FTSE 100 closes up 45 points
Royal Mail set for return to FTSE 100
Anglo American biggest gainer
FTSE 100 closed higher, but not above 7,300, as Wall Street shares raced north and sterling lost ground.
Britain's premier share index closed up around 45 points, or 0.62% at 7,289, while FTSE 250 was also higher - up over 27 points at 19,828.
"American stocks are leading the way. The rapid sell-off that we saw at the start of the month begun in the US, and it is also the country that has recovered the most," said David Madden, at CMC Markets.
"The Dow Jones and S&P 500 are comfortably above their respective 50-day moving averages, while the NASDAQ 100 isn’t a million miles away from its record highs."
In the currency markets, the pound is off 0.12% against the Euro at 1.1347, and down 0.09%, or 1.3958 against the US dollar.
Top riser on the Footsie was mining behemoth Anglo American (LON:AAL), which added 3.09% to 1,843.6p, after it completed the sale of the Drayton coal mine in Australia.
Meanwhile, property group Hammerson PLC (LON:HMSO) was the biggest FTSE 100 loser after its full-year results failed to cheer the market.
There was a rise in rents and profits but the group cautioned over Brexit-related uncertainty on the retail market generally.
Fails to remain above 7,300
The FTSE 100 has failed to remain above 7,300 but is still nursing a decent gain.
The top-shares index was up 47 points at 7,291 while its little brother, the FTSE 250, was up 23 at 19,824 with potash project developer Sirius Minerals PLC (LON:SXX) leading the way, up 3.9% at 26.6p.
This week will see some jockeying for position ahead of the FTSE indices reshuffle that will see some stocks drop out of the FTSE 100 and some FTSE 250 stocks make it into the top echelon.
Royal Mail PLC (LON:RMG), once a state-owned letter and parcels delivery organisation, is being tipped for a return to the big league while property company Hammerson PLC (LON:HMSO), which had results out today, is widely expected to drop down a division.
“Notable likely relegations from the FTSE 250 include the AA, the outsourcer Mitie and funeral provider Dignity. Games Workshop looks set to travel in the other direction stepping up from the FTSE Small Cap into the FTSE 250. That’s right, a company which manufactures and sells fantasy figurines is now worth more than the UK’s largest motoring organisation,” noted Laith Khalaf at Hargreaves Lansdown.
Talking of the AA, German bank Berenberg has slashed its target price for roadside recovery outfit AA plc (LON:AA. from 100p to 65p.
The rating was already ‘sell’ so there is no change there and the bank offers little prospect of change in the near-term, either, in a research note headed “a long road to recovery”.
3.00pm: London receives a boost from flying start on Wall Street
The Dow Jones made it back above 25,500 after opening more than 200 points higher, encouraging London’s Footsie to put on a bit of a spurt.
The FTSE 100 rose above its own milestone, climbing above 7,300 to 7,305, up 61 points on the day.
The top riser in London was blood cancer specialist HemoGenyx Pharmaceuticals PLC (LON:HEMO), which more-or-less doubled in price after it confirmed its lead candidate drug, CDX bi-specific antibodies, had shown signs of being effective in the treatment of acute myelogenous leukaemia (AML) in test-tube conditions.
Acute Myelogenous Leukemia (AML) affects >1M people globally (20K new cases US/year, 18K new cases EU/year) and kills 150K people/year. Only 27% of AML patients survive. Can @HemoGenyx help suffering from AML people? #HEMO #AML #Immunotherapy #antibodies
— HemoGenyx (@HemoGenyx) February 26, 2018
2.00pm: US stocks set to open higher
With US stocks set to add to Friday’s bumper gains, London’s benchmark index was trading close to its high for the day.
The FTSE 100 was up 37 at 7,282, 20 points or so below its highest level of the day.
In the US, spread betting quotes indicated the Dow Jones would open at around 25,460, after rising 348 points to 25,310 on Friday and the S&P 500 would open at around 2,758, after climbing 43 points on Friday to close at 2,747.
House-builders Persimmon PLC (LON:PSN), Taylor Woodrow PLC (LON:TW.) and Barratt Developments PLC (LON:BDEV) shares were up by around 0.8% to 1% after the release of mortgage data.
“UK Finance reported that mortgage approvals for house purchases picked up to a three-month high of 40,117 in January after slowing to a 56-month low of 36,085 in December from 39,624 in November, 40,599 in October and 41,647 in September,” observed Howard Archer, the chief economic advisor to the EY ITEM Club.
“January’s rebound in mortgage approvals suggests that there may have been a hit to activity in December as a reaction to the Bank of England raising interest rates in November. It is also possible that cutting stamp duty for first-time buyers in the Chancellor’s Budget may have provided limited support to mortgage approvals in January. It should be noted that housing market activity can be particularly volatile around Christmas and New Year,” Dr Archer added.
“While January’s rebound in mortgage approvals suggests that December’s drop overstated the weakness of housing market activity, it is still subdued. Indeed, January saw mortgage approvals for house purchases at the third lowest level since September 2016,” he noted.
Property group Hammerson PLC (LON:HMSO) was one of the few blue-chips to lose ground, sliding a penny to 475.2p in the wake of its full-year results.
“Hammerson’s full-year results show that not all real estate investment trusts (REITs) are equal, as the increase in its net asset value per share compares with the drop at Capital & Counties, outpaces the growth at Intu but lags the latest advance at Segro,” says Russ Mould, AJ Bell’s investment director.
“Hammerson’s exposure to premium retail shopping sites is clearly serving it well but all its shares have done is fall since December’s announcement of an all-share offer for Intu and as a result, the bidder looks likely to join the target by dropping into the FTSE 250 after this week’s reshuffle,” he added.
Noon: Dollar weakness takes the shine off Footsie's performance
The strength of sterling was crimping the Footsie’s style towards the end of the morning trading session.
The FTSE 100 was up 32 points at 7,277 despite the US dollar losing ground on the foreign exchange markets; many of the big guns in the Footsie earn a significant proportion of revenues in US dollars, so the greenback’s weakness is bad news for them.
On the positive side, because minerals are priced in dollars, a wilting US currency is good for miners, and it is the likes of Vedanta Resources, Anglo America, Kaz Minerals and Randgold Resources that are doing the heavy lifting for the blue-chips index.
Index heavyweight BP PLC (LON:BP.) was up 0.6% at 479.05p after Royal Bank of Canada increased its price target to 570p from 550p and upgraded the stock to ‘outperform’ from ‘sector perform’.
Among the mid-caps, shares in troubled doorstep lender Provident Financial PLC (LON:PFG) were off 9.5% at 594.4p after media reports over the weekend suggested it is in discussions with investors over a rescue rights issue.
Further down the food chain, GlobalData PLC (LON:DATA) was on the rise after it said it was in discussions to acquire a slew of companies owned by its chief executive officer, Mike Danson.
The shares were up 7.8%.
10.00am: Stocks come off the top
Blue-chips remain in positive territory but the Footsie is already off the top, despite the strength of mining stocks.
The FTSE 100 was up 23 at 7,268, with Anglo American PLC (LON:AAL) leading the way after it completed the sale of the Drayton coal mine.
The shares were up 2.1% at 1,826.2p after the company said it had sold the mine, which is located in New South Wales, Australia, to Malabar Coal for an undisclosed sum.
Also going well was Primark owner Associated British Foods PLC (LON:ABF) after its trading statement.
The shares advanced 1.9% to 2,696p as it reported sales growth in the first half of its financial year in all parts of the business except the Sugar division, where a decline in revenues has been well-flagged.
“A string of new shops helped boost sales at Primark by 9% in the first half of the financial year; however, the chain also saw a dip in revenues at its existing stores, hit by unusually warm weather in autumn. As a result, like-for-like sales, stripping out the effects of store openings, was [sic] down roughly 1%,” noted Fiona Cincotta, at City Index.
“The fact that the share price is up over 1.5% in early trade suggests that investors are in forgiving mood on Monday and happy to accept Primark’s explanation of this being a temporary slowdown. Furthermore, investors are focusing on the strong outlook for the budget retailer, with profit growth expected to accelerate thanks to a weaker dollar and stronger buying performance,” she added.
Open: FTSE 100 takes cue from positive performances in US and Asia
The FTSE 100 kicked off the trading week on the front foot, taking its cue from Asia and Wall Street, which ended last week in positive territory. The index of blue-chip shares opened up 41.5 points at 7,285.91.
The focus this week will on the direction of inflation (and by extension the trajectory of interest rates) with a raft of data expected from Europe and the US.
And as CMC Markets analyst Michael Hewson noted: “We’ll also get the first real in depth look at new Fed chief Jerome Powell and how he sees the US economy when he testifies to lawmakers tomorrow in his first semi-annual testimony.”
Turning to the market, shares in British Airways owner International Consolidate Airlines Group (LON:IAG) bounced back 1.6% after Friday’s results-driven sell-off.
Centrica (LON:CNA) was given a 1.4% boost after RBC Capital upgraded the stock to ‘outperform’. There was no such luck for BP (LON:BP. investors as an identical call from RBC left the stock unmoved.
Stepping down a division and focusing on the FTSE 250’s problem child, Provident Financial (LON:PFG) fell 9% on weekend reports of a rights issue to strengthen its balance sheet.
Among the tiddlers, Savannah Resources (LON:SAV) stood out with a 5% rise after tripling the resource estimate for its lithium project in northern Portugal.
Proactive news headlines:
Savannah Resources PLC (LON:SAV) chief executive David Archer said the 200% increase in the resource at Mina do Barroso marked it out as one of Europe's most promising lithium projects. The company said it will press ahead with “second pass” metallurgical test work. A scoping study should be commissioned soon, which would then lead to a definitive feasibility study later this year.
Digital technology and media group Falcon Media House PLC (LON:FAL) has signed what it called “a landmark deal” with Indian cable operator, JPR Network. The company has agreed to provide live and on-demand digital streaming technology to JPR Network, the Mumbai-based cable network provider.
Connemara Mining PLC (LON:CON) is raising £900,000 through a placing. Metal Tiger PLC (LON:MTR) will invest £200,000, and directors John Teeling and Jim Finn will also convert outstanding salaries amounting to £199,500 into shares as part of the same transaction. Patrick Cullen is appointed chief executive officer with "full executive authority."
Goldplat PLC (LON:GDP) turned in operating profits of £1.578mln for the six months to December 2017, as recovery operations in South Africa performed well and the mine in Kenya delivered significant improvements. The company held more than £900,000 on its balance sheet at the end of the period.
Medical imaging technology firm Feedback PLC (LON:FDBK), continues to see strong demand for its technology, which was reflected in revenue growth over the last 12 months that was in double digits in percentage terms.
Eckoh PLC (LON:ECK), the provider of secure payment products and customer contact solutions, has landed a contract with a big US retailer. Eckoh will provide its secure payments solution, CallGuard, to a US Fortune 250 retailer, for four years in a deal that is worth a minimum of US$1.9mln.
Civil airline lessor Avation PLC’s (LON:AVAP) fleet is now worth over US$1bn following a spate of purchases in December. Avation started to re-jig its portfolio last June when it sold six ATR turbo-prop planes, which it replaced with its first twin-aisled jet (a Boeing 777-300ER) and three others in December.
Tissue Regenix Group PLC (LON:TRX) has announced the launch of a new business unit as well as unveiling an exclusive distribution deal for its flagship product. The wound care specialist has set up TRX BioSurgery to further promote its DermaPure graft as surgical application following success in this sphere and the growing adoption of the product.
Gfinity PLC (LON:GFIN), the esports entertainment group, has been named by Microsoft Corp's (NASDAQ:MSFT) Turn 10 Studios as the Global Tournament Operator for the Forza Racing Championship (ForzaRC) 2018 and Forza Racing World Championship to be held in October at the Gfinity Esports Arena. Under the agreement, Gfinity will manage all league operations, including online qualifiers and LAN-based events, together with adjudication framework which supports all competitive gameplay.
Cabot Energy PLC's (LON:CAB) soon to be acquired Civita gas field, in Italy, has been affected by temporary operational problems. In June 2017, the company agreed a deal with Rockhopper Exploration PLC (LON:RKH) which sees it acquire a portfolio of Italian assets including Civita, but, on Monday, Rockhopper revealed that production at the field has been suspended due to pipeline problems.
Stratex International PLC (LON:STI) has relayed information about one of its partially-owned associated companies, Aforo Resources, which has sold out of assets in Cote d'Ivoire and inked a deal for new projects in Burkina Faso. Aforo has banked US$225,000 of gross proceeds from the sale of the Cote d'Ivoire assets.
Caledonia Mining Corporation PLC (LON:CMCL) has expressed its regret and sincere condolences after a fatality on the night shift at its Blanket gold mine in Zimbabwe. The fatality occurred in the Blanket Quartz Reef of the mine.
Good wind speed and more acquisitions kept Greencoat UK Wind PLC (LON:UKW) on course for its dividend and capital growth targets. The UK-focused fund has stakes in 29 off- and onshore wind farms, which generated 1,457GWh of electricity over the past year or enough for 620,000 homes.
Vast Resources PLC (LON:VAST), the AIM-listed mining company with operating mines in Romania and Zimbabwe, announced the appointment of Will Maberly as country manager for Zimbabwe. The group said Maberly's appointment is in line with its updated strategy to increase its footprint in Zimbabwe, seeking new opportunities and revitalising historic claims, in line with the amelioration of the political and economic environment in the country.
Rambler Metals and Mining PLC (LON:RMM) (TSXV:RAB), the copper and gold producer, explorer, and developer has announced that its president & chief executive officer, Norman Williams is attending the BMO Capital Markets 27th Annual Global Metals & Mining Conference in Hollywood, Florida from February 25-28, 2018.
International Ferro Metals PLC (LON:IFL) announced that Stephen Oke and John Ballard, non-executive directors of the company, resigned from the board with effect from 23 February 2018.
Instem PLC (LON:INS), a leading provider of IT solutions to the global life sciences market, announced that its chief executive officer, Phil Reason and chief financial officer, Nigel Goldsmith have each been granted nil-cost options over 80,000 ordinary shares under the company's long-term incentive plan (LTIP).
6.45am: Front foot start predicted
Ahead of Monday’s open London’s FTSE 100 looked set to get off on the front foot, with blue chip stocks generally seen higher at the start of what’s expected to be another eventful week.
“Whilst this new week starts off slowly, with little in the way of high impacting economic data to catch investor’s eye; things certainly pick up as the week progresses, with US inflation data and the first testimony by the new US Federal Reserve Chair Jerome Powell headlining,” said Jasper Lawler, analyst at London Capital Group.
Market indicators in Asia reveal a degree of positivity at the start of the new week.
Japan’s Nikkei advanced 260 points or 1.19% to trade at 22,153, while Hong Kong’s Hang Seng added 200 points or 0.64% rising to 31,469. The Shanghai Composite, meanwhile, climbed almost 1% to reach 3,320.
In London, with just over an hour till the start of equity trading, CFD and spreadbetting firm IG Markets sees the FTSE 100 rising around 41 points, calling the benchmark at 7,283 to 7,286.
Regarding corporate news, Monday’s highlights in the diary include Primark owned Associated British Foods PLC (LON:ABF).
Significant events expected for Monday February 26:
Trading updates: Associated British Foods PLC (LON:ABF)
Finals: Bunzl PLC (LON:BNZL), ), Hammerson PLC (LON:HMSO), Ascential PLC (LON:ASCL), Dialight PLC (LON:DIA), Keller Group PLC (LON:KLR), Quartix Holdings PLC (LON:QTX), RTC Group plc (LON:RTC), Senior PLC (LON:SNR)
Interims: Avation PLC (LON:AVAP), Dechra Pharmaceuticals PLC (LON:DPH), Sylvania Platinum Ltd. (LON:SLP), Town Centre Securities PLC (LON:TOWN)
Economic data: Nationwide UK house price index; BBA UK mortgage lending figures; US new home sales.
Around the markets:
Sterling: US$1.4027, up 0.0056%
Gold: US$1,339 per ounce, up 0.88%
Brent crude: US$67.43 per barrel, up 0.17%
Bitcoin: US$9,441 per coin down 1.51%
News Headlines
Government to introduce legislation to limit how much power firms can charge - The Independent
£15bn boost to UK growth as watchdog set for embarrassing U-turn - Telegraph.co.uk
Interest rate rise of 1% would cost average UK homeowner £930 a year -The Guardian
Vote Leave donations raise further concern over Melrose's GKN bid - The Guardian
Former Carillion boss `dumped shares at first possible moment´ - Daily Mail
Secret HSBC memo turns heat on Topshop boss Philip Green -The Times
London's transport body faces bumpy financial ride - Financial Times
Toys R Us could go bust tomorrow after desperate talks to find a buyer break down - Daily Mail