FTSE 100 up 54 points at close
Dow Jones jumps 166 points by midday
Crude climbs as US renews Iran sanctions
Miners rally after recent sell-off
Domino's Pizza results leave bad taste
5.30pm: Bullish tone for Footsie
The FTSE 100 index closed strongly in the blue on Tuesday led by a rally from heavyweight commodity stocks, bolstered by strong morning gains on Wall Street
At the close, the UK blue chip index was up 54.70 points at 7,718.48, albeit below the session peak of 7,752.08, having recovered from a low of 7,663.20.
Joshua Mahony, market analyst at IG commented: “Sharp gains from the likes of Anglo American, Glencore, BHP Billiton, Fresnillo, and Antofagasta coming on the day that the US imposes restrictions on Iranian exports of gold, silver, steel and aluminium.”
He added: “Crucially, while today marks the beginning of the re-upping of sanctions on Iran, this is the early tentative step, with the likes of iron, copper, and gold representing just a very low percentage of Iranian exports.
“Meanwhile, with sanctions targeting their all-important crude exports (63%) due to come into place on 4 November, the international response to today’s announcement will have a substantial impact for expectations going forward.”
On Wall Street, around midday, the Dow Jones Industrials was up over 166 points at 25,668, with both the broader S&P 500 index and tech-laden Nasdaq composite also higher.
Mahoney continued: “With the S&P 500 trading just 0.5% away from record highs, we have seen markets look past the instability of global trade and instead focus on the continually improving earnings picture.
“With US growth of over 4%, and consistent upgrades to corporate profitability, markets are clearly willing to look past their ongoing fears and instead look towards the positives today.”
But the day’s corporate news in London was less encouraging, creating a number of fallers, with testing equipment firm Intertek PLC (LON:ITRK) the biggest FTSE 100 faller, shedding nearly 10% after first-half earnings fell short of market expectations.
Meanwhile, investment platform blue chip Hargreaves Lansdown PLC (LON:HL.) fell more than 4% as comments on waning confidence among investors due to Brexit and rising costs took the shine off record-breaking full-year results.
And Holiday Inns owner InterContinental Hotels Group PLC (LON:IHG) was also among the top FTSE 100 fallers following its half-year results, losing 3%.
On the second line, Domino’s Pizza PLC (LON:DOM) was the biggest FTSE 250 faller, dropping nearly 10% as although its overall half-year sales rose, profits were constrained by investments overseas.
3:30pm: FTSE 100 set for strong close as investors shrug off trade worries
With around an hour to go, the FTSE 100 looks set for a strong finish to Tuesday, following US equities higher.
The London index was up 85p or 1.11% changing hands at 7,747.
“A strong start from the Dow Jones allowed the European indices to expand their gains as Tuesday went on,” said Connor Campbell, analyst at Spreadex.
“The US index jumped 150 points as the bell rang on Wall Street, the Dow leaping to 25650 for the first time since the end of February.
“It’s the latest example of investors picking and choosing when to focus on the ever-present trade war between the US and China, the Dow’s gains requiring the index to ignore S&P’s warning that the latter nation could shift from penalising goods to services.”
2:35pm: FTSE 100 stays higher as Wall Street makes a strong start to Tuesday’s session
The FTSE 100 continued to edge higher, gaining 80 points or just over 1.05% to 7,744 as investors looked ahead to the US open.
On Wall Street, the Dow Jones opened 0.41% or just over 100 points higher changing hands at 25,606.
The S&P 500 climbed 0.35% to 2,850 and the Nasdaq advanced 0.45% to 7,895.
Franchise firm Dean Foods Co and cloud-software company Twilio were among the early winners in New York.
At the same time, Zillow Group slumped after its revenue guidance proved an unpleasant surprise to Wall Street.
12:30pm: FTSE 100 gains strength into afternoon deals
By midday, the FTSE 100 had risen close to 1% as buyers are slowly brought into the market.
Standing at 7,739, the London index was up 75 points or 0.99%
“Global equity bulls were lingering in the vicinity during Tuesday’s trading session as investors diverted some attention from trade war concerns to focus on strong U.S corporate earnings,” said Lukman Otunuga, analyst at FXTM.
Early pre-market indicators point to positive start in New York, with the Dow Jones futures showing a 90-point rally, while the S&P 500 and Nasdaq are also seen higher.
NEWS OF THE DAY -
TUESDAY 7TH JULY 2018
with @AndrewScottTV#stocks #LSE #FTSE100 #AIM #proactive #investors #news #business #finance https://t.co/k75jJxUxvo pic.twitter.com/xeXXLI2F6i
— Proactive News Desk (@UK_Proactive) August 7, 2018
11:30am: FTSE 100 makes further gains, sees highest level of the week
The FTSE 100 continued to edge higher through Tuesday, up 64 points or 0.84% changing hands at 7,720.
“There’s been a bright start for the stock market here in London today, with the FTSE 100 adding more than 50 points and pushing up to its highest level of the week,” said David Cheetham, analyst at online broker XTB.
“The benchmark appears to remain in a broader consolidation range, with trading volumes light as is typical for this time of year.
“The pound is little changed on the day and remains near its recent lows and below the 1.30 handle against the US dollar.”
Elsewhere, Spreadex analyst Connor Campbell turned his attention to New York: “Looking to the afternoon and having bounced back by yesterday’s close the Dow Jones is in a decent position heading into the US session.
“The futures have the Dow rising 70 points when the bell rings on Wall Street, a move that will take it above 25550, and leave it on track to potentially surpass the 25600-teasing intraday highs struck at the end of July.”
11:00am: Halifax reveals ‘much stronger than expected’ house price growth
Stats from Halifax have revealed a ‘much stronger than expected’ UK housing market, with prices rising 1.4% in July, marking an annual rate of 3.3%.
It may be stronger than expected, but, that’s not necessarily to say it is strong. As Halifax described it, the market has actually “firmed modestly from its recent lows”, and, the mortgage lender claimed it was still dubious that the market was “seeing a sustainable shifting up of a gear”.
Halifax added that the Bank of England’s decision to increase the interest rate would not help the market either.
“Housing market activity is still relatively lacklustre and we expect it to remain so as the extended squeeze on consumer purchasing power only gradually eases, consumer confidence is relatively fragile and appreciable caution persists over engaging in major transactions,” Halifax said in the report.
“Potential house buyers may also be concerned that they are likely to face further interest rate hikes over the medium term following August’s hike.”
10:30am: FTSE 100 holds 50 points higher, crude prices rise as US sanctions Iran
The FTSE 100 continued to hold around 50 points higher, with the index changing hands at 7,712.
London’s large oil shares were among the morning’s notable risers as crude prices strengthened with the renewed US sanctions on Iran, which not only increases risk generally, but is expected to specifically reduce output from the country.
Brent crude rose 0.7% to US$74.25 per barrel whilst WTI edged 0.44% to US$69.32.
In London, BP PLC (LON:BP) was up 1.16% at 573p and Royal Dutch Shell PLC (LON:RDSB) gained 0.77% at 2,622p.
10:15am: UK consumer spending seen 5% higher in July
There’s a great deal of noise around Britain’s economics and whilst there aren’t many major statistics, there are somewhat more incidental indicators.
Yesterday’s improved new car sales figures, for the month of July, were followed up with further indications that consumers are spending.
A Barclaycard report today claimed a 5% increase in consumer spending in July, which was the third month in a row with at least 5% growth.
Stats from both credit and debit transactions also showed that ‘essential spending’ increased by 8.7% in the month, meanwhile, the World Cup somewhat inevitably triggered a major uptick in ‘pub spending’ – not least on the day of England’s semi-final against Croatia when, according to Barclaycard, there was a 73% surge in spending.
“The prolonged warm weather combined with England’s World Cup performance has created a short-term boost in spending,” said Esme Harwood, Barclaycard director.
“With the sunshine showing no sign of abating, spending levels have remained higher than we would normally expect with Brits keen to make the most of the heatwave - whether in the pub over a few drinks or stocking up at the supermarket to enjoy a barbecue.
She added: “It will be interesting to see if this strong level of growth continues as we move into the final stretch of summer.
“It’s clear that some consumers remain cautious about what’s to come with interest rates rising and overall confidence in household finances down slightly from June.”
9:45am: FTSE 100 continues to drift higher, pound holds up
The FTSE 100 strengthened through Tuesday morning’s deals, rising about 52 points, changing hands at 7,716.
It is, though, another typical August day with trading features relatively thin on the ground.
“After yesterday’s trade war-fearing, Brexit-bitten session, the markets got off to a brighter start on Tuesday, without really any reason to do so,” said Connor Campbell, analyst at Spreadex.
He added: “As for the pound, that most miserable of currencies, it managed to avoid any further losses as Tuesday got underway.
“Against the dollar it actually nudged up by 0.1%, lifting cable away from Monday’s 11 month lows; against the euro, however, it wasn’t so lucky, remaining the wrong side of €1.12.”
Fiona Cincotta, analyst at City Index, meanwhile, added: “A momentary respite in the flow of trade tariff news has given stock markets in Europe the chance to focus back on the basics: company earnings.
“Most European indices are trading higher, even the FTSE, despite a mixed bag of earnings with strong results from Hargreaves Lansdown and declines in profit from Standard Life Aberdeen, car dealer Pendragon and Domino’s Pizza.”
8.35am: Footsie moves higher
Taking its cue from Asia and Wall Street overnight, the FTSE 100 nudged higher in early trade.
However, the spectre of a ‘no deal’ exit from the EU meant the movement was comparatively modest with the blue-chip index advancing 21 points to 7,684.43.
After the recent sell-off in the sector amid international trade concerns, the miners enjoyed a rare day in the sun with Glencore (LON:GLEN) leading the way with a 1.9% rise.
Down a division in the FTSE 250, iron ore digger and processor Ferrexpo (LON:FXPO) was up 6.3% in the wake of an upgrade from JP Morgan Cazenove.
On the flipside, Domino’s Pizza (LON:DOM) shares were as appetising as last night’s leftover deep crust in the wake of the company’s interim figures, which knocked around 9% from its market value.
“On balance, these results will be received with something between grudging acceptance and mild disappointment,” said Steve Clayton, manager of the HL Select UK Growth Shares Fund, which holds a position in the stock.
“Domino’s is executing well in the UK with strong growth in sales and resilient earnings.
“But overseas, where the group has been expanding rapidly through acquisitions as well as new openings, profits have come in below par.
“The Norwegian business in particular has struggled to keep control of labour costs.”
Proactive news headlines:
IronRidge Resources Limited (LON:IRR) has announced the discovery of a high-priority lithium pegmatite target at the Apam West licence in Ghana, West Africa.
Asiamet Resources Limited (LON:ARS) has reported further “excellent” results from the current infill and extension drilling program being undertaken at the company's 80%-owned Beutong copper project in Indonesia.
Tech recruiter Harvey Nash Group PLC (LON:HVN) has received a bid to take it private worth 130p share in cash or a 17% premium to the close yesterday. Independent directors are recommending the offer, which is being made by funds controlled by shareholder DBAY Advisors.
Frontier IP Group PLC (LON:FIPP) has announced its first Portuguese spin out, NTPE, a company that is developing technology to print electronics on paper.
A drug that is the focus of legal action by Silence Therapeutics (LON:SLN) has been granted limited approval here in the UK. Patisiran, a new-breed of RNAi medicine developed by American biotech Alnylam Pharmaceuticals Inc (NASDAQ:ALNY), will join the Early Access to Medicines Scheme.
Landore Resources Ltd (LON:LND) has unveiled a new estimate of the BAM gold deposit’s mineral resource, based on field work conducted between 2015 and 2017. It has estimated some 623,000 ounces of contained gold, in 18.58mln tonnes of mineralization grading 1.04 grams per tonne.
Bacanora Lithium PLC (LON:BCN) has pushed back the commissioning date of the Sonora mine in Mexico while it arranges finance for the construction of the first phase. Work has started on the ground works and long lead engineering items and these are scheduled to be completed by the end of the year.
AfriTin Mining Ltd (LON:ATM) has highlighted the initial success of its new exploration efforts, which coincide with the group’s primary focus to deliver a pilot plant and advance towards the definitive feasibility phase of the project.
A court hearing has been scheduled for August 10 to consider an application to place BlueRock Diamonds PLC’s (LON:BRD) operating subsidiary, Kareevlei Mining, into provisional liquidation.
Metal Tiger PLC (LON:MTR) announced that its directors will be taking up a total of £66,000 worth of shares in the placing announced on 6 August 2018, taking the total gross proceeds raised to circa £3.516m. The firm said Charles Hall, its non-executive chairman, will be subscribing for £56,000 and Michael McNeilly, its chief executive officer, for £10,000.
Ceres Power Holdings PLC (LON:CWR) confirmed that its share consolidation of every 10 existing ordinary shares into 1 new ordinary share became effective today.
6.45am: Positive start predicted; pound at 11-month low
The FTSE 100 looks likely to open in positive territory with stocks in Asia enjoying a buoyant session and Wall Street edging back towards record territory.
But with Brexit worries weighing on sentiment, the move higher is likely to be muted. The spread betting firms are predicting the index of blue chip shares will edge just nine points higher to 7,672.78.
With the prospect of a no deal exit from the EU looming, the pound hit an 11-month low against the dollar overnight.
“Sterling has gone from bad to worse in the past few days,” said David Madden, analyst at CMC Markets.
“The Bank of England had a dovish hike on Thursday: Mark Carney, the BoE governor, talked down the pound down on Friday as he warned about the possibility of a ‘no-deal’ Brexit.
“Sterling sold-off heavily yesterday after secretary of international trade Liam Fox announced there is a 60-40 likelihood of the UK leaving the EU without a trade deal. Traders are terrified about the possibility of a ‘no-deal’ Brexit.
“The more we hear the phrase ‘no-deal Brexit’, the more likely the pound will be kept under the cosh.
“The British side might give off the impression they would be content without a deal in order to force Brussel’s hand, and the pound could be in for a rocky ride in the near-term.”
Finally, activity levels appear to be subsiding as the August lull kicks in.
Scheduled news has slowed to a trickle with financial groups Standard Life Aberdeen (LON:SLA) and Hargeaves Lansdown (LON:HL.) the most interesting of the trickle of results expected Tuesday.
Around the Markets:
- Pound worth US$1.2946
- Brent crude worth US$73.95 a barrel, up 20 cents
- Gold changing hands for US$12,18.10 and ounce, up 40 cents
City Headlines:
Financial Times
- Dell projects bullish outlook as it woos investors ahead of stock market (re)float
- Indra Nooyi to step down as chief executive of PepsiCo after 12 years
- Call for subsidies to boost ‘mini’ nuclear power - industry should have same help as offshore wind, report says
Times
- Bonds boss broke trading and hospitality rules, says Swiss firm GAM
- Barclays under fire for second time over PPI failures
- Trump’s China trade anger could hit investment, HSBC boss warns
Telegraph
- Trade war may escalate and kill bull market, banks warn
- Fever-Tree founders set to land £73mln payday in further stake sale
Guardian
- Former directors face questioning over Carillion's collapse
- Nationwide will not pass on full 0.25% interest rate rise to most savers
- Weight Watchers adds 1m subscribers in a year