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FTSE 100 closes in red as Wall Street stocks slide after US app ban

The UK's index of top shares closed down around 42 points at 6,007. Over the week as a whole, it shed around 0.41%

City sunrise
  • FTSE 100 finishes down around 42 points
  • White House to ban TikTok downloads
  • Airlines under pressure

4.50pm: FTSE closes lower

FTSE 100 index finished in the red on Friday, while US stocks also sank, as markets were rattled by possible retaliatory measures from China after the US announced a ban on key apps from this Sunday.

The UK's index of top shares closed down around 42 points at 6,007. Over the week as a whole, it shed around 0.41%.

Midcap FTSE 250 also lost ground, giving up over 159 points at 17,578.

It comes as the White House is looking to prevent downloads of TikTok and fellow Chinese-owned app WeChat over concerns of national security threat. The US Commerce Department announced the download ban on Friday and reiterated that use of the TikTok app will be banned in the US from November 12.

"Such a move opens an entirely new dimension to the US-China standoff, and puts major tech firms squarely in Beijing’s sights, as the two powers seek out their opponent’s weak spots," said chief market analyst Chris Beauchamp at online trading group IG.

"US markets have struggled to hold their ground all week, and as the week comes to a close it looks like more pre-election losses are in store."

US and Canada 11.40am EST/4.40pm

Wall Street benchmarks were heading south in early deals in New York. The Dow Jones Industrial Average shed over 68 points at 27,833. The S&P 500 lost over 22 at 3,334. The tech-laden Nasdaq  index plunged over 116 points at 10,793. Up in Toronto, the TSX gained around 22 points at 16,269.

3.50pm: TikTok to challenge US ban

FTSE 100 held tight onto its losses before the weekend, losing 29 points to 6,020.

Ryanair Holdings plc (LON:RYA) was trading 4% lower at €12.06 before close after announcing it would cut one in five of its flights scheduled for next month.

With the new cuts it would operate 40% below last year’s performance, although it hopes planes will be 70% full.

The airline said the Irish and EU governments are imposing “excessive and defective” travel restrictions.

Other airlines didn’t fare much better, with British Airways owner International Consolidated Airlines Group SA (LON:IAG) leading the pack with a 12% fall to 113.95p, followed by easyJet PLC (LON:EZJ) down 8% to 549.6p and Wizz Air Holdings PLC (LON:WIZZ) down 5% to 3,396.4p.

Looking at the US, TikTok told the NBC it is looking to challenge the ban on downloads the White House is imposing as of Sunday.

2.40pm: Mixed open in Wall Street

FTSE 100 was trading sideways in the early afternoon, while US stocks saw a mixed open.

London’s leading index was down 33 points to 6,016, the Dow dipped 7 points to 27,894 and the S&P 500 was up 4 points to 3,361.

Staying in the US, President Trump is reportedly going to ban WeChat and TikTok from app stores as of Sunday night.

The White House is looking to prevent downloads of Chinese-owned apps over concerns of national security threat, Reuters reported.

It is not going to be much of a change for TikTok, whose owner ByteDance has until November 12 clinch an agreement to secure its future in the country.

The tech giant has been discussing with Oracle to create a new company to address the Trump administration’s concerns, though it still needs official approval to go forward.

2pm: Daily COVID-19 infections rise by 6,000 in England

FTSE 100 dipped further after lunch, shedding 28 points to 6,021.

COVID-19 cases in England are rising by 6,000 every day in the week to September 10, prompting the government to consider a second lockdown.

This is compared to 3,200 cases per day the previous week, with the North West and London as the main hotspots.

With new regulations imposed on the North West, Midlands and West Yorkshire from Tuesday, the UK government is mulling over a wider lockdown.

“Regional restrictions are already being imposed in the hope that a repeat of the nationwide lockdown can be avoided but already there's reports that a brief two-week repeat is under consideration next month,” commented Craig Erlam at OANDA.

“It could be a bleak winter for business and the icing on the cake could be no-deal Brexit.”

12.45pm:  Wall Street expected to open in the red

FTSE 100 was wallowing in the red at midday, slipping 8 points to 6,041.

US futures were also pointing at a lower open as investors are getting nervous heading into the final few months of the year.

“The Fed is highly accommodative but not accommodative enough, Congress is desperate to agree a much needed relief package but no closer to doing so and virus numbers globally are rising, rapidly,” said Craig Erlam, analyst at OANDA Europe.

“What's more, tech stocks - which were a driving force behind the outstanding stock market comeback - remain shaky and vulnerable to more downside.”

The end of the year could see some of the uncertainty getting cleared out by a coronavirus vaccine and a political direction following the US elections, however there are still some more hurdles before we get there.

“Congress is running out of time and an awful lot of compromise is required to get anything over the line. In the absence of a deal, it's not hard to envisage a continuation of the tech-led correction in the markets,” Erlam concluded.

11.45am: UK restaurants see fewer visitors after ‘Eat Out To Help Out’ ends

FTSE 100 was in the red again before lunch, dipping 11 points to 6,038.

National figures showed that just under a third of adults said they had been out to eat or drink at a restaurant, café, bar or pub between September 9 and 13,

It was down from 38% two weeks ago, the first decrease following continued increases since early July, according to the Office for National Statistics (ONS).

The ONS also reported that 31% of adults who had visited public indoor places such as restaurants or hairdressers said they were always asked to provide their personal details for contact tracing services, while 26% were never asked.

Listed operators were under pressure, with Restaurant Group PLC (LON:RTN) shedding 6% to 52.4p, Franco Manca owner Fulham Shore PLC (LON:FUL) and Loungers PLC (LON:LGRS) both down 3% to 8.62p and 167p respectively.

10.40am: UK does not exclude second lockdown

FTSE 100 was barely out of the red in mid-morning, sitting at 6,049.

The debate is fierce in the UK on whether a second lockdown would be beneficial to bring down COVID-19 infections.

Health secretary Matt Hancock said on Friday such stringent measures would be the last resort.

“The number of people in hospital is doubling every eight days or so ... we will do what it takes to keep people safe,” he told Sky News. “We keep these things under review.”

The UK is seeing a surge in cases, having recorded 3,000-4,000 daily cases last week.

According to the Evening Standard, London may face local lockdowns and curfew as the number of cases per 100,000 over seven days rose from 18.8 to around 25.

If it increases to over 50, official plans set out potential restrictions.

“Boris Johnson says a national lockdown would be disastrous, but his scientific advisers are proposing a two-week lock-up in October... The question is whether the government decides to ‘follow the science’ or not,” noted Neil Wilson at Markets.com.

9.25am: Sainsbury's enjoys push after billionaire builds significant stake

FTSE 100 dipped further in one of those days when it is not clear in what direction trading wants to go.

London’s leading index shed 24 points to 6,025, while sterling was flat at US$1.2969.

J Sainsbury PLC (LON:SBRY) rose 2% to 195.9p early on Friday, still enjoying Thursday’s push after a billionaire investor became its fourth-largest shareholder.

Czech Daniel Kretinsky, the president of football club AC Sparta Prague, built up a 3.05% stake in the grocer worth £130mln.

Kretinsky is the chief executive officer and 94% owner of Energetický, the largest energy group in Central Europe.

It is not clear what his plan is but there are speculations he may be pushing for changes at the supermarket to boost its value, the Daily Mail reported.

8.35am: Dull end to busy week

The FTSE 100 index made a lacklustre start to proceedings on Friday morning with traders attempting to digest the latest UK retail figures while still making sense of the strategies of central bankers in the UK and US this week.

The index of UK blue-chips opened 16 points lower at 6,034.08.

Market watcher said there continued to be a hangover from Wednesday’s inconclusive commentary from the Federal Reserve, which neither ruled in nor out further stimulus measures.

“While the continuation of ultra-loose monetary policy should prove beneficial in the medium term, Main Street currently needs help and so hope will switch, once again, towards further fiscal stimulus, which is currently being stymied by political wrangling,” said Richard Hunter, head of markets at Interactive Investor.

Here in the UK, the Bank of England looks set to mount its support efforts once the furlough scheme has ended, analysts noted.

Turning to the Footsie, there was little in the way of price action among the blue-chips. Ocado (LON:OCDO), up 1%, received a modest boost from the retail numbers.

However, elsewhere in the sector, there was barely a flicker.

The miners were well bid amid hopes the Chinese economy, a driver of demand from the natural resources sector, was now in a sustained recovery phase. BHP (LON:BHP) led the index with 2.5% gain.

Proactive news headlines:

Braveheart Investment Group (LON:BRH) noted that investee company Pharm2Farm (P2F) has ordered an automated face mask production line that should be commissioned by the end of 2020. The production line has the capacity to produce up to five million standard or anti-viral face masks per month, said the investment company. Braveheart pointed out that conventional surgical type masks are recommended to be used for a maximum of two hours but P2F’s version contains an additional defensive layer that uses nanotechnology engineered to kill viruses and bacteria.

Remote Monitored Systems PLC (LON:RMS), which agreed to acquire Braveheart's 51.7%  stake in P2F in August, simply noted the announcement in a statement today.

Faron Pharmaceuticals Ltd (LON:FARN) has said a scientist leading a trial of its early-stage immuno-oncology drug will provide more context on the treatment's “promising” anti-tumour activity at a leading industry conference. Dr Petri Bono, principal investigator heading the phase I/II MATINS study of bexmarilimab, will also provide commentary around the drug’s potential efficacy. His team has observed a long-lasting partial response in a person with metastatic colorectal cancer and target lesion responses from “heavily pre-treated” melanoma and ovarian cancer patients.

Emmerson PLC's (LON:EML) new chief executive Graham Clarke has told investors he looks forward to regular progress updates as the potash mine group moves through a critical stage in its history. Clarke joined the company shortly after June’s feasibility study for Khemisset which confirmed the mine as a world-class, low capital cost, high margin potash mine. It envisaged outstanding project economics including earnings margins in excess of 61% over a 19-year minimum mine life. Subsequently, the company focus has shifted to making Khemisset "shovel ready".

Polarean Imaging PLC (LON:POLX) has completed the installation of its 9820 Xenon Polariser system at the University of Kansas (KU) Medical Center. KU is a major research and teaching hospital and the new technology will form the cornerstone of a new hyperpolarised 129Xe imaging research programme, added the company, which has now installed 23 systems. The latest unit will be used to “evaluate and assess” responses to therapy in lung disease patients, KU’s Dr Mario Castro said in a statement. Polarean has developed a drug-device combination which uses hyperpolarised 129-Xenon gas MRI.

Integumen PLC (LON:SKIN), which will soon be renamed DeepVerge PLC, reported a positive first half and said it remains comfortable guiding for £4mln of full-year revenue. Achieving that target will see a significant ramp-up. The company generated some £1.004mln of revenue in the first six months of 2020, and it expected to bring in another £1mln in the third quarter and then the fourth. Integumen chief executive Gerard Brandon pointed out that the business continues to grow and evolve via collaboration and acquisition. Most recently, in August, the company agreed to a £21.25mln merger with Modern Water PLC (LON:MWG).

Eurasia Mining PLC (LON:EUA), the Russia-focused Platinum miner, has reshuffled its executive team with non-executive director James Nieuwenhuys to become its new chief executive. Christian Schaffalitzky remains as executive chairman while Dmitry Suschov steps down from the board to become chief M&A officer. Nieuwenhuys has previously been CEO South Africa’s Lesego Platinum and was COO at Polyus Gold, Russian largest gold producer and has many contacts among PGM producers in Russia, China and South Africa, said Eurasia.

Trident Royalties PLC (LON:TRR) has announced the appointment of Helen Pein as an independent non-executive director, joining with immediate effect. The company noted that Pein is a highly experienced economic geologist with a 30-year career that has spanned multiple commodities and geographies. "I am delighted that Helen will be joining the board of Trident,” said James Kelly, Trident chairman in a statement.

APQ Global Limited (LON:APQ) has announced that as at the close of business on August 31, 2020, its unaudited book value per ordinary share was 29.71 US cents, equivalent to 22.19p.

Alien Metals Limited (LON:UFO), a minerals exploration and development company, said that, following the receipt of exercise notices, it has issued 56,250,000 ordinary shares in the company at an issue price of 0.15p per share and 16,041,667 new ordinary shares of no par value in the company at an issue price of 0.12p per share.

Chaarat Gold Holdings Limited (LON:CGH), the AIM-quoted gold mining Company with an operating mine in Armenia and assets at various stages of development in the Kyrgyz Republic, said it has been informed that Labro Investments Limited, the majority of shares in which the company's chairman, Martin Andersson, is indirectly beneficially interested, on September 16, 2020, purchased 144,134 ordinary shares in the company at an aggregate price of approximately 37.31p each, and on September 17, 2020, acquired a further 180,000 ordinary shares at an aggregate price of 37.72p each. Following these purchases, Labro now holds 203,475,349 ordinary shares, representing 38.79% of the company's issued share capital.  The combined holding of Labro and Martin Andersson is now 209,305,345 ordinary shares representing 39.90% of the company's issued share capital.

FastForward Innovations Ltd. (LON:FFWD), the AIM-quoted company focusing on making investments in fast-growing and industry-leading businesses, announce that at its annual general meeting held on Thursday, all resolutions which were proposed to shareholders were duly passed.

InnovaDerma (LON:IDP), a UK developer of beauty, personal care and life sciences products, has said it will announce its full-year results for the year ended June 30, 2020, on Wednesday, September 30, 2020. The management of InnovaDerma will deliver an online results presentation open to all existing and potential investors via the Investor Meet Company platform on the same day at 9.00am UK time. Investors can sign up for free via: https://www.investormeetcompany.com/innovaderma-plc/register-investor

7.35am: Retail sales above pre-pandemic levels

UK retail sales volumes, including petrol, rose by 0.8% month-to-month in August, according to the Office for National Statistics (ONS), matching the consensus forecast and further surpassing their pre-coronavirus (COVID-19) pandemic level.

Year-on-year growth increased to 2.8%, from 1.4% in July, marginally above the consensus of 2.7%.

Spread betting firm IG still expects the FTSE 100 index to open lower, now down around 2 points at 6,047.

The ONS’s deputy national statistician for Economic Statistics Jonathan Athow noted: “Retail sales continued to grow, further surpassing their pre-pandemic level. Sales of household goods thrived as the demand for home improvement continued and, despite a dip this month, online sales remained high.

“However, clothing stores continued to struggle with sales still well below their February level. Overall, the switch to greater online sales means the high street remains under pressure.”

UK retail sales volumes rose by 3.6% month-on-month in July as clothing sales grew and people spent more money on petrol as the coronavirus lockdown eased.

6.50am: Small loss predicted

The FTSE 100 index is expected to start cautiously on Friday following mixed performances overnight by US and Asian markets amid worries over a second wave of coronavirus (COVID-19) and the economic recovery from the first.

Spread betting firm IG expects the blue-chip index to open around 3 points lower at 6,046, having shed 28 points or 0.5% on Thursday to close at 6,049.92.

Overnight in New York, the Dow Jones Industrials Average closed 130 points, or 0.5% lower at 27,901, while the broader S&P 500 index lost 0.5%, and the tech-laden Nasdaq Composite dropped 1.3%.

Wall Street indexes fell for a second straight session after data showed recovery in the US labour market stalling and the Fed made no new monetary easing commitments at its meeting this week.

But Asian markets were positive on Friday, with Japan’s Nikkei 225 index up 0.1% and Hong Kong’s Hang Seng index ahead 0.3% as US stock futures crept higher indicating a recovery today in New York.

Sterling awaits retail sales

On currency markets, sterling held fairly steady as traders awaited the latest UK retail sales numbers, coming hot on the heels of this week’s inflation and unemployment numbers and yesterday’s Bank of England policy decision.

Jasper Lawler, head of research at London Capital Group noted: “The pound had a wobble after the BOE said it was again looking into negative interest rates (again!) at its rate-setting meeting yesterday.

“Let’s see if retail sales can tip Sterling over the edge. The forecast is for 0.7% monthly gains, down from 3.6%.

UK retail sales volumes rose month-on-month in July as clothing sales grew and people spent more money on petrol as the coronavirus (COVID-19) lockdown eased.

Job losses eyed at Investec

On the corporate front, just a pair of releases are scheduled to provide any interest, with a trading update due for revamped investment bank Investec PLC (LON:INVP), and interims expected from petrol stations operator Applegreen PLC (LON:APGN).

News reports this week suggested that Investec is set to cut 210 jobs amid a wider restructuring at the business, with the majority of job losses expected to be in support roles.

The firm’s Wealth and Investment division, and its south African business are likely to be spared any cuts.

Meanwhile, in a trading update at the end of July, Applegreen confirmed that its trading was ahead of expectations in the second quarter, and it had stayed profitable.

The company said business had been driven by strong store sales in local service stations, good fuel margins and extensive cost saving measures.

Around the Markets:

  • Sterling: US$1.2958, up 0.1%
  • Gold: US$1,940 an ounce, unchanged
  • Brent crude: US$43.54 a barrel, up 0.5%

6.45am: Early Markets - Asia/Australia

Stocks in the Asia-Pacific region were mostly higher on Friday with China’s Shanghai Composite up 0.57%, while Hong Kong’s Hang Seng index was 0.31% higher.

In Japan, the Nikkei 225 gained 0.09% and South Korea’s Kospi made a similar marginal gain, rising 0.02%.

Shares in Australia skipped the trend with the S&P/ASX 200 falling 0.02% but ASX tech stocks rebounded from yesterday’s heavy losses.

READ OUR ASX REPORT HERE

Proactive Australia news:

Cardiex Ltd (ASX:CDX) subsidiary ATCOR has been granted a new patent by the European Patent Office (EPO) to protect the intellectual property (IP) for the company’s proprietary SphygmoCor technology used in cuff-based blood pressure devices.

Alkane Resources Limited (ASX:ALK) is focused on growing its gold bounty through increasing production at Tomingley Gold Operations (TGO), pursuing organic growth through targeted exploration and development, and strategic investment.

Bellevue Gold Ltd (ASX:BGL) is focused on enhancing and growing the golden bounty at its namesake Bellevue Gold Project in Western Australia through development plans and aggressive exploration.

Maximus Resources Limited (ASX:MXR) has completed a $3.18 million capital raising on September 10 via the placement of 31,578,947 shares to institutional, sophisticated and existing shareholders.

Artemis Resources Ltd (ASX:ARV) (OTCMKTS:ARTTF) has started diamond drilling at Carlow Castle Gold Project in the West Pilbara region of WA as part of Project One Million targeting resources of 1 million ounces.

Greenland Minerals Ltd (ASX:GGG) is confident its Kvanefjeld project in Greenland is well-placed to take advantage of the long-term robust outlook for rare earth elements (REEs).

Arafura Resources Ltd’s (ASX:ARU) final rare earth oxide (REO) products from the Nolans project flowsheet piloting program have been validated by supply chain partners across the globe, including Europe, China and Japan.

Netlinkz Limited (ASX:NET) is approaching a key milestone of turning cashflow positive as business development initiatives begin to take hold in various markets and other markets show encouraging signs.

MMJ Group Holdings Ltd (ASX:MMJ) (OTCMKTS:MMJJF) believes that the current market and industry sentiment surrounding cannabis companies create investment opportunities in Canada and other countries at attractive valuations and prices.

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