FTSE 100 index closes down
Wall Street stocks lower
Brexit and trade in focus
FTSE 100 closed lower as did its mid-cap cousin FTSE 250 as traders got spooked by macro issues, including trade and Brexit.
Footsie closed the day down around 19 points at 7,016, with big miners in the losers list, while FTSE 250 was down around 58 at 18,660.
Over in Wall Street, the picture was also lower. The Dow Jones is off around 86 points, while the S&P 500 is down almost six and the tech heavy
Nasdaq exchange is down around 16 at 7,065.
David Madden, at CMC Markets, said: "Stock markets are in the red following yesterday’s bullish move.
"Fears regarding, US-China trade, Italy’s budget and Brexit all play into the mix. President Trump warned that that levy on Chinese imports might be increased, and further tariffs could be announced. This dampened investors’ hopes about a deal being struck at the G20 summit."
Top faller on Footsie was chemicals group Johnson Matthey (LON:JMAT), which dropped around 4% to stand at 2,950p.
4.00pm: Footsie remains under pressure
UK stocks were heading for a loss Tuesday afternoon, and bank shares are poised to be back in focus with results of the Bank of England’s stress tests looming.
The FTSE 100 was down 22 points at 7,013, retreating from gains logged on Monday.
Bank shares were lower in part before the UK’s central bank on Wednesday releases its annual report on how well banks could withstand an economic shock. The results will arrive at a time when UK lawmakers are preparing to vote on whether to accept a Brexit agreement negotiated between UK and EU officials.
Separately Tuesday, Morgan Stanley cut its price target on Royal Bank of Scotland Group PLC and Barclays PLC (LON:BARC). Morgan Stanley reduced its net interest income growth expectations for RBS because of Brexit uncertainty.
READ: Morgan Stanley cuts price targets for RBS and Barclays, maintains stance on Lloyds
Shares of RBS (LON:RBS) were down 2.2% to 220.46p, and Barclays PLC (LON: BARC) slipped 0.4% to 168.08.
3.05pm: FTSE at session lows
The FTSE 100 dropped Tuesday afternoon, dragged down further as US stocks opened in the red as President Donald Trump suggested he’s not ready to wind down his trade dispute with China.
The British benchmark slumped 48 points, or 0.7%, to 6,988, hitting intraday lows as miners, banks, oil producers pulled back.
On Wall Street, the Dow Jones Industrial Average tumbled more than 200 points. The S&P 500 gave up 0.4% and the Nasdaq was off 0.7%. Apple Inc. (NASDAQ:AAPL) shares fell 1.6% after Trump told the Wall Street Journal that Apple products imported from China may be hit with US tariffs.
Trump also said he may order a third round of tariffs on Chinese products if he and Chinese President Xi Jingping fail to solve their trade differences at the Group of 20 summit this week.
“It is looking like the weekend’s G20 meeting is going to be a bust – though there is every chance the president’s aggressive rhetoric could all be intimidation tactics ahead of the trip to Argentina,” said Connor Campbell, financial analyst at Spreadex.
UK miners remained lower, with Rio Tinto PLC (LON:RIO) down 2% to 3,556p, and Anglo American PLC (LON:AAL) off 1.8% at 1,534p.
In other UK moves, Hikma Pharmaceuticals (LON:HIK) shares rose 0.9% to 1,727p after Jefferies upgraded its rating on the drugmaker to ‘buy’ from ‘hold’.
1.10pm: Trump weighs in on China, UK
The FTSE 100 sagged Tuesday afternoon, and US stock futures indicated losses when Wall Street opens, with remarks by US President Donald Trump stoking global trade worries.
The UK’s large-cap gauge gave up 12 points at 7,023.29 after moving between 7,043.70 and 7,008.58 during the session.
In the US, futures for the Dow Jones Industrial Average declined 70 points. S&P 500 futures shed 0.4% and Nasdaq-100 futures were off by 0.6%.
The moves come after Trump told the Wall Street Journal, in an interview published Monday, that it was "highly unlikely" he would accept an offer by China that could avert higher tariffs next year on more than $200 billion of Chinese goods.
“The global economy is in a desperate need to end the ongoing trade dispute between the two largest economies,” said Hussein Sayed, chief market strategist at FXTM.
“Investors are likely to become more concerned that the G20 summit in Argentina kicking off on Friday won’t lead to a truce or a framework agreement between China and the U.S., but given that we’re living in a Trump world, there’s always a chance for last minute changes. Until then expect markets to remain choppy,” he added.
Mining stocks were under pressure, as China is a key buyer of industrial and precious metals. Copper producer Antofagasta (LON:ANTO) fell 3% to 782p, and Glencore PLC (LON:GLEN) lost 1.7% to 281.98.
Trump has also turned his attention back to the UK, telling reporters Monday that the current Brexit deal negotiated by UK Prime Minister Theresa May would make it difficult for the US and the UK to craft a trade deal. The House of Commons will vote on the Brexit agreement on December 11.
11.45am: Retail sales rise in November, says trade group
The UK’s large-cap equity market was stuck in the red in late morning trade Tuesday, but investors did receive somewhat of an upbeat reading on British retail sales.
The FTSE 100 was down 13 points to 7,023, with travel, mining and bank shares among those losing ground.
During trading action, the Confederation of British Industry said retail sales growth accelerated in the year to November. The trade association’s retail sales balance rose to +19 from +5 in October. The November figure was better than an expected print of +10.
Sales volumes increased for grocers and retailers of durable household and recreational goods. However, sales of clothing, footwear and leather, furniture and carpets fell.
CBI also said sales were reported to be sluggish for this time of year.
Anna Leach, CBI’s head of economic intelligence, said: “While it is encouraging to see headline retail sales growth strengthen in November after a weak outturn in October, the quarterly survey continues to paint a gloomy picture of the sector. Business sentiment remains poor, investment intentions are flat, and headcount continues to decline.”
The survey of 104 firms, including 47 retailers, was conducted before the Black Friday shopping period, with retailers of all kinds offering discounts through Cyber Monday.
Checking on merchandise companies, Marks & Spencer Group PLC (LON: MKS) was up 1.6% to 309.80p while grocer Tesco PLC (LON:TSCO) was off 1.9% at 196.70p.
In other moves Tuesday, Coca-Cola HBC AG (LON:CCH) climbed 5.8% to 2,400.00p after UBS hiked its rating on the bottler to ‘buy’ from ‘sell’.
READ: UBS double-upgrades Coca-Cola HBC to ‘Buy’, says special dividend "most likely"
Meanwhile, shares of Cranswick plc (LON:CWK) fell 6.8% to 2,678.67p after the food producer posted a decline in half-year profit.
READ: Cranswick half-year profit declines during "uncertain" domestic market conditions
10.15am: NMC Health shares hit
The FTSE 100 continued to struggle Tuesday Morning, with NMC Health plc falling by the most after following a ratings downgrade.
The blue-chips benchmark shed 9 points to 7,026, but was off an intraday low of 7,015.70. Travel shares were in focus across the UK equity market after a profit warning from holiday-services company Thomas Cook Group PLC (LON:TCG).
NMC Health (LON:NMC) put in the worst performance on the FTSE 100, as shares dropped 5.1% to 3,418p. The shares fell after Jefferies cut its rating on the leading private healthcare operator in the Gulf States to underperform from hold “as we do not share market optimism on Saudl and the economics to NMC.”
In a research note, Jefferies said it believes Saudi and UAE are fundamentally different markets. “Saudi has higher reliance on government pay; longer payment days and higher write-offs; a declining expat population as well as local competition from established players,” it said.
NMC’s strategy outside of Saudi is “increasingly broad,” with expansion in 17 countries and more than 100 facilities, said Jefferies.
Turning to the FTSE 250 index, Greggs plc (LON:GRG) shares jumped 11% to 1,369p after the maker of sausage rolls and other baked goods raised its 2018 pretax profit outlook and said total sales climbed 9% in the eight weeks to November 24.
The FTSE 250 index fell 60 points to 18,659.
READ: Greggs raises 2018 pretax profit view as sales climb
8.45am: Footsie retreats early on
The FTSE 100 index fell back in early trading, ignoring positive performances overnight on Wall Street and Asia, as Brexit deal uncertainties saw banks retreat, while holiday firms were battered by a fresh profit warning from Thomas Cook Group PLC (LON:TCG).
After around three-quarter of an hour of trading, the UK blue-chip index was about 12 points lower at 7,023, clipping back some of Monday’s 83 point gain.
Most of the early attention was on travel firms as Thomas Cook shares plunged by 29% to 34.36p after the FTSE 250-listed firm said it would suspend its 2018 dividend and issued its third profit warning this year in an attempt to soften the blow ahead of its annual results in two days.
The tour operator said an unusually hot summer in the UK had hurt demand with more consumers opting to stay at home and enjoy the weather, rather than booking a holiday abroad.
Michael Hewson, chief market analyst at CMC Markets UK commented: “The decision to cut the dividend can’t have been taken lightly however the lack of dividend is likely to be the least of shareholders problems given how badly the shares have performed this year.”
The Thomas Cook caution weighed on blue-chip holidays rival TUI AG (LON:TUI), down 7.5% at 1,154.50p, and mid-cap peer On The Beach Group PLC (LON:OTB) which shed 1.9% at 393p.
Proactive news headlines:
Oriole Resources PLC (LON:ORR) said it has hit ‘bonanza’ gold grades at its Bibemi project in Cameroon following the results from a rock-chip sampling programme.
OptiBiotix Health plc (LON:OPTI) said that its SlimBiome weight loss product has received a CE mark as well as medical device status.
Strategic Minerals Plc(LON:SML) has hit what it says are bonanza grades from the latest drilling programme at Redmoor in Cornwall. The indications for tungsten, tin and copper were the highest yet seen and had continued into the first hole of the phase 2 programme, added John Peters, Strategic’s managing director.
Tharissa PLC (LON:THS) has concluded a market related two-year Collective Agreement on SUBStantive Terms and Conditions of Employment with the Association of Mineworkers and Construction Union (AMCU), the recognised trade union at the Tharisa Mine in South Africa. The AIM-listed group said the agreement is effective from 1 July 2018 until 30 June 2020.
Bacanora Lithium PLC (LON:BCN), the London traded lithium exploration and development company, announced the appointment of Citigroup Global Markets Limited to lead the equity financing of the Sonora project alongside Canaccord Genuity, both of whom shall also act as joint corporate brokers.
Benchmark Holdings PLC (LON:BMK) shares rose as the fish breeding and genetics firm said it was successful in a patents infringement case in Thailand. Benchmark said a court in Bangkok has ruled that Marine-Tech International in Thailand infringed upon two of its patents and that the court has ordered MTI to cease using Benchmark's technology. An unspecified amount in damages awarded in Benchmark's favour may yet be subject to appeal, the company said.
Allergy Therapeutics PLC (LON:AGY) has said its revenues are “up strongly” on the prior year in most of its markets as it issued a trading update ahead of its annual general meeting (AGM) later today.
Rose Petroleum PLC (LON:ROSE) has entered into new arrangements for the divestment of its non-core Vane Minerals uranium projects in the United States. It has agreed the ‘database agreement’ with enCore Energy Corporation (CVE:EU) which initially sees the AIM-quoted company receiving US$300,000 worth of shares.
Belvoir Lettings PLC (LON:BLV) has strengthened its mortgage broking operation Brook Financial with the acquisition of MAB (Gloucester) Limited for £3.6mln net in cash. MAB Glos is the largest appointed representative firm of AIM-listed Mortgage Advice Bureau PLC (LON:MAB1), one of the UK's leading networks for mortgage intermediaries.
OPG Power Ventures PLC (LON:OPG) chairman highlighted the “strong operational performance” for the Chennai plant as the company reported results for the six months to 30 September. The company noted that it generated 1.55bn units in the half, up 9% from 1.42bn units in the comparative period of last year.
Galantas Gold Corporation (LON:GAL) today reported on the three month period which saw the start of limited gold production from its development project, the Omagh gold mine. Since the end of September, the mining firm delivered its first consignment of concentrate derived from underground feedstock at the mine.
Savannah Resources PLC (LON:SAV), the AIM listed resource development company, has announced the appointment of James Leahy as an Independent non-executive director with immediate effect. With more than 32 years' experience in financial services, the group said, Leahy has executive experience having acted as interim chairman for Bacanora Minerals Ltd, and served on the boards of several listed and private companies.
MTI Wireless Edge Ltd. (LON:MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, has announced the appointment of Brigadier General (retired) Amnon Sofrin as a non-executive director of the company. The group noted that Sofrin served in the Israel Defense Forces from 1973 to 2003 and after retiring from the IDF was assigned to a senior position within Israel's security apparatus as Head of the Intelligence Directorate of Israel's Secret Service until 2008.
Hurricane Energy PLC (LON:HUR), the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, has said it was informed on 26 November 2018 that on the same date its chairman, Steven McTiernan acquired 375,000 ordinary shares in the Company at a price of 40.61393p each. Following this transaction, it added, McTiernan holds 375,000 ordinary shares, which represents a total of 0.019% of the company's issued capital.
6.15am: Dull start predicted
The FTSE 100 looks set to give back some of the gains made Monday, while ignoring positive performances on Wall Street and Asia.
The index of blue-chip shares will open 14 points lower at 7,022, according to the spread betting companies after posting an 83 point gain the day before.
In the US, the Dow Jones closed the session 354 points to the good, buoyed by retail and tech stocks, while the indexes of mainland China, Hong Kong and Japan pushed into positive territory.
“Asia-Pacific equities markets were largely unbothered by the latest US-China trade developments, in the form of Donald Trump’s fresh threat to expand the scope of tariffs on Chinese imports,” the Financial Times noted.
Here in the UK, a bunch of second-line companies will hog the reporting spotlight today with Pets at Home (LON:PETS) garnering the most interest.
Will the market’s second most shorted stock defy those betting on its financial failure, or have the sellers got it right?
In the political arena, Theresa May still has to sell the Brexit withdrawal pact she has signed with Europe. This looks like a tough ask.
“There wasn’t much support for Theresa May’s deal yesterday in the House of Commons debate and the Prime Minister will have a tough time convincing allies and opponents alike to back the deal,” said David Madden of CMC Markets.
“Some MPs might view it as the least bad option, and the prospect of a no-deal could frighten some politicians. Sterling didn’t have much of a reaction to the debate.”
Around the Markets:
- Pound US$1.2805
- Gold down US$1.20 an ounce at US$1,221.2
- Brent Crude US$60.20 a barrel, down 28 cents
City Headlines:
- Financial Times
- Trump says Brexit deal may damage UK-US trade - US president claims agreement would be ‘great’ for EU at Britain’s expense
- Brexit heightens focus on UK bank stress tests - Bank of England set to unveil results of annual financial health check on UK lenders
- Malaysia’s Anwar wants more than $600mln from Goldman - Prime minister in waiting condemns bank’s ‘disgusting’ role in 1MDB fund scandal
- GM cuts point to rocky road ahead - factory closures are attempt to get to grips with changing consumer tastes
- Falling oil prices put new pressure on US energy sector - production companies’ financial improvement in the third quarter could be shortlived
- Times
- Liberum Capital could become the latest City broker to lose its independence as an Australian investment bank eyes a takeover that could value the company at £100mln
- Smallbone of Devizes, whose designer kitchens can be found in the homes of the well-heeled from Notting Hill to New York, could collapse into administration this week
- Labour relations and the flexibility of factory workers are better in Britain than in any other country in Europe, a government-backed report into the automotive industry says
- Guardian
- Shoppers in Britain were poised to carry on splashing the cash into Cyber Monday, with some forecasts suggesting they planned to spend more than £7bn across Black Friday and the online shopping day
- Air pollution from roads causes at least €70bn (£62bn) in health damage every year in the European Union, according to a new report, with diesel fumes responsible for three-quarters of the harm
- Independent
- A wake up call for rail operators? Commuters now have an ombudsman
- Theresa May's Brexit deal will damage UK public finances
- PayPal’s iZettle takeover could lead to higher prices for UK customers