FTSE 100 closes 76 pts higher
Bitcoin breaches US$10,000 marker
Shell scaps scrip dividend policy
All UK banks pass stress tests
FTSE 100 closed over 76 points higher as US stocks surged and oil major Royal Dutch Shell Plc (LON:RDSB) was top riser on the blue chip benchmark as it announced plans to return to paying an all-cash dividend.
David Madden, at CMC Markets, said: "The oil titan is still planning on paying down debt, but the scrapping of the scrip dividend is a sign of how strong their cash-flow position is. Traders are viewing the move as a sign the major oil company is returning to bullish days of before the downturn in the oil market."
Shell shares added 3.99% to 2,408p. BP plc (LON:BP. also nudged 0.62% higher to 499.28p.
FTSE 100 closed up 76.75, or 1.04% at 7,460, while FTSE 250 also surged, shoving Brexit worries to one side, gaining almost 145 points at 20,026.
In the currency markets, the pound was near flat against the Euro but shed 0.20% against the US dollar.
The biggest laggard on Footsie was medical products group ConvaTec Group PLC (LON:CTEC), which lost 2.54% to 189.86p.
3:45pm: FTSE 100 strengthens into close, up 1%
The UK banks may have got the all clear in the Bank of England stress tests, but, it wasn’t all good news from the Central Bank.
Mark Carney warned of the Brexit threat. Specifically, he cautioned that a disorderly Brexit would hit UK growth and further devalue the pound. More worrying, the BoE said there may be need for additional precautions for a ‘no deal’ Brexit, should it come alongside a global recession.
Trading in the sector was mixed, however, RBS moved almost 1% higher to 270.2p. Barclays was down 0.13% at 187.25p, while Lloyds had drifted 1.3% to 64.66p.
Banks aside, London’s blue-chip equities continued to strengthen as the afternoon progressed.
With just over an hour to go until Tuesday’s close, the FTSE 100 was up 79 points or 1.08% at 7,464.
Investors continued to be buoyed by Royal Dutch Shell Plc’s (LON:RDSB) strategy update, which featured upgraded cashflow expectations and dropped its share based dividends.
Shell shares were up 100p, 4.24%, trading at 2,461.5p.
Elsewhere, WPP Plc (LON:WPP) shares climbed just over 2%, to trade at 1,294p, on Tuesday amid reports that the ad agency may be set to land Ford as a customer from 2018 onwards.
2:35pm: FTSE 100 extends gains, Wall Street starts higher
UK equities strengthened further by mid-afternoon, with the FTSE 100 up 60 points or 0.8% changing hands at 7,444.
Over in New York, Wall Street benchmarks also began Tuesday higher. The Dow Jones was up 56 points, 0.24%, at 23,637. The S&P 500, meanwhile, climbed 0.2% to 2,606 and the Nasdaq edged 0.5% to 6,882.
1:00pm: FTSE 100 keeps onto mornings gains, up 45 points at lunch
Many of London’s blue-chip stocks had held onto the morning’s gains by early afternoon.
Royal Dutch Shell Plc (LON:RDSB) shares were up 80 points, 3.4%, trading at 2,441p while the UK banking stocks were on the back foot despite passing their stress tests.
Lloyds shed 1.89% to 64.26p, Barclays was down 1.55% to 184.6p, whereas RBS was just 0.3% lower at 266.8p.
The FTSE 100 was up 45 points or 0.6% changing hands at 7,423.
“Equities have extended their positive start to the week, sentiment supported by a positive OECD growth outlook, Shell raising guidance and restoring an all-cash dividend and UK Banks passing the latest stress tests,” said Mike van Dulken, head of research at Accendo Markets.
A stronger US dollar also supports London’s major international earners.
The greenback is being supported by comments from incoming Federal Reserve chairman Jerome Powell who is due to be confirmed later today.
Powell’s comments, released ahead of today’s meeting, stated his intention to respond decisively to any new economic crisis and his belief that the Fed would need to be flexible in its policy making as it adapts to changing economics.
11:00am: FTSE 100 up 40 points in late morning trade
The FTSE 100 continued to trade in plus territory, up around 40 points or 0.57% at 7,425.
Corporate news - namely Shell's dividend changes, and the successful UK bank stress tests - have provided some positive sentiments for investors, meanwhile. in the FTSE 250, Ocado's long awaited success was also a boon to investors.
10:30am: Bitcoin bubble watch – cryptocurrency breaches US$10,000
Barely a day goes by without emails landing either calling out Bitcoin as an overhyped bubble, or on the other hand proclaiming a cryptocurrency revolution.
Tuesday the Bitcoin value continued its roaring rally, moving beyond the US$10,000 marker and rising up to around US$10,026.
As most will already know, cryptocurrency trading can be very volatile. Indeed, Bitcoin may be based on a centralised ledger, but, there are still many markets to trade on.
Neil Wilson, analyst at ETX Capital, in a note highlighted: “The arbitrage potential between exchanges is exceptionally large, indicative of the fact this is an incredibly immature market that is completely decentralised and unregulated, which makes it totally unsuitable for institutional investors.
“The more Bitcoin comes into the mainstream the more light gets shone on it and this may not be for the good of speculators.
“From an investment point of view we are still in the very early stages and the investment community just doesn’t know enough, doesn’t have the depth of data to fairly value Bitcoin.
“Volatility has been so extreme that the big institutional investors don’t want to take the risk. The massive spread between exchanges is also a problem.”
Many traditional and institutional investors still see it as too risky, though with more and more headlines coming each day Bitcoin, blockchain et al are becoming harder to ignore.
9:30am: FTSE 100 stays on front-foot, Ocado and Shell among stand-out stocks
The FTSE 100 was on the front-foot on Tuesday morning, up around 30 points or 0.4% changing hands at 7,413.
Royal Dutch Shell PLC (LON:RDSB) gained around 3% in Tuesday’s early deals after a strategy update confirmed share-based dividends would be scrapped, and the big oil firm upgraded its cash-flow outlook.
“Ben van Beurden has delivered an early Christmas present for Shell shareholders,” said Nicholas Hyett, Hargreaves Lansdown analyst.
“Improved cash generation has allowed the group to scrap the scrip dividend, with the debt position improving steadily as well. The extra shares issued under the scrip are set to be swept back up by a $25bn share buyback over the next three years.
“It’s not all plain sailing though. The ambitious targets for a lower carbon footprint from its energy products reflects an increasingly carbon-conscious market, that’s also reflected in the group’s ongoing investment in new energies, which is set to step up from here.”
Ocado shares held onto the early gains, up 51p or 20% at 307.5p.
Elsewhere, the other blue chip news came in the banking sector, where all London’s blue-chip banks confirmed that they had passed the Bank of England's stress tests.
It will come as extra relief to Lloyds Banking Group PLC (LON:LLOY) and Royal Bank of Scotland PLC (LON:RBS), the bailed out banks which failed the hypothetical exercise a year ago.
London’s banking stocks were, however, mixed in Tuesday’s early deals.
RBS opened about 0.4% higher, up a penny to 268.65p while Standard Chartered PLC (LON:STAN) began the day rising 0.3% to 736.5p. Lloyds kicked of Tuesday trading lower, with its share down around 0.5% to 65.17p. Similarly, Barclays PLC (LON:BARC) was down about 0.4% in early exchanges changing hands at 186.8p.
9:30am: FTSE 100 kept afloat by Shell; Ocado stars after tie-up with French retail giant
There was no doubting the stock of the day – the online retailer Ocodo (LON:OCDO), whose shares flew up 25% after it said it would be tying up with the Groupe Casino.
The long-awaited international deal will see the UK online grocer supply its technology and blue-print for its smart warehouses to the French retail giant.
The FTSE 100, meanwhile, was kept afloat almost entirely by Royal Dutch Shell (LON:RDSA), whose weighting in the index means good or bad news always leaves its mark.
Thankfully for punters, buying Footsie spread bets or contracts, the news was positive from oiler, which was up 1.7% in early deals. This propelled the top stocks barometer 16 points higher to 7,400.28.
Not far behind, were Shell and shares in the budget airline easyJet (LON:EZJ), which was the beneficiary of a double upgrade.
Societe Generale went to ‘hold’ from ‘sell’ on the stock, while Kepler took the love a step further, moving to ‘buy’ from ‘hold’ in the wake of last week’s prelims.
On the debit side, the miners were in glum mood as investors pondered the stuttering economic performance of China, the main consumer of the output of the world’s leading diggers.
Glencore (LON:GLEN) was off 1.9%, followed by BHP Billiton, which fell 1.3%.
Proactive news headlines:
Tavistock Investments PLC (LON:TAVI) swung into profit and forecast more to come as funds under its management more than doubled in the first half of the year.
European Metals Holdings Limited (LON:EMH) (ASX:EMH) has announce a further upgrade of its JORC compliant Indicated Mineral Resource at the Cinovec Lithium/Tin Project in the Czech Republic, confirming its status as the largest Lithium resource in Europe.
The Federal Supreme Court of Ethiopia has eliminated a potential liability regarding an inherited claim for damages against KEFI Minerals PLC (LON:KEFI). This follows a judgement earlier this year that reduced the company's liability from US$12mln to US$600,000.
Acal PLC (LON:ACL), soon to change its name to DiscoverIE, ended its financial half-year with a record order book, after posting strong growth in sales and earnings.
Ormonde Mining PLC (LON:ORM) has said the Barruecopardo Tungsten mine project in Salamanca, Spain is well into its construction period, with commissioning scheduled to commence in the third quarter of 2018.
Touchstone Exploration Inc (LON:TXP) told investors that results from this year’s drill programme has continued to beat expectations. The company has begun preparations for its next four new wells. New drilling is expected to start in January, and will be funded by existing cash resources.
Tlou Energy Limited (LON:TLOU) has told investors that its 2D seismic acquisition programme in Botswana has now been completed. It is part of a campaign that aims to expand and enhance the current gas resources across Tlou’s coal bed methane asset portfolio.
E-bank FairFX Group PLC (LON:FFX) has launched a multi-currency business current account, Fair Everywhere, as its first step in the small company business sector.
Life sciences group OptiBiotix Health PLC (LON:OPTI) is seeking shareholder consent to re-organise its capital structure so it can make future dividend payments. Rather than making regular cash pay-outs, the company wants to be able to sanction a “dividend in specie” that would allow it to distribute its holding in SkinBioTherapeutics PLC (LON:SBX).
Online content software group Mirada Plc (LON:MIRA) has received more financial support from its major shareholder Ernesto Tinajero. The over-the-top content specialist will receive £1.7mln in a one-year convertible loan.
Following a successful commercial trial, Mporium Group PLC (LON:MPM), the event-driven marketing technology specialist, is to provide its IMPACT technology product to Total Media, the behavioural planning agency.
ANGLE PLC (LON:AGL, OTCQX:ANPCY) has provided headline findings of an academic study which shows Parsortix, its ground-breaking liquid biopsy, outperforms other approaches to harvesting circulating tumour cells. Known for short as CTCs, these blood-borne cells provide a tell-tale early sign of cancer.
Giulio Cerroni, appointed chief executive officer of IXICO PLC (LON:IXI) in February, has outlined his vision of the future growth strategy of the company.
The T3 copper project in Botswana currently being worked up in joint venture by MOD Resources (ASX:MOD) and Metal Tiger PLC (LON:MTR) has secured a further environmental approval for drilling to the north of the mineralisation.
Hummingbird Resources (LON:HUM) has announced that, in line with the imminent commencement of gold production from its Yanfolila Gold Mine in Mali, the company will be producing a Single Mine Origin pure gold coins, originating from Yanfolila, called the "1oz Hummingbird". The 1oz Hummingbird will be part of a collection of seven coins to be launched officially in 2018.
One of our eagle-eyed correspondents in Canada spotted an interesting release from Orvana Minerals Corp (TSX:ORV) that has a read-across for London-listed Anglo Pacific Group PLC (LON:APF). It was a drilling report from the El Valle-Boinàs and Carlés copper-gold mines in northern Spain (collectively known as EVBC).
accesso Technology Group PLC (LON:ACSO) announced that it has had a number of recent award wins in recognition of its innovative technology, its impact on the end-markets it serves, and on its growth track record as a firm. accesso said it received two awards at the 2017 IAAPA Attractions Expo: the attraction industry's largest and most prestigious event. In the same week, accesso was also named mid-market business of the year at the Lloyds Bank National Business Awards.
6.45am: Mixed day in Asia
The Footsie is seen opening fairly flat on Tuesday following mixed showings overnight on Wall Street and in Asia, with the main attention on the banking sector ahead of stress test results.
Spread betting firm London Capital Group expects the FTSE 100 index to open around 2 points higher at 7,38, having shed 25.74 points on Tuesday.
Overnight on Wall Street, the Dow Jones closed around 22 points higher at 23,580, while the broader indices edged lower. Meanwhile Asian shares were lower today, drifting back from decade highs as Chinese stocks stumbled for a second straight session.
On currency markets, sterling held fairly steady versus both the dollar and the euro, at US$1.3327 and €1.1193 respectively.
UK banks will be front and centre on Tuesday with the Bank of England set to release its latest stress tests for the sector, a key indicator introduced following the 2008 financial collapse.
The central bank’s tests determine whether banks have a strong enough balance sheet to withstand further financial shocks or whether further capital bolstering is required.
In a preview, Credit Suisse’s analysts said they think the tests will be “most important” for Lloyds Banking Group PLC (LON:LLOY) and Barclays PLC (LON:BARC).
Specialty retailers also eyed
Away from the banks, a couple of speciality retailers will provide the other main interest, with updates due from both Topps Tiles PLC (LON:TPT) and Pets at Home PLC (LON:PETS).
Topps has already warned that its full year profits will be at the lower end of the range of market expectation, so no more nasty surprises are expected when the numbers are released today.
The tile specialist said in October that its revenues for the year to 30 September 2017 were expected to fall to £211.6mln from £215mln last year.
By contrast, back In August, Pets at Home reported a solid first quarter trading update, with Merchandise like-for-like sales (LFLs) continuing to show an improved trend at +1.5%.
In a preview, analysts at Numis Securities said they expect another solid quarter of LFLs from Pets at Home, also up 1.5% again and retain a positive stance on the group, encouraged by the price repositioning being undertaken in Merchandising, and significant long-term growth opportunity in the roll-out and maturity of the Services division.
Significant events expected on Tuesday November 28:
Finals: Gooch & Housego PLC (LON:GHH), Greencore Group PLC (LON:GNC), ITE Group PLC (LON:ITE), Shaftesbury PLC (LON:SHB), Sanderson Group PLC (LON:SND), Treatt PLC (LON:TET), Topps Tiles PLC (LON:TPT), Urban & Civic PLC (LON:UNAC), UDG Healthcare PLC (LON:UDG)
Interims: Acal PLC (LON:ACL), BCA Marketplace PLC (LON:BCA), Cranswick PLC (LON:CWK), D4t4 Solutions PLC (LON:D4T4), GB Group PLC (LON:GBG), IG Design Group PLC (LON:IGR), KCOM Group PLC (LON:KCOM), Pets at Home Group PLC (LON:PETS), Park Group PLC (LON:PKG), Scholium Group PLC (LON:SCHO), ULS Technology PLC (LON:ULS)
Economic data: Nationwide house price index; Bank of England Financial Stability report; US international trade in goods; US FHFA house price index; US Conference board consumer confidence
Around the markets:
- Sterling: US$1.3132, up 0.1%
- Gold: US$1,293.80 an ounce, unchanged
- Brent crude: US$57.79 a barrel, down 0.6%
City Headlines:
- Lloyds Banking Group executive wrote ‘no value in HBOS’ note – The Times
- Unilever to delay picking UK or Netherlands for sole base – Financial Times
- British Airways owner IAG buys Gatwick slots from collapsed Monarch – Financial Times
- Chinese venture is healthy addition for Astrazeneca – The Times
- easyJet admits 50% pay gap between women and men citing dearth of female pilots – The Independent
- Waterstones set to open five new branches this year – The Guardian
- Feather & Black falls into administration in further gloom for furniture retail – Daily Telegraph
- Uber’s car-sharing service banned in Israel in latest legal setback for taxi firm – The Independent
- SocGen to close 15.0% of branches as it cuts costs – Financial Times
- Norway’s $1 trillion sovereign wealth fund steps up ‘no’ votes on CEO pay – The Independent
- Yo Sushi hires Pizza Express mastermind to spearhead international expansion – City AM
- Gold miner with plans to dig in N Ireland secures £45 million injection – Financial Times