FTSE 100 closes lower
US stocks lower
US tech shares down
FTSE 100 recouped some losses but closed down nearly two points at 7,302 at Monday's close as trade worries continued to weigh.
US stocks were also under pressure and the Nasdaq is down over 63 points at the time of writing, while the Dow Jones Industrial Average is off over 19.
"A sell-off in US tech names is providing the entertainment this afternoon on what is otherwise a mostly uneventful day," said Chris Beauchamp, analyst at spread better IG Index.
For example, Apple (NASDAQ:AAPL) shares lost 1.89%, while Amazon (NASDAQ:AMZN) lost 2.57% to US$1,919.64.
"Equities have struggled all day to make gains and the tentative bounce for Wall Street has fizzled out rapidly. Talk of fresh tariffs continues to be the driving force behind the declines, with the announcement of fresh tariffs seemingly designed to prompt a modest bout of losses."
The pound rose 0.69% against the US dollar and is up 0.11% against the Euro.
Top riser on Footsie was utility SSE (LON:SSE), up 3.55% to 1,122.50p, while top laggard was GVC Holdings (LON:GVC), which dropped 3.49% to 995p.
It came despite revenue rising in the online and European retail segments in the latest half year as it identified further cost savings from its Ladbrokes Coral acquisition.
3:00pm: Footsie pares losses
The FTSE 100 index pared losses in late afternoon dealings as Wall Street’s opening declines proved less than feared, although trade tensions between the US and China continue to sap interest.
The UK blue-chip index slipped 1.5 points to 7,302, after earlier hitting an intraday low of 7,267.83.
US stocks fell as trading started for the week. The Dow Jones Industrial Average pulled back 0.2% to 26,111 and the S&P 500 was off 0.2% at 2,900. The tech-laden NASDAQ fared worse, losing 0.7% to 7,950.
Apple Inc. (NASDAQ:AAPL) slumped 1.5% to US$220.50, weighed by concerns the tech behemoth could be hurt by a trade war between the US and China as the US eyed another US$200bn in tariffs for Chinese imports. Imports could be hit with a tariff rate of 10%.
Michael Hewson, chief market analyst at CMC Markets UK, said: “While the headline number of 10% is lower than the originally feared 25%, the news has still come as a surprise given last week’s reports that talks were set to restart.
“It certainly doesn’t bode well for a speedy consensus and in a sense could be construed as bad faith on the part of the US, in terms of creating an environment that isn’t really conducive to a positive outcome for any upcoming talks.”
1:30pm: Miners continue pull back on China worries
Large-cap mining stocks remained lower in afternoon action in London following a report the US is set to slap tariffs on another US$200bn worth of Chinese imports.
The FTSE 100 shed 0.2% to 7,289.78 before Wall Street’s open. Futures for US equities turned lower, indicating the Dow Jones Industrial Average may fall 37 points and the S&P 500 could decline 4 points when trading gets underway.
Russ Mould, investment director at AJ Bell, said: The UK “mining sector’s rally last week has proved to be short lived with Glencore, Antofagasta and Anglo American among the weakest FTSE 100 stocks on Monday. The only real bright spots on the UK market were utilities and telecoms.”
But some UK small-cap miners fared better. Among them, AIM-listed Anglo Asian Mining Plc (LON:AAZ) climbed 12% to 51p as the company said recent exploration work at its currently producing Gedabek open pit gold mine has confirmed the existence of further mineable ores.
Elsewhere for AIM stocks, Hornby Plc (LON:HRN) shares jumped 27% to 40p in early afternoon trade, with the AIM-listed toy train maker saying it reached a licensing agreement with Warner Bros. Consumer Products.
Meanwhile, Faron Pharmaceuticals Ltd (LON:FARN) picked up 2.5% to 101p as the biotech said it’s filed a clinical trial application for Clevegen, its precision cancer immunotherapy.
12:00pm: IMF flags risks of no-deal on Brexit
The International Monetary Fund said UK economic growth should moderate at a rate of 1.5% this year and in 2019 assuming the UK and the European Union can reach a broad trade agreement for goods and some services as the UK prepares to leave the bloc in March 2019.
But a “more disruptive departure from the EU could lead to a significantly worse outcome, especially if it were to occur without an implementation period,” the IMF said in a statement.
The UK and the EU also need to clarify their future economic relationship and Ireland’s land-border status, it said.
Meanwhile, the British Chambers of Commerce downgraded its UK growth outlook, saying Brexit uncertainty is hurting trade and investment. The group now foresees growth of 1.1% in 2018, down from its previous forecast of 1.3%.
Joshua Mahony, market analyst at IG, said: “News of a growth downgrade from the BCC should come as no surprise for many, with the UK economic picture looking increasingly murky. However, what is interesting is that we are now seeing outlooks dictated not only by the impact of a normal Brexit, but instead many are becoming aware that a no-deal Brexit is growing increasingly and expectations are reflecting that.”
The FTSE 100 decreased by 0.2% to 7,289.94 as the IMF’s warning added to concerns over the US-China trade dispute.
10:15am: UK households in most confident mood in three years
UK households registered the strongest outlook over their financial situation in three years, despite uncertainty over Brexit and sustained inflationary pressures, according to data firm IHS Markit.
The company’s Household Finance Index came in at 45.9 in September, the best level since a record high of 46.2 was logged in January 2015, driven by an increase in income from employment.
As well, inflation expectations declined to a 21-month low in September despite the perception among households that living costs have risen markedly.
Rebecca O’Keeffe, head of investment at Interactive Investor, said: “Despite Brexit, unemployment is at the lowest level since 1975, job vacancies are at record highs, and as a result consumer confidence is climbing steadily as wage gains have outpaced inflation for the past four months.”
IHS’s survey also showed the second-lowest level of pessimism in households about their future futures since the UK voted to leave the European Union in June 2016.
But there’s still concern over the outlook for consumer spending, IHS noted, as the degree of uncertainty towards job security edged up to a seven-month high.
With an eye toward the Bank of England, close to three-quarters of households expect another interest rate hike within the next year.
Even though the survey was upbeat, the FTSE 100 was still in the red, down by 3 points at 7,301 at 10:15am.
8:30am: FTSE drops on US-China trade worries
The FTSE 100 declined in early-morning moves, with mining stocks under pressure from concerns about continued friction between the US and China on trade matters.
The benchmark fell 18 points, or 0.2%, to 7,286.28. The decline comes as US President Donald Trump is set to impose another US$200bn in tariffs on goods imported from China, according to a Wall Street Journal report.
As well, it appears Chinese officials may decline an invitation to Washington to work out a trade pact.
Naeem Aslam, chief market analyst at Think Markets UK, said: “There was some hope last week that the White House may be able to resolve this matter with Beijing in a more peaceful fashion. So far, the Chinese government has declined to resume the trade talks because Trump is telling his aid to prepare for the next round of trade tariffs.”
Among the FTSE 100’s biggest losers were shares of miners, including Glencore PLC (LON:GLEN), Antofagasta (LON:ANTO) and American Anglo PLC (LON:AAL). Mining shares can be swayed by developments in China, which is a major buyer precious and industrial metals, such as copper.
But defensive stocks fared better, topped by utility companies SSE plc (LON:SSE) and British Gas owner Centrica PLC (LON:CNA), and by British American Tobacco plc (LON: BATS).
Proactive news headlines:
Recent exploration work undertaken by Anglo Asian Mining Plc (LON:AAZ) at the currently producing Gedabek open pit gold mine has confirmed the existence of further mineable ores. Accordingly, an updated resource and reserve estimate will be published by the end of September 2018.
Kaptungs, a sUBStantial shareholder of Mirada Plc (LON:MIRA), is pumping £3mln into the over-the-top TV software specialist by sUBScribing for 3mln shares at 1p each - a sUBStantial premium to Friday's closing price of 0.68p.
Mosman Oil And Gas Limited (LON:MSMN) has been informed that its 16.5% owned Stanley-1 well is now flowing gas and liquid hydrocarbons to sale. Baja Oil and Gas LLC, Mosman’s partner, advised that the well’s production rate is temporarily constrained by existing surface equipment limitations.
Sirius Minerals PLC (LON:SXX) has inked its latest supply deal, arranging to sell up to 2.5mln tonnes of POLY4 to Brazilian fertiliser distribution firm The Cibra Group. As a result the group’s contracted peak take-or-pay sales volume now rises to 8.2mln tonnes.
Faron Pharmaceuticals Ltd (LON:FARN) said it has filed a clinical trial application for Clevegen, its precision cancer immunotherapy. It paves the way for a phase I/II study, called MATINS, that will assess the investigate safety and efficacy of the drug candidate.
Red Rock Resources Plc (LON:RRR) has netted approximately £508,000 in dividends from Jupiter Mines (ASX:JMS), payable from income from the Tshipi manganese mine in South Africa. The dividend amounts to A$0.05 per share and puts Jupiter on a 14.5% yield for the first half of fiscal 2019.
Cadence Minerals Plc (LON:KDNC) has opted not to press ahead with its planned investment in Premier African Minerals Ltd’s (LON:PREM) Zulu lithium project. At the end of June, the two parties agreed in principle for Cadence to take up to a 30% stake in Zulu Lithium Mauritius Limited (Mauco), a wholly-owned sUBSidiary of Premier African, for up to US$5.1mln.
BigDish Plc (LON:DISH) has launched the beta UK version of its yield management platform in Bath and is targeting up to 6,000 restaurants across England, Scotland and Wales by the end of 2019.
Background check specialist Clearstar Inc (LON:CLSU) posted an underlying profit on higher demand for medical screening services such as clinical testing and occupational health services.
Tekcapital PLC (LON:TEK) said its portfolio company, medical treatment developer Belluscura PLC, has widened its portfolio with several new patent filings in patient recovery.
Frontier IP Group Plc (LON:FIPP) has recruited Matthew White, the former head of innovation at AB Sugar, as its director of commercialisation.
The latest exploration work undertaken by Ariana Resources plc (LON:AAU) in Turkey has revealed significant potential for the expansion of the Ivrindi gold project. Ivrindi is 100%-owned by Ariana, and is held separately from the Kiziltepe joint venture, which is already in production.
Greatland Gold plc (LON:GGP) has commenced a second drilling campaign at the Havieron project in the Paterson region of Western Australia. Greatland's first drilling campaign at Havieron, carried out in April-May 2018, yielded excellent results, which included 121 metres at 2.93 grams per tonne gold and 0.23% copper.
Tlou Energy Ltd (LON:TLOU) has updated on its operations at the Lesedi coal bed methane project, where it is gearing up for a well in October. The company, in a statement, confirmed that the well locations have been agreed, scouted and inspected.
Tower Resources PLC (LON:TRP) told investors that it had been informed that it will be granted a one year extension for the Thali licence, offshore Cameroon, so long as a rig contract is entered into within the next three month.
Metminco Limited (LON:MNC) (ASX:MNC) advised that, further to its announcement of 13 September, it is not yet in position to make an announcement regarding a proposed capital raising and acquisition, so consequently its shares remain temporarily suspended on AIM and the ASX.
W Resources PLC (LON:WRES), the tungsten, copper and gold mining company with assets in Spain and Portugal, announced the appointment of Pablo Neira and James Argalas as non-executive directors of the company with immediate effect.
APQ Global Limited (LON:APQ), the Guernsey-based emerging markets growth company announced that, as at the close of business on 31 August 2018, its unaudited book value per ordinary share was US$101.58, equivalent to £78.15.
6:30am: FTSE 100 set to start in the red on trade concerns
The FTSE 100 looks set to open its weekly account down 15 points at 7,319.04 with trade concerns once again guiding sentiment.
Mixed messages from the White House appear to have both the Chinese and world equity markets hopping from foot to foot.
While there had been signs that talks between the two sides might restart, the positivity was quickly snubbed out when it emerged that President Trump had instructed aides to proceed with further trade tariffs against the People’s Republic.
Now it appears the Chinese may decline an invitation to Washington to hammer out a trade pact.
Back here in the UK, the week’s scheduled trading includes updates from fast expanding online retailer Ocado (LON:OCDO), B&Q owner Kingfisher (LON:DGE) and drinks maker Diageo (LON:DGE).
On Tuesday we’ll get the latest inflation number which will help the Bank of England’s Monetary Policy Committee form a view on interest rates.
Around the markets:
- Pound worth US$1.3083
- Gold down US$1.20 an ounce at US$1,199.90
- Brent crude changing hands for 77.99 a barrel, down 10 cents
City Headlines:
- Financial Times
- Vodafone’s new CEO says he may consider mast sale in order to cut telco’s £31bn debt pile
- Aviva set to fight Unilever plans to relocate headquarters from London ahead of Brexit
- Deutsche Bank to shift more assets from London
- Salesforce co-founder, Marc Benioff, to buy Time magazine for US$190mln
- Times
- Growth to slow to a snail’s pace, British Chambers of Commerce warns
- Mike Ashley to become luxury property developer as he plans Chelsea project
- Daily Telegraph
- Bank of England warns there is a 31% chance of a Corbyn government
- The next recession will be longer and deeper than the last, a group of US economic experts warn
- Time is running out for BAE Systems to confirm a long-awaited deal to sell Typhoon fighters to Qatar
- Guardian
- Kweku Adoboli, the former UBS banker jailed for the UK’s biggest ever fraud, will on Monday file for a judicial review of the decision to deport him to Ghana
- Robots in workplace 'could create double the jobs they destroy', according to the World Economic Forum
- The stationery chain Paperchase has come under mounting pressure after one of its main credit insurers reduced cover after a slump in profits