FTSE closes 5.27 up at 7,493
Sterling rises against dollar, euro
Croda and BP shares jump after Q3 updates
FTSE 100 closed up marginally on Tuesday as miners suffered and the pound firmed.
The UK blue-chip benchmark had a pretty lacklustre afternoon session, to close at 7,493, while the mid-cap benchmark, the FTSE 250 was 14.61 higher at 20,227.
In the currency markets, sterling added 0.43% against the Euro, and 0.50% against the US dollar.
It comes after the EU’s chief Brexit negotiator Michel Barnier said he was ready to speed up talks with the UK and heightened expectations of an interest rate rise by the Bank of England on Thursday, to return it back to the level of last year.
Top Footsie riser was Croda International (LON:CRDA), which shifted up 4.24% to 4,184p after it confirmed its outlook for the full year and said that the improved sales trend seen in the first half had continued in the third quarter.
Silver giant Fresnillo (LON:FRES) was the biggest laggard, dropping 2.62% to 1,302p as the gold price lost 0.15%.
Randgold Resources (LON:RRS) was also lower, off 1.79% to 7,395p.
4.00pm: FTSE flat ahead of close
The FTSE 100 was broadly flat ahead of the closing bell as the pound rose against the dollar despite strong US data.
Sterling increased 0.45% versus the dollar at US$1.3268. Against the euro the currency was up 0.41%.
The pound gained after the EU’s chief Brexit negotiator Michel Barnier said he was ready to speed up talks with the UK. Expectations that the Bank of England will raise interest rates on Thursday also offered some support.
Stronger-than-expected US data, including the Conference Board’s consumer confidence index and the Chicago PMI, failed to derail the rise in cable.
“That’s likely because investors are a bit nervy ahead of the week’s Fed meeting,” said Spreadex’s Connor Campbell.
On the company front, BP and Croda continued to rise after the companies’ third quarter updates impressed investors.
WPP gained even as it cut sales expectations for the third time this year and reported a drop in third quarter like-for-like revenue, though it said it was taking steps to address the slowdown in clients’ advertising spending.
Ryanair surged as it said it was course for record annual profits despite a rota mess-up that led to pilot shortages and the cancellation of thousands of flights.
Burberry declined after announcing Christopher Bailey, who stepped down as chief executive in July, will leave the company entirely.
Fresnillo and Glencore were on the back foot as precious metal prices fell.
3.30pm: William Hill and Ladbrokes shares rise in relief at government gaming review
The government said it would cap the size of the stakes punters can make fixed-odds betting terminals but shares in gambling firms gained as the proposal was considered less harsh than some had expected.
The Department for Digital, Culture, Media and Sport (DCMS) minister Tracey Crouch said that the current level of regulation on the machines, which allow gamblers to bet up to £100 per spin, is inappropriate.
Crouch said the government would cut the maximum bet on the FOBTs to between £2 and £50 and called for a review of the of the spin speed on games.
William Hill and Ladbrokes were among the biggest risers in afternoon trade as investors had been pricing a worse-than-anticipated outcome for the government review on the high-speed electronic casino games.
2.30pm: US data surprises to the upside
US consumer confidence in October reached its highest level in nearly 17 years.
The Conference Board’s sentiment index rose to 125.9 from an upwardly revised 120.6 in September, beating forecasts of 121.0.
Separately, the Chicago purchasing manager’s index jumped to 66.2 in October from 65.2 in the prior month, well above the 50 level that indicates improving conditions. It marked the highest level in six-and-a-half years and beat expectation for a decline to 62. Growth was supported by an increase in demand and output.
The dollar is up 0.10% against the euro and 0.19% verus the euro but down 0.30% versus the pound on Brexit optimism.
2.00pm: Pound strengthens as Barnier says he ready to speed up Brexit talks
The FTSE 100 is broadly flat as the pound spiked after the EU’s chief Brexit negotiator Michel Barnier said he was ready to accelerate talks with the UK.
He said the agenda and dates for the next round of Brexit talks would be set in the “next few hours or days”, Reuters reported.
Sterling strengthened on his remarks, rising 0.35% versus the dollar to US$1.3254 and 0.47% versus the euro to €1.1389.
1.00pm: Ryanair flying higher
Ryanair shares are up 5.95% to 16.75p after saying it was on track to post record annual profits despite having to cancel 20,000 flights following a mess-up over how it scheduled time off for pilots.
The company has had more than a billion euros knocked off its share price since it announced a first wave of cancellations on 15 September, forcing it to cut its annual growth plans to 129 million passengers from 131 million.
Still management said it expected the cuts would lift average ticket prices above previous expectations. The group is now hiring about 40-50 pilots per week in order to expand by 50% in the next six years. Ryanair has replaced its rostering team and hired back its former director of flight operations from Malaysia Airlines to support efforts in retaining and attracting pilots.
“More passengers, lower fares and on course for another record profit - investors might be wondering what all the fuss was about in the wake of September’s cancellation fiasco,” said ETX Capital’s Neil Wilson.
“But beneath the rising revenues and passengers there are concerns about rising labour costs that will affect Ryanair’s unit cost advantage over peers.”
Wilson said while Rynair insisted the pay increases will not affect the hefty unit cost advantage it has over competitors, it will "undoubtedly have a material impact on earnings".
12.30pm: FCA says UK firms could start 'irreversible' Brexit plans
The Financial Conduct Authority has warned that UK firms will start making “irreversible” decisions about staff and operations by Christmas unless the government secures a Brexit transition deal with the EU soon.
Andrew Bailey, chief executive of the FCA, said a transition deal would ease pressure on firms to take irreversible decisions, namely moving operations and staff to the EU.
Financial firms in Britain are already renting new buildings in the EU but such decisions could be reversed, he said.
Putting staff in new operations in the EU to ensure continuity of operations after Brexit would be more difficult to reverse, however, Bailey added.
“That is why they and we tend to take the view that the end of this year, beginning of next year is the point at which these things start happening,” Bailey said.
12.00pm: FTSE gains lessen
The FTSE 100 saw its gains recede slightly in midday trading as the pound rose against the dollar and the euro ahead of Thursday’s Bank of England interest rate decision.
BP and Croda are among the biggest risers after well-received third quarter updates.
EasyJet is also flying higher, extending Monday’s gains following the announcement that it is buying some of Air Berlin’s operations to become the leading airline in Berlin.
WPP shares recovered following an initial decline after cutting its full year guidance and reporting a drop in third quarter like-for-like revenue as it battles a slowdown in client spending.
Burberry was under the cosh after saying Christopher Bailey, who stepped down as chief executive in July but remained in creative control, is to leave the company entirely by the end of next year.
Weir Group plunged as it said full-year operating profit was expected to be slightly lower than previously estimated due to higher costs and investments in its mining business.
Pearson is on the back foot following a Reuters report that it has entered exclusive talks with Asian funds Baring Private Equity Asia and Citic Capital Holdings to sell its English language unit, Wall Street English.
In economic data, the euro weakened despite better-than-expected eurozone GDP in the third quarter as inflation in the bloc fell in October.
Closer to home, UK consumer confidence declined in October with GFK’s sentiment index falling to -10 from -9 in September.
The pound is up 0.07% against the dollar at US$1.3217 and up 0.185 versus the euro at €1.1356, boosted by expectations that the Bank will raise interest rates on Thursday.
11.30am: French economic growth slows in third quarter
France’s economy grew 0.5% in the third quarter compared to the previous three months, boosted by an increase in consumer spending and investment, according to the first estimate by the INSEE national statistics agency.
It marked a slowdown on a 0.6% quarterly rise in the second quarter and brings the annual rate of gross domestic product to 2.2%, the fastest pace of growth since 2011.
Consumer spending in the country increased by 0.5% in the third quarter after a 0.3% rise in the previous quarter while investment edged up 0.8% following a 1.0% gain.
11.00am: Eurozone inflation misses estimates
Eurozone inflation unexpectedly fell in October to an annual rate of 1.4% from 1.5% in September.
The core consumer price index, which strips out volatile items such as energy and food, dropped to 0.9% year-on-year in October from 1.1% the previous month.
“The decline in core inflation may have been the most surprising data point today,” said ING.
“It was well below analyst estimates and the lowest reading in five months.
“While seasonal effects are likely impacting the number to a certain degree, price growth in services dropped from 1.5% to 1.2% and these prices are likely to bounce back - this will be taken as a sign that last week’s dovish tapering from the ECB were justified.”
Corrected colours in the graph pic.twitter.com/nTSZRQCU2p
— EU_Eurostat (@EU_Eurostat) 31 October 2017
The euro has weakened, falling 0.17% verus the dollar, 0.23% versus the pound and 0.02% against the yen.
10.30am: Eurozone economy grows more than expected
The eurozone economy grew at an annual rate of 2.5% in the third quarter, beating expectations of 2.4% and following 2.3% in the second quarter, Eurostat revealed.
Compared to the previous quarter, eurozone gross domestic product rose 0.6% after a 0.7% increase in the second quarter and compared to forecasts of 0.5%.
Euro area #GDP +0.6% in Q3 2017, +2.5% compared with Q3 2016: preliminary flash estimate from Eurostat https://t.co/1fE3UuAXNy pic.twitter.com/d1MGiMEseI
— EU_Eurostat (@EU_Eurostat) 31 October 2017
In comparison, UK GDP expanded just 1.5% year-on-year and 0.4% quarter-on-quarter over the same period.
“A surprising acceleration in the eurozone’s economy during Q3 will certainly please Mario Draghi, and the ECB may now rethink its slow tapering of the monetary stimulus,” said Dennis de Jong, managing director at UFX.com
“Draghi can also point to a period of sustained growth as vindication for an expansionary monetary policy which has not been without its critics.
“Even with the global recovery firming up, the ECB chief has been understandably cautious to change course, given sluggish inflation and the twin spectres of Brexit and Catalan unrest.”
Separately, Eurostat revealed the eurozone unemployment rate fell to 8.9% from 9.0%, ahead of estimates of 9.0%.
10.00am: BP and Croda top risers, Burberry biggest faller
Specialty chemicals company Croda International is the top riser on the FTSE 100 after reporting a 4.4% increase in constant currency sales growth in the third quarter, driven by its personal care division.
"The group has successfully achieved its priorities this year by driving profitability through premium, faster growth market niches and improving its performance in less differentiated market," said AJ Bell.
"The combination of good top line growth and a slight increase in margins puts the group on track to meet its full-year forecasts. Croda’s shares were up by over 4.3%."
BP is also on the front foot after a well-received third quarter update.
“BP has spent the past seven years addressing big problems, with first the Gulf of Mexico disaster and then the oil price crash throwing the group into disarray. Those headwinds are finally fading into the history books," said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
Going the other way, Burberry slumped after saying, Christopher Bailey, will step down by March 2018. The designer was responsible for turning the British company into a global fashion brand as chief executive. Marco Gobbetti took over as chief executive earlier this year but Bailey retained creative control.
9.30am: UK consumer confidence falls
UK consumer confidence dropped in October on a gloomier economic outlook amid Brexit uncertainty.
GfK's monthly consumer sentiment index declined to -10 this month from -9 in September,
“As concerns about the wider economic prospects for the UK economy dampen our outlook, consumers are showing no real ‘get-up-and-go’,” GfK analyst Joe Staton said..
8.30am: FTSE 100 opens on the front foot
The FTSE 100 got off to a solid if unspectacular start, shrugging off the rather sluggish performances of Wall Street and Asia’s main share markets to advance 12 points to 7,500.29.
The index of blue-chip shares was dragged higher by BP (LON:BP.) after reporting a 9% increase in third-quarter profits and announcing it would launch a share buyback. Its shares rose 3.4% in early trade.
Also on the up were shares in the speciality chemicals group Croda International (LON:CRDA), which rose 5% after a bullish trading update.
Stepping down a division to the FTSE 250, the pumps specialist Weir Group (LON:WEIR) fell almost 8% after it gave a mini-profits warning as it said earnings from its minerals operation would be slightly lower than forecast.
Looking at the macro-economic picture and across the Channel, the French economy grew at a better-than-expected 0.5% in the third-quarter, giving an annualised rate of 2.2%.
Proactive news headlines:
Wolf Minerals Limited (LON:WLFE) has enjoyed one its best quarters since production started at its Hemerdon tungsten mine in Devon. The price of tungsten rose to a three year high of over US$310 per metric tonne during the quarter to September, while concentrate production and sales rose by 15% to 35,601 mtu.
The latest preclinical data for Sareum Holdings PLC’s (LON:SAR) checkpoint kinase 1 (Chk1) inhibitor candidate continues to show demonstrate the potential of the cancer-fighting treatment.
ReNeuron Group PLC (LON:RENE) was in demand early on Tuesday after the cell-based therapeutics specialist delivered another encouraging update from its phase II clinical study treating stroke patients with its CTX stem cells.
Ferrum Crescent Limited’s (LON:FCR) is pressing on towards a maiden JORC 2012 resource estimate for its Toral prospect in Spain. Executive directors Laurence Read and Miles Campion have completed a review of the company's operations and believe this is the correct decision for the company in order to realise value from the project.
Strategic Minerals PLC (LON:SML) has released the results from the latest four holes to be drilled on the Redmoor tin-tungsten project in Cornwall. These show high grades and should serve to provide further support to the resource upgrade currently in preparation which is due for release in the first quarter of 2018.
KEFI Minerals PLC (LON:KEFI) has re-jigged its plans for production at the Tulu Kapi gold project in Ethiopia. The new plans allow for 145,000 ounces of production in the first three years, up from the 115,000 that had been planned for previously. The new plans dovetail with the requirements of infrastructure specialist Oryx, which has said in Heads of Terms that it will provide US$135mln in funding. That number may now be increased to US$140mln.
Kibo Mining PLC (LON:KIBO) has announced that its CEO Louis Coetzee will be presenting at the One Belt One Road summit in Beijing this week, highlighting the critical energy situation in Southern Africa and the development of the Mbeya Coal to Power Project.
APQ Global Limited (LON:APQ), the emerging markets income company, has made a further appointment to its International Advisory Council with Manos Papatheofanous joining it. The group said he will leverage his invaluable 20 years of expertise in the financial markets to assist in locating Emerging Markets opportunities globally for APQ.
6.45am: Slow start predicted
The FTSE 100 looks set to make a slow start to the trading day with the spread betting firms predicting the index of blue-chip stocks will edge just three points higher at the open to 7,490.81.
The session looks likely to be one of consolidation with a drag to performance exerted by Asia’s main markets and Wall Street, which delivered what can best be described as sluggish performances overnight.
The uncertainty created by Catalonia’s move towards independence appears to have abated now direct rule has been imposed by Madrid ahead of fresh regional elections before Christmas.
“One outperformer yesterday was the Spanish stock market, which has undergone a significant number of convulsions this month as a result of the constitutional crisis,” said Michael Hewson, analyst at CMC Markets.
Back here in the UK, interim results from BP will take centre stage later, with the oil major expected to have benefited from a steadier oil price.
The impact of the cancellations debacle will be uppermost in the minds of investors in Ryanair, when the low cost carrier weighs in with its first-half figures.
Significant events expected on Tuesday October 31:
Interims: BP PLC (Q3) (LON:BP.) , Ryanair PLC (LON:RYA), Great Eastern Energy Corp (LON:GEEC)
Trading updates: Croda International PLC (Q3) (LON:CRDA), DS Smith PLC (Q3) (LON:SMDS), Just EatPLC (LON:JE.), Plus 500 Ltd (LON:PLUS), Weir Group PLC (Q3) (LON:WEIR), WPP PLC (LON:WPP)
Finals: Egdon Resources PLC (LON:EDR), Earthport PLC (LON:EPO)
Around the markets:
- Sterling worth US$1.3268, up 0.45%
- Brent crude at US$60.95, up 0.08%
- Gold at US$1,269.55 an ounce, down 0.53%
City Headlines:
- Iraq has demanded that Russia’s state-owned oil company Rosneft provide “clarifications” about contracts signed with Kurdistan’s autonomous regional government, after threatening that deals made without Baghdad’s approval would be considered illegal.
- Oxford Properties, the real estate arm of a US$72bn Canadian pension fund, is expanding into Asia as it cools on UK office space after Britain voted to leave the EU.
- Facebook and Twitter will call for help in the battle against online manipulation when they testify to Congress on Tuesday, while revealing that Russian meddling ahead of the US election was wider than previously reported.
- Taiwan-listed Apple suppliers climbed on Monday after demand for the new iPhone X exceeded supply when pre-orders for the device opened late last week.
- The chief executive of British Airways, Willie Walsh, has rejected claims that flights between the European Union and the U.K. will be grounded in a “no deal” Brexit scenario.
- Employers are looking for skilled workers to smooth the transition out of the European Union, pushing the number of professional jobs available in the U.K. up 7% in the last three months.
- Concierge to the wealthy Ten Lifestyle eyes Aim flotation: The growing number of high net worth individuals willing to pay for someone else to help them make lifestyle and travel decisions has prompted concierge Ten to seek a stock market flotation.
- Pearson is understood to be nearing a sale of its English-language teaching business to two Asian private equity funds for up to US$400mln.
- Strike action at the new nuclear power station at Hinkley Point has been averted after hundreds of construction workers voted in favour of an improved pay deal.
- A near-double-digit increase in lending to households in the year to September has left the Bank of England on track to raise interest rates on Thursday, amid concerns that consumers are creating an unmanageable mountain of unsecured debt
- The chief executive of HSBC has said Britain’s biggest bank will wait as a long as possible before shifting jobs out of London as a result of Brexit, but warned that continued uncertainty could curtail foreign investment in the UK.
- Vital banking services disrupted for 1,200 small businesses hit by controversial money laundering crackdown at HSBC. The lender has been fighting to tackle dirty cash since it was received fines of £1.2bn in 2012 for helping Mexican drug lords.
- EasyJet has signed an agreement to buy a chunk of Air Berlin’s business for £35mln.
- Chemicals tycoon Jim Ratcliffe buys classic motorcycle-clothing brand Belstaff.