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FTSE 100 closes a shade lower as markets uninspired; US celebrates Independence Day holiday

The Footsie finished down nearly six points at 7,603

Bear and bull
The Footsie remained on a tight leash all day
  • FTSE 100 closes slightly lower

  • Coca Cola top laggard

  • US closed for July 4 celebration; jobs tomorrow

FTSE 100 closed slightly lower as markets were uninspired and traders sat on their hands ahead of the closely followed US jobs number tomorrow (Friday).

Wall Street has its doors closed today as the US celebrates its Independence Day.

The Footsie finished down nearly six points at 7,603.

Mid-cap cousin FTSE 250 was bucking the trend though, and the exchange added nearly seven points at 19,797.

In Europe, the German DAX added around 13 and the CAC 40 gained nearly two points.

Top laggard on London's Footsie was Coca Cola HBC AG (LON: CCH), which dropped almost 7% to stand at 2,864.29p.

The ex-dividend status of some FTSE 100 constituents wiped around 5 points off the index.

The gold price came off recent highs with the cost of a barrel of Brent at US$63.29.

"Trading volumes and market volatility are low as many traders on this side of the Atlantic are sitting on their hands," noted David Madden, at CMC Markets. "Today’s movements are not a good reflection of wider the market sentiment, but keep in mind that the FTSE 100 and the DAX reached 10-month highs yesterday. Dealers are likely to be coaxed off the fence tomorrow when the US will release the latest non-farm payrolls report."

The New York Stock Exchange is closed today as the US celebrates Independence Day.

3.45pm: A day for the narcoleptics

The FTSE 100 has fallen into the red but it's a very pale shade of red, in keeping with the day's (lack of) activity.

London's index of heavyweight shares was down 2 points (0.0%) at 7,607 on a day when the ex-dividend status of a handful of FTSE 100 constituents wiped around 5 points off the value of the index.

Mining and commodities group Glencore PLC (LON:GLEN) was off the pace, sliding 1.6% to 272.5p despite Barclays raising its target price to 360p from 340p.

Among the small caps, drugs developer Faron Pharmaceuticals Oy (LON:FARN) shot up 30% to 124.5p as Timo Syrjälä increased his take to 13.11% from 12.14%.

2.45pm: The Footsie remains in the doldrums

The FTSE 100 remains tethered to last night's closing level but there has been a bit more life shown by the mid-cap FTSE 250.

The FTSE 100 ended the lunchtime session at around 7,610, up a point, while the FTSE 250 was up 17 points at 19,807.

Energean Oil & Gas PLC (LON:ENOG) led the FTSE 250 higher with a 12% jump to 942p after splashing the cash on a suite of gas assets in the Mediterranean, North Sea and Europe.

READ Energean Oil & Gas snaps up Mediterranean gas portfolio from Edison for US$750mln

3i Infrastructure PLC (LON:3IN) edged up 0.5% to 302p after the investor in infrastructure assets issued a quarterly update covering the April-June period.

Total portfolio income and non-income cash was £28.2mln million in the period, up from £22.2mln in the same period of last year.

1.30pm: The Footsie goes round in circles

The Footsie remains rudderless and with the US markets closed today, there seems little chance of that changing this afternoon.

The FTSE 100 was up 3 points (0.0%) at 7,613, having moved throughout the day in a narrow channel spanning from 7,603 to 7,623.

Broker comment put a dent in the share price of pumps and valves specialist, Spirax-Sarco Engineering PLC (LON:SPX).

The shares retreated 2.3% to 9,180p -at more than £90 a throw the share price could do with coming down a bit – after Goldman Sachs downgraded the stock to 'sell' from 'neutral' even while increasing the target price to 7,500p from 6,700p.

11.45am: Tumbleweed futures on a roll ...

London's leading shares are doing a passable imitation of the US today and taking the day off.

The FTSE 100 was up 9 points (0.1%) at 7,618, led by a couple of retailers: fashion firm Burberry Group PLC (LON:BRBY), up 2.1% at 1,952p; and supermarkets group J Sainsbury PLC (LON:SBRY), up 1.7% at 201.9p.

Burberry's advance came after Mainfirst upgraded the stock to 'outperform' from 'neutral', with a target price of 2,150p - up from 1,800p previously.

The latter is holding its annual general meeting today, where chairman Martin Scicluna told shareholders that the current share price undervalues the company.

Also going well is Flutter Entertainment PLC (LON:FLTR), up 1.3% at 6,930p, as rumours persist that the Paddy Power and Betfair brands own is “in play”.

Sector peer William Hill PLC (LON:WMH) edged up 0.05p to 1263.75p after it threatened to close 700 high street shops in response to tougher restrictions on fixed odds betting termnals.

In the broader market, Intelligent Ultrasound Group PLC (LON:MED) was the top performer, soaring 141% to 16.25p, as it signed its first licensing agreement, with an unnamed original equipment manufacturer focused on the ultrasound machine market.

10.45am: FTSE 100 spins its wheels

Leading shares remain mixed in London, with traders having half an eye on the US jobs report for June, due out tomorrow.

The FTSE 100 was down 3 points (0.0%) at 7,606.

“The US jobs report's out on Friday and we're expecting some 170,000 posts to have been created in June, and we think the markets are misreading some of the signs,” said James Knightley at ING Economics.

Knightley said last month's jobs figures were regarded as disappointing but he argues that the situation is more positive than is generally realised.

“There's no lack of a desire to hire for US companies; the challenge is finding the right people with the right skills,” Knightley opined.

“The proportion of companies with vacancies that they cannot fill is now at an all-time high,” Knightley noted.

He reckons the US central bank will squeeze in just two “precautionary interest rate cuts” rather than the four the market is pricing in.

Investors have not been stampeding of late to buy shares in car dealers and today's new car sales data is unlikely to change that.

“The Society of Motor Manufacturers and Traders (SMMT) reported that new UK car registrations fell 4.9% year-on-year in June to 223,421 units,” reported Howard Archer, the chief economic advisor to the EY ITEM Club.

“This marked a fourth successive decline and was deeper than the year-on-year drops of 4.6% in May, 4.1% in April and 3.4% in the key month of March (due to the number plate change),” he added.

“New car sales have been driven down by a number of road blocks - dwindling demand for diesel cars, stricter emission regulations leading to persistent supply problems from last September and more cautious consumers and businesses. It may be that a number of businesses are delaying replacing fleet vehicles due to economic and Brexit uncertainties. Meanwhile, consumers have faced extended relatively limited purchasing power, although this has improved recently. A further problem for the automotive sector has seen the removal of incentives for buying plug-in hybrid vehicles,” Archer noted.

Car dealers Pendragon PLC (LON:PDG) and Lookers PLC (LON:LOOK) were down 1.8% at 15.1p and 2.2% lower at 48.3p respectively but Inchcape PLC (LON:INCH) was up 1.3% at 636p.

 

9.45am: Few fireworks expected on 4th of July

With the US on holiday today it is shaping up to be a quiet day in London.

The FTSE 100 was more or less unchanged, with losses from ex-dividend stocks offset by enthusiasm for telecoms stocks.

“European trading action is expected to remain reticent today as the biggest market in the world, the US, is closed to celebrate the 4th of July. Trading over in Asia has also been somewhat quiet as traders await the next action by the Federal Reserve,” reported Naeem Aslam at thinkmarkets.com.

Mobile network operator Vodafone PLC (LON:VOD), up 2% at 134p, was the best performing Footsie stock while sector peer BT PLC (LON:BT.A), up 0.9%, also garnered some love.

Primark owner Associated British Foods plc (LON:ABF) was modestly higher, up 0.3% at 2,450p, after a mixed trading update.

“Primark continues to deliver a very impressive performance in a tough retail environment without the aid of the online businesses that’s keeping most retailers’ necks above water. Offering shoppers value for money when rivals are struggling has seen Primark seize market share in the UK, and the proposition is proving attractive overseas too, with a reasonable performance in Europe and promising noises emerging from the fledgling US business,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

“The Retail performance is unfortunately being soured by the struggling Sugar operations, where the end of quotas has seen sugar prices plummet. The good news is that conditions seem to be stabilising. Throw in a good performance from ABF’s branded groceries business, which includes Twinings Ovaltine and balsamic vinegar brand Acetum, and it looks like the rest of the sprawling empire might finally be set to support rather than undermine the success on the high street,” he added.


 

8.40am: Flat start for Footsie

In line with pre-market predictions, the FTSE 100 opened almost flat at 7,609.52 as it resisted the upward pull of Asia’s main markets and Wall Street, which closed a shortened pre-Independence Day session in record territory.

While the rest of the world reacted to the hopes for potentially lower interest rates in the US following another round of lacklustre economic data, eyes in London were firmly fixed on a potential Brexit-inspired recession here in the UK.

While a slow burn, the London market appeared to be factoring in the recent service sector PMI data, which showed the dominant portion of the British economy was contracting. Construction and manufacturing were already in reverse gear.

On what is likely to be a subdued day of trading, given US markets will be closed today, British Airways owner International Airlines Group PLC (LON:IAG) led the losers, falling 7.9% after investors lost their entitlement to a pay-out.

In fact, so-called ex-dividend stocks lopped around 5 points from the Footsie.

On the rise was Associated British Foods (LON:ABF), which nudged 1% higher even after its Primark clothes retail arm fell victim to the poor May weather.

“[ABF] has the luxury of having diversity across its business model, with the owner of Primark, as well as the company behind brands like Twinings tea and Ovaltine, having another decent quarter,” said Michael Hewson, analyst at CMC Markets.

Leading the large-cap risers’ board was Sainsbury (LON:SBRY), up 2% after finding some support after its sell-off Wednesday, which was inspired by another rather dour current trading statement.

Proactive news headlines:

Argo Blockchain PLC (LON:ARB) shares surged on Thursday as it increased its crypto mining capacity by 129% to support its generation of Bitcoin. The firm said that it had ordered 5,000 Antminer S17 mining units costing around US$13.09mln, half of which would be paid immediately while the rest would be paid five days before shipment and funded from a combination of cash and cryptocurrency assets.

ValiRx Plc (LON:VAL) has teamed up with UK-based clinical contract research organisation Aptus to help prepare the clinical development plan for its VAL301 endometriosis treatment.

Arc Minerals Limited (LON:ARCM) said the team that discovered one of the largest high-grade copper deposits of recent times has identified a new target on the AIM-list mine developer’s Zambia licence areas. African Mining Consultants and Douglas Haynes Discovery have picked over the extensive early exploration work carried out by Arc and mapped out a six-kilometre “strike” called West Lunga grading up to 463 parts per million copper.

Graphene specialist Directa Plus PLC (LON:DCTA) has been granted a US patent that will enable it to develop an ink based on its G+ graphene product. The patent relates to the production of a water-based dispersion of pristine graphene nanoplatelets (GNPs).

Mkango Resources Ltd (LON:MKA) has been granted a new exclusive prospecting licence covering an area in the Mchinji district, central Malawi.

SkinBioTherapeutics PLC (LON:SBTX) is continuing “advanced” talks with potential commercial partners, while founder and chief executive Cath O'Neill has now left the board to focus on the company’s scientific developments.

Bluebird Merchant Ventures PLC (LON:BMV) has seen a delay in the schedule for permits to be granted to re-open two mines in Korea. At Gubong, a central government panel will consider the application next month in what is a one-day process. A permit for the other mine, Kochang, is still being assessed, with the delay caused by the interpretation of new legislation for mining in the event of natural disasters.

Golden Saint Technologies Limited (LON:GST) announced that its group managing director, Pierre Fourie has today resigned with immediate effect to return to his long-standing interests in the mining sector as it revealed the appointment of a key member of the team developing its project in Thailand.

Seeing Machines Limited (LON:SEE) has reshuffled its leadership team and appointed the general manager of its fleet division as its permanent chief executive.

CentralNic Group PLC (LON:CNIC), the global internet platform that derives revenue from the subscription sales of internet domain names, announced the settlement of its €50mln senior secured bond issue, the placement of which was announced on 24 June 2019, occurred on 3 July 2019. Upon disbursement, which is expected before the end of this month, the company said it will  use the funds to repay existing interest-bearing liabilities and to fund its most recent acquisitions, TPP Wholesale and Hexonet. It added that both acquisitions are progressing to plan and are expected to complete on schedule by the end of this month.

Bango PLC (LON:BGO), the mobile commerce company, has announced the appointment of finnCap as nominated adviser and broker to the company with immediate effect.

Rainbow Rare Earths Limited (LON:RBW) said it received orders for a total of 144,703,421 new ordinary shares under its placing, raising £4.3mln (US$5.5mln) before expenses, with new and existing shareholders at an issue price of 3p each. The group noted that the placing price represented a discount of approximately 21.1% to the closing middle market price of 3.8p on 2 July.

6.05am: Subdued start predicted 

The FTSE 100 looks set to resist the pull of Wall Street and Asia’s main markets with the spread betting firms suggesting the blue-chip shares will make a subdued start.

While the Dow Jones closed almost 180 points to the good and at a new record high Wednesday, the UK stocks benchmark is expected to nudge just 5 points higher to 5,614.32.

The buoyant mood internationally came amid heightened rate cut expectations in the US following another batch of lacklustre economic data.

The nomination of International Monetary Fund chief Christine Lagarde to the role of European Central Bank president added to froth, raising the prospect of a period of looser monetary policy.

Back here in the UK, ex-dividend factors are likely to hold back the Footsie with a number of big stocks, including British Airways owner IAG, trading without an entitlement to a pay-out.

City dealers, meanwhile, are likely to be circumspect Thursday in the wake of weaker-than-expected CIPS data, which suggests Britain’s dominant services sector felt the Brexit pinch as it contracted last month.

“Investors will likely chase dip-buying opportunities in downside corrections, as the soft British pound and the prospects of a cheaper liquidity remain mouth-watering in the actual context of the global equities rally,” said Ipek Ozkardeskaya, analyst at London Capital Group.

The big scheduled news comes from Associated British Foods (LON:ABF), whose relative success or failure will be gauged on the performance of its retail arm, Primark.

Alongside ABF, builders Persimmon (LON:PSN) and MJ Gleeson (LON:GLEE) will provide some guidance on the state of the UK housing market.

Significant events expected on Thursday:

Trading updates: Associated British Foods plc (LON:ABF), Persimmon PLC (LON:PSN), MJ Gleeson PLC (LON:GLEE), 3i Infrastructure PLC (LON:3IN)

Ex-dividends to knock 5.3 points off FTSE 100: Aveva PLC (LON:AVV), Coca-Cola HBC PLC (LON:CCH), International Consolidated Airlines Group PLC (LON:IAG), Next PLC (LON:NXT)

Economic data: UK Halifax house prices; US balance of trade; US weekly jobless claims

Around the markets:

  • Pound worth US$1.2586 (up 0.1%);
  • Gold US$1,421.40 an ounce, up 50 cents;
  • Brent crude changing hands for US$63.46, down 33 cents

City Headlines:

Financial Times

  • Osborne eyes chance of taking IMF vacancy - former UK chancellor seeks backing to replace Christine Lagarde
  • Private equity builds firepower for property slump - groups targeting ailing assets raise US$8bn in preparation for slowdown
  • Huawei founder predicts internet of things is next US battle

Times

  • Labour poll support at record low
  • Recession fears rise as services sector dips
  • Staff at cosmetics firm The Hut set to share £21mln windfall
  • Boeing gives US$100mln to crash families
  • The City regulator is planning to ban the sale to small investors of financial instruments that allow people to bet on the direction of bitcoin and other digital currencies
  • Woodford prepares to cut jobs

Daily Telegraph

  • Former UBS banker says Andrea Orcel tells Santander: make me CEO or pay €100mln
  • Grocers warn Halloween Brexit could derail Christmas sales
  • Millennials set for longer retirements than baby boomers despite rising pension ages

Guardian

  • Netflix signs deal with Shepperton Studios
  • Google and Facebook investigated over market dominance

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