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FTSE 100 closes in red as UK traders eye holiday weekend

The UK index of leading shares closed the day down over 36 points, or 0.61%, at 5,963

Amigo Holdings PLC - FTSE 100 set to open on the front foot ahead of BoE governor's speech
Up, down, up, down - but never moving far from the 6,000 level
  • FTSE 100 closes below 6,000
  • US markets up
  • BoE governor addresses the central bankers' symposium in Wyoming

5pm: FTSE closes down after lacklustre session

FTSE 100 index closed in the red on Friday after a lacklustre session and ahead of the bank holiday weekend.

The UK index of leading shares closed the day down over 36 points, or 0.61%, at 5,963. Over the week, Footsie fell around 0.63%.

"This morning there was some excitement as Shinzo Abe, the prime minister of Japan, announced he was stepping down for health reasons," noted David Madden, at CMC Markets.

"The surprise announcement made a lot of headlines, but it didn’t have a huge impact on stocks in Europe. Things have been a little directionless today, partially because there has been a lack of local news, but it is likely that UK-based traders are winding down ahead of the long weekend."

Top footsie laggard was beleaguered aerospace engineer Rolls Royce, which shed 3.28% to 241.80p. It follows the announcement yesterday that revenues in the six months to June had fallen by 26% to £5.8bn, while the group's £5.4bn record loss had included a £2.6bn foreign exchange loss, £1.1bn from impairments and £366mln of restructuring charges.

Rolls is looking to raise £2billion by selling parts of its business as it struggles to get through the pandemic.

US and Canada 4.30pm/11.30am EST

Wall Street benchmarks were in the green in early deals on Friday. The Dow Jones Industrial Average was up over 89 points at 28,581. The broader-based S&P 500 index added around ten points at 3,494. The tech-heavy Nasdaq exchange added over 71 points at 11,697. In Toronto, the TSX was in the red, having shed over 33 points at 16,697.

3.15pm/10.15am EST: Proactive North America headlines:

Golden Arrow Resources Corp (CVE:GRG) kicks off drilling at Tierra Dorada gold project in Paraguay to define targets

Matinas BipPharma Holdings Inc (NYSEAMERICAN:MTNB) secures enrollment for MAT9001 head-to-head trial versus Vascepa

Aequus Pharmaceuticals Inc (CVE:AQS) (OTCQB:AQSZF) posts second-highest quarterly revenue as demand grows for opthalmic and transplant products

Tetra Bio-Pharma Inc (TSX:TBD) (OTCQB:TBPMF) maps out CBD metabolites in humans who vaped QIXLEEF therapeutic

Aftermath Silver Ltd (CVE:AAG) (OTCQB:AAGFF)  upsizes previously announced placing to C$15.6M

Thoughtful Brands Inc (CSE:TBI) (OTCQB:PEMTF) (FWB:1WZ1) launches a new e-Commerce subsidiary

Gevo (NASDAQ:GEVO) says its intellectual property worth $412M following third-party evaluation

Bragg Gaming (CVE:BRAG) (OTC:BRGGF)  turns a profit, doubles revenue in 2Q results as global customer base grows

Champignon Brands Inc (CSE:SHRM) (OTCQB:SHRMF) to offer esketamine for depression at Ontario clinic

Benchmark Metals Inc (CVE:BNCH) (OTCQB:CYRTF) makes new discovery at Marmot zone as it drills new targets at Lawyers gold and silver project in Canada

2.45pm: Wall Street starts higher

As expected, the markets in New York have made a positive start to the final session of the week as traders maintained positivity arising from Fed chair Jerome Powell’s speech on Thursday which indicated an easing of monetary policy from the central bank.

In the first minutes of trading, the Dow Jones Industrial Average was 0.06% higher at 28,508 while the S&P 500 climbed 0.25% to 3,493 and the Nasdaq rose 0.48% to 11,680.

Markets seemed to have shrugged off a slowdown in US consumer spending in July, which could cause the economic recovery to lose some steam, while personal incomes rose 0.4% in the month as the US government kept paying businesses to keep employees on the payroll.

The positive start for the Dow also means the index has effectively erased all of its losses for the year-to-date following its plunge in March.

Back in London, the FTSE 100 was still trading sideways, down just 4 points at 5,995 at 2.45pm.

2.00pm: Little movement for FTSE 100

It’s not long now until the Bank of England governor, Andrew Bailey, is set to give his speech at the symposium of central bankers.

Let’s hope he says something interesting because the London stock market is having one of those days when doing one of those word-find puzzles compiled using Egyptian hieroglyphics would be more interesting than tracking the Footsie.

London’s index of leading shares is down 5 points (0.1%) at 5,995, having moved since about 11.20am in a narrow band ranging from 5,989 to the heady heights of 6,007.

There has been a modicum of excitement among the tiddlers, with Beximco Pharmaceuticals Ltd (LON:BXP) catching the eye with an announcement about a possible coronavirus (COVID-19) virus.

The manufacturer of generic pharmaceutical products and active pharmaceutical ingredients and the Serum Institute of India, the world’s largest vaccine producer, are to cooperate on the development of a COVID-19 vaccine.

Beximco’s shares were up 11% at 61p.

12.30pm: Investors looks to US markets to provide a bit of impetus

European indices have been drab but their US counterparts are keen to get the party started following yesterday’s speech from Federal Reserve chairman, Jerome Powell.

Spread betting quotes suggest the Dow Jones will open 145 points firmer at 28,637 while the S&P 500 is tipped to start 15 points higher at just below the 3,500 level.

All of that may change when the US personal income and expenditure numbers for July are released.

The former is expected to ease by -0.2% and the latter to rise by 1.5%.

Economists are expecting the core personal consumer expenditures price index to rise 1.2%.

“Today's monthly private consumption data for July are going to be very interesting. Retail sales grew again in July (despite high-frequency indicators suggesting otherwise) but it may be the case that consumers substituted away from services into goods,” commented Danske Bank.

Later in the day, we will have the Chicago purchasing managers’ index for August, which is expected to be around the 52 level, and the final reading of the University of Michigan consumer sentiment index, where economists have pencilled in a number of 72.8.

In London, the ennui continues but the Footsie has at least made it back into positive territory; it’s been flip-flopping like a beachgoer’s casual footwear all day and is currently up 7 points (0.1%) at 6,008.

11.50am: Ennui is the watchword

The FTSE 100 has been on a short leash this morning, not venturing far from last night’s close.

The FTSE 100 is currently down 9 points (0.1%) at 5,991 but considering sterling is up by four-fifths of a cent against the greenback – normally regarded as a headwind for Footsie stocks – that performance feels a bit like a moral victory.

The square root of bog-all is happening in terms of news flow for blue-chip companies but there is a bit more action among the FTSE 250’s mid-caps.

Mask maker Avon Rubber PLC (LON:AVON) has announced the award of a dual source contract to supply replacement M61 filters for the M50 mask system.

Avon will compete for each order of the US$127mln over five years – or possibly seven if the extension periods are granted.

The news did not do much for the FTSE 250 constituent’s share price; in fact, it is down 0.3% at 3,875p, which is slightly worse than the performance of the FTSE 250, which is down 19 points (0.1%) at 17,743.

Essentra PLC’s (LON:ESNT) announcement also failed to get the pulses racing.

Shares in the packaging products and ciggie filters producer were down 0.1% at 311.2p after it said full-year revenue and adjusted operating profit are going to be around the current consensus.

If it’s excitement you want, then look no further than BBCI SICAV SA (LON:BBGI), because nothing says excitement more than infrastructure investment.

Joking aside, the company reported a 0.1% increase in its “investment basis” net asset value per share to 136.4p at the end of June from 136.2p at the end of 2019.

The shares rose to the giddy heights of 171p, up 0.5% on the day.

10.15am: Set for a snoozeathon

The trading day is just two hours old and it has already been an up-and-downer, with stocks now firmer on balance.

The FTSE 100 is up 12 points (0.2%) at 6,012, with financial stocks such as Standard Chartered PLC (LON:STAN), Prudential PLC (LON:PRU) and the big four banks to the fore, with gains ranging from 1.4% to 2.6%.

“As the dust settles on the Federal Reserve’s historic policy shift the mood in the market is upbeat. European bourses and US futures are pointing to a stronger start after a mixed finish on Wall Street overnight,” said Fiona Cincotta at City Index.

“Today it is the turn of Bank of England Governor Andrew Bailey to take to the virtual stage at Jackson Hole. Investors will be looking for further clarity around negative interest rates. Earlier this month Andrew Bailey said that negative rates were in the BoE’s toolbox; however, he also said there are no plans yet to use them.

“The question is whether the BoE sticks to its preferred avenue and just adds additional stimulus to bridge the fallout from the withdrawal of the Government’s job retention scheme, whilst keeping interest rates at or above 0 or whether this will be when the central bank looks towards using negative rates,” she added.

Bailey’s speech is likely to be a sedate affair, which is more than could be said (one expects) for a general meeting (if it happens) of Amigo Holdings PLC (LON:AMGO) to vote on proposals by disgruntled shareholders, the Richmond Group.

Richmond – the investment vehicle of Amigo’s founder James Benamor - has withdrawn one of its proposed resolutions from the general meeting it has requested, namely a vote on whether chief executive Glen Crawford should be removed as a director.

The controversial lender issued fiscal first-quarter results this morning that revealed a sharp rise in bad debts due to a more gloomy assessment of the prospects for customers in the aftermath of coronavirus.

Shares in Amigo were up by a sixth at 14p after it said it is preparing to restart lending “on a prudent basis” by the end of this year.

8.42am: Flat as a pancake

The FTSE 100 resisted the pull of Wall Street and Asia’s main markets to open flat as a pancake.

Fed chair Jerome Powell’s comments on US inflation and non-comments on the broader vision of the US rate-setting body met with a collective shrug here in the UK.

Likewise, there appeared to be little early excitement ahead of words from Bank of England governor Andrew Bailey, whose turn it is to speak at the virtual gathering that has replaced the annual Jackson Hole jamboree for central bankers.

Unsettling for the markets early on was the news that Japan’s premier Shinzo Abe is resigning due to ill health.

His eight years in office make him the country’s longest-serving prime minister and his tenure has coincided with a period of stability in Japanese politics.

The nudge higher in the gold price gave a boost to precious metals groups Polymetal (LON:POLY), up 1.6%, and Fresnillo (LON:FRES), ahead 1.5%.

On the downside, Rolls Royce (LON:RR.) continued its post-results sell-off even after heading off the market’s major worry – a highly dilutive rights issue – by saying it well sell assets worth around £2bn.

Proactive news headlines

Integumen PLC (LON:SKIN) has agreed to buy water monitoring company Modern Water PLC (LON:MWG) for £21.25mln. The two companies have been working together since March, when Integumen provided its AI technology to produce test kits for Modern Water.

Ncondezi Energy Limited (LON:NCCL) said it has signed a shareholder agreement term sheet with China Machinery Engineering Corporation (CMEC), which will see it maintain a 40% stake in its 300-megawatt coal-fired power project and coal mine in Mozambique.

Trident Royalties PLC (LON:TRR, FSX:5KV) said it is paying A$800,000 in cash and shares for a package of four existing gold royalties in Western Australia. The projects are sited in the globally recognised Pilbara and Yilgarn mining regions and the deal represents the company’s fourth since listing on AIM just three months ago.

Blackbird Plc (LON:BIRD) has partnered with Tata Communications to launch a cloud-based editing service for live video to the media and sports industries after recently securing a multi-year order from the Indian digital services giant.

AfriTin Mining Ltd (LON:ATM) hailed a “transformational” year in its preliminary results having achieved initial production of tin concentrate and first revenues. Following last year’s transition from developer to producer, the AIM-listed firm is now working towards ramping up production to 720 of tin concentrate per annum then increasing capacity to 5,000 tonnes per annum.

Benchmark Holdings PLC (LON:BMK) has delivered positive earnings in its third quarter, which it attributed to higher revenues and margins in its genetics division after moving external production in-house and reducing its operating costs during the coronavirus pandemic.

Europa Metals Ltd (LON:EUZ) has announced metallurgical test-work results for its Toral project that demonstrates "excellent" lead, zinc and silver recovery and grades. Chief executive Laurence Read said: “While Europa Metals is extremely pleased with the results from the TOD-025, high-grade, sample, it is of particular note that ore sorting could well bring new areas of the deposit's overall resource into the mineable area having previously been discounted due to the low-grade nature of the ore.”

Bezant Resources PLC (LON:BZT) has raised £625,000 to fund new exploration at the Hope copper-gold project in Namibia. In particular, Bezant said it will assess the gold potential at Gorob-Vendome deposit, where most of the historic drill programs were not assayed for gold, and at the Kalengwa project in Zambia to test one or more of the identified anomalies.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) has completed the retail component of the 1 for 3.2 pro-rata accelerated non-renounceable entitlement offer, which formed part of the company's underwritten A$98.5 million equity raising. The retail entitlement offer closed on August 25 with eligible shareholders applying for around A$11 million worth of new fully paid ordinary shares in line with their entitlements and additional new shares under the Retail Shortfall Facility.

Tavistock Investment PLC (LON:TAVI) will hold a second meeting after its annual shareholder meeting next month to consider a capital reduction proposal that it said will facilitate the payment of dividends to shareholders.

Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) confirmed its strong financial position as it released interim results for the six months ended June 30. It ended the period with US$11.8mln of cash and it was debt free. The pre-revenue firm reported a US$199,000 profit for the period due as its numbers were boosted by finance income of US$874,000.

Curzon Energy PLC (LON:CZN) told investors that it believes the Coos Bay coal bed methane assets continue to hold potential value though noted the present challenges.

Mkango Resources Ltd (CVE:MKA, LON:MKA) said a government delegation has expressed satisfaction with development work at Mkango's Songwe Hills rare earths project in Malawi. The pre-revenue company had cash of US$6,440,697 at June 30, 2020, as second quarter mining exploration expenditures stepped up to US$613,565 from US$301,186 as work on the feasibility study at Songwe Hills cracks on, which contributed to a net loss of US$913,674. 

FastForward Innovations Ltd (LON:FFWD) said a revised chapter 11 plan of reorganisation for its investee company Factom, which allows the company’s US$6mln SAFE note to be converted to equity in Factom, has been approved by the US bankruptcy court for the district of Delaware and Factom’s shareholders.

Asiamet Resources Limited (LON:ARS) announced the appointment of Leonard Aurlianus to the role of chief financial officer, based in Jakarta.

Aminex PLC (LON:AEX) told investors it has further extended the deadline to complete its farm-out deal with ARA Petroleum to September 30 from August 28. The company continues to await government approval for the transaction.

APQ Global Ltd (LON:APQ) expects to report both its final result for last year and its interim results for this year in September, which it said was due to needing further time to refine the disclosure in accounts and the associated review by the company's auditor.

IronRidge Resources Limited (LON:IRR) said it will be attending several online conferences in the coming months, including Mines and Money Online Connect Global, which runs from August 31 to September 3. Others include Precious Metals Summit Beaver Creek, 121 Mining Investment Online APAC, 121 Mining Investment Americas Online, International Precious Metals & Commodities Show and 121 Mining Investment Online EMEA.

6.34 am: Forward momentum predicted 

London reacted with indifference to yesterday’s speech from the chairman of the Federal Reserve, Jerome Powell, but is making more of an effort today.

The FTSE 100 is expected to open at around 6,023 and seeing as the index had the decency to close at 6,000 (down 46 points) last night, that makes the arithmetic easy in terms of calculating the gain.

“As a reaction to the pandemic, the Fed pursued an extremely aggressive stimulus package as a way of trying to cushion the blow of the lockdowns. Central banks around the globe all took the decision to go down the easing route in a bid to assist their respective economies. At the time of the interest rate cuts and the various government bond-buying schemes were announced, some economists cautioned there could be a spike in inflation,” said David Madden at CMC Markets.

Robert Carnell, ING’s Regional Head of Research for Asia-Pacific, would like to know how Powell “is going to reach, let alone exceed 2% inflation” but said he had has bought markets some more time.

While London’s Footsie drifted lower following Powell’s speech yesterday at Jackson Hole, in the US the Dow Jones rose 160 points to 28,492 and the S&P climbed 6 points to 3,485.

Asian markets this morning are mostly firmer with Japan’s Nikkei 225 up 88 points at 23,297 and Hong Kong’s Hang Seng 161 points to the good at 25,442.

Today, the Bank of England’s governor, Andrew Bailey, is set to do his party piece at Jackson Hole.

The market will be interested in Bailey’s views on negative rates, said economists at ING: “They are still on the table and a renewed threat to use them could prove some trouble for GBP”.

On the corporate front, the level of in-fighting among the stakeholders has made Amigo Holdings PLC (LON:AMGO) one of the most inappropriately named companies listed on the stock exchange.

The consumer credit company is set to announce his quarterly numbers today.

Around the markets

  • Sterling: US$1.3267, up 0.66 cents
  • 10-year gilt: yielding 0.339%, up 3.51 basis points
  • Gold: US$1,951.50 an ounce, up US$17.90
  • Brent crude: US$45.64 a barrel, up 4 cents
  • Bitcoin: US$11,388, up US$116

6.45 am: Early Markets: Asia / Australia

Stocks in Asia Pacific were mixed today as investors reacted to recent developments from the US Federal Reserve.

Shares in Japan led losses among the region’s major markets with Nikkei 225 falling 1.66%

Chinese stocks were higher with the Shanghai composite up 1.08 % while Hong Kong’s Hang Seng index advanced 1.34%.

S&P/ASX 200 fell 52 points or 0.86% to 6,074 with losses across almost all sectors with materials, technology and consumer discretionary experiencing some of the sharper falls.

READ OUR ASX REPORT FOR MORE INFORMATION

Proactive Australia news:

Emerald Clinics Ltd (ASX:EMD) has raised $2.2 million via the placement of shares at 8 cents each to fund the expansion of its clinical services, research and development and business development opportunities.

Pantoro Limited (ASX:PNR) (FRA:RKN) has increased its share purchase plan (SPP) to $5.5 million from the initial target of $5 million after receiving strong interest from its shareholders.

Perseus Mining Limited (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) has revealed updated mineral resources and ore reserves at each of its West African operations.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) has completed the retail component of the 1 for 3.2 pro-rata accelerated non-renounceable entitlement offer, which formed part of the company's underwritten A$98.5 million equity raising.

Red River Resources Ltd (ASX:RVR) has received encouraging early results, including visible gold, from a maiden diamond drilling program targeting the Eleanora Garibaldi Lode at Hillgrove Gold Project in NSW

Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) continues to enhance the underground mining potential of satellite deposits at Tomingley Gold Operations in Central West NSW with more high-grade results.

Roots Sustainable Agricultural Technologies Ltd (ASX:ROO) has set up a new plant-based meats department aimed at capitalising on study results that show the positive effects of its Root Zone Temperature Optimisation (RZTO) technology on the yield of protein-based plants.

Greenland Minerals Ltd (ASX:GGG) has been notified by Greenland’s Environmental Agency for Mineral Resources Activities (EAMRA) that the environmental impact assessment (EIA) review process for its world-class Kvanefjeld Rare Earth Project in Greenland is near completion.

Bryah Resources Ltd (ASX:BYH) has made new a nickel-copper-cobalt discovery after assessing results from recently completed reverse circulation (RC) drilling at Mount Labouchere prospect within the Bryah Basin.

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