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FTSE 100 closes flat as traders don't know which way to turn

Footsie closed down around 0.19 at 7,436, while mid-cap FTSE 250 was up around 95 points at 19,807

Bear and bull
It's a stand-off (still)

FTSE 100 closed near flat as Wall Street markets fell as traders weren't sure which way to turn.

A dearth of major macroeconomic news along with not much detail on China/US tread talks has left investors somewhat out in the cold.

Footsie closed down around 0.19 at 7,436, while the mid-cap FTSE 250 was up around 95 points at 19,807.

Top faller was food services giant Compass Group plc (LON:CPG), which joined big cap miners at the bottom of the Footsie heap. Its shares dropped 2.2% to stand at 1,753.5p.

Barclays downgraded the group to ‘equal weight’ from ‘overweight’ for the first time in a decade.

The investment bank said the company’s valuation had now reached levels that made “upside feel more limited” and that they were now more cautious in the medium-term.

In the US at the time of writing, the Dow Jones Industrial Average is down around  67 points, and the S&P 500 is down around eight points.

2.15pm: US stocks set for mixed start

The FTSE 100 remains becalmed and it looks like US benchmarks will go the same way.

Shortly ahead of the US open, the FTSE 100 was unchanged at 7,437.

Meanwhile, spread betting quotes are pointing to the Dow Jones opening at around 26,406, down 6 points from Friday’s close, and the S&P 500 adding a point or so at 2,908.

READ: Gold as an investment

“The Q1 US earnings season started on Friday with good results from JPMorgan beating on both the top and bottom line while Wells Fargo disappointed on its interest income outlook,” said Peter Garnry at Saxo Bank.

“Financials will dominate this week with earnings today from Goldman Sachs, Citigroup and Charles Schwab. Tomorrow, Bank of America and BlackRock will follow and then midweek Morgan Stanley and US Bancorp, and ending the financials’ super week on Thursday we’ll have American Express,” he added.

1.00pm: The Footsie adopts a holding pattern

The FTSE 100 has either run out of puff or started the Easter break early.

The index has stuck close to Friday’s closing level and is currently down 6 points (0.1%) - a hefty move by today’s standards – at 7,431.

“The sharp rebound in equities seen this year is beginning to look a little tired and markets were little changed amidst a downbeat set of forecasts from the IMF. While the IMF cuts its global growth forecast for 2019 and warned of downside risks, it is still projecting but with little conviction some recovery in growth 2020 – the infamous two-handed economist lives on,” quipped Rupert Thompson, the head of research at Kingswood, the asset management company.

Sterling is about a third of a cent higher against the US dollar, which is usually seen as a negative factor in terms of sentiment towards blue-chips.

“Sterling continues to mark time in the absence of any fresh Brexit-related news and with Parliament in recess this week, the busy economic calendar may provide markets with some relief from the political merry-go-round. Likely of most interest will be tomorrow’s UK labour market data which has held up well in recent months. Wages are expected to pull-back slightly, though remain close to a post-crisis high, while unemployment is also likely to remain at historically low levels. Further signs of a tight labour market are likely to underpin the Pound,” suggested Michael Brown, a senior analyst at Caxton FX.

One stock that is closely tied to the fluctuations of the exchange rate is easyJet PLC (LON:EZJ); the stock was up 1.8% as investors try to figure out how much it will benefit from Jet Airways going belly-up.

“There’s mounting speculation that Jet Airways could be the next airline to go under after reports the firm are flying just 7 planes as it seeks a solution to its growing debt problem. The decision to ground around 80% of its fleet has been exacerbated by pilots striking and means that thousands of passengers have been left stranded as the search continues for investors to buy 75% of the company,” noted David Cheetham at XTB Online Trading.

READ: Gold as an investment

Meanwhile, on the commodities markets, gold is floundering a bit, trading at US$1,289.10 an ounce, down US$6.10 (0.5%).

11.45am: London a sea of tranquility

The FTSE 100 continued to spin its wheels, with investors paying little heed to ostensibly encouraging weekend comments on the US-China trade talks.

Despite there being marginally more risers than fallers among its constituents, the Footsie was slightly in the red, down 3 points (0.04%) at 7,422.

“It seems likes investors are taking a breather, and the lack of volatility in Asia overnight prompted some dealers to sit on their hands this morning. Steven Mnuchin, US treasury secretary, issued a positive statement about US-China trade talks over the weekend, and he claimed the negotiations are ‘close to the final round’, and that is adding to global feel good factor,” commented David Madden, a market analyst at CMC Markets.

READ: Gold as an investment

While bargain hunters might be venturing back on to the share register of drugs firm Indivior following its recent legal dust-up with the US authorities, investors seem increasingly nervous about the prospects for Indivior's former owner, Reckitt Benckiser PLC (LON:RB.).

An article by a news agency last Friday stressed that, while Reckitt has not been indicted by the US Department of Justice, it could still end up taking collateral damage, if only through the delay of the long-expected and in some quarters much-desired split of Reckitt's consumer and healthcare divisions.

Reckitt shares were off 0.9% at 5,850p in mid-morning deals.

Among the small caps, SigmaRoc PLC (LON:SRC) received a welcome in the hillsides after it expanded its portfolio in South Wales with the acquisition of a 40% stake in quarry owner GD Harries.

The shares were up 2.7%.

 

10.35am: Back to square one for the big dogs index

The FTSE 100 was experiencing that Monday morning feeling – slow to rise but looking presentable by about 10.30am.

The index of blue-chip stocks was barely changed, while the FTSE 250 gauge of mid-caps was up 56 points (0.3%) at 19,768, thanks in part to a 22% rise for IWG (LON:IWG). The temporary office space provider has sold off its Japanese business for £320mln as part of a strategic collaboration with TKP, the country’s largest provider of banquet halls and conference rooms.

READ Office giant IWG sells off Japanese business for £320mln

Bargain hunters have been piling into scandal-hit drugs developer Indivior PLC (LON:INDV), pushing the price up 16% to 40.9p. That’s still a long way below the 106p or so at which the shares were trading prior to last Wednesday’s news of indictment by the Grand Jury in the US.

If things are all quiet on the equities front, it is not much more exciting on the macro economic front.

“We start the week in a somewhat quiet fashion , with the US Empire Manufacturing index the only data release of interest. The US manufacturing sector has not been immune to the global slowdown and we will look to see whether the April figure points to any trend reversal,” Danske Bank said.

“On the political front, EU ministers are expected to vote today on approving the negotiating mandate for the Commission to start trade talks with the US . With cracks in the EU's united front not only showing with regard to the Brexit strategy, focus will be on whether France openly opposes the start of the negotiations,” the bank opined.

9.40am: Miners a drag on the blue-chip index

The FTSE 100 was modestly lower, weighed down by mining stocks, which are out of favour this morning.

The index of heavyweight shares was sporting a 13 point (0.2%) loss at 7,424, thanks largely to mining stocks such as Rio Tinto PLC (LON:RIO), Anglo American PLC (LON:AAL) and Fresnillo plc (LON:FRES) sliding 1% or so.

Rio Tinto announced this morning it had committed US$302mln of additional capital to advance its Resolution copper project in Arizona.

Cruise ship operator Carnival PLC (LON:CCL) was the best performer as it bought another chunk of shares as part of its equity repurchase programme.

8.50am: Weak start for Footsie

The FTSE 100 got off to a subdued start, falling 8 points to 7,428.58 as traders largely ignored the positive kick-off to proceedings in Asia, which had been buoyed by the positive mood music around Sino-American trade talks.

Instead, a stronger pound, which was bubbling just below the US$1.31 level, weighed on overseas earners led by the miners.

The biggest faller early on, however, was bluechip caterer Compass Group (LON:CPG), down 2.5% after Barclays cut its recommendation to 'equal-weight', arguing its shares are now fully valued.

The Compass share price has run up from below 1,500p last October to hit a recent high above 1,800p.

READ: Gold as an investment

On the upside, WPP (LON:WPP) topped the Footsie risers, up 1.5% following reports it expects five bids for its market research arm Kantar.

On the FTSE 250, the day’s big talking point was IWG (LON:IWG), the office rental firm formerly known as Regus, which unveiled plans to offload property in Tokyo. Its £320mln deal with TKP, with which it is partnering, sent the shares 13.3% higher.

But Acacia Mining (LON:ACA) was down in the dumps, off 2.7% after the gold digger’s first-quarter production report failed to pass muster.

Proactive news headlines:

SigmaRoc PLC (LON:SRC) has expanded its portfolio in South Wales with the acquisition of a 40% stake in quarry owner GD Harries (GDH).

Summit Therapeutics PLC (NASDAQ:SMMT) (LON:SUMM) has trumpeted the early success of a pre-clinical antibiotic that may help overcome drug resistance to a potentially deadly infection. It presented data at a leading healthcare conference that showed its treatment, DDS-04, had successfully tackled bacteria called Enterobacteriaceae in animals with urinary tract infections.

Virtual reality (VR) specialist Immotion Group PLC (LON:IMM) is to install aquatic immersive experiences at two major aquariums in the US. The AIM-quoted company will install a range of VR cinematic motion pods on a revenue-share basis at Odysea Aquarium, in Scottsdale, Arizona, and The Maritime Aquarium, in Norwalk, Connecticut.

Savannah Resources PLC (LON:SAV) is to take 100% control of its flagship asset, the Mina do Barroso Lithium project in Portugal. The 25% that Savannah doesn’t already own is to be acquired from minority shareholders in an all-share transaction valued at approximately US$11.9mln.

Jersey Oil and Gas PLC (LON:JOG) chief executive Andrew Benitz told investors there’s “still plenty to play for” at the Verbier project, as the rig moves off following an unsuccessful appraisal well. The well failed to upgrade Verbier’s resource base, the discovery is now believed to host closer to 25mln barrels rather than 130mln, and the company today confirmed it was drilled under budget.

READ: Gold as an investment

Securing approval in the US for iclaprim remains the top priority for Motif Bio PLC (LON:MTFB), the company said in its full-year results statement but stressed it is only part of a broader plan for iclaprim's long term success.

Kalahari Metals Limited, in which Metal Tiger PLC (LON:MTR) holds a 50% stake, has received notification that the environmental management plan for its Okavango copper project has been reviewed and approved by the Botswana Department of Environmental Affairs.

Baker Steel Resources Trust Ltd (LON:BSRT) has completed on its agreement to invest into Azarga Metals Corp (CVE:AZR) The deal was previously announced on 14 February.

Rambler Metals and Mining PLC (LON:RMM) said, under its recent fundraising, it received valid acceptances in respect of 37,490,043 open offer shares giving it total proceeds of £524,860.58. The company added that, to date, it has raised total gross proceeds from the subscription and open offer of approximately £9mln via the issuance of 637,271,940 shares.

LoopUp Group PLC (LON:LOOP), the premium remote meetings company, has appointed Keith Taylor as an independent non-executive director, with immediate effect, and said he will become a member of the audit, remuneration and nominations committees. The group noted that Taylor has nearly 30 years' experience in senior roles across the finance industry, having worked for Barclays for over 20 years, most recently as a managing director within the Corporate & Investment Banking division.

88 Energy Limited (LON:88R) (ASX:88E) is pleased to confirm that the Company's latest corporate presentation, which was presented at its AGM held earlier today, is now available on the company website. www.88energy.com.

6.30am: FTSE 100 set to open in positive territory

The FTSE 100 looks set to open its weekly account in positive territory, taking its cue from Asia’s main markets, which in turn were buoyed by the mood music around Sino-American trade negotiations.

The index of blue-chip shares is predicted by the spread betting firm to advance 17 points to 7,451.06.

Treasury Secretary Steve Mnuchin said on Saturday America and China were inching towards an accord; however, the two sides don’t appear close to an imminent accord.

READ: Gold as an investment

Meanwhile, it was all quiet on the Brexit front with Prime Minister Theresa May having negotiated her ‘flextension’ to Halloween and MPs on Easter break.

“The pound is likely to remain becalmed now that a Brexit decision has been kicked into the long grass,” said Michael Hewson, analyst at CMC Markets.

“While the avoidance of a no deal Brexit has been welcomed by the markets, the nature of it is likely to continue to hang over sentiment as well as the UK economy, for the next few months.”

The shortened week before the Easter break is lining up to be a busy one for corporate news with updates from Marmite maker Unilever (LON:ULVR), miners BHP (LON:BP) and Rio Tinto, along with scheduled reports from rat catcher Rentokil (LON:RTO) and distribution firm Bunzl (LON:BNZL).

Significant announcements expected on Monday April 15:

Trading updates: Petra Diamonds Ltd (LON:PDL)

Interims: Carr’s Group PLC (LON:CARR)

Finals: Filta Group Holdings PLC (LON:FLTA), Crossword Cybersecurity Plc (LON:CCS), Mobile Tornado Group Plc (LON:MBT)

Economic data: US NY Empire State manufacturing index

Around the markets:

  • The pound is worth US$1.3094
  • Gold worth US$1291.7 an ounce, down US$3.50
  • Brent crude US$71.34 a barrel, down 21 cents

City Headlnes: 

  • Financial Times
  • UK productivity warning rings alarm bells - slowdown worse than in any other comparable country, new research shows
  • Purdue tried to buy Reckitt’s addiction business - opioid maker sought drug group that treats abuse of its own painkillers
  • German regulator says Huawei can stay in 5G race
  • Watchdog presses Deutsche to cut US investment unit - division must be reduced whether or not Commerzbank merger proceeds
  • KKR founders set sights on Japan conglomerates - private equity firm hopes to buy carve-outs from companies like Panasonic
  • Times
  • British American Tobacco is under pressure to replace its long-serving chairman Richard Burrows to comply with new corporate governance rules
  • Debenhams looks in-house for new chief to oversee recovery
  • Edward Bramson has been dealt a blow after a leading shareholder advisory group told Barclays’ shareholders to oppose the activist investor’s bid for a seat on the bank’s board
  • Stagecoach to challenge ban over rail bids
  • American Airlines cancels summer flights as Boeing 737 Max fears persist
  • Daily Telegraph
  • British American Tobacco investors' fury over £7.5m golden parachute for ex-chief executive
  • Saudi Aramco's success proves the oil age has a future
  • Stagecoach launches legal attack on Chris Grayling over decision to block train line bids
  • British Steel requests £100mln loan as Brexit deal failure leaves it out of pocket
  • Netflix and Amazon Prime next targets for government crackdown
  • End of plastic rings as Guinness joins Carlsberg in getting rid of packaging that strangles birds and fish
  • Guardian
  • Online casino goaded addict to gamble away £20,000 on sister site
  • UK property market ‘in line for summer Brexit relief rally’
  • Netflix to pass 150mln global subscriber mark as domination goes on
  • Dividend income for holders of UK shares jumps to record £19.7bn

READ: Gold as an investment 

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