FTSE 100 up 19 points to 7,583
Antofagasta upgraded by RBC
Norway to keep investing in oil stocks
No progress after US-China trade talks
3.50pm: Miners lead the way
A swathe of green among the miners has helped push the FTSE 100 up to its highest level for the day as traders wind down ahead of the three-day weekend. The index of blue-chip shares is 19.4 points to 7,582.6 as the closing bell draws near.
Antofagasta PLC (LON:ANTO) has jumped just over 3% to 826p on the back of an upgrade from analysts at RBC Capital, while it, along with its peers, has also been boosted by the rising copper price which hit four-week highs earlier on today.
Glencore PLC (LON:GLEN) (up 3.1% to 319.8p), Anglo American PLC (LON:ALL) (up 2.4% to 1,571p) and Fresnillo PLC (LON:FRES) (up 2.3% to 944.6p) are all comfortably higher.
Because of its widespread use in everything from electrical wiring to rooftops, it is also often seen as a bellwether for the global economy.
The market certainly seems to think the global economy is in decent shape, with defensive stocks being chucked out of the portfolio.
Tobacco companies British American Tobacco plc (LON:BATS) (down 3% to 3,942p) and Imperial Brands PLC (LON:BATS) (down 1.6% to 2,801p) have both been stubbed out, as have Severn Trent PLC (LON:SVT) (down 1.4% to 1,933p) and United Utilities Group PLC (LON:UU.) (down 1.1% to 165.5p).
Housebuilders remain under pressure once again today though. They were nursing losses earlier in the week after Rightmove data pointed to a slowing UK housing market and news this morning that mortgage approvals fell in July hasn’t helped.
Persimmon PLC (LON:PSN) (down 1.5% to 2,451p), Barratt Developments PLC (LON:BDEV) (down 1.5% to 538p) and Berkeley Group Holdings PLC (LON:BKG) (down 1.7% to 3,642p) are all in the red.
3.15pm: Solid start in New York
US stocks kicked off Friday’s session on solid footing as investors digested fresh economic data and interpreted a speech by Federal Reserve chairman Jerome Powell.
Early in the session, the Dow Jones Industrial Average index added 66 points to hover at 25,724, led higher by DowDuPont Inc, Chevron Corp, Walgreens Boots Alliance, Caterpillar and Visa.
The tech-laden Nasdaq was also having a strong morning and climbed 38 points to hover at 7,915, pushed up by Autodesk, Advanced Micro Devices Inc, Netflix and Newfield Exploration. Elsewhere, the S&P 500 gained 7.7 points to lurk around the 2,864 mark.
Delivering an address at the Fed’s yearly confab in Jackson Hole, Wyoming, Fed chairman Jerome Powell said he anticipates that the current path of gradually rising interest rates will continue.
“If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate,” he said in prepared remarks.
2.50pm: Petrol prices hit four-year high
Just in time for the bank holiday weekend, petrol prices have hit four-year highs, according to the AA.
Yesterday, the average price of petrol in the UK was 130.05p a litre and diesel 132.72p a litre, their highest levels since September 2014.
“This is summer holiday pump exploitation at its worst,” said the AA’s fuel price spokesman Luke Bosdet.
“The Transport Secretary’s app-based fuel price transparency for motorways can’t come soon enough.”
2.35pm: Norway urged to stick with oil and gas investments
Norway’s sovereign wealth fund is reportedly pushing back against calls for the divestment of its oil and gas assets.
The wealth fund, which has underpinned Norway’s national pensions, was borne out of the state’s share of its North Sea oil business.
It holds sUBStantial international oil and gas stocks, including more than US$6bn worth of Royal Dutch Shell, in addition to BP, Chevron, ExxonMobil and Total, along with notable stakes in ConocoPhillips and Schlumberger.
There have been calls from the Norwegian central bank to divest and diversify, but, those calls were answered by a government commission which cautioned against selling out of hydrocarbons.
“A sale of energy stocks would challenge the current investment strategy of the fund, with broad diversification of the investments and a high threshold for exclusion,” the commission said.
2.15pm: What’s on next week?
Summer is coming to an end and Monday will be the last bank holiday until Christmas but there are plenty of things to look forward to on the financial calendar.
The Restaurant Group PLC (LON:RTN), which publishes its interims on Friday, will most likely be glad that the recent heatwave is over since it meant many people spent more time in the beer garden than at restaurants.
First-half results from oilfield services firms Petrofac (LON:PFC) and Hunting Plc (LON:HTG) may have received a boost from the recent recovery in oil price while a tough retail market has been less kind to the performance of high street stores owned by WH Smith (LON:SMWH), which will release a trading update on Thursday.
The four day week ahead will also see interims from Bunzl PLC (LON:BNZL) and Churchill China PLC (LON:CHH) along with full year results from Hays plc (LON:HAS) and a trading update from Diploma PLC (LON:DPLM). Read more here.
1.30pm: FTSE holding on to gains
The blue-chips are holding on to the gains made towards the end of the morning, with the FTSE 100 currently up 13.6 points, or 0.2%, to 7,576.8.
Top spot goes to Antofagasta PLC (LON:ANTO) though, which, along with copper prices hitting one-month highs, has benefitted from RBC’s upgrade to ‘outperform’. Shares jumped 3.2% to 830.8p.
Drugmaker Shire PLC (LON:SHP) is also on the up, rising 2.4% to 5,529p after US regulators approved its Takhzyro drug for a treatment of patients suffering from a rare hereditary disease which causes swelling.
UBS analysts said the decision wasn’t too surprising but added that the decision should calm any nerves ahead of Shire’s potential acquisition by Japanese outfit Takeda.
Housebuilders remain under pressure once again today. They were nursing losses earlier in the week after Rightmove data pointed to a slowing UK housing market and news this morning that mortgage approvals fell in July hasn’t helped.
Persimmon PLC (LON:PSN) (down 1.2% to 2,461p), Barratt Developments PLC (LON:BDEV) (down 1.5% to 538p) and Berkeley Group Holdings PLC (LON:BKG) (down 1.6% to 3,638p) are all in the red.
1.10pm US stocks set to open in the black
US stocks are seen starting higher on the last trading day of the week, after falling yesterday, as fears over trade ease and traders eye the Central Banker symposium in Jackson Hole, where Fed chairman Powell is due to speak today.
Wall Street benchmarks ended lower on Thursday, with tit-for-tat tariffs between the US and China overshadowing their trade negotiations in Washington.
The Dow Jones Industrial Average slipped 76 points at 25,656, while the Nasdaq lost around ten points and the S&P 500 lost nearly five points at 2,856.
In Futures today, the Dow Jones is ahead by 52; the Nasdaq is up by around 18 and the S&P 500 added nearly six points.
Jerome Powell's speech comes after President Trump said he had not been impressed with the Fed's recent hiking of interest rates. Investors will be closely watching to see what Powell makes of the US and global economy and where it's heading for the rest of 2018.
Also in focus today, the top US tech giants are expected to meet in San Francisco, California to discuss security issues ahead of the 2018 US elections.
12.45pm: Fed chair due to speak later on
The US dollar has slipped back today ahead of a speech by Federal Reserve chair Jerome Powell.
Traders will be paying close attention for any hints about the pace of interest rate rises over the next year or so. Comments about the impact of the US-China trade war will also be keenly eyed.
“There are indications that the global economic outlook is slowing when compared to this time last year, and ... Federal Reserve policymakers are concerned about the prolonged trade tensions,” said FXTM’s head of currency strategy Jameel Ahmed.
“If Powell suggests that these concerns could also weaken the US economic outlook, this would represent a risk for the dollar.”
The greenback is down almost half a cent against the pound to US$1.285.
12.10pm: The dangers of momentum investing ...
One of my favourite things to read at the end of a busy week; John Harrington's investment columns!
Investing in small caps that are creating a buzz should come with a wealth warning. You need to kiss a lot of frogs and so far none have turned into a prince. https://t.co/ZGlzvRHz1w via @proactive_uk #BQE #brighterir #AndrewScottTV #CapitalNetwork1
— John Harrington (@JournoJohnH) August 24, 2018
11.55am: WTF? P&G applies to trademark popular acronyms
Consumer goods giant Proctor & Gamble has applied to trademark popular acronyms such as NBD, LOL and WTF, according to reports.
In case you don’t know, they stand for No Big Deal, Laugh Out Loud and, well, I’m sure you’ve heard of the other one ...!
Anyway, P&G, which owns popular brands such as Febreze and Fairy Liquid, reportedly registered the trademark applications with the US Patent and Trademark Office back in April.
The move is part of a wider strategy to target the lucrative under-35 population, which P&G reckons are more likely to buy its products if they’re branded with ‘young people’s language’.
11.30am: Antofagasta boosted by RBC upgrade
Antofagasta PLC (LON:ANTO) shares shot higher after RBC Capital Markets upgraded the stock, saying the valuation provides a “compelling entry point” following a recent sell off.
RBC raised its rating on the FTSE 100-listed group to ‘outperform’ from ‘sector perform’ but cut its target price to 950p from 980p after poor first-half results.
Shares in Antofagasta fell following disappointing first half results and weaker copper prices but RBC said the second half suggests better prospects.
“The shares have derated significantly, a rarity for ANTO,” the broker said.
“Valuation provides a compelling entry point in our view. We expect the shares to regain a premium valuation over the coming months possibly enhanced by its copper exposure, which has significantly underperformed iron ore by 10% in the year to date.”
Shares are up 3.1% to 829.8p.
11.10am: FTSE finds it feet
After a sluggish start to a morning when most of the City seems to have knocked off already for the three-day weekend, the FTSE 100 has found some life over the past 30 minutes or so.
The index of blue-chip shares is now up 16.1 points, or 0.2%, to 7,579.4.
Two of London’s oil giants BP PLC (LON:BP.) (up 1.1% to 558.6p) and Royal Dutch Shell PLC (LON:RDSB) (up 0.6% to 2,602p) flowed higher after the Norwegian government said the country’s sovereign wealth fund – the world’s largest – should stay invested in oil stocks.
Drugmaker Shire PLC (LON:SHP) is also on the up, rising 2.4% to 5,529p after US regulators approved its Takhzyro drug for a treatment of patients suffering from a rare hereditary disease which causes swelling.
UBS analysts said the decision wasn’t too surprising but added that the decision should calm any nerves ahead of Shire’s potential acquisition by Japanese outfit Takeda.
Top spot goes to Antofagasta PLC (LON:ANTO) though, which, along with copper prices hitting one-month highs, has benefitted from RBC’s upgrade to ‘outperform’. Shares jumped 3.2% to 830.8p.
Housebuilders came under pressure once again today. They were nursing losses earlier in the week after Rightmove data pointed to a slowing UK housing market and news this morning that mortgage approvals fell in July hasn’t helped.
Persimmon PLC (LON:PSN) (down 1.2% to 2,461p), Barratt Developments PLC (LON:BDEV) (down 1.5% to 538p) and Berkeley Group Holdings PLC (LON:BKG) (down 1.6% to 3,638p) are all in the red.
10.40am: China to keep retaliating
As analysts expected, the low-level talks between the US and China over the past have yielded little progress.
The White House said the officials “exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship”.
Chinese finance minister Liu Kun, who wasn’t involved in the discussions, said today that his country will continue to retaliate against the US trade tariffs.
"China doesn’t wish to engage in a trade war, but we will resolutely respond to the unreasonable measures taken by the United States,” Mr Liu told Reuters.
10.15am: House of Fraser warehouses set to re-open
House of Fraser’s distribution centres in Wellingborough and Milton Keynes are set to reopen today.
The two warehouses had stopped processing orders following a row with HoF’s new owner, Mike Ashley, and site operator XPO Logistics over a £30mln debt owed by the retailer.
The department store chain, which fell into administration earlier this month before being bailed out by Ashley, took its website offline last week following a spate of delays.
Fashion business site Drapers reports that the centres are expected to start processing orders again today, although the website is still down.
Due to delays with delivering online orders, we have taken the decision to cancel and refund all orders that have not already been sent to customers. All customers affected will receive an email in the next couple of days. Please accept our apologies for any inconvenience caused.
— House of Fraser (@houseoffraser) August 16, 2018
9.40am: UK agrees potato export deal with China
The UK has struck a new deal to export seed potatoes to China, which the government said will bring “major benefits” to Scotland.
Around 70% of the 100,000 tonnes exported from the UK each comes from farms north of the border. As a whole, the UK export market is estimated to be worth £90mln.
International trade secretary Dr Liam Fox said: “With China expected to have 220 cities with a population of more than a million by 2030, that is a huge market that UK potato farmers will now be able to make the most of.”
The UK has struck a new trade deal to export seed potatoes to China. Given that around around 70% of the 100,000 tonnes of seed potatoes exported from the UK annually coming from Scottish farms there should be benefit in it for us. @NFUStweets
— Scott Walker (@nfus_chiefexec) August 24, 2018
9.40am: UK agrees potato export deal with China
The UK has struck a new deal to export seed potatoes to China, which the government said will bring “major benefits” to Scotland.
Around 70% of the 100,000 tonnes exported from the UK each comes from farms north of the border. As a whole, the UK export market is estimated to be worth £90mln.
International trade secretary Dr Liam Fox said: “With China expected to have 220 cities with a population of more than a million by 2030, that is a huge market that UK potato farmers will now be able to make the most of.”
9.15am: Ryanair tightens rule on cabin baggage
Ryanair Holdings PLC (LON:RYA) has said passengers will have to pay £6 if they want to take a 10kg piece of hand baggage on its flights in a bid to reduce delays and speed up boarding.
The budget airline said from November passengers would still be allowed to take one “small personal bag” into the cabin for free, as long as it will fit under the seat, but will have to pay the extra charge if they also want to take a 10kg piece of luggage, such as a pull-along suitcase, into the cabin.
Alternatively, passengers will still have to pay £10 if they want to check the bag into the hold instead, with larger check-in luggage costing £25 per bag.
The airline said the move was not aimed at making money, but rather to improve punctuality and reduce boarding gate delays, adding that it had also increased the size of the small carryon bag that remains free to 20 litres.
I so wish there was another airline taking passengers from the northwest to #Limoges .. especially in view of @Ryanair spectacular money grabbing (sorry, time saving) measure introduced today. I would fly any airline, any NW airport to avoid #Ryanair @BBC_HaveYourSay
— vicki (@Vickikg) August 24, 2018
8.45am: Antofagasta leads the way
The FTSE 100 was becalmed on the final day ahead of the Bank Holiday weekend with index of blue chip shares down less than a point at 7,563.14.
Sino-America trade worries tinged with Chancellor Philip Hammond’s Project Fear comments focusing on a hard Brexit were directing sentiment early on, analysts said.
Marked down after two-day run following Persimmon’s (LON:PSN) upbeat results statement were the housebuilders, though it must be said traded volumes behind the movements were thin.
The miners enjoyed a rally, led by copper giant Antofagasta (LON:ANTO), which was up 2.2%. RBC Capital also upgraded the stock to ‘outperform’.
Dropping down a division, the clothier Ted Baker (LON:TED) was in demand and up 2.3% after Peel Hunt upgraded its call on the stock to ‘add’.
Among the small-caps, KEFI Minerals (LON:KEFI) enjoyed a rare day in the sun. The shares were up 10% after the gold mine developer said a consortium of Ethiopian investors said they would help fund the company’s project in the country.
6.45am: Flat open predicted
The FTSE 100 is poised to open relatively flat as traders get ready for the bank holiday weekend, with a fresh round of US trade tariffs and Trump’s legal issues reducing global risk appetite.
Spread-betting firm IG is expecting the FTSE 100 to open around 1 point lower at 7,561 after closing 11 points lower on Thursday at 7,563.
The decline was bolstered by a mixed performance US performance on Thursday as a fresh round of tit-for-tat tariffs between the US and China laid bare the lack of progress between the two economic heavyweights.
Jasper Lawler, head of research at London Capital Group, said “the bar had been set low” for the latest negotiations, but even these were being missed with bellwether stocks for the dispute such as Boeing Co (NYSE:BA) and Caterpillar Inc. (NYSE:CAT) suffering due to their heavy international exposure.
The US indices yesterday all closed lower, with the Dow Jones Industrial Average closing down 76 points at 25,656, while the S&P 500 closed down 4.8 points at 2,856 and the Nasdaq closed down 10 points at 7,878.
In Asia today, the Japanese Nikkei 225 was up 155 points at 22,566 driven by a strong showing in pharmaceuticals and a softer yen/dollar exchange rate, while Hong Kong’s Hang Seng was down 130 points at 27,659 as it was dragged by the insurance sector.
On the currency markets, the pound was relatively flat against both the dollar at US$1.28 and the euro at €1.11.
The dollar’s strength may not last much longer as Federal Reserve Chair Jerome Powell prepares to make a speech at the Jackson Hole conference later this afternoon, with Lawler saying it could contain “fresh hints as to how the Fed view the escalating trade tensions”.
Lawler added that in its recent FOMC minutes, the Fed raised concerns over the issue of trade as well as housing and emerging markets, which if compounded by anything in Powell’s speech today, could result in “the dollar’s rally on Thursday [being] quickly reversed”.
Upcoming bank holiday results in sparse corporate diary for Friday
The diary looks predictably light for the penultimate Friday of August, so attention will likely focus on building materials firm Kingspan Group PLC (LON:KGP) which is among a couple of names expected to release results.
UBS is expecting the Ireland-headquartered group to report 4% like-for-like sales growth and overall growth of 11% with the help of its M&A activities.
“We expect EBITA growth of +8%, driven by organic EBITA growth of +5%, FX -4% and M&A contribution of +7% (or €12mln).
"This implies margins will be slightly down to 9.9%, mainly reflecting what Kingspan has previously commented – that the decline seen in the UK around Q417/Q118 has now stabilised.”
Significant announcements expected on Friday, August 24:
Interims: Computacenter PLC (LON:CCC), Henry Boot PLC (LON:BOOT), Kingspan Group PLC (LON:KGP)
Economic data: US durable goods orders
Around the markets:
Sterling: US$1.2822, no change
Gold: US$1,185 an ounce, no change
Brent crude: US$75.18 per barrel, up 0.6%
Proactive news headlines
Premier African Minerals Ltd (LON:PREM) has agreed to let Cadence Minerals Plc (LON:KDNC) have a little more time to carry out its due diligence on the Zulu lithium and tantalum project in Zimbabwe.
KEFI Minerals plc (LON:KEFI) has signed a detailed heads of agreement with a syndicate of Ethiopian investors for an investment in its Tulu Kapi gold project in the country.
The crushing circuit at BlueRock Diamonds PLC’s (LON:BRD) Kareevlei diamond mine is now processing at or above the company’s target level following repairs to the cone crusher.
Cadence Minerals Plc (LON:KDNC) has been granted more time to carry out its due diligence on the Zulu lithium and tantalum project in Zimbabwe.
Caledonia Mining Corp PLC (LON:CMCL) has entered into a memorandum of understanding with Fremiro Investments (Private) Limited to buy a 15% stake in the Blanket mine in Zimbabwe for US$16.6mln.
Alba Mineral Resources plc (LON:ALBA) has completed the acquisition of a further 41% stake in Gold Mines of Wales, bringing its total holding in the project to 90%. The company also reported good progress across its projects for the first half.
Vast Resources PLC (LON:VAST) has revealed drilling results from the recently added Blueberry project where initial drilling has confirmed gold and silver mineralization at or near surface, with higher grades found in deeper zones.
City Headlines:
The Daily Telegraph: The Competition and Markets Authority is formally investigating the proposed £12 billion merger between Asda and Sainsbury’s to create a supermarket giant.
Financial Times: Saudi Arabia's sovereign wealth fund will seek $11 billion from international banks to fill the hole left by the delayed listing of state energy group Saudi Aramco.
The Times: Executives at Britain’s largest accounting firms are holding last-minute talks to try to agree proposals to reform the industry and halt a review by the competition regulator.