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FTSE 100 and sterling finish strong; US stocks off to the races

Despite the strength of sterling, it has been a stonking day for the Footsie

Boohoo Group PLC -
Elsewhere in Europe, and in the US, traders were singing a similarly optimistic tune
  • FTSE 100 jumps 85 points
  • Sterling rises by a cent against the dollar
  • HSBC gains as Chinese investment firm boosts its stake

5.00pm: Stocks roar to life in UK, Europe, US alike

It was a good day for the FTSE 100, which ended the Monday session up 85 points, 1.5%, at 5,927.9. The FTSE 250 did even better, closing 326 points, 1.9%, higher at 17,370.3. 

Stocks rose across a variety of sectors despite lingering uncertainty, CMC Markets UK analyst David Madden noted.

"In London, it is a broad-based rally as banks, oil, house building, supermarket, hospitality, transport and travel stocks are all showing gains," Madden wrote Monday. "Traders are clearly content to buy back into the market in light of the losses that were posted last week, but the bullish move seems excessive when you consider the uncertainty in relation to the UK-EU trades talks, the lack of a stimulus package in the US, and the health woes."

HSBC Holdings plc (LON:HSBA) (NYSE:HSBC) shares gained nearly 9% in London to £308.55 and 9.6% to $19.84 in New York on news that Chinese investment firm Ping An Asset Management has increased its stake in the bank to 8% from 7.95%

Elsewhere in Europe, and in the US, traders were singing a similarly optimistic tune.

"There has been a huge shift in sentiment when compared with the losses that were posted in the eurozone on Friday," Madden wrote. "Equities in the US are driving higher, but stocks on this side of the Atlantic have been gaining ground since the morning. The health crisis in Europe is still serious but dealers have shrugged it off."

The US' Dow Jones index was up 458 points, 1.7%, to 27,632.4 at midday, thanks in part to a surge among bank and tech stocks. Bank of America Corporation (NYSE:BAC) jumoed 3.2% to $24.23 and Amazon.com Inc (NASDAQ:AMZN) gained 1.1% to $3,128.04.

4.00pm: Good day for equities and sterling

A late surge by the Footsie has seen it rise above the 5,950 level, despite sterling continuing to be flavour of the day on forex markets.

London’s index of leading shares, which normally retires to its room to sulk when the pound rises strongly against the dollar, was up 107 points (1.8%) at 5,950, with property group Land Securities PLC (LON:LAND), up8.4$ at 531.7p, leading the way.

Sector peer British Land PLC (LON:BLND), up 7.0% at 344.5p, is also getting a lot of love from investors.

Meanwhile, sterling has ebbed to US$1.2844 after hitting US$1.29 at one point today but it is still up by almost a cent on hopes that a Brexit settlement may yet be agreed before the rapidly approaching deadline.

“Another round of trade talks start this week and we are rapidly reaching crunch time with a deal needing to be largely finalised by the end of October,” said Rupert Thompson, the chief investment officer at fund management firm, Kingswood.

“Whether we end up with one or not is still far from clear. That said, the prospects for a deal maybe look rather better than they did a couple of weeks ago when the Government was busy tearing up parts of the Withdrawal Agreement. With significant COVID restrictions quite probably still in place in the new year and the Government already under attack for incompetence, it may not wish to take the flack for inflicting yet more chaos onto the economy,” Thompson suggested.

3.30pm : Proactive North America headlines:

GR Silver Mining Ltd (CVE:GRSL) (OTCQB:GRSLF) discovers new underground polymetallic mineralization at Mexico project

Pacific Empire Minerals Corp (CVE:PEMC) (OTCQB:PEMSF) says sampling at Jean Marie project shows potential for a precious-metal-enriched, copper porphyry deposit

Auryn Resources Inc (TSE:AUG) (NYSEAMERICAN:AUG) shareholders get advisory company's encouragement to approve Eastman acquisition and subsequent creation of Fury Gold

FSD Pharma Inc (NASDAQ:HUGE) (CSE:HUGE.CN) (FRA:0K9A) wins FDA nod to begin Phase 2 clinical trial for its lead drug micro-PEA to treat coronavirus patients

Australis Capital Inc (CSE:AUSA) (OTCMKTS:AUSAF) appoints cannabis industry veteran Sameer Kumar as independent director

BevCanna Enterprises Inc (CSE:BEV) (OTCQB:BVNNF) says it is well-positioned as a leader in the cannabis-infused beverage space as it prepares to take on the US market

Binovi Technologies Corp (TSXV:VISN) (OTC:BNVIF) congratulates Dallas Stars on NHL Western Conference Championship

Klondike Gold Corp (CVE:KG) (OTCPINK:KDKGF) upsizes placing to C$3.8M and raises C$1.55M in first tranche

Novavax Inc (NASDAQ:NVAX) to present on COVID-19 vaccine candidate this week

3.20pm: Reach writes its own headlines

Having racked up a triple-digit gain the Footsie has stepped back a little but is still well in credit.

London’s index of top shares was up 95 points (1.6%) at 5,937, some 15 points below its intra-day high.

Away from the big caps, if newspaper group Reach PLC (LON:RCH) ran any newspapers that had City pages of any consequence they might be running a piece tomorrow on the group’s surprisingly upbeat half-year financial reports.

Shares in the Daily Mirror and Daily Express publisher rose 18% to 76p after it revealed, effectively, that things are still getting worse, only not so quickly as they were.

Underlying profit before tax in the first half of the year slid to £53.5mln from £69.9mln the year before but investors were encouraged by news that digital revenue in the third quarter was up 12.9% year-on-year.

ValiRx PLC (LON:VAL) had an up and down day after a clinical trial update on its lead candidate, VAL201, a prospective treatment for prostate cancer.

The shares initially surged on the headline results but subsequently dived 16% to 45p.

2.45pm: Wall Street rises at the opening bell

As expected, the main indices on Wall Street began the week on the front foot despite political volatility ahead of Tuesday’s presidential election debate.

In the first minutes of trading, the Dow Jones Industrial Average was up 1.56% at 27,599 while the S&P 500 climbed 1.46% to 3,347 and the Nasdaq rose 1.48% to 11,075.

Investors may in a good mood at the start of the week, however, the debate as well as the all-important US payroll figures on Friday could alter sentiments as the week progresses.

Back in London, the FTSE 100 had added to its gains and was up 94 points at 5,936 at 2.45pm.

12.33pm: US stocks set to open higher

It’s looking like another risk-on day for US markets, which enjoyed sparkling gains on Friday.

Spread betting quotes point to the Dow Jones industrial average opening around 335 points higher at 27,509 and the S&P 500 kicking off 42 points heavier to 3,340.

The tech-heavy NASDAQ is hailing an Uber cab and zooming all the way up to 11,328 – up 415 points – after Uber Technologies Inc (NYSE:UBER) said its spell on London’s naughty step was now over.

READ Uber granted London operating licence following court ruling

Traders are counting down the hours to tomorrow evening’s first US presidential debate and trying to calculate what effect the New York Times’s revelations about President Trump’s tax returns will have on the outcome of the election.

The Teflon-president has escaped unscathed before from other potentially damaging revelations and has a habit of claiming all negative news about him is “fake news” so it is probably that his hard-core support will ignore the allegations in the New York Times.

“While the most important aspects of the debate will focus around Trump's handling of the Coronavirus and who's best to steer the economy through the recovery, the New York Times report on Donald Trump's taxes - or lack of - will undoubtedly come up. Whether Biden can fully capitalize on it is another thing, with the President likely to continue to brush it aside as fake news and reinforce his attack on fake news media,” said Craig Erlam at OANDA.

Erlam believes the debating arena “surely favours Trump” but others point to Biden’s conclusive victory in the first debate when he was President Obama’s vice-president as evidence that he is no slouch as an orator himself.

In London, the FTSE 100 has surrendered some gains but is still sitting on a handsome profit of 79 points (1.4%) at 5,922.

Bank of England deputy Dave Ramsden, speaking at the Society of Professional Economists, has poured cold water on suggestions that the central bank could opt for negative interest rates although he did not rule it out.

Ramsden said the UK economy proved more resilient during the height of the lockdown restrictions than the Bank had expected but warned that unemployment is set to rocket in the next few months.

11.20am: Sterling shoots up on hopes of Brexit deal

Despite sterling tearing up trees on foreign exchange markets on hopes of a Brexit agreement, London’s blue-chips are still feeling pretty (blue) chipper.

The FTSE 100 was up 88 points (1.5%) at 5,931, despite sterling adding more than one and a half cents against the US dollar at US$1.2900.

“Brexit talks are back on the agenda, with Michael Gove heading to Brussels for talks ahead of tomorrow’s final scheduled round of negotiations. The sterling rise seen this morning serves to highlight the hopes that we could see some form of breakthrough as we enter the final straight, with rumours of concessions on both sides serving to highlight the possibility we have turned a corner,” said IG’s Joshua Mahony.

“The hope is that Barnier and Frost will be able to progress talks enough to enter a two-week ‘tunnel’ in a bid to thrash out a deal by the 15 October deadline cited by Johnson. As things stand, markets have become accustomed to the idea that talks could fail, leaving the potential for significant sterling gains if Johnson manages to emerge with a positive deal from these late talks,” he added.

Resource stocks are not participating in London’s advance, with precious metals miner Fresnillo PLC (LON:FRES) down 1.7% at 1,166p and oil giant Royal Dutch Shell PLC (LON:RDSB) off 0.1% at 970.7p.

Among the mid-caps, bookie William Hill PLC (LON:WMH) has come down to earth with a bump after last week’s bid-fuelled rise.

The shares are down 11% at 278.9p after the William Hill board indicated it would be minded to accept an offer from Las Vegas casino operator Caesars Entertainment Inc (NASDAQ:CZR) if it was pitched at 272p a share (or more, obviously).

READ Caesars Entertainment pitches William Hill cash takeover at £2.9bn

“Although William Hill’s online proposition lags behind some of its rivals, it’s been focused on the US for some time and boasts a 29% share of the US sports betting market. Caesar’s clearly sees vast potential for online betting, given the entertainment giant’s extensive relationship with dozens of big US sports teams,” said Susannah Streeter, an analyst at Hargreaves Lansdown.

“The pandemic severely disrupted large sports fixtures, and the closure of betting shops during lockdown had a severe effect on William Hill’s revenues in the first six months of the year; however, the deal, if it’s approved, isn’t expected to close until the second half of 2021 at a time when the sporting calendar on both sides of the Atlantic is expected to be back in full swing,” she added.’

9.50am: Banks and Diageo lead the charge

Banking stocks are leading the market higher, with HSBC PLC (LON:HSBA) heading the charge.

The FTSE 100 was up 86 points (1.5%) at 5,928.

HSBC shares have received a decent boost as one of its largest shareholders Ping An raised its stake from 7.95% to 8%, pulling the shares off their 11-year London trading lows, seen at the end of last week. This has helped the rest of the sector enjoy a decent rebound, with Standard Chartered also sharply higher,” said CMC Markets’ Michael Hewson.

Not just Standard Chartered PLC (LON:STAN) – which is up 5.1% at 353.9p – but more UK-focused lenders such as Natwest Group PLC (LON:NWB) and Lloyds Banking Group PLC (LON:LLOY); the former is up 4.4% at 103.95p and the latter is up 4.3% at 25.78p, despite neither of them attracting much interest from Chinese insurance giants so far as I know.

READ HSBC surges as largest shareholder ups stake

Investors are also raising a glass to Diageo PLC (LON:DGE) after the Guinness and alcoholic spirits maker issued a trading statement ahead of its annual general meeting today.

The shares rose 6.0% to 2,672.5p after it said it had made a good start to the current financial year. The US business is performing strongly and ahead of management’s expectations.

“Their H1 FY21 sales are still expected to decline year-on-year (against a COVID-free comparison) resulting in margin dilution but management now expect an improvement in sales and profits compared to H2 FY20; due to the continued robust demand off-trade sales and a gradual reopening of the on-trade in most markets,” said Chris Beckett, the head of equity research at Quilter Cheviot.

“Due to its exposure to the hospitality industry beverages have underperformed other consumer staples during the pandemic; however, overall investors are likely to react positively to this morning’s update. Diageo now trades on a 23x calendar 2021 expected earnings, which we believe is attractive for a quality company in an advantaged category,” Beckett said.

In the unlikely event that anyone needs further evidence of how hard the hospitality industry has been hit by the pandemic, the Office for National Statistics has just provided some.

8.40am: Strong start to the week

The FTSE 100 made a strong start to the trading week, taking its cue from Asia’s main markets.

China’s corporate profitability data released over the weekend got local markets motoring.

While the world’s second-largest economy appears to be shrugging off the ill effects of coronavirus, the West seems still in its grip.

In New York, daily infections are back above 1,000, while the UK may introduce a more draconian regime to counter the worst effects of a second wave.

On the market, HSBC (LON:HSBA) was the early riser with a 10% gain. The move was prompted by a filing by biggest shareholder Ping An, which showed the insurer had increased its stake.

The vote of confidence in the Asia-focused bank followed the drop in the stock to a 25-year low amid concerns HSBC may be caught in the crossfire between the US and China.

Up 5% was Smirnoff maker Diageo (LON:DGE), which said the outlook for the year had improved since its last update, particularly in the US.

A dollop of reality was factored into the share price of bookie William Hill (LONLWMH), which fell 12% early on after a more than 40% rise on Friday after two suitors emerged from the woodwork. Ladbrokes owner GVC (LON:GVC) opened 3% lower.

Proactive news headlines

OptiBiotix Health PLC (LON:OPTI) said it has signed an exclusive distribution agreement with United Italian Trading Corporation (UITC) for its SlimBiome Medical weight management product in the Singaporean market.

Open Orphan PLC (LON:ORPH) said it has won a £4.3mln contract to carry out a viral challenge study for a top-ten global vaccine company.

ANGLE PLC (LON:AGL, OTCQX:ANPCY) said it has submitted for regulatory approval in the US its Parsortix PC1 liquid biopsy for use in women with metastatic breast cancer (MBC).

Symphony Environmental Technologies PLC (LON:SYM) said its d2w biodegradable plastic technology has been incorporated into a new 100ml security bag that will be trialled at airports in Aberdeen, Glasgow and Southampton operated by AGS Airports Ltd.

InnovaDerma PLC (LON:IDP) has appointed an exclusive distributor for North and South America while it also made its entry in the Australian market.

Fintech company [email protected] Capital PLC (LON:SYME) said demand for its services has continued to grow since it last updated the market in July.

Incanthera PLC (AQSE:INC) has received positive data from a skin sensitisation study of its Sol skin cancer technology, which demonstrate it is “non-irritant”.

e-Therapeutics PLC (LON:ETX) said it has expanded its scientific advisory board with the appointment of Bill Harte and John Mattick.

Scotgold Resources Ltd (LON:SGZ) continues to build the resource inventory at the Cononish gold and silver mine. The company has identified gold and silver anomalies to the north east of the mine that are consistent with the 'Mother Vein' structure.

NQ Minerals PLC (AQSE:NQMI)(OTCQB:NQMLF) has boosted production and processing rates at its Hellyer mine in Australia to 165 tonnes per hour. Plans are being finalised to increase production further to 180 tph, equivalent to about 1.5mln tonnes per year.

Mosman Oil and Gas Ltd (LON:MSMN) told investors that the Stanley-4 well is flowing around 155 barrels of oil per day. Oil sales from the well are due to start this week, the company noted in a statement.

Ncondezi Energy Ltd (LON:NCCL) has moved to put investors’ minds at rest over backing for the Ncondezi 300 megawatt power project in Tanzania. Lead investor CMEC has compiled a preferred list of partners who are familiar with the project and has indicated that sealing a deal with a new technology partner would take about a month to complete if required.

Instem PLC (LON:INS) has reported a strong rise in profits in the first half of its current year as the group highlighted the “resilience” of its business model during the coronavirus pandemic.

Chesnara PLC (LON:CSN) again raised its dividend as cash reserves and its solvency position were largely unchanged in the half-year to end June.

Ceres Power Holdings PLC (LON:CWR) delivered revenue growth in the year to the end of June despite the coronavirus (COVID-19) pandemic delaying some sales. The fuel cell and electrochemical technology firm said the year saw a 21% increase in revenue and other operating income to £19.9mln from £16.4mln the year before.

Bahamas Petroleum Company PLC (LON:BPC) is looking forward to a “potentially company-making” next six months. The company is counting down to the high-impact Perseverance-1 well, in the Bahamas, while a work programme in Trinidad also promises to significantly boost production volumes.

EQTEC PLC (LON:EQT) chief executive David Palumbo told investors that there’s growing awareness among potential customers of the company’s proposition. Palumbo said that 2021 is seen by EQTEC as “potentially exponential” in terms of deal closures and revenue growth.

Crossword Cybersecurity PLC (LON:CCS) has reported strong growth in orders for its Rizikon Assurance supply chain risk management platform in the first half of its current year. In its results for the six months ended June 30, the AIM-listed firm reported that orders for Rizikon Assurance were up 41% year-on-year (YOY), while recurring revenue from the firm’s consulting services had doubled over the same period compared to 2019.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) is set for a transformational year as it heads towards first sulphate of potash production from the Lake Way project in the first quarter of 2021.

Anglesey Mining PLC (LON:AYM) lost £305,000 in the year to March, up slightly from the £234,000 lost in the corresponding period a year earlier. The company ended the financial year with £95,000 in cash, although subsequent to the period end, in August, it raised £200,000 in a placing. 

Arkle Resources PLC (LON:ARK) turned in a loss of €220,000 for the six months to June 2020. The company closed out the period with €252,000 in cash. However, a further £600,000 was raised in August, covering expenses for the next 18 months.

Genedrive PLC (LON:GDR) will issue £1mln of shares to BGF Investments LP after the private equity group exercised its right to convert part of its £2.5mln loan note. The molecular diagnostics company will allot 4,478,681 new ordinary shares and pay roughly £134,000 in cash to BGF, reflecting the accrued interest owed on this tranche of the loan.

Condor Gold PLC (LON:CNR)(TSX:COG) has received gross proceeds of £62,000 after  certain warrants were exercised. It will issue 200,000 new ordinary shares at a subscription price of 31p per share. 

6.12 am: Market called higher 

The FTSE 100 looks set to open firmly on the front foot, taking its cue from Asia’s main markets which kicked off the week strongly.

Leading the pack was China, where profits from the industrial sector grew for the fourth straight month, suggesting the world’s second-largest economy is starting to shrug off the effects of coronavirus.

The People’s Republic looks like the exception rather than the rule with a spike in cases in the West prompting a second round of shutdowns.

Here in the UK, the government is reportedly mulling tighter restrictions in London and the north in a bid to slow the infection rate as the nation heads into the potentially deadly winter period.

Looking ahead, it could be a make-or-break week for presidential hopeful Joe Biden who will be hoping to stretch his narrow poll lead in the wake of the first US presidential debate on Tuesday.

“President Trump, fresh from a New York Times report that he paid a grand total of $750 in federal income tax in 2016 and 2017, has set the tone for the debate, demanding via Twitter (of course), that Sleepy Joe Biden take a drugs test before, or after the debate,” said Jeffrey Halley, senior market analyst at OANDA.  

“Cringe or clap, the first presidential debate is usually the most closely followed and will be critical for President Trump to erode Mr Biden's lead in the polls.”

Elsewhere, negotiators from the EU and UK meet this week in Brussels in a last gasp bid to hammer out a trade deal.

The two sides are meeting as the clock ticks down on when an agreement can realistically be signed off with only around a month left before the talks are effectively timed out.

With reporting season almost at an end, the week’s scheduled updates come from second-liners such as fashion group Boohoo (LON:BOO), Daily Mirror owner Reach (LON:RCH) and steak bake maker Greggs (LON:GRG).

Around the markets

  • Pound worth US$1.2771 (up 0.2%)
  • Bitcoin US$10,896.20 (up 1.20%)
  • Gold US$1,865.90 (flat)
  • Brent crude US$41.65 (down 0.41%)

6.45 am: Early Markets: Asia / Australia

Asia Pacific markets were mostly positive with Japan’s Nikkei 225 adding 0.64% and South Korea’s Kospi rising 1.48%

Mainland Chinese stocks lagged, with the Shanghai composite down 0.03% while Hong Kong’s Hang Seng index rose 0.98%.

Shares of China Evergrande Group (HKG:3333) in Hong Kong soared nearly 12% after the Chinese property developer said that its “operations remain stable and healthy while financial conditions remain sound.”

In Australia the S&P/ASX 200 remained flat as the number of new COVID-19 cases continued to decline, with just five new cases identified in Victoria and no new cases for the second day in NSW.

READ OUR ASX REPORT HERE

Proactive Australia news:

Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) has soared to a new 13-year high after forging a binding agreement with Tesla Inc (NASDAQ:TSLA) for the supply of spodumene concentrate from the company’s North Carolina deposit.

MGC Pharmaceuticals Ltd (ASX:MXC) has expanded a phase II double-blind, placebo-controlled clinical trial to evaluate the safety and efficacy of the natural anti-inflammatory formulation ArtemiC™ on patients diagnosed with COVID-19.

Fe Limited (ASX:FEL) (FRA:B4T) has appointed an experienced iron ore executive as projects director to help drive the company’s two new iron ore asset acquisitions into production.

Blue Star Helium Ltd (ASX:BNL) (OTCMKTS:AZZEF) has acquired an additional 22 new leases over 34,848 gross acres within the highly prospective Las Animas region in Colorado, USA.

Core Lithium Ltd (ASX:CXO) has received gold grades of up to 106.5 g/t and observed visible gold in rock chips at the newly defined Covidicus West prospect of the Bynoe Gold Project in the Northern Territory.

Paradigm Biopharmaceuticals Ltd (ASX:PAR) has received positive feedback from a European Medicines Agency (EMA) scientific advice meeting which provides a clear path forward to registration for Zilosul® in Europe.

Musgrave Minerals Ltd (ASX:MGV) has received further strong results for the remaining reverse circulation (RC) and diamond drill holes at the new Starlight and White Light gold discoveries at Break of Day, on the company’s flagship Cue Gold Project in Western Australia’s Murchison district.

Ciphepoint Ltd (ASX:CPT) has closed a strongly supported non-renounceable pro-rata rights issue offer which raised in excess of $1.458 million.

Latin Resources Ltd (ASX:LRS) (FRA:XL5) is making significant progress with ongoing exploration activities at gold and halloysite-kaolin projects in current Australian exploration hotspots.

Rimfire Pacific Mining NL (ASX:RIM) has received firm commitments for $2.1 million through a placement to fund ongoing exploration in the prolific Lachlan Fold Belt in central New South Wales.

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