FTSE 100 closes lower
Dow Jones and S&P 500 make brief attempt at advancing before heading into the red
Ted Baker on the back foot after RBC target price cut
FTSE 100 finished up where it had languished virtually the whole day - in the red
Britain's blue-chip index closed down over 26 points at 6,810.
The FTSE 250 on the other hand, a better gauge of UK companies, added over 180 points at 17,976.
It came as other European benchmarks were also lower, but US stocks rose after they had crashed on Friday.
David Madden, analyst at CMC Markets UK, said: "The morning session started off a little on the positive side, on the back of modest gains made in Asia overnight.
"The US and China are in talks today and tomorrow in relation to trade, and that helped raise investor sentiment in Asia overnight.
"The upbeat mood in Europe didn’t last long as markets handed back some of Friday’s bullish move. When upward moves are short lived it can be a sign that dealers aren’t particularly confident."
Top laggard on Footsie was packaging group Smurfit Kappa Group PLC (LON:SKG), whose shares lost 5.20% to 2,080p.
2.35pm: Wobbly Wall Street
An indecisive start on Wall Street did little to bolster London’s blue-chip index, which has slipped back below 6,800.
The FTSE 100 was down 41 points at 6,796. In the US, the Dow Jones opened modestly firmer but sUBSequently ebbed to 23,390, down 43 points. The broader-based S&P 500 also opened on the front foot but retreated to 2,528, down 4 points.
While the FTSE 100 was in the doldrums, weighed down a little by the US dollar’s slide on forex markets, the mid-cap FTSE 250 was up 135 points (0.76%) at 17,931, with curtains and bedding seller Dunelm PLC (LON:DNLM) leading the way with an 11.3% gain following its Christmas trading update.
UBS responded to the trading update by increasing its price target for Dunelm to 650p from 600p; Dunelm shares currently trade at around 644p.
Ahead of its results later this week, under-pressure clothing firm Ted Baker PLC (LON:TED) was down 2.3% at 1,550p after RBC slashed its price target to 2,000p from 2,500p.
Equiniti Group PLC (LON:EQN) was down 1.7% at 202.5p, despite being selected by Ofcom, the communications watchdog, to run the Programme Making and Special Events (PMSE) grant funding scheme.
#PressRelease - Equiniti To Support Ofcom Clearance Of 700 MHz Radio Spectrum. The full release and our comments are here - https://t.co/UqmV28NKWZ pic.twitter.com/X6EV9cq2iz
— Equiniti (@equiniti) January 7, 2019
1.15pm: Investors fagged out after research note on tobacco giants
The Footsie trimmed its losses in the lunchtime trading session, struggling back above 6,800 in the process.
The FTSE 100 was down 34 at 6,804.
Trade talks between the US and China are on investors’ minds.
“Although China has already telegraphed that it is happy to resolve the trade spat amicably, it’s difficult not to see Beijing as pushing for the best deal here. The White House is on the back foot, with a potentially damaging government shutdown ongoing and Donald Trump very much seen as the culprit of the recent stock market volatility,” opined James Hughes at Axi Trader.
“The trade deal – assuming it’s reached - should be good for stocks, but this point won’t have escaped Chinese negotiators. There’s not too much on the US economic calendar today, with the composite ISM reading later today not expected to deliver much of interest. Arguably the biggest risk here is that further signs of rampant economic growth will push back against that restrained message Jerome Powell issued on Friday, bolstering the greenback and adding fresh downside pressure to equities,” he added.
Spread betting quotes suggest the Dow Jones will open around 25 points higher at 23,458, which is neither here nor there, really. The S&P 500 was tipped to open at around 2,532, barely changed.
Back in Blighty, tobacco stocks were friendless after research house Cowen abandoned bullish positions on British American Tobacco PLC (LON:BATS) and Imperial Brands PLC (LON:IMB).
Both stocks were downgraded to “market perform” from “outperform”; BATS tumbled 3.2% to 2,499.5p and IMPS dived 4.0% to 2,352.5p. Cowen has a price target of 2,650p for the former and a target of 2,500p for the latter.
12.05pm: US stocks look set to open lower
Footsie’s losses were lengthening ahead of what is expected to be a soft start on Wall Street.
The FTSE 100 was down 46 at 6,792.
“As for the Dow Jones, it is set to open 0.2% lower when the bell rings on Wall Street, a dip that would take the index back under 23,400,” reported Connor Campbell, helpfully, at Spreadex.
“Beyond the ISM services PMI, expected to pull back from 60.7 to 59.6 month-on-month, there isn’t a whole lot on the economic agenda this afternoon, meaning investors are going to be on high alert for any updates on how the US-China trade talks are going in Beijing,” he added.
Oil prices have perked up on hopes that trade talks in Beijing can head off a US-SINO trade war but no one seems to have told BP PLC (LON:BP) and Royal Dutch Shell PLC (LON:RDSB), both of which are down by around 1%.
In the oil sector, Sound Energy PLC (LON:SOU) was wanted after an update on its TE-10 prospect in eastern Morocco while Bowleven PLC (LON:BLVN) put on a spurt after announcing a special dividend.
Sound Energy shot up 25% after it confirmed it has completed the drilling of the TE-10 well and identified gas bearing sands.
READ Sound Energy sees more pay in TE-10 well as drilling completes
Bowleven was up by around one-fifth at 32p as it said it intends to propose a special dividend of 15p per share.
$BLVN Bowleven investors set for £50mln windfall https://t.co/VZhWl1yQdn via @proactive_UK #BLVN #brighterir #AndrewScottTV #CapitalNetwork1
— Proactive Investors (@proactive_UK) January 7, 2019
10.30am: Broker downgrades weigh on Footsie giants
After dithering for an hour or so the Footsie has shifted into gear … reverse gear.
The FTSE 100 was down 40 points (0.6%) at 6,797.
The index’s cause was not helped by broker commentary, with utility company Centrica PLC (LON:CNA) down 5% after Jeffries downgraded the stock to ‘hold’ from ‘buy’, hotels operator Intercontinental Hotels Group PLC (LON:IHG) 2.8% lower after Morgan Stanley downgraded the shares to ‘underweight’ from ‘equal weight’ and banking giant HSBC PLC (LON:HSBA) off 1.8% after Citi abandoned its neutral position and switched to a ‘sell’ recommendation.
The UK new car market declined by -6.8% in 2018, with annual registrations falling for a second year to 2,367,147 units https://t.co/1ZTQLqsxBo pic.twitter.com/FxOq3aaytL
— SMMT (@SMMT) January 7, 2019
Car dealers Inchcape PLC (LON:INCH) and Pendragon PLC (LON:PDG) did not seem fazed by the release of new car registrations for December as the former rose a penny to 556p and the latter gained 0.35p at 22.65p.
“Against the continued backdrop of uncertainty the UK economy continues to show signs of slowing down with new car sales dropping 7% last year, the largest decline since the financial crisis,” noted Fiona Cincotta at City Index.
“Industry bodies blame the decline on stricter emissions rules and a drop in demand for diesel cars but the underlying Brexit effect remains the strongest factor in the equation,” she added.
9.15am: Monday morning lethargy
Like a lot of us on a Monday morning, London’s blue-chip index was having trouble getting itself in gear.
The Footsie was more or less unchanged at 6,839.
It is set to be a big week for Christmas trading updates from the retailers and the market appears to be expecting positive noises from the supermarket groups, as the likes of Tesco PLC (LON:TSCO), J Sainsbury PLC (LON:SBRY) and Wm Morrison Supermarkets PLC (LON:MRW) were among the best performers, rising by between 1.7% and 2.8%.
Fellow travellers Ocado PLC (LON:OCDO) and Marks and Spencer Group PLC (LON:MKS) were up 1.6% and 1.5% respectively.
The groceries sellers were in demand despite reports that Morrisons will be cutting products on almost 1,000 products, as it seeks to head off the threat of the hard discounters such as Aldi and Lidl.
Mid-cap retailer Dunelm Group PLC (LON:DNLM) advanced 12.2% to 649p after it revealed like-for-like (LFL) revenues in the 13-week period to 29 December were up 9.0% year-on-year, with the stores racking up a 5.7% improvement in LFL sales while the online sales were up 37.9%.
8.35am: Footsie falls
As expected, the FTSE 100 got off to a lacklustre start with the index of blue-chip stocks nudging 4 points lower to 6,833.18 as investors paused for breath after Friday’s 144-point rally.
The resumption of Sino-American trade talks led to an Asia-wide rally earlier on. However, traders here in London were a little more circumspect.
“Looking ahead, we have a week of double-headed ‘Trumpian’ risks,” said Neil Wilson, an analyst at Markets.com.
“First, China-US trade relations are in focus as official convene for talks with barely two months left of the ceasefire. On Monday morning we heard some warm words but the proof will be in the detail of any deal.
“Second, is the US Federal government shutdown, which is rumbling on as the president refuses to back down on his Mexican wall.”
Leading the fallers, down 3.9%, was Centrica after US outfit Jefferies downgraded to ‘hold’ from ‘buy’.
The miners, buoyed by Chinese attempts to stoke economic growth, were in demand.
Dunelm (LON:DNLM), the first of the major retailers to report this week, kicked off the programme with a solid trading update that propelled the FTSE 250 home furnishings group 7% higher.
Among the tiddlers, Cameroon-focused oiler Bowleven (LON:BLVN) advanced 18% after it announced plans for a £50mln special dividend.
Proactive news headlines:
Nektan PLC (LON:NKTN) shares jumped in early trading Monday after reporting “another record quarter” as revenues in the second three months of its 2019 fiscal year surged 83%.
88 Energy Ltd (LON:88E) told investors it is scheduled to spud the Winx-1 conventional exploration well in Alaska in mid-February. The explorer said that the construction work is presently underway for the 11-mile ice road to access the Winx-1 site, it will take around three weeks to complete and the well pad will be completed thereafter.
OptiBiotix Health PLC (LON:OPTI) has inked a supply and profit sharing agreement with Zeon Lifesciences Ltd for its SlimBiome weight loss product.
Rose Petroleum PLC (LON:ROSE) has highlighted the findings of a Schlumberger study of the Gunnison Valley Unit (GVU) project area in Utah’s Paradox basin. The fracture characterisation study’s detailed analysis of the proposed GVU22-1 well location concluded that it would be situated optimally.
Bloomsbury Publishing PLC's (LON:BMY) digital arm has entered strategic sales partnerships with leading publishers Rowman & Littlefield and Manchester University Press.
Amryt Pharma PLC (LON:AMYT) said a pre-clinical study of a cream for a severe and very difficult to treat skin condition has delivered encouraging results.
HemoGenyx Pharmaceuticals PLC (LON:HEMO) expects to soon begin talks with a global pharmaceutical company over a possible licensing deal for its CDX antibodies – its flagship treatment for blood cancer.
Berkeley Energia Ltd (LON:BKY) has told the Australia stock exchange in a filing that it knows of no reason for the recent rise in the company’s share price. Berkeley noted that a major seller had now completed its exit from the company.
Sound Energy PLC (LON:SOU) confirmed it has completed the drilling of the TE-10 well which identified gas bearing sands. The reservoirs were observed within and below the currently mapped TAGI structural closure which potentially de-risks upside in the North East Lakbir across the Tendrara project area, the company noted.
Anglo African Oil & Gas PLC (LON:AAOG) told investors that Schlumberger wireline logging of the recently drilled TLP-103C well, has confirmed multiple discoveries at its Tilapia licence in the Republic of the Congo.
Carmeltazite, a mineral found in one of the gemstones from the Mount Carmel property in Israel owned by Shefa Yamim ATM LTD (LSE: SEFA) has been recognised and approved as a new mineral by the International Mineralogical Association.
In an open letter to shareholders Louis Coetzee, the chief executive of Kibo Energy PLC (LON:KIBO), has set out the company’s position as one purely focused on energy going into 2019.
Physiomics PLC (LON:PYC) has said that it will be attending the Biotech Showcase partnering conference in San Francisco from 7-9 January 2019 during the JP Morgan Healthcare Conference week.
Rambler Metals and Mining PLC (LON:RMM) (TSXV:RAB) has applied for voluntary delisting of its ordinary shares from the TSX Venture Exchange, with the shares set to continue to trade on London’s AIM exchange where the vast majority of trading activity takes place. The group said its directors believe that the minimal trading activity of the company's shares on the TSXV no longer justifies the expense and administrative requirements associated with maintaining this dual listing.
6.30am: FTSE 100 set to pause for breath
The FTSE 100 looks set to make a tentative start to proceedings, ignoring the upbeat mood in Asia, which was buoyed by the re-start of Sino-American trade talks.
The index of blue-chip shares is predicted by the spread-betting firms nudge just two points higher to 6,839.42 after ending Friday 144 points to the good.
Analysts believe Washington’s resolve to broker a deal may have been strengthened following the recent Wall Street sell-off, coupled with some pretty lacklustre manufacturing data.
“The power dynamic has changed; the US stock market is far from reaching record highs, so President Trump might be willing to adopt a more open approach,” said David Madden of CMC Markets.
Asia’s major markets responded positively. Japan’s Nikkei led the way with a 2.5% jump. On the foreign exchange markets, the Chinese renminbi was firmer, while the dollar dropped; oil futures firmed.
Back here in the UK, it is expected to be a busy week with a welter of retailers updating on the Christmas trading period. Key among them will be Marks & Spencer (LON:MKS), which posts its numbers on Thursday.
Tesco (LON:TSCO), Sainsbury (LON:SBRY) and Morrisons (LON:MRW) are among the other big names set to provide some colour on the state of the UK’s high streets and trading estates.
Significant announcements expected on Monday January 7:
Trading updates: MJ Gleeson PLC (LON:GLE), Mattioli Woods PLC (LON:MTW)
Economic data: US ISM non-manufacturing report; US factory orders
Around the markets:
- Pound worth US$1.2747
- Gold changing hands for US$1,291.60 per ounce, up US$5.80
- Brent crude trading at US$58.70 a barrel, up 74 cents
City Headlines:
Financial Times
- Brexit worries mount for British manufacturers - almost three-quarters of companies are less confident about the economy than a year ago
- Former Barclays executives prepare to face fraud trial - John Varley, former chief, and three others pursued in SFO prosecution
Times
- Selfridges rings up another record Christmas
- Deliotte does well out of Comet liquidation
- Unions warn of credit crisis as household debt jumps above £15,000
- Lord Sugar’s property and trading vehicle restarted dividend payments last year, despite posting a pre-tax loss of £40mln
- Britain misses out on boom in big private equity deals
- Exodus from City gathers pace as Brexit looms larger on horizon
Daily Telegraph
- British Airways owner pursuit of Norwegian 'could curtail dividend'
- Crisis averted? Bitcoin's energy consumption drops amid price crash
- Deutsche Bahn, the German owner of one of Britain’s biggest rail franchises, is demanding compensation from Network Rail for extensive delays in electrifying the ailing Northern franchise.
- Sales of new cars are expected to fall for a second year running when industry data is posted later today
Guardian
- Morrisons has announced it is slashing the price of more than 900 products, as a week of retail trading updates is expected to show that Aldi and Lidl’s low prices helped the two German chains win the Christmas battle among supermarkets
- Disney has revealed it spent nearly £100m making Mary Poppins Returns, the sequel to the 1964 classic starring Julie Andrews, in Britain
- M&S: another five-year plan, still no great leap forward