FTSE 100 closes higher despite dismal US data

Britain's blue-chip index finished up over 74 points at 6,218

  • FTSE 100 index closes up 74 points
  • The mid-cap FTSE 250 also gains ground
  • AstraZeneca shares up on potential vaccine news

5.05pm: FTSE 100 closes up

FTSE 100 index closed to the good on Thursday as the prospect of reopening economies and the easing of lockdowns boosted investor sentiment.

Britain's blue-chip index finished up over 74 points at 6,218.

The more UK-focused FTSE 250  also headed north, gaining over 192 points at 17,335.

"The reopening of economies has been a common theme across the markets in recent weeks, and it’s the reason why stocks have been bullish lately," noted David Madden, at CMC Markets.

"Optimism in relation to a possible Covid-19 vaccine is circulating too," he added. "AstraZeneca said the results of the first vaccine trail completed with the University of Oxford should be available very soon."

In London, shares in the drugs titan AstraZeneca (LON:AZN) closed up 4.43% to stand at 8,698p.

The positive finish for footsie came despite downbeat data from the US.

Unemployment benefit claims rose by another 2.1 million last week, while GDP figures showed that the economy had shrunk at a faster pace than had initially been estimated in the first three months of 2020.

The Dow Jones added over125 points nat 25,674, while the broader based S&P 500 gained over 17 points at 3,053.

3.35pm: Third rise in succession?

London’s leading shares re coasting towards the end of what should be the third day of rises in succession.

The FTSE 100 was up 69 points (1.1%) at 6,214.

The mid-cap FTSE 250 advanced 171 points (1.0%) to 17,315, with heavily indebted Cineworld PLC (LON:CINE), up 21% at 93.68p, leading the way after it was given some breathing space by its bankers.

READ Cineworld arranges new loans and plans for July cinema reopening

3.00pm: US open a bit more middling than expected

US indices opened higher, except for the NASDAQ, after US jobless claims last week failed to upset the applecart.

The Dow Jones was up 54 points (0.2%) at 25,602, the S&P 500 was up 4 points (0.1%) at 3,040 but the NASDAQ Composite was down 4 points (0.0%) at 9,408.

“As the economy re-opens initial jobless claim are starting to fall more quickly, but at 2.12 million for last week it remains horribly high. Hiring is happening, but it will be constrained by social distancing restrictions while the government’s own support efforts could hinder the pace of recovery,” was the analysis of the US jobs data from James Knightley, the chief international economist at ING.

“Intriguingly there is a steep decline in continuing jobless claims to 21.05mn from 24.9mn and this is well below the 25.7mn consensus forecasts. We doubt this is due to hiring and may reflect more the fact the continuing claims numbers are state benefits and don't include the people claiming the Pandemic Unemployment Assistance - they are not eligible for regular or extended unemployment benefits. As of the week of 9 May, the total number of benefit claimants including Pandemic Unemployment Assistance was 31 million,” he added.

In London, the FTSE 100 was up 76 points (1.2%) at 6,220.

2.15pm: US indices still expected to open higher

US investors have not been overly moved by the release of a slew of economic data that in more normal times would have them throwing themselves in the nearest pond.

Spread betting quotes suggest the Dow Jones average will open at around 25,798, up 250 points, while the S&P 500 is looking like it will put on about 14 points to open a shade above 3,050.

In London, the FTSE 100 was up 83 points (1.4%) at 6,228.

1.55pm: US first-quarter GDP revised lower

US durable goods orders plunged 17.2% in April, although the fall was not as bad as economists had expected.

The consensus forecast was for a fall of 18.2%.

US gross domestic product in the first quarter fell by an annualised 5%. revised data showed. The flash estimate indicated a 4.8% decline, and economists were expecting this estimate to be confirmed by today’s data.

The data from the US has had little effect on the Footsie in London; the top shares index was up 67 points (1.1%) at 6,211.

1.35pm: US first-time jobless claims in line with 

US first-time jobless claims last week totalled 2.12mln, in line with the consensus forecast, and down from 2.44mln the week before.

Continuing claims fell by 3.9mln to 21mln.

The FTSE 100 was up 66 points at 6,211 shortly after the release of the data.

1.10pm: The Footsie basking above 6,200

London’s leading stocks are sitting pretty but the weekly jobless claims from the US plus US gross domestic product data could potentially dampen the mood.

The Footsie broke through the 6,200 barrier on the stroke of noon, since when it has risen to 6,209, up 65 points (1.1%).

US jobless claims are expected to be in the region of 2.1mln while the gross domestic product number is expected to be little changed from the flash estimate, which was for an annualised decline of 4.8% in the first quarter.

12.50pm: US indices expected to open higher

The FTSE 100 was close to its high for the day ahead of what is expected to be a firm opening in the US.

London’s index of heavyweight shares was up 68 points (1.1%) at 6,212.

US indices are expected to join in with the general advance on global stock markets. Spread betting quotes suggest the Dow Jones average will open at around 25,744, up almost 200 points, while the S&P 500 is looking like it will put on about 10 points to open at 3,046.

11.55am: UK economic sentiment falls

The European Commission’s Economic Sentiment Indicator (ESI) for the UK fell to 61.7 in May, from 62.4 in April; 100 represents the 1990-to-2019 average.

“The further fall in the ESI in May likely isn’t a reliable sign that GDP [gross domestic product] has continued to fall on a month-to-month basis,” cautioned Pantheon Macroeconomiscs’ Samuel Tombs.

“Fieldwork for all four sub-sector surveys used to calculate the overall ESI occurred in the first half of May, largely before the government recommended on May 13 that employees who could not work from home should return to their usual workplaces. A variety of unconventional daily indicators, from motor vehicle journeys to energy consumption, all point to a recovery in activity that built momentum during May. At this stage, then, we’re still penciling-in a 3% month-to-month rise in GDP in May, reversing some of April’s likely 20% or so decline,” Tombs said.

“Meanwhile, the ESI’s survey contains further signs that CPI [consumer prices index] inflation is on course to fall to a near-zero rate by the summer. Retailers have amassed so much excess stock during the lockdown that they now plan to slash prices to shift it,” Tombs said.

“The net balance of non-food retailers intending to increase prices rose to -15 in May, from -28 in April, but remained well below its +31 average in the 2010s. It points to core goods inflation declining to about -2.0% by July, from 0.5% in April, which would subtract 0.8pp from the headline rate. Services firms also look set to cut prices, when they reopen for business; the net balance planning to raise prices increased to -34, from -38, but also remained greatly below its +6 average of the last decade,” he added.

The FTSE 100 was up 41 points (0.7%) at 6,185, with holding company Melrose Industries PLC (LON:MRS) – best known as the owner of automotive and aerospace engineer GKN – leading the way with a 6.0% rise to 125.8p.

11.10am: Asia-focused lenders not invited to the party

The FTSE 100 index remained positive late morning as investors continued to shrug off mounting tension in Hong Kong to focus on things slowly getting back to normal – albeit with mass redundancies – in the West.

The UK blue-chip index was up 30 points (0.5%) at 6,174, and would’ve been higher still but for losses for Asia-focused lenders Standard Chartered PLC (LON:STAN) and HSBC Holdings PLC (LON:HSBA), which are under selling pressure as a result of the clashes between the Chinese authorities and Hong Kong protestors.

WATCH: Morning Report: FTSE 100 rises on Europe’s coronavirus bailout and US reopening plans

Standard Chartered was down 4.4% at 393.4p and HSBC was off 4.1% at 380.3, the latter after announcing the launch of five separate offers to purchase for cash previously issued loan notes.

“A recovery in bank stocks in London continues although HSBC and Standard Chartered have been left out of the move this morning, thanks to the continuing crackdown in Hong Kong. It is not so long ago that these two were meant to be the future, powering ahead in key growth regions while UK-focussed names lag behind but political upheaval in Hong Kong and the US-China situation continue to act as a drag on share prices, with no sign that either of these situations will change in the near-term,” observed Chris Beauchamp, the chief market analyst at IG.

Fast indicators

The Office for National Statistics (ONS) has published its latest set of faster indicators, covering the UK’s society and economy.

According to the data, online job vacancies declined more than 50% from the start of March to the start of May 2020, with the categories of catering and hospitality, and wholesale and retail, both seeing very large declines in job adverts across this period, albeit stabilising in May between 20% and 25% of their 2019 averages.

In contrast, education saw a far smaller decline to around 80% of its 2019 average. The volume of job vacancies in health and social care saw little or no change from March to May, the ONS said.

The ONS also published the initial results from Wave 5 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) of UK businesses for the period May 4 to May 17, 2020.

According to the survey, 79% of businesses had applied for the Coronavirus Job Retention Scheme, while 42% of businesses had less than six months of cash reserves.

24% of businesses who have currently paused trading expect to start trading again in the next four weeks, compared to 31% who expect to start trading in more than four weeks’ time; 46% are not sure when they will restart trading.

Of the 14% of businesses who reported they had paused trading but are intending to restart trading in the next two weeks, 31% of their workforce will return from furlough leave, the ONS reported.

9.50am: easyJet flying high after on flights resumption news

The Footsie briefly topped 6,200 this morning and remained firmly in positive territory on renewed optimism about an end to coronavirus pandemic ockdowns.

London’s index of leading shares was up 40 points (0.7%) at 6,184, with asset manager M&G PLC (LON:MNG), up 9.4% at 149.35p, leading the advance, after its business update yesterday.

easyJet PLC (LON:EZJ), up 5.2% at 745.4p, was in the silver medal position as the low-cost airline confirmed it would resume flights from June 15.

“It’s encouraging to see the airlines start giving firm dates for getting planes back into the sky. All signs are pointing to a long road to recovery though. Unfortunately, this means easyJet is joining many of its competitors in making a large number of its staff redundant as it buckles up for several years of reduced demand,” observed William Ryder, an equity analyst at Hargreaves Lansdown.

“One possible silver lining for shareholders is that the crisis provides airlines with a chance to reset their costs structures. Airlines can renegotiate with airports and other suppliers, as well as reducing headcount and agreeing reductions in staff pay. That would make the surviving airlines leaner and more efficient than they were previously, even if social distancing measures prevent them from exploiting this in the near term,” he added.

8.40am: Third session of gains

The FTSE 100 index made a positive start to proceedings on Thursday as it nudged into territory last seen in February.

The index of UK blue-chips advanced 44 points to 6,187.82.

While the gains weren’t of the quantum seen in recent days, it appears the UK price-setters continue to be buoyed by efforts globally and nationally to ease lockdown restrictions.

However, perhaps the froth will be knocked off the market when US traders emerge from their slumbers to react to the latest weekly jobs data this afternoon.

The devil, of course, will be in the detail with investment experts such as James Mee, who heads the Waverton Multi-Asset Income Fund, eyeing the number of Americans that are temporarily unemployed versus those who are long-term out of work. As the millions in the latter category creep up, so do the worry levels, says Mee.

On the market, Rolls Royce (LON:RR.), which has announced a series of cost savings measures to right-size the business following the coronavirus pandemic, was the Footsie’s top faller, tumbling 6.5%.

Making an interesting contrast and suggesting some sort of long/short strategy at play in the aero-engineering sector was the 4.2% rise in GKN-owner Melrose Industries (LON:MLRO).

Also in demand early on were shares in the investment group M&G (LON:MNG), which was lauded on Wednesday for making a dividend payment in the face of some pretty horrendous market turmoil and when others were cancelling the payout. The stock advanced 5%.

Hyve Group (LON:HYVE) topped the FTSE 250 with around a 500% gain. Unfortunately for investors this was purely technical following the consolidation of its shares.

Cineworld (LON:CINE) was the mid-cap index’s real main gainer, up 20% as coronavirus lockdown restrictions look set to be eased further in the UK.

Proactive news headlines:

Bidstack Group PLC (LON:BIDS) told investors it is pleased with its progress and noted that the fledgling In-game advertising industry is seeing a spike in demand amidst the coronavirus (COVID-19) pandemic. The company, which hosts its AGM later on Thursday, has seen notable momentum in recent weeks with new agreements entered into for key partnerships and it is now working with most of the major ad firms. James Draper, Bidstack chief executive said in a statement: “The disruption to the advertising industry arising from the global cancellation of live sports as a result of COVID-19 has resulted in media buyers following audience demand and seeking to get in front of the increasing numbers of consumers turning to video gaming as an alternative.

Galantas Gold Corp (LON:GAL) has told investors that concentrate processing has now restarted at its wholly-owned gold mine near Omagh, Northern Ireland. During the downtime, maintenance of certain aspects of the processing plant was undertaken which is expected to minimise any future disruptions, the company noted. Staff previously furloughed under the UK government grant scheme are now back at work, it added. Corporate activities also continue, the company noted. “Discussions with a number of parties continue in terms of a corporate action involving a potential sale or joint venture and due diligence materials continue to be processed,” Galantas said in a statement.

Oncimmune Holdings PLC (LON:ONC) said it has signed its largest contract to date with Swiss pharma giant Roche to profile auto-antibodies in patient samples collected during cancer immunotherapy trials. The new contract follows an initial project between the companies over the past two months and will enable further assessment of individual patient responses to immunotherapy through immune profiling. The contract involves a substantial upfront payment, added the AIM-listed group and starts immediately. Initial results are scheduled to be provided to Roche within three months and the project to be completed by November.

Filta Group Holdings (LON:FLTA) said it believes revenues and margins will return to levels seen in the first quarter once social distancing restrictions are lifted and the restaurant and hospitality industries return to normality. “Albeit that there has to be some uncertainty as to how long, and to what extent the restrictions may persist, we believe that, by the actions we have taken, we will be able to manage the group through that period and to be in a strong position thereafter,” said Filta's chairman Tim Worlledge. His comments accompanied full-year 2019 results from the oil filtration and fryer management group. Revenues for the 12 months ended December 31, 2019, were up 75% to £24.9mln, reflecting an £8.6mln contribution from the 2018 acquisition, Watbio.

AFC Energy PLC (LON:AFC) has said its HydroX-Cell(S) fuel cell system remains on target for initial release in 2022 following successful development works this year. The hydrogen power generation specialist said designs have been engineered for the first full commercial scale prototype system, which will commence manufacture in June and build on positive results achieved both at laboratory scale and single-cell commercial-scale testing. AFC also said that its internal capacity to produce HydroX-Cell(S) electrodes has increased and a pilot fabrication process for the production of membrane electrode assemblies (MEA) is under development.

Blue Star Capital PLC (LON:BLU) said its investee company, SatoshiPay, has received support in the form of a strategic investment from its key partner, the Stellar Development Foundation (SDF). SDF has invested US$500,000 by way of a convertible loan note to support SatoshiPay in the development of its B2B solution for commercial, cross-border payments and digital wallets using the blockchain framework. The company said the funds will be used primarily to develop and market the SatoshiPay B2B solution which is currently being tested with a product expected to enter closed alpha testing within 8 weeks and a public beta launch expected in the fourth quarter of 2020.

e-therapeutics PLC (LON:ETX) has said it is moving into the field of RNA interference, also known as gene silencing. The approach won inventors Andrew Fire and Craig Mello a Nobel Prize in 2006. Since then researchers have struggled with RNAi discoveries, partly because of problems getting the molecules to their target. e-therapeutics believes its computational approach to drug discovery could aid the search for new RNAi drug candidates. Its machine learning-enhanced database of over 15mln small molecule compounds will allow scientists to perform functional in-silico (computer-based) phenotypic screens. In the same announcement, the company also said it has appointed Dr Paul Burke, head of Burke Bioventures, as chair of its scientific advisory board (SAB).

Kodal Minerals PLC (LON:KOD) told investors that its feasibility study for the Bougouni lithium project, in Mali, has been accepted by the country’s Ministry of Mines and Petroleum. The ministry confirmed that no further technical and financial meetings are required prior to mining licence approval. Additionally, the Directorate Nationale de la Géologie et des Mines has now agreed the mining area and new permit boundary to encompass all resources along with the proposed mining and associated infrastructure areas. Kodal also noted that its gold assets in Mali and Cote d'Ivoire have attracted interest from investors and other exploration and development companies.

Primary Health Properties PLC (LON:PHP), one of the UK's leading investors in modern primary healthcare facilities, said it has contracted to provide development funding for the construction and acquisition of a purpose-built primary care centre in Arklow, Co. Wicklow, Ireland for an anticipated total cost of €18.0mln. In a statement, the FTSE 250-listed firm said agreements for a lease with an initial term of 30 years have been signed with the Health Service Executive and a local GP practice, which will relocate to the centre on practical completion. The building, which will comprise an area of 5,333 square metres, is to be constructed to the new Nearly Zero-Energy Buildings regulations in Ireland.

Power Metal Resources PLC (LON:POW) has extended its option to acquire an additional 10% of the Haneti polymetallic project in Tanzania until the end of August. The company said that it and partner Katoro Gold PLC (LON:KAT) are still evaluating approaches to take a stake or farm-into the project. Power Metal has a 25% stake in Haneti but can increase this to 35% through the payment of a further £25,000 to Katoro.

Thor Mining PLC (LON:THR) (ASX:THR) has advised shareholders that trading in its shares have been halted on the Australian Securities Exchange effective from Thursday May 28 pending an announcement related to the entering into an exclusivity arrangement in respect of a potential acquisition by the company and an associated fundraising. The group said the ASX trading halt will remain in place until the earlier of the commencement of trading on Wednesday June 3 or the release of an announcement by the company. Trading in the company's ordinary shares will continue on AIM during this period.

Genel Energy PLC (LON:GENL) announced that payments have been received from the Kurdistan Regional Government for oil sales during April 2020. It said the Taq Taq partners have received a gross payment of $1.9mln, with Genel's net share of the payment being $1.1mln, while the Tawke partners have received a gross payment of $8.5mln, with Genel's net share of the payment being $2.1mln.

Circassia Group PLC (LON:CIR) said that the proposed transfer of the Tudorza and Duaklir assets to AstraZeneca PLC (LON:AZN)  first announced on April 9, 2020, has now completed. Ian Johnson, the group’s executive chairman commented: "The completion of this transaction transforms Circassia into a debt-free business. Niox is a highly differentiated respiratory diagnostic platform that will be able to deliver long-term growth and enhanced shareholder returns."

Ergomed PLC (LON:ERGO), a company focused on providing specialised services to the pharmaceutical industry, has announced that Richard Barfield, its chief financial officer will present at the Jefferies Virtual Healthcare Conference at 2pm BST on June 2, 2020. A live webcast of the presentation will be available on Ergomed's website: https://www.ergomedplc.com/investor-relations/reports-and-presentations/

Shield Therapeutics PLC (LON:STX), a commercial-stage pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru/Accrufer (ferric maltol), will be presenting at two investor presentations next month, providing an overview of the business and progress being made by the company The group said Tim Watts, its chief executive officer, will present online at the Shares Spotlight webinar on Wednesday, June 3 at 6.05pm. Investors can register to attend here: https://bit.ly/36AKJhe. It also noted that Watts will present at the Proactive Investor webinar on Thursday, June 4 which starts at 6.00pm. Investors can register to attend here: https://bit.ly/2TENuZq. The group said no new material information will be disclosed at either event and the presentations will be made available on the company website shortly after the events: https://www.shieldtherapeutics.com/investors/presentations

Faron Pharmaceuticals Oy (LON:FARN0 (NASDAQFIRSTNORTH:FARON), the clinical-stage biopharmaceutical company, said it plans to host a virtual R&D Day via webcast on Tuesday, June 16 at 3pm EEST, 1pm BST, 8am EDT. The event will provide an opportunity for the company's management team to present its R&D strategy and provide insight into Faron's two clinical-stage programmes. Management will discuss the Company's wholly-owned novel precision cancer immunotherapy, Clevegen, targeting Clever-1 positive tumour-associated macrophages (TAMs) in selected metastatic or inoperable solid tumours, currently under development in the ongoing phase I/II MATINS clinical trial. Management will also discuss Traumakine, for the treatment of patients with Acute Respiratory Distress Syndrome (ARDS), which is currently being investigated in COVID-19 patients in the ongoing REMAP-CAP trial and the WHO's Solidarity trial. There will be an opportunity to ask questions during the webcast.

Anglo Pacific Group PLC (LON:APF) (TSX:APY) announced that at its annual general meeting held on Wednesday, May 27, all resolutions were duly passed by a show of hands, with Resolutions 15 to 18 passed as special resolutions. It noted that following the AGM the group’s chief executive officer and chief financial officer gave a short presentation followed by a Q&A session with the board for shareholders, and a replay of this webcast will be available on the company's website.

6.45am: Another strong start expected

The FTSE 100 is set to start Thursday strongly, tipped to rise more than 1%, as Europe advanced coronavirus bailout arrangements and America further detailed its reopening for more non-essential businesses, even though tensions between the US and China continue to rumble on.

CFD and spreadbetting firm IG Markets is predicting a 78 point gain for the FTSE 100 as it makes a price of 6,213 to 6,215 for the blue-chip benchmark with just over an hour to go until the open.

Attention is on Europe’s planned economic stimulus though it is not without critics.

“In Europe, optimism also abounded, helped by an EU Commission proposal that include the raising of €500bn of debt on bond markets, which would be handed out as grants to the worst affected European countries hit by the virus pandemic, with other measures set to include a suite of new taxes and levies on tech companies, and on single-use plastics, over the course of the next few years,” said Michael Hewson, senior analysts at CMC Markets (UK).

“While markets have reacted as if this is a significant moment for Europe, the sums involved are tiny in the overall scheme of things, given the scale of the economic shock, particularly since none of the money will be available immediately. There is also the prospect that the stated sums will probably get watered down, and even if it is delivered will probably be so small as to be completely insignificant,” he added.

Over the pond, US equities saw more volatility overnight with Hong Kong part of the focus in latest tensions with China and America looking at removing economic favour for the city-state so that it is treated the same as China. Meanwhile the Chinese are reportedly separately preparing to snap-back with its own measure pointed at US trade.

Nonetheless, the Dow Jones Industrial Average marked a strong finish to Wednesday’s session at 25,548, up 553 points or 2.21%. Meanwhile, the S&P 500 added 1.48% to close at 3,036 and the Nasdaq Composite climbed 0.77% to 9,412.

In Asia on Thursday, Hong Kong’s Hang Seng fell 284 points or 1.22% to 23,016 and the Shanghai Composite dipped 0.19% to 2,831. But at the same time, Japan’s Nikkei 225 index gained 395 points or 1.85% to trade at 21,814.

Around the markets:

  • The pound: US$1.2262, up 0.01%
  • Gold price: US$1,718 per ounce, up 0.5%
  • Brent crude: US$34.07 per barrel, down 5.8%
  • WTI crude: US$31.77 per barrel, down 7.5%
  • Bitcoin: US$9,156, up 3.29%

Significant events expected on Thursday:

Trading update: IWG PLC (LON:IWG)

Finals: Filta Group Holdings PLC (LON:FLTA), PayPoint PLC (LON:PAY), Urban Exposure PLC (LON:UEX)

Interims: Daily Mail & General Trust PLC (LON:DMGT)

Economic data: US weekly jobless claims, US GDP

City Headlines:

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