FTSE 100 closes down 13
US stocks open lower
Ashtead Group top loser on Footsie
FTSE 100 closed around 13 points lower on Monday as UK politics and Brexit continued to trouble investors.
The UK's blue-chip benchmark finished around 13 points off at 7,000, while FTSE 250 closed out 49 points lower at 18,540.
It comes as UK Prime Minister Theresa May continues to try and sell her draft Brexit plan.
Fiona Cincotta, at CMC Markets, said: "Brexit headlines continued to fuel volatility in the pound on Monday as traders watched and waited.
"May was attempting to drum up backing for the Brexit deal, this time from business leaders, whilst dissenters from her party attempted to draw together enough support for a leadership challenge. With insufficient letters submitted so far for a vote of no confidence, Theresa May is still clinging onto power."
Governor of the Bank of England Mark Carney will appear before Parliament's Treasury Select Committee tomorrow and could provide a welcomed distraction, suggested the analyst.
Top loser on Footsie was Ashtead Group PLC (LON:AHT), which shed 4.26% to stand at 1,798p.
2.35pm: FTSE 100 advances
US stocks, opened on the back foot, confounding expectations of a firm start.
The Footsie reacted by taking a step back, trading at 7,040, up 26 points on the day.
The Dow Jones shed 47 points at 25,366 and the S&P 500 was down 6.6 at 2,728.
Blue-chip news-flow remains sparse – not for London, the excitement of Japanese car-maker Nissan revealing it plans to remove its chairman, Carlos Ghosn, who also happens to be the head honcho at French outfit Renault.
READ Nissan chairman Ghosn to be ousted for "serious misconduct", could face arrest
Mid-caps provide a bit more grist for the mill.
CYBG PLC (LON:CYBG) – which sounds like a New York punk-rock club but which is actually a bank – is bidding farewell to its chief operating officer, Debbie Crosbie.
The owner of the Virgin Money bank said Crosbie is resigning to become chief executive of TSB, the bank that likes to say “there’s a problem accessing your online banking account”.
CYBG was down 1.2% on the news.
Hikma Pharmaceuticals PLC (LON:HIK) was 1.5% lower at 1,713p after it said it had launched Triazolam tablets, the generic equivalent to Halcion, a treatment for insomnia.
1.05pm: Footsie accelerates on expectations of a firm opening on Wall Street
Ahead of what is expected to be a firmer opening on Wall Street, the FTSE 100 was trading close to its intra-day high.
The FTSE 100 was up 47 at 7,061, having reached as high as 7,7070 at one stage.
“US index futures may be poised to start the day with some modest gains, but upside is being kept firmly in check by the fact that there was no progress regarding Sino-US trade ties at the weekend’s APEC summit. This is pushing expectations towards an announcement being seen as part of the G20 meeting at the end of the month, but time is pressing here as a slowing Chinese economy and weakening currency is risking a series of corporate defaults for some of those companies servicing US dollar-denominated debt. Again, any flight for quality in the bond market would have the residual effect of pushing US treasury yields higher and again giving cause to sell down stocks,” said James Hughes at Axi Trader.
Connor Campbell at Spreadex said that sterling was under pressure again on foreign exchange markets “as Theresa May appeared to rule out extending the Brexit transition period to the end of 2022 in a Q&A at the CBI conference”.
“This meant that against the dollar it saw its gains completely erased, slipping 0.1% having at one point grazed $1.289 with a 0.4% increase; against the euro, meanwhile, it dropped 0.3%, tumbling back towards €1.121,” he reported.
Bit of a love-in here at #CBI2018 in London. Audience loving PM’s defiant attitude. She is avoiding some of the more pressing questions about her position though. ‘How many ministers can you afford to lose before your position becomes untenable?’ asks one.
— Tom Howard (@proactivetom) November 19, 2018
On the equity market, utility Centrica PLC (LON:CNA) was going against the flow, shedding 2.65p at 142.6p after Goldman Sachs trimmed its price target to 174p from 179p.
11.40am: May says extending the transition period is an option but not one she wants to exercise
The prime minister, Theresa May, has been fielding questions at the CBI Conference and thus far has not said anything to fright the horses.
The FTSE 100 continued to trade sideways, up 22 at 7,036, as May mercifully refrained from reprising her Abba dance routine at the CBI conference – although she might have been humming “The Winner Takes It All” to herself.
Something pretty strange about sitting listening to Theresa May at CBI ‘getting on with the job’ when she doesn’t know and no one else does either, whether she’s about to face a vote of no confidence at the hands of her own side
— Laura Kuenssberg (@bbclaurak) November 19, 2018
House-builders were defying the trend, with the likes of Barratt Developments PLC (LON:BDEV) down 1.4% and Persimmon PLC (LON:PSN) off 0.6%, as further evidence emerged of the UK’s housing market cooling down.
“According to Rightmove, average UK house prices fell by 0.2% in November on a yearly basis. It was the first year-on-year fall in seven years. On a monthly basis, average asking prices dipped by 1.7% - its biggest monthly drop since 2012,” reported David Madden, at CMC Markets.
Johnston Press PLC (LON:JPR) has called in the administrators, having failed to attract what it considered to be fair offers for its assets – or, at least, offers that would enable it to pay off the secured senior notes that are due for repayment next June.
The company had put itself up for sale and there had been “considerable interest” in the formal sale process but ultimately no decent offers came in and the board concluded that there is no value in the ordinary shares of the company.
READ Johnston Press bought by its bondholders after filing for bankruptcy protection on Friday
Shares in mid-cap property firm LondonMetric Property PLC (LON:LMP) advanced 2.5p to 186.3p after it announced the sale of its retail park in Martlesham Heath, Ipswich, for £22.0mln.
10.25am: FTSE 100 sees gains trimmed
The FTSE 100 remained in positive territory, following buoyant sessions in Asia this morning.
The blue-chip index was up 19 at 7,033, helped in part by the strength of mining stocks.
“The FTSE 100 is moving cautiously higher this morning, as further signs of a breakdown in relations between the US and China failed to fully dampen early trade in Europe,” reported Josh Mahony at IG Index.
“US-China relations remain just as icy as ever, despite recent hopes of an impending trade deal between the two sides,” Mahony continued.
“Unfortunately, there are precious few signs of a shift in tone from either side, and with issues such as IP [intellectual property] theft remaining a topic that seems to have no solution (due to Chinese rejection that it occurs), some issues seem destined to remain a roadblock to future progress,” Mahony predicted.
There is little macroeconomic data scheduled today to move markets and precious little in the way of company announcements from Footsie constituents, either, leaving the field clear for mid-caps to hog the spotlight.
The FTSE 250 was up 68, or 0.36%, at 18.657, with Diploma PLC (LON:DPLM) leading the way with a 5.6% rise.
“Many people following stock markets focus their attention on companies either trying to dominate the world, develop innovative new technology, or discover the next big miracle drug or large oil field.
“In doing so, they often miss less-glamorous companies which may actually be better investments over the long term. Diploma arguably fits the bill as a distributor of products that helps many industries do their day job,” said Russ Mould, the investment director of AJ Bell.
“It provides technical products like hydraulic seals for heavy industrial equipment, wiring and connectors for aerospace and rail industries, and clinical diagnostic kit for hospitals.
“That may sound boring, yet Diploma’s full-year results show yet another year of growth in revenue, pre-tax profit and dividends.
“It has delivered [a] 1,090% total return for shareholders over the past decade, which is the rise in its share price and all dividends reinvested. That is seven times greater than the 156% total return from the FTSE 100 index over the same period. As such, boring is certainly beautiful when it comes to Diploma,” Bell opined.
Babcock International PLC (LON:BAB) rose 0.8% to 588.8p after it provided clarification following a report by Sky News regarding exceptional items likely to be included in the group's half-year results announcement this week.
The group said the net cash costs relating to its exit from a number of low-margin activities will not be material.
8.40am: Positive start
The FTSE 100 defied early predictions of a dour start to the trading week to jump 30 points in the first half hour to 7,043.67.
Brexit worries were set to one side as traders waited to hear how Theresa May would position her blueprint when she speaks to the great and the good of British business later at the CBI annual conference.
At the same time, the momentum behind the ‘no confidence’ vote appears to be running out of steam, leaving the Prime Minister in a slightly stronger position but, in all likelihood, still unable to sell her EU exit plan to parliament.
easyJet (LON:EZJ) and Kingfisher (LON:KGF) were up 2.4% and 1.5% respectively ahead of updates later this week.
The relief for investors in the DIY chain is that the chief executive, according to weekend reports, looks more inclined to fund a B&Q spruce up with a sale and leaseback deal than tapping the market for the £125mln required.
On the broker front, the gruel was fairly thin with just one significant downgrade earlier with Investec moving to ‘hold’ from ‘buy’ on AstraZeneca. Shares in the drug giant were little changed.
After so much success onshore in Morocco, there was always likely to be pothole along the road for Sound Energy. PLC (LON:SOU). Yet the 36% markdown of the shares appears a little precipitous for one dud well.
Proactive news headlines:
Rockfire Resources PLC (LON:ROCK) saw its shares soar in early trading Monday after its intersected “bonanza” grade gold at its Double Event prospect in Queensland.
Active Energy Group PLC (LON:AEG) told investors on Monday that its Timberlands International subsidiary received government approval for two five-year commercial timber permits (CTP) in Newfoundland. The group will use waste wood from the permits to provide raw material for its biomass technology CoalSwitch.
Greatland Gold PLC (LON:GGP) has lauded exceptional laboratory assay results from the company's first drill hole (HAD005) of the current campaign at its 100%-owned Havieron licence in the Paterson region of Western Australia.
Haydale Graphene Industries PLC (LON:HAYD), the advanced materials group, has signed an exclusive licence agreement with TKS Siampress Management for its anti-counterfeit ink.
Kromek Group PLC (LON:KMK) has clinched a long-term supply agreement to customise its technologies for baggage screening systems.
Block Energy Plc (LON:BLOE) boss Paul Haywood has hailed the entry of oil major ExxonMobil to the Republic of Georgia as validating the country's “credentials as a secure and stable place to do business”. Exxon, the world’s largest non-state-owned oil company, joins the international drilling group Schlumberger in taking a serious interest in the potential hydrocarbon bounty of the former Soviet state.
Aspen Bridging, the bridging loan subsidiary set up by S & U PLC (LON:SUS) in 2017, is set for expansion in 2019, with a targeted 50% increase in the loan book to around £30mln.
Custodian REIT PLC (LON:CREI), the UK property investment company, has acquired the 43,000 sq ft Evesham Shopping Park.
Coinsilium Group Limited (AQSE:COIN) said its investee company, RSK Labs, is to be acquired by Gibraltar-based RIF Labs.
Sound Energy PLC (LON:SOU) said wireline log interpretation of the TE-9 well the Tendrara area of Morocco has not established the presence of producible gas, and hence the well will be plugged and abandoned, and not tested, with the firm to move directly on to the TE-10 surface location.
Highlands Natural Resources Plc (LON:HNR) has withdrawn all of the permit applications for its West Denver shale operation following objections by the local community. The oil and gas group said it appreciates the concerns and debate raised by its development plans and was taking the action to affirm its commitment to being a responsible and transparent operator within the state of Colorado. Big Pic in April.
Cradle Arc PLC (LON:CRA) shares ticked up in early trading Monday after it hailed a “vote of confidence” in its Mowana copper mine in Botswana following an extension to its working capital facility for the project.
MTI Wireless Edge Ltd. (LON:MWE) saw its shares jump on Monday as the radio frequency technology group reported strong nine month results which reflected the merger with MTI Computers and Software Services (1982) Ltd. completed on 20 August 2018.
Vast Resources PLC (LON:VAST) has commenced surface exploration drilling at the Magura Neagra and Piciorul Zimbrului prospecting licences, known collectively as Zagra, in northern Romania.
Oriole Resources PLC (LON:ORR) has started sample analysis and trenchwork at two projects in Cameroon. The junior signed options over Bibemi and Wapouzé earlier in the year.
Galantas Gold Corporation (LON:GAL)(CVE:GAL) is to issue between 64mln and 80mln new shares to raise a minimum of £3.2mln and a maximum of £4mln. The money raised will be used for working capital and to achieve full production at Galantas’s Omagh gold mine Ireland, where mining is already underway.
Amur Minerals Corporation (LON:AMC) has set out a strategic plan for the development of the Kun-Manie nickel-copper sulphide mineral project in the far east of Russia. The company will focus on engineering and taking the Kun-Manie project to bankable feasibility study level, on infrastructure, on the engagement of a strategic partner, and on a phased funding process.
NQ Minerals PLC (LON:NQMI) has signed a marketing and off-take agreement with Traxys, the global commodities trader. The deal comes a week after NQ Minerals shipped its first concentrate from the Hellyer mine in Tasmania to Traxys, and follows on from an earlier off-take deal signed in August.
Eland Oil & Gas PLC (LON:ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, said it intends to commence a share buyback programme for a maximum aggregate consideration of up to £3.0mln. The company said it believes that the current share price substantially undervalues its assets, the performance of the business to date, and its prospects. The group added that its robust balance sheet provides the opportunity to take advantage of prevailing market conditions to repurchase shares at advantageous levels.
Anglo African Oil & Gas plc (LON:AAOG,. the independent oil and gas developer, announced a partial drawdown of the conditional £5mln Convertible Loan Note Financing Facility with Sandabel Capital previously announced on 24 October 2018. The group said Sandabel has agreed to subscribe for £1,000,000 of unsecured loan notes under the terms of the Subscription Agreement. AAOG has elected not to redeem these loan notes in accordance with the repayment schedule and therefore Sandabel will receive conversion rights over the loan notes. The Initial Spot Price in relation to these notes is 10.3125p.
6.30am: FTSE 100 set to nudge 11 points lower
The FTSE 100 looks set to kick off the week in red with Brexit and international trade acting as a drag with index of blue-chip shares is forecast to fall 11 point to 7,002.88.
Prime Minister Theresa May, after a weekend defending her blueprint for the UK’s departure from the EU, will try to sell the plan to business when she addresses the Confederation of British Industry annual conference later Monday.
In the meantime, there is still the small matter of the PM’s own political future. “Having had the weekend to absorb the events at the end of last week, we appear to have no better idea as to whether the Prime Minister will face a leadership challenge than we did on Friday,” said Michael Hewson, analyst at CMC Markets.
“A satisfactory Brexit solution would appear further away than ever, and despite speculation that Graham Brady, head of the Conservative Party 1922 committee might well get the required 48 letters for a leadership challenge, we still seem no nearer to knowing whether the numbers are there than we did on Friday, which rather begs the question if they can’t get the numbers now, will they ever be able to do so.
“It also raises another point in that even if they were to get the numbers, would they be able to get enough votes to force her out. If Sir Graham Brady is to be believed in comments made at the weekend, he suggested that the Prime Minister would win any confidence vote, which may help explain why a number of Brexit supporting cabinet ministers, including Michael Gove decided to stay.
“Furthermore, none of the politics at the weekend changes the parliamentary arithmetic around the prospects of getting this deal past MP’s, which means we are quite likely to see further sterling volatility as the partisan politics of parliament continues to take centre stage, with calls for another election, or another referendum a continued refrain, as if either would somehow change the options in front of parliament.”
Overseas, the Asia-Pacific Economic Cooperation Meeting was anything but as it laid bare the continued trading tensions between the US and China. “The gathering failed to issue a joint communiqué for the first time in its 29-year history, damping hopes that a detente between Washington and Beijing could be in store at the G20 world leaders summit in Argentina later this month,” noted the Financial Times.
Away from trade and politics, it looks likely to be a reasonably busy week for scheduled company news with updates from British Gas owner Centrica (LON:CNA), DIY giant Kingfisher (LON:KGF), caterer Compass (LON:CPG) and the low cost airline, EasyJet (LON:EZJ).
Around the Markets:
- Pound worth US$1.2836
- Gold changing hands for US$1,219.80, down US$3.20 an ounce
- Brent crude price rises 57 cents a barrel to US$67.33
City Headlines:
- Financial Times
- Barnier proposes Brexit transition lasting to 2022 - prolonging free movement and EU payments would fuel Eurosceptic ire
- Brexit forces UK satellite maker to send work to EU - Surrey Satellite Technology forced to put mitigation measures in place for contracts
- Apple boss says tech industry regulation ‘inevitable’ - free market not working in protecting privacy, concedes Tim Cook
- LSE Group looks to shift debt trade to Italy in Brexit hedge - a fifth of €13bn-a-day sovereign bond business could leave London
- Times
- Activist investor Edward Bramson could for a seat on the Barclays board
- Almost 5,000 former workers at Johnston Press face cuts to their pensions in the wake of the collapse of the owner of The Scotsman, The Yorkshire Post and the i newspapers
- Interserve, one of the biggest suppliers of cleaning and catering services to government departments, schools and hospitals has failed to provide civil servants with details of how it would ensure continuity of service in the event of a Carillion-style collapse
- The American activist investor calling for a shake-up at Playtech has written to the gaming technology group’s directors calling on them to cut all ties with Teddy Sagi, its billionaire founder
- Daily Telegraph
- Coast Capital Management, a Wall Street hedge fund, is threatening an audacious boardroom coup at FirstGroup after accusing bosses of “driving the bus off the cliff”
- Russian gold miner Polyus has put back plans to sell down more of its shares in London as markets turn volatile and the gold price slides
- Britain’s top pubs, bars and restaurants, including Pizza Hut, YO! Sushi and TGI Fridays, saw slow sales growth last month as business costs squeezed margin
- Guardian
- CBI president to endorse Theresa May’s draft Brexit deal
- Noel Edmonds likely to file £60mln Lloyds suit on Wednesday
- All eyes on the Bank's response to the threat of a disorderly Brexit
- Johnston Press: rescue plan for Scotsman newspaper group