FTSE 100 closes down
SSE defies the trend as Ovo homes in on SSE Energy Services
Wall Street shares slide
5.20pm: Footsie closes in the red
FTSE 100 closed in the red at the start of the week as the unrest in Hong Kong sent ripples through markets.
The tensions have become increasingly violent since June this year when a movement began due to opposition to a bill allowing extradition to mainland China.
Pro-democracy protesters have today shut down the city’s airport and clashed with police.
FTSE 100 closed down 27.13 points at 7,226.72, while FTSE 250 lost 179.15 to finish at 18,913.00.
On Wall Street, the Dow Jones Industrial Average plunged 240.81 to 26,046.43, while the S&P 500 lost 20.92 to 2,897.83.
"A mixture of the trade standoff with China, and the tense political situation in Hong Kong has promoted traders in the US to trim their equity positions," said analyst David Madden, at CMC Markets.
"The absence of any major economic announcements left traders looking at the international headlines, and they aren’t particularly encouraging," he added.
"It is possible that President Trump will use the Hong Kong situation against Beijing when it comes to negotiations."
Top loser on Footsie was NMC Health (LON: NMC), which shed 5.59% to 1,910p, while the top riser was consumer goods group Reckitt Benckiser (LON: RB), which gained 1.59% to 6,127p.
3.15pm: Footsie off the pace
London’s leading shares remain slightly off the pace after US benchmarks, as expected, opened sharply lower.
The FTSE 100 was down 28 points (0.4%) at 7,226, while in the US, the Dow Jones was down 208 points (0.8%) at 26,080 and the S&P was off 23.5 points (0.8%) at 2,895.
FTSE 250 shipping services provider Clarkson PLC (LON:CKN) found the market hard to please with its interim results.
The company saw profit before tax increase to £20.1mln from £19.2mln the year before but the shares fell back 5.9% to 2,375p.
Liberum stuck with its ‘buy’ recommendation and 3,200p target price but trimmed its forecasts for 2020 and 2021 by 4% on a more conservative outlook for the group’s financial division.
2.00pm: US markets set to open lower
The FTSE 100 traded sideways over the lunchtime session, ahead of what is expected to be a weak start on Wall Street.
London's index of heavyweight shares was down 28 points (0.4%) at 7,226.
Across the pond, if spread betting quotes are to be believed, the Dow Jones will open some 142 points lower at around 26,145 while the S&P 500 is tipped to start 15 points lower at around 2,903.6.
Burford has already got the right hump with notorious US short-seller Muddy Waters, which has accused Burford of “Enron-esque mark-to-model accounting” and “egregiously misrepresenting” its returns.
Gotham Capital has pitched in, saying Burford has enjoyed a false valuation and that short-sellers should be congratulated on bringing this to light.
“Litigation assets — whose associated cash flows’ size and timing are notoriously unpredictable — should not be financed with debt. This poses a real risk of an eventual asset/liability mismatch nightmare,” Gotham said.
12.30pm: Hong Kong stand-off hits markets
Losses have lengthened as investors get increasingly antsy about developments in Hong Kong.
The FTSE 100 was down 32 points (0.4%) at 7,221, some 11 points above its low point for the day.
“Events in Hong Kong threaten to overshadow equity markets on Monday. Reports that authorities have closed the airport in Hong Kong sent markets lower after what had been a positive open in Europe,” reported Neil Wilson.
“We’re also heard reports that armed police are gathering in Shenzhen, the mainland China city that borders Hong Kong.
“We don’t know what happens next - there is no sign that protestors are about to back down and the authorities are only hardening their stance. Hong Kong has kind of been under the radar of most traders (unless you’re into the Hang Seng) but increasingly I feel like that this has the potential to spiral into a bigger market worry. Today’s moves highlight the risks,” Wilson declared.
Shares in the Persian Gulf-focused private healthcare operator were the biggest blue-chip fallers, down 4.1% at 1,940p. Last week, the company felt obliged to put out a statement after a share price wobble saying that it was trading in line.
More than 4.5% of the company's shares have been sold short (the practice of borrowing shares and selling them in the hope of being able to buy them back later), which is up from about 3% three months ago.
10.50am: London's leading stocks mixed to lower
The Footsie continues to dance to sterling's tune, albeit in counterpoint.
Sterling has risen by two-fifths of a cent against the US dollar to US$1.2069 but this has resulted in investors turning their back on London's blue chips with the result that the FTSE 100 is down 11 points (0.1%) at 7,243.
Heavily-followed fertiliser mine developer Sirius Minerals PLC (LON:SXX) was deep in the you-know-what again after Eurochem, a privately owned fertiliser company, expressed scepticism over the Woodsmith mine project.
Sirius is hoping to be cranking out 10mln tonnes of polyhalite a year by 2024 but Eurochem thinks it will take much longer than that to get up and running plus it is not entirely sure the market for polyhalite is as strong as Sirius hopes.
According to The Times newspaper, Sirius said that the criticism from a competitor gave it “even greater confidence that we are on the right path” but the shares nevertheless tumbled 7.5% to 8.57p this morning.
The timetable that Sirius Minerals has set itself for building a giant fertiliser mine under the North York Moors looks “almost impossible”, according to an established industry player. #SXX https://t.co/q7ycIpNxPB— David Burton (@DavidBurton1971) August 12, 2019
9.55am: Pound recovers; Footsie fades
After a bright start, London's index of leading shares has surrendered its gains after sterling rallied on foreign exchange markets.
The FTSE 100 index was down 5 points (0.1%) at 7,249 as the pound battled back to US$1.2061, up a third of a cent against the greenback.
“After two weeks of losses, markets in Europe have opened higher this morning despite the Chinese central bank fixing the Chinese yuan above the 7 level for third day in succession. While the direction of travel is clear and that the yuan is likely to weaken further, it would appear that as long as the decline happens gradually, markets are more likely to be comfortable with it,” opined Michael Hewson, the chief market analyst at CMC Markets.
Mining and banking stocks generally failed to participate in the advance; among the latter, Royal Bank of Scotland PLC (LON:RBS) was off 0.7% at 203.2p after reports that it has lined up Alison Rose, the deputy chief executive officer (CEO) of its Nat West business, as its new CEO.
While the FTSE 100 has turned south, the mid-cap FTSE 250 remains positive, up 24 points (0.1%) at 19,116, despite another bad day for Sirius Minerals PLC (LON:SXX), which is down 13% at 8.08p on fund-raising concerns.
Tullow Guyana BV is the operator of the Orinduik block with a 60% stake; Eco Atlantic Oil & Gas Ltd (LON:ECO, CVE:EOG) has a 15% stake and saw its shares shoot up 91% to 130p on the news.
Eco are delighted to announce a significant oil discovery on the Orinduik Block. The Jethro-1 well was drilled to a final depth of 4400m and encountered 55m of net high-quality oil pay in excellent sandstone reservoirs. ➡️ https://t.co/exgKq0AJEZ#ECO #EOG #Oil #Discovery— Eco Atlantic Oil & Gas (@EcoAtlantic_OG) August 12, 2019
8.25am: Ailing pound gives the Footsie a lift
As predicted, the FTSE 100 got off to a strong start, rising 43 points to 7,297.23.
The index of UK blue-chips took its cue from Asia’s main markets, which made headway while largely ignoring the trade sabre-rattling on Friday by Donald Trump.
The main early action, however, was on the foreign exchange markets with pound languishing amid fears Britain may be headed towards recession. Earlier, sterling bumped as low as US$1.2010.
“The combination of a slowing economy, global economic weakness, the increasing chance of a cut to interest rates and the risk of a no-deal Brexit will continue to anchor sterling,” said Neil Wilson, an analyst at Markets.com.
“No-deal talk is the biggest concern – remove that and we get a big bounce even with the economic and monetary risks.”
Turning to the market, Thomas Cook (LON:TCG) gave up its recent gains after it said it planned tap investors for £150mln, prompting a 24% collapse in the share price.
SSE (LON:SSE), by contrast, advanced 9.4% after it confirmed talks to sell its household energy business to Ovo (LON:OVO).
However, the day’s big mover was Eco Atlantic (LON:ECO, CVE:EOG), which announced it had made a significant oil discovery off the coast of Guyana. The shares shot up 80% in opening trade.
6:20am: FTSE 100 set to make strong start
The FTSE 100 looks set for a strong start, taking its cue from Asia’s main markets, which kicked off the week in confident fashion.
The index of blue-chips is expected to advance 43 points to 7,296.85, though trade concerns look likely to linger.
"On Friday, President Trump set US-China relations back even further by claiming that he ‘won’t do business with Huawei’ and he suggested that the planned trade meeting for September, might not take place," said David Madden of CMC Markets.
"Previously, the US promised to loosen the restrictions on the Chinese tech giant, and he appears to have done a U-turn. Technology, national security, and intellectual property rights are an important component of the trade negotiations, so this is likely to hold up the prospect of a deal."
Overnight haven stocks were in demand. Gold, however, dipped back under the US$1,500-mark.
Here in the UK, the corporate news looks set to slow to a trickle with London headed into the summer lull.
Around the markets: Pound worth US$1.2036 (flat); Bitcoin US$11,450.93 (0.55%); Brent crude US$58.40, up 20 cents
Today’s major announcements
Interims: Valeura Energy PLC (LON:VLU), Cablevision Ho. PLC (LON:CVH), Grupo CLS (LON:GCLA)
Proactive news headlines
Circassia Pharmaceuticals PLC (LON:CIR) has hired one of Pfizer’s top executives to become its first chief operating officer. Jonathan Emms, who has held a number of senior positions at both Pfizer and GlaxoSmithKline PLC (LON:GSK), will join the respiratory drug specialist next month.
Thor Mining PLC (LON:THR)(ASX:THR) has received further assay results from the second metallurgical bulk sample drill hole at the company's wholly-owned Molyhil tungsten molybdenum deposit in the Northern Territory of Australia.
Bluejay Mining PLC (LON:JAY) has received an export permit from the government of Greenland for the shipment of the 40,000 tonnes of run of mine bulk sample material from the Dundas ilmenite project to be processed at the company's pilot processing plant in Quebec, Canada.
Benchmark Holdings PLC (LON:BMK) is hopeful that a string of prospective licensing deals for its non-core animal vaccines will help to offset “challenging” conditions in the shrimp and seabass/ bream markets.
OptiBiotix Health PLC (LON:OPTI) continues to see commercial traction for its functional food technology. In the latest of a series of similar deals, the company said it had signed an exclusive manufacturing, supply and distribution agreement with Brisbane-based dairy supplier Maxum Foods for its SlimBiome weight management product.
Shanta Gold Ltd (LON:SHG) has booked revenues of US$53.6mln during the first half 2019 on the production of 42,230 ounces of gold from its New Luika mine in Tanzania.
Eco Atlantic Oil & Gas Ltd (LON:ECO, CVE:EOG) has announced a major new oil discovery in the Orinduik block offshore Guyana.
Kodal Minerals PLC (LON:KOD) says it is seeking clarification over the status of £200,000 expected from stockbroker SVS Securities. The money was part of a £575,000 funding in July and due to be transferred today, but SVS went into administration last week.
Amphion Innovations PLC (LON:AMP) has sold 100,000 shares in lung scanning device maker Polarean Imaging PLC (LON:POLX) to reduce its outstanding debts. Following the sale, Amphion holds a 15.97% stake in Polarean.
Katoro Gold Plc (LON:KAT) has appointed SI Capital Ltd as broker with immediate effect as it looks to advance its projects in Tanzania. “As mentioned recently, we are actively looking to increase the current combined JORC compliant gold resource at Imweru while continuing to develop Haneti in tandem with AIM listed Power Metal Resources plc, who are farming into this highly prospective project,” said chief executive Louis Coetzee. “ I am bullish about the commodity basket that Katoro offers and I look forward to updating the market on further news as we advance the portfolio up the value chain."
Oracle Power PLC (LON:ORCP) has raised £500,000 through a share placing to pay off debt. The placing will be issued with one warrant for each share. Brandon Hill Capital Limited has agreed to take a 22.53% stake in the firm as part of the placing.
Mosman Oil & Gas Ltd (LON:MSMN) said drilling at the Stanley 3 well in Texas has been completed on time and on budget after reaching a target depth of 5,100 feet.
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