- FTSE 100 index closes 67 points lower
- US shares mixed
- APAX Global Alpha sees its NAV move back above €1bn
5pm: Footsie erases most of Monday's gains
FTSE 100 index closed in the red on Tuesday as hopes for a quick coronavirus vaccine were somewhat dashed.
Britain's blue chip benchmark erased most of yesterday's gains to close down over 67 points at 6,037, down 1.11% on the day.
US markets were also muted after a tentative start.
"Early stock market gains have been given up, as pre-market record highs for the S&P 500 failed to come to fruition despite recent hopes around an impending vaccine," noted Joshua Mahony, senior market analyst at spreadbetter IG.
Mahony noted that unfortunately, while drugs titan AstraZeneca (LON:AZN) hopes to receive enough trial results by the end of 2020, the director of partner the Oxford group sees approval only coming by winter 2021.
The Oxford/AstraZeneca vaccine is one of five promising candidates to reach advanced clinical trials.
US and Canada 4.30pm/11.30am EST
Wall Street shares were mixed in early deals in New York. The Dow Jones Industrial Average was in the red and plunged over 127 points at 28,181. The S&P 500 added 0.94 at 3,432. The tech-heavy Nasdaq added around 24 points at 11,403. Up in Toronto, the TSX plunged over 77 points to stand at 16,549.
3.40pm: Footsie lower
Following an indecisive start on Wall Street, UK blue chips are lower on balance.
The FTSE 100 was down 27 points (0.4%) at 6,078, close to its lowest point of the day.
The FTSE 250, less weighed down by sterling’s strength on foreign exchange markets, was faring a bit better but was still in arrears – down 63 points (0.4%) at 17,622.
James Fisher and Sons PLC (LON:FSJ) led the mid-cap index lower after its half-year results were released to a cacophony of raspberries.
The marine services provider saw underlying profit before tax slump by 20% to £15.1mln in the first half of 2020 from £20.9mln the year before.
Half-year results from Apax Global Alpha Limited (LON:APAX) received a more sympathetic reception, with the shares rising 2.9% to 165p.
The investment company’s net asset value moved back above €1bn, helped by overweight positions in the technology and telecoms sector.
3.30pm/10.30am EST: Proactive North America headlines:
Blackrock Gold Corp (CVE:BRC) gets second drill rig at Tonopah West; Silver Cloud drilling set for the Fall
Globex Mining (TSX:GMX) (OTCMKTS:GLBX) closes two additional property deals to raise $1.7M in cash
Klondike Gold Corp (CVE:KG) (OTCPINK:KDKGF) plans C$2.5M private placement for Yukon exploration
Newgioco Group Inc (NASDAQ:NWGI) scores top 5 market share in Italian online poker market in latest industry rankings
XPhyto Therapeutics Corp (CSE:XPHY) (OTCPINK:XPHYF) rapidly advances its drug delivery system for Parkinson's skin patches
2.45pm: Mixed start for Wall Street
Despite expectations of a higher start across the board, the main indices in New York were a more mixed picture on Tuesday morning as the Nasdaq and Dow turned red in the early minutes of trading.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.06% at 28,290 while the Nasdaq was down 0.01% at 11,379. The S&P 500 was the only index in the green, rising 0.12% to 3,435.
Investors do not seem to know which way to turn, with positive US-China trade developments seemingly failing to provide an overall boost for markets.
However, news of a Dow Jones Industrial Average reshuffle has worked out well for three stocks scheduled to join the index, with Salesforce.com (NYSE:CRM), Amgen Inc (NASDAQ:AMGN) and Honeywell International Inc (NYSE:HON) all higher in early deals. It was less good news for Exxon Mobil Corp (NYSE:XOM), Pfizer Inc (NYSE:PFE) and Raytheon Technologies Corp (NYSE:RTX), who are being removed to make way for the new arrivals.
Back in London, the FTSE 100 was 15 points lower at 6,089.
2.00pm: Sterling tearing it up on the forex markets
London’s index of top shares has given up virtually all of the morning’s gains as sterling makes ground on foreign exchange markets.
The FTSE 100 was up 4 points (0.1%) at 6,109.
Sterling was almost a whole cent firmer against the greenback at US$1.3161; the Footsie has a lot of stocks that earn a shed-load of dollars so a strong exchange rate is generally viewed as a headwind for the index.
Mining stocks are prominent among the index’s losers while even oil giants Royal Dutch Shell PLC (LON:RDSB) and BP PLC (LON:BP.) - down 0.7% and 0.1% respectively – are off the pace, despite the oil price heading north.
Brent crude was up 78 cents (1.7%) at US$45.91 a barrel.
“Oil prices have reached new highs as [with] tropical storm Marco and tropical storm Laura baring down on Loiusinana’s Port Author, approximately 45% of the natural gas in the Gulf of Mexico could be taken offline,” said SP Angel.
“Tropical Storm Laura is expected to be a Hurricane category 2, by the time it makes landfall during the middle of the week, which could create a significant impact
“The weather is expected to be warmer than normal throughout west and southwest over the next two weeks which could generate additional cooling demand,” the boutique broker added.
BREAKING NEWS: Tropical Storm Laura has become a hurricane with max sustained winds of 75 mph.— ABC13 Houston (@abc13houston) August 25, 2020
Meanwhile, Galveston officials have ordered a mandatory evacuation for all residents. We'll be live on TV starting at 10 a.m. with the latest.https://t.co/EI6feqQSHq pic.twitter.com/avtSodJmwU
12.05pm: US indices set to keep the bandwagon rolling
Rain has stopped play. That’s in the final test between England and Pakistan but it might as well apply to the London Stock Exchange.
The FTSE 100 is up 13 points (0.2%) at 6,117 – a level at which it has hovered around since 9.45am.
Aveva Grpup PLC (LON:AVV) is leading the adfvance after it finalised the terms of its takeover of Oslsoft.
Across the pond, the main indices are all set to open higher.
Spread betting quotes indicate the Dow Jones will advance 175 points to 28,485, the S&P will climb 14 points to 3,445 and the NASDAQ Composite will jump 276 points to 11,656.
“One thing markets will be keeping an eye on is the tentative rise in the Vix in recent days,” said IG’s Chris Beauchamp, referring to the index (sometimes referred to as the Fear Index) that tracks volatility in the markets.
“Having dropped sharply in June and July, the market’s ‘fear gauge’ has slowed its decline in August, and as the month draws to a close it appears to be gaining ground. A mis-step by the Fed this week might provide the spark for a bounce in this reading, providing a rude shock for equity markets, which in the US case have become used to a life of steady gains,” he added.
Neil Wilson of markets.com reckons economists remain concerned about the double dip.
“According to the National Association for Business Economics, there is a one in four chance the US economy could fall into a double-dip recession. Two-thirds of economists surveyed think the world’s largest economy remains in recession,” Wilson reported.
Traders stateside will be waiting for the Conference Board’s consumer confidence survey for August, plus a rag-bag collection of housing market indicators.
11.30am: Gloomy CBI Distributive Trades Survey
Retail employment fell at the fastest rate since February 2009 in the year to August, according to the CBI’s latest monthly Distributive Trades Survey.
The retail employment number deteriorated to -45% from -20% in May.
Things are not expected to improve soon, with the CBI adding that an even sharper decline is anticipated in the year to September.
The survey, which featured 63 retailers among its 128 respondents, also showed a slight fall (06%) in retail sales on a year ago, after July’s +4% reading.
The CBI said the decline was broad-based across sectors, with only grocers, furniture & carpets, non-store and ‘other’ goods sales seeing growth.
“The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather that avoided,” said Alpesh Paleja, the CBI’s lead economist.
“Indeed, the latest survey shows that trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning. Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.
“As a result, further support may well be needed for the retail sector if demand continues to disappoint. Extending business rates relief will go a long way towards alleviating pressure on retailers’ cash flow,” the economist continued.
“Investment intentions for the year ahead remained firmly negative, but less so than in the previous quarterly survey.
“Despite the gloomy data, however, retailers expect a moderate improvement in the business situation in the coming quarter,” Paleja said.
9.50am: A bit of stock rotation is going on
Share prices were fast out of the traps but the pace has eased off coming to the first bend.
The FTSE 100 was up 18 points (0.3%) at 6,122, driven by “renewed hope of an amicable trade deal between the US and China”, according to Russ Mould at AJ Bell.
Neil Wilson of markets.com adds a bit more detail.
“Top US and Chinese officials discussed the phase one trade agreement after a meeting scheduled for earlier this month was postponed. Both sides are seeing progress in areas like the increase in purchases of US products by China. The two sides also discussed how China will ensure greater protection for intellectual property rights, remove impediments to American companies in the areas of financial services and agriculture, and eliminate forced technology transfer, the US Trade Representative said in a statement. This came after the US and EU agreed to reduce tariffs on some goods,” Wilson said.
It looks like there is a bit of stock rotation going on, with housebuilders sent to the doghouse for a spell to make space on the stage for previously little loved travel and leisure-related stocks.
The BT Group PLC (LON:BT.A) bandwagon trundles on, with the shares adding to yesterday’s gains, which were prompted by bid speculation. The shares are up 1.6% to 110.7p and only a bit move than three quid off where they were five years ago.
8.40am: Positive progress continues
The FTSE 100 index built on Monday’s 100-point gain in early trade on Tuesday fuelled by a potent cocktail – a potential end to Sino-American trade hostilities and a possible coronavirus vaccine.
The UK index of blue-chip stocks rose 56 points to 6,161.15.
On the macro-economic front, Germany’s revision upwards of its second-quarter GDP figure was met will a collective ‘meh’ from the market. The figure moved from a 10.1% contraction to 9.7%, which still represented the steepest quarterly decline since records began in 1970.
“The expenditure components, published for the first time, inevitably confirmed that all types of private demand fell sharply,” said Chris Scicluna of Daiwa Capital Markets.
Eyes will remain trained on Germany to assess whether the closely followed IFO Institute business climate data supports the continued recovery of Europe’s largest economy.
Aero-engineers Rolls Royce (LON:RR.) and Melrose (LON:MLRO), ahead 3.2% and 3.6% respectively, followed in IAG’s vapour trails.
On the FTSE 250, Cineworld (LON:CINE) continued its mini-run, adding a further 5.2% to its value.
Proactive news headlines:
Next 15 Communications Group PLC (LON:NFC) has said trading is well ahead of management expectations set back in March leading it to raise its full-year expectations. In a trading statement, the group said revenues for the six months to the end of July, 2020, are expected to be up by around 6.5% year-on-year to £126mln, while adjusted profit before tax is expected to be more than 16% higher at a minimum of £20mln. Next 15 said the strong performance has been driven by the group’s business-to-business (B2B) technology-focused agencies, such as Activate and Agent3, while trading in the brand marketing and creative technology divisions has been more resilient than previously anticipated. Next Fifteen Communications also announced that it has appointed Berenberg as the company’s joint broker to work alongside its existing corporate broker and Nominated Adviser, Numis, with immediate effect.
Eurasia Mining PLC (LON:EUA) said it has been granted a licence for the Monchetundra Flanks project in Russia by the regional licensing body, SevZapNedra. The palladium, platinum, rhodium, iridium and gold producing company is the operator of the Monchetundra project, comprising two predominantly palladium open pit deposits close to the town of Monchegorsk on the Kola Peninsula. It also operates the established West Kytlim mine in the Urals. "The directors are encouraged with the approval of Monchetundra Flanks license, an important milestone for the company,” Eurasia’s chairman Christian Schaffalitzky said in a statement.
Catenae Innovation PLC (LON:CTEA) has secured the first commercial order for its Onsite ID app with Newcastle Premier Health (NPH) taking up the platform as part of its ‘access control’ programme which allows its business to continue during the coronavirus (COVID-19) pandemic. The Onsite ID app - which uses blockchain technology to create a digital wallet for health and work-related documents – is being used to store COVID-19 test results as a ‘passport’ allowing users to share their status in a secure, immutable and GDPR compliant manner when meeting clients in person.
C4X Discovery PLC (LON:C4XD) chief executive Clive Dix has said he is “delighted” by the progress to date of the drug developer as he hailed the start of clinical trials of a treatment for opioid dependence. It was one of a series of highlights included in the company’s latest business update from which investors also learned the group has begun a new partnership with the GEN-COVID Consortium in Italy. The collaboration will deploy C4X’s Taxonomy3 platform technology to examine genetic data from coronavirus (COVID-19) patients to identify genes specifically associated with severe types of the disease.
World High Life PLC (LON:LIFE) (OTCQB:WRHLF) said Georges St-Pierre, a brand ambassador for the firm and its subsidiary cannabidiol (CBD) brand Love Hemp, will be showcased in a special broadcast on the BT Sport network. St-Pierre is a Canadian professional mixed martial artists and a three-time Ultimate Fighting Championship (UFC) world champion who retired from the sport in 2019. The special, which will air on Thursday, will consist of a five -hour programme and an interview with St-Pierre wearing Love Hemp branded apparel.
Eden Research PLC (LON:EDEN) said it has received authorisation to sell its sustainable bio-fungicide in Australia for use on wine and table grapes. It will go on the market under the name of Novellus, providing a residue-free solution for the common disease Botrytis cinereal when one is most needed. That is because the world’s sixth-largest wine producer is phasing out conventional chemicals, meaning the Eden product will provide growers “with a much-needed sustainable solution to the disease”. The product, known in Europe and Africa as Mevalone, will be marketed and distributed in Australia by commercial partner, Sipcam.
Thor Mining PLC (LON:THR) (ASX:THR) has received assay results from gossan rock chip sampling at the 100%-owned Pilbara Goldfield tenements in Western Australia. The results indicate the gossan is strongly anomalous for nickel over the entire 900 metres strike length. Assays for gold in stream sediment samples, also collected in this program, are expected shortly. A total of 49 rock chip samples were all anomalous for nickel, with peak value of 2,678 parts per million (ppm).
NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQMLF) is to restart exploration at its highly prospective Hellyer project in the Mt Read volcanic belt, a geological terrain in north-west Tasmania renowned for large scale and high-grade polymetallic deposits. NQ is currently producing lead and zinc concentrates (with significant gold and silver credits) by reclaiming the Hellyer mine tailings generated from the former mining operations and processing them through the Hellyer concentrator plant at the rate of over 1.2 million tonnes per annum. "There is now significant potential to define new and extensive high-grade mineralisation at Hellyer, one of the world's great polymetallic high-grade mines,” said NQ’s chairman David Lenigas.
Iconic Labs PLC (LON:ICON), a multi-divisional new media and technology business, announced that it has received a notice from European High Growth Opportunities Securitization Fund in respect of the exercise of its conversion rights under the Convertible Bonds issued in respect of the fourth and fifth tranches drawn down under the Financing and Settlement Agreement for the aggregate principal amount of £170,000 resulting in the issue to the investor of 2,428,571,428 new ordinary shares.
Condor Gold PLC (LON:CNR) (TSX:COG) announced that on August 24, 2020, Galloway Limited, which is indirectly wholly owned by Jim Mellon, a non-executive director of Condor, purchased 75,000 ordinary shares in the company at a price of 50.25p per share for a total purchase consideration of £37,688 Accordingly, further to the purchase, Mellon owns, directly and indirectly, a shareholding of 18,626,963 ordinary shares or 15.9% of the company’s share capital. The direct interest is in 2,889,883 ordinary shares and the indirect interest is in 15,737,080 ordinary shares held through Galloway Limited. Galloway Limited is wholly owned by Burnbrae Group Limited, which is wholly owned by Jim Mellon.
Condor Gold also announced on Monday that following the receipt of notices for the exercise of warrants, it is issuing 120,891 new ordinary shares with a nominal value of 20p each in the capital of the company at a subscription price of 40p per share. The company has received gross proceeds of £48,356.40 from the exercise, it added.
6.50am: Strength set to continue
The FTSE 100 index is seen opening higher on Tuesday, extending the previous session’s rally after strong performances overnight from US and Asian markets amid fresh US/China trade deal talks and coronavirus vaccine hope.
Spread betting firm CMC Markets expects the blue-chip index to open around 20 points higher at 6,104, having jumped 102.84 points on Monday to end at 6,104.73.
Overnight in New York, the Dow Jones Industrials Average advanced by over 378 points, or almost 1.4% to close at 28,308.46, while the broader S&P 500 index rose 1%, and the tech-laden Nasdaq Composite added 0.6%.
In New York trading, shares of dual-listed drug giant AstraZeneca PLC (LON:AZN) rose on a Financial Times report that said the US government was considering fast-tracking the firm’s experimental coronavirus vaccine.
Asian stock markets were mostly higher on Tuesday as well, with Japan’s Nikkei 225 index up 1.7%, although Hong Kong’s Hang Seng index shed 0.5%.
The upbeat sentiment followed reports that top US and Chinese officials saw progress in resolving concerns around the Phase 1 trade deal reached between the two countries in January.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He, the US Treasury confirmed in a statement on Tuesday, during a “regularly scheduled call”.
Meanwhile, China’s commerce ministry said in a statement there had been “constructive dialogue”, which followed the US Treasury declaring that “both sides see progress”.
Economic challenges remain
But Michael Hewson, chief market analyst at CMC Markets UK remained fairly sanguine: “Yesterday’s rebound was probably driven by nothing more than a lack of bad news, fear of missing out, and expectations of continued central bank monetary stimulus, as we look towards the Jackson Hole virtual symposium later this week, driven by concerns that the recent recovery of the last few weeks is showing signs of levelling off.
“The US rebound, in particular, is being driven by a fairly small cohort of big tech, as well as some small tech shares, and as such could be described as rather unbalanced in nature.”
Hewson also noted: “As a reminder of the challenges facing economies across the globe, today’s latest iteration of Germany’s latest Q2 GDP revision is expected to affirm how badly the German economy fared as a result of the lockdown period.
“A contraction of -10.1% is expected to be confirmed, with private consumption expected to show a decline of -9.8%, and capital investment to show a decline of -12.2%.”
Today will also bring the latest German IFO business climate survey. In July the IFO survey rose to a post-pandemic high of 90.5, after slipping to a record low of 74.2 in April.
Corporate news at a premium
The slow start to the week on the UK corporate results front is set to continue on Tuesday, with just three sets of interims from James Fisher & Sons PLC (LON:FSJ), Arrow Global Group PLC (LON:ARW), and Apax Global Alpha Limited (LON:APAX) on the agenda.
In a trading update at the start of July, FTSE 250-listed James Fisher reported that its revenues dropped by 18% during the second quarter of 2020, reflecting continued downward pressure on oil and gas prices and the impact of the coronavirus (COVID-19) pandemic.
In Fisher’s Marine Support division, the second quarter saw subsea service projects being deferred, in both renewables and in the oil and gas sector, together with supply chain challenges due to COVID-19 across all businesses.
The Specialist Technical division had proved resilient, however, with Offshore Oil, which had good momentum entering 2020, trading well despite the COVID-19 challenges and it is expected to report improved profitability compared to the first half of 2019.
Asset manager and debt purchaser Arrow Global Group PLC (LON:ARW) will also deliver its delayed first half-numbers on Tuesday. In a first-quarter trading update on May 15, Arrow said its pre-tax profit had fallen by 43% to £9mln, compared with £15.8mln in Q1 2019, as coronavirus lockdown restrictions across the UK and Europe affected cash collections and portfolio acquisitions.
Arrow withdrew its financial guidance for the 2020 financial year given the level of operational and economic uncertainty across Europe, but said it hopes to provide revised guidance for its 2020 performance with its delayed interims.
Around the markets:
- Sterling: US$1.3102, down 0.1%
- Gold: US$1,928.50 an ounce, up 0.1%
- Brent crude: US$45.16 a barrel, up 0.1%
6.45am: Early Markets - Asia/Australia
Asia Pacific stocks were higher on Tuesday after the S&P 500 index touched another record high overnight on Wall Street.
Stocks in Japan led the gains with the Nikkei 225 jumping 1.33%, while South Korea’s Kospi rose 1.48%.
However, mainland Chinese stocks were mixed by the afternoon with the Shanghai Composite shedding 0.49%
Australia’s S&P/ASX 200 was up 0.52% thanks mainly to strong gains from the banks, insurers and technology stocks.
Proactive Australia news:
Comet Resources Limited (ASX:CRL) is keen to get on the ground after completing the first stage of an agreement with El Alamo Resources Limited (EARL) resulting in 50% ownership of the Santa Teresa Gold Project.
White Rock Minerals Ltd (ASX:WRM) has applied for an OTCQX cross listing of securities in North America following strong interest from North American investors in the company’s recent equity raising and its Red Mountain project.
Great Western Exploration Ltd (ASX:GTE) is to begin exploration at the Atley Gold Project in Western Australia, with field mapping, soil sampling and shallow auger drilling to test structural targets along strike of the Youanmi and Penny West gold deposits.
MGC Pharmaceuticals Ltd (ASX:MXC) has executed an agreement with a leading Russian doctor and medical researcher to establish a joint venture company for medical products in the Russian market, including to facilitate registration of anti-inflammatory product ArtemiC as a medicine.
Roots Sustainable Agricultural Technologies Limited (ASX:ROO) has received firm commitments to raise around $2.51 million via a private placement to fund the commercialisation of its 'Root Zone Temperature Optimization' systems and advance other initiatives in the artificial meat market.
Horizon Minerals Ltd (ASX:HRZ) has started a strategic review of its Nimbus Silver-Zinc Project in Western Australia to assess value creation options including divestment, joint ventures or standalone development.