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FTSE 100 firms on Friday as Trump's UK visit dominates headlines

In the currency markets, the pound gained 0.07% against the Euro and was up 0.11% against the US dollar

donald trump
Brexit and Trump and the two intertwined are dominating headlines
  • FTSE 100 closes higher on day and week 

  • US stocks firmer

  • Pound nudges higher

  • Trump slams UK's Brexit plans

FTSE 100 closed Friday higher as Wall Street indices firmed and the pound reversed earlier losses.

The UK blue-chip index closed around ten points higher at 7,661, while FTSE 250 was up nearly 34 points to 20,819. Footsie was also up on the week as a whole to the tune of about 0.57%.

In the currency markets, the pound gained 0.07% against the Euro and was up 0.11% against the US dollar.

It comes as President Donald Trump is on his first official visit to the UK where he has met the Prime Minister Theresa May and is now meeting the Queen at Windsor Castle.

As with all things Trump, controversy has surrounded the trip and he has seemingly backtracked from comments made in the Sun newspaper, which appeared to criticize the Prime Minister's Brexit plans.

David Madden, at CMC Markets, said of trading on Friday 13: "The mood is cautiously optimistic as the trade standoff between the US and China continues."

He added: "US equity markets are mixed as banks kick-off earnings season. Traders booked some of their profits on US stocks after they had a strong finish yesterday. The trade spat with China is still bubbling away in the background, and remains at the forefront of traders’ minds."

The Dow Jones Industrial Average is up over 74 points at the time of writing, while the broader based S&P 500 added 29 to 2,803.

3.50pm: Trump backtracks

Donald Trump has seemingly taken back his earlier criticism of Theresa May, telling reporters the Prime minister “will do very well” in Brexit negotiations.

"I've been watching her over the last couple of days. She's a tough negotiator. She's a very, very smart and determined person."

He adds: "I would much rather have her as my friend than my enemy."

The positive comments didn’t move the pound too much, although it has recovered some of its earlier losses. Sterling is currently down 0.16% against the dollar to US$1.319 but it is up slightly against the euro to €1.132.

3.15pm: Footsie still ahead

With less than 45 minutes left in the trading day, the FTSE 100 is up 20.5 points to 7,671.8, having given up some of the gains it had made earlier in the day as the pound pared some of its losses.

Sales, marketing and support services group DCC Plc (LON:DCC) is the top blue-chip riser, up 4.3% to 7,195p, having reiterated its full-year forecasts and made a couple of acquisitions in the US and the UK.

Miner Randgold Resources Ltd (LON:RRS) was the heaviest faller, shedding 1.5% to 5,488p as it followed the gold price lower.

3.05pm: US stocks hardly move at the bell

As expected, it has been a rather muted start on Wall Street following yesterday’s gains.

The Dow Jones Industrial Average is up 12.4 points to 24,937.4, while the tech-heavy Nasdaq has advanced 1.8 points to 7,825.7.

The broader S&P 500 has taken a minor tumble, dropping 6.0 points, or 0.2%, to 2,792.1.

2.45pm: Pound still lower on Trump comments

The pound is still propping up the blue-chips on the FTSE 100, having taken a knock from Donald Trump’s pretty damning comments on the UK’s Brexit white paper.

The President, who is over here on a state visit, said maintaining close ties with the EU after Brexit would make a lucrative US trade deal unlikely.

“If [the UK government] do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.”

He also said he would gone about securing a deal with the EU “much differently”.

The comments weighed on sterling, which is down 0.3% against the dollar to US$1.317 and flat against the euro at €1.131 – although it had been down by more earlier in the day.

2.20pm: Busy week ahead in London

A number of big names are due to publish an update of one sort or another next week.

Royal Mail PLC (LON:RMG) is set to deliver a first-quarter trading update on Tuesday, while Talktalk Telecom Group PLC (LON:TALK) and housebuilder Galliford Try plc (LON:GFRD) are also set to update the mark.

Consumer goods giant Unilever plc (LON:ULVR), retailer Sports Direct International PLC (LON:SPD), miners Anglo American PLC (LON:AAL) and Rio Tinto PLC (LON:RIO), utility firms Severn Trent PLC (LON:SVT) and SSE plc (LON:SSE) and several other blue chips are also expected to report.

Of course there is also data due next week, with the latest jobs, inflation and retail sales numbers all due on Tuesday, Wednesday, and Thursday, respectively.

For a more in-depth look forward, take a look at our week ahead.

1.45pm: Tissue Regenix CEO excited to soon be selling first products in UK

Tissue Regenix Group PLC (LON:TRX) boss Steve Couldwell joined Andrew Scott in the Proactive studio earlier today…

1.10pm: Poundworld to close 80 more stores

Poundworld is to close 80 more stores, putting another 1,024 jobs at risk.

The closures are in addition to the 25 shops it announced it would shut earlier this week, when it said 250 or so jobs would be lost.

The discount retailer fell into administration last month after talks with a potential buyer, R Capital, collapsed. Another possible sale to Poundworld’s original founder, Chris Edwards, also fell through.

12.50pm: Slow start predicted in US

Perhaps unsurprisingly, it looks set to be a much quieter start in the US today, given the gains made over the past few days.

Spreadbettors are calling the Dow Jones Index to open broadly flat at 24,918, while the Nasdaq is also seen flat at 7,365.6. The S&P 500 is seen lower but only by 1.0 point at 2,796.8.

“The Dow Jones isn’t set to do much of anything when the bell rings on Wall Street, the index’s futures suggesting a rather flat start to the session,” said Spreadex analyst Connor Campbell.

“Not that the Dow will mind; despite the trade chaos on Tuesday, the index has still managed to extend its recovery, crossing 24900 for the first time since mid-June.”

12.35pm: FTSE 100 holding on to early gains

In early afternoon trading, the FTSE 100 is up 32.2 points, or 0.4%, at 7,683.6.

The blue-chips have been boosted by a weaker pound, which makes their overseas earnings worth more when translated back into pounds, while it also makes their products cheaper to foreign buyers.

Sterling is currently 0.6% down against the dollar to US$1.312, while it is also 0.2% off versus the euro at €1.129.

Micro Focus International PLC (LON:MCRO) is the top riser, advancing 4.8% to 1,280p as it continues to recover the losses it sustained following Wednesday’s interim results.

Miners are among the worst hit, with Randgold Resources Ltd (LON:RRS) (down 1.7% to 5,480p) and BHP Billiton PLC (LON:BLT) (down 1% to 1,641p) slipping.

12.20pm: Umbrella sales weren’t good last week

Perhaps the most obvious sentence I’ll write today, if not ever: not many umbrellas were bought last week – you know, when it was really hot.

Shoe repairer and key cutter Timpson, which also sells brollies, said it sold less than £2,000 worth across the company last week. Maybe they should have rebranded them as parasols?

12.10pm: Johnson & Johnson ordered to pay out US$4.7bn in talc cancer case

Johnson & Johnson (NYSE:NJ) stock has dipped in pre-market trading in New York after the US consumer goods giant was ordered to pay US$4.7bn (£3.6bn) in damages to 22 women who claimed its talc products caused them to develop ovarian cancer.

A jury in Missouri awarded US$550mln in compensation and a further US$4.1bn in punitive damages.

Lawyers for the 22 women represented in the case, six of whom have died from ovarian cancer, claim J&J knew that its talc was contaminated with asbestos since the 1970s but failed to warn consumers about the risks.

The company, which is facing 9,000 other legal cases involving its signature baby powder, said it was “deeply disappointed” and plans to appeal. Shares are down 2.8% to US$124.19 in New York.

11.55am: Goldman raises a glass to Diageo

Diageo PLC (LON:DGE) is among the top blue-chip movers after it was upgraded by Goldman Sachs, which thinks the Johnnie Walker and Smirnoff owner’s organic sales growth is about to accelerate.

The US investment bank said the acquisition of “super premium” tequila brand Casamigos will boost sales growth in the US while headwinds in the Indian market should abate.

Goldman Sachs has increased its earnings per share (EPS) forecasts for the financial year just ended and the next two by 1%, 6%, and 7% respectively, prompting the upgrade to ‘buy’ from ‘neutral’.

“We expect evidence of accelerating organic sales growth and margin delivery to drive outperformance,” the bank said.

The shares were up 1% after the upgrade at 2,813p, well below the bank’s price target of 3,160p.

11.30am: Takeover Panel clouds Sky

There was yet another twist in the long-running takeover saga for Sky PLC (LON:SKY) on Friday.

The UK Takeover Panel ruled that The Walt Disney Company (NYSE:DIS) would need to make a minimum bid of 1,400p per share for Sky if it succeeds in its bid to buy Twenty-First Century Fox Inc (NASDAQ:FOX), which owns a 39% stake in the satellite broadcaster and is in a bid battle with Comcast Corp. (NASDAQ:CMCSA) for the firm.

On Thursday, the UK government formally approved Fox’s bid for the FTSE 100-listed firm as long as Sky News is sold off to a “suitable third party”.

That clearance followed Fox’s move on Wednesday to up its offer for Sky to 1,400p a share, well above its initial 1,075p per share agreed bid launched in December 2016 before the company got embroiled in a takeover probe.

That increased offer was trumped later the same day by a raised bid of 1,475p a share from Comcast which Sky’s independent directors said they would recommend to shareholders, having previously backed Fox’s increased offer.

Sky plans to request that the Takeover Panel’s hearings committee be convened in order to review this ruling, while Disney and Fox are considering their positions, the Panel said in a statement.

In late morning trading, Sky shares were 0.2% lower at 1,542.5p, having seen strong gains since the bid tussle accelerate. Meanwhile, the FTSE 100 index remained higher, up 34 points at 7,686.

10:50am: Gains slightly eroded

The FTSE 100 index eased back from early highs as the morning session progressed on a fairly quiet Friday the 13th, with traders looking for Wall Street to provide further direction later, particularly with some big US banking results due today.

Around 10.50am, the UK blue chip index was up 29 points at 7,680, albeit well below the morning peak of 7,716, tracking gains by US and Asian markets as Trump trade worries recede again.

Chris Beauchamp, chief market analyst at IG, commented: “Hopes are high that earnings season will deliver plenty of good news, although with high expectations (earnings growth of 21% for the S&P 500 has been forecast by Thomson Reuters) comes the risk of disappointment.

“The constant drumbeat of company reports from the US over the next few weeks will at least allow us to focus on something other than the trade spat between the US and China. From a price perspective, the S&P 500 and the FTSE 100 are both at key levels, with a breakout above 2800 for the former likely to galvanise risk appetite.”

He added: “Ahead of the open, we expect the Dow to start at 24,933, up 9 points on Thursday’s close and within easy distance of 25,000, one of those round numbers so beloved by the President.”

On currency markets, the pound was another 0.3% lower against the euro at €1.1289, and shed 0.5 against the US dollar at US$1.3132, which helped support international stocks on the Footsie.

9.45am: Ex-pats have property issue

With Brexit uncertainties rumbling on, a report has shown that ex-pat Brits have been suffering with Europe’s property markets having seen tough times since 2010.

Analysis by Hargreaves Lansdown Currency Service shows that house prices in Spain are still 16% lower than they were in 2010 after plunging during the financial crisis.

Portugal, meanwhile, saw deep house price cuts, followed by an accelerating recovery from 2014, while in France, prices largely held up – although they suffered a blip between 2013 and 2015.

On paper, Hargreaves says there are bargains to be had, however, since 2015, Brexit uncertainty has pushed the pound from €1.38 to €1.13, making them look far less attractive. That means that if you’re buying in pounds, since 2015, prices in France have actually risen by 29%, those in Spain are up 39% and in Portugal they have risen 48%.

Chris Saint, senior currency analyst at Hargreaves Lansdown Currency Service said: “Anyone who’d been hoping to buy a home overseas may have seen the collapse in Spanish house prices, the blip in France and the difficult years in Portugal as their opportunity to snap up a bargain.

“However, local prices aren’t the whole story here, because the price you pay also depends on the exchange rate. Since 2015, Brexit uncertainty has pushed the pound lower, making house prices in Europe far less attractive.”

In early morning trading on Friday, sterling was another 0.2% lower against the euro at €1.1294, but held steady against the US dollar at US$1.3121.

On equity markets, however, the mood was brighter, with the FTSE 100 index up 46 points at 7,697 around 9.45am. 

8.35am: Footsie in demand

The FTSE 100 got off to a positive start, advancing 51 points to 7,702.83 as trade fears receded.
 
President Trump's intervention in the Brexit debate, and specifically his assertion that a bi-lateral trade deal was unlikely if the UK followed the current blue-print for departing the EU, hit the pound.
 
For the exporters, particularly dollar earners, sterling's woes actually provided a modest boost.
 
However, the day's big mover was Diageo (LON:DGE), which rose 1.7% after Goldman Sachs upgraded the drinks group to a 'buy'.
 
Credit checker Experian (LON:EXPN) was one of only three fallers in the blue-chip index, with the stock hit by a bout of mild profit-taking in the wake of its latest trading update. 
 
Recruiter Hays (LON:HAS), by contrast, was up 4.4%, after it said its earnings would likely exceed market forecasts.

Proactive news headlines:

Solo Oil PLC’s (LON:SOLO) executive chairman Neil Ritson is to retire before the end of 2018 as part of a board restructuring designed to ready the company for the future.

Columbus Energy Resources PLC (LON:CERP) has expanded its footprint in southern Trinidad with the acquisition of Steeldrum for £4.4mln in shares. Steeldrum is producing at a rate of 200-250 barrels oil daily currently and has reserves of 5.6mln barrels at the Innis-Trinity and South Erin fields and 1.1mln within the Cory Moruga development project.

Telit Communications PLC (LON:TCM), the Internet of Things (IoT) enabler, has agreed to sell its automotive division to TUS International for US$105mln in cash.

W Resources PLC has revealed that initial assays results from the reverse circulation (RC) drilling campaign at its São Martinho gold project in Portugal has shown thick gold intersections and high grades. The AIM-listed firm said highlights from the first seven holes of the 15-hole campaign are a 25-metre intersection of gold at 0.85 grams per tonne.

Minds + Machines Group Limited (LON:MMX) has received approval to launch a new batch of generic top-level domains in China: .fashion, .fit, .yoga and .luxe.

Next Fifteen Communications Group PLC (LON:NFC) has snapped up digital marketing business Technical Associates Group in a deal worth up to £3.6mln.

genedrive PLC (LON:GDR), the rapid diagnostics specialist, said it is applying for an additional £2mln of grant funding as it updated on current trading. The awards will be used to progress work on the company's hepatitis-c and tuberculosis products.

Lionsgold (LON:LION) has announced the appointment of Michael Anthony Corcoran as its interim chairman and non-executive director with immediate effect. The AIM-listed gold company, said concurrently with Michael joining the board, David Price, its non-executive chairman, has stepped down from the board to focus on his role as CEO of a separate company.

Providence Resources PLC (LON:PVR), the Ireland-based oil & gas exploration company, confirmed that, having received approval from the Minister of State at the Department of Communications, Climate Action and Environment, the farm-out comprising the assignment of equity (35%) and transfer of operatorship of FEL 2/14 to TOTAL E&P Ireland BV has now completed.

6.45am: FTSE 100 set for bright start

The FTSE 100 looks set to kick off on the front foot with America-China trade fears receding.
 
But on his visit to the UK, US President Donald Trump put a spanner in the works by effectively declaring a bilateral deal with Britain null and void if the Prime Minister Theresa May continues down the road towards a soft Brexit.
 
The spread betting firms are predicting the index of blue-chip shares will nudge 39 points higher at the open to 7,690.33.
 
Sterling dropped around a quarter of a percentage point to US$1.317 on the Trump intervention.
 
"The timing of the US President's landing on British soil couldn’t have been worse for Prime Minister Theresa May. The same day that she publishes her whitepaper outlining the post Brexit UK-EU relationship, as a softer version of Brexit, Trump a known supporter of a hard Brexit grabs the spotlight," said Jasper Lawler of London Capital Group.
 
"Trump’s declaration that this softer version of Brexit would mean that a trade deal with the US was 'probably' off the table, was a blow to both host Theresa May and the pound, sending sterling tumbling overnight. 
 
"Let’s not forget that the hope of a quick trade deal with the US was a significant factor in Theresa May’s decision to invite Trump in the first place; another embarrassment that May could have done without."
 
On a fairly quiet day for corporate news, credit checker Experian (LON:EXPN) updates as does Hays (LON:HAS), the recruitment firm, which is also a decent barometer for the health of the British economy.
 

Around the Markets:

Gold currently trading at US$1,245.20, down US$2.10
 
Brent crude changing hands for US$74.27, down 18 cents
 

City Headlines:

Financial Times 

The EU financial markets regulator of regulators has sounded the alarm over firms’ preparedness for a hard Brexit, joining a chorus of EU bodies that have warned recently not enough is being done

Johnson & Johnson shares dipped on Thursday evening after a Missouri jury ordered it to pay nearly $4.70bn in damages in a lawsuit brought on behalf of 22 women who claimed they developed cancer from using products containing talc, including baby powder

Times

Glencore is facing the threat of legal action being taken by its own investors after it emerged last week that American anti-corruption investigators were targeting the mining and commodities group

Sky could change hands for as much as £30 billion amid an escalating takeover battle for the European pay-TV group, analysts have predicted

Telegraph 

The US Department of Justice has sought to overturn a court decision which allowed A&T to acquire Time Warner

McLaren plans to almost double the rate it builds its supercars as part of an ambitious expansion plan

Daily Mail

Budget airline Norwegian Air swung to a profit as it managed to keep a lid on spending while also boosting demand for cheap long-haul flights

 

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