FTSE 100 notches up triple digit gain as bullish market mood continues

Britain's blue-chip benchmark finished up over 162 points higher, or 2.61%, at 6,382

Wizz Air Holdings - FTSE 100 to start higher following strong Chinese data
FTSE 100 closed higher for the third day in a row on Wednesday
  • FTSE 100 index closes over 162 points up
  • But miners get hit as gold falls
  • US to ban Chinese carriers

5.05pm: FTSE adds 2.61% on day

FTSE 100 notched up a decent triple digit gain on Wednesday as the index closed higher for the third day in a row.

Britain's blue-chip benchmark  finished up over 162 points higher, or 2.61%, at 6,382 but miners took a hit due to the decline in gold, which slumped 2% on the day.

"Just as June has been great for stocks so far, it has been dire for gold, and even a weaker US dollar is having little impact on an asset that tends to prosper best in risk-off environments," noted Chris Beauchamp, chief market analyst at online trading group IG.

Top of the Footsie loser pile was precious metal giant Polymetal International (LON:POLY), which shed 6.58% to 1,498p.

The top gainer was British Airways owner International Consolidated Airlines Group (LON:IAG), which continues  to bounce back after getting crushed amid the pandemic. Shares flew up over 11% to 279.20p.

On Wall Street, markets were upbeat, not least due to the monthly ADP private sector jobs report, which showed nearly three million jobs were lost in May against a predicted 9 million and strong services sector data from China overnight.

The Dow Jones Industrial Average advanced over 407 points at 26,149, while the S&P 500 added over 35 at 3,116.

3.55pm: Washington to ban Chinese passengers flying to US

The Footsie powered higher ahead of the close, adding 150 points to 6,377, while sterling trimmed its gains with a 0.17% nudge up to US$1.2573.

Meanwhile, Washington is reportedly planning to ban Chinese airlines from flying to the US.

According to an exclusive report by Reuters, President Donald Trump’s administration would implement these measures in mid-June to pressure Beijing to allow US carriers to resume flights.

The order would apply to Air China, China Eastern Airlines Corp, China Southern Airlines Co and Hainan Airlines Holding Co.

Delta Airlines and United Airlines asked to resume flights to China this month.

Remaining in the US, the latest ADP nonfarm employment change reading topped expectations – ‘only’ 2.76mln jobs were lost in May against the predicted 9mln, lifting US stocks.

“Again, no thought given to the domestic situation in the US. Nor the still-increasing death tolls in the US and UK. Nor the as-yet-unresolved tensions between the US and China,” commented Connor Campbell, analyst at Spreadex, in relation to the stock rises.

3pm: Bank of England urges banks to prepare for no-deal Brexit

The Footsie spiked on Wednesday afternoon, gaining 112 points to 6,333.

The Dow Jones rose 218 points to 25,961 while the S&P added 24 points to 3,105 at open in Wall Street.

Back home, the Bank of England governor reportedly urged banks to prepare for a no-deal Brexit.

Andrew Bailey told chief executives that the central bank had shifted its assumption about the ongoing negotiations between the UK and the EU, according to Sky News.

The current government has repeatedly denied plans to request an extension to the transition period.

The deadline to lodge a formal request is the end of June.

Analysts at ING Economics said this month is set to be “turbulent” for markets, with potential to hurt the pound, although they “can't completely rule out a fudge being agreed in June to buy more time”.

2pm: Saudi Arabia, Russia reach oil production cuts preliminary agreement

The Footsie was further up after lunch, bagging a gain of 73 points to 6,293.

In the oil sector, the Organisation of the Petroleum Exporting Countries (OPEC) leader Saudi Arabia and non-OPEC member Russia are said to have agreed a preliminary deal to extend production cuts by one month.

It will raise pressure on countries struggling to do so, Reuters reported.

“Any agreement on extending the cuts is conditional on countries who have not fully complied in May deepening their cuts in upcoming months to offset their overproduction,” an OPEC source was reported as saying.

Amid a plunge in demand during lockdowns, the so-called OPEC+ (which includes Russia) agreed to cut output by 9.7mln barrels per day, or 10%, in May and June in an attempt to lift prices.

UK-listed oil majors BP PLC (LON:BP.) and Royal Dutch Shell PLC (LON:RDSA) rose 2% to 335.48p and 3% to 1,377.4p, respectively.

12.35pm: Google faces US$5bn lawsuit over privacy matters

The Footsie trimmed its gains at lunchtime, rising 52 points to 6,273.

Analysts expect the Dow Jones to rise modestly at the opening bell, with the indices ignoring what’s going on in the streets of America.

“The pre-open ADP nonfarm unemployment rate figure, set to show that another 9 million jobs were lost in May, could pose a threat to the Dow’s gains, though going by recent weeks, investors aren’t too fussed about that any more,” Connor Campbell at Spreadex added.

Remaining in the US, Google’s parent company Alphabet Inc (NASDAQ:GOOG) is facing a US$5bn lawsuit on ‘private mode’ browsing on its research engine.

Californian law firm Boies Schiller Flexner filed the claim on Tuesday, on the grounds that users’ privacy was breached as they were tracked despite the incognito mode.

"As we clearly state each time you open a new incognito tab, websites might be able to collect information about your browsing activity,” a spokesman of the tech giant told the BBC.

Shares were flat at US$1,433.04 in pre-market trading.

11.30am: Restaurant Group to permanently shut some Frankie & Benny's sites

The Footsie trimmed its early strong gains in late morning, but was still 77 points higher at 6,297.

Lockdown easing talk continues to dominate and Restaurant Group PLC (LON:RTN) advanced 3% to 67.5p despite a BBC report published late on Tuesday that many Frankie & Benny's sites may not reopen.

The eateries owner emailed managers of its leisure division, which also includes Mexican restaurant chain Chiquito.

The latter fell into administration earlier this year, and in March it was announced 61 out of 80 branches were going to be permanently shut.

Publicans were also on the rise, perhaps after breweries announced plans to produce 250mln pints of beers within the next two weeks.

The government is drawing up a ‘secret blueprint’ to help UK pubs open again, the Daily Mail reported.

Venues could be asked to use an app to receive orders, like the one already implemented by JD Wetherspoon PLC (LON:JDW).

Fuller, Smith & Turner PLC (LON:FSTA) jumped 9% to 769.45p, Wetherspoon rose 4% to 1,164.9p and Mitchells & Butlers PLC (LON:MAB) gained 3% to 191p.

10.30am: FTSE 100 above 6,300 mark 

FTSE 100 continued its ascent, bagging 90 points to 6,310 over recovery hopes following the UK Services PMI figures for May.

Experts noted that activity improved towards the end of May, since the earlier flash estimate was 27.8 while the final reading was 29.0.

Firms reported that the mid-month reopening of the construction sector and online sales initiatives boosted activity towards the end of the month. 

But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says that a full V-shaped recovery in services activity is unlikely to happen this year.

“Social distancing measures will constrain capacity in many discretionary services sectors, restrictions on air travel will hit demand for services exports, and consumer caution will persist as long as the virus is circulating,” he commented.

Tombs also expects further declines in domestically-generated inflation, as the prices charged balance increased to 45.2 in May from 42.5 in April, but remained well below its 51.9 average in the past decade.

“On past form, it points to a 1.5pp decline in the Monetary Policy Committe’s (MPC) preferred measure of underlying services inflation over the next six months, from April’s 1.9% rate,” he concluded.

“Accordingly, the prospect of an incomplete rebound in activity and well below-target CPI inflation will ensure that the MPC expands its QE programme at its meeting on June 18, probably by about £100bn.”

9.40am: UK services decline at a slower pace in May

The Footsie was on the rise in mid-morning after a survey on UK service providers showed a slower pace of decline in activity.

The UK services PMI was 29.0 in May, still well below the 50.0 mark but an improvement compared to the 13.4 reading in April.

Just over half of the survey panel reported a drop in business activity during May, mostly due to lack of new business to offset losses, while only 13% signalled an increase.

Analysts predicted that this reading would be little improved from last month as it could not capture easier lockdown measures.

"Service providers recorded another modest improvement in their business expectations from the low point seen in March, with some hopeful that the reopening of clients' business operations would start to boost activity in the coming months,” said Tim Moore, economics director at IHS Markit, which compiles the survey.

"However, customer-facing businesses continue to report extreme levels of concern about their near-term prospects, with efforts to adapt to social distancing measures set to hold back capacity and generate a sharp increase in costs."

London’s leading index added 74 points to 6,294 while sterling rose 0.2% to US$1.2584.

8.35am: Further gains for Footsie

The FTSE 100 index got off to a positive start on Wednesday, buoyed by the performance of Asia and Wall Street overnight, where traders continued to buy the rally and ignore the race riots.

The index of UK blue-chip stocks rose 46 points to 6,266.16.

“Historically unrest such as we’ve been seeing has been widely ignored by equity markets and that seems like the case again,” said James Hughes of Scope Markets.

“Instead investors continue to focus on the reopening of the economy, and how quickly that will have an effect on the bottom line.”

China provided some hope to the wider world after its Caixin purchasing managers’ index not only rose for the first time in four months but by its fastest pace in a decade.

This perhaps provided some early tentative support for the v-shaped rebound in economic activity in the wake of the coronavirus lockdown, experts said.

The decision by OPEC+ to extend production cuts for another month sent Brent crude above US$40 a barrel for the first time since the March as price hostilities between Saudi Arabia and Russia broke out.

On the London market, the biggest beneficiary of this rise in crude prices was BP (LON:BP.), which was up 1.5%.

The travel stocks continued their perky run, with easyJet (LON:EZJ), up 3%, leading the early Footsie risers, even though its demotion from the blue-chip index looks inevitable when the quarterly reshuffle is announced after the market close today.

British Airways owner IAG (LON:IAG) followed in the budget airline’s vapour trail, rising 2.5% amid hopes a new ‘air bridge’ initiative could pave the way to a resumption in foreign holiday activity.

Defence contractor Chemring (LON:CHG) bucked the recent trend in the industry after almost defiantly standing by full-year revenue and profitability targets. This earned the shares an 18% mark-up.

With a stock overhang out of the way after Invesco on Tuesday offloaded its shareholding, it was also Provident Financial’s (LON:PFG) time to fly. The shares advanced 7%.

Proactive news headlines:

Kavango Resources PLC (LON:KAV) said it has been granted two prospecting licences in the Botswana section of the Kalahari copper belt. The explorer said the two licences are located southwest of Sandfire Resource’s T3 and A4 Dome copper-silver discoveries and cover around 1,294 square kilometres. The licence terms are for an initial period of three years, however, it can be extended to seven, with Kavango adding that the acquisition of further licences is currently underway.

Integumen PLC (LON:SKIN) said its subsidiary Labskin has partnered with the University of Aberdeen to test anti-viral skin and dental products that might mitigate the transmission risk of the coronavirus (COVID-19). Scientists will use Labskin’s cloned human skin coated with the SARS-CoV-2 virus in their research, which will take place in a Category 3 lab at the university. Work will be carried out to assess the transferability of viral particles from materials to skin. Also being studied is the ability of the virus to remain infective while on the skin surface. Ultimately, the team hopes to quantify the efficacy of mouthwash and dental care products as well as soap washing and hand sanitisers.

Instem PLC (LON:INS) said it has won a contract worth to provide services to Biotoxtech, which runs the largest non-clinical research and development facility in South Korea. The contract is worth approximately US$1mln, the group said in a statement, with a majority of the revenue to be recognised in 2020 and the balance in 2021. Instem said it will provide the Korean company with a comprehensive package of preclinical data collection, analysis and regulatory submissions management solutions. Instem also revealed results for the year to end December 2019, which saw revenues increase 13% to £25.7mln and underlying profits (adjusted EBITDA) rise to £4.9mln from £4.1mln. Recurring revenue rose 9% to £14.9mln, while software-as-a service (SaaS) sales improved £16mln to £6.4mln.

Power Metal Resources PLC (LON:POW) and its partner Red Rock Resources PLC (LON:RRR) have launched efforts to expand the footprint for their gold exploration venture in Australia. The Red Rock Australasia Pty Ltd (RRAL) vehicle has now applied for four additional gold exploration license areas, spanning 916 square kilometres in the Central Victoria Goldfields region. It promises to double RRAL’s landholding position and will make it one of the largest tenement holders in the goldfields, the partners said in separate statements.

Bango PLC (LON:BGO) has said it is deploying its payment optimisation technology to help grow the active carrier billing customer base of du, a mobile operator in the United Arab Emirates (UAE). The e-commerce specialist said growing the number of customers using direct carrier billing (DCB), a one-click method of charging purchases to a user’s mobile phone bill, is a “powerful way for operators to capture more value” from the consumption of ‘over-the-top’ content and services. Bango said du customers were offered a chance to re-engage with DCB within an approved credit limit, and that within two weeks of launching the campaign 20% of du customers wanting to spend in the Google Play app store had re-engaged and made a least one purchase with carrier billing.

Amryt Pharma PLC (LON:AMYT) has appointed Swiss group Swizz Biopharma to market Myalepta, its treatment for leptin deficiency in seventeen countries in Central Europe and the West Balkans. Under the agreement, Swixx will be the exclusive distributor of  Myalepta (metreleptin) in the countries, which are all new territories for the group, Amryt said. In a statement, Amryt chief executive Joe Wiley commented: "Metreleptin is currently the most significant driver of revenue growth for Amryt with sales growing 49% in Q1 2020 versus the same period in 2019.

Sareum Holdings PLC (LON:SAR) has said it is raising £718,500 before expenses via a placing of shares at 0.6p each with the new funds used to explore the potential benefit of its TYK2/JAK1 inhibitors against coronavirus (COVID-19). A separate fundraiser overseen by PrimaryBid will offer private investors new shares in the company on the same terms. As at March 31, 2020, Sareum had cash of £980,000. It expects to receive a research and development tax credit next January of £150,000.

Braveheart Investment Group PLC (LON:BRH) said it was notified on June 2, 2020, that its chief executive officer, Trevor Brown has sold 3,092,057 ordinary shares of 2p each in the company at an average price of 22.19p per ordinary share. It said that, following the transaction, Brown now holds a total beneficial interest in 4,983,877 ordinary shares, equivalent to approximately 15.89% of Braveheart 's issued share capital.

Westminster Group PLC (LON:WSG), a leading supplier of managed services and technology-based security solutions worldwide said it has been notified by holders of Convertible Loan Notes (CLNs) that they have elected to convert CLNs to the value of £93,750 into 937,500 ordinary shares in the company.

Diversified Gas & Oil PLC (LON:DGOC), the U.S. based owner and operator of natural gas, natural gas liquids, and oil wells and midstream assets, announced that on June 2, 2020, Brad Gray, its chief operating officer acquired 20,000 ordinary shares of 1p each in the company through the market at an average price of 106.40p per share. Following this purchase, the group added, Gray is now interested in 2,302,981 ordinary shares representing approximately 0.33% of the company's issued share capital.

Anglo Pacific Group PLC (LON:APF) (TSX:APY) said it has received notification of the following transactions by Kings Chapel International Limited, a person closely associated with its chief executive officer, Julian Treger. It noted that on June 1, 2020, Kings Chapel International sold 270,000 ordinary shares of 2 pence each in the company at a price of 158p per share. The group said the transaction reduces Treger's interest to 82% of his pre-existing beneficial holding of shares in line with the company's announcement on May 22, 2020, and concludes the disposals by Treger and persons closely associated with him. Following this sales, the total beneficial holding of shares in the company held by Treger and persons closely associated with him totals 4,525,631, representing 2.49% of the issued ordinary share capital of the company.

OptiBiotix Health PLC (LON:OPTI) said it received notification on June 2, 2020, for the exercise of a warrant over 50 ordinary shares in the company at an exercise price of 8p each providing the company with proceeds of £4.00.

PowerHouse Energy Group PLC (LON:PHE), the UK technology company commercialising hydrogen production from waste plastic, said it is issuing 2,003,502 ordinary shares of 0.5p each in the company further to the exercise of warrants at 0.5p per ordinary share.

Caledonia Mining Corporation PLC (LON:CMCL) announced that it has issued and allotted 2,500 common shares of no par value each in the company following an exercise of share options.

Woodbois Ltd. (LON:WBI), the African focused forestry and timber trading company, has announced that its annual general meeting will be held at the company's registered office, Dixcart House, Sir William Place, St Peter Port, Guernsey GY1 1GX, on Tuesday, June 30, 2020, at 10.00am. It said that in light of the current coronavirus (COVID-19) restrictions on Guernsey, it is not expected that shareholders will be able to attend in person, by corporate representative or by a proxy other than the chairman of the meeting. Accordingly, the group’s board encourages all shareholders to appoint the chairman of the meeting as a proxy by completing the Form of Proxy in the Notice of AGM or, in the case of CREST members, by using the CREST electronic proxy appointment service.

Symphony Environmental Technologies PLC (LON:SYM) has announced that it's annual general meeting (AGM) will be held at 11.00am on June 26, 2020, at 6 Elstree Gate, Elstree Way, Borehamwood, Hertfordshire WD6 1JD. The group said that in light of the coronavirus (COVID-19) pandemic and the social distancing measures in place, shareholders will not be able to attend the AGM in person and arrangements for the AGM may also need to change at short notice.

Argo Blockchain PLC (LON:ARB), the leading cryptocurrency miner based in the UK (LSE:ARB), has announced that it will hold its Annual General Meeting (AGM) at 10.00am on Thursday, June 25, 2020, at 50 Jermyn Street, London, SW1Y 6LX. In light of coronavirus (COVID-19) and in order to comply with the UK government's prohibition on public gatherings and guidelines on social distancing, the meeting will be closed to the public and shareholders should not attempt to attend in person as no admission will be permitted. The company said it will take questions and comments from shareholders via email on: [email protected] and will be posting answers and replies on its website: www.argoblockchain.com.

6.45am: Footsie called higher again

The FTSE 100 is expected to open higher on Wednesday, taking its lead from Asia following strong data for the Chinese economy.

Spread-better IG expects the FTSE 100 to add around 66 points at open after ending Tuesday’s session up 54 points at 6,220.

Markets appear to have been boosted by strong economic data out of China, where the Caixin services index rose to its highest levels since 2010 as the world’s second-largest economy continued to rebound from its lockdown earlier in the year.

However, while China’s economy may be recovering, there are worries among some that the advancing markets may be suffering a disconnect with the wider economy, with the UK and US services PMIs, due later today, expected to show yet again the extent of the economic damage caused by lockdown measures alongside a spike in  American unemployment.

On Wall Street overnight investors appeared to shrug off the economic uncertainty and civil unrest in the US to focus on the easing of pandemic lockdown restrictions, with the Dow Jones Industrials Average closing 1.05% higher at 25,742 while the S&P 500 rose 0.82% to 3,080 and the Nasdaq Composite climbed 0.59% to 9,608.

The positivity combined with the Chinese data also made for a positive session in Asia oday, with Japan's Nikkei 225 up 1.04% at 22,558 while Hong Kong’s Hang Seng added 1.32% at 24,312.

On currency markets, the pound was 0.31% higher at US$1.2586 against the dollar, with the US and UK PMI data due later potentially serving as movement catalysts as the state of both economies becomes clearer.

Significant announcements expected for Wednesday:

Finals: Wizz Air Holdings PLC (LON:WIZZ), C&C Group PLC (LON:CCR), Angling Direct PLC (LON:ANG), Instem PLC (LON:INS)

Interims: SSP Group plc (LON:SSPG), Chemring Group PLC (LON:CHG)

AGMs: Aston Martin Lagonda Global Holdings PLC (LON:AML), Jersey Oil & Gas PLC (LON:JOG)

Economic data: UK services PMI, US services PMI, US non-manufacturing PMI, US ADP unemployment

Around the markets:

  • Sterling: US$1.2586, up 0.31%
  • Brent crude: US$40.10 a barrel, up 1.34%
  • Gold: US$1,724.29 an ounce, down 0.31%
  • Bitcoin: US$9,515, down 6%

City headlines:

  • IWG, the world’s largest flexible workspace company, has taken over a Hong Kong office vacated by WeWork, in a first move to capitalise on the retrenchment of its rival – Financial Times
  • easyJet and cruise operator Carnival are set to lose their place in the FTSE 100 index of the UK’s biggest companies following the collapse in their share prices due to the coronavirus pandemic’s impact on the travel industry - Guardian
  • Britain will have “no choice” but to offer the people of Hong Kong a route to UK citizenship if China strips them of their freedom, Boris Johnson has warned – Times
  • Worried households paid back an unprecedented £7.4 billion of loans and credit card debt in April but businesses taken on debts to weather the coronavirus storm, Bank of England figures have shown – Telegraph
  • Travelodge is set to launch last-resort bankruptcy proceedings that will allow the hotel operator to keep sites open and pay landlords less – FT

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