FTSE 100 slides again
Burberry, Informa and Pearson drag the index lower
Bitcoin slumps some more
Investors continue to sift over Carillion collapse while Interserve gets dragged into the picture
The FTSE 100 ended the day in the red as it has done every day this week.
The top-shares index was down 31 at 7,725, with corporate news flow from Informa PLC (LON:INF), Pearson plc (LON:PSON) add Burberry Group PLC (LON:BRBY) acting as a drag.
Burberry was the biggest faller of the three, down 9.3%, after what Ken Odeluga, a market analyst at spread betting firm City Index, called “another strained quarter”.
“Was it poor enough to warrant sending as much as £640mln of share value up in smoke on Wednesday? We doubt it. The decline looks like an overreaction to the group’s 2% retail sales fall. Down £16mln against the same three months in the year before, Burberry has had better quarters,” he noted, while adding that the fiscal third quarter left the group just £572mln short of year-end sales projected at £2.23bn by March.
“Little wonder Burberry has calmly reiterated conservative operating profit guidance,” Odeluga said.
Top riser on the market was Deltex Medical Group plc (LON:DEMG), which shot up 90% to 2p on the back of a major new hospital account for the oesophageal Doppler monitoring device maker.
3:30pm: FTSE 100 set to close in negative territory despite Wall Street gains
Although Wall Street benchmarks were moving higher, London’s FTSE 100 stayed negative.
The index was down 25 points, 0.33%, changing hands at 7,731 with just under an hour until Wednesday’s close.
In New York, the Dow Jones was up 82 points or 0.32% at 25,875 while the S&P 500 and Nasdaq also climbed 0.3% to 2,785 and 7,241 respectively.
1:30pm: FTSE 100 still lower, but Wall Street to open higher
London’s FTSE 100 was still somewhat in the doldrums, albeit the benchmark could find a little support from an apparent improvement in sentiment.
Changing hands at 7,738, the index was down 17 points or 0.22%.
“Equities have regained poise after yesterday's bout of weakness, although sentiment remains bruised following some more disappointing corporate updates,” said Mike van Dulken, head of research at Accendo Markets.
“Traders are displaying a little more appetite for risk assets versus yesterday's cautiousness, perhaps buoyed by more M&A, putting a mix of both risk and defensives in the driving seat.”
Over in the United States, topsy-turvy trading continues with the Dow Jones indicated 120 points higher in pre-market dealing, with futures seen at 25,942.
The S&P 500 and Nasdaq, meanwhile, were also projected to start in positive territory.
Goldman Sachs was among the hot stocks in premarket, after quarterly profits came in materially above expectations, similarly, Bank of America was another feature with profits ahead of expectations and revenue was worse.
12:00pm: FTSE 100 continues to lag, Bitcoin extends slump as punters exit
The FTSE 100 continued to lag, down 13 points or 0.18% changing hands at 7,742 by midday.
At the same time, the losses were slightly bigger for the FTSE 250 which at 20,830 was down 47 points or 0.23%.
The FTSE All Share index, meanwhile, slipped 0.2% to 4,251.
11:45am: Bitcoin slumps yet again as speculators continue to jump ship
By Wednesday morning, another US$2,000 or so has been wiped off the price of Bitcoin which is now testing US$10,000.
Bitcoin was down US$956 or 8.4% trading at US$10,391, whereas Ethereum had shed nearly 14% down to US$908.74. Ripple’s XRP was even more aggressively lower, down 25% to US$1.05 per token.
It appears, at least so commentators say, that the come-lately speculators that peaked cryptocurrency trading are now jumping ship amid continuing worries over potential regulatory crackdowns in major economies around the world.
“While $10,000 even two months ago would have been seen as a huge success for Bitcoin enthusiasts, the euphoria towards the back end of 2017 saw prices sky rocketing on a daily basis driving many to claim it was in dangerous bubble territory,” said Craig Erlam, analyst at Oanda.
“While that in itself doesn’t mean bitcoin will crash and burn, the warnings have proven to be legitimate in recent weeks.
Erlam added: “The question now is how long it will take bitcoin - as well as other cryptocurrencies that have had an equally awful month, some worse - to find its feet again.
“There was clearly a significant speculative component to the rally late last year and the drop will be very discouraging to those that previously thought there was easy money to be made.”
10:20am: Miners positive, but oil stocks and banks lacklustre
Anglo American Plc (LON:AAL) led the FTSE 100 miners, recovering from a weak session on Tuesday, with the stock up 17.6p or 1% to trade at 1,773p.
Glencore Plc (LON:GLEN) was up 0.31% to 406.94p, while Rio Tinto Plc (LON:RIO) gained 0.3% to trade at 4,059p.
BHP Billiton plc (LON:BLT) was only slightly higher, changing hands at 1,621p.
Oil majors were lower, however, as Brent crude moved down. Royal Dutch Shell Plc (LON:RDSB) and BP Plc (LON:BP) backed off, slipping 0.37% and 0.21% respectively to trade at 2,577.5p and 517.28p.
Banking stocks were also on the back foot. Royal Bank of Scotland Group Plc (LON:RBS) was the lowest, down 1.04% to 295.6p, while Barclays Plc (LON:BARC) edged only slightly lower.
Lloyds Banking Group Plc (LON:LLOY), however, was in positive territory changing hands at 70.53p.
Burberry Group Plc (LON:BRBY) shares started Wednesday 7% lower, changing hands at 1,658p, after it unveiled a 2% drop in retail revenues, reflecting weaker sales in the UK.
The luxury fashion brand said retail revenue in the three months to 31 December 2017 came to £719mln, down from £735mln the same period a year ago. Comparable store sales growth slowed to 2% from 3% the previous year.
Elsewhere, Cineworld Group plc (LON:CINE) was down 4%, trading at 541p, as it launched a £1.7bn fully underwritten rights issue which will fund the takeover of Regal Entertainment Group.
The cinema operator in December announced it would buy US rival Regal in a deal that values the business at US$3.6bn. Cineworld will issue 1,095,662,872, respresenting 400% of its existing issued share capital and 80% of the enlarged group. Investors to receive four shares at 157p each for every one they hold.
9:45am: FTSE 100 on the back foot as investor sentiments remain slightly negative
The FTSE 100 was on the back foot through Wednesday morning after Wall Street failed to hold onto its gains despite the initial rally that saw the Dow Jones finally breaking above the 26,000 marker.
Some 283 points were lost in the Dow’s reversal, and it ended down about 10 points for the day.
“Whilst there was no obvious cause for the selloff, there is some suggestion that rising concerns over the US shutdown is weighing on investor’s minds,” CFD firm City Index said.
“Congress has until Friday to pass a new spending bill, or else face a US government shut down; immigration discussions have been complicating efforts to reach a deal on government spending.
“The dollar has also been a casualty of shutdown concerns, with the dollar hitting a fresh 3 year low of 90.113 overnight. As fears over a US government shutdown have eased early this morning, the dollar has since climbed back up 0.3% to 90.70.”
In the UK, meanwhile, the FTSE 100 was down 22 points, 0.29%, changing hands at 7,733.
8:50am: FTSE 100 nudges lower; Carillion fallout continues as Informa looks to wrap UBM into £9bn conferences empire
The FTSE 100 made a lacklustre start to proceedings as it nudged 10 points lower to 7,746.09 following a rare down day on Wall Street.
The fall-out from the Carillion (LON:CLLN) collapse continued as the national newspapers rounded on the management and the seeming incompetence of Theresa May’s government.
The big corporate news of the day was Informa’s (LON:INF) talks to acquire smaller rival UBM (LON:UBM) to create a £9bn exhibitions group.
Shares in the former fell 5% early on – although was largely technical as Informa is proposing issuing new paper as part of the deal.
UBM, meanwhile, shot up 14% on the news.
Elsewhere, the third quarter trading statement from fashion house Burberry (LON:BRBY) sent the stock tumbling 4.7% as retail sales came in shy of expectations.
Proactive news headlines:
Hurricane Energy PLC (LON:HUR) updated on the ongoing review being conducted by its recently formed Listing and Governance Committee (LGC), as it continues to prepare for promotion to a ‘premium’ segment of a recognised stock exchange.
It is an “exciting period of growth” for Genedrive PLC (LON:GDR) according to its boss, David Budd, as the medical diagnostics group hurtles towards commercialisation of its Hepatitis C (HCV) ID Kit.
Clinigen Group PLC (LON:CLIN) said it is positioned for another year of growth as it told investors trading at the halfway stage had been in line with expectations. The speciality pharma and services company reported that revenues were up 28% year-on-year, although the figure was distorted by what are called ‘pass through costs’ associated with the unlicensed medicines it accesses on behalf of patients in need.
OptiBiotix Health plc’s (LON:OPTI) work on the emerging field of the human microbiome will be recognised at a leading industry conference next month. For the company is to present an abstract at ProBiota 2018, attended by the movers and shakers of the industry.
Advanced materials group Haydale Graphene Industries PLC (LON:HAYD) has entered into a commercial supply and development agreement with Australian-listed Talga Resources.
Eland Oil & Gas PLC (LON:ELA) has confirmed that the Opuama-8 well has now been drilled and handed over to the field production team. The Elcrest joint venture subsidiary successfully drilled and completed the well, which is now expected to be flow tested before it goes into production.
IronRidge Resources Limited (LON:IRR) has expanded its lithium interests in Ghana with the acquisition of a lithium pegmatite tenure adjacent to its Ewoyaa prospect. The AIM-listed junior is acquiring the Saltpond licence from local Ghanaian firm Joy Transporters.
Shanta Gold Limited (LON:SHG), the East Africa-focused gold producer, developer and explore, has appointed Numis Securities as its nominated adviser and sole broker with immediate effect.
6.45am: Lower start called
The FTSE 100 is called to start lower after Wall Street posted a sharp reversal on Tuesday and Asian stocks fell.
US shares had surged to new records at the open yesterday after the Martin Luther King day holiday, but the gains were all relinquished as stocks posted the sharpest one day reversal in almost two years.
The Dow Jones finished 10 points lower having breached the 26,000 mark earlier after triple digit point gains, while the S&P 500 and Nasdaq were off around nine and 37 points respectively.
Footsie closed down around 13 at 7,755 as big cap miners weighed and today spreadbetters at IG Index reckon it will open a further 12 points lower.
In Asia, the Nikkei 225 in Japan is down 103 points at the time of writing.
Today investors will have an array of UK corporate updates to consider as well as US industrial production figures, which is likely to give further clues on the strength of the economy there.
There will also be European inflation data and a speech today by Bank of England monetary policy committee member Michael Saunders, who last year pushed to reverse the August 2016 rate cut.
Meanwhile, Christmas may have come and gone but it's still a hot topic for the retail sector, in the throes of the trading update season.
Today, Burberry (LON:BRBY) will sashay down the catwalk and investors will be looking for a smooth execution of the new strategy under its new boss Marco Gobbetti.
Elsewhere, publisher Pearson plc (LON:PSON) will issue a trading statement and analysts at Liberum Capital expect the FTSE 100 listed firm to disappoint the market on 2018 guidance, either with this update or with its full-year results.
In a note to clients last week, the analysts said: “2018 is shaping up to be another difficult year in US Higher Education and the recent move by #2 player Cengage to offer an ‘all you can eat’ pricing model threatens to introduce the tsunami of price deflation on top of volume declines and industry pressures continue."
Significant updates expected:
Production update: BHP Billiton plc (LON:BLT), Hochschild Mining PLC (LON:HOCH)
Trading update: Burberry PLC (LON:BRBY), Pearson plc (LON:PSON), Diploma PLC (LON:DPLM), Clinigen Group PLC (LON:CLIN), Secure Trust Bank PLC (LON:STB), Henry Boot PLC (LON:BOOT), City of London Investment Group PLC (LON:CLIG)
Economic data: US industrial production; Federal Reserve Beige Book
Around the markets:
- Sterling: US$1.3774, down 0.12%
- Gold: US$1,335.40 an ounce, flat
- Brent crude: US$63.68 a barrel, down 0.08%
City headlines:
- Arden seeks merger as brokers face Mifid II challenge -Times
- YouTube tightens rules for video creators to make money from ads - FT
- Ericsson hit by write-downs of almost $2 billion - FT
- Trafigura inks 15-year deal with Cheniere Energy- FT
- David Einhorn’s Greenlight Capital takes small stake in Twitter- FT
- BoE predicts ‘entirely manageable’ impact on banks from Carillion failure- FT
- Celgene in discussions to buy Juno Therapeutics - FT
- GE Chief considers further break-up of conglomerate- FT
- Tate & Lyle names former PepsiCo Executive as CEO - FT
- Melrose faces pensions hurdle in GKN bid as trustees fire warning shot - Telegraph
- Greggs takes on Burger King and McDonald’s with hot food menu - Guardian
- Panic as Barclays dumps pensions of 250,000 workers into risky casino banking arm - Daily Mail
- Mr. Kipling’s not so exceedingly good sales figures: Battenbergs and Bakewells unpopular over Christmas - Daily Mail
- Bitcoin crashes 28% & Ethereum plummets 30% amid shock crackdown - Daily Express