FTSE 100 closes a shade higher as Wall Street chugs upward

The UK's premier share index added nearly 14 points to close at 7,034

alphabet hq
Not much is happening over on Wall Street today, except for Alphabet's results which are due after-hours
  • FTSE 100 closes up

  • Global stocks largely quiet

  • UK manufacturing output growth slows

  • Ryanair posts €105.6mln Q3 loss

FTSE 100 closed Monday on the front foot, while European counterparts lagged, and US shares were also gaining ground.

The UK's premier share index added nearly 14 points to close at 7,034, while the FTSE 250 added over 37 to 18,848.

David Madden, market analyst at CMC Markets UK, said: "European equity markets are lower this afternoon as no change to the macroeconomic climate encouraged traders to cash in their positions.

"The US-China trade spat, the Italian recession and the uncertainty hanging over Brexit are all bubbling away in the background. Volatility has been low as there has been little in the way of news to trigger excitement."

The German DAX lost around four points at 11,176, while the French CAC 40 is off around 19 points at 5,000.

On Wall Street, the Dow Jones Industrial Average is up around 14 points, while the S&P 500 and Nasdaq are also both higher.

3.15pm: Muted start on Wall Street hits Footsie

The FTSE 100 has been in the black for all of the session…until now. The index of blue-chip shares is currently 5.2 points, or 0.07%, down at 7,015.0.

The dip follows a muted start on Wall Street, where the Dow Jones has opened 73.7 points down at 24,990.2; the tech-heavy Nasdaq Composite is up 12.1 points to 7,276.1; and the broader S&P 500 is flat at 2,706.6.

Leading the losers in London is Irish packaging giant Smurfit Kappa Group PLC (LON:SKG), which has lost almost 2% of its value to sit at 2,170p.

Cigarette maker Imperial Brands PLC (LON:IMB), which is down by a similar percentage to 2,510p.

At the other end, Software firm Sage Group PLC (LON:SGE) is the top riser, up 2.7% to 643.8p. Closely following that is pest control group Rentokil Initial PLC (LON:RTO), which has jumped 2.6% to 349.2p today.

2.40pm: BHP knocked by broker downgrade

BHP Billiton plc (LON:BHP) shares look expensive after outperforming Rio Tinto PLC (LON:RIO) by 12% since January 2018, according to heavyweight investment bank JP Morgan Cazenove.

Analysts downgraded BHP to ‘underweight’ from ‘equal weight’ with a target price of 1,980p per share, saying BHP is now the only diversified miner not trading at a substantial discount versus its late cycle average multiple.

In reaction, shares in BHP fell 0.7% to 1,711p come Monday afternoon, although they been as low as 1,690p earlier in the session.

The broker otherwise remains positive on the investment case for UK diversified miners due to substantial discounts compared to historical multiples and the market.

2.15pm: Ferrexpo plunges as it investigates charity partner

Ukraine-based Ferrexpo PLC (LON:FXPO) has launched an investigation into the use of monies it donated to Blooming Land, a charity based in the country. 

Blooming Land co-ordinates the iron ore pellet maker’s corporate social responsibility (CSR) programme but operates independently.

Bank statements from the charity contained unexplained discrepancies said Ferrexpo, which has sent copies to its auditor Deloittes to carry out a review.

Ferrexpo donated US$9.5mln to Blooming Land in the first half of 2018 but stopped any further donations in May.

Deloittes might quality its opinion on the full year results due on 20 March pending the outcome of the review said Ferrexpo, though it still expects to report underlying profits [EBITDA] of US$500mln for 2018. Shares in the FTSE 250 member tumbled 9.5% to 237.3p.

1.50pm: SuperBowl ad time...

Aside from the American Football, the most important thing to happen on SuperBowl night is often the half-time adverts. Here's a look at some of last night's:

The latest installment of Disney's Toy Story franchise is due this summer

Happily married tennis star Serena William promotes a dating app

John Legend and Adam Levine change some nappies

And my personal favourite, Steve Carrell telling people that Pepsi is 'more than ok'

1.15pm: Pound’s stumble boosts Footsie

The weak construction PMI data earlier this morning has dented the pound, which has been on the rise in recent sessions as expectations of a ‘no-deal’ Brexit fade.

Sterling is down 0.1% against the dollar to US$1.306, while it has also slipped ever so slightly against the euro to €1.141.

That has helped to lift the FTSE 100, which is 18.1 points, or 0.3%, in the black at 7,038.3.

A weak pound is good news for Britain’s blue-chips as it makes their overseas earnings – about 75% of total earnings – worth more when converted back, while it also makes their goods cheaper to foreign buyers.

Software firm Sage Group PLC (LON:SGE) is the biggest gainer, climbing 2.3% to 641.4p, while oil supermajor Royal Dutch Shell PLC (LON:RDSB) is up 2.2% to 2,439p on the back of higher oil prices.

Auto Trader Group PLC (LON:AUTO) is still the index’s top faller, down 2.2% to 446.1p, although Irish packaging group Smurfit Kappa Group PLC (LON:SKG) isn’t far behind – down 2.1% to 2,166p.

12.40pm: US stocks set for quiet start ahead of Alphabet results

US stocks are poised for a marginally positive open Monday as traders await more earnings.

Foremost among those is tech giant Alphabet (NASDAQ:GOOGL), the parent company of Google, which will report its latest quarterly numbers after the New York bell tonight. Analysts are expecting a 20% increase in sales compared to the same period last year.

On Friday, US blue-chips closed slightly higher while the Nasdaq Composite slipped after Amazon.com Inc (NASDAQ:AMZN) issued a weak outlook.

But on the plus side, the latest stats showed that no-farm payrolls picked up 304,000 jobs in January for their biggest gain since February 2018.

In that last session, the Dow Jones Industrial Average added around 64 points at 25,063, while the tech-heavy Nasdaq lost around 17 points at 7,263. The broader-based S&P 500 added over two points at 2,706.

In futures trade today, the Dow Jones is up 4 points; the Nasdaq is ahead by around three and the S&P 500 is near flat. In Toronto, the TSX on Friday shed around 34 points to 15,506.

“At the moment the Dow Jones is looking just as dull as its European peers did earlier in the day, the futures suggesting the index will start the week flat at 25050,” said Connor Campbell, analyst at spread betting group Spreadex.com.

“Beyond the rescheduled factory orders figure, which is expected to bounce from -2.1% to 0.3% month-on-month, there isn’t a whole lot for the US markets to grapple with, the juiciest release, Alphabet’s Q4 results, happening after hours.”

12pm: Flybe investors to vote on future of chairman

Struggling domestic airline Flybe PLC (LON:FLYB) is to give shareholders a vote on the future of its chairman next month.

Flybe’s biggest single shareholder, Hosking Partners, asked for the meeting to be convened as it wants to replace Simon Laffin with veteran airline industry executive Eric Kohn.

Kosking wants Kohn to be appointed to the role and to take an in-depth look at how Flybe bosses handled the recent sales process, which saw it agree a cut-price £2.2mln deal with a consortium backed by Stobart Group Limited (LON:STOB) and Virgin Atlantic.

Flybe also confirmed that it has received an offer of alternative financing from ex-Stobart boss Andrew Tinkler, although it wasn’t convinced that the proposal “offers the certainty required to secure the future of Flybe”.

Still, the news gave investors hope that the 1p a share Connect Airways deal might not go through and the share price reflected that, with the stock climbing 13.8% to 3.6p.

11.35am: ‘Number of parties’ interested in Patisserie Valerie

The parent company of Patisserie Valerie, Patisserie Holdings, has received a number of offers, according to the administrators overseeing the cake shop chain sale process.

“We are encouraged by the scope of offers received from trade and finance buyers for all and for parts of the business,” said KPMG partner David Costley-Wood.

“We will now be taking a number of these offers forward, and hope to be able to make progress in short order.”

Costley-Wood didn’t reveal the names of any bidders or how many have been lodged.

Patisserie Holdings slipped into at the end of January after make-or-break talks with its lenders collapsed.

The company was rocked in October following the arrest of its chief financial officer and the discovery of a near-£40mln blackhole in its accounts.

Patisserie had thought it had almost £30mln of cash in the bank, but an investigation showed that it was actually £9.8mln in the red.

11am: Oilers lead FTSE 100 higher

The FTSE 100 has shaken some weak manufacturing data to hit a two-month high this morning.

Shortly before 11am, the index of blue-chip shares was up 22.1 points, or 0.3%, to 7,042.4.

Leading the charge were London’s oil supermajors, with Royal Dutch Shell PLC (LON:RDSB) adding 2.2% to 2,436.9p, while its rival BP PLC (LON:BP.)  crept 0.7% higher to 524.9p.

They have been boosted by strengthening oil prices, which also reached two-month highs on Monday thanks to Opec-led supply cuts kick in and US sanctions against Venezuela’s petroleum industry.

Earlier this morning, Brent crude touched US$63.40 a barrel, the highest since 7 December.

Car sales platform Auto Trader Group PLC (LON:AUTO) was the index’s biggest faller, down 2.2% to 446p.

Mining stocks were weighing heavy, too, as broader concerns over US-China trade talks hit the diggers.

10.35am: Housebuilding slowdown ‘very worrying’

“Unlike the weather, there’s no thaw in sight yet for Britain’s construction industry,” said Blane Perrotton, managing director of property consultancy and surveyors Naismiths.

“Such an abrupt slide in sentiment has plunged the sector back towards levels not seen since the deep-frozen lows of last March.

“With the PMI data showing both output and new orders sliding too, 2019 is off to a faltering start. And more worrying still is the slowdown in housebuilding activity, which for much of 2018 provided a ‘get out of jail’ card for an otherwise embattled industry.

“Brexit fears have squeezed developer demand ever since the EU referendum, but as the prospect of a ‘no deal’ exit looms ever larger, Britain’s builders are grappling with the realisation that things could be even worse than feared.”

10.15am: UK construction growth falls to 10-month low in January

UK construction growth “slowed sharply” last month, according to the latest purchasing managers’ index (PMI).

Construction output growth fell to a ten-month low of 50.6 in January, compared with 52.6 and 53.4 in December and November, respectively.

“UK construction growth shifted down a gear at the start of 2019, with weaker conditions signalled across all three main categories of activity,” said HIS Markit’s Tim Moore.

“Commercial work declined for the first time in ten months as concerns about the domestic economic outlook continued to hold back activity. The latest survey also revealed a loss of momentum for house building and civil engineering, although these areas of the construction sector at least remained on a modest growth path.”

9.45am: Taptica and RhythmOne merger moves a step closer

A merger between two of the UK’s leading online video marketing firms has moved a step closer to completion after RhythmOne PLC (LON:RTHM) bosses gave their backing to the tie-up with Taptica International PLC (LON:TAP).

The pair confirmed they were in “advanced discussions” last Wednesday following several weeks of initial talks and RhythmOne has now recommended Taptica’s offer to its shareholders.

“I believe this transaction best positions RhythmOne for the future,” said RhythmOne chairman Eric Singer.

“As we look into and plan for our next fiscal year, combining RhythmOne and Taptica addresses the importance of scale in our industry.”

Almost half of Taptica and RhthymOne investors have already agreed to back the offer, which will see Taptica own 50.1% of the enlarged group and Rhythm One owning the remaining 49.9%.

9.10am: Ryanair falls to surprise Q3 loss

Ryanair PLC (LON:RYA) is among London’s top blue-chip fallers after the budget airline slumped to a surprise loss in the third quarter.

The company, which is ineligible for inclusion on the FTSE 100 because of its Dublin HQ, said it had been forced to slash prices amid intense competition in the short-haul market in Europe.

As a result, Ryanair made a net loss of €105.6mln for the three months to December 31, compared to a net profit of €19.6mln a year ago.

"In our view, Ryanair remains the long-term winner in the European airline industry, based on its leading market position, extensive network, low unit costs and strong balance sheet," Liberum said.

"We see tougher market conditions in the short term as positive for the stronger airlines in the long term, since this clears out weaker competitors and aids consolidation in the market.

Ryanair shares were down 5.1% to €10.86 on Monday morning and Liberum analysts encouraged investors to take advantage of the “short-term share price weakness”.

8.40am: Subdued start for Footsie

As expected, the FTSE 100 made a subdued start to proceedings with the index of blue-chips rising just 3 points to 7,023.22.

Shares in Ukraine-focused miner Ferrexpo (LON:FXPO) fell 7% after it said publication of its prelims could be delayed as it investigates payments made to a charitable foundation.

There was a broader-based sell-off in the natural resources sector with profit-taking and continued worries over the direction of Sino-American trade talks hitting the diggers.

Rio Tinto (LON:RIO), Anglo American (LON:AAL) and Antofagasta (LON:ANTO) were down respectively 1.7%, 1.6% and 1.2%.

Additional downward pressure was applied to Rio by JP Morgan Cazenove, which moved to ‘neutral’ from ‘overweight’ on the stock.

KAZ Minerals (LON:KAZ) fell 2.6% after HSBC moved its call on the stock to ‘hold’ from ‘buy’.

HSBC went in the other direction with its call on Royal Mail Group (LON:RMG), which advanced 1.5% to 280.8p.

Proactive news headlines:

Regenerative medical devices maker Tissue Regenix PLC (LON:TRX) remains on track to hit its target of breaking even by 2020 after revenues more than doubled last year. The company, which was spun out from the University of Leeds in 2006, saw revenue jump to £11.6mln in the 12 months ended 31 December 2018, up from £5.2mln a year earlier.

Avacta Group PLC (LON:AVCT) is set to ink an exclusive licensing agreement with US-listed Moderna Inc (NASDAQ:MRNA). The deal relates to the Affimer programme the two have been working on.

Mkango Resources Ltd (LON:MKA) has increased the mineral resource estimate at its Songwe Hill rare earths project in Malawi.

BATM Advanced Communications Limited (LON:BVC) had clinched a follow-on contract for its cyber communications technology from a government defence department.

A merger between two of the UK’s leading online video marketing firms has moved a step closer to completion after RhythmOne PLC (LON:RTHM) bosses gave their backing to the tie-up with Taptica International PLC (LON:TAP).

Circassia Pharmaceuticals PLC (LON:CIR) revealed that its partner, AIT Therapeutics Inc. has successfully completed a pre-submission meeting with the US FDA for the ventilator-compatible nitric oxide product AirNOvent.

CentralNic Group PLC (LON:CNIC) said it had delivered “strong” trading in 2018 as it issued an update including the integration of technology group KeyDrive. The internet domain services provider said trading for the year ended 31 December had been in line with market expectations with revenues expected to be around £42.5mln compared to £24.3mln the year before, while adjusted underlying earnings (EBITDA) were up to £6.7mln from £6.6mln.

Frontier IP Group Plc’s (LON:FIPP) portfolio firm, Amprologix, has won a £1.2mln UK government contract to accelerate the development of a new antibiotic to tackle antimicrobial resistant MRSA and other superbugs.

Hurricane Energy PLC (LON:HUR) will have to wait to complete the buoy hook-up operation as it makes the final, crucial preparations for its planned early production system on the Lancaster Field, in the waters west of Shetland. On Saturday (Feb 2) the pull in rope failed. There were no casualties and the buoy returned to its starting position and is not damaged.

Angus Energy Plc (LON:ANGS) remains ‘quietly optimistic’ over the potential of the Brockham prospect in Surrey even though the BRX4Z well flow test hit water. Angus is the majority owner-operator at Brockham, while Alba Mineral Resources PLC (LON:ALBA) has a 5% stake.

AfriTin Mining Limited (LON:ATM) has hailed the discovery of significant grades of lithium, in addition to tin, in pegmatites in the ML 133 License, located in the Nainais area of Nambia. The firm said recent test work indicates that the most abundant lithium-bearing mineral present is petalite, with lesser lithian-muscovite, montebrasite and cookeite.

ECR Minerals PLC (LON:ECR) will shortly commence drilling at the Black Cat prospect within the Bailieston gold project area in Victoria, Australia. This programme is in addition to the previously announced drilling which will be taking place at the Creswick gold project and the Blue Moon prospect at Bailieston.

Thor Mining PLC (LON:THR) has found extensive tungsten mineralisation in samples from the Samarkand deposit, one of thirteen deposits at Bonya in Northern Territory. Bonya is a 40/60% joint venture with Arafura Resources Limited ASX:ARU and sits adjacent to Thor’s Molyhil tungsten project.

IronRidge Resources Ltd (LON:IRR) is making good progress on its portfolio of gold projects in Côte d’Ivoire. An airborne geophysical survey has been completed over the Vavoua portfolio, where a significant shear zone that hosts 700,000 ounces Abujar project has now been defined over approximately 0 40 kilometres of strike.

Goldplat plc (LON:GDP) boosted production of gold equivalent ounces in the three months to December 2018 by 57% to 9,648 ounces.

Arc Minerals Ltd (LON:ARCM) has discovered several large new anomalies on the Zamsort copper-cobalt project in Zambia. The two most prospective are Cheyeza and Lumbeta.

Aminex PLC (LON:ARX) announced that John Bell, currently its senior independent non-executive director, has assumed the position of chairman from Keith Phair, who after nine years on the board has decided to retire as a non-executive director, both with immediate effect.

6.30am: FTSE 100 set to make slow start

The FTSE 100 looks set to make a subdued start to the trading week with dealers set to take stock after last week’s push above 7,000 – the first time the index had seen this level since November.

The blue-chips will nudge down three points at the open to 7.017.22, according to the spread betting companies.

“Markets in Europe look set for a fairly low key start in a week where the focus is set to remain on a weak economic outlook after some disappointing economic numbers last week,” said Michael Hewson of CMC Markets.

In Asia, the mood was positive with the major markets there in positive territory, buoyed by Friday’s positive jobs data from the US.

The only real negative was the performance of Sony, which fell 8% after the consumer electronics giant was hit by slower than expected sales of cameras and smartphones.

Back here in the UK, it is set to be another busy week for corporate and economic news.

We have updates from Thomas Cook (LON:TCG), Ryanair (LON:RYA) and Tate & Lyle (LON:TATE), while the Bank of England delivers a triple-bill of news on what has now been dubbed Super Thursday.

Around the markets:

  • Pound worth US$1.3071
  • Gold worth U$1,316.40 an ounce, down US$5.70;
  • Brent crude changing hands for US$62.78 a barrel, up 3 cents

City Headlines:

  • Financial Times
  • Nissan U-turn a Brexit ‘warning sign’, says business secretary
  • UK CFOs say Brexit is biggest risk to business - other factors include weak demand and US protectionism, Deloitte report shows
  • US Q1 earnings tipped for first decline in three years
  • Times
  • Companies are scaling back spending and hiring plans more ferociously than at any time for nine years amid uncertainty about Brexit
  • The second biggest shareholder in Metro Bank has lent out a chunk of its stake in the company in a move that could give ammunition to hedge funds betting against the troubled lender
  • Contractors stockpile supplies to keep lights on after Brexit
  • Daily Telegraph
  • Indian tycoon dials up £6bn City float of Airtel Africa empire
  • Sunrise Records, run by entrepreneur Douglas Putnam, is the front-runner in an auction being overseen by administrators at KPMG
  • Secret Escapes is holding talks with investment banks about a potential £500m stock market float
  • Patisserie Valerie administrator KPMG has blocked a rescue attempt by the former boss of cafe chain Druckers
  • Guardian
  • The courier company Hermes is to offer drivers guaranteed minimum wages and holiday pay in the first UK deal to provide trade union recognition for gig economy workers
  • Falling diesel sales more than Brexit behind Nissan's X-Trail decision

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