FTSE 100 index closes up 27 points
Smurfit Kappa dives after pricing €400mln bond issue
FTSE 100 closed higher on Thursday with resource stocks largely making up the leader board.
The premier index of leading shares added around 27 points to finish at 6,968.
The FTSE 250 finished lower though, heading over 116 points at 18,711.
Drinks giant Diageo plc (LON:DGE) was top Footsie riser, up 4.67% to 2,901.50p as it beat on earnings and sales forecasts for its half year due to stronger demand from China and India.
On Wall Street, stocks were mixed at the time of writing, with the Dow Jones Industrial Average down around 73 points and then S&P 500 up around 18.
4.00pm: Smurfit Kappa slows the Footsie's progress
Heading into the last half hour of trading, the FTSE 100 was up 35 points at 6,976, having failed to build on a bright start.
Irish packaging giant Smurfit Kappa Group PLC (LON:SKG) was a drag on the Footsie’s progress, shedding 5.8% at 2,188p after announcing the pricing of its senior notes offering after the market closed yesterday.
The box maker lobbed out €400mln of bonds, due for redemption in 2026, carrying a coupon of 2.756%.
3.00pm: Footsie moving sideways at higher levels
US blue-chips opened firmer – if one conveniently overlooks the 124 point fall on the Dow Jones industrial average.
The broader-based S&P 500 was up 7.5 at 2,688.6 and the tech-heavy NASDAQ Composite was up 63 points at 7,246.
Closer to home, the FTSE 100 shifted sideways throughout the afternoon session, up 27 points at 6,968.
Chilean miner Antofagasta PLC (LON:ANTO) and Mexican digger Fresnillo (LON:FRES), up 5.3% and 4.2%, have supplanted boozemeister Diageo plc (LON:DGE) at the top of the Footsie’s totem.
Among the mid-caps, engineering firm Renishaw PLC (LON:RSW) was going well after its interims, rising 6.3% to 4,640p.
“The UK and Ireland division saw a 20% rise in revenue in the six month period but that might be because clients were front loading their orders ahead of Brexit,” suggested David Madden at CMC Markets.
“Renishaw have increased their headcount, and boosted capital expenditure – a sign of business confidence. The group are expanding their distribution centre in Ireland as a safeguard in relation to Brexit, which shows the company is taking sensible steps to ensure the business will endure minimal impact from the UK’s departure from the EU,” he added.
One of the biggest employers in #Gloucestershire says it's stockpiling products ahead of Brexit. Engineering firm Renishaw says it's also 'well placed to respond to changes to future trading arrangements between the EU & the UK.' pic.twitter.com/JG8oAw0eWS
— BBC Radio Glos (@BBCGlos) January 31, 2019
1.15pm: Metro Bank tumbles after embarrassing admission over loan classifications
The Footsie, in the words of Connor Campbell at Spreadex, continues to lurk near 7,000 without being able to break the barrier.
The blue-chip index was up 36 points (0.5%) at 6,978, about two-thirds of the way up its trading range today.
It was, at least, outstripping the mid-cap FTSE 250, which was down 3 points at 18,825, where Metro Bank PLC (LON:MTRO) dived 8.1% to 1,124p after it revealed the Prudential Regulation Authority (PRA) had taken issue with the way it had classified some loans.
READ Metro admits truth over loans error: Regulator NOT bank discovered accounting error as chief exec claimed
At the other end of the FTSE 250 greasy pole sat Rank Group PLC (LON:RNK), the casinos and bingo halls operator. John O’Reilly, the group’s chief executive, conceded that the first half of its fiscal year had been a tough one but said he was encouraged by the group’s improved performance in the second quarter.
Rank’s shares were up 8.4% at 162.2p.
Noon: FTSE 100 resumes upward trajectory
The Footsie sparked back into life in the run-up to midday, with much of the heavy lifting being done by resource stocks.
The FTSE 100 was up 41 points (0.6%) at 6,982, with oil stocks going well after Shell’s warmly received trading update.
READ Shell’s 2018 profits jump by a third to best levels since 2014, cash generation strong
Among the miners, Anglo American PLC (LON:AAL) was up 36p at 1,935p after Deutsche Bank (DB) increased its price target to 1,800p from 1,700p and JPMorgan (JPM) nudged its target up to 2,210p from 2,180p.
DB also lifted its target for BHP Group PLC (LON:BHP), to 1,600p from 1,550p but JPM trimmed its target price to 1,975p from 1,980p; the shares were up 24.6p at 1,696.8p.
Ahead of results tomorrow, commodities trader and mining group Glencore PLC (LON:GLEN) rose 2.15p to 307.4p, well below JPM’s new price target of 380p, up from 370p.
11.00am: Gains pared as futures point to a subdued start on Wall Street
Futures markets are pointing to US benchmarks opening only modestly firmer, suggesting the fizz has already gone out of the market.
The FTSE 100 was up 25 points (0.4%) at 6,966, having earlier entertained the idea of moving back above 7,000 when it briefly hit 6,995.
“The Fed meeting lit a rocker under stocks yesterday, pushing the Dow back above 25,000 once more,” said Chris Beauchamp, the chief market analyst at IG.
“However, a shockingly-bad German retail sales figure, which recorded its worst monthly fall since early 2007, has dampened sentiment and increased existing worries that the eurozone is headed into a much softer economic patch but if the Fed is going to remain so circumspect on monetary policy then equities will have much less to worry about,” he continued.
“Now, if US and Chinese officials could just sort out a positive statement and indicate that progress has been made, we could be in for another leap higher, breaking above 2,700 on the S&P 500 and smashing through that downtrend line from the October highs that seemingly everyone (even the avowed non-chartists) are watching,” Beauchamp said.
FTSE over last 2 days
sellers gettin whipped....big time pic.twitter.com/d633IGb9mk
— DAN (@dentist007) January 31, 2019
Back in the UK, Standard Life Aberdeen PLC (LON:SLA) was down 4.3% at 253.65p after Morgan Stanley downgraded the stock to ‘equal weight’ from ‘overweight’.
9.45am: Hot toddy for the Footsie
Central banks reserve the right to change their minds and it appears a rethink by Federal Reserve is in the offing, boosting stock market sentiment.
The FTSE 100 was up 36 points (0.5%) to 6,978.
“The FTSE found some renewed vigour Thursday, as did Wall Street last night after the Fed surprised markets with a much softer tone on interest rate hikes for this year. In contrast to plans laid out only six weeks ago the central bank signalled that it may not raise rates any time soon while it monitors a slowdown not only in domestic economic growth but also a more widespread slowdown in the global economy,” said Fiona Cincotta, the senior market analyst at City Index.
The dollar has taken a tumble this morning but the Footsie’s big dollar earners seem to have shrugged that off.
Reaction to trading updates from the big beasts of the Footsie was split evenly, with Royal Dutch Shell (LON:RDSB) and Diageo plc (LON:DGE) getting the thumbs-up and BT Group PLC (LON:BT.) and Unilever plc (LON:ULVR) getting the bum’s rush.
Shell and Diageo were up 4% and 4.2% respectively while BT and Unilever were down 4.1% and 2.9% respectively.
Diageo half-year figures tell us lots about the state of Scotch whisky exports. It has c40% of production. pic.twitter.com/SUfekqtGyY
— Douglas Fraser (@BBCDouglasF) January 31, 2019
“There’s a lot for BT to cope with both near and long-term, and questions about the dividend will not go away. Profit is steady over the past nine months at £5.55 billion but huge investment in its fibre network reduced free cash flow by 11%,” commented Lee Wild at interactive investor.
“BT shares underperformed the wider market heading into these results and, despite appearing cheap and offering an attractive yield, the market may wish to see what [new boss] Jansen has up his sleeve before backing the new man,” Wild suggested.
8.45am: Hot streak
The FTSE 100 made a better than expected to start, setting up the potential for a three-day winning streak as it rose 47 points to 6,988.15.
Who knows, the Footsie may even nudge back above 7,000 by the end of the week if the momentum continues.
With the index of blue-chip heavily weighted towards the oilers, Royal Dutch Shell’s (LON:RDSA) results-inspired 3.5% move higher provided the much of the driving force behind the index.
Dovish comments by Fed chief Jay Powell also gave a boost to sentiment.
Just ahead of Shell on the leader board was Smirnoff Vodka maker Diageo (LON:DGE), which advanced 4% as it provided half-year figures and said it would launch a £600mln share buyback.
“Unsurprisingly, for a group that turns water into something stronger than wine, Diageo generates a lot of cash and the company threw off another £1.3bn in these last six months alone,” said Hargreaves Lansdown stock picker Steve Clayton.
“These figures show the underlying strength of Diageo, with good growth across the board, despite a volatile macro-economic backdrop.”
There were no surprises from BT (LON:BT.A), whose financial performance was every bit as anaemic as predicted. The shares slid 1.6%.
Proactive news headlines:
BigDish Plc (LON:DISH) went live with its restaurant booking service in Bristol on Thursday while also updating on its strategy for 2019.
ValiRx Plc (LON:VAL) has beefed up its intellectual property once again after the junior biotech secured two new patents for its VAL301 compound in China and Russia, respectively.
Mineral resources exploration company Oriole Resources PLC (LON:ORR) is to receive a rebate of around £500,000 from the taxman.
Trading in discoverIE Group PLC’s (LON:DSCV) fiscal third quarter continued strongly leaving the group on track to meet full-year earnings expectations.
GP surgery property owner Primary Health Properties PLC (LON:PHP) raised its dividend for a 22nd year as it played down Brexit uncertainties. “Whatever the final outcome and consequences of Brexit for the UK it is unlikely to have a direct impact on the primary health centres we invest in,” said Harry Hyman chief executive.
Regenerative medicines group Collagen Solutions PLC (LON:COS) has signed a new licence and distribution agreement for its knee cartilage scaffold ChondroMimetic with an Indonesian partner.
Shefa Yamim (ATM) Ltd (LON:SEFA) has released the results from a bulk sampling at Zone 2 of its Kishon Mid-Reach project in Israel.
Acquisitive computer game production services provider Keywords Studios PLC (LON:KWS) said 2018 was “another year of good organic growth and geographic expansion”.
Scancell Holdings PLC (LON:SCLP) said in its interim results it has the cash to advance its pipeline of immunotherapy products.
SkinBioTherapeutics PLC (LON:SBTX) said there are no safety or compliance concerns with people taking part in a test of the company’s skin cream. Half the 120 volunteers have been through the trial process with the study set to complete as expected during this quarter.
Cell therapy specialist ReNeuron Group PLC (LON:RENE) said new data will be presented that demonstrate the feasibility of scaling up production of ReNeuron's CTX-derived exosomes. Exosomes are nanoparticles released by cells that are believed to play a key role in cell-to-cell communication.
A ban on tenant fees from June will have less impact than expected on Belvoir Letting PLC (LON:BLV). Originally, Belvoir, which runs the UK’s second largest letting network, forecast the ban would knock 8% from gross profits.
IronRidge Resources Limited (LON:IRR) has issued an update for its Cape Coast lithium portfolio in Ghana. The exploration company said it had completed 4,684 metres of reverse circulation drilling at the Abonko target and Eqoyaa lithium project which had returned visible spodumene intersections with assays pending.
Redx Pharma Plc (LON:REDX) is exploring options for Novel Bacterial Topoisomerase Inhibitor (NBTI) programme with other parties potentially interested in licensing the project after Deinove said it has decided not to exercise their option. The firm said the decision by Deinove follows a period of nine months of evaluation during which the group had sole rights to develop the programme.
Ashley House PLC (LON:ASH) has said it is expected to turn a profit in its full-year period after narrowing losses in the first six months.
Metal Tiger PLC (LON:MTR) has sold a slug of the shares it owns in Aussie-listed copper explorer MOD Resources worth £254,000.
Rainbow Rare Earths Ltd’s (LON:RBW) CEO Martin Eales believes the miner now has a plan in place take its financial performance to break-even and beyond.
Acquisitive oiler Diversified Gas & Oil PLC (LON:DGOC) has confirmed that trading in the final weeks of 2018 “remained strong”.
Cradle Arc PLC (LON:CRA) said that, further to its announcement of 20 December 2018, it has appointed Antony Batty and Hugh Jesseman of Antony Batty & Company as joint administrators to the company with immediate effect. It added that the objective of the administration is to enable an orderly realisation of its assets with a view to maximising value for creditors and shareholders and, if possible, the survival of the company.
88 Energy Limited (LON:88E) ((ASX:88E) confirmed that the company's latest corporate presentation is now available on its website.
6.30am: Subdued start predicted
The FTSE 100 looks set to get off to a subdued but positive start after posting a triple digit gain on Wednesday.
The index of blue-chip shares will open eight points higher at 6,949.63, according to the spread betting companies.
Wall Street closed on a high, after climbing more than 400 points. It was buoyed by dovish comments from US Federal Reserve chief Jay Powell, which effectively kicked the interest rate can down the road. His words had a knock-on positive impact for Asia’s main stock markets.
“The US central bank dialled down its language, and dropped the phrase ‘further gradual increases’ in relation to rate hikes,” said David Madden, analyst at CMC Markets.
“The Fed also said they would also be ‘patient’ when it comes to hiking rates.”
Back here in the UK, it’s set to be a busy day for scheduled company news with updates from struggling telco BT (LON:BT.A), drinks maker Diageo (LON:DGE), Marmite owner Unilever (LON:ULVR) and oil major Shell (LON:RDSA).
Around the markets:
- Pound worth US$1.3126
- Gold up US$8.70 an ounce at US$1,324.2
- Brent crude up 53 cents a barrel at US$63.18
City Headlines:
- Financial Times
- Central bank gold-buying reaches half-century high - Russia leads countries shifting reserves from the US dollar
- Facebook eases investor fears with earnings surge
- UK car plant investment slumps as output hits five-year low
- North unveils £70bn high-speed rail expansion - fast line from Liverpool to Newcastle at heart of 30-year infrastructure upgrade
- Times
- Grant Thornton’s failure to spot Patisserie Valerie ‘fraud’ is ‘extraordinary’, MPs hear
- Tesla’s profits fail to impress
- Barclays shifts €190bn assets to Ireland
- Daily Telegraph
- Microsoft posts higher profits as cloud sales jump
- Plunge in car production puts industry on red alert
- Guardian
- Mystery offshore investor takes 20% stake in Evening Standard