FTSE 100 closes 1.87 points lower
US stocks higher
ITV falls on Endemol concerns
FTSE 100 closed in the red, but only marginally, on Tuesday as US stocks headed higher and the pound was little moved.
The UK index of leading shares finished down 1.87 at 7,300, but its mid-cap cousin, the FTSE 250 added over 83 points at 20,458.
The UK pound is off 0.14% against the US dollar, and flat against the Euro.
It came as commentators said that the latest round of US on China tariffs had already been really priced into the markets.
The US put duties on US$200bn of Chinese imports on Monday. Beijing responded with new tariffs on US$60bn of American goods.
David Madden, at CMC Markets, said: "Equity markets in Europe got off to as positive start as the US’s tariffs on China’s imports weren’t as tough as originally predicted.
"The Trump administration revealed US$200bn worth of tariffs on Chinese imports, and the levy was set at 10%, and that will rise to 25% in January if the trade dispute is still ongoing."
Madden noted that there were moves higher today in copper, palladium and platinum, lifting the big mining stocks like Glencore (LON:GLEN), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO).
Glencore was top gainer on Footsie, up 2.78% to 308.70p. NMC Health was the top laggard, off 3.10% to 3,436p.
3.05pm: Footsie steps back as ITV drops
The FTSE 100 edged back in afternoon trade as a drop in ITV plc (LON:ITV) shares weighed, but mining stocks enjoyed gains as the sector, along with Wall Street, worked to set aside concerns about the US-China trade discord.
The benchmark shed 6 points to 7,296, pulling back from an intraday high of 7,320.07. Stocks on Wall Street opened modestly higher in the wake of the Trump administration’s decision to add more tariffs on Chinese imports. The Dow Jones Industrial Average gained 81 points to 26,143, the S&P 500 picked up 0.3% and the Nasdaq Composite Index bulked up 0.6%.
Lukman Otunuga, research analyst at FXTM, said: "Financial markets offered a fairly muted response to the announcement as the tariffs were already heavily priced into markets. Investors are instead likely to remain guarded and adopt a “wait and see” approach ahead of China’s possible retaliation to the latest round of U.S. tariffs.”
Beijing has said it's planning to impose levies on more than 5,000 US products.
The FTSE 100 was hurt in part by ITV shares, which fell 3.5% to 152p as investors appeared to turn sour on the broadcaster’s bid to acquire TV production company Endemol Shine.
But mining stocks remained in recovery mode after coming under pressure Monday ahead of the anticipated tariff announcement by the US. Glencore PLC (LON:GLEN) topped gainers by rising 2.5% to 308p, and Antofagasta PLC (LON:ANTO) moved higher by 1.2% to 786p.
2.15pm: Crypocurrency cold-shouldered
Bitcoin prices continued to remain pressure on Tuesday, falling further below the US$6,500 level as the outlook for the cryptocurrency worsened after a drop to five-day lows on Monday.
Jordan Hiscott, chief trader at ayondo markets commented: “The interest in Bitcoin has waned significantly. This comes dually from lower prices and general sentiment surrounding crypto as a whole.”
He said: “Firstly, as prices have not rebounded higher from $6,000, certainly as some had hoped, its feels as if a ‘malaise’ is now engulfing the asset, possibly only in the short term though.
“In addition, even the speculation traders, that profit on an intraday basis for the various moves up and down, have seen a huge change in trading patterns and behaviour as the double digit percentage movements are now few and far between. Even recently, a move of 1% is rare.”
The trader added: “Earlier in the year I warned that if there was a breach of the $5,800 level to the downside in Bitcoin, I would expect severe weakening of the price, not just specifically to Bitcoin but to the whole crypto space.
“It might not be as far as $3,000, but could touch $4,200, which I regard as the next level of support should $5,800 level be breached. It’s important to note that this hasn’t materialised yet, so until this happens it’s not out of the question that prices could revert higher.”
12:15pm: FTSE 100 creeps higher
The FTSE 100 swung into positive territory early afternoon, with indications that Wall Street will open higher despite the Trump administration’s decision to impose more tariffs on Chinese goods.
The UK blue-chip index picked up 11 points at 7,313, rising from an intraday low of 7,281.98. Futures for the Dow Jones Industrial Average pointed higher after the Dow closed down nearly 100 points on Monday. Futures for the S&P 500 and the NASDAQ indexes gained as well.
Russ Mould, investment director at AJ Bell, said: “An escalating trade war between the US and China may have provided an unhelpful backdrop to global markets yet parts of Asia have shrugged off the latest events with leading indices in China, Hong Kong and Japan rebounding on Tuesday.
Mould added: “Interestingly, miners had a rare day of not being hit by trade war gloom with Glencore, Antofagasta and Rio Tinto among the big metal bashers heading upwards on the stock market amid talk that Beijing will increase infrastructure investment.”
Mining stocks were under pressure Monday, but recovered ground on Tuesday. Glencore PLC (LON:GLEN) moved up 2.5% to 307p, Antofagasta PLC (LON:ANTO) tacked on 1.4% at 787p, and Rio Tinto PLC (LON:RIO) advanced 1.3% to 3,651p. Fresnillo PLC (LON: FRES) rose 2.2% to 805p after RBC reportedly raised the copper miner to a ‘top pick’ rating.
10:00: New US tariffs bites bigger share of world trade
The Trump administration’s latest round of US tariffs of goods from China is affecting 2.5% of global trade, a jump of more than one percentage point, according to figures from ING.
“Although this percentage may seem small, the tariffs will disrupt Sino-American supply chains, and may, therefore, triple the effects on world trade,” said Timme Spakman, an ING economist, in a note.
The rate of trade affected by US-imposed levies worldwide had stood at about 1% before US President Trump on Monday said the government will impose a 10% tariff on another US$200bn worth of Chinese goods.
The White House says it may hit China with more tariffs if Beijing continues to retailiate. If the US acts further, that could affect 4% of world trade, said ING.
Spakman added: “Given that, China's ministry of commerce has already pledged it will 'guard its interests' and has announced retaliatory tariffs earlier in the year, we don't expect a deal anytime soon and instead expect further elevation in 2019.”
The FTSE 100 index was down 1 point at 7,302.05, off session lows.
8.45am: Weak start as expected
The FTSE 100 drifted 11 points lower to 7,291.43 after the US moved to slap a US$200bn levy on Chinese imports with the threat of a 25% hike to that figure in January.
Any retaliatory action will be met with an additional US$267bn of trade tariffs, the White House has warned.
Wall Street took a hit with the tech giants, which rely on the People’s Republic for cheap components, leading the retreat.
On the market here in the UK, Ocado (LON:OCDO) led the Footsie, gaining 3.5% in early trade after its latest trading statement recorded an 11.5% increase in sales.
Also on the up was British Gas owner Centrica (LON:CNA) after Goldman Sachs upgraded the stock to a ‘buy’. The shares rose 2.7%.
Down 2% and topping the losers’ list was ITV (LON:ITV) following a report over the weekend it is in the running to acquire Peaky Blinders creator Endemol Shine. Deutsche Bank, in a note issued Tuesday, said the Endemol valuation being touted looked “challenging”.
The big deal in the second-tier was a £4.3bn bid for insurer Jardine Lloyd Thompson (LON:JLT), which set the share soaring 31%. The would-be buyer is the American giant Marsh and McLennan.
Finally, interim results from Spire Health (LON:SPI) failed to inspire as the shares receded 9% as the company talked of “headwinds” affecting the industry and it recalibrated full-year guidance.
Proactive news headlines:
Poland is one of the last large high growth takeaway markets left in Europe, according to Peter Shaw, chief executive of DP Poland Plc (LON:DPP), which operates the Domino’s Pizza master Franchise in the country. His comment was borne out by first-half results, which mark some significant progress in the six months ended June 30 – both operationally and financially.
Renowned Hollywood sound designer, Scott Gershin and his Sound Lab team, have joined Keywords Studios PLC (LON:KWS), the technical services provider, from Technicolor. The acquisition announcements accompanied the group’s half-year results that largely rubber-stamped last month’s first-half trading update.
Online payments specialist Bango plc (LON:BGO) saw another surge in payments through its platform over the past six months. Giants in the space Amazon, Microsoft, Google and Samsung use the Bango platform to collect payments and through these and other customers end user spend climbed to £220mln.
VR Education Holdings Plc (LON:VRE) said its "1943: Berlin Blitz" experience, made in collaboration with the BBC, was nominated for best Linear Virtual Reality experience at the Venice Film Festival in September, while also reporting a 30% increase in revenue in its first set of half year results since listing on AIM in March.
Digital marketing services company Be Heard Group PLC (LON:BHRD) has posted a sharp rise in half-year revenues, boosted by new contract wins with some of the UK’s biggest businesses.
Haydale Graphene Industries PLC (LON:HAYD) has been chosen to help develop high performance kit for British athletes training for the 2020 Olympic Games. The English Institute of Sport will use Haydale and its long-term partner the Welsh Centre for Printing and Coating at Swansea University to incorporate graphene coatings into a range of clothing for elite performers.
Mark Scanlon is to step down as the chief executive officer of Personal Group Holdings plc (LON:PGH), the employee benefits and insurance specialist, after nearly seven years in the role.
G3 Exploration Ltd (LON:G3E) highlighted a period of “continued operational progress” as it released its interim results statement, for the six months ended June 30. Operationally, the G3 Exploration company highlighted that it completed its exploration programme for the Guizhou Block and said that the next phase is currently being discussed with PetroChina.
United Oil & Gas Plc (LON:UOG) has raised £3mln of new capital to fund the pursuit of new projects. The funds were raised through an oversubscribed share placing, selling 54.5mln new shares priced at 5.5p (plus share warrants which are exercisable at 8p).
Union Jack Oil PLC (LON:UOG) chairman David Bramhill highlighted a period of portfolio expansion as the UK onshore oiler released its half yearly results statement. Two transactions topped up UJO’s interests in the Wressle and Biscathorpe projects, meanwhile, a new partnership agreement with Humber Oil & Gas was reached, to support growth through new opportunities.
Eland Oil & Gas PLC’s (LON:ELA) latest well update brings positive news from the Opuama and Ubima fields, where new wells are being tested. The Opuama-10 well, based on most recent test results, is now expected to achieve a stabilised production rate above 5,500 barrels of oil per day, which would take overall field output beyond 29,000 bopd.
Anglo Asian Mining Plc (LON:AAZ) has boosted reserves and resources at the Gedabek open pit in Western Azerbaijan. The total gold and copper resource amounts to 985,697 ounces of gold, 63,375 tonnes of copper and 8,171,626 ounces of silver.
W Resources PLC (LON:WRES) has hit high-grade and wide intersections from recent reverse circulation drilling at its Régua mine development in northern Portugal. The reverse circulation assays are significantly higher than expected, including 29 metres 0.75% WO3 from 48 metres on the north-western flank.
The highlights of the first half of the fiscal year for NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQMLF) undoubtedly centre around the Hellyer mine in Tasmania. During the period to June 30 the company continued the refurbishment of the Hellyer floatation plant on time and on budget in anticipation of the restart of production.
i3 Energy PLC (LON:I3E) remains confident that it will receive development and production consent from UK regulators for its Liberator and Liberator West blocks in the UK North Sea next year. The explorer thinks the approval process will be unaffected by a delay in concluding negotiations with a potential farm-in partner.
Kibo Energy PLC (LON:KIBO) thinks a recent announcement by the Tanzania Electricity Supply Company (TANESCO) could bode well for its ambitions in the east African country. The AIM-quoted company owns a thermal coal deposit near Mbeya in southern Tanzania, where it is also developing a 250-350 megawatt mouth-of-mine thermal power station called the Mbeya Coal to Power project (MCPP).
Tharisa plc (LON:THS) has restructured its proposed acquisition of the Salene chrome project in Zimbabwe. Rather than buying 90% of the project outright as initially intended, Tharisa will instead take an option to acquire 90% depending on the outcomes of a US$3.2mln exploration programme, which it will fund.
Flying Brands Limited (LON:FBDU), the medical services and software company, said it is convening an Extraordinary General Meeting to consider a resolution to change the name of the company to IQ-AI Limited. Trevor Brown CEO, commented "The new name, IQ-AI is the acronym for Imaging Quantification- Artificial Intelligence, which powerfully acknowledges the strategic focus of our group businesses in coming years. "
Metminco Limited (LON:MNC) (ASX:MNC) advised that it is still not yet in position to make an announcement regarding a proposed capital raising and acquisition. It added that the voluntary suspension will end on the earlier of the commencement of trading on the ASX on Wednesday 19 September 2018, or when the anticipated announcement referred to above is released to the market. The company’s shares on AIM remain temporarily suspended.
6.45am: Trade worries to hit sentiment
The FTSE 100 index is expected to drop back on Tuesday following overnight falls by US stocks and commodity prices amid continuing trade war friction, with US President Trump imposing a 10% tariff on another US$200bn worth of goods from China.
Spread betting firm IG expects the bluechip index to open around 36 points lower at 7,263, having shed 1.94 points in topsy-turvy trading on Monday.
Overnight on Wall Street, the Dow Jones Industrial Average closed 92 points lower at 26,062 led by a tumble from tech stocks amid speculation over the further trade tariffs, which were announced after New York’s close.
In Asia today, however, stocks were fairly sanguine as they awaited any retaliation from China over Trump’s latest move, which was largely as expected, and as the US did offer further trade talks with the Asian powerhouse.
Chinese stocks turned fairly flat after initial falls, while Japan’s Nikkei 225 index rose 1.5%, having been closed for a public holiday on Monday, helped by a weaker yen which boosted exporters.
Elsewhere on currency markets, the pound remained fairly steady against both the dollar and the euro after recent gains as traders awaited Wednesday’s UK inflation data for fresh direction.
Ocado progress eyed
On the corporate front, Ocado Group PLC (LON:OCDO) will be the main focus with the recently promoted FTSE 100 company having been busy building what it believes is the largest robotic warehouse for online grocery retail in the world.
The costs of that, coupled with the severe weather earlier in the year, meant the company swung to a loss of £9mln in the first half of the year.
In today’s third-quarter trading update, investors will be looking to see if Ocado still expects underlying earnings to improve significantly, as it forecast back in July. Costs will be in focus, too.
On top of its traditional grocery delivery service, Ocado is also in the business of helping other retailers with their distribution networks.
Shares surged at the start of summer when it signed a deal with US supermarket giant Kroger, so any further details of that contract win will also be keenly eyed.
Short but sweet from Northgate
Elsewhere, vehicle hire firm Northgate PLC (LON:NTG) will issue a first-quarter update ahead of its annual general meeting today.
Analysts at Peel Hunt expect a relatively short statement, which will confirm trading is in line, detail regional Vehicle on Hire (VoH) metrics, and provide brief a trading/margin commentary.
The analysts noted that Northgate’s full-year guidance is for average VoH in the UK & Ireland to be ‘high single-digit', with the rental margin 'broadly flat'.
Meanwhile, Spire Healthcare PLC (LON:SPI) has been one of the summer’s biggest movers, falling 22% on the day of a profit warning on 6 August and the stock now trades at an all-time low since its IPO.
In the trading update, the FTSE 250-listed company changed its full-year 2018 guidance from flat underlying earnings (EBITDA) year-on-year to now expecting it to be “materially lower than for 2017”. Tuesday’s first-half results are therefore likely to make for glum reading, with NHS revenues forecast to decline by 9.5% for the period.
Significant events expected on Tuesday September 18:
Trading updates: Ocado Group PLC (LON:OCDO), Northgate PLC (LON:NTG)
Finals: AEW UK Long Lease REIT PLC (LON:AEWL), Eagle Eye Solutions PLC (LON:EYE), GRC International Group PLC (LON:GRC), Green REIT PLC (LON:GRN), Haydale Graphene Industries PLC(LON:HAYD), Purecircle Limited (LON:PURE), Springfield Properties PLC (LON:SPR)
Interims: Augean PLC (LON:AUG), Bango plc (LON:BNG), Be Heard Group PLC (LON:BHRD), Cloudcall PLC (LON:CALL), DP Poland Plc (LON:DPP), Faroe Petroleum plc (LON:FPM), Frontier Smart Technologies Group Limited (LON:FST), Hydrogen Group PLC (LON:HYDG), Judges Scientific PLC(LON:JDG), JTC PLC (LON:JTC), Keyword Studios PLC (LON:KWS), NAHL Group plc (LON:NAH), Personal Group Holdings plc (LON:PGH), Smart Metering Systems PLC (LON:SMS), VR Education Holdings Plc(LON:VRE)
Economic data: US housing market index
Around the markets:
- Sterling: US$1.3158, up 0.02%
- Gold US$1,199.70 an ounce, unchanged
- Brent crude: US$68.65 a barrel, down 0.4%
City Headlines:
- Donald Trump moved to slap a 10% tariff on about US$200bn worth of Chinese imports beginning next week – Financial Times
- Michel Barnier, the European Union’s chief negotiator, is expected to insist on cast iron guarantees that Britain will not attempt to reopen the terms of any Brexit deal after it has been signed – The Times
- The new chief executive of Boohoo, John Lyttle, who was poached from Primark, is in line for a £50 million bonus if shares in the online fashion retailer rise by 180% over the next five years – The Times
- The former chairman and chief executive of Lloyds, Win Bischoff and Eric Daniels, face a grilling by investigators over claims they covered up a massive fraud – Daily Mail
- Douglas Flint, former chairman of HSBC, has been appointed chairman of IP Group, the FTSE 250 technology commercialisation company – The Times
- Coca Cola said it was “closely watching” the cannabis drinks sector as the group looks to offset slowing consumption of its core range of soft drinks – Financial Times
- Falling demand for diesel motors has forced Jaguar Land Rover, Britain’s largest carmaker, to resorting to a three-day working week at one of its factories – Financial Times
- High street fashion retailer H&M reported a better-than-expected rise in sales in the third quarter as its efforts to compete with online rivals began to pay off – Daily Mail
- Altaba, a holding company made up of the parts of Yahoo not bought in Verizon's acquisition of the internet company, said it had agreed to settle claims following a 2013 data breach – Daily Telegraph
- Shares in Russian aluminium producer Rusal jumped as much as 17% on Monday after the US Treasury said it would allow the company to negotiate some new contracts raising hopes for a reprieve from sanctions – Financial Times