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FTSE 100 closes higher but only just as sentiment boosted by trade progress

The UK blue-chip index finished around five points ahead at 7,183

Brexit flag of the union
Cracks might be starting to appear in Theresa May's doomsday approach
  • FTSE 100  closes up five pts

  • US benchmarks open up

  • Colter well results boost oil tiddlers

FTSE 100 closed the day in positive territory, but only just, as sentiment was boosted by progress in the US and China trade negotiations.

The UK blue-chip index finished around five points ahead at 7,183.

The index was blighted by resource stocks moving lower on the back of a fall in the oil price. Brent crude was down 3.49% to $64.89 a barrel at the time of writing.

FTSE 250 though did finish in the drink, down around 22 points, or 0.12% to 19,246. Brexit dominated headlines again, with pressure mounting on

Prime Minister Theresa May to delay the process, but she remains focused on getting a deal done by March 29.

David Madden, analyst at CMC Markets, said: "The FTSE 100 was in positive territory earlier in the day, but a move lower in the oil market weighed on commodity related stocks like BP, Royal Dutch Shell and BHP Billiton. The FTSE 100 has recovered some ground and is largely unchanged on the day."

3pm US shares open higher

US markets opened sharply higher and may have dragged the Footsie into positive territory with them.

The FTSE 100 was up 7 points at 7,186 after it was reported in the London Evening Standard that the prime minister, Theresa May, was set to promise a new House of Commons vote on delaying Brexit.

In the US, the Dow Jones was 148 points to the good at 26,180 and the S&P 500 was up 13.3 at 2,806.

Away from the big caps, investors welcomed what could be a change in direction for stem cells group Widecells PLC (LON:WDC).

The shares rose 12% to 0.235p after David Sefton, the executive chairman at oil explorer Anglo African Oil & Gas PLC (LON:AAOG), moved in as chairman.

Sefton has an option to acquire up to 29.9% through a company he controls.

On the subject of oil explorers, United Oil & Gas PLC (LON:UOG) rose 7.3% to 4.4p on the back of the Colter appraisal well results while Baron Oil PLC (LON:BOIL), which also has a stake in the well, was the top riser in London with a 44% increase to 0.325p.

READ United Oil & Gas shares rise as ‘bonus’ discovery is made in Colter well

2.15pm: Shares soft ahead of expected firm start on Wall Street

US markets are tipped to open higher but that has cut little slack with UK investors, where the Footsie remains becalmed.

The FTSE 100 was down 6 points at 7,173.

Across the pond, spread betting quotes suggest the Dow Jones industrial average will open at about 28,204, up 172 points. The S&P 500 is tipped to race to around 2,809, up from 2,793 at Friday’s close.

1.00pm: Housebuilders drag Footsie into the red

The UK's benchmark index shuffled sideways for most of the morning but took a dip into the red just before noon.

The FTSE 100 was down 10 points at 7,169, with housebuilders featuring prominently among the big losers.

Persimmon shares are being hit after it was reported that the government may ban Persimmon from the Help to Buy scheme. This would be a big blow given that more than 50% of its private sales are Help to Buy. This scheme has been central to Persimmon's recovery last year as the company is expected to report solid full-year results tomorrow, ahead of market expectations,” reported Neil Wilson at markets.com.

“However, house builders [are] all looking to wean themselves off the Help to Buy drug ahead of the scheme's planned finish in 2023, Persimmon is not entirely out on a limb,” Wilson suggested.

Persimmon PLC (LON:PSON) was the top blue-chip faller, down 5.9%, but the realisation that the government might be about to reverse its long-held policy of sucking up to housebuilders also put the frighteners on Taylor Wimpey PLC (LON:TW.) and Barratt Developments PLC (LON:BDEV) – down 2.8% and 2.1% respectively.

11.30am: Footsie shuffling sideways

A pattern – if a slightly bumpy line moving sideways can be considered a pattern – appears to have been set by the FTSE 100.

The blue-chip index has traded between about 7,185 and 7,200 for the last two hours and is currently at 7,188, up 10 points.

Away from the large caps, Baron Oil PLC (LON:BOIL) and Tekcapital PLC (LON:TEK) were squabbling over pole position on the leader-board; both were up by a third.

Baron Oil, which has an 8% interest in the Colter well, off the Bournemouth coastline, shot up after a “bonus” oil discovery was found at the prospect, although it does mean a sidetrack shaft will have to be drilled.

Information technology companies backer Tekcapital PLC (LON:TEK) saw its market capitalisation rise to £3.2mln after it estimated the net value of its assets at US$16.1mln.

10.10am: Leading shares mixed as Brexit picture remains cloudy

The Footsie was clinging on to meagre gains as optimism over US-Sino trade talks battled with exasperation over Brexit negotiations.

The top-share index was up 13 points at 7,192.

“The pound is stuck in limbo this morning, as news of a 12 March meaningful vote brings out both increased optimism and anxiety at the same time. With Theresa May running down the clock ahead of the 29 March deadline, it is becoming increasingly likely that the only deal on the table will be one that is almost identical to that wholly rejected by parliament; however, with Theresa May frantically attempting to find some form of breakthrough with the EU which would enable a shift in sentiment in parliament, the likely event is that we see an extension to article 50 instead to kick the can down the road once more,” suggested Joshua Mahony at IG Group.

The Footsie was receiving a bit of support from drugs giant AstraZeneca PLC (LON:AZN), which was 0.7% higher at 6,203p after it revealed the Phase III THEMIS trial of Astra’s Brilinta drug met its primary endpoint.

The mid-cap FTSE 250 went its own way, sliding 80 points to 19,190, due in no small part to a 20% fall in the share price of Centamin PLC (LON:CEY) after the gold miner’s 2018 results.

A warning on revenues from spread betting firm CMC Markets Plc (LON:CMCX) last Friday is having more of an effect today on sector peer IG Group Holdings PLC (LON:IGG) than it is on CMC.

CMC slumped from 116p to 90p on Friday but edged up 0.1p today while IG Group was off 4.2% at 550.5p.

9.20am:  US-Sino trade talk hopes trump Brexit fears

A bit of tangible evidence of a thawing in US-Sino trade relations has lured buyers into the market in London.

The FTSE 100 was up 21 points at 7,200.

“The ‘risk on’ tone continued in Asia today, especially in China where key equity indices have rallied more than 5% (so that the CSI300 is now up more than 27% year-to-date in USD terms) after President Trump tweeted that he had decided to delay the tariff increases on $200bn of imports from China that had been scheduled for 1 March,” reported Daiwa Capital Markets.

“According to Trump, ‘The US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues’, with a summit with President Xi Jinping at Mar-a-Lago proposed to “conclude an agreement,” Daiwa noted.

Commodity plays were identified as the big beneficiaries from the Donald’s latest pronouncement; commodities trader Glencore PLC (LON:GLEN) topped the blue-chip risers with a 2.5% gain, with copper miner Antofagasta PLC (LON:ANTO), up 2%, not far behind.

Reaction to Bunzl PLC’s (LON:BNZL) results and its latest acquisition was not favourable, with the shares sliding 4.5% to 2,426p.

READ Bunzl prepared for post-Brexit supply chain disruption

Primark owner Associated British Foods plc (LON:ABF) was also in the red after its trading update, shedding 32p at 2,281p.

“These results follow a similar pattern seen in previous updates with a reduction in sugar revenues, steady growth at its other divisions and expectations for a 4% rise in sales at Primark over the first half. The focus on the group continues to be on the expansion of Primark into the US and though it is at an early stage investors will welcome promising early signs,” said Graham Spooner, an investment research analyst at retail investor-focused broker, The Share Centre.

“The full-year outlook remains unchanged with adjusted operating profit in line with last year. We, therefore, continue to maintain our 'Hold' recommendation as the longer term growth prospects for Primark remain sound and there is increasing global demand for food, although the sugar business remains a concern,” he added.

Liberum Capital Markets, meanwhile, reiterated its ‘buy’ recommendation and target price of 3,070p, saying it was a solid first half update from AB Foods, with full-year guidance reiterated.

8.35am: Positive early progress

The FTSE 100 got off to a subdued start, rising 10 points to 7,188.59, as London’s traders gave a guarded welcome to the latest update on Sino-American trade negotiations.

Asia’s main markets were buoyed by the news that Washington has pushed back its deadline for the implementation of Chinese tariffs to allow further talks between Washington and Beijing.

“The greatest benefit to Trump’s series of tweets on the extension has unsurprisingly been felt in China, with the Shanghai composite up four per cent on the day,” said Craig Erlam of OANDA.

“What may be surprising is that other regional bourses lagged well behind, obviously, China was most at risk but the pain would be felt outside of its borders,” he added.

The builders were marked down after Persimmon’s (LON:PSN) practices selling 'Help to Buy' homes came under scrutiny. Its shares fell 6%, while rivals such Taylor Wimpey (LON:TW.), Barratt (LON:BDEV) and Berkeley (LON:BKG) were down between 1-1.5%.

Results from Centamin (LON:CEY) were far from golden as shares in the precious metals producer fell almost 9% after it revealed it had paid out almost US$100mln last year in profit share, royalties and taxes, mainly to the government of Egypt, home to its main mine.

Proactive news headlines:

United Oil & Gas PLC (LON:UOG) has told investors that the Colter appraisal well, off England’s South Coast, has unearthed a ‘bonus’ discovery through a side-track will now need to be drilled to reach the well’s primary target. The well was drilled down to a total depth of 1,870 metres. The company reported that the well unexpectedly remained on the southern side of the Colter Prospect bounding fault, meaning the primary target was not encountered.

Using ANGLE PLC’s (LON:AGL, OTCQX:ANPCY) liquid biopsy has been revealed to result in a 30-fold increase in tumour cells harvested for analysis in cancer patients. Parsortix was deployed by a Düsseldorf team called Disseminated Cancer Cell Network.

Synairgen plc’s (LON:SNG) prelims revealed the company made significant progress in the year just gone. It completed the first part of its SG015 study, assessing the safety of its inhaled interferon beta drug, SNG001.

Tekcapital PLC (LON:TEK) has reported a record level of net assets in its latest full-year results and is eyeing the cannabis sector for its next potential investment.

Oil and gas rig supplier ADES International Holding PLC (LON:ADES) has renewed contracts for six onshore operating rigs in Saudi Arabia that it acquired in December. All six rigs are contracted for a minimum of three years, starting in February, and they will add up to US$228mln to the contract pipeline.

Anglo Asian Mining PLC (LON:AAZ) has published its mineral resources and ore reserve estimate for its Gadir underground mine in Azerbaijan and issued dividend guidance for 2019.

Tlou Energy Ltd (LON:TLOU) told investors that it has now begun production testing operations at the Lesedi coal bed methane project in Botswana. The company, in a statement, said that the Lesedi 3 development pod has been completed with surface production equipment now installed and operational.

Highlands Natural Resources PLC (LON:HNR) told investors that initial production rates from the East Denver project have measured 4,600 barrels oil equivalent per day, and they are expected to rise further. The production pad – to which the Buckskin, Citadel, Grizzly, Hagar, Ouray, Thunder, Wildhorse and Powell wells are attached – is flowing oil at a combined rate of around 4,053 Bopd while combined gas rates were 3.28mln cubic feet per day.

Base Resources Ltd. (LON:BSE) offset lower grades at its Kwale mineral sands operation in Kenya with a 66% boost to output during the six months to December 2018, which meant that production was broadly flat when compared to the corresponding period a year ago.

Erris Resources PLC (LON:ERIS) is continuing with exploration on its Abbeytown zinc project in Ireland. Drilling has now succeeded in connecting the underground mineralisation with that at the surface and also out to the south.

Goldplat plc (LON:GDP) turned in an operating loss for the six months to December 2018 of £653,000 against an operating profit of £1.6mln for the corresponding period a year earlier.

Kavango Resources PLC (LON:KAV) said it has raised £500,000 in a share placing to fund an acceleration of its Kalahari Suture Zone (KSZ) project in southwest Botswana.

Vast Resources PLC (LON:VAST) has sent out a letter to shareholders following what it calls the “non-receipt” of US$5.5mln in financing that it had been expecting from erstwhile backer Mercuria B. The letter outlines details of a general meeting to be held on 11 March, at which Vast will request its shareholders to grant it the authority to issue new equity and to disapply pre-emption rights.

6.30am: FTSE 100 set for a subdued start

The FTSE 100 looks set to make a subdued start to the new trading week with the index of blue-chip shares predicted to open just five points higher at 7,183.60.

Asia’s main markets were buoyed by the news that Washington has pushed back its deadline for the implementation of Chinese tariffs to allow further talks between Washington and Beijing.

However, market sentiment in London is expected to be driven by fears the UK is inching ever closer to a no-deal Brexit with Theresa May delaying a deal vote until March 12 – just 17 days before the UK is set to leave the EU.

“This is a gamble that she hopes will buy her more time for negotiations. But she risks infuriating ministers who are already prepared to revolt against her,” said Jasper Lawler, analyst at London Capital Group.

Updates and results are expected this week from jet engine maker Rolls-Royce (LON:RR.), Primark owner Associated British Foods (LON:ABF), advertising and marketing giant WPP (LON:WPP) and broadcaster ITV (LON:ITV).

Significant announcements expected on Monday February 25:

Trading update: Associated British Foods plc (LON:ABF)

Finals: Hammerson PLC (LON:HMSO), Bunzl PLC (LON:BNZL), Ascential PLC (LON:ASCL), Hiscox PLC (LON:HSX), Centamin PLC (LON:CRY), Kosmos Energy PLC (LON:KOS), RTC Group PLC (LON:RTC), Quartix PLC (LON:QTX), Bank of Ireland PLC (LON:BKIR)

Interims: Dechra Pharmaceuticals PLC (LON:DPH), Tristel Plc (LON:TSTL)

Economic data: BBA UK mortgage lending figures; CBI quarterly service sector survey

Around the markets:

  • Pound worth US$1.3075
  • Gold changing hands for US$1,333.60, up 80 cents
  • Brent Crude worth US$66.96, down 16 cents

City Headlines: 

  • Financial Times
  • KKR circles Asda after Sainsbury’s deal setback
  • Big banks divided on defaults strategy after Brexit - some have set aside more than £500m, others are not so pessimistic on outlook
  • IAG hits out at aviation regulator over Heathrow rebates deal - CAA cut out of negotiations on charges between airlines and airport operator
  • Hidden buyer of Evening Standard stake is Saudi - Sultan Mohamed Abuljadayel has links to Riyadh-owned bank and also backs the Independent
  • Cyber-attacks on financial services sector rise fivefold
  • Times
  • Bosses hit out at fresh delay to Brexit
  • The gender pay gap at the Bank of England has worsened in the past year
  • Non-Standard Finance’s pay committee has stepped in to head off a probable row over an instant £7mln windfall for its founders should the sub-prime lender land its £1.3bn hostile bid for its bigger rival, Provident Financial
  • South Korean investors are pulling out of deals to buy London offices after investing almost £3bn last year with overall investment in the sector on course for a big drop ahead of Brexit
  • Daily Telegraph
  • Laura Ashley rebuffs takeover approach
  • Business Secretary urged to personally lead battle to save Honda's UK factory
  • Thomas Cook a short-seller target as it bids to sell airline
  • Bumper pay day for bosses at loss-making Laing O’Rourke
  • FTSE bosses voice fears of political turmoil
  • Guardian
  • UK food imports from EU face '£9bn tariff bill' under no-deal Brexit
  • Taking part in the Premier League title race can be worth hundreds of millions of pounds to a football club’s home city, according to a report that said Manchester City and Liverpool are squaring up for a £300mln battle
  • The luxury car firm Aston Martin Lagonda is gearing up for its first set of financial results since a disappointing stock market float

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