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FTSE 100 holds losses; US Dow drops off after positive start

London's leading index dropped 26 points to 5,943 in the late afternoon

Apple Inc. - FTSE 100 to start higher despite looming uncertainty over vaccines, stimulus and lockdowns
  • FTSE 100 index sheds 34 points
  • Brexit remains a question mark
  • US stocks fall amid continued coronavirus stimulus questions

5 pm: FTSE ends lower, US markets follows suit

The FTSE 100 ended Wednesday 34 points lower, a 0.6% drop, at 5,935.1. The FTSE 250 fared better, gaining 59 points, 0.3%, to end at 17,950.4.

"The positive move in the pound has put pressure on the FTSE 100," CMC Markets UK analst David Madden wrote. "The international nature of some of the big components in the index means that a rally in sterling tends to hurt stocks like Diageo, AstraZeneca, GlaxoSmithKline, and Burberry as they derive a relatively large amount of their revenue from overseas. The health crisis is a growing concern, and there are fears about tighter restrictions."

In the US, markets found themselves in the red at noon ET despite a promising start. 

The Dow Jones Industrial Average dropped 135 points, 0.5%, to 28,544.1; the Nadaq fell 83 points, 0.7%, to 11,780.3; and the S&P 500 lost 18 points, 0.5%, to 3,493.6.

"The lack of political progress in relation to the proposed coronavirus relief package and the setback with respect to the potential Covid-19 drugs are hanging over the markets.," Madden wrote. "A lacklustre mood is doing the rounds."

3:30 pm: Proactive North America headlines:

Mandalay Resources Corp (TSE:MND) (OTCQB:MNDJF) (FRA:R7X2) lifts full-year consolidated gold-equivalent output guidance after strong 3Q in Australia

Heritage Cannabis Holdings Corp (CSE:CANN) (OTCQX:HERTF) (FRA:2UE) appoints Umar Syed as president medical products role

ImagineAR Inc (CSE:IP) (OTCQB:IPNFF)  announces signing of reseller agreement with digital and physical sign manufacturer Sticky Media

Montoro Resources Resources Inc (CVE:IMT) (OTCMKTS:IMTFF) acquires added ground adjacent to Marathon Gold’s Valentine Lake gold property in Central Newfoundland

Viscount Mining Corp (CVE:VML) (OTCQB:VLMGF) (FRA:7VM) begins drilling at Silver Cliff property

Medallion Resources Ltd (CVE:MDL) (OTCPINK:MLLOF) narrows down search for right location for its rare earth production facility in North America

Mawson Gold Ltd (TSE:MAW) (OTCPINK:MWSNF) (FRA:MXR) joint ventures into the Whroo Goldfield in Australia

American Battery Metals Corporation (OTCQB:ABML) appoints University of San Francisco professor and former investment banker David Batstone to the board

Gevo Inc (NASDAQ:GEVO) (FRA:ZGV3) inks joint development agreement with TOTAL's polymers division to develop renewable isoamylene

Nomad Royalty Company Ltd (TSE:NSR) (FRA:IRLB) reports preliminary revenue of US$7.6M in third quarter from gold ounces sold

3.30pm: EU, UK to extend Brexit talks after October deadline

FTSE 100 held onto its losses ahead of close, dropping 26 points to 5,943.

Meanwhile, sterling had recovered from earlier dips, jumping 0.8% to US$1.3038.

The EU and UK are set to keep discussing Brexit after the mid-October deadline, Reuters reported.

The two parties are still struggling to agree on key points, while EU leaders will encourage chief negotiator Michel Barnier to intensify talks to reach a deal by December 31.

UK negotiator David Frost will also ask Prime Minister Boris Johnson if it is worth continuing negotiations and whether a deal can be reached.

EU representatives are expected to say progress in Brexit talks is “still not sufficient” at this stage.

2.45pm: Wall Street starts higher

The main Wall Street indices managed to make a positive start to Wednesday’s session as investors seemed to shrug off ongoing uncertainty to push forward with more gains.

In the first minutes of trading, the Dow Jones Industrial Average rose 0.14% to 28,721 while the S&P 500 climbed 0.09% to 3,515 and the Nasdaq was up 0.14% at 11,880.

Earnings appear to have been the main factor behind the continued optimism among traders, with earnings beats from big banks such as Goldman Sachs indicating that the economy may be in better shape than initially feared.

Some macro news may have also provided some positivity as producer prices were reported to have risen 0.4% in September, higher than the 0.3% consensus figure.

Back in London, the FTSE 100 had recovered a few points into late afternoon but was still down 13 points at 5,956 shortly before 2.45pm.

2.15pm: UK unveils coronavirus testing plan to simplify travel 

FTSE 100 dipped further in the afternoon, shedding 20 points to 5,949.

The UK has unveiled a COVID-19 testing plans to cut travel quarantine.

Transport Secretary Grant Shapps told the annual Abta travel convention that inbound visitors will have to quarantine for a week, take a test and then be released.

Shapps ruled out testing on arrival and said the assays need to be done in person.

Ryanair Holdings plc (LON:RYA) and British Airways owner International Consolidated Airlines Grp SA (LON:IAG) were flat on Wednesday afternoon at €12.33 and 97.9p respectively, while easyJet plc (LON:EZJ) advanced 2% to 496.7p.

12.45pm: Wall Street to see mixed open

FTSE 100 was firmly in the red at lunchtime, sitting 15 points underwater at 5,954.

Wall Street is expected to see a mixed open, with futures pointing at a barely red S&P500 and the Dow Jones called a few points higher.

Investors are weighting up the stimulus talks and the halts to COVID-19 trials by J&J and Eli Lilly, though markets are getting used to the ups and downs of pharma development.

However, Washington is still stalled over the stimulus package as both sides are not getting closer to an agreement.

“I struggle to see these differences being overcome before the election, the only comfort being that the Democrats are in a good position for a clean sweep, meaning any package could be larger again. But at what cost in the interim,” said Craig Erlam, analyst at OANDA Europe.

“Investor sentiment is proving very resilient against this backdrop, perhaps driven by an unwavering belief that the next month could deliver a stimulus package, Covid vaccine, a relatively peaceful election result and a Brexit deal.”

“That looks optimistic at the moment but equally, all of those individual outcomes are probably more likely that the alternative at this point. Some may take a little longer but all look likely.”

On the US agenda Goldman Sachs, Wells Fargo and Bank of America are scheduled to report today, after peer JP Morgan posted results suggesting it may be more optimistic about the economy than analysts anticipated.

12:30pm: IG mulls whether FTSE 100 faces deeper slide

“It certainly looks like the FTSE 100 is engaging in a replay of previous lower highs in its current downtrend from the June highs,”  

“The price slipped yesterday and has moved below the 50-day MA (5,991) today.

“For now it holds rising trendline support from the September low, but a drop below 5,930 would likely signal the start of a deeper pullback that brings 5800 into view.

“A rally above 6,040 negates this bullish view.”

11.50am: EU to say Brexit talks not enough to reach deal

The Footsie dipped in the red before lunch, sliding 10 points to 5,959.

EU representatives are expected to say progress in Brexit talks is “still not sufficient” to reach an agreement, according to Reuters.

Negotiations are underway this week, where 27 EU leaders will agree on stepping up contingency plans in case of a no-deal situation.

Chief negotiator Michel Barnier will be encouraged to intensify talks to reach a deal by December 31.

“There is a feeling that something has to give, and with this critical summit ahead of us, today could provide fireworks if both sides decide to finally cede ground in a bid to start the sprint towards the finish line,” commented Joshua Mahony, analyst at IG.

“With the pound on the slump, the big question is where now for the UK economy. The lack of any major progress in Brexit talks, coupled with a rise in unemployment, do little to inspire confidence going forward.”

10.45am: Eli Lilly pauses COVID-19 treatment trials

The Footsie trimmed its gains in late morning, adding 26 points to 5,996.

UK stocks remained unphased after Wall Street stocks fell overnight following Eli Lilly’s halt to the trial of its combination antibody treatment for COVID-19.

The pharma developer did not specify why it took this decision but said it was due to safety reasons after being advised by the Data Safety Monitoring Board (DSMB).

“Lilly is supportive of the decision by the independent DSMB to cautiously ensure the safety of the patients participating in this study,” the firm said.

The candidate combines two engineered antibodies to treat patients with severe symptoms.

The news came a day after Johnson & Johnson (NYSE:JNJ) paused dosing in all its COVID-19 vaccine candidate clinical trials after an unexplained illness in a study participant.

“Markets don’t like too much negative headlines, but these sorts of bumps are to be expected along the road to a vaccine, particularly given the sheer pace of development,” Neil Wilson at Markets.com said.

10:00am: GBP/USD decline could see bears come back into play

“GBP/USD has been on the slide since Monday's peak, with the pair heading back towards the key $1.2845 support level today,” said IG analyst Joshua Mahony.

“The short-term uptrend seen throughout the three weeks to Monday looks to possibly come to an end should the price fall below the $1.2845 level.

“As such, there is still a chance of a bullish continuation of that trend, but this decline is increasingly likely to end that bullish bias. With that in mind, watch for a break below $1.2845 to bring a more bearish outlook for the pair.”

9.45am: Just Eat top riser after order growth boost

FTSE 100 continued its ascend in mid-morning as it continued to ignore the talks on a potential nationwide lockdown and the upcoming Brexit talks.

London’s leading index advanced 36 points to 6,005 while sterling shed 0.3% to US$1.2893 as the EU trade talk deadline comes closer.

“The currency is likely to remain volatile as the market is still in the dark as to what is really going on with the negotiations,” noted Russ Mould, investment director at AJ Bell.

The Footsie was powered by pharma, consumer goods and mining companies. “All these stocks are big dollar earners and they benefit from renewed weakness in the pound,” Mould continued.

Just Eat Takeaway.com NV (LON:JET) was the top blue-chip riser, advancing 6% to 9,395.18p after boasting strong quarterly numbers.

Orders climbed 46% to 151.4mln thanks to new restaurant partnerships, including a deal covering 800 McDonald’s restaurants and 300 Greggs locations in the UK.

After shareholders approved the acquisition of Grubhub earlier this month, the transaction is anticipated to complete in the first half of next year, making it the world's largest online food delivery company outside of China.

8.55am: Footsie manages to advance

The FTSE 100 started Wednesday on the front foot, apparently oblivious to the wider global trends and national political chaos.

The index of UK blue-chips opened 18 points higher at 5,987.60.

Wall Street offered little in the way of encouragement overnight after a lacklustre session; the performance of Asia’s main markets was similarly muted; and Apple’s iPhone 12 and HomePod Mini launches, meanwhile, underwhelmed.

Closer to home, it emerged that UK prime minister Boris Johnson could pull the trigger on a ‘circuit-breaker’ two-week lockdown to put a cap on infection rates in a tacit admission that scientific advisers at Sage and opposition leader, Sir Keir Starmer, may have a point.

On the market, it was a busy day for corporate news with updates from ASOS (LON:ASC), Barratt (LON:BDEV), JustEat (LON:JET) and Pearson (LON:PSON).

A strong rise in revenues and customers numbers were seen as a cue to book further profits on shares in the online fashion retailer ASOS, which have more than quadrupled in value since their lockdown nadir. They fell 5.8%.

“ASOS has performed well in 2020 thanks to the pandemic,” said David Madden, of CMC Markets, providing his comments on the company’s prelims. “The lockdowns had a painful impact on traditional retailers but in turn it channelled more business towards e-commerce companies.”

Another online giant benefiting from this switch to digital was Just Eat, which topped the Footsie with a 5.5% gain as the pandemic boom in takeaways continued.

Builder Barratt, meanwhile, was static after its market update, while Pearson (LON:PSON) delivered what was a fairly depressing assessment of the last nine months of trading.

However, shares in the educational publisher jumped 4% as rising digital sales surprised on the upside.

Proactive news headlines:

Touchstone Exploration Inc (LON:TXP, TSE:TXP) has announced a significant gas discovery at the Chinook-1 exploration well in Trinidad. Chinook-1 was drilled down to 10,039 feet and has encountered some 589 feet of net gas pay across three sections in the Herrara sands, and also saw 20 feet separately in the shallower Cruse formation, the group said. The well was a follow up to the successful Cascadura gas discovery well, testing a separate structural formation to the south. It is planned that Chinook-1 will be tested and completed for production during the first quarter of 2021.

Mosman Oil and Gas Limited (LON:MSMN) has told investors that the Falcon-1 well at the Champion project in Texas has now successfully reached target depth and has confirmed the pre-drill geological model. The next step will be to complete wireline logging. The company said it intends to provide more well results once the logs have been evaluated. Nonetheless, it also said that results seen to date have led to an expectation that Falcon-1 will be completed as a production well.

Kromek Group PLC (LON:KMK) said it has started development of a new system to improve pathological medical imaging techniques used during cancer surgery to distinguish between healthy and non-healthy tissue. The detection technology specialist said the three-year project, which has received a grant from Innovate UK and is being conducted in partnership with medical imaging firm Adaptix and the University of Manchester, is aiming to develop a prototype of a new type of pathology cabinet, based on Kromek's CZT detectors and Adaptix's Flat Panel X-Ray Source technology.

Applied Graphene Materials PLC (LON:AGM) has reported “excellent commercial progress” in its full-year results, noting that its development pipeline is continuing to grow despite delays caused by the coronavirus pandemic. In its figures for the year ended July 31, 2020, the AIM-listed firm reported an underlying (EBITDA) loss of £3.08mln, narrowed from a £4.56mln loss in the previous year, while revenues climbed to £0.08mln from £0.05mln. Looking ahead, the company said it remains in “good shape to build on its revenue plan”, with cash in the bank of £3.68mln and an “increasing number of customer products coming to market”.

Angling Direct PLC (LON:ANG) reported a profit surge in its first half as the fishing tackle retailer highlighted “considerable resilience” in its trading performance for the period. For the six months ended July 31, 2020, the company posted a pre-tax profit of £1.4mln, up from £0.4mln in the prior year, while revenues jumped 21% to £32.1mln. The group also said sales across all of its channels from June 15, the date its stores re-opened following lockdown, to the end of the period were up 95%.

Directa Plus PLC (LON:DCTA) said its oil spill clean-up business Setcar has seen significantly improved results this year so far. The graphene specialist said 51%-owned Setcar’s revenue had risen to €3mln from €2.6mln in the period January 1 to October 1, 2020, despite coronavirus (COVID-19 headwinds. Over that period, Setcar had won 132 new contracts and been awarded 32 out of 77 tenders, Directa noted. Setcar’s contracted orders are now expected to generate revenue of €4mln during 2021 and €3mln during 2022.

KR1 PLC (LON:KR1) said it has sold 202,297 tokens in the Polkadot project at an average price of US$5.12 each, netting the company proceeds of around US$1.03mln. The digital asset investment firm said the partial exit represents only a small part of its position in Polkadot and that it is actively staking a “significant majority” of the holding to generate recurring revenue. The company said it now holds around 3.56mln Polkadot tokens.

VietNam Holding Limited (LON:VNH) saw its net asset value (NAV) rise by 4% in September helped by increased exposure to the country’s banking sector, the fund’s manager Dynam Capital said. In its monthly update, Dynam noted that the benchmark VNAS Index performed well in September, rising 4.4% for the month, driven mainly by banks, food & beverage (F&B) and industrial goods. Most of the listed banks achieved above market-expectation earnings for the third quarter, Dynam said, and F&B companies (VNM, SAB) are also likely to release surprise earnings growth considering the notable domestic retail sales increases.

Anglo Asian Mining PLC (LON:AAZ) has confirmed a significant improvement in production during the third quarter, with gold equivalent ounces (GEO) up 25% on the tally for the preceding three months. The Azerbaijan based miner said it produced 18,451 GEO in the three months ended September 30, 2020, versus 14,819 GEO in the second quarter of the year. It saw production for the first nine months of the year reach 50,702 GEO, against 60,122 GEO in the comparative period of 2019.

Union Jack Oil PLC (LON:UJO) has agreed to acquire an additional 30% interest in the North Kelsey project, taking its stake in the exploration project to 50%. It is acquiring the stake from Egdon Resources with a £100,000 payment in cash. Additionally, the deal includes an agreement to cancel the disproportionate funding obligation attached to Union Jack’s original 20% interest in North Kelsey, stipulated in a prior farm-in deal between the two UK oil firms. All further financial obligations at North Kelsey will be carried equally, in line with their respective 50% stakes in the project.

SIMEC Atlantis Limited (LON:SAE), the global developer, owner and operator of sustainable energy projects has announced the appointment of its former CFO Duncan Black as a non-executive director (NED), with immediate effect, and the appointment of Stephen Hodges as Special Adviser to the group's board. The company noted that Black brings to the group a wealth of experience in leading investment groups, advisory firms and power companies within the UK, Asia and Australia. He has formerly held the positions of Co-Head, Infrastructure Investment, at Eastspring Investments (part of Prudential PLC), Asia Head of Acquisitions at Deutsche Asset Management, CFO of CLP Holdings' Australian electricity and gas utility business, EnergyAustralia, and Head of Finance and Development at InterGen in Asia Pacific. SIMEC Atlantis pointed out that Hodges is a waste sector specialist who most recently held the position of Director of Engineering at Viridor Waste Management Ltd.

Savannah Resources PLC (LON:SAV) has announced the appointment of Farview Solutions as Strategic Adviser to help guide the development path for the Mutamba Mineral Sands Project in Mozambique and recommend associated strategic opportunities for the company. The resource development company pointed out that Farview Solutions provide strategic advice and advisory services to the mineral sands, titanium pigment and industrial minerals industries. Bruce Griffin, the owner of Farview Solutions, will be primarily responsible for advising Savannah in relation to Mutamba. In a statement, David Archer, Savannah's CEO commented: “Mutamba is one of the largest undeveloped mineral sands deposits in the world and Bruce will help Savannah define the best value-adding development, commercial and corporate paths, both to help unlock the value of the Project and to sequence it into playing a major role in the production of titanium feedstocks for international industry."

4D pharma plc (LON:DDDD) said it has accepted an invitation to present data at a leading cancer conference. The company has been given three poster slots at the Society for Immunotherapy of Cancer  (SITC) next month that will focus on clinical trials of its promising single-strain live biotherapeutic, MRx0518. The first poster will describe initial immune modulation and safety data from the neoadjuvant monotherapy trial in patients awaiting surgery for solid tumours. A neoadjuvant is a drug given as a first step to shrink a tumour before surgery. Two further posters will provide details of MRx0518 in combination with an existing cancer drug called Keytruda.

SkinBioTherapeutics PLC (LON:SBTX) has raised £4mln from existing and new institutions that will help fund work on new product applications for its technology and will also be used to expand its research and development capabilities. Up to a further £500,000 could be banked from an open offer of stock to current shareholders not involved in the placing. The proceeds of the fundraisers will be deployed to explore other uses for SkinBiotix - which harnesses the power of the microbiome found on the skin – in oral and hair indications.

APQ Global Limited (LON:APQ), an emerging markets growth company based in Guernsey, has announced that, at its annual general meeting held on Tuesday, October 13, 2020, all resolutions were duly passed.

Amryt Pharma PLC (NASDAQ:AMYT) (LON:AMYT), a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases, has said it will issue its unaudited financial results for the third quarter ended September 30, 2020, on November 5, 2020, at 12.00pm GMT / 7.00am ET. Amryt will host a conference call and webcast for analysts and investors on November 5 at 2.30pm GMT / 9.30am ET via Webcast Player URL: https://edge.media-server.com/mmc/p/dor9m4ay

6.45am: Positive start predicted 

The FTSE 100 is expected to begin Wednesday’s session in positive territory as traders look to recover some losses despite a continued sense of uncertainty around multiple factors relating to the coronavirus and the economy.

Spread-better IG expects the FTSE 100 to open up around 23 points after closing around 32 points lower on Tuesday.

However, expectations for a positive start are being overshadowed by looming uncertainties across a whole range of areas, with vaccine trial delays and fading hopes of a new US stimulus package knocking markets yesterday.

Wall Street finished firmly in the red overnight, with the Dow Jones Industrials Average closing down 0.55% at 28,679 while the S&P 500 dropped 0.63% to 3,511 and the Nasdaq Composite fell 0.1% to 11,863.

The tech-heavy Nasdaq may have also been weighed down by shares in Apple Inc (NASDAQ:AAPL) after an iPhone launch event yesterday seemed to have left many investors feeling underwhelmed.

The picture was more mixed in Asia earlier today, with Japan’s Nikkei 225 up 0.02% while Hong Kong’s Hang Seng fell 0.08%.

Back in the UK, uncertainty around the new lockdown restrictions is on the rise as dissenting voices across the political spectrum have criticised the government’s new three-tier lockdown system, although there is little idea of how to proceed, with the prospect of a two-week ‘circuit breaker’ of heavy lockdown measures likely to hit the travel and hospitality sectors once again.

Brexit is also likely to make a reappearance in trader’s minds as the ‘cliff edge’ to secure a trade deal with the EU edged ever closer.

This combination of uncertainty seemed to have weighed on the pound, which was 0.18% lower at US$1.291 against the dollar on Wednesday morning.

Around the markets:

  • Sterling: US$1.291, down 0.18%
  • Brent crude: US$41.31 a barrel, down 0.33%
  • Gold: US$1,894 an ounce, up 0.08%
  • Bitcoin: US$11,407, down 0.73%

6.45am: Early Markets - Asia/Australia

Stocks in the Asia-Pacific region were mostly lower on Wednesday with the Shanghai Composite down about 0.73% while Hong Kong’s Hang Seng index dipped 0.24%.

Singapore’s Straits Times index slipped 0.62% after official estimates showed the country’s economy contracted 7% in the third quarter as compared to a year ago.

In Japan, the Nikkei 225 skipped the overall trend among the region’s major markets with a small 0.04% gain, while South Korea’s Kospi declined 0.89%.

Australia’s S&P/ASX 200 closed 0.27% lower, ending its seven-session winning streak after a coronavirus (COVID-19) vaccine setback rattled Wall Street overnight.

READ OUR ASX REPORT HERE

Proactive Australia news:

MGC Pharmaceuticals Ltd (ASX:MXC) has received positive results from a pre-clinical in vivo safety and toxicity study, including histology testing, of ArtemiCTM on rats with no pathological changes or differences between the study groups reported.

Boadicea Resources Ltd (ASX:BOA) shareholders approved the asset sale of nine tenements in the Fraser Range to IGO Ltd (ASX:IGO) at today’s general meeting.

Brookside Energy Ltd’s (ASX:BRK) Orion Project Joint Venture with Stonehorse Energy Limited (ASX:SHE) has executed a purchase and sale agreement for its third producing property acquisition, the Thelma 1-32 well, including the associated 40 HBP acres and existing infrastructure.

Blackstone Minerals Ltd (ASX:BSX) (FRA:B9S) has completed a positive scoping study which paves the way for continued progress with the development and restart of the Ta Khoa Nickel-Copper-PGE Project in Vietnam.

YPB Group Ltd (ASX:YPB) has secured a Master Service Agreement (MSA) with a third channel partner in Thailand, Jirawattano Co Ltd, offering the company immediate access to a broad range of consumer goods industries that produce high-volume products.

Creso Pharma Ltd (ASX:CPH) welcomes recent Israeli Medical Cannabis Agency (IMCA) data that highlights a significant recent increase in medicinal cannabis uptake from patients in the country.

Macarthur Minerals Ltd (ASX:MIO) (CVE:MMS) (OTCMKTS:MMSDF) has strengthened its balance sheet through a private placement raising almost A$6.25 million and a A$20 million standby equity finance facility secured under a Controlled Placement Agreement.

Emyria Ltd (ASX:EMD), formerly known as Emerald Clinics Limited, is uniquely positioned to play a leading role in a new-look healthcare industry, which has changed forever with the global COVID-19 pandemic.

Nelson Resources Ltd (ASX:NES) has its sights set on discovering the next Tropicana-style deposit as it ticks off several successes during the 2020 financial year despite a challenging 6-12 months due to COVID-19.

BlackEarth Minerals NL (ASX:BEM) is well funded to complete a feasibility study for its Maniry Graphite Project in Madagascar as well as exploration activities at the Donnelly River nickel-copper-PGE prospect in Western Australia.

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