Friday.
Mike van Dulken, Head of Research at Accendo Markets commented: “Political uncertainty continues to dominate, be it stateside, North Korea, Spain or closer to home in Westminster.”
Around 8.40am, the FTSE 100 index was down around 3 points at 7,519, giving back some of Friday’s near 15 point advance as the pound rallied slightly after falls then.
On currency markets today, the pound recovered 0.5% versus the dollar at US$1.3124, and was up 0.4% against the euro at €1.1187.
On the corporate front, Smith & Nephew PLC (LON:SN.) was the biggest FTSE 100 faller, down 1.5% to 1,371p after the medical equipment manufacturer said its chief executive Olivier Bohuon is to step down from his role by the end of 2018 after seven years in the role.
The group said the 58-year-old will continue to lead the company until a successor is found.
Downgrades hit BT, TalkTalk
Telecoms giant BT Group PLC (LON:BT.A) was also under pressure early on, losing 0.7% at 281.05p after US bank Citigroup chopped its rating back to ‘sell’ from ‘neutral’, citing worries over a coming “fibre land grab”.
Citigroup also made the same move for FTSE 250 broadband provider TalkTalk PLC (LON:TALK), which dropped 2.5% to 209.9p.
But the strongest market gainer, was mid cap hotels firm Millennium & Copthorne PLC (LON:MLC) which soared 23% higher to 559.5p after its Singaporean majority-owner tabled a 552.5p a share cash mop-bid for the firm that values it at around £1.8bn.
Proactive news headlines:
Jersey Oil and Gas PLC (LON:JOG) shares jumped almost 300% in Monday’s opening deals after it revealed a new oil discovery in the North Sea, with the side-track to the originally unsuccessful Verbier well hitting hydrocarbons. The Statoil led exploration venture has proven the oil accumulation in what is described as good quality sands, and the results are now being evaluated alongside 3D seismic data to assess what the find means for the rest of the nearby acreage.
Tests have revealed that gold recoveries from the BAM East deposit in Ontario held by Landore Resources Limited (LON:LND) ought to be very high. A combination of gravity and cyanidation recovery methods was used, and was able to extract 99% of the gold contained in the ore.
Columbus Energy Resources PLC (LON:CERP) has unveiled a new £4mln equity funding effort which is earmarked for an acceleration of the group’s growth strategy.
ReNeuron Group PLC (LON:RENE) is to present more pre-clinical data highlighting the potential of its exosome therapy as a cancer treatment. Data will show a significant reduction in cancer cell proliferation when treated with ExoPr0 and provides important proof-of-concept for applications across a range of cancers, said ReNeuron.
Emerging markets fund manager APQ Global Limited (LON:APQ) has strengthened its International Advisory Council (IAC) with the appointment of experts in the Middle East and global currency markets.
Liquid biopsy firm ANGLE PLC (LON:AGL) announced today that one of its customers has successfully grown circulating tumour cells (CTCs) harvested by its Parsortix system. In a separate announcement, ANGLE told investors that it might have found a new use for Parsortix: enabling researchers to examine the effects of different drugs on circulating tumour cells (CTCs).
Union Jack Oil PLC (LON:UJO) has stuck a deal to acquire the onshore UK assets of Nautical Petroleum, a Cairn Energy PLC (LON:CNE) subsidiary. It delivers stakes in a number of onshore oil projects – including 10% of the Keddington oil field, 10% of the Louth prospect, 16.67% of the Kirklington oil project and 16.67% of the historic Dukes Wood oilfield. All the assets are operated by UJO partner Egdon Energy Ltd (LON:EDR).
Tidal power specialist Atlantis Resources Ltd (LON:ARL) has moved a step closer to securing a firm order for its turbines in Indonesia, with its customer, SBS Energi Kelautan, deciding to proceed with investment on Phase 1 of the Nautilus tidal stream project in Indonesia.
Bezant Resources PLC (LON:BZT) has commenced extraction and processing of the higher-grade virgin gravels from within the deeper levels of the open pit at its Choco platinum-gold project in Colombia.
Tlou Energy Limited (LON:TLOU) told investors it has kicked off a new 250 square kilometres seismic survey in Botswana, spanning its flagship Lesedi coal bed methane project and the adjacent Mamba area. The programme is aimed at areas that are believed to be highly prospective for additional gas reserves, and the objective is to deliver greater resources for both project areas.
Base Resources Limited (LON:BSE) has continued to mine successfully at the Kwale mineral sands project such that reserves at the Central Dune were depleted by 11.2 mln tonnes of ore containing 790,000 tonnes of heavy mineral, while resources were reduced by 12.8 mln tonnes containing 870,000 tonnes of heavy mineral.
KEFI Minerals PLC (LON:KEFI) is now pulling together project finance for the Tulu Kapi gold project in Ethiopia, according to Harry Anagnostaras-Adams, the company’s executive chairman. "It has been an exceptionally busy quarter,” he says.
Cora Gold Limited (LON:CORA) listed on AIM today, following a £3.45 mln fundraising exercise. The company is just over 33%-owned by Hummingbird Resources PLC (LON:HUM), and aims to develop a gold project in Mali.
Scotgold Resources Limited (LON:SGZ) has announced the appointment of Richard Barker as a director of the company effective immediately. The group said Barker is a corporate advisor with extensive experience within Australia and the UK in the oil and gas and mining sectors.
Frontier IP (LON:FIPP) announced that its portfolio company Exscientia Limited was the winner of the Best Emerging Biotech Company Award at the OBN Annual Awards ceremony, celebrating outstanding achievement in the UK life sciences sector, held in Oxford on October 5 2017.
6.50am: Slow start expected
The FTSE 100 is seen starting a touch easier today reflecting mixed performances from Asian and US markets in the last sessions following storm-battered US payroll numbers, with some key UK data and Catalan independence uncertainty a focus.
Spread betting firm CMC Markets expects the FTSE 100 index to open about 3 points lower at around 7,519, having gained 14.88 points on Friday.
Those gains came despite initially weaker US markets as worries about the future for UK Prime Minister Theresa May, following her poor performance at last week’s Tory Party conference, dragged sterling back, boosting internationally-focused blue chips. On currency markets today, the pound held at around US$1.30 against the dollar.
No important domestic data is due today so markets are likely to drift as the week begins, with corporate news also fairly thin on the ground.
Express deal interest for Trinity Mirror
Among the few companies on the corporate diary today, newspapers group Trinity Mirror PLC (LON:TNI) will deliver a trading update, with any news on its talks to buy all of Richard Desmond's Northern & Shell publishing assets, which includes tabloid rivals the Daily Express and The Star - announced last month - sure to be a focus.
In its last update at the end of July, Trinity Mirror said it expected adjusted results for the year to be in line with expectations, and confirmed that like-for-like revenues in July were expected to have fallen by 8%, slightly better than the 9% decline seen in the first half.
The outlook comments then noted that whilst the economic environment, in particular for print, was proving more challenging than anticipated, the group continues to believe that its strategy will meet their objective to deliver sustainable growth in revenue, profit and cash flow over the medium term.
Pollsters YouGov eyed too
With talk of another possible UK general election if Theresa May gets toppled, full year numbers from polling firm YouGov PLC (LON:YOU) could also be a focus today.
In a preview last week, analysts at Numis Securities pointed out that YouGov released an “encouraging trading update” on August 8 which saw them raise their pre-tax profit estimates for the firm by around 5% to £15.5mln
They said: “The performance trends reporting in H1 continued into H2, with organic growth growing 'strongly' in Data Products & Services (H1 +24%) while Custom Research 'significantly improved its profitability'; H1 profits rose +30% with margin +140bp to 11.9%.”
The analysts added: "A highlight of the half was the demonstration of the accuracy of its General Election seat by seat model which combines connected data with analytics.”
Significant events expected on Monday October 9:
Trading update: Trinity Mirror PLC (LON:TNI)
Finals: CAPP-XX Limited (LON:CPX), Plant Impact PLC (LON:PIM), YouGov PLC (LON:YOU)
Interims: Centamin PLC (Q3) (LON:CUY), XP Power PLC (Q3) (LON:XPP)
Economic data: BRC retail sales monitor
US Columbus Day holiday – markets open, banks closed
Around the markets:
- Sterling: US$1.3072, down 0.3%
- Gold: US$1,271.80 an ounce, up 0.2%
- Brent crude: US$49.48 a barrel, up 0.4%
City Headlines:
- Rivals deliver broadside at BT’s broadband plans – The Times
- RBS Boss: Brexit will cause City job losses – The Scotsman
- Just Eat takeover of rival Hungryhouse ‘in doubt’ – The Times
- Ted Baker to unveil double-digit profit growth again on the back of overseas expansion – City AM
- Sale of fashion chains Oasis, Warehouse and Coast is cancelled after only one offer – Daily Mail
- Boeing helped finance bailout of Monarch Airlines – Financial Times
- Monarch’s fear of losing £60mln landing slots as its operating licence hangs in the balance - Daily Mail
- John Flannery sends cost-cutting signal at GE with shake-up – Financial Times
- Uber’s rivals in Paris turn up efforts to grab market share – Financial Times
- Harvey Weinstein fired from The Weinstein Company following harassment scandal – The Independent
- Buzzfeed UK doubles turnover but losses rise on the back of rapid expansion – Daily Telegraph
- Scottish Power to act on controversial default energy tariffs – Financial Times
- Deutsche Börse intensifies efforts to pull euro clearing from UK – Financial Times
- UK companies keep close eye on Morrison’s data leak case – Financial Times
- ONS inflation bungle piles on the pressure for UK rate rise – The Times
- Warnings grow louder over cryptocurrency as valuations soar – The Guardian
- Losses at Trump’s Scottish golf resorts have doubled – Scottish Herald