FTSE 100 closes down 8.47 at 7,526
US stocks modestly higher
Commodity stocks higher
FTSE 100 closed in negative territory despite a rise in resource stocks and as US shares were higher.
The UK blue-chip benchmark closed 8.47 points, or 0.11% lower at 7,526, while FTSE 250 shed over 42, or 0.21% to finish at 20,217.
Brent crude rose 1.64% to US$57.17 a barrel and gold rose 0.28% an ounce.
"China posted higher than anticipated imports in September, and the growth rate ticked up too, and this boosted the basic resources sector," noted David Madden at CMC Markets.
Imports jumped by 18.7%, while analysts were expecting a rise of 14.7%.
Higher on Footsie were copper giant Antofagasta (LON:ANTO), up 1.87% and Glencore (LON:GLEN), up 1.54% to 382.40p, but the biggest riser was Standard Life Aberdeen (LON:SLA), up 2.08% to 446.30p.
The biggest loser was Convatec Group (LON:CTEG), which plunged over 26% to 205p
The medical products company cut its full year revenue guidance after supply issues in its Advanced Wound and Ostomy Care businesses hurt its third quarter performance.
Full year organic revenue is now forecast to rise between 1% and 2%, down from group’s previous expectation that it would grow more than the 4% reported in 2016.
3.25pm: Footsie flat despite US gains
The Footsie had turned flat again in late afternoon trading in spite of early modest gains in on Wall Street, with the pound mixed amid worries over Brexit talks and ahead of some key UK data later this week
Around 3.25pm, the UK blue chip index was just 2 points higher at 7,537, well below the session peak of 7,557.00 and close to the day’s low of 7,531.48.
On currency markets, sterling slipped 0.1% lower versus the US dollar at US$1.3271, but ticked lower 0.1% higher against the euro at €1.1252 on worries that Brexit negotiations could be heading for a “breakdown” as UK prime Minister Theresa May headed to Brussels today for meetings with senior EU officials.
In early New York trading, the Dow Jones Industrials was up 19 points at 22,890, with other benchmarks also a touch higher, but held off opening highs as global political worries, such as President Trump’s threat to end the Iran nuclear deal countered by hopes for further positive US corporate earnings this week.
Energy boost
Firmer oil prices provided underlying support, with Brent crude still up 1.3% at US$57.91 a barrel after Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters and raising concerns over exports from OPEC’s second-largest producer.
Energy stocks found support from firmer crude prices, with BP PLC (LON:BP) up 0.5% at 493.25p and Royal Dutch Shell PLC’s (LON:RDSA) A shares ahead 0.4% at 2,295.5p helped as well by a price target hike from Barclays Capital.
Strength in heavyweight commodity stocks also helped prop up the FTSE 100 index as metal prices advanced after Chinese inflation data for September met expectations.
Chilean copper miner Antofagasta PLC (LON:ANTO) the top blue chip gainer, up 3.3% at 1,048p, while BHP Billiton plc (LON:BLT) added 2.5% at 1,433p, and Glencore PLC (LON:RIO) took on 2.4% to 385.70p.
2.00pm: Footsie up as sterling slips
The FTSE 100 index pushed back up towards session highs in afternoon trading on expectations for a firm start on Wall Street and as sterling gave back earlier gains.
Around 2.00pm, the UK blue chip index was up over 9 points at 7,544, still below the session peak of 7,557.00 but above the low of 7,531.48.
The Footsie's move higher came as the pound eased back 0.1% versus the US dollar to US$1.3271, and ticked lower against the euro at €1.1239 after traders cited a Bloomberg headline that said Brexit negotiations could be heading for a “breakdown”
UK prime minister Theresa May has headed to Brussels today for what she said she is expecting to be a "constructive" meeting with senior EU officials as part of her attempt to achieve a smooth exit from the bloc, her spokesman said on Monday.
May will meet EU Commission head Jean-Claude Juncker and chief Brexit EU negotiator Michel Barnier and she will also speak to French President Emmanuel Macron and Irish Prime Minister Leo Varadkar.
1.50pm: Property prices rise, but number of sales fall
A new north-south property divide is emerging in the UK, according to the latest data from property website Rightmove, which said prices rose in eight out of 10 regions last month, the exceptions being Yorkshire and Humber and east Midlands.
Rightmove reported that asking prices for homes coming to the market in England and Wales rose by 1.1% to £313,435 in the four weeks to 7 October, rebounding after a 1.2% drop the previous month.
However, Rightmove added that there were more sellers chasing fewer buyers as cash-strapped consumers become more cautious about major spending commitments.
The number of properties coming to market in England and Wales was up 3.1% last month compared with the same period in 2016, but the number of sales agreed was down 5.9%.
1.20pm: Regulator warns on young people’s debt
Andrew Baily, the chief executive of the Financial Conduct Authority has warned of a "pronounced" build-up of debt among young people.
In an interview with the BBC, Bailey said the young were having to borrow for basic living costs.
The regulator also said he "did not like" some high-cost lending schemes.
Recent Bank of England figures showed that consumer debt, excluding mortgages, now totals over £200bn and is approaching levels not seen since the financial crisis.
12.15pm: Footsie pretty flat
The FTSE 100 index was barely changed in early afternoon trading, just ticking lower as the pound firmed slightly, even though US stocks are expected to open a touch higher today, extending recent all-time highs.
Around 12.15pm, the UK blue chip index was down about 2 points at 7,533, just above the session low of 7,532.80, and below the day’s high of 7,557.00, stock in a narrow trading range.
On currency markets, sterling was barely changed versus the dollar at US$1.3301 ahead of UK inflation numbers due tomorrow, but it ticked 0.3% higher against the euro, with the single currency worried by Catalan independence uncertainties for Spain.
In New York, US stock futures pointed modestly higher as global political worries over Catalonia and President Trump’s threat to end the Iran nuclear deal was countered by hopes for further US corporate earnings this week, with streaming firm Netflix Inc (NASDAQ:NFLX) due to report after the close today.
Craig Erlam senior market analyst at Oanda said: “With corporate earnings season now underway and the number of companies reporting on the third quarter picking up quickly – 56 S&P 500 companies to release numbers this week – investors will be looking to the figures to add further support to the rally.
“This is particularly the case given the quieter week we have on (US) economic data side, with predominantly tier two figures scheduled for release.”
In London, strength in heavyweight mining stocks continued to underpin the FTSE 100 as commodity prices advanced after Chinese inflation data for September met expectations, with Chilean copper miner Antofagasta PLC (LON:ANTO) the top blue chip gainer, up 3.1% at 1,046p, while BHP Billiton plc (LON:BLT) added 2.2% at 1,428p, and Rio Tinto PLC (LON:RIO) also rose 2.1% to 3,766.5p.
Drugs wanted
Drugmakers were also in demand, with Shire Plc (LON:SHP) up 2.5% at 3,945.5p after Sky News reported that US hedge fund Sachem Head Capital Management is urging the Dublin-based drugmaker to explore a sale or spin-off of several of its units.
The move, which the broadcaster said has been raised during discussions between the hedge fund and Shire directors in recent months, comes after Sachem Head disclosed during the summer that it had acquired a small stake in the pharmaceuticals group.
Fellow FTSE 100-listed drugmaker AstraZeneca PLC (LON:AZN) also found gains, up 0.6% at 5,160p after Swiss bank Credit Suisse upgraded its rating to ‘outperform’ from ‘neutral’ in a review of the global pharma sector.
Meanwhile, US broker Jefferies International raised target prices for both AstraZeneca and rival GlaxoSmithKline plc (LON:GSK), up 0.2% at 1,519p, in its own sector review today.
And broker comment also gave a lift to blue chip commercial broadcaster ITV plc (LON:ITV), which added 1.1% at 174.5p after the broking arm of HSBC upped its stance to ‘buy’ from ‘hold’ in a note on the European TV sector.
But on the downside, automotive and aerospace parts makers GKN PLC (LON:GKN) was once again the biggest blue chip faller, shedding another 2% at 311.6p as a welter of broker downgrades rolled in following last week’s profit warning.
Among the negative comment, French broker Societe Generale cuts its stance for GKN to ‘hold’ from ‘buy’, while Numis Securities reduced its rating to ‘add’ from ‘buy’ noting that the “banana skins are unfortunate but are mainly one-off in nature and do not detract the inherent value argument.”
Although the Numis analysts added that: ”It certainly raises the pressure on the new management team”.
10.20am: Oil driven higher
Crude prices jumped today as Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters and raising concerns over exports from OPEC’s second-largest producer.
In mid-morning trading, Brent crude futures were up 1.3% to US$57.91 a barrel, having traded as high as US$58.13.
Rebecca O’Keeffe, Head of Investment at Interactive Investors commented: “Oil prices have spiked on increased tension in Kirkuk. Iraq is one of the biggest oil producers in the world and the Kurdish controlled region in the north of the country produces a significant proportion of Iraqi oil.
“In parallels with the situation in Spain, the semi-autonomous Kurdish region voted for independence last month, but the prospect of obtaining it seems slim. However, this military move by Iraqi forces has seen oil prices move higher as fears grow that an escalation of tensions in the region will disrupt the supply chain.”
Energy stocks found support from firmer crude prices, with BP PLC (LON:BP) up 0.5% at 493.2p and Royal Dutch Shell PLC’s (LON:RDSA) A shares ahead 0.1% at 2,288.5p helped as well by a price target hike from Barclays Capital.
Strength in heavyweight commodity stocks helped keep the FTSE 100 index modestly higher, up around 3.5 points at 7,538.
8.30am: Positive start
The FTSE 100 opened in positive territory, led higher by the miners, which received a boost from the latest Chinese inflation data.
While China’s consumer prices rose in line with expectations at 1.6%, producer prices grew at a faster than anticipated 6.9%, spurred by a resurgence in construction.
Filling in the gaps here, the big diggers, particularly those producing the bulk commodities such as iron ore and coal, benefit directly from any upturn on building spend.
Leading the pack with a 3% rise was Antofagasta (LON:ANTO), a specialist in copper, which has also been in demand of late with the market for the red metal moving from over-supply to deficit. Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) were not far behind Anto.
Also on the up was ITV (LON:ITV) after an upgrade by the investment banking arm of HSBC, which went to ‘buy’ from ‘hold’ on stock in the broadcaster.
The list of losers was led by ConvaTec (LON:CTEC) after the medical products giant sounded the alert over sales, which will be weaker than expected.
Among the smaller-caps, ACAL (LON:ACL) was up 7% after it did the reverse of ConvaTec and upgraded its forecasts.
Telit Communications (LON:TCM), specialist in machine-to-machine technology, was chase 6% on bid speculation fuelled by an article in Monday’s edition of the Financial Times, which pointed to potential Chinese interest in the business.
Proactive news headlines:
Fox Marble Holdings PLC (LON:FOX) has now received the complete advance payment of US$500,000 from OM Enterprises, as per the sales agreement announced last month.
Medtech firm genedrive PLC (LON:GDR) has signed a distribution agreement with Sysmex Corporation, a world leader in clinical laboratory systemization and solutions, covering EMEA, with an initial focus on Africa.
RM Secured Direct Lending PLC (LON:RDML), an investment trust specialising in secured debt instruments, saw its net asset value per share rise last quarter to 99.51p from 97.6p at the end of June.
Shares in industrial Internet of Things company Telit Communications Plc (LON:TCM) advanced on Monday following weekend reports that potential bidders are circling.
Customised electronics specialist Acal Plc (LON:ACL) expects full-year earnings to be ahead of expectations after a strong first half performance.
Futura Medical PLC (LON:FUM) jumped at the opening bell after it told investors that the majority of physicians in the US think its erectile dysfunction gel is an improvement over current ED therapies. The innovative healthcare group said the latest market research data found that 60% of doctors think MED2002 – the official name of the gel – is a better treatment than the likes of Viagra and Cialis.
Sunrise Resources Plc (LON:SRES) has discovered a potential new perlite/pozzolan deposit in Nevada. Using techniques refined from those that identified the CS pozzolan/ perlite deposit, Sunrise has identified a new conical outcrop of glassy volcanic rock having a base diameter of approximately 400m and a height of up to 45m above the surrounding plain, suggesting good tonnage potential.
Concepta PLC (LON:CPT) has signed up two more distributors in China for its myLotus fertility product, who will target the early pregnancy market as well as infertility. Huanzhong Biotech and Wanma Technology have both signed 3-year exclusive distribution agreements, which will cover the provinces of Hebei near Beijing and the Shanghai area respectively.
Highlands Natural Resources Plc (LON:HNR) told investors it is now moving ahead to flowback operations at the Wildhorse and Powell wells, at the East Denver project in Colorado. The company has now completed a fracking programme on the two wells, with each fractured 55 times. It is expected that both wells will begin production during the fourth quarter.
Silence Therapeutics PLC (LON:SLN) has announced the appointment of Dr Annalisa Jenkins, CEO of Dimension Therapeutics Inc. as the AIM-listed group’s non-executive chair with effect from today. Jenkins will succeed Dr. Stephen Parker, the company's non-executive chairman since September 2015 who will become a non-executive director.
Orosur Mining Inc (LON:OMI) has commenced a 15,000 metre drill campaign in Colombia. The drilling is supported by the US$3.2 mln in new money that the company raised in August. Separately, first quarter production numbers from the San Gregorio mine in Uruguay show that Orosur is on track to meet guidance of between 30,000 and 35,000 ounces of gold for the year.
Strategic Minerals Plc (LON:SML) has signed a term sheet for the acquisition of the Leigh Creek copper mine in Australia. Subject to due diligence, Strategic will pay A$1mln in cash in staged payments, provide interim loan funding, subscribe for shares in the owner, LCCM, and grant a significant royalty over the project.
Merrill Lynch Australia funds have bought just over 5% of Base Resources Limited (LON:BSE). The share purchase comes after Taurus sold a slightly bigger stake last week.
Vast Resources PLC (LON:VAST) enjoyed a record third quarter, as operations at the Manaila polymetallic mine in Romania and the Pickstone-Peerless gold mine in Zimbabwe outperformed the previous quarter in terms of tonnes mined, tonnes milled, copper concentrate produced and gold produced. At Manaila there was a 31% increase in copper concentrate produced, although grade dropped marginally. Zinc production fell, but gold production rose.
Metal Tiger PLC (LON:MTR) told investors that it has added more shares in Kingsgate Consolidated Limited (ASX:KCN). It has purchased 430,000 shares at a price of 33 Australian cents, equivalent of 20p, per share. The transaction takes MTR’s stake up to 11.58mln shares, amounting to 5.18% of the Australian company.
Società Chimica Bussi (SCB) is investing in additional manufacturing capacity for a stain removal product developed by Itaconix Plc (LON:ITX).
APQ Global Limited (LON:APQ), the emerging markets growth company, announces that as at the close of business on 30 September 2017, its unaudited book value per ordinary share was 96.94p.
6.45am: Quiet start predicted
The FTSE 100 is set to open flat with investors looking to the changing political landscape in mainland Europe rather than taking their cue from Asia’s main markets, which were buoyant.
The spread betting firms reckon the index of blue-chip shares will inch just 1.2 points higher to 7,536.66 – putting it around 20 points shy of the closing high it hit last Thursday.
Understandably, the inhabitants of the Square Mile are expected to be a little cautious with instability caused by Catalonia and following Austria’s general election and lurch to the right. The country now has Europe’s youngest national leader in 31-year-old Sebastian Kurz.
A backlash against immigration was behind the success of the AfD in Germany, which has upset the political equilibrium there.
Chancellor Angela Merkel’s hand has been weakened further ahead of coalition talks by her Christian Democratic Union party’s poor showing in the Lower Saxony elections.
“Attention will also be on this week’s EU summit in Brussels in the wake of last week’s warning from EU chief negotiator Michel Barnier that the Brexit talks are deadlocked, though it was admitted there had been some progress,” said Michael Hewson of CMC Markets ahead of the Belgian gathering on Thursday.
Back home we have a busy week for scheduled company news with ASOS, Bellway, Travis Perkins, Merlin Entertainments, Unilever and Intercontinental Hotels Group reporting.
We get a double dose of data on Tuesday and Wednesday with inflation stats and employment numbers respectively with the former potentially sealing the case for an immediate rise in interest rates.
- Pound worth US$1.3284
- Gold up US$1 an ounce at US$1,305.60.
- Brent crude up 66 cents at US$57.83 a barrel.
Business Headlines
Financial Times
- Elliott Advisors, the activist investor run by billionaire Paul Singer, is expected to attend BHP Billiton’s annual shareholder meeting in London this week, as it continues to press for strategic change at the world’s biggest mining company.
- US banks and insurers will be forced to review their auditor relationships that often stretch back decades after being caught by new European rules aimed at ending the cosy relationships between companies and the “big four” accounting firms.
- Michael Spencer’s Nex Group to cut costs after shaky start.
- Royal Bank of Scotland, the taxpayer-backed bank, has excluded potentially thousands of small businesses from a £400mln compensation scheme set up in response to a long-running scandal over alleged mistreatment of customers.
- Potential bidders are circling UK tech company Telit Communications, with private equity buyers weighing up making offers for a large part of the business as a mystery Chinese investor continues to build a stake.
- US banks to introduce new anti-fraud measures after Equifax hack.
The Times
- Philip Hammond is pushing for an international trade agreement in services to “rehabilitate globalisation” in the West to counter recent populist surges in Europe and America.
- Underlying sales at Britain’s biggest pub and restaurant chains turned negative last month as consumers reined in spending on eating and drinking out.
Daily Telegraph
- Global banks and international bond strategists have been left stunned by revised ONS figures showing that Britain is £490 bn poorer than had been assumed and no longer has any reserve of net foreign assets.
- One in five FTSE 100 defined benefit pension schemes would be at risk of failure if Britain entered another economic downturn, research reveals.
- Britain’s remaining coal-fired power plants could enjoy an 11th-hour revival in the early 2020s despite the Government’s drive to cut carbon emissions, if ministers choose not to risk raising household energy prices.
Guardian
- Sir Vince Cable has accused Network Rail and the company behind the HS2 rail link of being secretive at a crucial time for transport infrastructure in Britain.
- A £600mn case is due to begin in the high court this week which is expected to lead to five former directors of Lloyds Banking Group being asked to explain the circumstances that led to the rescue of HBOS during the height of the financial crisis.
- Saudi Aramco has dismissed reports that it is considering shelving plans for the world’s biggest ever flotation, with the state-owned oil company saying the $2 trillion (£1.5 trillion) listing was on track for next year.
Daily Mail
- Suppliers halt deliveries to British Toys R Us stores as the retailer battles £3.8bn of debt in the US.