FTSE 100 closes 23 points higher
Ocado top dog
May scrapes through on Brexit vote
FTSE 100 managed to scrape together a positive finish, just as Prime Minister Theresa May did in the Commons with a narrow win that went the government's way on a Brexit vote.
Rebel Tories had wanted to give MPs the power to prevent the UK leaving the EU without a deal but that notion was defeated..
Now, May's administration is a step closer to getting its EU (Withdrawal) bill into law.
FTSE 100 closed up around 23 points at 7,627, while FTSE 250 added over 90 points at 20,926.
"The FTSE along with other global indices was on the rebound on Wednesday, capitalising on the lack of trade war news to claw back some of the losses from the previous session," said Fiona Cincotta, senior market analyst at City Index.
She added: "Concerns that the US – Sino trade war would see China’s demand for metal reduced meant mining shares had contributed heavily to the decline of the FTSE in the previous session.
"Today bargain hunters were out in force buying back into the likes of Glencore and Fresnillo as metal prices recovered."
The Footsie podium though went to online retailer Ocado Group (LON: OCDO), up 5.55% to 1,001.50p, pulling back from yesterday's plunge, on the back of upbeat analyst comments.
Earlier this month the firm was promoted to the FTSE 100. Top loser was property group Berkeley Group Holdings (LON: BKG), which shed 5.9% to 3,893p after it warned on the profits for the year ahead.
3:45pm: FTSE 100 clutches positive territory after brief Wall Street rally fell flat
City investors had kept their clutches on at least some of the day’s earlier gains as Wall Street took the air out of what was expected to be relief rally.
The FTSE 100 was up 35 points or 0.46% to 7,638.
In New York, the Dow Jones turned negative falling 49 points or 0.2% to 24,650 whereas the S&P 500 and Nasdaq were both in positive territory.
“The Dow Jones, which at one point looked like it was going to reclaim 150 points, ended up starting the US session flat, the wrong side of 24700,” said Connor Campbell, analyst at Spreadex.
“There was little for the index to really work with on Wednesday, beyond the ever-looming threat of a full-blown trade war between the world’s two largest economies.
He added: “Only the FTSE remained in the green with any real sUBStance, and even then its 0.6% increase was half of the growth posted at lunchtime.
“Though the UK index broadly just followed the direction of trading from around the Western world, sterling’s reversal of its initial losses also helped erase some of the FTSE’s gains.”
2:45pm: Dow Jones rally loses a little steam, but Wall Street equities remain positive
The Dow Jones initial rally lost some steam not long after Wednesday’s open with the New York benchmark up 44 points or 0.18%, at 24,744, after futures pointed to a 100 point gain.
At the same time, the S&P 500 was up 0.36% at 2,770 and the Nasdaq climbed 0.6% to 7,772.
In London, meanwhile, the FTSE 100 remained 61 points or 0.81% higher at 7,665.
2:00pm: FTSE 100 up 1% as Wall Street is set to rally on open
The FTSE 100 remained 1% higher into mid-afternoon dealing as an anticipated positive start to Wall Street trade supported investor sentiment.
Changing hands at 7,680 the index was up around 75 points.
With half an hour to the New York open, Dow Jones futures point to a 120 points rally while the S&P 500 and Nasdaq were also on the front foot.
Fresh mergers and acquisition talk was in the spotlight, with Disney lifting its bid for Fox up to US$71.3bn, US$35 per share.
Fox in turn, acknowledged that the new Disney offer was superior to last week’s competing proposal from Comcast.
12:50pm: FTSE 100 holds onto most of the morning’s gains, Wall Street futures point higher
The FTSE 100 has held onto the majority of the mornings gains, but, has nonetheless eased off in afternoon dealing.
Changing hands at 7,662, the index was up 58 points or 0.77% as the market begins to look across the Atlantic.
Wall Street equities look set to follow Europe and Asia’s lead, with something of a rally anticipated.
With an hour and a half until the New York open, Dow Jones futures indicate a 93-point positive start at 24,808 while the S&P 500 and Nasdaq are also seen rising.
12:30pm: CBI manufacturing stats show improved performance
UK manufacturing stats, the Confederation of British Industry (CBI) measure of activity, showed a pick up, thanks to stronger order books.
Output in the sector was at its strongest level in the year to date, suggesting regained momentum after a weak start. Performance in the quarter is in contrast to the early months of the year.
“The June CBI industrial trends survey points to the manufacturing sector showing welcome improvement after a largely sluggish 2018 so far,” said Howard Archer, EY chief economic advisor.
“A clear pick-up in domestic demand was the main factor behind June’s improved orders. Export orders showed only marginal improvement in June while and remained appreciably below late-2017 levels.”
Archer added: “The only disappointing development in the survey saw manufacturers’ output expectations dipping to a three-month low in June despite improved orders.”
12:05pm: FTSE 100 remains on front foot, up 1%
The FTSE 100 remained on the front foot heading into lunch with the blue-chip benchmark up 80 points or 1.06% changing hands at 7,682.
Artjom Hatsaturjants, analyst at Accendo Markets, said: “The FTSE has extended its recovery, as investors re-discover their inner bull, retracing all of the week's trade war inspired declines,”
“With oil back on the ascent thanks to a surprise API inventory drawdown late last night, FTSE energy names are being offered a short-term reprieve before what would appear to be an almost-inevitable OPEC oil production hike (rolling back on the production cuts).”
“All the while, Asia-oriented stocks (Miners, HSBC) are heaving a sigh of relief that US-China reciprocal tit-for-tat tariff threats are a way off becoming tangible policy.”
11:40am: Brent crude edges higher as market looks to OPEC meeting
Brent crude moved 0.6%, up to around US$75.50 per barrel, as the market awaits a key OPEC meeting later this week.
Attentions are focused on the possibility of changes to the cabal’s agreements over output quotas, which via past interventions supported the recovery in oil prices.
Whilst there’s broad expectations that agreed volumes could be increased, though certain comments through international media suggest a consensus may not be easily reached.
Specifically, Iran is reportedly expecting to return from the discussions in Vienna before sUBStantive discussions take place with non-OPEC members (i.e. Russia).
“Preparations for the OPEC meeting at the end of the week are seeing reports emerge from a handful of informal advance discussions,” said Ken Odeluga, analyst at City Index.
“The market is taking the talk with a pinch of salt.
“Both Brent and WTI contract were about 50 cents higher just now, sufficiently neutral to the notion that Gulf producers disagree with a Saudi/Russia drive to end supply cuts.”
Oil prices were meanwhile supported by an unexpected draw down in US crude inventory statistics.
11:15am: Upcoming Brexit vote weighs on the pound
As the latest ‘crucial’ Brexit debate is due in Westminster, the pound was only slightly lower, 0.06%, but, at its lowest level against the US dollar since late 2017.
MPs will this afternoon vote on the degree of influence that parliament will have on the final decisions on the final Brexit deal – it follows Theresa May’s defeat earlier this week when the House of Lords put forward an amendment to give MPs a say if the UK government can’t reach a deal with the EU.
“From the market’s perspective if the amendment is rejected, then it could be seen to signal a greater possibility of a hard Brexit and this could well apply more selling pressure to sterling,” said David Cheetham, analyst at XTB.
10:40am: FTSE 100 moves back above 7,700 as rebound continues
The FTSE 100 continued to strengthen, up 97 point or 1.28% rising back above 7,700 by mid-morning.
“Buyers have stepped in this morning to lift markets further off yesterday’s lows, and a lack of fighting talk from either of the two combatants has helped soothe nerves too,” said Chris Beauchamp, analyst at IG Markets.
He added: “Housebuilders have been left out of the general rally this morning, as Berkeley Group casts a pall over the sector.
“While the good times may not be over, the years of bumper profits look to have come to an end. Still, at around 9 times earnings the shares still do not look overly expensive, so today’s fall may well be limited.”
9:45am: FTSE 100 continues higher as investor sentiment rebounds
London’s FTSE 100 added to the morning’s initial gains, rebounding somewhat from the week’s losses.
Changing hands at 7,683, the index of the City’s top 100 shares was up 80 points or 1.06%.
Attentions are, of course, not far from the trade tensions between the United States and China.
“Despite the White House heightening the trade war rhetoric with a 35-page report – the snappily titled ‘How China's Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World’ – the European markets broadly mounted a rebound after the bell,” said Connor Campbell, analyst at Spreadex.
“All of the major sectors were in the green, with the fact Brent Crude is back above $75.50 per barrel following a half a percent rise certainly helping the UK index have the edge over its Eurozone peers.
“The pound wasn’t as fortunate as the FTSE. Against the dollar it dipped another 0.1%; and while that may not sound like a lot, it leaves cable straining to hold its head above $1.315, its worst price in 7 months.”
8:40am: FTSE 100 bounces back; Ocado leads the index with BT Group also among the risers
The FTSE 100 opened strongly, racing 68 points higher to 7,671.86, as the jitters over the unfolding US-China trade war receded.
"Further tariffs could take a while longer to outline and implement giving significantly more scope for both sides to pull back from the brink," said CMC Markets analyst Michael Hewson.
Turning to the market, Ocado (LON:OCDO) led the way with a 6% rise, bouncing back from a dreadful Footsie debut on Monday.
This morning Peel Hunt repeated its 'buy' advice, raising its price target to £17 a share from £6.10. The current price is just over £10, so it's a punchy valuation.
"It doesn’t happen very often, but we believe Ocado Solutions has potential to become the standard platform for retail logistics across all sectors as the operating system of retail," Peel Hunt analyst James Lockyer.
"Whilst the company is currently focusing on exclusive contracts within the food retail vertical, we would advocate an eventual shift in its focus towards becoming the open industry standard; just like the Windows operating system, which has more than 80% market share as it didn’t restrict itself to just IBM manufactured computers."
Praise indeed.
BT Group (LON:BT.A) was among the risers too, up 2.3%, after Jefferies upgraded its recommendation to 'buy' from 'hold'.
On the flipside, the full-year results and outlook statement from builder Berkeley Group (LON:BKG) weren't particularly well received with the stock down 3%, dragging the rest of the sector lower.
Proactive news headlines:
Sirius Minerals PLC (LON:SXX) has announced a 7-year supply deal which will see it sell POLY4, the fertilizer product from its Yorkshire mine, to Intercontinental Trade DMCC Dubai which will in turn distribute it in Nigeria. It covers up to 350,000 tonnes of POLY4 per year for the 7 years following the start of production.
MySQUAR Limited (LON:MYSQ) has raised £2mln to fund its acquisition of MyPay Myanmar as it looks to accelerate the development of its mobile payment system. The AIM-quoted firm has issued £2.22mln of convertible bonds to Atlas Capital Markets, which has supported it in the past.
Mporium Group PLC (LON:MPM) said its proprietary IMPACT technology has been used across the launch campaign for the Samsung S9 mobile phone.
ClearStar Inc (LON:CLSU) said it has significantly expanded the number of collection sites for its ClearMD mobile drug testing solution by integrating with the network of industry giant Abbott Laboratories. The employee background checking specialist has similar tie-ups with LabCorp and Quest Diagnostics.
Genedrive PLC (LON:GDR) has announced a multi-partner grant award from the UK National Institute for Health Research’s Invention for Innovation programme for NHS point-of-care test. The AIM-listed firm said the award is for the development and implementation of a point-of-care pharmacogenetic test to avoid antibiotic-related hearing loss in newborn children.
Kazakhstan-based accommodation group Chagala Group Limited (LON:CGLO) has received a cash offer at US$1.55 per share from major stakeholder, AIMS.
African Battery Metals PLC (LON:ABM) has reported on six months, which it described as “a very busy period” as it advanced plans to become a significant explorer, developer and ultimately producer of battery metals. The junior mining company, formerly known as Sula Iron & Gold, was relaunched in January alongside the acquisition of a cobalt asset in the Democratic Republic of Congo (DRC) and the appointment of a team.
6.45am: Footsie set to bounce back
Markets have been sliding since Friday on trade war fears but it looks as if buyers are beginning to return.
Continuing the firmer trend seen yesterday afternoon, the FTSE 100, which retreated 27 points to close at 7,604 on Tuesday, was expected to open some 60 points higher this morning.
“The markets have been trading on the same piece of general trade war news for a while, as a result selling exhaustion has started to set in,” suggested Jasper Lawler at LCG.
In the US, futures markets point to the Dow opening around 118 points higher this afternoon.
US markets were weak yesterday with the Dow Jones average hardest hit of the main benchmarks, tumbling 287 points (1.2%) to 24,700.
The broader-based S&P 500 fell 11 points (0.4%) to 2,763.
In contrast, most Asian markets had a positive session this morning. While the Shanghai Composite was down 5.5 at 2,902, Japan's Nikkei 225 was up 191 points at 22,467 while in Hong Kong, the Hang Seng was up 264 at 29,732.
On the domestic scene, a relatively quiet day is expected, with the full-year results from housebuilder Berkeley Group the likely highlight.
The market is expecting the group to announce full-year profit before tax of around £905mln on revenue of £2.7bn. UBS is a bit more upbeat than the consensus, predicting profit before tax of £935mln on sales of £2.79bn.
The group has previously cautioned that rising costs, mortgage availability and economic uncertainty could put a crimp on its growth rate, so investors will be interested to see if there is any commentary on these issues, especially in view of the recent trading update from Crest Nicholson, which is also focused on the south-east of England and which recently complained of cost pressures.
Significant announcements expected on Wednesday:
Finals: Berkeley Group PLC (LON:BKG), PLC (LON:BOTB), Severfield PLC (LON:SFR)
Economic data: CBI industrial trends survey; US existing home sales
Around the markets:
- Sterling: US$1.3169, down 0.04 cents
- 10-year gilt: yielding 1.282%
- Gold: US$1,276.50 an ounce, down US$2.10
- Brent crude: US$75.43 a barrel, up 35 cents
City Headlines:
- General Electric has been replaced by Walgreens Boots Alliance in the Dow Jones Industrial Average, as the industrial conglomerate saw US$120 billion wiped off from its value.
- Shares in shoe retailer Footasylum plunged by 52% after the trainer retailer warned over future growth.
- Losses in low-cost airline Flybe increased to £19.2 million in the year to March 2018, up from £6.7 million in the prior year.
- Billionaire Jim Ratcliffe’s petrochemicals giant Ineos failed to overturn Scotland's effective ban on shale gas fracking in its call for judicial review of Holyrood’s indefinite moratorium on hydraulic fracturing.
- An Australian court fined Apple A$9 million (£5 million) yesterday after the consumer watchdog accused it of disabling iPhones and iPads when their screens were fixed by independent repairers.
- The FTSE 100 tool and plant hire company Ashtead recorded revenues of £3.19 billion in the year to the end of April, up by a fifth, as it benefited from increased demand after hurricanes Harvey, Irma and Maria.
- Two leading research institutes, Munich-based Ifo institute and RWI in Essen, have slashed German growth forecasts, amid warnings of the impact of a trade war and a potential crisis in the eurozone.
- Telstra has announced plans to cut 8,000 jobs in a major restructuring that will split its infrastructure assets into a new wholly owned business unit.
- The British Summer Fruits (BSF) trade body said its members were 10% to 15% short of labour and expect to be more than 30% short by the autumn as the government drags its feet on a seasonal agricultural workers scheme.
- There was a serious misconduct by Lloyds Banking Group over the handling and disclosure of fraud at its HBOS Reading unit, an internal report written by a former manager at the bank in 2013 and published on Tuesday alleged.