FTSE 100 closes lower on day and week
UK index out of step with most market indices on day of global gains
World trade is "in reverse" as trade war fears escalate
FTSE 100 closed lower Friday after a lackluster afternoon session as US benchmarks trotted higher and big cap miners did well.
The UK's premier share index finished almost ten points in the red at 6,809. It was also down on the week as a whole, losing around 2.3%.
The FTSE 250 fared better on Friday though - adding nearly 16 points to close at 18,643.
Silver giant Fresnillo (LON:FRES) was the top Footsie riser, adding 6.14% to stand at 946.80p, while Anglo American (LON:AAL) got the second prize - adding 4.05% to 1,865p.
Top laggard among Britain's blue chips was mobile phone giant Vodafone (LON:VOD), which shed 4.89% to 137p, after its results.
The group's third-quarter revenue was hit by the adoption of IFRS 15 rules, the sale of its Qatar stake and foreign exchange headwinds.
3.25pm: Still snoozing
Approaching the last hour of trading the suspicion was that traders were honouring the ancient tradition of Friday being POETS day …
The FTSE 100 was up 3 points at 6,822, with Fresnillo, up 5%, the top riser after a broker upgrade, and Vodafone the biggest faller after its trading update this morning.
In the market as a whole, payments solutions provider Earthport PLC (LON:EPO) was the top riser, soaring 29% to 35.8p as Mastercard trumped the previously agreed takeover bid by Visa.
READ Mastercard outbids Visa as credit card giants battle for Earthport
It was a grim day for Midatech Pharma PLC (LON:MTPH, NASDAQ:MTP), however, which lost two-fifths of its value, as provided a stark assessment of its finances.
2.50pm: Wall Street opens on the front foot but the Footsie goes into its shell
For once, the futures markets got the Dow’s opening movement pretty much bang on with the US benchmark opening 180 points or so higher.
After almost 20 minutes of trading the Dow Jones industrial average had extended its gains to 190 points (0.78%) at 24,743. The broader-based S&P 500 was up 18 points (0,69%) at 2,661.
Back in Blighty, the FTSE 100 was so impressed with Wall Street’s verge … it retreated to last night’s closing level of 6,819.
World Trade Monitor November 2018: the volume of world trade decreased 1.6% in November, having increased 1.2% in October (initial estimate 1.1%). Due to US shutdown no data are available. The 0.0% import/export volume growth US is a technical assumption https://t.co/UTw3h9eTzT pic.twitter.com/m92rqJpyCE
— CPBuk (@CPBnl_uk) January 25, 2019
Dutch finance house ING Research commented on today’s data release from the Netherlands Bureau of Economic Policy Analysis, which shows both advanced economies and emerging markets showed a decline in import demand in November.
“World trade is in reverse,” ING declared.
In November 2018, 1.6% fewer goods crossed borders than in the previous month when the volume of world trade still grew 1.2% on a month-on-month basis. The less volatile three-month average growth figure took a nosedive as well with a decrease from 1.1% in October last year to 0.0% in November, ING reported.
“We expect the damage of the trade war to increase over the next twelve months. By far the largest part of tariff elevations by the US and the sUBSequent retaliation by the US' trade partners, has only been implemented in the second half of 2018. This means that its detrimental effect on trade growth will continue well into 2019,” ING said.
2.10pm: Footsie advances again as traders look for a strong start on Wall Street
The Footsie perked up ahead of what is expected to be a strong start on Wall Street.
The FTSE 100 was up 19 at 6,838.
READ DJIA set for triple digit gain after mixed close for US stocks
The Dow Jones Industrial Average is poised for a more than 180-point gain, according to futures trade.
On the foreign exchange markets, the pound was having a good day against the dollar rising 0.41 cents (0.31%) but then again, the dollar trade weighted index was down 0,29% so sterling’s performance was about par for the course.
1.00pm: Top-shares index is back to square one
With precious little corporate news flow to whet the appetite, pundits have been digging a bit deeper into the CBI’s distributive trades survey for January.
The FTSE 100 was barely changed midway through the lunchtime session.
The EY ITEM club said the survey pointed to retail sales being stagnant at the start of 2019 after a lacklustre final quarter of 2018.
“The CBI distributive trades survey points to weak retail sales in the first half of January and end of December,” said the EY ITEM club;s chief economic advisor, Howard Archer.
“January’s balance of 0% was the second lowest after December since April 2018. The December balance had been down from a spike to +19% in November from what had been a six-month low of +5% in October. This compares to the 2018 peak of +32% in June.
“Sales for the time in year were reported to be below average by the largest amount since November 2011 in January. Specifically, a balance of 37% of retailers reports sales volumes below average for the time of year in January,” Archer said.
On the plus side, Archer observed that retailers look surprisingly optimistic about prospect for sales in February with a balance of +24% expecting sales volumes to be up year-on-year.
“This is the highest expectations balance for the month ahead since last May,” Archer revealed.
Among the blue-chip retailers, Burberry PLC (LON:BRBY) was the worst performer, down 1.9%, but the luxury goods firm’s focus is more on China so it was unlikely to have been laid low by the CBI’s survey.
Shopping centres owner Intu Properties PLC (LON:INTU) was down 1.7% at 104.95p but that was more because Goldman Sachs downgraded the mid-cap to ‘sell’ from ‘neutral’ and slashed its price target to 92p from 117p.
Citigroup was even more brutal, cutting the target price to 69p from 190p as it also moved to ‘sell’ from ‘neutral’.
12.15pm: Footsie dips after CBI distributive trades survey
London’s leading shares index was barely clinging on to gains as it entered the lunchtime session following a weak CBI distributive trades survey.
The FTSE 100 was up 12 points at 6,831.
The survey of 103 firms, of which 42 were retailers, showed that sales volumes for the retail sector stabilised (in line with expectations), following a decline in the previous month.
Sales for the time of year remained well below average; the CBI said sales were at their lowest since November 2011.
Orders placed with suppliers rose only slightly.
“The High Street has had another challenging month, with retail sales volumes flat and well below average for the time year. Pressures on the retail sector remain high, with consumer spending expected to remain fairly subdued and competition fierce,” said Rain Newton-Smith, the CBI’s chief economist.
“There are early signs of companies bracing themselves for a no-deal Brexit: some of our wholesalers are now reporting that they’re building up stocks in case the UK exits the EU without a deal. It’s absolutely vital politicians act immediately to take No Deal off the table, protect the UK economy and avoid devastating disruption,” Newton-Smith implored.
"Clear signs of consumer caution." @samueltombs on U.K. CBI Distributive Trades Survey, January #PantheonMacro
— Pantheon Macro (@PantheonMacro) January 25, 2019
11.30am: The Footsie moves into consolidation mode
The week is showing every sign of fizzling out – not that it showed much fizz in the Uk this week.
The FTSE 100 was up 25 at 6,844, following a global trend – most of the world’s market benchmarks have made progress today.
“Ahead of the US open, global oil prices remain bid as turmoil in Venezuela has generated concerns that its crude exports could soon be disrupted,2 reported Dean Popplewell at Oanda.
“Brent futures are at +$61.62 a barrel, up +53c or +0.9% – Brent has lost about -1.8% this week and remains on track to post its first week of losses in four-weeks, while U.S West Texas Intermediate (WTI) crude futures are at +$53.70 per barrel, up +57c, or +1.1%,” he added.
Brent’s recovery has provided a small leg-up to oil giants BP PLC (LON:BP.) and Royal Dutch Shell (LON:RDSB), both of which are modestly higher.
OIL PRICE: NOT ABOVE $62 AGAIN
Brent Crude Oil futures were at $61.89 a barrel at 0246 GMT, 80 cents, or 1.3 percent, above their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.90 per barrel, up 77 cents, or 1.5 percent.https://t.co/dyRUS9QqWF pic.twitter.com/fYrOF0wwFW
— WOGNEWS (@WOGNEWS1) January 25, 2019
10.30am: Gains pared as brokers take a poke at REITS
The Footsie’s gains were ebbing away in the latter half of the morning.
The FTSE 100 was up 22 at 6,841, thanks largely to mining stocks, which were wanted after an overnight rise in commodity prices.
Mexican miner Fresnillo PLC (LON:FRES) got an additional leg-up from UBS, which upgraded the stock to ‘buy’ and whacked up the target price to 1,100p from 900p previously.
The stock sat atop the Footsie leader-board with a 3.5% increase at 922.8p.
Real estate investment trusts were in focus with Goldman Sachs and Citi both giving the sector the once-over.
Goldman Sachs raised Land Securities PLC (LON:LAND) to ‘neutral’ from ‘sell’ but trimmed its target price to 769p from 788p.
Citigroup went the other way, moving from ‘neutral’ to ‘sell’ as it slashed the target price to 743p from 974p.
The shares currently trade at 845.4p, down 0.8p.
Citi also downgraded British Land PLC (LON:BLND) to ‘sell’ from ‘neutral’ as it chopped its target price to 452p from 647p.
Goldman Sachs stuck with its ‘neutral’ rating but lopped 31p off the target price at 589p – 23.8p above the current share price (down 3.2p on the day).
Segro PLC (LON:SGRO) eased 0.4p to 639.6p after Goldmans trimmed its target price to 701p from 716p.
9.20am: Digging deep
Miners have ridden to the rescue, driving the Footsie to reverse earlier losses.
The FTSE 100 recovered from its low point of 6,819 to post a 37 points rise at 6,856.
The top three risers among blue-chips were all mineral plays: Fresnillo PLC (LON:FRES), up 2.8%; Antofagasta PLC (LON:ANTO), up 2.3% and Glencore PLC (LON:2.1%).
The mid-cap FTSE 250 was up 61 points (0.3%) at 18,688 despite a lukewarm response to the trading update from Scottish soft drinks firm AG Barr PLC (LON:BAG).
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said it was a “sturdy set of numbers” from the Irn-Bru maker,
“With wider uncertainties lingering though, there’s no telling how much of a headache Brexit will be. Added to that, it’s very likely we’ll see more regulatory clampdowns in the medium-term, and that’ll mean another round of shake-ups for the industry, Lund-Yates predicted.
The shares were off 25p at 773p.
8.30am: Vodafone leads the Footsie's retreat
Hopes of a firm start for the Footsie were quickly dashed with mobile phones networks operator Vodafone PLC (LON:VOD) leading the retreat.
The FTSE 100 was down 24 points (0.4%) at 6,819.
Vodafone was down 3.5% after a trading update covering its third quarter. Vodafone's third-quarter revenue was dented by the adoption of IFRS 15 rules, the sale of its Qatar stake and foreign exchange headwinds.
“Most revenue metrics for the quarter are under pressure, with additional headwinds coming from foreign exchange. Of particular concern is a growing voice within the investment community that the dividend itself, where the current yield of 9.3% is a patent invitation to income-seeking investors, could become unsustainable given pressures on revenues,” commented Richard Hunter, the head of markets at interactive investor.
Sterling’s strength has not helped the Footsie’s cause. The battered pound has rallied on a press report that the Democratic Unionist Party (DUP) has privately agreed to back prime minister Theresa May’s latest Brexit deal rehash.
“Given that the sticking point is the Irish border, if the Northern Irish are willing to go along with it, that makes it much more palatable to the rest of the country,” suggested Marshall Gittler at ACLS Global, adding with commendable understatement that “the issue is too complicated to explain every time in this comment”.
Proactive news headlines:
Europa Oil & Gas Holdings PLC (LON:EOG) told investors that the Wressle project has been granted a one-year extension to its existing planning approvals. The award extends access to the project until 24 January 2020.
Union Jack Oil PLC (LON:UJO) executive chairman David Bramhill described himself “very pleased” as the Egdon Resources operated Wressle project received a one-year extension to existing planning approvals.
FairFX Group Plc (LON:FFX) expects 2019 to be “another year of significant growth” as it reported strong numbers for 2018.
Frontier IP Group Plc (LON:FIPP) said one of its investee companies has landed a £403,000 government grant. The cash received by The Vaccine Group is part of a £1.46mln Anglo-Chinese project to combat an emerging antibiotic-resistant disease able to jump from pigs to humans with potentially fatal effect.
Midatech Pharma Plc (LON:MTPH, NASDAQ:MTP) outlined plans for its lead drug candidate as it updated on its funding position by stating it currently had “very limited cash”.
88 Energy Ltd (LON:88E), in its quarterly report, updated investors on its progress in Alaska where it is advancing both conventional and unconventional oil and gas assets. Exploration drilling is anticipated in the coming weeks with the Winx-1 well.
Oracle Power (LON:ORCP) has appointed a local expert as chief executive to expedite the financial close of its coal-fired power station project in Pakistan. Naheed Memon, who joined the board as a non-executive earlier this month has now become CEO with a remit to manage the delivery of the Thar project on the ground in Pakistan.
Asiamet Resources Limited (LON:ARS) said the additional Resource evaluation drilling required to complete the bankable feasibility study being undertaken on the Beruang Kanan Main (BKM) copper deposit in Central Kalimantan, Indonesia is progressing to plan, with initial results positive and in line with expectations.
Coal production at Regency Mines PLC’s (LON:RGM) 47%-owned Omega operations in Virginia, US continues to improve following the move of a high wall miner at the end of November.
The final set of assay results from the drilling at Kodal Minerals PLC’s (LON:KOD) Bougouni lithium project continue to point to high-grade mineralisation.
Pan African Resources plc (LON:PAF) saw a sharp increase in gold production in the first half of its fiscal year. Gold production from the group’s continuing mining operations increased by 54.2% to 81,014 ounces (oz) in the six months to the end of 2018 from 52,548 oz in the same period of 2017.
SigmaRoc PLC (LON:SRC) has announced plans to raise approximately £12mln through a vendor consideration placing to part-fund the initial consideration for the acquisition of CCP Building Products Limited. The AIM-quoted buy-and-build construction materials group said it is looking to place 30,257,053 ordinary shares at a price of 41p each. The shares closed trade on Friday at 41.60p.
Tertiary Minerals plc has raised £250,000 before expenses via a placing to provide additional working capital for the company to fund development work for its fluorspar projects and for potential acquisition opportunities. The AIM-listed group, which is building a strategic position in the fluorspar sector, said SVS Securities placed 83,333,333 new ordinary shares in the company at a price of 0.3p each.
Europa Metals Limited (LON:EUZ), the European lead-zinc explorer, announced that it has submitted a formal application requesting the removal of the company from the ASX official list and has made an application to move from the Main Board of the Johannesburg Stock Exchange to the AltX. Consequently, the group added, Europa Metal's primary listing is expected to become the AIM market operated by London Stock Exchange.
Ariana Resources PLC (LON:AAU) said it was informed today that on 22 January 2019 its managing director, Kerim Sener, purchased 860,000 ordinary shares in the company at a price of 1.75p each, taking his holding in the company to 19,564,252 ordinary shares representing 1.85% of the issued share capital. It added that it was also informed that on the same date its chairman Michael de Villiers purchased 1,120,000 ordinary shares at 1.75p each, taking his total shareholding in the company to 54,845,000 ordinary shares representing 5.18%. And that William Payne, a non-executive director purchased 1,450,000 ordinary shares also at 1.75p each, taking his and his family's total shareholding to 9,359,314 ordinary shares, or 0.88%.
6.45am: Blue-chip index set to claw back some of yesterday's losses
The FTSE 100 was set to claw back most of yesterday’s losses despite the US-Sino trade dispute rumbling on.
Spread betting quotes suggest the FTSE 100 will open at around 6,833, having closed at 6,819, down 24 points, on Thursday.
“Wilbur Ross, the US secretary of commerce stole some of Mario Draghi’s thunder as he announced the US and China were ‘miles and miles’ away from ending the trade dispute, but in the same update Mr Ross said there is fair chance that China will get a trade deal,” reported David Madden at CMC Markets.
“Larry Kudlow, an economic adviser to the Trump administration said the US president is optimistic on trade talks,” he added.
US markets were mixed at the close last night, with the Dow shedding 22 points at 24,553 and the S&P 500 adding 3.6 at 2,642.
Asian markets this morning were on the rise with the Nikkei 225 in Tokyo up 199 points at 20,774 and the Hang Seng in Hong Kong 391 points to the good at 27,512.
It has not been a particularly busy week on the home front for big corporate news so although Friday is typically threadbare in terms of scheduled announcements, we are getting used to it by now.
Vodafone PLC from the FTSE 100 and AG Barr from the FTSE 250 are the two big names in the frame today.
Mobile phone networks operator Vodafone has seen its share price perform terribly since the end of 2017 and investors will want some of the fears to be allayed by management.
They will want to hear that competition in Italy and Spain has not become any more fierce and that organic growth numbers still look reasonably good as the FTSE 100-listed firm’s broadband service expands.
UBS expects Vodafone to re-iterate its full-year guidance organic growth in underlying earnings (EBITDA) of around 3%.
Irn-Bru maker AG Barr had a challenging 2018, but the signs looked good during a strong first half when the company posted 5.5% jump in revenue despite the “Beast from the East” and a CO2 shortage denting sales.
Significant announcements expected on Friday:
Trading updates: Vodafone PLC (LON:VOD), AG Barr PLC (LON:BAG)
AGMs: Regency Mines PLC (LON:RGM)
Economic data: CBI monthly distributive trades survey; US durable goods orders; US news home sales; University of Michigan final consumer sentiment index
Around the markets:
- Sterling: US$1.3118, up 0.53 cents
- 10-year gilt: yielding 1.152%
- Gold: US$1,288.20 an ounce, up US$2.30
- Brent crude: US$61.79 a barrel, up 70 cents
- Bitcoin: US$3,856.57, down US$9.23
City headlines:
- The prime minister, Theresa May, has come under increasing pressure from some colleagues to rule out a “no deal” Brexit
- Cafe shops operator Patisserie Valerie is to ask the tax-man for a rebate as it has paid tax on illusory profits.
- An alleged “fat finger” trading error yesterday temporarily wiped $41 billion off the market capitalisation of Jardine Matheson, a giant Asian conglomerate founded more than 180 years ago.
- Starbucks beat Wall Street’s forecasts and sent its shares slightly higher last night as it revealed that new drinks helped to attract more customers to cafés in America and China during the last quarter.
- Capital & Regional, the shopping centre owner, said the value of its properties outside London fell by more than 10% in the second half of 2018.
- Buzzfeed, the news website that pioneered the “listicle”, is cutting about 250 staff after its digital advertising revenues fell short of expectations.
- The International Monetary Fund has warned the system of global cooperation that saved world finance in the 2008 crisis may break down if there is another major shock or a deep recession.
- BT has become the first international company to secure a licence to sell its services directly to Chinese customers.
- Mark Carney, the Bank of England governor, has not ruled out raising interest rates this year – even if the UK crashes out of the EU without a deal.
- Airbus warned it could leave Britain if a no deal threatened its international competitiveness, condemning the 'disgraceful' chaos surrounding Brexit.
- Tax relief awarded to oil and gas companies removing hundreds of North Sea wells, rigs and pipelines will hit British taxpayers with a £24 billion, the UK public spending watchdog has said.
- New Look, the struggling clothing retailer, may be forced to put itself up for sale in order to complete a rescue refinance.
- Renault has appointed the outgoing Michelin boss Jean-Dominique Senard as chairman and Carlos Ghosn’s former deputy Thierry Bolloré as chief executive after Ghosn resigned from both roles.