FTSE 100 closes higher as global growth fears ease, but Carnival shares sink

The UK's premier index closed up nearly 19 points at 7,169, while FTSE 250 added over 96 at 8,896

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The Footsie's gains were overshadowed by those notched up by US benchmarks
  • FTSE 100 closes higher

  • US stocks also up

  • Cruise ship giant Carnival is top FTSE loser

FTSE 100 closed the day higher, albeit not that convincingly,  as global equity markets seemed to have a renewed spring in their step.

The UK's premier index closed up nearly 19 points at 7,169, while FTSE 250 added over 96 at 8,896. The pound nudged up a tad against the US dollar - up 0.07%.

European indices were higher, with the German Dax ahead by nearly 72 points at 11,419 and the French  CAC 40 added around 46 points.

In the US, the Dow Jones Industrial Average is up 109 at the time of writing, and the S&P 500 gained around 15  points at 2,814.

Sinking to the bottom of the Footsie pile was cruise ship operator Carnival (LON:CCL), which saw shares tank 8.46% to stand at 3,800p.

The company, in its first quarter results, lowered full-year guidance, saying for 2019, it expects adjusted earnings per share to be in the range of US$4.35 to US$4.55, compared to guidance issued in December of US$4.50 to US$4.80.

Arnold Donald, Carnival’s president and chief executive officer noted: "For the full year, our earnings guidance now reflects $155mln, or $0.22 per share, from fuel price and currency moving against us.

"Operationally, we continue to expect revenues and adjusted earnings per share improvements in line with our December guidance."

3.00pm: Leading shares clinging on to gains as US stocks power ahead

The FTSE 100 is holding station above 7,200 as some of sterling's strength against the dollar dissipated.

The index of leading shares was up 34 points (0.5%) at 7,211.

Ocado continues to head the list of blue-chip risers after it signed a deal with Aussie supermarket chain, Coles.

Peel Hunt has resumed coverage of the online shopping technology pioneer with a 'buy' recommendation and a price target of 1,700p.

The shares were up 60p at 1,315.5p.

HSBC has given a lift to much of the housebuilding sector with a broker note.

Taylor Wimpey PLC (LON:TW.), Persimmon PLC (LON:PSN), Berkeley Group Holdings PLC (LON:BKG) and Barratt Developments PLC (LON:BDEV) each had their price target raised by the bank.

Taylor Wimpey advanced 0.3% to 175.9p as HSBC bumped up its target by 30p to 230p while Persimmon climbed 23p to 2,178p after HSBC upgraded the stock to 'buy' from 'hold' and cranked up the target price to 2,960p from 2,480p.

Berkeley actually slipped 5p to 3,783p after HSBC hiked the price target to 4,130p from 3,780p but Barratt Developments was the best blue-chip performer in the sector, advancing 1.1% to 596.6p, after HSBC bumped up the target price to 770p from 620p.

1.45pm: US benchmarks off to a flying start

The FTSE 100 received a leg-up from US benchmarks, which opened sharply higher.

Th FTSE 100 was up 42 points (0.6%) while across the pond, the Dow Jones industrial average was 227 points (0.9%) to the good at 25,746 while the broader-based S&P 500 was 26 points firmer (0.9%) at 2,824.

12.30pm: Gains ebb away as sterling perks up

The FTSE 100 was slowly relinquishing the morning's gain as sterling's strength dampened enthusiasm for equities.

The leading shares index was up 14 points (0.2%) at 7,192 having spent the second half of the morning bobbing around the 7,200 level.

On the foreign exchange market, sterling has gained almost half a cent against the greenback, rising to US$1.3245, which usually acts as a dead-weight on the index, comprised as it is of many multinationals.

“An interview with Jacob Rees-Mogg appeared to be responsible for the pound perking up on Wednesday morning,” said Connor Campbell, who was so stultified by the thought of an interview with Rees-Mogadon that he forgot what day it is.

“The ERG chair said that it is ‘very, very difficult’ to see the UK leaving the EU without a deal, and that, in his opinion, the choice is breaking down to May’s deal or no Brexit. The pound would take either option, especially the latter, with the comments briefly sending the currency 0.3% higher against both the dollar and the euro before pulling back slightly,” Campbell said.

“Turning to this afternoon and the Dow Jones is expected to start the US session with a bang, the futures pointing to a 160 point, 25,700-teasing open,” Campbell said.

The FTSE 250, less constrained by a strong pound, was outperforming its bigger brother, rising 136 points (0.7%) to 18,936, led by Clarkson PLC (LON:CKN), which was up 10.4% at 2,440p after it was revealed late last night that Peter Backhouse, a non-executive director of the company, had purchased 1,000 shares at £23 a pop.

10.45am: Ocado leads the Footsie higher

 The FTSE 100 was consolidating early gains as investors try to get to grips with the implications of parliament’s power grab last night.

The top-shares index was hovering around the 7,200 level, up 22 points.

“The latest twist in the Brexit saga has seen the UK parliament vote in favour of giving themselves greater input into the process of leaving the EU with a series of indicative votes now expected to take place tomorrow. This paves the way for a different path to that plotted by PM May but it is worth pointing out that any suggestions made by the House of Commons won’t be legally binding and the outcome could in fact help May’s deal pass,” summarised David Cheetham at online trading platform, xtb.

On the macroeconomic front, UK Finance reported that mortgage approvals for house purchases fell to 35,299 in February from 39,555 in January.

The February reading was the lowest since April 2013.

“February’s drop in mortgage approvals to a near six-year low adds to recent indications that heightened economic and Brexit uncertainties are weighing down on the housing market. It is already under some pressure from overall challenging conditions – still relatively limited consumer purchasing power (despite recent improvement) after an extended squeeze, fragile consumer confidence and wariness over higher interest rates. It should be noted that the overall national picture has been dragged down by the particularly poor performance in London and parts of the South East,” said Howard Archer, the chief economic advisor to the EY ITEM Club.

None of which stopped housebuilders Persimmon and Barratt Developments from posting handsome gains but these were surpassed by online shopping technology pioneer Ocado PLC (LON:OCDO), which rose 4.6% after clinching a deal with Australian supermarket, Coles.

“This is another very positive move for Ocado as it focuses on exploiting the great advantage it has with world-leading technology in automated warehouses and online grocery delivery," said Ian Forrest, an equity analyst at The Share Centre.

"Deals such as this are expensive in terms of upfront costs, but the longer term benefits could be significant as Ocado will receive fees in the future based on sales achieved. The cash received from its recent deal with Marks & Spencer will prove very valuable to Ocado in enabling it to fund its existing technology deals as well as enter into further deals with retailers around the world, such as Coles. It was no surprise to see the shares respond positively with a 5% rise taking them up to a new record high," he added.

9.45am: The Footsie ambles back above 7,200

 The FTSE 100 shrugged off a hesitant start with housebuilders to the fore in the wake of a trading update from Crest Nicholson PLC (LON:CRST).

The index of leading shares was back above 7,200, up 29 points (0.4%) at 7,207.

Persimmon PLC (LON:PSN) and Barratt Developments PLC (LON:BDEV) were up 2.2% and 1.4% respectively after FTSE 250 housebuilder Crest Nicholson poached the chief executive officer of rival Galliford Try plc (LON:GFRD) and reassured the market it expected in 2019 to deliver both revenue and volumes similar to last year and continue to improve its cash generation.

Crest was up 7% at 377.6p while Galliford Try, which has appointed its head bean-counter, Graham Prothero, to succeed the departing chief executive, Peter Truscott, was down 3.1%.

Peel Hunt responded to developments by upgrading Crest to ‘hold’ from ‘reduce’, opining that the poaching of Truscott was “a positive appointment”.

Peel Hunt now has a price target of 360p, up from 305p previously, while another broker, Liberum Capital Markets, stuck with its 405p price target and ‘buy’ recommendation.

8.30am: Footsie cautiously positive

The FTSE 100 nudged into positive territory – though only just – as Brexit uncertainty acted as a drag on the market.

The index of blue-chip stocks rose just 4 points shortly after the open to 7,181, though City traders largely ignored the modest positivity emanating from Wall Street. The picture was mixed in Asia, with Japan rebounding, while Chinese stocks lost more ground.

“In focus today will be further Brexit developments in parliament following MPs’ overnight vote to take control of the Brexit process, with a series of indicative votes scheduled for Wednesday to find a consensus on all options,” said Mike van Dulken of Accendo Markets.

Ocado (LON:OCDO) was the Footsie’s top performer after the online grocer said it had struck a technology deal with Aussie retailer Coles. The shares advanced 4.2%.

An upbeat AGM statement from Crest Nicholson (LON:CRST) sent its shares soaring 9% and dragged the rest of the sector with it.

The outlook for Ferguson (LON:FERG), the Anglo-American giant that supplies the building sector, wasn’t quite as rosy as it warned its full-year profits would be at the lower end of forecasts.

Proactive news headlines:

ValiRx Plc’s (LON:VAL) joint venture ValiSeek has agreed letters of intent with one European and one US partner to take lung cancer treatment VAL401 into a phase III trial.  ValiSeek is also seeking external financing towards the next trial and will handle the commercial negotiations with ValiRx having no further financial commitment to the next stages of VAL401’s development.

Erris Resources PLC (LON:ERIS) has delivered positive results from 527 closely spaced soil samples taken from the Abbeytown zinc project in County Sligo, Ireland. Three new targets have been identified up to 1.25 kilometres southwest of the old Abbeytown mine.

Shares in S & U PLC (LON:SUS) opened sharply higher after the company revealed another year of record profits for its car purchase finance arm. The loans specialist cheered the market with a 12.3% increase in the full-year dividend to 118p in respect of fiscal 2019 from 105p in fiscal 2018.

Pizza chain operator DP Poland PLC (LON:DPP) is trying out a partnership with Poland's largest takeaway delivery aggregator and the early signs are promising. The company, which operates the Domino's Pizza franchise in Poland, has already warned the market that it faced increased competition in the second half of 2018 from the two main delivery aggregators and it has evidently decided that if you can't beat 'em, join 'em.

Personal Group Holdings PLC (LON:PGH) has reported improved profits in its latest full year, saying that it saw “potential opportunity” in a less predictable business environment caused by the ongoing Brexit shenanigans. Big Pic needed.

Alliance Pharma PLC (LON:APH) posted strong growth, boosted by acquisitions, as overseas sales surpassed domestic revenues for the first time ever. The company’s star international brands performed well, led by Kelo-cote, a skin treatment.

Motif Bio PLC (LON:MTFB) (NASDAQ:MTFB) received a monetary boost – and by extension a vote of confidence in its prospects – as it raised £2.7mln via a share placing. The cash will fund the business through the coming months as it meets with officials at the US Food & Drug Administration to discuss the future of its antibiotic, iclaprim.

Faron Pharmaceuticals Oy (LON:FARN) plans to raise around €3mln (£2.5mln) via a share placing and sUBScription to institutional investors to advance its development programmes and provide working capital into the third-quarter of 2019. The AIM-listed clinical-stage biopharmaceutical company said the placing will be conducted by way of an accelerated bookbuild process.

Galantas Gold Corporation (LON:GAL)(CVE:GAL) is expanding its gold milling capacity at the Omagh mine in Northern Ireland. The company’s mill is already producing a gold and silver concentrate using a non-toxic, froth-flotation process.

The open pit reserve at the T3 copper project in Botswana has been increased to 34.4mln tonnes grading 1% copper and 13.2 grams per tonne silver, after a significant work programme undertaken by owner MOD Resources (LON:MOD). London-based investment company Metal Tiger PLC (LON:MTR) holds around 10.5% of MOD.

Kore Potash PLC (LON:KP2) has received an engineering, procurement and construction proposal from a French consortium of engineering companies, comprising Technip France, Vinci Construction, Egis International and Louis Dreyfus. The proposal was a month late.

88 Energy Ltd’s (LON:88E, ASX:88E) exploration partner Red Emperor Resources (LON:RMP) (ASX:RMP) has issued a statement reaffirming its intention to continue pursuit of oil in the Nanushuk play. It comes as 88 Energy has plugged and abandoned the Winx-1 well which unearthed more than one potential oil zone, but, none were found to be sufficiently promising to conduct further testing.

ADES International Holding PLC (LON:ADES) told investors that it has now completed its transaction with Weatherford International, to acquire a package of rigs currently in Algeria and Iraq. For a total of US$32mln, the company has picked up two onshore rigs currently in Algeria and two that are in southern Iraq but are due for relocation to Saudi Arabia.

FairFX, the e-banking and international payments group said it has raised around £2mln before expenses after the exercise of warrants over 7,500,000 new ordinary shares which were issued to Crystal Amber Fund in conjunction with the company's equity placing announced in March 2016. The group said the funds raised will support its growth plans in 2019 and beyond.

Be Heard Group PLC (LON:BHRD), the digital marketing group, said it was notified that on 25 March 2019, its chief executive officer, Simon Pyper purchased 397,768 ordinary shares in the company at 1.255p each. The group said Pyper's total holding in the company is now 4,138,456 ordinary shares, representing 0.40% of the total issued share capital.

Highlands Natural Resources PLC (LON:HNR) said, further to its recent sUBScription and PrimaryBid fundraising, its executive chairman, Robert Price's holding in the company now represents 8.79% of the group’s total voting rights, although the number of ordinary shares held by Price has not changed.

Solo Oil PLC (LON:SOLO) announced that an updated copy of the company's presentation is available on its website. www.solooil.co.uk

Franchise Brands PLC (LON:FRAN), an international multi-brand franchisor, announced that it will be exhibiting at the UK Investor Show 2019 taking place at the Queen Elizabeth II Conference Centre, Westminster this Saturday 30 March 2019, and can be found at Stand 52.

6.30am: Rally on the cards

The FTSE 100 index is expected to rally on Tuesday, recovering from Monday’s falls after modest gains overnight from US and Asian markets, with all eyes still on the Brexit situation after the UK parliament yesterday voted to effectively take charge of the process for a day.

Spread betting firm IG expects the blue-chip index to open around 38 points higher at 7,207 having shed 30 points on Monday.

Overnight on Wall Street, the Dow Jones Industrials Average closed modestly higher, up 14 points, or 0.1% at 25,516 as US bond yields edged higher having been on a downward curve due to worries over the health of the US economy.

In Asia today, Hong Kong’s Hang Seng index was also up around 0.1%, but Japan’s Nikkei 225 index was stronger, gaining over 2% after two days of losses.

On currency markets, sterling remained cautious against both the US dollar and the euro as traders await the next twists in the Brexit saga.

Last night the UK government was defeated in another vote on the Brexit process with UK lawmakers wresting control of the parliamentary agenda for Tuesday after prime minister Theresa May said she would not bring her EU agreed deal back for a third meaningful vote until she was sure it could be passed.

With EU leaders last week agreeing to give the UK a short extension to the Brexit date, previously set as this Friday 29 March if parliament agrees to May’s deal, MPs will today hold a series of indicative votes to see which areas of the deal are acceptable to them and which are not, although the prime minister has said there is no guarantee she will abide by their wishes.

UK restructuring the focus for Ferguson

On the corporate front, investors in blue-chip plumbing and heating distributor, Ferguson Plc (LON:FERG) will be hoping to see evidence that the US-focused firm’s  UK turnaround plan is paying off in its first-half results on Tuesday.

The FTSE 100-listed plumbing and heating supplies group is on track to complete a restructuring of its UK business this year to address weak repair, maintenance and improvement markets. 

The first quarter saw continued strength in its North American operations offset a fall in the UK to bring revenue up 8.5% to £3.3bn and organic sales up 6.7%. UBS expects second-quarter organic sales growth of 5.3%, led by another strong performance in the US business.

Fevertree needs to start sparkling in US

Fevertree Drinks PLC (LON:FEVR) was one of the big casualties of October’s global equities sell-off, and the posh tonic maker is still some 25% off the all-time highs it hit in the month prior.

The company, which is one of the biggest on AIM, didn’t help itself when it went silent during November, a month in which it has traditionally told investors that results will be way ahead of forecasts.

Normal service was resumed at the start of this year when it lifted its forecasts for the year just gone and investors will be hoping for a repeat in Tuesday’s 2018 results.

Margin squeeze at AG Barr

Sticking with fizzy drinks, Irn Bru maker AG Barr PLC (LON:BAG) is also set to report its full-year results on Tuesday.

The company, which also makes Rubicon and Strathmore drinks, reported steady revenue growth in January’s trading update and investors will want to see if that is reflected in the profit column.

House broker Shore Capital expects operating profit to have edged 1% higher to £45.5mln. That compares with consensus of £46.4mln and guidance of delivering profit ahead of last year.

Significant events expected on Tuesday March 26:

Interims: Ferguson Plc (LON:FERG), Mysale Group PLC (LON:MYSL)

Finals: Fevertree Drinks PLC (LON:FEVR), AG Barr PLC (LON:BAG), Moss Bros Group plc (LON:MOSB), Vectura PLC (LON:VEC), S&U PLC (LON:SUS), Personal Group Holdings PLC (LON:PGH), Alliance Pharma PLC (LON:APH), Access Intelligence PLC (LON:ACC), Boku Inc (LON:BOKU), T Clarke PLC (LON:CTO), Gulf Marine Services PLC (LON:GMS), LiDCO Group PLC (LON:LID), Michelmersh Brick Holdings Plc (LON:MBN), Pelatro PLC (LON:PTRO), STM Group Plc (LON:STM), XL Media PLC (LON:XLM)

Trading updates: United Utilities PLC (LON:UU.)

Economic data: UK quarterly GDP; UK balance of payments; US durable goods orders; US Case-Shiller home price index

Around the markets:

  • Sterling: US$1.3183, down 0.1%
  • Gold: US$1,193.71 an ounce, down 0.1%
  • Brent crude: US$67.38 a barrel, up 0.2%

City Headlines:

  • Three UK government ministers quit last night to give MPs the power to tear up Theresa May’s deal as the parliament seized control of Brexit – The Times
  • Mike Ashley's Sports Direct is considering a cash offer to buy the struggling department store chain Debenhams – Daily Telegraph
  • Ocado lands partnership deal with Australia's Coles Group, its fifth overseas deal in less than 18 months - Reuters
  • William Hill is seeking to cut in its rents by 50% to help it offset the cost of revenue lost due to imminent curbs on fixed-odds betting terminals – The Guardian
  • Apple rolled out its first product on Monday dedicated to digital services, beginning a renewed push into video, finance, news and gaming – Financial Times
  • JP Morgan Chase has sent new contracts to hundreds of employees in London requiring them to relocate if Britain leaves the European Union without an agreement next month – The Times
  • Autonomy founder Mike Lynch has been accused of “revenue pumping” to conceal the fact that the FTSE 100 software company was “stagnating” prior to its $11.1bn takeover by Hewlett-Packard Daily Telegraph
  • Train company Govia is poised to net hundreds of millions of pounds if Transport Secretary Chris Grayling delays a key decision on the hugely profitable South Eastern franchise – Daily Telegraph
  • Global co-working giant Wework doubled its revenue last year as it began to attract larger companies for longer periods, but losses continued to widen for the New York start-up – The Times
  • The Co-operative Group has avoided a fine from the grocery regulator despite being found guilty of “widespread” failings in how it treated its suppliers – The Times
  • The eurozone faces disaster in the next economic downturn because many countries have failed to prepare, according to David Lipton, deputy managing director of the International Monetary Fund – Daily Mail
  • The International Monetary Fund managing director has joined the growing clamour to further tax tech firms Google, Facebook and Amazon – The Guardian
  • Aviva Investors, which manages over £348bn in assets, has sent a stinging rebuke to FTSE 100 firms calling for a "fundamental rethink" of how bosses are paid amid rising concerns about inequality – Daily Telegraph

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