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FTSE 100 closes near flat as Middle East tensions cool

The UK blue-chip benchmark closed 1.20 points, or 0.02% at 7,258..

London
FTSE 100 closed higher - by a tiny shade
  • FTSE 100 closes near flat 

  • Micro Focus and Tesco shares jump

  • ITV and mining stocks slump

 

FTSE 100 closed in positive territory, but only just, as traders came back to stocks desite and amid geopolitcal tensions.

The UK blue-chip benchmark closed 1.20 points, or 0.02% at 7,258.

Its mid-cap cousin, the FTSE 250 was also higher, up almost 118 points at 19,772.

Top riser on FTSE 100 was Micro Focus International PLC (LON:MCRO), which added over 7% to 1,258.5p after Bloomberg had reported that activist investor, Elliott Management Corp, had built up a position in the enterprise software firm.

Top loser was broadcaster ITV plc (LON:ITV), which lost 4.86% to 142.90p after the share went ex-dividend.

On Wall Street, US benchmarks were higher at the time of writing, with the Dow Jones ahead by 1.25%.

David Madden, at CMC Markets, summed up the day's trading thus: "Stocks are higher today as tensions regarding the Middle East have cooled.

"President Trump announced that an attack in Syria was not ‘imminent’, and dealers are taking this as a cue to snap up relatively cheap stocks.

"Mr. Trump has slightly backed down from yesterday’s warning to Russia that a military assault was in the pipeline. Investors are mindful the situation is far from over, but for now they are content to stay long."

3.50pm: WTO warns on risk of trade wars

The World Trade Organisation has warned that tit-for-tat trade wars over tariffs could hurt global trade.

The WTO’s annual analysis has shown that global trade has seen its most rapid growth in six years.

But WTO's director general, Roberto Azevedo, said this could be put at risk by protectionism amid a dispute between US and China over trade tariffs.

"The strong trade growth that we are seeing today will be vital for continued economic growth and recovery and to support job creation," said Azevedo.

"However, this important progress could be quickly undermined if governments resort to restrictive trade policies, especially in a tit-for-tat process that could lead to an unmanageable escalation."

Last month US President Donald Trump revealed plans for a 25% tariff on US steel imports and a 10% tariff on aluminium from countries, including China.

Worries about the ongoing trade dispute along with geopolitical tensions, including the prospect of a US strike against Syria, saw the FTSE 100 fall 13 points to 7,243. 

3.30pm: Availability of unsecured credit falls in first quarter, BoE survey reveals 

Banks reined in the amount of unsecured credit available to households in the first quarter, the Bank of England revealed in its survey of credit conditions earlier today.

The BoE said the drop reflected “a changing appetite to risk” with lenders tightening their credit scoring criteria for granting credit cards and personal loans.

Consumers borrowed less on credit cards in the quarter but took out more personal loans, the survey said.

The report also showed that the availability of mortgages was unchanged in the quarter and lenders do not expect this to change in the following three months.

Demand for mortgages for house purchases declined but banks see a “marked pick-up” in the second quarter. 

3.10pm: Micro Focus tops the FTSE 100

Micro Focus International PLC (LON:MCRO) has replaced Tesco as the top riser on the FTSE 100 after Bloomberg reported activist investor, Elliott Management Corp. has built up a position in the enterprise software firm.

Shares are up 7% to 1,252p.

Bloomberg said the New York hedge fund, run by billionaire Paul Singer, plans to push for changes at the UK firm, which transformed itself last year following the US$8.80bn reverse takeover of Hewlett Packard Enterprise Co's (NYSE:HPE) software arm in September, according to people familiar with the matter.

READ: Micro Focus spikes higher on report activist investor Elliott has built up stake in software firm

The biggest faller on the FTSE 100 is ITV plc (LON:ITV) after the stock went ex-dividend. 

2.40pm: US stocks open higher

US stocks have opened higher as geopolitical concerns receded and investors waded through corporate earnings.

The Dow Jones Industrial Average jumped 210 points to 24,405, the S&P 500 added 17 points to 2,658 and the Nasdaq gained 44 points to 7,113.

President Donald Trump played down the timing of a US air strike on Syria in a tweet today, which helped ease concerns about an imminent attack.

Traders were also digesting US data on jobless claims and import prices that missed economists’ expectations.

On the corporate front, quarterly earnings from BlackRock, Delta Air Lines and Rite Aid Corp (NYSE:RAD) beat expectations. 

2.20pm: Bitcoin surges over $8,000

Bitcoin is up 10% to US$7,691 after reaching a peak of US$8,011 earlier in the day, according to Coindesk.

It is unclear what caused the sudden jump in price.

"The renewed interest in cryptos might relate to the need for wealthy Russians and Chinese under pressure from new sanctions and tariffs to covertly send money overseas. Bitcoin’s price surge could well be enough to capture the imagination of traders in what is still a very speculative market," said Jasper Lawler, head of research at  London Capital Group.

1.40pm: US stock futures rise

US stocks are poised to open higher after Donald Trump tweeted that a military strike on Syria may not be imminent.

Dow Jones Industrial Average futures rose 102 points to 24,269, S&P 500 futures increased 11 points to 2,653 and Nasdaq futures grew 34 points to 6,627.

Data from the Labor Department showed initial jobless claims fell to 233,000 last week from 242,000 the previous week, missing expectations of 230,000.

Separately, the Labor  Department revealed US import prices were unchanged in March following a 0.3% increase in February.

Bed Bath & Beyond Inc (NASDAQ:BBY) shares sank ahead of the opening bell after its earnings guidance for 2018 missed analysts’ forecasts.  

Shares in BlackRock Inc (NYSE:BLK) and Delta Air Lines (NYSE:DAL) gained after both reporting first quarter earnings that beat market estimates.

1.00pm: Household savings deteriorate in 2017, ONS reveals

Household savings in 2017 fell to the lowest rate since 2008, the Office for National Statistics has revealed.

The cash-based savings ratio dropped to 0.9% last year from 2.9% in 2016.

Charles Haresnape, chief executive at Gatehouse Bank, said rising inflation has hit disposable incomes.

"It is 2018 and yet, from a savings perspective, things are as bad in many respects as 2008.”

“The fact that savings levels haven't been this low since the global financial crisis exploded a decade ago is a worrying sign.

“Importantly, these ONS statistics reflect cash in purses and wallets, namely how people really feel about their spending and saving power on the ground.”

Haresnape said the marked deterioration in disposable incomes is unlikely to be offset by modest dips in inflation like the one seen in February.

“Also weighing on people’s minds will be house prices, which are not consistently keeping up with inflation,” he added.  

“So many homeowners, emboldened to borrow by healthy rises in recent years, are all too aware now that their house is not the piggy bank it used to be.”

12.20pm: FTSE 100 flat in lunchtime trade 

The FTSE 100 has clawed back gains in midday trading as investors continue to assess geopolitical tensions.

Donald Trump tweeted that he “never said when an attack on Syria would take place” a day after saying a US strike “will be coming”.

Connor Campbell, financial analyst at Spreadex, said this tweet was “the main driver of growth, lifting the majority of the markets out of the red and into the green”.

“This apparent de-escalation – however, temporary; the tone of Trump’s Twitter is often a coin toss – has allowed the markets to shake off their initial reticence,” he said.

Meanwhile, the UK is waiting for Theresa May’s response to a suspected chemical weapons attack in Syria. She has summoned minsters to an emergency meeting to discuss the matter, the BBC reported.

In company news, Tesco PLC (LON:TSCO) shares continued to surge after reporting well-received full year results yesterday.

Shire Plc (LON:SHP) gained after Reuters reported that Japan’s Takeda Pharmaceutical has sounded out its major creditors for loans ahead of making a bid for the London-listed company.

Dunelm Group PLC (LON:DNLM) shares rose on Thursday as the homewares retailer reported a rise in third-quarter revenue driven by strong online growth, despite a ‘challenging consumer backdrop’.  

Mining shares, including Randgold Resources Ltd (LON:RRS), Fresnillo PLC (LON:FRES) and Antofagasta PLC (LON:ANTO), dropped on the back of a slump in copper prices.

Hays plc (LON:AS) shares declined as the recruiter revealed the UK jobs market remained subdued in the third quarter amid Brexit uncertainty. 

11.20am: 'Where is our thanks for bringing down ISIS', says Trump

Donald Trump has just tweeted that an attack on Syria "could be soon or not so soon at all". He also wants the world to thank him for his efforts in bringing down ISIS.

11.00am: IAG buys minority stake in Norweigan Air

British Airways owner International Consolidated Airlines Group (LON:IAG) said it has taken no decision to make an offer for a full take over of Norwegian Air but has not written it off as a future possibility.   

The remarks follow a Bloomberg report that said IAG was looking to put in an offer for Norwegian Air.  The news sent shares in IAG down 1.7% but pushed  Norwegian Air’s up 14.3%.

In a statement, IAG said it considers Norwegian to be an “attractive investment” and has acquired a 4.61% stake in the airline.

“The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian,” it added.

“IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made.”

10.40am: EDF hikes electricity prices

EDF Energy is raising electricity prices by 2.7% for its 1.3 million customers from June 7 but gas prices will remain unchanged.

Typical standard dual-fuel customers will see their bill rise by 1.4%, or £16 a year, to £1,158, as a result.

Béatrice Bigois, EDF Energy managing director of customers, said: "We know that price rises are not welcome and we have worked to offset rising energy and policy charges by cutting our own costs.

"We will be writing to affected customers this month to encourage them to choose a fixed-price tariff or to pay by direct debit to save on their bills."

Earlier this week Centrica PLC’s (LON:CAN) British Gas said it would incrase price of its standard variable tariff (SVT) by 5.5% at the end of May due to higher costs associated with government policies.

10.00am: Geopolitical tensions push oil prices higher

The price of Brent crude has eased after reaching its highest levels since December 2014 last night above US$73 per barrel.

Brent crude is now sitting at US$71.90 per barrel.

Prices rose yesterday after US President Donald Trump said on Twitter that missiles “will be coming” in Syria.

Reports that Saudi Arabian defence systems had intercepted a number of missiles fired from Yemen, over the skies of Riyadh also pushed prices higher.

9.30am: UK house prices remain at five-year low

UK house prices remained at a five-year low in March due to weaker consumer demand, according to the Royal Institution of Chartered Surveyors (RICS).

RICS said its monthly house price balance –which measures the difference between the percentages of surveyors reporting price rises and price falls – remained at zero last month, the lowest reading since February 2013. Economists had expected a reading of +2.

In London, the net balance was -47 with respondents citing further price declines.

Consumer demand has softened amid Brexit uncertainty and the prospect of higher interest rates.

“The latest RICS results provide little encouragement that the drop in housing market activity is likely to be reversed anytime soon,” the organisation’s chief economist, Simon Rubinsohn, said.

8.30am: FTSE opens on the back foot

The mood was a sombre one in the City amid worries of how planned reprisals against Syria might affect the uneasy international peace that followed President Donald Trump’s sabre rattling over trade.

The FTSE 100 was almost lifeless early on as it nudged four points lower to 7,253.26.

“Fading fears of a full-blown trade war between the US and China has been a big positive for global stockmarkets, but equity investors are now taking money off the table ahead of possible US air strikes against Syria,” said Lee Wild, head of equity strategy at Interactive Investor.

“Already at odds with Russia over the poisoning of former spy Sergei Skripal, risk here is of serious escalation of hostilities in the Middle East if Donald Trump and the West provoke Syria’s allies Russia and Iran.”

A crumb of comfort from the situation may fall to those invested in the oil sector with Brent Crude Oil for May delivery pushing above US$73 a barrel.

It meant BP (LON:BP.) and Royal Dutch Shell (LON:RDSA) were in demand early on, although the movements higher were muted.

Top of the pile for a second day was Tesco (LON:TSCO) with a 2.3% gain as it continued to win over sceptics in the wake of its prelims on Wednesday, which contained good news on the dividend.

Sticking with the grocery sector, Ocodo (LON:OCDO), whose chief executive Tim Steiner saw financial details of his divorce settlement feature prominently in the national press, was hit by a downgrade.

Stock in the home delivery group fell 3% after the shares were cut to ‘neutral’ from ‘overweight’ by JP Morgan Cazenove.

The potential conversion of bonds into ordinary equity appears to be unsettling the price of one-time punters’ favourite Sirius Minerals (LON:SXX), which was down 4% early on.

Proactive news headlines:

Strategic Minerals Plc (LON:SML) said its Cobre magnetite tailings operation in New Mexico saw continued strong sales in the first quarter of 2018. The AIM-listed miner reported quarter sales of US$1.4mln at 21,635 tonnes, in line with management expectations.

Sirius Minerals PLC (LON:SXX) wants to swap debt for equity, as it has called its convertible bondholders to action. The UK mine developer, in a stock market statement, highlighted that the bonds are trading substantially "in‐the‐money" and said it is seeking to accelerate conversion.

Atlantis Resources Limited (LON:ARL) said the MeyGen tidal stream power project has now formally entered the 25-year operations phase.

Galileo Resources PLC (LON:GLR) said it has completed a placing to raise £550,000 of working capital for the next stage of its Star Zinc project. The AIM-listed miner said the 50mln new shares, with a placing price of 1.1p or a 20% discount on the 11 April 2018 mid-market close of 1.375p, would be admitted to trading on AIM at or around 17 April 2018.

African Battery Metals PLC (LON:ABM) has extended the auger drilling programme on its Kisinka property in the Democratic Republic of the Congo (DRC) to investigate some additional soil anomalies. The AIM-listed firm said that two lines of augering have so far been completed on the 70% owned Kisinka licence acquired in December 2017 - one across the southeastern part and the second towards the northwestern part of the licence.

SDX Energy Inc (LON:SDX) confirmed its latest well success, with the Ibn Yunus-1X well at the South Disouq project unearthing a larger than expected gas reservoir. The company told investors that the well encountered 100.8 feet of natural gas pay in the Abu Madi horizon and the average porosity was measured at 28.5%.

Galantas Gold Corporation (LON:GAL) (CVE:GAL) has negotiated two tranches of additional finance that will be used to further develop the Omagh Mine in Northern Ireland. It has agreed a concentrate prepayment deal for US$1.6mln with Ocean Partners. The coupon is 8.75% plus US dollar 12-month LIBOR with a six-month interest payment holiday. The arrangement fee is US$25,oo0, while Ocean will also get 15mln bonus warrants.

Falcon Oil & Gas Ltd (LON:FOG) has boasted that it has a “strong financial position” as it awaits a pivotal, official decision from the authorities in Australia’s Northern Territory. 

Seeing Machines Limited (LON:SEE), an industry leader in computer vision technologies which enable machines to see, understand and assist people, has announced the appointment of Cenkos Securities as its nominated adviser and joint broker with immediate effect. The group said Canaccord Genuity Limited will remain as joint broker to the company.

AfriTin Mining Limited (LON:ATM), a mining company with a portfolio of near-production tin assets in Namibia and South Africa, with the flagship asset being the Uis Tin Mine in Namibia, has announced the appointment of a new joint broker, Novum Securities with immediate effect.

Thor Mining PLC (LON:THR) (ASX:THR) has announced a CHESS Depositary Interest (CDI) Sale Facility for holders of less than a marketable parcel of CDIs quoted on the Australian Securities Exchange (ASX). Under ASX Listing Rules, the group said, a process exists which allows listed entities to provide holders of parcels of securities valued at below A$500 the opportunity to sell those holdings without incurring brokerage or other transaction fees.

6.45am: FTSE 100 expected to start on the back foot

The FTSE 100 is seen on the back foot ahead of Thursday’s open as international conflicts continue to weigh on investor sentiments.

Minutes from the last Federal Reserve rate meeting, released last night, were somewhat positive with the central bank taking a glass half full view of the US economy.

But, the market was far more concerned with President Trump’s threat of strikes against Syria and reports of that Saudi Arabian defences intercepted missiles fired from Yemen.

Crude oil prices spiked higher on the apparent heightened risk to supply. Meanwhile, risk appetite among equity investors lowered.

“It is probably safe to presume given President Trumps comments earlier in the week, that we may well see a military response by the end of the week, as the situation in Syria ramps up further, and this may well temper investor enthusiasm to buy back into the market ahead of the weekend,” said Michael Hewson, analyst at CMC Markets.

“As a result of this reticence, stocks markets here in Europe look set to open slightly lower this morning.”

The Dow Jones closed Wednesday some 218 points or 0.9% lower, at 24,189, while the S&P 500 gave up 0.55% to 2,642. At the same time, the Nasdaq reduced by 0.36% to 7,069.

In Asia, Japan’s Nikkei was only slightly lower changing hands at 21,674. Hong Kong’s Hang Seng, meanwhile, dipped 0.18% to 30,842 and the Shanghai Composite slide 0.35% to 3,196.

Australia’s ASX 200 was also in negative territory, down 0.26% to 5,813.

In London, CFD and spreadbetting firm IG Markets sees the FTSE 100 starting the session lower - calling the benchmark down 16 points just over an hour before the open, at 7,239 to 7,243.

Around the markets

Sterling: US$1.4179, up 0.01%

Gold: US$1,350 an ounce, down 0.47%

Brent crude: US$72.16 a barrel, up 1.55%

Bitcoin: US$6,941, up 0.03%

The FTSE 100 is seen on the back foot ahead of Thursday’s open as international conflicts continue to weigh on investor sentiments.

Minutes from the last Federal Reserve rate meeting, released last night, were somewhat positive with the central bank taking a glass half full view of the US economy.

But, the market was far more concerned with President Trump’s threat of strikes against Syria and reports of that Saudi Arabian defences intercepted missiles fired from Yemen.

Crude oil prices spiked higher on the apparent heightened risk to supply. Meanwhile, risk appetite among equity investors lowered.

“It is probably safe to presume given President Trumps comments earlier in the week, that we may well see a military response by the end of the week, as the situation in Syria ramps up further, and this may well temper investor enthusiasm to buy back into the market ahead of the weekend,” said Michael Hewson, analyst at CMC Markets.

“As a result of this reticence, stocks markets here in Europe look set to open slightly lower this morning.”

The Dow Jones closed Wednesday some 218 points or 0.9% lower, at 24,189, while the S&P 500 gave up 0.55% to 2,642. At the same time, the Nasdaq reduced by 0.36% to 7,069.

In Asia, Japan’s Nikkei was only slightly lower changing hands at 21,674. Hong Kong’s Hang Seng, meanwhile, dipped 0.18% to 30,842 and the Shanghai Composite slide 0.35% to 3,196.

Australia’s ASX 200 was also in negative territory, down 0.26% to 5,813.

In London, CFD and spreadbetting firm IG Markets sees the FTSE 100 starting the session lower - calling the benchmark down 16 points just over an hour before the open, at 7,239 to 7,243.

Around the markets

Sterling: US$1.4179, up 0.01%

Gold: US$1,350 an ounce, down 0.47%

Brent crude: US$72.16 a barrel, up 1.55%

Bitcoin: US$6,941, up 0.03%

Headlines

UK house prices flat in March - Financial Times

FirstGroup rejects takeover bid from US equity group Apollo - The Guardian

ConocoPhillips to cut 450 UK jobs on Southern North Sea production halt - Yahoo Finance UK

Toys R Us receives several $1bn bids for its Asia unit -BBC New

Netflix and executives sued over bonus scheme - Financial Times

Hammerson is told to embrace Klépierre's improved offer - The Times

Crispin Odey amasses large bet against UK government debt - Financial Times

JPMorgan Sued Over Cash Advance Fees for Cryptocurrency Purchases - Bloomberg

Bank of America to stop lending to makers of 'military-style firearms' - CNNMoney

Facebook Does the Bare Minimum and Backs Off Opposition to California Privacy Bill – Gizmodo

Thursday April 12:

Trading update: Hays plc (LON:HAS)

Interims: WH Smith Plc (LON:SMWH)

Finals: Central Asia Metals PLC (LON:CAML), Destiny Pharma plc (LON:DEST), Saga PLC (LON:SAGA)

Ex-dividends: To knock 4.27 points off FTSE 100 index - ITV plc (LON:ITV), Paddy Power Betfair plc (LON:PPB), Reckitt Benckiser PLC (LON:RB.), Rentokil Initial PLC (LON:RTO), Smurfit Kappa Group PLC (LON:SKG)

Economic data: US weekly jobless claims; US import, export prices

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