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FTSE 100 closes higher as markets await more from Trump on trade

The UK's premier share index finished up nearly 37 points at 7,365 on the day

Sainsbury's
The FTSE 100 closed higher ahead of a speech by President Trump at the economic club of New York
  • FTSE 100 index closes up nearly 37 pts
  • US markets open higher ahead of Trump trade speech
  • Sterling mostly flat as traders struggle for direction

5.05pm: FTSE 100 closes higher

FTSE 100 index closed higher on Tuesday as US stocks reached new highs and markets await the next installment of President Trump.

The UK's premier share index finished up nearly 37 points at 7,365 , while the midcap FTSE 250 was also higher, adding over 17 points at 20,427.

"Markets have been relatively calm as they await the next spark from Donald Trump, with the president due to make an appearance at the Economic Club of New York," noted Joshua Mahony, market analyst at spreadbetting firm IG Index.

"For all the self-lauding Trump will likely engage in on the US economic picture, markets will instead look for any updates on the move towards a 'phase one' trade deal with the Chinese. The confidence we have recently seen over a potential breakthrough appears to be faltering, with questions over the contents and timing of a phase one deal varying from one day to the next."

On Wall Street, the Dow Jones Industrial Average added over 27 points at 27,719, while the S&P 500 gained over nine points at 3,096.

3.55pm: FTSE 100 moves higher into final hour of trading

As Tuesday’s session entered its final hour the FTSE 100 was continuing its ascent and was 57 points higher at 7,386 at around 3.55pm.

Trade optimism following a delay of US tariffs on car imports from the EU have provided a boost to risk appetite over the session.

However, it was results driving the big risers and fallers among the blue-chips in late-afternoon, with Aveva Group PLC (LON:AVV) the best performer after a swing to a half-year profit drove its shares up 4.4% to 4,444p.

By contrast, the FTSE 100's biggest faller, sales and marketing group DCC PLC (LON:DCC), tumbled sank 5.3% to 6,970p after saying its full-year results will only be “broadly in line” with market expectations as profits in its interims results dropped to £57.56mln from £85.88mln.

The renewed strength in equities left sterling in a bit of a rut, down 0.09% at US%1.2839 against the dollar as there was little Brexit or UK election new to excite currency traders, although a cyberattack earlier today’s against the Labour Party’s campaigning systems may have raised a few eyebrows.

2.40pm: US markets open higher as Trump speech expected

Wall Street has kicked off its Tuesday session on the front foot amid increased trade optimism that a speech from Donald Trump later will deliver good news regarding US-China trade negotiations.

Shortly after the opening bell, the Dow Jones Industrial Average was 0.01% higher at 27,694, the S&P 500 was up 0.14% at 3,091 and the Nasdaq rose 0.17% to 8,478.

Whether or not the positivity can be maintained will depend on what Trump unveils in his speech at the New York Economic Club at 12.30pm Eastern Time (5pm GMT).

The positive start in the US gave the FTSE 100 a little bum in mid-afternoon, rising 34 points to 7,363 at around 2.40pm.

1.25pm: Wall Street points to higher start ahead of key Trump speech

US markets are set to open higher on Tuesday morning ahead of a speech, due at 12pm New York time, from president Donald Trump that will provide updates on the US’s trading status with both China and the EU.

Reports earlier today that Trump will delay a decision to impose tariffs on EU car imports has already provided something of a bounce for equities, so any positive developments in the negotiations between Washington and Beijing are likely to provide more momentum.

Given Trump said over the weekend that discussions were progressing “very nicely”, more good news will be expected, however, the detail of any developments remains sketchy, particularly regarding previous reports of a roll-back of tariffs as part of an initial deal with China.

The renewed trade optimism helped lift the FTSE 100 higher into early afternoon, with the index up 29 points at 7,358 at around 1.20pm.

However, this was bad news for currency traders as the pound fell 0.12% to US$1.2835 as there were little Brexit or election-related developments to keep it afloat.

United Utilities Group PLC (LON:UU.) was the biggest blue-chip riser, up 4% at 877.2p, while sales, marketing and support services group DCC PLC (LON:DCC) was at the bottom of the pile, slumping 5% to 7,008p after a cautious trading update.

12.00pm: FTSE 100 adds to earlier gains on hopes of a delay to the introduction of US tariffs on EU vehicles

London’s index of leading shares slowly added to earlier gains in the second half of the morning trading session, helped by some trade war optimism.

The FTSE 100 was up 26 points (0.4%) at 7,354.

“Speculation that President Trump will defer making a decision whether to slap tariffs on EU vehicle imports this week has boosted sentiment in European equity markets. The Trump administration has softened its stance in relation to the EU in recent months, which has been a factor in the rally in European stocks,” declared David Madden at CMC Markets.

“The White House has until tomorrow to make its call, and there is talk the decision will be pushed back. Traders are cautiously optimistic, hence why stocks are higher this morning,” he added.

Meggitt PLC (LON:MGGT) was not participating in the general market advance as traders took issue with its third-quarter trading update, even though the aerospace engineer increased full-year revenue guidance.

The shares dipped 0.7% to 624.8p.

The market was a bit more receptive to the update from broadcaster ITV PLC (LON:ITV), up 2% at 138.65p.

READ ITV’s own productions Love Island, Queer Eye drive better sales

The Love Island maker said positive advertising revenue growth and strong online viewing figures for popular TV series such as Queer Eye gave it confidence in its full-year financial guidance.
 

10.45am: Sainsbury's lifted by market share data (or media buzz over its Christmas ad)

Sterling hardened a little following the release of UK jobs and earnings data but remains lower on the day against the dollar.

A weak currency is generally good news for London’s blue-chips and sure enough, the FTSE 100 was in positive territory, up 24 points (0.3%) at 7,352.

UK average earnings grew less than expected in the third quarter, rising 3.6% from a year earlier; the consensus forecast had been for a 3.8% increase.

The unemployment rate had been expected to remain unchanged from the previous quarter at 3.9% but eased to 3.8%.

The unemployment benefits claimant count for October rose by 33,000 versus economists expectations of an increase of 24,200.

“News of the economy contracting for a second successive month in September has been swiftly followed by a warning of how the growing economic malaise is feeding through to the labour market. Official data from the Office for National Statistics showed employers cutting headcounts at the fastest rate for four years in the third quarter,” said Chris Williamson, the chief business economist at IHS Markit.

“The number of people in employment fell by 58,000 in the three months to September, the biggest reduction since 2015, and vacancies dropped by 53,000 compared to a year earlier, representing the biggest annual fall in demand for staff since 2009. Annual wage growth also slowed, down from 3.7% in the three months to August to 3.6% in the three months to September, its slowest rate for a year.

“The official data are now falling into line with earlier warning signs of a weakening labour market from the surveys, which suggest that the deteriorating picture for jobs and wage growth has persisted into October. Recruitment agencies reported that the demand for permanent staff at employers had grown at the joint-slowest rate for a decade in October as uncertainty and worries about the outlook reduced firms’ appetite to take on extra employees,” he added.

“The number of people placed in permanent jobs meanwhile fell for an eighth straight month, dropping in October at one of the steepest rates since the global financial crisis. Wage growth remained elevated, however, due to ongoing shortages of suitable staff, although the rate of wage inflation was reported to have been running well below that seen this time past year,” Williamson reported.

On the corporate front, leading equities were firmer on balance but notable dissidents including DCC PLC (LON:DCC), down 3.6% after its trading update, and Tesco PLC (LON:TSCO), down 1.9% after the release of the latest grocery market share data from Kantar.

READ DCC sounds note of caution over full-year outcome

Sales, marketing and support services group DCC cautioned that the full-year outcome will be “broadly in line” with market expectations – a phrase that sets alarm bells ringing (albeit quietly) in the City.

Tesco, meanwhile, was the highest-profile casualty in the aftermath of the latest grocery market share release from market research firm Kantar.

Supermarket sales grew by 1.0% year-on-year in the 12 weeks to 3 November, which was slightly down on sales growth in a 12-week period a month earlier.

“After a positive month last time around, Sainsbury’s sales were down by 0.2% in the past 12 weeks, with its market share falling back slightly to 15.6%,” said Kantar's Fraser McKevitt.

“Meanwhile, Tesco saw sales fall by 0.6%. The UK’s largest supermarket recently unveiled its new ‘Clubcard Plus’ offer which gives subscribers 10% off two large shops each month. Some 1.8 million households made at least two trips to the retailer worth £50 or more in the past four weeks, a number Tesco will be looking to boost through its latest initiative,” he added.

Wm Morrison Supermarkets PLC (LON:MRW) was down 0.4% at 197.3p and Ocado Group PLC (LON:OCDO) was 0.6% lower at 1,095.5p but J Sainsbury PLC (LON:SBRY) rose 1.1% to 206.3p - although the Sainsbury's share price rise might have had more to do with the media coverage of its Christmas advertising campaign than its market share performance.

 

9.45am: Unemployment rate falls a bit more than expected

The UK unemployment rate edged down to 3.8% in the third quarter, the Office for National Statistics said. Economists had expected a reading of 3.9%.

The unemployment rate was 0.2 percentage points lower than in the same period of 2018 and down 0.1 percentage point from the second quarter of this year.

The UK employment rate was estimated at 76.0% for the third quarter, up from 75.5% a year earlier but down from 76.1% in the preceding quarter.

The estimated annual growth in average weekly earnings for employees in Great Britain was 3.6% for both total pay (including bonuses) and regular pay (excluding bonuses).

The FTSE 100 dipped a little on the numbers but soon recovered its poise and is currently up 16 points (0.2%) on the day at 7,345.

8.40am: Footsie bounces higher

The FTSE 100 nudged higher as it took its cue from gains on Wall Street, which closed on another high, and in Asia, though bubbling under the surface were worries over trade and Hong Kong’s political strife.

The index of UK blue-chips opened 24 points to the good at 7,352.85

Going forward, the market’s mood could be dictated by a speech from Donald Trump later Tuesday in which it is hoped he will provide guidance on the status of a first-stage trade deal with China.

“The White House has been careful to say it hasn’t agreed to roll back tariffs yet,” said Neil Wilson senior markets analyst at Markets.com. “But hope springs eternal, especially when the Fed has your back.”

Forgetting the irrational exuberance that drove Russian steel producer Evraz (LON:EVR) 2% higher to the top of the Footsie leader board, broadcaster ITV (LON:ITV) and credit checker Experian (LON:EXPN) were the stand-outs on the leading index – up 1.95% and 2.1% respectively.

The former’s trading statement was treated with relief rather than delight, while the latter doubled down on its profit forecasts after a strong first half.

Tesco (LON:TSCO), off 1%, was marked down in the wake the latest Kantar market data, which suggested the UK’s largest supermarket chain had been worst affected by the German discounters.

 

Proactive news headlines:

Alien Metals Ltd (LON:UFO) has confirmed the potential for direct shipping of iron ore from the Hancock Ranges and Brockman projects in western Australia over which it holds an exclusive option to acquire a 51% interest. Independent laboratory analysis of 17 rock chip samples taken from both tenements has highlighted the potential high grade of the ore, with stand-out numbers including 64.2% iron from the Sirius Extension prospect, 63.9% from the Kalgan prospect, 60.3% from the BHP 20 prospect and 65.4% from the BHP 19 prospect.

SDX Energy PLC (LON:SDX) has told investors that production has now officially begun at the South Disouq gas field in Egypt. The company owns a 55% stake in the South Disouq which has been a key focus for investors and management alike. Gas has been flowing at South Disouq since 7 November, the company confirmed in a statement, and all four of the field’s wells have now been hooked up to the central processing facility. In a separate statement, the company announced that Mark Reid has been appointed as the company’s permanent chief executive following on from his interim appointment back in May.

BigDish PLC (LON:DISH) has overhauled its management team and strategy to achieve critical mass. Tom Sumner has been appointed as chief executive of the restaurant booking app firm, while current CEO Sanj Naha will in future focus on electronic point of sale and third-party restaurant technology platforms. BigDish is also undertaking a major overhaul of its restaurant acquisition strategy with seven of its nine territory managers to leave and a new telesales operation to come onstream in Manchester from December.

Telit Communications PLC (LON:TCM) has said profits for the first three quarters of its current year have been “slightly ahead” of its expectations. In a trading update for the nine months to 30 September, the Internet of Things (IoT) specialist said revenues for the period were 7.8% higher year-on-year at US$274.5mln.

Tower Resources PLC (LON:TRP), the AIM listed oil and gas company with its focus on Africa, said that further to its announcement on 15 October 2019 regarding the completion of a placing and subscription for £1.5mln, the issue of 349,643,617 new ordinary shares has now been completed, with the Second Tranche comprising 338,076,923 placing shares and 11,566,694 commission and fee shares.

Asiamet Resources Limited (LON:ARS) said that it received notification yesterday that Dominic Heaton, a non-executive director of the company, purchased 236,550 common shares in the company on market at an average price of 2.9p each on 7 November 2019. Following these transactions, the group added, Heaton's interest in the company is 1,895,643 common shares, which represents approximately 0.17% of the issued common share capital.

Columbus Energy Resources PLC (LON:CERP) has announced an extension of the Incremental Production Service Contract (IPSC) for the Inniss Trinity field in Trinidad. The extension replaces prior obligations and allows for the implementation of a pilot project for CO₂ injection based enhanced oil recovery.  In effect, the EOR venture replaces prior obligations requiring the drilling of seven new production wells. It also means that the IPSC runs until December 2021, extended from a previously envisaged end date of January 2020.

Alba Mineral Resources PLC (LON:ALBA) executive chairman George Frangeskides declared himself “pleased” as horizontal drilling was completed successfully in the new Horse Hill well. A total of 2,500 feet was successfully drilled horizontally wholly within the targeting ‘sweet spot’ of the conventional Portland oil reservoir. It was decided, according to Alba, that there was little technical or economic merit in completed the maximum allowed horizontal section, of 3,000 feet, because the programme achieved a good, clean horizontal trajectory.

Polarean Imaging PLC (LON:POLX) has installed its latest research unit at a hospital in Vancouver, Canada. The order for the 9820 Xenon Polariser system was from the University of British Columbia, but the unit will be installed at the BC Children's Hospital, a leading paediatric research and teaching centre.

Anglo African Oil & Gas PLC (LON:AAOG) has signed a rig agreement ahead of a side-track well planned for its Tilapia Field in the Republic of Congo. It has an ‘option’ on specialised equipment supplied by Société de Forage Pétroliers (SFP) that is currently being used by a “super-major” to drill its 56%-owned TLP-103C-ST prospect and four others. Work will take place in either the first or second quarter of next year, depending on SFP’s work commitments – later than expected.

Scotgold Resources Ltd (LON:SGZ) closed out the year to 30 June 2019 with just under US$4mln cash in the bank. The picture is likely to have been transformed in the months subsequent, however, as the company moves full steam ahead to bring the Cononish mine in Scotland into production within a matter of months.

AdEPT Technology Group PLC (LON:ADT) continues to trade in line with expectations with organic revenue growth augmented by contributions from acquisitions. The acquisitive information technology services provider saw revenue rise by 26% to £30.8mln in the six months to the end of September from £24.4mln in the same period of last year.

Amur Minerals Corporation (LON:AMC) has completed the hydrological assessment for its Kun-Manie nickel copper sulphide project. The assessment has been approved by the necessary Russian Federation agencies, an important component in completing the TEO, the local equivalent of a feasibility study. The hydrological assessment has confirmed the presence of substantial groundwater reserves located along the Maly Kurumkon and Bolshoy Kurumkon watersheds, sufficient to support the Kun-Manie proposed mining operation.

Bluejay Mining PLC (LON:JAY) has appointed Joshua Hughes as Greenland Exploration Manager. Hughes will manage multiple interrelated exploration programmes in Greenland, as Bluejay moves to advance its two large scale base metal projects, Disko-Nuussuaq and Kangerluarsuk.

ADM Energy Plc (LON:ADME) has completed a second round of funding worth £129,000 through a subscription at 7p per share by Mrs Olanike Olakunmi Anani. Anani is already is a shareholder in the Nigerian oil group and her stake in the business rises to 6% following this latest subscription.

Ceres Power Holdings PLC (LON:CWR), a global leader in fuel cell technology and engineering, revealed that it is hosting a Capital Markets Day at its new manufacturing facility in Redhill today. The group said Phil Caldwell (CEO) and Richard Preston (CFO) will be joined by senior management colleagues who will describe the areas of activity for the business and the key drivers for growth alongside a tour of the manufacturing facility.  It pointed out that no further material or new information will be disclosed in the presentations and there will be no statement on current trading.

IronRidge Resources Limited (LON:IRR) said it will be attending the 121 Mining Investment Event on November 12-13, at Clifton Venues, 10 Spring Street, Sydney, Australia. The group pointed out that the presentation can be viewed on the Investor Relations section of the company's website.

Base Resources Limited (LON:BSE) (ASX:BSE), the African mineral sands producer, said its latest company presentation, which was delivered today at the TZMI Congress in Singapore, is available from the company’s website.

6.45am: FTSE 100 tipped to move higher 

The FTSE 100 is expected to open higher on Tuesday as investors awaited the latest figures from the UK’s labour market.

Spread-better IG is predicting that the FTSE 100 will open around 29 points higher after ending Monday’s session 31 points lower at 7,328.

Traders will be hoping that the jobs market can send out some more positive signals for the British economy following yesterday’s GDP reading, which showed the UK had once again avoided recession with 0.3% growth in the third quarter.

In the US overnight, news from Boeing that its troubled 737 MAX aircraft could return to the skies earlier than expected boosted the Dow to another record high, ending the session 0.04% higher at 27,691.

However, the continued uncertainty of US-China trade talks sent other US indices into the red, with the S&P 500 closing down 0.2% at 3,087 while the Nasdaq Composite fell 0.13% to 8,464.

A speech by president Trump at the New York Economic Club later today may provide some catalysts more movement, particularly if any details emerge around a scheduled meeting with Chinese president Xi Jinping.

Asian markets headed higher this morning despite the underlying trade picture and yesterday’s violence in Hong Kong, with Japan’s Nikkei 225 rising 0.81% while Hong Kong’s Hang Seng rose 0.48%.

On the currency markets, sterling was 0.09% higher at US$1.2862 against the dollar ahead of today’s jobs figures having been given a boost on Monday by a decision from Brexit Party leader Nigel Farage not to stand candidates in Conservative-held seats in next month’s election, which many traders have interpreted as increasing the chance of a Boris Johnson victory.

Significant events expected for Tuesday:

Interims: Vodafone Group plc (LON:VOD), ITV (LON:ITV), Land Securities Group PLC (LON:LAND), B&M European Value Retail SA (LON:BME), DCC PLC (LON:DCC), Electrocomponents (LON:ECM), Experian PLC (LON:EXPN), Premier Foods PLC (LON:PFD), AdEPT Technology Group PLC (LON:ADT), Aveva Group PLC (LON:AVV) Gear4music (Holdings) PLC (LON:G4M), Oxford Instruments plc (LON:OXIG)

Trading statements: Aggreko (LON:AGK), Meggitt PLC (LON:MGGT), Arrow Global Group PLC (LON:ARW), Assura PLC (LON:AGR), Gamesys Group PLC (LON:GYS)

AGMs: BHP Group PLC (LON:BHP), Craneware (LON:CRW), Galliford Try (LON:GFRD), Pacific Horizon (LON:PHI), Surface Transforms (LON:SCE)

Economic announcements: UK labour market, EU ZEW economic sentiment

Around the markets:

Sterling: US$1.2862, up 0.09%

Brent crude: US$62.51 a barrel, up 0.5%

Gold: US$1,450 an ounce, down 0.4%

Bitcoin: US$8,754, down 0.8%

City headlines:

Ratings agency Moody’s has issued a debt downgrade warning to the entire world on fears that political turmoil from Westminster to Hong Kong poses a threat to the economy – Telegraph

Boeing said on Monday it could have its fleet of 737 Max jets flying again by January as safety checks on the aircraft’s troubled flight software reach completion – Guardian

Schools and roads construction giant Kier has admitted to covering its former chief executive’s home broadband bill in a pay report that is set to trigger a shareholder revolt this week – Daily Mail

Walgreens Boots Alliance has received a buyout proposal from the private equity group KKR, a deal that would be the biggest private equity transaction on record – Financial Times

The sale of British Steel to the state-backed Jingye Group has sparked speculation that it could open the door for another Chinese company to make an offer to Tata Steel – Times

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