FTSE 100 closes down 20 pts
Pound gains against the dollar
UK services sector growth accelerates
Sainsbury's top riser on Footsie
Amid weak volumes due to the US holiday, FTSE 100 closed in the red.
The UK's premier index of leading shares closed at 7,573 - down around 20 points.
Meanwhile, FTSE 250 closed down 12.71 at 20,652.
In the currrency markets, the pound made a strong return to form on the back of stronger-than-expected services report.
The UK services PMI report for June came in at 55.1, which easily topped the consensus estimate of 54.
Against the US dollar, the pound added 0.25% to 1.3224 and against the Euro, it gained 0.20% at 1.1337.
"Traders are worried that we are edging towards a trade war, and are cutting their equity positions. Volumes and market volatility are low as the US stock markets are closed for the Independence Day holiday," said David Madden, at CMC Markets, on the general mood of the day.
Sainsbury (LON:SBRY) was the big riser on Footsie, up 2.95% to 328p as its shares were wanted after it announced it had secured £3.5bn in funding for the planned merger with Asda.
The big loser on Footsie, joining other big miners, was copper major Antofagasta (LON:ANTO), down 2.68% to 944p.
2.40pm: China will not fire the first tariff shot
FTSE 100 remained dull as the quiet mid-week trading progressed, down 10 points at 7,583.
After months of tensions and speculations, hopes are dying that the US and China can find an amicable solution before President Trump’s deadline this Friday for the imposition of a raft of tariffs.
Although China confirmed it will not fire the first shot, the country promised to respond in kind.
Trump has also said that he is ready to impose more tariffs not only on China, but on Canada, the EU and Mexico, which could raise a prospect of a global trade war.
David Morrison, senior market strategist at GKFX said: “So, if he can follow through on election promises and appear to champion American businesses at the expense of the US’s trading partners without upsetting the domestic stock market, then he’ll capitalise accordingly.”
He added: “But this raises the prospect that the only thing that will persuade him from taking further measures is a significant sell-off in US stocks. The trouble is that a bigger move on tariffs is likely to lead to a more aggressive response from China, the EU and everyone else. If so, it’s difficult to see how even US equities will dodge the fall-out.”
12.20pm: Pound climbs against the dollar
The FTSE 100 remained subdued in lunchtime trading, off 16 points at 7,576, weighed by a firmer pound which received a boost from a strong UK services sector purchasing managers index
The services PMI reading suggested better growth in the UK economy in the second quarter, raising expectations that the Bank of England could sanction a rate rise sooner rather than later and helping sterling rise against both the dollar and the euro.
Commenting on the PMI numbers, Connor Campbell, financial analyst at Spreadex said they suggest "second-quarter GDP growth of around 0.4%, double what was seen in the first quarter, the pound received a much-needed boost following that PMI hat-trick, climbing back above US$1.322 against the dollar while jumping 0.4% against the euro."
Elsewhere the eurozone services PMI reading also came in better than estimated at 55.2 against forecasts of 55.0, and up from 53.8 in May, but that failed to boost the euro very much.
With US stock markets closed today for the Independence Day holiday celebrations, trading is expected to remain fairly dull while global trade war concerns remain high ahead of President Trump's deadline this Friday for the imposition of a raft of tariffs.
10.10am: Footsie down, but off lows
The FTSE 100 remained weak in mid-morning trading but was off the opening lows, down around 10 points at 7,571 even though sterling ticked higher following another above-forecast UK purchasing managers report.
The IHS Markit/CIPS UK services purchasing managers index (PMI) rose to 55.1 in June, up from 54.0 in May, the strongest increase in activity in the UK's dominant sector since October 2017.
UK service providers reported a general upturn in client demand, particularly for business and financial services, with some firms benefiting from unusually favourable weather conditions.
However, the report also revealed that Brexit-related uncertainty had held back business investment, particularly in relation to spending by large corporate clients.
Chris Williamson, chief business economist at IHS Markit, said: “The survey data indicate that the economy likely grew by 0.4% in the second quarter, up from 0.2% in the opening quarter of 2018.
He added:” The sharp rise in business costs, linked to surging oil prices and the need to offer higher wages, suggests inflation will also pick up again from its current rate of 2.4%.”
On currency markets, the pound recovered to trade flat against the dollar and rose modestly against the euro.
Naeem Aslam, chief market analyst at ThinkMarkets UK commented: “The momentum continues for the British economy, the services PMI data has lifted the hopes that the Bank of England would raise rates sooner than later. This has helped the British pound against the dollar and we are seeing more encouraging signs from investors which tells us that the current momentum has a potential to continue its trend,”
Buyers look to defend near-term bullish bias in cable after UK data beat https://t.co/UOgnftooOj
— ForexLive (@ForexLive) July 4, 2018
8.35am: FTSE 100 starts Wednesday slightly lower than expects
In Wednesday’s early deals the FTSE 100 moved a little lower than had been expected, with the London index losing 27 points or 0.36% to trade at 7,565.
As traders gather themselves following England’s World Cup dramas last night, some may well be glad that with the US public holiday its likely to be a quieter day as it progresses.
Wall Street is closed, but, before the market idles London had at least one or two items of interest for traders.
J Sainsbury plc (LON:SBRY) shares were higher, rising about 1% to around 321p, after it eked out a small rise in like-for-like sales in its fiscal first quarter, helped by Argos, which returned to growth after three quarters of declines.
But it was ahead of analysts’ forecasts, with some expecting like-for-likes to show a small decline this time around.
“We know that consumers were in fine fettle in May, as the Royal Wedding and some good weather lifted spirits, and that’s helped Sainsbury’s to achieve a positive period of trading,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“The June sunshine and the start of the World Cup no doubt also provided a boost to Sainsbury’s coffers, as shoppers came home with TVs and barbecues.
The analyst added: “Conditions remain challenging though, and while the top line is just about growing, Sainsbury’s efforts to lower prices mean that may not entirely feed through into profits.”
Foodservice contractor Compass Group Plc (LON: CPG) slumped 1.4%, to 1,599p, as it revealed there’ll be more management changes, with group finance director Johnny Thomson now due to stand down from the role by the end of December.
The FTSE 100-listed firm - which lost its chief executive Richard Cousins at the start of the year following his death with his family in a seaplane crash in Australia on New Year’s Eve – said the search for Thomson’s successor will be started immediately.
In a story likely to stoke Brexit headlines, bourse operator London Stock Exchange Group Plc (LON:LSE) saw its share 0.5% lower, at 4,412p, on Wednesday morning following reports it has applied for several trading and trade reporting licences so that it can operate from Amsterdam if the UK leaves the EU without a Brexit deal.
Proactive news headlines:
Nektan PLC (LON:NKTN) has reported record results for its fourth quarter as it closed out a strong financial year in 2018. In a trading update, the AIM-listed gambling product provider reported that net gaming revenue (NGR) for its managed gaming solutions division in Europe had risen 36.7% to £5.7mln in the fourth quarter compared to the same period in 2017, while for the full year NGR was up 48.1% on 2017 at £19.4mln.
Sunrise Resources Plc (LON:SRES) has updated investors on developments at the CS Pozzolan-Perlite Project in Nevada, where it is progressing towards establishing production. In a stock market statement, the company noted that the permitting and regulatory process is on track, with baseline studies now complete.
Eland Oil & Gas PLC (LON:ELA) has provided investors with an update for the Opuama field, in Nigeria’s OML 40 licence area, where new wells are currently being added. The company noted that the Opuama-9 well, which was completed on June 21, continues to be optimised but highlighted that production has been measured at an overall rate of 7,000 barrels of oil per day – which is above the upper end of previous guidance, pitched at 4,000 to 6,000 bopd.
Directa Plus Plc (|LON:DCTA) has received a second big order for technical clothing incorporating its graphene enhancement G+ from Alfredo Grassi. The order is worth €700,000 and will delivered this financial year.
Ceres Power Holdings PLC (LON:CWR) has raised £20mln (gross) through a conditional placing and share subscription at 15.08p per share.
Tekcapital PLC (LON:TEK) has announced that its wholly owned portfolio company Lucyd Pte Ltd has appointed Ira A. Clement, a licenced optometrist, as a science advisor and that the firm has filed a new patent application.
Biomass boiler specialist Aggregated Micro Power Holdings plc (LON:AMPH) saw profits rise 78% to £1.66mln in the year to the end of March after revenues more than doubled to £40mln from £15.8mln.
Greatland Gold plc (LON:GGP) has announced a new drilling campaign at its Havieron license following “encouraging” results from the final three holes of its first drilling programme.
Vast Resources PLC (LON:VAST) saw record sales at both the Pickstone–Peerless gold mine in Zimbabwe and at Manaila in Romania in the past quarter. Gold production at the 25%-owned Pickstone mine rose 10% to 6,969 ounces with sales up 3% at 6,754oz. Grades were 2.48 g/t (2.78 g/t).
Cradle Arc Plc (LON:CRA) has announced the disposal of assets in Burkina Faso which are deemed to be ‘non-core’ to the business. It is disposing of the company’s subsidiary Société Miniére de Kerboulé SARL (or SMK) holds the wholly owned Arae and Gassel-Manere exploration licences which together comprise the Kerboulé Gold Project.
Connemara Mining Company PLC (LON:CON) has announced the commencement of a new drill programme at the Oldcastle Zinc project located in counties Cavan and Meath, Ireland.
Bushveld Minerals Limited (LON:BMN) is ready to push on with the development of its Imaloto coal power project in Madagascar in the second half of the year. The company’s coal and energy subsidiary, Lemur Holdings, signed a 30-year concession agreement with the Madagascan government last month which gives it the right to build, own, operate and supply an initial 60 megawatts in Imaloto..
Tissue Regenix Group PLC (LON:TRX) has announced the appointment of Gareth Hywel Jones as chief financial officer. The AIM-listed firm said Jones will join the group as CFO, company secretary and as an executive director on board on 30 November 2018.
OptiBiotix Health plc (LON:OPTI) said it has appointed Dr Sofia Kolyda as director of research & development with immediate effect.
Chaarat Gold holdings Limited (LON:CGH), the AIM quoted company developing the Chaarat Gold Deposit in the Kyrgyz Republic, announced the appointment with immediate effect of Robert Benbow as an executive director. Benbow’s appointment as chief operating officer, and he has worked with Chaarat since September 2016.
Thor Mining PLC (LON:THR) (ASX:THR) said SI Capital today released an initiation of coverage note on the stock with an ‘outperform’ rating.
6:50am - FTSE 100 to start 4th of July lower, US market closed but attentions remain on ‘trade war’
London’s FTSE 100 is expected to start Tuesday slightly lower, and, however it starts, the session is likely to lack latter triggers due to the US Independence day public holiday keeping Wall Street closed today.
CFD and spreadbetting firm IG Markets makes the London index down about 4 points, calling it at 7,577 to 7,581 with just over an hour to go until the open.
As it is the 4th of July so there’ll be no shortage of flag-waving over in the United States, but, whilst Wall Street will be closed everyone else’s market remains unnerved by patriotism-turned-protectionism that threatens to derail international trading relations.
At the end of this week the tariffs come into effect, bringing tangibility to replace rhetoric - and the markets will the material impacts of the so-called trade war between the United States and China.
Investors are already somewhat braced for impact.
“With just two days to go until the US-Sino trade war threats start to take effect, relations between the US and China remain hostile, rattling investors,” said Jasper Lawler, analyst at London Capital Group.
The latest focal point for the market is technology, with semiconductor firm Micron Technology for example now being tied up in increased red tape amid reports of an import ban.
Tuesday’s Wall Street close saw the Dow Jones lose 132 points or 0.54% for the session before the public holiday, finishing at 24,174.
The S&P 500 gave up 0.49% to 2,713 whilst the Nasdaq had it worst, ending down 0.86% to 7,502.
Closer to home, Britain’s own customs and trading environment remains an issue and insecurities are expected to undermine any otherwise positive economic triggers – such as the monthly service sector PMI readout, due today, which is now being predicted ahead of previous forecasts.
“With the clock ticking until the Brexit deal October deadline and still a mind-boggling amount of uncertainties to resolve, the pound could find any service sector pmi inspired rally drastically limited by the lack of Brexit progress,” Lawler said.
He added: “Brexit will be firmly back on the agenda, with the Prime Minister due to hold talks at the Chequers residence this weekend, in the hope of finding a solution to the customs partnership with the EU post Brexit.
“Theresa May has made a series of pleas to her bickering party to sort out their differences and to the EU, not to decline the third proposal.”
Over in Asia, equity markets had followed the momentum from Wall Street, as the major eastern benchmarks were lit in red.
Japan’s Nikkei was off only be a small margin, down just a few points or 0.1% at 21,782.
Hong Kong’s Hang Seng, meanwhile, gave up much more as it lost 1.26% to 28,186 whilst the Shanghai Composite was marked down 0.48% to 2,768.
Elsewhere, Australia’s ASX 200 was down 0.48% at 6,180.
Around the markets
• Sterling: US$1.3204, up 0.08%
• Gold: US$1,257 an ounce, up 0.48%
• Brent crude: US$78.10 a barrel, up 1.02%
Headlines
- WPP clashes with Sorrell venture in €300m Dutch auction – Sky News
- Town centres could become ghost towns, warns former retail chief – BBC News
- KPMG to face investigation over audit of failed Bargain Booze owner Conviviality – The Independent
- Banks could have to pay out 'billions' more in PPI claims – BBC News
- China central bank seeks to reassure after renminbi tumble – Financial Times
- Ryanair pilots in Ireland to strike Thursday 12 July – BBC News
- Facebook reveals it gave 61 companies access to widely blocked user data – The Guardian
- Facebook acquires London-based AI firm to help it better understand human speech – The Verge
- Barnes & Noble sacks CEO for policy ‘violations – Financial times
- Micron Chip Sales Banned in China on Patent Case – Bloomberg.com