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FTSE 100 closes marginally down after treading water through the day as Parliament breaks for Easter after Brexit extension

Holiday cheer as airline stocks gain on hopes holidaymakers will put Brexit concerns aside for summer

FTSE 100
Discounting ex-dividend stocks, the Footsie was little changed
  • FTSE 100 index down 3.96 points

  • UK Parliament breaks for Easter after new Brexit date 

  • Grafton Group climbs after buying Dutch DIY chain

  • WH Smith proves it is better to travel than to arrive

FTSE 100 closed the day slightly down, taking the lacklustre cue from US markets which were also treading water after investors took a cautious view ahead of the first quarter earnings season that kicks off on Friday.

Concerns over a global economic slowdown, also kept investors firmly on the sidelines, with US Federal Reserve vice chair Richard Clarida in a speech saying that incoming economic data show that US growth is "slowing somewhat" while inflationary pressures have been muted.

 

 

Gainers for the day were blue chip airline stocks, on hopes people will be booking holidays now instead of worrying about Brexit, says CMC Markets analyst Michael Hewson.

He said the prospect of a cliff-edge Brexit or a messy no-deal Brexit has been postponed for another six months to the end of October.

"Investors ... can start piling back in to UK stocks, which I think are fairly cheap," he said.

IAG (LON:IAG) added 5.9% at 545.40 while easyJet (LON:EZJ) gained 8.38% to clsoe at 1,144.50p and TUI AG was up 8.27 at 775.40.

The DJIA was down 0.16% while the S&P 500 was down 0.04% and the NASDAQ also eased 0.08%.

 

3.15pm: Losses lengthen despite moderately firm start on Wall Street

The FTSE 100 drifted further into the red, despite a moderately firm start by Wall Street.

The UK's index of leading shares was down 13 points (0.2%) at 7,409.

In the US, the Dow Jones was up 38 points (0.1%) at 26,196 while the S&P 500 was up 2.6 points (0.1%) at 2,890.8.

2.00pm: The Footsie drifts lower

The FTSE 100 lapsed back into the red in the lunchtime session, albeit only just.

The top-shares index was down a point at 7,421 despite expectations that US markets would open modestly firmer.

Things were a lot more vibrant in the mid-cap FTSE 250, which was up 107 points (0.6%) at 19,592, despite potash project developer Sirius Minerals PLC (LON:SXX) tumbling 10.7% to 21.7p.

DIY group Grafton Group PLC (LON:GFTU) was 4.4% higher after it announced the acquisition of Polvo for €131mln.

Polvo is one of the top three leading businesses in the specialist ironmongery, tools, ventilation systems, fixings and related products market in the Netherlands, according to Grafton.

Elsewhere among the FTSE 250 retail crowd, stationer WH Smith PLC (LON:SMWH) hardened 56p to 2,194p after its interims.

“Retailer WH Smith must now be fonder of travel than Phileas Fogg of Around the World in 80 Days fame,” quipped AJ Bell's investment director, Russ Mould.

“Once again, first half results show its moribund high street business being rescued by the part of the business which serves airports, motorway service stations and train stations.

“Almost more important than the robust performance from this latter part of the business in the first six months of its financial year is the promise of a better-than-expected showing from it in the second half,” he added.

12.15pm: Leading shares add to earlier gains

The FTSE 100 extended its gains ahead of what is expected to be a mixed open in the US.

At 7,440, the index was up 18 points (0.3%), despite the likes of Aviva PLC, Barratt Developments PLC, Croda International PLC, ITV plc, Mondi Plc and Paddy Power Betfair plc trading in ex-dividend form.

Mining stocks were out of favour, including Rio Tinto PLC (LON:RIO), which was down 1.1%at 4,712p after French banker Exane downgraded the stock to “underperform” from “neutral”, despite increasing the target price to 4,500p from 4,300p.

In other broker action, HSBC downgraded grocery delivery technology specialist Ocado Group plc (LON:OCDO) to 'reduce' from 'hold'.

The target price was bumped up, however, to 900p from 750p; Ocado shares currently trade at 1,395p, down 2.8%.

11.00am: Airline stocks wanted after Brexit extension

The FTSE 100 crept into positive territory, helped by the strength of airline stocks, which are wanted following the extension of the Brexit deadline.

The index of heavyweight shares was just 2 points firmer at 7,424, with easyJet PLC (LON:EZJ) and International Consolidated Airlines (LON:IAG) leading the way, with rises of 5.9% and 5.0% respectively.

READ Airline stocks see red after cautious outlook from easyJet fuels Brexit concerns

Another leisure stock from the “easy” stable, easyHotel PLC (LON:EZH), was 8.3% higher at 72p after it bragged of a “fourth year of outperformance” for the hotels it owns and manages.

The picture at its franchised hotels was less bright but the company still claimed that its franchised branches were outperforming the market.

 

10.00am: Mixed picture for blue-chips

London's leading stocks remained modestly lower following the Federal Reserve's slightly hawkish statement last night.

The index of the stock market's biggest companies was down 9 points (0.1%) at 7,412.

“The Fed minutes were more hawkish than anticipated. A few weeks ago, when the US central bank kept interest rates on hold and lowered the growth forecast, dealers took that as a sign that rates won’t be hiked this year. The minutes last night, showed that some policymakers would be keen to hike rates should the economy improve, and that took some traders by surprise as they thought a rate hike in 2019 was off the table. In a way, it was typical of the Fed to give themselves some wiggle room,” said David Madden at CMC Markets.

After “Super Wednesday” it was back to “Threadbare Thursday” in terms of news flow from the blue-chips, with traders having to make do with the meagre gruel served up by south American miner Fresnillo plc (LON:FRES) and arguably the market's least sexy stock, National Grid PLC (LON:NG.).

Fresnillo was down 3.2% at 833.2p after its first quarter production report.

“Q1 production only came in overall weaker than we expected with silver, including silverstream, -10% below our forecasts and gold -9% below,” said RBC.

National Grid was down 1.3% at 823.5p after issuing what it called technical guidance for fiscal 2018/19. The power distribution firm said underlying earnings per share are in line with expectations, with higher operating costs in its US business offset by lower finance costs.

8.55am: Footsie weak in early trade

London's index of leading shares traded slightly lower as the Tories and Labour geared up to hammer out a Brexit accord after Prime Minister Theresa May won a six-month ‘flextension’ to allow her to broker an EU departure deal.

The UK blue-chip index fell 14 points to 7,407.85, while the pound, while briefly above US$1.31, failed to maintain its upward momentum.

“The problem for traders and investors is that the extension to October 31 does not bring us any closer to a resolution,” said Neil Wilson, analyst at Markets.com.

“The cliff-edge has simply been pushed back. We are in a period of peak uncertainty for UK politics and that won’t help investors pile back into UK assets.”

On the market, ex-dividend factors knocked around 8 points from the Footsie as both Aviva (LON:AV.) – down 5% - and Standard Life Aberdeen (LON:SLA) – off 5.6% - traded without entitlement to a payout.

Marks & Spencer (LON:MKS) was off 1% after being downgraded Credit Suisse, while Whitbread (LON:WTB) was little changed after receiving similar treatment by Morgan Stanley.

Proactive news headlines:

Vast Resources PLC (LON:VAST) was a top riser in London on Thursday morning after it updated on financing discussions as well as the restructuring of its business. The mining firm said it was expecting term sheets (non-binding investment agreements) from financial institutions for loan finance to bring its Baita Plai metal mine in Romania into production.

hVIVO PLC (LON:HVO) bosses are confident that the drug development services provider will turn a profit next year as it starts to see the benefits of recent changes. The company, which carries out ‘challenge’ trials on behalf of drugmakers, said its pipeline of opportunities for 2020 is already “looking exceptionally strong”.

Faron Pharmaceuticals Ltd (LON:FARN) is to target more patients with late-stage colorectal cancer as part of the ongoing phase I/II study of its Clevegen immunotherapy drug.

Alba Mineral Resources plc’s (LON:ALBA) investment in the Horse Hill oil project continues to see a boost from ongoing test production and fresh drill programmes promise new potential value catalysts in the coming months. Today, a new update from Horse Hill’s Portland reservoir production test revealed that oil has continued to flow at a stable rate of 220 barrels per day. It is a constrained rate, held below the 362 bopd top rate seen previously, due to prudent reservoir management.

Security software firm Corero Network Security PLC (LON:CNS) has reiterated its commitment to moving into profit at the underlying earnings (EBITDA) level this year.

BigDish PLC (LON:DISH) is planning to add reviews and reservation sharing features to its app and website as part of technology development targets for the second quarter.

OptiBiotix Health PLC (LON:OPTI) said it has received a licence from the Food Standards and Safety Authority India (FSSAI) for its award winning weight management product, SlimBiome to be manufactured in India.

Instem PLC (LON:INS) said shareholders including chairman David Gare and non-executive director David Sherwin plan to sell stock in the IT company “to satisfy market demand and broaden the institutional investor base”. A total of 1.6mln shares (the equivalent of 10.2% stake) are being sold at “not less than” 290p a share.

Shefa Yamim (ATM) Ltd (LON:SEFA) is planning to change its name to Shefa Gems Ltd at its annual general meeting next month. The Israeli gem miner added that if the name change was approved at the 23 May meeting its SEFA ticker would remain the same.

Kibo Energy PLC (LON:KIBO), the multi-asset, Africa focused energy company, announced that an updated version of its corporate presentation is now available on the company's website. www.kibo.energy

6.45am: Easier start predicted

The Footsie is seen slightly lower ahead of Thursday’s open – there would be a bunch of factors in the market though, as it has become customary, everything is about Brexit.

In America, Federal Reserve minutes from the last policy meeting were found to be less dovish than expected, with central bankers open to raising rates later this year, meanwhile, at the ECB, Mario Draghi’s panel stuck with their view that rates would remain untouched and ‘all instruments’ would be available if the economy faltered further.

But, attentions this morning will be on the news that went bump in the night - that the Brexit deadline has been extended until Halloween.

A new 31 October deadline means there’s a lot more time for political wrangling and uncertainty, but, the ‘cliff edge’ is now removed for the time being. It also means that the UK will have to participate in the upcoming European Elections.

The extension is longer than Theresa May sought, but, shorter than the 12-months that some European leaders had provisionally offered.

It has removed the immediacy of Brexit, but, perhaps domestically provides a trigger for the next round of uncertainty and political jostling.

“Prime Minister May will now have to return to the UK and make the case to her disgruntled Brexiter MPs later today that the UK will now not leave on April 12th and will be in the EU for another six months,” said Michael Hewson, analyst at CMC Markets.

“This is not likely to go down well, which could well increase internal party manoeuvres to replace her.”

As the pound strengthened, the FTSE 100 is seen starting the session slightly lower with IG Markets calling the London index down 14 points, at 7,399 to 7,402.

Last night in New York, the Dow Jones was practically flat – closing up only 6 points – at 26,157 whilst the S&P 500 was marked 0.35% higher at 2,888 and the Nasdaq gained 0.69% to finish at 7,964.

In Asia, Japan’s Nikkei rose by 28 points or 0.13% to 21,716 and Hong Kong’s Hang Seng was down 0.91% at 29,845, while the Shanghai Composite was off by 1.4% at 3,196.

Significant announcements due Thursday April 11:

Trading update: Man Group PLC (LON:EMG),

Interims: WH Smith PLC (LON:SMWH)

Finals: Corero Network Security PLC (LON:CNS), hVivo PLC (LON:HVO), Trackwise Designs PLC (LON:TWD)

Ex-dividends to knock 7.97 points off FTSE 100 index: Aviva PLC (LON:AV.), Barratt Developments PLC (LON:BDEV), Croda International PLC (LON:CRDA), ITV plc (LON:ITV), Mondi Plc (LON:MNDI), Paddy Power Betfair plc (LON:PPB), Rentokil Initial PLC (LON:RTO), Standard Life Aberdeen PLC (LON:SLA), Smurfit Kappa Group PLC (LON:SKG)

Economic data: UK RICS housing survey; US weekly jobless claims; US PPI

Around the markets

  • The pound: US$1.3104, up 0.1%.
  • Gold: US$1,307 per ounce, down 0.1%
  • Brent crude: US$71.44 per barrel, up 1.16%
  • Bitcoin: US$5,209, down 0.3%

City Headlines:

  • Mike Ashley threatens to sue Debenhams' administrators for rejecting his £200m last-ditch offer – Daily Mail
  • Ghosn attacks 'backstabbing' ex-colleagues in video statement – Sky News
  • Pri-mania as world's largest Primark opens in Birmingham – BBC News
  • Boss of Chinese smartphone firm is handed £730m bonus – Daily Mail
  • Co-op cooks up gender-neutral 'gingerbread person' – Sky News

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