FTSE 100 index closes up
Twitter turns a corner
US stocks also heading for new highs
Gold gives up US$6.80 at US$1,270.80 an ounce (click here to read on gold as an investment)
FTSE 100 closed at a near seven month high as global markets continue the decent run.
The UK blue-chip index finished up around 63 points at 7,523, while FTSE 250 added over 72 at 19,908.
On Wall Street, stocks are higher at the time of writing, and marching towards new highs, with the Dow Jones ahead by nearly 157 points and the S&P 500 exchange up over 24 points.
Market analyst David Madden from CMC Markets noted that the oil and gas sector had helped the London index.
"The DAX and CAC 40 were previously in the red, and they have turned positive on the day, as the feel good factor has spread across Europe," he added.
The rally in global stocks is showing no signs of slowing down, and lately, no news has been deemed to be good news."
3.00pm: US indices open higher, with Twitter setting the pace among S&P 500 stocks
The FTSE 100 broke through the 7,500 barrier after US indices opened brightly.
London’s benchmark index was up 51 points (0.7%) at 7,510, while in the US, the Dow Jones was 79 points (0.3%) higher at 26,592 while the S&P 500, which earlier had been expected to open mixed, shot up 10.5 points (0.4%) to 2,918.5, buoyed by well-received results from social media firm Twitter.
“Twitter’s winter of discontent appears to be over,” declared Dr ben Marder, a senior lecturer in marketing at the University of Edinburgh Business School.
“Daily active users were up 11% year-on-year and an impressive 8mln from the previous quarter, showing the strength of Twitter’s core offering and signalling that the platform has truly secured its place among social media giants.
“Twitter is increasingly a battle ground for political discussion and a transmitter of social movements such as #metoo, which brings its own challenges. Like all the other giants at the feast (Facebook), humble pie has been eaten recently over user protection, though it seems Twitter has learnt from these criticisms. It has led the way with an algorithmic detection of abuse and has allowed users more control over their conservation, while cleverly walking the tight rope of free speech,” Marder said.
Micro-blogging site Twitter Inc. (TWTR) Tuesday reported a surge in its first-quarter profit. Both earnings and revenues beat analysts' estimates, sending shares up by 6 percent in the… https://t.co/qnCeJWVFMZ
— Trader Launch (@TraderLaunch) April 23, 2019
“My prediction is that 2019 will be a strong year for Twitter. Though it may have reached its natural peak in usership [sic], there are reasons to be optimistic. Increased engagement, positive steps to protect users, efficient methods of monetising its offering and the continuation of brand identity focussed on societal change, will keep the birds chirping and the sun shining at Twitter HQ,” he concluded.
READ Wall Street starts on the right foot as earnings season rages on
While the first quarter earnings season raged on in the US, in the UK it was more like the Easter holiday snoozing on, with little in the way of corporate news flow, unless a tender offer for its €500mln worth of 2.125% notes due 2020 from Tesco PLC (LON:TSCO) floats your boat.
Shares in the supermarket chain were up 0.6% at 251.5p.
READ: Gold as an investment
1.45pm: FTSE 100 hits (gently) a six-month high
The FTSE 100 was sitting at a six-month high but still unable to rise above the 7,500 level.
London's index of heavyweight shares was up 30 points (0.4%) at 7,490, just below its high point for the day.
A rise in the value of sterling this morning has taken some of the glow off the Footsie but has been more than offset by the strength in oil stocks following the increase in the price of Brent crude to US$74.18, up 14 cents (0.2%).
READ: Gold as an investment
Oil prices have risen following the US decision to end sanctions waivers on Iranian oil exports.
Bjarne Schieldrop, chief commodities analyst at Nordice corporate bank, SEB, expects a reactive response from Saudi Arabia and believes oil price will continue on its current bull-ride.
“Saudi Arabia pre-emptively and proactively lifted oil production last year in anticipation of US sanctions towards Iran. Sanctions were supposed to be more or less ‘cold turkey’ starting in November 2018 but US President Donald Trump caved in and handed out a large portion of waivers. The result was that the pre-emptive production increase by OPEC+ last year instead managed to crash the oil price to below $50/bl. Saudi Arabia is unlikely to make the same mistake again and is in our view likely to be reactive this time - first seeing how much oil supply is really lost and then increasing production according to needs,” Schieldrop said.
Secretary of State Mike Pompeo announces the U.S. will stop granting sanction waivers for countries importing Iranian oil.
"Our goal has been to get countries to cease importing Iranian oil entirely," Pompeo said. pic.twitter.com/zMcZbMuYNv
— POLITICO (@politico) April 22, 2019
“That means that the oil price will likely continue on its current bull-ride for a while, before Saudi Arabia decides to pitch in with substantially more production. Iran probably exported about 2mln bl/day in March 2019 according to Tanker Trackers. That is down 1mln bl/day from one year ago,” he added.
12.30pm: US stocks set for mixed start
The FTSE 100 has continued its almost neurotic adhesion to the 7,490 level.
The blue-chip index was up 30 points (0.4%) at 7,490, where it has been for much of the morning, despite sterling gaining a quarter of a cent against the greenback; a rise in the value of the pound is normally a bad thing for most of the companies in the Footsie.
“Global equity markets are still marching higher although April has been a bit choppy. Overall, though, Q4's wall of worry has been replaced by complacency about the many problems in the global economy,” declared Peter Garnry, the head of equity strategy at Saxo Bank.
“China’s stimulus policies and improving economic figures have eased concerns and renewed positive sentiment on equities. Meanwhile, financial conditions in the US have dropped to very low levels and the VIX Index is hovering around the 12.5 level which is substantially below its historical average,” he added.
Turning his attention to US earnings, Garnry notes that “this earnings week is all about technology earnings with releases from Microsoft, Intel, PayPal, Twitter, Facebook, Google and Amazon”.
Talking of the US, spread betting quotes suggest the Dow Jones will open 26 points higher at 26,537 while the S&P 500 is seen opening its account at around 2,907.4, down half a point or so from last night’s close.
In London, Tekcapital PLC (LON:TEK) was showing a clean pair of heels to all other stocks, rising 62% following the announcement of the first commercial order for its portfolio company, Salarius, a maker of a low-sodium salt substitute known as MicroSalt.
READ Tekcapital soars as Salarius secures first order for MicroSalt
Fishing tackle seller Angling Direct PLC (LON:ANG) reeled in plenty of buyers after its trading update, which revealed it had made a strong start to the year.
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READ: Gold as an investment
10.00am: Oil stocks drive the Footsie higher
The FTSE 100 was extending early gains, thanks to the heavily weighted oilers and no thanks to airline and housing stocks.
The index of London’s leading shares was up 29 points (0.4%) at 7,489, bolstered by a 2.2% rise on oil giant Royal Dutch Shell (LON:RDSB) and a 2% advance by its perennial rival, BP PLC (LON:BP.).
“The Trump administration’s decision to end waivers that allow a number of countries – including, notably, China – to buy Iranian oil without any blowback, letting them expire at the beginning of May, caused Brent Crude to pump higher. The black stuff crossed $75.50 per barrel following a 0.4% increase, striking its best price of 2019 and highest level in approaching 6 months,” reported Connor Campbell at Spreadex.
While oil has a spring in its step, gold is struggling to burn off those Easter calories, sliding US$2.20 (0.2%) to US$1,275.40 an ounce.
“Gold’s performance in recent weeks has been bearish thanks to a stabilising dollar, easing concerns over slowing global growth and rising equity markets,” said Lukman Otunuga, a research analyst at FXTM.
“While the yellow metal is likely to edge lower in the near term, the medium to longer term outlook still points in favour of further upside. The combination of geopolitical risk factors, US-China trade developments, lingering concerns over slowing global growth, Brexit and a dovish Federal Reserve remain core themes that have the potential to boost appetite for Gold,” he added.
READ: Gold as an investment
News flow from the big caps was minimal.
British Land PLC (LON:BLND) was 1.1% lower at 589p after announcing it had exchanged contracts on the sale of 12 superstores from its joint venture with Sainsbury's for £429mln. Its share of the proceeds will be £193.5mln, representing a modest premium to September 2018 book value.
Cruise ship operator Carnival PLC (LON:CCL) was off 19p at 4,017p despite its latest venture into the market to buy back shares; this time round it bought 50,000 shares at an average price of 4,040.31p.
8.45am: Footsie posts early gains
The oil price directed sentiment driving the day’s big movers as the FTSE 100 defied the early predictions to move 14 points higher to 7,473.40.
Brent crude and West Texas Intermediate were both trading higher and at levels not seen since last autumn as the US sanctions noose tightened around Iran and those countries taking its output.
The upshot for the markets was that Shell (LON:RDSA) and BP (LON:BP. topped the index of blue-chips, up 1.8% and 1.7% respectively.
As both have significant Footsie weightings, the performance of stock in the two super-majors was the difference between a higher rather than lower open.
One the debit side, airlines easyJet (LON:EZJ) and IAG (LON:IAG), owner of British Airways and Iberia, traded 2.6% and 1.6% lower respectively.
For no matter how well the pair hedge against the rising cost of jet fuel (which is linked to the oil price), they are both still likely to be financially impacted.
“Rising oil prices look set to be the bulwark for another positive session in Europe as the main indices cement multi-month highs,” said Neil Wilson, analyst at Markets.com
“Both the DAX and FTSE 100 are looking very perky although momentum indicators do point to them being overbought at present and potentially ripe for a pullback.
“There’s definitely still a holiday feel to trading here in the City this morning with a very light corporate calendar and small fry eco data, although things should pick up later in the week with the US GDP print the main event, due Friday.”
Looking to Wall Street later, earnings season gets into full swing. Boeing, Amazon, Tesla, Facebook, Microsoft and around 150 more S&P 500 companies are reporting this week.
“So far earnings season has been pretty positive – three-quarters of companies reporting so far beating expectations, albeit those expectations were not very high in the first place. You’d have to sum it up as a very low bar cleared,” said Markets.com’s Wilson.
Proactive news headlines:
Active Energy PLC (LON:AEG) has been awarded a US$500,000 renovation grant to help build its new manufacturing site in Lumberton, North Carolina.
Tekcapital PLC’s (LON:TEK) shares soared in early deals on Tuesday after its portfolio company, Salarius, secured the first commercial order for its low-sodium salt substitute MicroSalt.
Sareum Holdings Plc (LON:SAR) said data from a potential cancer drug it developed will be showcased at the world’s leading oncology conference. Updated results from a phase I/IIa studies carried out on SRA737 by licensing partner Sierra Oncology will be delivered in the form of two abstracts at the American Society of Clinical Oncology (ASCO) annual meeting in Chicago on June 1.
Franchise Brands PLC (LON:FRAN) has reported a record first quarter in its current financial year in a trading update ahead of its annual general meeting (AGM) on Tuesday. Stephen Hemsley, chairman of the AIM-listed firm, said the franchise network had grown sales by 12% in the period compared to 10.4% growth in the whole of its 2018 fiscal year.
Keywords Studios PLC (LON:KWD), the technical services provider to the global video games industry, has acquired Wizcorp for 120mln Japanese yen in cash. Based in Tokyo, Wizcorp develops games on behalf of others, mainly for mobile devices. It has particular expertise in HTML5 – a hypertext mark-up language (HTML) used to create web pages - and other mobile technologies.
Falcon Oil & Gas Ltd (LON:FOG) (CVE:FO) told investors that it has extended its deal to acquire royalties over the Beetaloo basin assets. The company, in a statement, detailed that it has secured two additional years to pick up additional royalties (overriding royalty interest – or ORRI) following a prior deal struck in 2013.
Diversified Gas & Oil PLC (LON:DGOC) has completed its US$400mln acquisition of assets from HG Energy II Appalacia LLC, delivering some 107 producing wells to the company’s portfolio. The transaction grows daily production by around 30% to over 90,000 barrels oil equivalent per day, and, it is described as being “immediately accretive”.
Ironridge Resources Ltd (LON:IRR) has been granted an exploration for the Zaranou gold project in Côte d'Ivoire. The exploration licence covers 397 square kilometres of ground. IronRidge has the right to acquire up to 100% of the project through staged earn in arrangements.
Resource estimation work has commenced on the Moonta copper project in South Australia. Thor Mining PLC (LON:THR)(ASX:THR) holds a significant interest in Moonta through a complicated structure involving an interest in Enviro Copper Ltd, which is earning into the property from Andromeda Metals.
Bezant Resources PLC (LON:BZT) has entered into a binding memorandum of agreement to acquire a 50% interest in a small scale copper mining licence in Zambia, which contains the Buffalo exploration project.
APQ Global Ltd (LON:APQ), the emerging markets growth company announced that as at the close of business on 31 March 2019, its unaudited book value per ordinary share was 92.32 US cents, equivalent to 70.85p.
Rose Petroleum PLC (LON:ROSE) has confirmed the appointment of Tom Reynolds as a non-executive director of the company, with immediate effect. It pointed out that Reynolds has been working with the company for the past six months on a consultancy basis and has a detailed knowledge of the group's operations. Concurrent with Reynolds' appointment, the firm added, Kelly Scott has stepped down from the board but will continue in his executive role with the company in a non-board capacity.
EQTEC Plc (LON:EQT), the technology solution company for waste gasification to energy projects, said Align Research have produced an Initiation of Coverage report on the company.
6.35am: FTSE 100 set for a muted start
The FTSE 100 looks set to make a muted start to the shortened trading week following mixed sessions on Wall Street and Asia.
The index of blue chips is predicted to open down six points at 7,456.88 amid nagging concerns over the state of health of the Chinese economy and the threat of further Iran sanctions.
The former first. Overnight, reports emerged from a meeting, chaired by premier Xi Jinping, which revealed Beijing will focus on structural reform rather than fiscal stimulus to kick-start the world’s second-largest economy.
In the US, meanwhile, the White House effectively put on warning those still buying Iranian oil they now risked US sanctions.
“The US government granted eight countries permission to keep importing oil from Iran, but now there is speculation that Mr Trump will remove that exemption in a bid squeeze Iran’s oil exports to zero,” said David Madden analyst at CMC Markets.
“WTI hit its highest level since late October, while Brent Crude hit level not seen in early November.”
Brent was trading 36 cents higher at US$74.40, with West Texas Intermediate jumping US$1.70, or 2.26%, to US$65.70.
The week is a busy one with bank reporting season getting underway with Royal Bank of Scotland (LON:RBS) and Barclays (LON:BARC). Results are also expected from the marketing and advertising giant WPP (LON:WPP), publishing giant Pearson (LON:PSON) and druggie AstraZeneca (LON:AZN).
Significant announcements expected on Tuesday April 23:
AGMs: ECR Minerals PLC (LON:ECR), Franchise Brands PLC (LON:FRAN)
Economic data: CBI industrial trends survey; US new home sales; US Markit composite PMI
Around the markets:
- Pound worth US$1.2986
- Gold trading at US$1,276.10 an ounce, down US$1.50
City Headlines:
- Financial Times
- Brexit-backing Tories to seek May’s resignation
- Barclays to cut bonuses for investment bankers - bank bolsters defences against activist investor Bramson with pay crackdown
- London Metals Exchange to shake up rules on responsibly sourced metals
- Musk pitches Tesla profitability on robotaxi hopes
- Times
- The property division of Royal Bank of Scotland’s scandal-hit restructuring division paid out dividends of almost £450mln
- Yo! Sushi is to drop the conveyor belt from some of its restaurants in an attempt to broaden its appeal
- Financial Conduct Authority expresses alarm over rise in guarantor loans
- Daily Telegraph
- Ex-Nissan boss Carlos Ghosn hit by fresh charge
- The US government is in talks with London-headquartered mining business TechMet about potential investment in the firm as it works to secure better supplies of the rare metals required to mass-produce electric cars
- A $9bn US hedge fund that forecast the 2008 global financial meltdown has quietly built a multimillion-pound bet against struggling travel agent Thomas Cook
- Guardian
- British craft beer boom stalls as big drinks companies muscle in
- Facebook profits likely to fall after fake news and privacy scandals