FTSE 100 closes 46 points up
In US, Dow Jones rockets
Pound jumps 0.6% higher vs US dollar
Financial stocks boosted by US tax cut hopes
Anglo American top riser on Footsie
FTSE 100 closed higher as US shares did well and the pound firmed.
"European stock markets are strong as the political and economic landscape is improving. There is talk US lawmakers will pass the pro-business tax cuts that President Trump proposed this week, and that has been fuelling global investor sentiment. The prospect of tax cuts being approved ahead of Christmas is propping up global stock markets," said analyst at CMC Markets David Madden in a note nearing the end of London trade.
FTSE 100 closed up over 46 points at 7,537, while the FTSE 250 also did well, adding 206 points to 20,255.
In the currency markets, the pound was up 0.13% against the Euro, and up 0.56% against the US dollar.
In America, the Dow Jones Industrial Index is up almost 190 points at the time of writing, to 24,841 as the mood was bullish.
In equities, top gainer on Footsie was mining titan Anglo American plc (LON:AAL), which advanced 5% to 1,480.50p as the gold price lifted 0.48% to US$1,260.60P.
On the losing front, budget carrier easyJet (LON:EZJ) flew 2.82% lower to 1,377p. On Monday, the group confirmed it has bought part of collapsed Air Berlin’s operations at Berlin Tegel Airport.
The budget carrier said the acquisition of the operations, including runway slots and 24 aircraft, will make easyJet the leading airline in Berlin.
3.10pm: US records help support Footsie
The FTSE 100 index held firm in late afternoon trading as US stocks opened at new record highs today amid growing expectations for the safe passage of President Trump’s corporate tax cut legislation.
Around 3pm, the UK blue chip index was about 34 points higher at 7.524.54, albeit still below the session peak of 7,544.26.
In early trade on Wall Street, the blue chip Dow Jones Industrial Average leapt over 200 points, or 0.8% higher to 24,852, while the broader S&P 500 and the tech laden Nasdaq Composite Indexes gained around 0.8% and 0.7% respectively.
James Hughes, chief market analyst at AxiTrader commented: “The Dow and S&P ended strongly on Friday as Congress in the US is now seemingly close to passing the final bill on the US tax reform that would see a huge cut in corporate taxes.
“This move has been anticipated by the markets ever since President Trump took office, and if passed it would be his first major victory as President. The vote for the bill will be one of the big events of this week as both the House and Senate are expected to vote before the bill goes to the White House for Trump to finally sign it into law.”
On currency markets, sterling was stronger against a weaker dollar, jumping 0.7% higher to US$1.3406, and gained 0.2% versus the euro to €1.1354.
Among equities, financial groups such as Old Mutual PLC (LON:OMG) and Prudential PLC (LON:PRU) rose on the FTSE 100 index as perceived beneficiaries of the US tax reforms, up 4.8% to 213.2p and 2.2% to 1,888.5p respectively.
But shares in spreadbetting firms were under pressure, with IG Group PLC (LON:IGG) dropping8.5% to 670p, CMC Markets Plc (LON:CMC) shedding 11.5% to 148.5p, and Plus500 Limited (LON:PLUS) falling 9% to 840.5p after the European Union's securities watchdog proposed curbs on core parts of their markets.
The ESMA are suggesting prohibiting the sale and marketing of binary options and restricting the sale and marketing of contracts for difference (CFDs).
12.25pm: Industrials trends remain solid
UK factories matched a three-decade high for orders this month, according to the CBI’s latest industrial trends survey, supported by economic recovery in Europe and the weak pound even as Britain’s economy remains slow.
The CBI survey’s industrial order book balance remained at +17 in December, its joint highest level since August 1988.
The survey’s gauge of export orders edged down to +16 from +20 in November which was its highest level since 1995.
But despite the recent strength in orders, the CBI’s gauge of factory output expectations for the next three months remained at +13, its lowest since October 2016, while manufacturers expected their prices would rise at the fastest rate since June.
There was little reaction from currency markets to the survey. At lunchtime sterling remained higher against a weaker US dollar, up 0.3% at US$1.3362 and was flat versus the euro at €1.1334.
Similarly, the FTSE 100 index was largely unmoved, remaining ahead around 31 points at 7,521, supported by expectations for further gains today in New York following Friday’s boost on US tax reform progress.
10.45am: Bitcoin futures negative effect
The price of Bitcoin dropped back from nearly US$20,000 overnight, with futures in the cryptocurrency having been trading on the Chicago Mercantile Exchange (CME) since Sunday evening.
Bitcoin’s price is still hovering around the US$18,800 level with the futures price looking “quite stable” on CME’s platform, according to traders.
However, Jasper Lawler, head of research at London Capital Group commented: “Futures trading has had a negative effect on Bitcoin so far with the price of the futures down on the lofty opening price of $20,650 and the spot price down slightly too.”
But, he added: “This negative impact from CME futures on Bitcoin is likely temporary, just like it was with the launch of CBOE futures last week. Until the bulk of the volume of trading is done through futures, spot prices should dictate the futures price, not vice versa.”
With real currencies, the pound perked up against the dollar as the morning session progressed, adding 0.2% at US$1.3329, but drifted 0.2% lower versus the euro at €1.1316.
With equities, the FTSE 100 index held firm today, up around 30 points at 7,520 supported by strength in financial stocks on US tax reform progress.
10.00am: Big FTSE 100 target for 2018
Investment platform AJ Bell believes the FTSE 100 could launch a concerted attack on the 8,000 mark for the first time in 2018.
Russ Mould, investment director at AJ Bell thinks that with the blue chip index once again approaching its all-time time closing high of 7562.28, three things could power the FTSE 100 to new levels next year.
He said: “While issues such as Brexit, an economy that is hardly firing on all cylinders and political risk must not be dismissed, none of these fears are new and the UK market has three things going for it as we enter 2018 – performance, valuation and dividend yield.”
In mid-morning trading on Monday, the FTSE 100 index was just over 24 points higher at 7,514, easing back from an opening peak of 7,544.26, boosted by US tax reform moves, and as sterling remained fairly moribund against both the dollar and the euro – at US$1.351 and €1.1325 respectively.
8.35am: Brisk start for Footsie
The FTSE 100 got off to a brisker than anticipated start, with market lifted by hopes that President Trump’s tax reforms may actually make it onto the statute books.
The index of blue-chip shares opened up 37 points higher at 7,527.52 following a record close on Wall Street, and a strong showing from Asia’s main stock markets.
Shares in the financial betting specialist IG Group (LON:IGG) reacted negatively to the latest round of regulatory tightening by authorities in Europe and UK as they shed 5%.
An early pocket rocket was ValiRx (LON:VAL), which shot up 27% after it said the regulators have allowed it to accelerate the development of its prostate cancer drug after encouraging early results.
You could have bought into this stock, currently trading at almost 7p, at less than a penny on November 23.
ValiRx has been buoyed not just by early encouraging signs from VAL201, the prostate drug, but also by results from a trial of another compound, VAL401, in lung cancer patients.
Proactive news headlines:
ValiRx PLC (LON:VAL) chief executive Dr Satu Vainikka said the company was entering a “new and exciting phase” after being given the go ahead by regulators to expand and accelerate its early-stage cancer study. The Medicines and Healthcare Regulator Agency and Research Ethics Committee is allowing the researchers to substantially raise the dosing of VAL201, a treatment for metastatic prostate cancer and other solid tumours.
PowerHouse Energy Group PLC (LON:PHE) has identified a site for its first commercial distributed modular gasification system, not far from the University of Chester’s Thornton Science Park where the PowerHouse G3-UHt research demonstrator is operating.
Chaarat Gold Holdings Ltd (LON:CGH) is raising US$20mln through a combination of equity and loan notes. Commitments have already been secured for US$15mln of the raise. The money will be used to continue development work on the Tulkubash heap leach project in Kyrgyzstan.
Kibo Mining PLC (LON:KIBO) has held high-level talks with the Tanzanian government regarding the future of the Mbeya coal-to-power project. It expects to sign a power purchase agreement with local electricity giant TANESCO shortly.
Vast Resources PLC (LON:VAST) has announced the resignation of Roy Pitchford from his position as chief executive. It comes as the company transitions to focus more on its mining operations in Romania, which it is developing polymetallic open-pits, and Pitchford’s role is now being taken up by Andrew Prelea, who is president of the Romanian subsidiary.
Echo Energy PLC (LON:ECHO) shares are to resume trading on London’s AIM market at 8:00 am this morning, following the release of an admission document regarding the proposed acquisition of assets in Argentina. The acquisition comes with an equity sale, with nearly 48mln new shares being issued to investors at a price of 17.5p. A general meeting of shareholders will now be convened in London on January 3.
Gfinity PLC (AIM:GFIN), a leading international esports entertainment group, has made its first major signing for the Elite Series season three in March.
Aircraft leasing company Avation PLC (LON:AVAP) has acquired and delivered into service a new Boeing 777-300ER commercial passenger aircraft.
Savannah Resources PLC (LON:SAV) has delivered a maiden resource of 3.2mln tonnes of ore grading 1% lithium oxide at its Mina do Barroso deposit in Portugal. Drilling continues, and a maiden resource for a neighbouring deposit is expected early next year.
Shefa Yamim A.T.M Limited (LON:SEFA), a minerals company focused on the exploration for precious stones in Northern Israel, started trading on the London Stock Exchange’s official list today, following a placing and subscription at 110p per ordinary share. In early trading, Shefa Yamim’s shares were holding steady at 110p each.
Active Energy Group PLC (LON:AEG) , the international biomass based renewable energy and forestry management business, has announced that its chief executive officer Richard Spinks has increased his holding in the company to 52,105,333 ordinary shares, or 6.013% of the voting share capital following the exercise of options and warrants for the issue of ordinary shares at a price of 1.25p each. The group said the option and the warrant exercise raised £521,666, with the proceeds being utilised, in particular, to capitalise on the commercial activities of Active Energy.
Solo Oil PLC (LON:SOLO), the natural resources investment company today announced the retirement of Fergus Jenkins as executive technical director of the Company. The group said Jenkins is stepping down to pursue other business interests but will remain as a non-executive director of Solo for the next 6 months.
Collagen Solutions PLC (LON:COS), the developer and manufacturer of medical grade collagen and tissue components, has announced the appointment of Chris Brinsmead as a non-executive director of the company. The firm said Brinsmead has worked in the pharmaceutical industry for over thirty years, holding executive leadership roles within ICI and AstraZeneca.
e-therapeutics PLC (LON:ETX), the computer-based drug discovery platform company, announces that it has received notifications from each of its directors that they have purchased, in aggregate, 670,000 shares in the company at a price of 8.9p per share. The purchases took place on 15 December 2017.
6.45am: Modest gain predicted
The FTSE 100 looks set to kick off the final trading week before Christmas in positive territory with the index of blue-chip shares called 13 points higher by the spread betting firms which see it opening at 7,503.57.
Another record finish on Wall Street is set to provide the propellant, with US markets closing higher amid suggestions President Trump’s tax reforms will make it onto the statute books.
“It is possible that US law makers will vote on the tax reform this week,” said David Madden of CMC Markets.
“Some last minute tweaks to be bill last week won over a few senators, and now there is a greater chance the US will cut the corporate tax rate to 21% from 35%.
“Whether the cuts will actually encourage American businesses to relocate back to the US remains to be seen, but it makes the prospect of companies moving their headquarters overseas less likely.”
The optimism out of America looks to be infectious with Asia’s main markets also given a boost.
Back here in the UK, it is set to be a slow week for news with the Square Mile winding down ahead of the festive break. The corporate diary is empty, with the only updates of any real note being from the Confederation of British Industry on retail sales and manufacturing.
Around the Markets:
- Pound worth US$1.3347
- Gold up US$1.60 per ounce at US$1,259.10
- Brent crude worth US$63.50 a barrel, up 27 cents
Business Headlines
Financial Times
Barclays’ unpopular bet on investment banking seems to be paying off in the U.K. as the bank closes in on the top spot in the UK’s annual investment banking league tables for the first time since 2012.
A hedge fund with a small stake in Sky has complained that Walt Disney’s takeover of 21st Century Fox could cost minority shareholders in the UK satellite broadcaster a hefty premium unless the regulator intervenes.
Disney and Hulu face battle to close the gap with Netflix.
Adani cancels A$2 billion Australia coal mine contract amid cash crunch.
France’s Thales has agreed to buy struggling digital company Gemalto in a deal worth close to €4.8 billion.
Times
Concerns have been raised about Poundland’s ability to continue sourcing goods after credit insurers reduced their cover for the retailer.
Venezuela has awarded licences to Rosneft, the Russian state-owned oil producer, to develop two offshore gasfields in the South American country.
European competition regulators are said to be considering opening an investigation into Ikea this week as part of a broader attack on tax avoidance by multinational businesses.
Average house prices in England and Wales are rising at the slowest pace in nearly six years as a downturn in London and the South East weighs on the national average.
Daily Telegraph
Google faces fresh EU showdown as rivals attack search giant’s response to record fine.
Gas crisis could force smaller energy suppliers out of business: The fate of Britain’s new breed of upstart energy suppliers hangs in the balance after a series of gas supply disruptions ripped through energy markets last week.
Bankers set for US$120mln payday from shopping centre deals.
The boss of wealth management giant St James’s Place (SJP) is to be named the chairman of horse racing-focused Weatherbys Bank as he prepares to step down from the FTSE 100 group.
Guardian
Amazon could face an investigation by the Advertising Standards Authority over complaints that its premium service is failing to deliver on time in the run-up to Christmas.
UK banks tell May a Canada-style Brexit deal is not good enough.
Daily Mail
Superdry set to kit out Harry’s Invictus heroes as it takes on Adidas and Nike.
Daily Express
Four Seasons care home debt spark calls for government intervention.
London Stock Exchange chairman Donald Brydon is expected to see off an attempt by rebel shareholder TCI to oust him on Tuesday.
City AM
Insurance startup InsurePal to launch £15mln initial coin offering.