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FTSE 100 closes in positive territory but off session highs

Last updated: 18:04 19 Dec 2017 GMT, First published: 06:39 19 Dec 2017 GMT

US Senate

 

  • FTSE 100 closes up around seven points

  • US stocks mixed after record highs

  • Sterling weaker versus dollar and euro

  • Shire top gainer

 

FTSE 100 kept its head above water to close higher, bolstered by weaker sterling on Tuesday.

Britain's premier blue-chip index finished up around seven points at 7,544, a fair bit below the day’s peak of 7,563.49.

FTSE 250 fared better, closing out at 20,341, which was up over 86 points.

Nevertheless, analysts are still upbeat about potential rises ahead of the Christmas break.

"The FTSE 100 is just about in positive territory even though it hit a six week high earlier today," said David Madden, analyst at CMC Markets.

"The London market was broken out of the downward trend that it was in since early November, and if the bullish move continues, we could see it target 7600 before the Christmas break."

In the currency markets, the pound was down 0.51% against the Euro and down 0.15% against the US dollar.

On Wall Street, there was a mixed picture. The Dow Jones was down over 47 points, while the S&P 500 gained over seven points.

On Footsie, the drugs titan Shire Plc (LON:SHP) was top gainer, up 3.79% to 3,920p despite the group revealing that clinical trials for a drug to treat Hunter syndrome in children had not met primary and secondary endpoints.

The biggest loser was Mediclinic International (LON:MDC), which shed 4.77% to 579p.

3.15pm: Footsie holds gains despite US turn down

The FTSE 100 index hung on to its gains in late afternoon trading in spite of a turn lower on Wall Street as profit-takers moved in following a surge to record highs yesterday ahead of key votes on the US tax reform bill.

Around 3.10pm, the UK blue chip index was 16 points firmer at 7,553, below the day’s peak of 7,563.49 but still supported by a weaker pound.

On currency markets, sterling was off 0.2% against the dollar at US$1.3358 and lost 0.4% versus the euro at €1.1312.

After three-quarters of an hours trade in New York, having pushed up to fresh all-time highs at the open, the Dow Jones Industrials beat a swift retreat, losing around 16 points at 24,775, with both the broader S&P 500 and tech-laden Nasdaq composite both lower as well.

The US House of Representatives is expected to vote on the final version of the tax reform bill on Tuesday, while the Senate vote is expected to follow either later on Tuesday or on Wednesday.

Dennis de Jong, managing director at UFX.com, commented : “With Republicans poised to push through Donald Trump’s GOP tax bill, investors are eyeing up something of an early Christmas present.

“The bill’s expected approval has already driven world stock markets to record highs and, despite the likely absence of John McCain and Thad Cochrane, investors can start counting their chickens.”

He added: “While the American middle class may be impacted negatively, the nation’s big corporations and multi-millionaires are likely to revel in the latest tax cuts and that’s what investor confidence is built upon.

“The sting in the tail could be that while the population of Wall Street cash in, the everyday American will be worse off and that’s concerning for the long term stability of the world’s largest economy.”

1.45pm: US advance to continue

The Footsie maintained its modest gains in early afternoon trading on expectations that US stocks will extend yesterday’s record highs again today thanks to US tax reform hopes, although the New York advance is likely to be more muted than on Monday..

Connor Campbell, financial analyst at Spreadex said: “Looking to this afternoon and though the Dow Jones is set to rise after the bell, the futures aren’t suggesting the same level of record-breaking growth seen on Monday. The likely 40 point increase will leave the Dow short of 24850-crossing all-time intraday high managed at its peak yesterday.”

At 1.45pm, the FTSE 100 index was around 12.5 points firmer at 7,549, holding off the early peak of 7,563.49, with heavyweight dollar earners supported by a retreat by sterling.

On currency markets, the pound was down 0.2% versus the dollar at US$1.3355, and off 0.6% against a firmer euro at €1.1292 reflecting Brexit uncertainties.

David Cheetham, chief market analyst at XTB.com commented: “The FTSE 100 made its own all-time high of 7600 back in June and after a near 6-month consolidation the recent trade has this target once more in the cross hairs of the bulls.    

11.25am: Footsie sees steady gains

The FTSE 100 index held firm in late morning trading, albeit off earlier highs, as financials continued to find gains on the back of US tax reform move hopes, with US stocks expected to extend yesterday’s record highs again today.

Around 11.20am, the FTSE 100 index was 10.5 points higher at 7,547, easing further off the early peak of 7,563.49.

On currency markets, sterling was 0.1% lower versus the dollar at US$1.3379, and down 0.3% against a firmer euro at €1.1328 despite German business confidence taking  a surprise turn for the worse this month, with the IFO survey declining to 117.2.

Joshua Mahony, market analyst at IG said: “Brexit worries are proving a drag on the pound, with the weaker FX helping drive outperformance in the FTSE 100. Meanwhile, with the US tax reforms expected before the New Year, market optimism is sky high.”

He added: “Another day of gains looks to be on the cards today, as the optimism brought about by the premise of a tax reform breakthrough maintains the bullish risk-on sentiment evident over recent trading days.

“With all hurdles out the way, there is little reason to believe that the reforms will not be passed into law in the near future, and to some extent the continued anticipation is beneficial for markets given the possibility of a ‘buy the rumour, sell the fact’ move.”

Banks find gains

Among the FTSE 100 gainers, financials added the most points to the index boosted by hopes for the US tax reform moves, with  Standard Chartered PLC (LON:STAN) up 1.4% at 775p, while HSBC Holdings PLC (LON:HSBA) rose 0.2% to 757.7p, and Lloyds Banking Group PLC (LON:LLOY) added 0.5% at 67.09p.

Insurer Old Mutual (LON:OML) remained the top blue chip gainer, ahead 3.9% at 221.4p on news it will receive £600mln for its single-strategy asset management business led by Richard Buxton.

The deal with private equity firm TA Associates is part of the firm’s strategy to spin-off the wealth management operations.

But on the downside, Associated British Food PLC’s (LON:ABF) was the biggest FTSE 100 faller, down 2.8% at 2,782p after RBC Capital cut its rating for the Primark clothing stores to food producing conglomerate to ‘sector perform’ from ‘outperform’, cutting its target price to 3,100p from 3,500p.

The broker also lowered its underlying forecasts for Primark by 3%, owing to weaker like-for-like sales assumptions which it now expects to be flat next year (versus previous estimate of +1.5%).

Away from the blue chips, Acacia Mining (LON:ACAA) added 0.2% to 180p after the FTSE 250 listed firm said it would sell its 2% royalty over the Houndé Mine in Burkina Faso for US$45mln to Canadian firm Sandstorm Gold Ltd.

Price comparison website operator GoCompare.Com (LON:GOCO) also found gains, up 3% to 102.25p after it agreed to buy The Global Voucher Group, which operates MyVoucherCodes.co.uk, and its units for £36.5mln in cash.

And drugmaker Indivior PLC (LON:INDV), which makes drugs that treat opioid addiction, gained 1% at 401.4p after announcing operations to amend and extended debt facilities.

10.45am: Ryanair boss’s legacy at risk - analyst

Ryanair PLC (LON:RYA) boss Michael O’Leary could leave the Irish airline group in 14 months, according to Darren McKinley, senior equity analyst at broker Merrion, a report in the Irish Examiner said today.

McKinley said the 30-year legacy of the — who has built Ryanair into one of the largest airlines in the world — is at risk if he remains at the helm, the newspaper added.

The analysts’ assessment comes at the end of a turbulent three months for the Dublin and London listed airline which has endured a self-inflicted crisis.

The group was finally forced to recognise pilots’ unions last week in the face of a threat of cockpit strikes in Dublin and other major bases in the UK, Germany, Italy, Spain, and Portugal.

Swiss bank Credit Suisse recently downgraded its rating for Ryanair to ‘neutral’ from ‘outperform’, citing concern that staff expenses will rise “significantly” beyond the €100mln forecast by the airline for 2019.

But Ryanair shares were still over 4% higher today in London at €15.25 on relief after Irish pilots yesterday suspended planned strike action.

Meanwhile, the FTSE 100 index drifted further back from early highs, adding 13 points at 7,550.

10.00am: Hopes for jobs and pay in 2018

UK employers plan to hire more workers and raise pay more quickly in 2018, in spite of continuing fears that Brexit will make the country a less attractive place to do business, according to a survey released today.

The annual report by the Confederation of British Industry and recruitment firm Pertemps showed 51% of employers expect to expand their workforce next year, up from 41% in last year’s survey.

The survey also showed that slightly more than half of businesses expected to raise pay next year in line with or above the rate of retail price inflation, which could mean increases of around 3%, up from about 2.5% currently.

Such an increase would be line with the Bank of England’s forecasts.

As the morning session progressed in London, the FTSE 100 held its gains, up around 19 points at 7,556, just off the early peak of 7,563.49.

On currency markets, the pound remained flat against the dollar at US$1.3374, but was 0.3% lower against the euro at €1.1329.

8.45am: Good gains early on

The FTSE 100 kicked off in fairly chipper fashion adding 19 points to 7,556.27, albeit on lacklustre trading volumes.

The continued upward momentum was supported once again by optimism that President Trump’s US tax reforms may actually make it into law.

“Much like on Monday, Tuesday saw little for investors to focus on beyond Trump’s likely tax bill success later this evening,” said Connor Campbell of Spreadex.

“Unsurprisingly investors have ignored the nuances of the Republican tax ‘reforms’ – especially the impact it will have on the American middle class – to instead revel in what it means for the nation’s mega-corporations and millionaires.”

On the market, the day’s big riser – up 7% - was the insurer Old Mutual (LON:OML), which will receive £600mln for its single-strategy asset management business. The deal with private equity firm TA Associates is part of the strategy to spin-off the wealth management operations.

Stepping down a division to the FTSE 250, Saga (LON:SAGA), the oldies holiday firm, was hit with a double downgrade – from RBC Capital and Peel Hunt. The shares drifted 1.5% lower.

Proactive news headlines:

UK Oil & Gas Investments PLC (LON:UKOG), Solo Oil PLC (LON:SOLO) and Alba Minerals PLC (LON:ALBA) are among the oil explorers reporting the same update for the Horse Hill - aka Gatwick Gusher - project in southern England - where the next phase of work is now expected to start "in late winter 2017/18”.

Radiation technology company Kromek Group PLC (LON:KMK) saw a solid increase in revenue in the six months to the end of October and remains on course to achieve break-even on an EBITDA basis over the full-year.

Base Resources Limited (LON:BSE) is acquiring an initial 85% stake in the Toliara Sands project in Madagascar for an up-front payment of US$75mln. Base will pay a further US$17mln for the remaining 15% on the completion of certain milestones. To fund the deal a partially underwritten US$100mln placing and entitlement offer is now underway. Broker RFC Ambrian called the deal "fantastic".

Bulk email specialist Dotdigital Group plc (LON:DOTD) is on track with its “ambitious growth plans”, with the strong trading momentum reported earlier this year showing no signs of stopping. dotdigital’s non-executive chairman Frank Beechinor-Collins will tell shareholders at Tuesday’s annual general meeting that the continued progress is being driven by “strong international sales and growing demand for dotmailer in the ecommerce market”.

Challenger Acquisitions Ltd (LON:CHAL) remains confident that the stalled New York Wheel (NYW) project will get rolling again soon as too many vested interests want to see a return on their investment.

Faron Pharmaceuticals Ltd (LON:FARN) has been given the green light to continue a phase II/III study of its lead drug. Traumakine is being tested for safety and efficacy in patients with multi-organ failure (MOF). This is a potential second indication for a treatment which is currently undergoing phase III trials on patients with acute respiratory distress syndrome (ARDS).

Cancer drug discovery firm Sareum Holdings Plc (LON:SAR) has secured patents in Japan and China for its TYK2 kinase inhibitor programme.

Akers Biosciences Inc (NASDAQ:AKER, LON:AKR) has unveiled plans to raise US$6mln. It plans to issue a mix of common stock, warrants and convertible shares.

Tlou Energy Limited (LON:TLOU) told investors it has now completed the first two core holes in its ongoing programme at its coal bed methane projects in Botswana. The first two holes were drilled at the Lesedi project, and the third hole is being drilled in the Mamba area and it is expected to be completed in early 2018.

Rambler Metals and Mining PLC (LON:RMM) has achieved record monthly throughput at its Nugget Pond mill in Canada, where ore from the company's Ming mine is processed. The company processed an average of 1,221 metric tonnes of ore per day and remains on track to hit a quarterly record.

Horizonte Minerals Plc is to acquire the Vermelho nickel-cobalt project from Brazil's national mining champion Vale. The price is US$$8mln, with just US$150,000 up front and the rest deferred. The company is raising £8mln through a placing of shares in the UK and Canada to fund the deal.

European Metals Holdings Limited (LON:EMH) has added the Northwest Cinovec license to the area it has under application with the Czech government. In addition, the company has revealed that recent testwork has demonstrated ways to reduce capex and opex in the roasting process at Cinovec. Cinovec is one of Europe's leading lithium projects.

Coinsilium Group Limited (AQSE: COIN), the blockchain venture builder and investor, noted the increase in the company's share price today but confirmed that “they know of no specific corporate or operational reason for the increase”. The group pointed out, however, that continues to be active in the increasingly dynamic and popular blockchain technology sector. Consillium shares on NEX were 12.8%, or US$0.03p higher at US$0.22.

Ebiquity plc (LON:EBQ announces that after 10 years as a director of the data-driven marketing insights firm, Nick Manning is stepping down from the board and will be leaving the company at the end of the year.

Touchstone Exploration Inc. (LON:TXP) (TSX:TXP) announced that on 18 December 2017, Paul R. Baay, the Trinidad and Tobago focused oil and gas exploration and production company’s president and chief executive officer, exercised incentive share options over 100,000 common shares in the company at a price of C$0.05 per share (approximately 2.9p per share).It added that Baay subsequently sold 100,000 common shares at a price of C$0.20 per share (approximately 11.7p per share).

6.45am: Flat start predicted

The  Footsie is seen opening fairly flat on Tuesday, consolidating the previous session gains as the Christmas week slow down continues, despite record gains overnight on Wall Street.

Spread betting firm CMC Markets expects the FTSE 100 index to open around 1 point lower at 7,536, having added 46.44 points on Monday.

US stock indexes finished posted fresh record highs overnight bolstered by US tax reform optimism, helping buoy Asian markets today, but there was a lack of other impetus.

On currency markets, sterling held fairly steady versus a cautious dollar at US$1.337, but eased 0.1% lower against the euro at €1.1344 amid Brexit uncertainties

With Christmas fast approaching, the corporate diary is going to look even more barren over the next few days, but at least one FTSE 100 listed firm will report results on Tuesday - although not until around midday.

Carnival not over

Cruises operator Carnival PLC (LON:CCL) saw their London and New York listed shares lose some steam in the second half on worries over the impact of Hurricanes Harvey, Irma and Maria, which in September wreaked havoc across Florida and the Caribbean.

However, rival cruise ships owner Royal Caribbean’s shares found support after its November figures, which beat expectations, despite what it said was a US$55mln hurricane hit from lost revenue and higher costs, helped by a drop in fuel costs.

Analysts expect Carnival - which owns the P&O and Princess lines as well - to report full-year sales of US$17.4bn and earnings per share of US$3.70, compared to US$16.4bn and US$3.73 a year earlier.

Investors will also be seeking any guidance for 2018, when analysts are expecting a 6% increase in sales to US$18.4bn and a 16% jump in earnings per share to US$4.29, with the impact of the sterling/dollar exchange rate and fuel prices both the main focus.

Significant events expected on Tuesday December 19:

Finals: Carnival PLC (LON:CCL)

Interims: Kromek Group PLC (LON:KMK)

AGMs: Applied Graphene Materials PLC (LON:AGM), Blancco Technology Group PLC (LON:BLTG), Dotdigital Group plc (LON:DOTD)

Economic data: German IFO business climate data; US housing starts

Around the markets:

  • Sterling: US$1.3177, flat
  • Gold: US$1,260.50 an ounce, down 0.1%
  • Brent crude: US$57.32 a barrel, up 0.3%

City Headlines:

  • GlaxoSmithKline raises stake in its Saudi Arabian unit to 75% - The Times
  • RBS closures: SNP begs Theresa May to halt 62 branches shutting across UK – Daily Express
  • Future of Colman’s mustard factory to be decided next year, says owner Unilever – Daily Mail
  • ‘Fox and mouse have stitched us up’: Sky shareholders claim broadcaster has been undervalued in Disney deal – Daily Mail
  • Toys R Us faces collapse with loss of all 3,200 UK job – The Guardian
  • Uber Cambridge license renewed for five years by local council – City AM
  • Virgin billionaire Richard Branson is taking up Hyperloop One Chairman role – City AM
  • Berkshire Hathaway shares top $300,000 in latest milestone – Financial Times
  • ESPN Boss quits after revealing substance abuse – Financial Times
  • Toyota pledges to introduce electric or hybrid versions of all cars by 2025 – Financial Times
  • Boeing’s order book did not suffer because of our jet, says Bombardier – The Times
  • Kaspersky Lab files lawsuit against Trump administration – Daily Telegraph
  • Rosneft plans to drive up oil output by 30mln tonnes in 5 years – Financial Times
  • Utmost acquires Generali PanEurope in €230mln deal – Financial Times
  • Vonovia to buy residential real estate rival Buwog for €5.2bn – Financial Times
  • First Quantum agrees option to acquire controversial Alaskan Pebble mining project – Financial Times
  • UK homeowners slash house prices by over £25,000 on average as property market slows – The Independent
  • Beware the Bitcoin bubble, say experts after digital currency almost doubles its price in just three weeks – Daily Mail

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