FTSE 100 closes down 45
Burberry investors spooked
EC cuts UK growth forecasts due to Brexit "uncertainty"
FTSE 100 closed firmly in the red as US stocks lagged and there were dismal growth forecasts for the UK in the wake of the Brexit vote.
The FTSE 100 shed over 45 points to 7,484, while FTSE 250 - a more UK company focused index- tanked over 228 points, or 1,12% to 20,071.
UK growth is likely to fall from 1.5%, down from 1.8% previously, to 1.3% in 2018 and 1.1% in 2019, new stats from the European Commission showed today.
It comes as the EU's chief negotiator Michel Barnier said time was "pressing" to get a deal on the divorce bill, as more talks started again.
The pound lost 0.28% against the Euro, but was up 0.16% against the US dollar.
Top riser on FTSE 100 was Informa PLC (LON:INF), up 4.13% to 731.50p after the publishing group reiterated its full-year guidance in a trading update, with revenues growing around 40% in the ten months to October 31.
The biggest loser was Burberry Group plc (LON:BRBY), which lost almost 10% at 1,787p as interim results, though decent, were below expectations.
Housebuilders also suffered on the day, with Persimmon (LON:PSON) down 3.97% to 2,662p after the latest housing data from the Royal Institution of Chartered Surveyors, showed house prices were down in four areas of the country last month.
3pm: FTSE 100 lags
The FTSE 100 has been in the red for nearly all of Thursday, with several factors all coming together to paint a pretty bleak picture for UK markets.
First up was a survey from the Royal Institution of Chartered Surveyors which said house prices across the UK have stalled over the last few months, and in some places have actually retreated.
Housebuilders out of favour on latest RICS study
As a result the blue chip housebuilders were out of favour, with Persimmon PLC (LON:PSN) (down 3.2% to £26.83), Barratt Developments PLC (LON:BDEV) (down 3.2% to 614p), while Taylor Wimpey PLC (LON:TW.) (down 2.9% to 191.7p) all nursing chunky losses.
Although not company specific, next up were the economic forecasts from the European Commission which slashed its expectations for the UK economy over the next few years, adding to the negative sentiment.
The EC now expects the economy to grow by 1.5% in 2017 due to “uncertainty” over Brexit, down from its previous expectation of 1.8%. The EC has also cut the figure to for next year to 1.3% and just 1.1% in 2019.
Red-soaked minig stocks
Weak import data from China – the world’s biggest consumer of commodities – saw metal prices soften today. This, combined with a slightly weaker dollar, saw the miners head sharply lower.
Glencore PLC (LON:GLEN) is down 2.8% at 362.3p, Rio Tinto PLC (LON:RIO) has shed 2.2% to £36.88, while BHP Billiton plc (LON:BLT) has lost 2.8% to trade at £14.36. A host of others in the sector were also in the red on Thursday.
Broadcaster ITV plc (LON:ITV) was also among the top blue chip fallers, down 3.9% to 155.2p, ahead of its results next week.
Given that it is free-to-air, ITV relies heavily on advertising which analysts might come under pressure given recent complaints from retailers about a slowing consumer environment.
The biggest faller on the Footsie though was luxury clothes maker Burberry Group PLC (LON:BRBY), which registered an eye-watering 10% drop to £17.90.
The market failed to warm to a new strategy which will see it become an even more exclusive brand, and interim results, although decent, were slightly below expectations.
Informa boosted by solid update
There were a few good news among the big players though, with Informa PLC (LON:INF) leading the way.
The publishing group added 3.8% to trade at 729p after it reiterated its full-year guidance in a trading update, with revenues growing around 40% in the ten months to 31 October.
Drinks company Coca Cola HBC AG (LON:CCH) took second spot among the gainers, adding 1.7% to £26.04, as a warm European summer helped sales in the third quarter to fizz 5% higher.
Vodafone PLC (LON:VOD) surged in the afternoon by 1.9% to 220p following its tie-up with AIM-listed CityFibre.
The deal will see the two join forces to build a new ultra-fast broadband network for up to 5mln homes in the UK – a move which could pit Vodafone against the likes of BT Group plc (LON:BT.A).
3pm…Wall Street falls back from recent highs
As expected the US markets have followed their counterparts across the pond lower with little to drive the markets even higher.
The Dow Jones opened 0.3%, or 63 points, lower at 23,492; the tech-heavy Nasdaq lost 0.5%, 359 points, early on to sit at 6,753.5; while the broader S&P 500 is down 0.4% to 2,584.6.
"While not quite as bad as the 100 point fall posted just after the bell, the Dow Jones still finds itself down 60-ish points, sporadically dipping below 23500<” said Spreadex analyst Connor Campbell.
“The Dow has begun to flag a bit this week, and though it wouldn’t be a surprise if the index suddenly turned things around later in the session, it should be noted that it’s been crawling, rather than surging, to its recent all-time highs.”
2.30pm…21st Century Fox tops expectations with Q1 results
Media giant 21st Century Fox Inc (NYSE:FOXA) saw its shares edge higher in early deals over in New York after it released better-than-expected first quarter results.
The company, which is majority-owned by media mogul and billionaire Rupert Murdoch, is currently waiting on UK competition authorities to decide whether or not its £11bn takeover of Sky PLC (LON:SKY) can go through.
Fox’s adjusted earnings from continuing operations came in at 49 US cents in the three months to the end of September, beating market consensus for 48 US cents.
Including one-time items, earnings came in at 45 US cents a share compared with 44 US cents a year ago.
Top line rose 7.6% year-on-year to US$7.0bn, and also beat market consensus for $6.868bn, largely due to the robust affiliate revenues at the Cable Network Programming and Television segments, as well as content revenues at the Filmed Entertainment segment.
2pm...Lloyds and NS&I to raise savings rates
Lloyds Banking Group PLC (LON:LLOY) said it will raise its savings rates in response to the Bank of England’s first hike in a decade.
The lender will add 0.15% to its savings rates, including its Cash ISA, Easy Saver and Halifax Everyday Saver, compared to the 0.25% increase the BoE said it would lift its base rate by last Thursday.
Earlier, UK state-owned bank National Savings & Investments (NS&I) said it would pass on the full base rate rise onto consumers and will shorten the odds on Premium Bond prizes.
From 1 December rates will rise by 25 basis points across its variable product range, including its Direct Isa, Income Bonds, Investment Account and Junior Isa.
1.20pm…US stocks sets to open in the red
Across the pond on Wall Street, US stocks look likely to follow their UK counterparts lower at the opening bell as earnings season continues its wind down and next to no meaningful market to steer the markets one way or the other.
The Dow Jones is seen a hefty 107 points lower at the open to 23,430; the S&P 500 is expected to be 16 points in the red at 2,578; while the tech-heavy Nasdaq is forecast to fall 55 points at the bell to 6,291.
“Looking to the US open and in the face of a deathly dull economic calendar the Dow Jones is struggling to remain at record highs, with the index facing a [100] point fall after the bell,” said Spreadex analyst Connor Campbell.
1.10pm...Miners weigh on Footsie
As the market in London headed into the afternoon, the FTSE 100 took a turn for the worse.
It has been hovering just below yesterday’s close but slumped shortly after midday and is now down 45 points, or 0.6%, to 7,484.7.
The dip coincided with news that the European Commission has slashed its UK economic growth forecasts for the next few years.
It now expects the economy to grow by 1.5% in 2017 due to “uncertainty” over Brexit, down from its previous expectation of 1.8%. The EC has also cut the figure to for next year to 1.3% and just 1.1% in 2019.
Miners and Burberry nurse big losses
The heavyweight miners have been one of the main drags on the index, with metal prices softening despite seemingly supportive data from China – the world’s because commodities consumer.
Glencore PLC (LON:GLEN) is down 2.9% at 360.5p, Rio Tinto PLC (LON:RIO) has shed 2.1% to £36.94, while BHP Billiton plc (LON:BLT) has lost 2.5% to trade at £14.39. A host of others in the sector are also nursing losses.
The housebuilders were out of favour after the latest survey from the Royal Institution of Chartered Surveyors found that prices nationally have stalled over the last few months.
Persimmon PLC (LON:PSN) was the hardest hit down 3.4% to £26.78, Barratt Developments PLC (LON:BDEV) fell 3% to 616p, while Taylor Wimpey PLC (LON:TW.) also saw 3% wiped from its value to trade at 191.4p.
By the far the biggest faller though was Burberry Group PLC (LON:BRBY), down 10.9% to £17.68, as investors failed to warm to a new strategy and results, although decent, were slightly below expectations.
Informa and Coca Cola HBC try their best
Going the other way was publishing group Informa PLC (LON:INF), which added 2.9% to trade at 722p to make it the top blue chip riser.
The company reiterated its full-year guidance in a trading update, with revenues growing around 40% in the ten months to 31 October.
Drinks company Cocal Cola HBC AG (LON:CCH) took second spot among the gainers, adding 1.7% to £26.04, as a warm European summer helped sales in the third quarter to fizz 5% higher.
12.25pm…Moody’s warns on UK mortgage borrowers
The housing market took another blow on Thursday, with ratings agency Moody’s warning that mortgage borrowers in Northern Ireland, east Anglia, east midlands and the south west are most vulnerable should interest rates keep rising.
When the Bank of England raised rates to 0.5% this time last week, it hinted that borrowing costs could rise a few more times over the coming years.
“In the event of a rate increase to 1.25%, borrowers in East Midlands, East Anglia and Northern Ireland are up to 2x more likely to face financial stress and go into arrears than a borrower in Scotland,” said analyst Steven Becker.
12.15pm…Sainsbury’s shares hit 11-month lows
Shares in J Sainsbury plc (LON:SBRY) have fallen to an 11-month low after the supermarket chain lowered its interim dividend and posted a 9% decline in profits, reflecting price cuts, wage inflation and the consolidation of Argos.
Underlying profit before tax fell to £251mln in the 28 weeks to 23 September as the supermarket price war raged on amid fierce competition.
German discounters Aldi and Lidl are the ones who have sparked the recent price war, while margins have also been hit by the weak pound.
"A slow summer has dragged down profits at Sainsbury’s, which is battling industry-wide headwinds in the retail sector," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
"Consumer spending is under pressure from higher inflation, while it’s costing supermarkets more to fill their shelves with stock."
Shares are down 2.3% to 228.2p.
12pm...AIM debutant AfriTin Mining looking to become African tin champion
11.45am...Coca Cola HBC shares fizz higher as sales rise
FTSE 100 drinks maker Coca Cola HBC AG (LON:CCH) climbed towards the top of the index on Thursday after it saw sales fizz higher in the third quarter.
The company – which bottles and sells Coca Cola drinks in 28 countries mostly in Europe and Asia – saw revenues jump 5% to €1.82bn (Q3 2016: €1.74bn) in the three months to September 30.
Its established markets segment which includes the UK, German, Spain, Portugal and others reported volume growth of 2.2%, while developing markets volume – think Hungary, Czech Republic, Poland – jumped 5.1% in the quarter.
Emerging markets – those such as Romania and Serbia where CCH has only recently started to really push its products – reported a 3.5% volume increase.
“We go into the final quarter encouraged by our progress and confident in delivering on our expectations for the full year,” said acting chief executive Michalis Imellos.
11.20am…European Commission slashes UK growth forecasts
The European Commission has slashed its UK growth forecasts for 2017 to 1.5% due to “uncertainty” over Brexit, down from its expectation of 1.8% back in the spring.
It has also cut the figure to for next year to 1.3% and just 1.1% in 2019.
"Economic growth in the UK has been slowing since the start of the year, as higher consumer prices constrained private consumption growth," the EU forecast said.
"Based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the UK, growth is still expected to remain subdued over the forecast horizon."
By contrast, the EC has sharply raised its Eurozone growth forecasts, predicting it will expand by 2.2% this year – the fastest pace in a decade.
That figure is well above the 1.7% previously forecast and comes as the latest GDP figures beat expectations.
Worth noting that even with status quo, EC predicts UK GDP growth to slow to 1.1% by 2019. pic.twitter.com/Wa16phqcdR
— Joe Miller (@JoeMillerJr) November 9, 2017
11.05am…Hurricane Energy mulls move to premium listing
Hurricane Energy Plc (LON:HUR) revealed this morning it is considering an upgrade to its listing, with a potential transfer from the junior AIM market to a premium listing on the London Stock Exchange.
The successful UK offshore oiler, which raised more than £500mln of capital earlier this year, has announced a number of measures to recognise the company’s new size and scale.
“This makes perfect sense,” said oil analyst Malcolm Graham-Wood.
“The company has a market cap of nearly £600mln, has just raised over US$500mln in debt and equity and has a substantial development programme over the next two years or more.
“With a revised competent person’s report imminent, which will include Lincoln and Halifax, the company is poised to grow significantly.”
10.55am...Anglo Pacific boss discusses 'strong' third quarter
10.45am...More on that CityFibre-Vodafone tie-up
CityFibre Infrastructure Holdings PLC (LON:CITY) was the big mover on the junior market this morning after it announced a long-term strategic partnership with UK telecoms giant Vodafone PLC (LON:VOD).
The two companies are joining forces to build a new ultra-fast broadband network for 5mln homes and businesses in the UK.
The fibre-optic FTTP (fibre-to-the- premises) network will be capable of carrying one gigabit (I,000 mbps) of data to the door of the user. To give you an idea of how fast that is, the average download speed in the UK is just over 16mbps.
CityFibre will build, own and operate the network with Vodafone having a exclusive rights to market ultrafast consumer broadband services for a set period.
Absolutely thrilled that @VodafoneUK and @CityFibre have teamed up to deliver FIVE MILLION full fibre broadband connections. Building Britain's full fibre future https://t.co/nzV44ew33r
— Matt Hancock (@MattHancock) November 9, 2017
10.30am...Retailers up for sale
It was another slow day in London for the blue chips with the FTSE 100 down 0.1%, or 5.2 points, to 7,524.6 as it struggled to find its mojo.
One of the reasons for the Footsie’s sluggishness is the stronger pound, which is up slightly against both the euro and dollar this morning.
Sterling is looking to claw back some of the losses it incurred yesterday during the latest round of political chaos for Theresa May and the Tories.
Burberry hammered after strategy update
Luxury clothing giant Burberry PLC (LON:BRBY) was by far this biggest blue chip faller as investors failed to get on board with the new strategy and results, although solid, weren’t as good as some had expected.
Adjusted operating profits jumped 17% in the first half to £185mln, although the markets were perhaps expecting something a little better.
New chief executive Marco Gobbetti used the results to unveil a new strategy to make the brand even more exclusive in a bid to boost margins.
Investors seemingly weren’t too keen with the renewed push into high-end luxury, which is seen by some as a riskier sector. Shares slipped 10% to £17.90.
Fellow retailer, albeit a high street one, Marks and Spencer Group Plc (LON:MKS) shed 3.3% to 322.2p after it said on Wednesday it would open fewer Simply Food stores following a fall in sales within its food business.
Supermarket chain J Sainsbury plc (LON:SBRY) rounded out the top three FTSE 100 fallers; down 2.3% to 228.2p after reporting a 9% decline in half-year profits.
Informa, AstraZeneca top fallers
Preventing the index from slipping too far was events and publishing group Informa PLC (LON:INF), which added 2.9% to trade at 722p.
The company reiterated its full-year guidance in a trading update, with revenues growing around 40% in the ten months to 31 October.
Drugs giant AstraZeneca PLC (LON:AZN) was also in demand after a third quarter update.
Product sales at the company are still falling as a few of its blockbuster drugs lose market share to generic versions, but Astra has been making up for that with various non-core asset disposals.
Those sales have helped to offset declining drug revenues and AZ now expects core EPS to show a percentage decline at the lower end of the guidance range of “low to mid-teens”. Shares rose 1.7% to £50.79.
Down on the junior market, CityFibre Infrastructure Holdings PLC (LON:CITY) surged 26.5% higher to 54.7p after it inked a strategic partnership with telecoms giant Vodafone PLC (LON:VOD).
8.45am...Sluggish start once again for FTSE 100
The FTSE 100 got off to a sluggish start, falling 20 points to 7,510.10, following relatively quiet trading sessions on Wall Street and in Asia.
Shares in Burberry (LON:BRBY) were crucified after investors decided they didn’t like the contents of the company’s strategy update.
It revealed the purveyor of the famous Burberry check planned to move more upmarket in an attempt to shore up its profit margins.
There will also be store closures as new chief executive Marco Gobetti looks to sharpen up the business’ image.
Around 10% was wiped off the share price – or £800mln from the value of the company.
The latest retailer to roll out results was J Sainsbury (LON:SBRY), which provided a mixed update. While half-year profits were stuck in reverse gear (no shock there), underlying sales – the litmus test for grocers – were at least moving forward.
The net effect on the share price? Well, almost negligible as the stock lost around 0.5% early.
Sainsbury’s interims followed a half-time round-up from Marks & Spencer (LON:MKS) on Wednesday, which provided few reasons to be cheerful ahead of the crucial festive season.
The sector’s go-go stock of the day was Dixons Carphone (LON:DC.), up 4% in the wake of an upgrade to ‘buy’ made by the mid-tier house Investec.
A bit of a head-scratcher really as Investec isn’t normally noted for moving the market in FTSE 100 shares.
6.45am...sluggish start predicted
London’s FTSE 100 is expected to start Thursday’s session on the back foot after relatively quiet equity trading in the United States and Asia.
Wall Street benchmarks closed higher on Wednesday, albeit not very much.
The Dow Jones was up only 6 points, 0.13%, ending the day at 23,563 meanwhile the S&P 500 edged just 0.14% to 2,594. The Nasdaq finished trading a little bit better, up 0.32% to 6,789.
“Traders are a bit worried that President Tump’s tax reforms could be delayed as the Republican Party lost out in elections in New Jersey and Virginia,” said David Madden, analyst at CMC Markets.
“This suggests the Republicans are not as popular was Mr Trump would have you believe, and in turn they may find it difficult to change the tax system. The indices were a bit subdued over the possible hold-up in the relation to the tax proposals.”
In Asia, Japan’s Nikkei was trading down 0.2% at 22,686 while Hong Kong’s Hang Seng moved higher, up 0.64% at 29,093.
Back in London, CFD and spreadbetting firm IG Markets sees the FTSE 100 trading around 5 points lower, calling the blue-chip benchmark at 7,513 to 7,517 just over an hour before Thursday’s opening bell.
Thursday’s agenda:
Trading update: AstraZeneca PLC (Q3) (LON:AZN), Aldermore Group PLC (Q3), (LON:ALD), Arrow Global Group PLC (Q3) (LON:ARW), Coca Cola HBC (Q3) (LON:CCH), IMI PLC (LON:IMI), Inmarsat Plc (Q3), (LON:ISAT), Beazley PLC (LON:BEZ), Derwent London PLC (LON:DLN), Informa PLC (LON:INF)
Interims: Dairy Crest Group PLC (LON:DCG), Halfords Group plc (LON:HFD). Prime People PLC (LON:PRP), Renewi PLC (LON:RWI), Sainsbury (J) PLC (LON:SSE), Wincanton PLC (LON:WIN)
Finals: Craneware PLC (LON:CRW), Gattaca Plc (LON:GATC), Go-Ahead Group PLC (LON:GOG)
Economic data: UK balance of trade data; US weekly jobless claims, US wholesale inventories
FTSE 100 ex-dividends: GlaxoSmithKline, Whitbread plc
Proactive news headlines
Shares in IronRidge Resources Ltd (LON:IRR) opened higher after the company published high-grade lithium pegmatite trenching and rock chip sampling results from its Ghanaian assets, and said numerous target areas had been identified within its recently acquired high-resolution airborne geophysical survey in Ghana.
SkinBioTherapeutics PLC (LON:SBTX) said its SkinBiotix technology has passed two additional and final toxicity tests, meaning it is safe to use in the company’s three target markets.
Researchers at Charles River Laboratories assessed for photo-toxicity (sensitivity to sunlight) and ocular toxicity (effect on eye cells).
Secure payments specialist Eckoh PLC (LON:ECK) has been granted two further US patents that will protect its CallGuard platform. The first relates to the technology’s tokenisation process, which is used to encrypt card data or personal information such as social security numbers.
Mining royalties company Anglo Pacific Group plc (LON:APF, TSE:APY) had a strong third quarter, with free cash flow tripling from the previous year’s level.
Energy storage and clean fuel company ITM Power plc (LON:ITM) has secured funding from the Department for Business, Energy and Industrial Strategy (BEIS) to undertake a study examining the potential deployment of large-scale power-to-gas energy storage.
Tower Resources PLC (LON:TRP) will resume trading on Aim today after the Africa- focused oil explorer raised £2.1mln through a placing backed by directors and financier Lansdowne. The shares were suspended in May due to uncertainty over Tower’s financial position.
Aminex plc (LON:AEX) has appointed John Bell as an independent non-executive director of the company with immediate effect. Bell is managing director of Gulfsands Petroleum and a chartered engineer with a 30-year career in the energy sector, including senior positions at BP, Statoil and Suncor.
Rose Petroleum PLC (LON:ROSE) has told investors that its disposal of the SDA Mill gold operation in Mexico is now nearing completion and it has struck an interim agreement with the buyer, allowing operations to restart at the project. The company said that the final major item required for closing, a restructuring of Mexican ownership of SDA, is at an advanced stage and it due to be in place later this month.
Rambler Metals and Mining PLC (LON:RMM) has issued and allotted 450,000 ordinary shares following the exercise of options by a retired employee of the company.
Hurricane Energy Plc (LON:HUR) is considering an upgrade to its listing, with a potential transfer from the junior AIM market to a premium listing on the London Stock Exchange. The successful UK offshore oiler, which raised more than £500mln of capital earlier this year, has announced a number of measures to recognise the company’s new size and scale.
Bushveld Minerals LIMIted’s (LON:BMN) tin assets started trading separately today after AfriTin Mining LIMIted was admitted to AIM. Now focused more on vanadium, Bushveld will retain a 17.5% stake with a further 24.4% to be distributed to shareholders.
Eland Oil & Gas PLC (LON:ELA) has now confirmed a further expansion of the Opuama field, greenlighting two more wells at the Nigerian oil operation. The company on Tuesday revealed that the recently drilled Opuama-7 had been brought onto production, with better than expected rates seen in well testing, and the drilling of the Opuama-8 well is due to start in December.
Business news headlines
UK house price growth flatlines - Financial Times
Train drivers agree 28% pay rise to end Southern Rail strikes - The Times
Bitcoin hits record high after developers suspend plans to 'fork' currency – Reuters
SSE, Innogy to create UK retail power firm with 11 billion pound sales - Reuters
Topshop makes all of changing rooms gender neutral - Manchester Evening News
Tencent sees video games, more ads in Snapchat's future – Reuters
Justice Department Says Not So Fast to AT&T's Time Warner Bid - New York Times
Uber in deal with NASA to build flying taxi air control software – Reuters
Marissa Mayer grilled by Congress over massive Yahoo security breach - CNNMoney