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FTSE 100 closes lower as market indecision reigns ahead of Fed rate decision

Last updated: 17:00 17 Mar 2021 GMT, First published: 06:30 17 Mar 2021 GMT

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  • FTSE 100 closes lower

  • US stocks mixed ahead of Fed press conference

  • Vodafone lifted by towers pricing

5pm: FTSE closes in the red

FTSE 100 finished in the red midweek as markets are cautious ahead of the US Federal Reserve's press conference later.

The UK's premier share index finished down almost 41 points at 6,762. FTSE 250 dropped almost 206 points at 21,558.

Investor attention is on Fed chair Jerome Powell's comments later, as he is due to announce the Central Bank's interest rate decision, though no change to policy is expected.

"Equity markets in Europe have been quiet today as traders are content to sit on their hands ahead of the announcement. Broadly speaking, stocks are mixed, this was partially caused by a move higher in government bond yields," said David Madden, analyst at CMC Markets.

Chris Beauchamp, analyst at IG Index, said the "onus" was now on the Fed to provide clarity on what it will do next, or at least something "to appease markets that have moved towards an expectation of earlier rate forecasts".

"Some might argue that Powell has already been fairly clear on this, but markets can be very obtuse when the mood takes them, and in this clash of expectations we can usually find a good dose of volatility," he added.

4.05pm: Markets in the doldrums

A revival in the Dow Jones Industrial Average, now up 80 points or 0.25% ahead of the outcome of the latest Federal Reserve meeting, has done little to perk up UK shares.

The FTSE 100 continues to be in the doldrums, down 32.48 points or 0.48% at 6771.13. The more domestically focused FTSE 250 is also lower, down 176.02 points or 0.81% at 21,588.47.

Mining shares remain among the fallers, with Evraz PLC (LON.EVR) 24.2p or 4.31% lower at 537.6p and Anglo American PLC (LON.AAL) down 119.5p or 3.97% at 2888.5p.

The risers include BT Group PLC (LON.BT.A), up 8.7p or 6.08% at 151.9p after its EE mobile business won spectrum at the latest 5G auction. Rolls-Royce Holdings PLC (LON.RR) has accelerated 4.5p or 3.66% to 127.35p after upgrades from JP Morgan and Berenberg, while Vodafone Group PLC (LON.VOD) is up 2.7p or 2.07% to 137.3p on reports about the pricing of its mobile phone towers IPO. The business, Vantage Towers, reportedly revised the range from €24-€25 a share from the intial €22.5-€29. Even though this was at the lower end of the first estimates, Bloomberg quoted broker finnCap as saying the listing was always going to be a challenge,so this could be seen as a success.

Brent crude is down 0.94% at $67.75 a barrel after the US Energy Information Administration's weekly report showed a higher than expected increase in stockpiles of 2.4mln barrels, compared to forecasts of a 2.1mln rise.

2.46pm: WHO statement on vaccine worries

With European countries split over whether to keep using the Oxford-AstraZeneca COVID-19 vaccine after reports of blood clots in a small number of recipients, the World Health Organisation has issued a statement.

It said: "In extensive vaccination campaigns it is routine for countries to signal potential adverse events following immunization. This does not necessarily mean that the events are linked to vaccination itself, but it is good practice to investigate them."

WHO said it is carefully assessing the latest available safety data for the AstraZeneca vaccine: "Once that review is completed, WHO will immediately communicate its findings to the public.

"At this time, WHO considers that the benefits of the AstraZeneca vaccine outweigh its risks and recommends that vaccinations continue."

AstraZeneca (LON.AZN) shares are currently down 135p or 1.87% at 7097p.

The FTSE 100 is stuck around its earlier levels, down 36.02 points or 0.53% at 6767.59. Meanwhile the three main US indices are also all in the red.

2.15pm: Proactive North America headlines:

VR Resources Ltd (CVE:VRR) (OTCQB:VRRCF) (FRA:5VR) plans phase 2 drilling in June at Reveille project as it updates on first phase

American Resources Corporation (NASDAQ:AREC) moves forward with planned 2kW mobile electrolytic cell rare earth processing plant

VolitionRx Limited (NYSEAMERICAN:VNRX) says new data demonstrate Nu.Q's effectiveness in monitoring treatment of Sepsis

FansUnite Entertainment Inc (CSE:FANS) (OTCQB:FUNFF) (FRA:4UY) partners with TGS Esports for live esports tournament prediction games

KULR Technology Group Inc (OTCQB:KULR) partners with Andretti Technologies to develop thermal management tech for EV motorsports

Algernon Pharmaceuticals Inc (CSE:AGN) (OTCQB:AGNPF) (FRA:AGW) submits pre-investigational new drug meeting request with US FDA for its DMT stroke research program

FSD Pharma Inc (NASDAQ:HUGE) (CSE:HUGE) (FRA:0K9A) in license agreement with Innovet Italia to develop FDA-approved drugs to treat gastrointestinal diseases in dogs and cats

Renforth Resources Inc (CSE:RFR) (OTCPINK:RFHRF) (FRA:9RR) announces discovery of new gold zone at Parbec deposit, Quebec

Psyched Wellness Ltd (CSE:PSYC) (OTCQB:PSYCF) (FRA:5U9) submits patent application for AME-1

Ascendant Resources Inc (TSE:ASND) (OTCMKTS:ASDRF) (FRA:2D9) to start Phase 2 metallurgical test work at its Lagoa Salgada project in Portugal

Tinka Resources Limited (CVE:TK) (OTCPINK:TKRFF) (FRA:TLD) reports more strong drill results from Ayawilca in Peru ahead of updates resource estimate and PEA

Benchmark Metals Inc (CVE:BNCH) (OTCQB:CYRTF) (FRA:87CA) says AGB zone could be high-grade starter pit after latest drill results

Heritage Cannabis Holdings Corp (CSE:CANN) (OTCQX:HERTF) (FRA:2UE) closes its C$13.8M equity financing 

Victory Square Technologies  Inc (CSE:VST) (OTCMKTS:VSQTF) (FRA:6F6) plans to invest up to $5M to start commercializing ventures incubating in stealth mode

Todos Medical Ltd (OTCQB:TOMDF) says "excited about the path in front"as it continues to build into a world-class company

Canada Silver Cobalt Works  Inc (CVE:CCW) (OTCMKTS:CCWOF) (FRA:4T9B) hails 'excellent' results in bench scale tests involving Re-2Ox process 

Ximen Mining Corp (CVE:XIM) (OTCQB:XXMMF) (FRA:1XMA) completes an airborne geophysical survey of its Providence and Bud-Elk properties in British Columbia 

Vuzix Corporation (NASDAQ:VUZI) receives deployment order for its M400 Smart Glasses from a US-based Fortune 100 insurance and financial services company 

Royal Road Minerals Limited (CVE:RYR) restarts drilling program at Caribe gold project with more powerful rig 

BioPorto A/S (CPH:BIOPOR) says 2021 "will be a pivotal year" as it publishes its 2020 Annual Report 

1.43pm: Wall Street makes muted start

Wall Street has made a cautious start to Wednesday’s session as traders seem content to sit back and await the latest commentary from the Federal Reserve.

Shortly after the opening bell, the Dow Jones Industrial Average rose 0.1% to 32,864, while the S&P 500 dropped 0.45% to 3,944 and the Nasdaq slipped 1.1% to 13,319.

Investors may be treading lightly in equities amid concerns that any comments from Fed chair Jerome Powell later today could cause a shift in bond yields, the rising of which in recent weeks has pressured stocks.

Sentiment may also have been dented slightly by a 10.3% slump in US new home starts in February, according to new data, as winter storms caused the American construction sector to freeze up a little.

Back in London, the FTSE 100 had recovered some of its losses in mid-afternoon but was still down 21 points at 6,782 at around 1.45pm.

12.47pm: Banking group gets broker boost

Standard Chartered PLC (LON.STAN) is bucking the market's downward trend after analysts at HSBC raised their recommendation from buy to hold.

They said: "After a weak 2020, the stock is again one of the worst performers in our European banking universe in 2021 year to date, hurt by lower US rates, geopolitical tensions and better investment stories elsewhere. But we’re getting more optimistic on the operational outlook.

"First, the benefit of having a balance sheet geared to short rates is that most of the pain has now already been felt....Secondly, the outlook for loan growth is improving; Standard stemmed its loss of market share in mortgages in Hong Kong in 2020, where mortgage applications have picked up in recent months.

"We raise our EPS forecasts by 5.5% for 2021 and 8.4% for 2022; we make small uplifts to revenue, modest reductions to our impairment forecasts (which were already sub-consensus), and share buybacks are another factor. We now incorporate the expectation of higher rates (up to a 50bp increase) in our target price for the first time; that helps explain much of the move to 550p from 430p. But even so, we think risks are still weighted to the upside from higher rates and faster-than-expected loan growth."

Standard's shares are 10.7p or 2.18% higher at 502p.

Overall though, the FTSE 100 is still drifting lower ahead of the US Federal Reserve comments. It is currently down 34.57 points or 0.51% at 6769.04.

11.42am US markets await central bank news

Wall Street is expected to see a mixed opening after Tuesday's dip, as investors await the outcome of the latest US Federal Reserve meeting. 

There is an air of caution ahead of the Fed's announcement, with all eyes on what the central bank will say about the prospects of rising inflation. US Treasury yields have been on the rise in recent weeks on concerns that a post-pandemic economic recovery could drive up prices. The 10-year yield has climbed from 1.62% overnight to a new 13 month high of 1.65%.

Dave Madden at CMC Markets UK said: "Jerome Powell, the head of the Fed, is in a difficult spot as he doesn’t want to hike rates anytime soon but at the same time, he can’t ignore the rise in yields and the increasing chatter that higher inflation is in the pipeline. Mr Powell will probably make it clear that the Fed won’t be pushed around by the bond market and that it will stay the course with respect to its policy as its economic aims are far from being achieved."

Apart from the Fed, US housing starts are set to come in at 1.56mln in February, down from 1.58mln the previous month.

The Dow Jones Industrial Average is expected to open around 26 points higher at 32,852 but the S&P 500 and Nasdaq Composite are both indicated to open marginally lower.

Uber Technologies Inc is forecast to fall 1.8% at the start of trading after it gave 70,000 UK drivers workers benefits such as holiday pay and pensions.

Starbucks is expected to open 0.3% higher ahead of its annual meeting at 10am pacific time (5pm GMT).

Meanwhile the FTSE 100 has dipped further into the red, down 36.14 points or 0.53% at 6767.47.

11.04am: Leading shares cautious

There is a mixed picture from oil shares after the International Energy Agency said demand could exceed pre-coronavirus levels within the next two years, but added there was enough oil in tanks and under ground to keep global markets adequately supplied for now.

Brent crude is down 1.27% at $67.52 a barrel after the report and ahead of the latest EIA stockpile figures from the US. There are expectations of a 2.7m increase after last week's 13.8m surge.

So BP PLC (LON.BP)  is 0.37% or 1.15p better at 312.3p but Royal Dutch Shell PLC (LON.RDSB) has seen its B shares dip 1.11% or 16.2p to 1442.8p.

Overall the FTSE 100 seems to have settled at around early levels, down 21.75 points or 0.32% at 6781.86.

9.58am: Markets remain in the red

Leading shares continue to hover in the red, with mining and property companies among the fallers. The FTSE 100 is down 22.4 points or 0.33% at 6781.21.

Evraz PLC (LON.EVR) is down 15.6p or 2.78% at 546.2p while Anglo American PLC (LON.AAL) has lost 70.5p or 2.34% to 2937.5p. Land Securities Group PLC (LON.LAND) is 13.3p or 1.88% lower at 692.5p.

Providing some support, apart from BT Group PLC (LON.BT.A), is Rolls-Royce Holdings PLC (LON.RR). The aero engine maker, which has struggled during the pandemic as travel became practically non-existence and its airline customers were hit hard, is up 49p or 3.99% at 127.55p. It has been boosted by positive comments from analysts at JP Morgan and Berenberg.

On the FTSE 250, down 0.63% at 21,626.93, the leading faller is SSP Group PLC (LON.SSPG). The Upper Crust concession owner is down 23.2p or 6.71% at 322.6p after it unveiled a £475mln cash call.

Russ Mould, investment director at AJ Bell, said: “SSP is asking investors for more cash for the third time since the pandemic started, showing just how brutal the crisis has been for some companies.

“Business has dried up for its cafes and restaurants in airports and train stations, forcing the company to go cap in hand and ask for more funds until travellers return. It raised £216 million a year ago going into the crisis and then a further £11 million in June to offset the costs of paying a dividend.

“Now it wants £475 million to give it several options depending on how the year plays out. The cash should provide a buffer if the pandemic goes on longer than expected...

“At some point we’ll all be buying a croissant and a coffee while waiting to go on a journey; and it’s almost certainly a ‘when’ not ‘if’. SSP just cannot have full confidence in when that will be.”

8.35am: Leading shares make shaky start

Investors are keeping their powder dry ahead of the key US Federal Reserve meeting later.

The FTSE 100 is down 20.34 points or 0.3% in early trading, with housebuilders among the leading fallers.

But BT Group PLC (LON.BTA) is the biggest riser, up 4.6p or 3.21% at 147.8p after its mobile business EE won 5G spectrum in the latest auction.

Also bucking the trend is Hargreaves Lansdown PLC (LON.HL), up 39.5p or 2.55% at 1589p after it said the recent GameStop share frenzy would help its profits beat forecasts.

Overall markets will be looking out for any hawkish comments from the Fed about inflation as the US economy recovers.

David Madden at CMC Markets UK said: "The Fed meeting is likely to be the main focus of today’s session...The US central bank is operating an extremely loose monetary policy as a way of providing support to the economy. In recent weeks, we have seen evidence the country is rebounding, unemployment is falling, while services and manufacturing levels are robust. It is encouraging that the economy is turning around but the prospect of higher growth also comes with the prospect of higher inflation.

"Recently we saw the yield on the US 10-year government bond move above 1.63%, its highest level in 13 months. An increase in yields tends to forewarn an increase in interest rates, something the Fed are not planning until 2024. Last month, Jerome Powell, the Fed’s boss, cautioned that inflationary pressure is on the horizon but it shouldn’t be big enough or last long enough to justify tightening policy. Mr Powell will have to strike a balance between not seeing too concerned about higher yields but at the same time, he can’t be exceptionally dovish as that would most likely inflate stock prices even more."

Signs of an economic recovery following the pandemic should give a lift to the UK market, especially the blue chip index, according to Richard Hunter, head of markets at interactive investor,.

He said: "The UK’s premier index is receiving increasing attention as an undervalued destination. The likelihood of a surge in economic growth could be of particular benefit to mature and cyclical businesses, which are to be found in abundance in the FTSE 100. Coupled with undemanding valuations and an increase in overseas institutional interest, the FTSE 100 is potentially well positioned to build on the gains of 5.2% it has seen so far this year.” 

Proactive news headlines

DeepVerge (LON:DVRG) said initial results from phase III clinical studies of a rapid Covid breath test showed it can deliver results in under 60 seconds. 

Canadian Overseas Petroleum Limited (LON:COPL) has completed its reverse takeover of Atomic Oil and Gas. It shares have now been suspended pending a listing on the LSE’s standard market.

Supply@ME Capital PLC (LON:SYME) announced it has signed an initial agreement to buy a FinTech-powered commodities trade enabler, focused on small and medium-sized enterprises, based in Singapore.

Red Rock Resources PLC (LON:RR.) and Power Metal Resources PLC (LON:POW) said their joint venture company Red Rock Australasia Pty Ltd (RRAL) was awarded two additional licences in the Victoria Goldfields, boosting the planned IPO of the business.

Kavango Resources PLC (LON:KAV) reported encouraging initial results from airborne electromagnetic (AEM) surveys flown over its interests in the Kalahari Copper Belt (KCB) in Botswana.

MetalNRG PLC (LON:MNRG) said it raised £2.3mln via a share placing priced at 6p, with the funds to be used to develop the Gold Ridge gold project in Arizona. The new shares come with a warrant attached on a one-for-one basis.

Jersey Oil and Gas PLC (LON:JOG) has unveiled plans to raise up to £15mln through a placing and subscription to strengthen its balance sheet ahead of what it said were anticipated commercial negotiations for its Greater Buchan Area (GBA) project in the North Sea.

Thor Mining PLC (LON:THR, ASX:THR, OTCQB:THORF) confirmed that trading in its shares will begin today on the OTCQB Market in the United States.

Caledonia Mining Corporation PLC (LON:CMCL) (NYSEAMERICAN:CMCL) said it is to be included in the MVIS Global Junior Gold Miners (GDXJ) Index for the first time on March 19 following the index’s first quarter 2021 review.

Kodal Minerals PLC (LON:KOD) announced the final loan conversion under a US$1.5mln unsecured convertible loan agreement with Riverfort Global Opportunities PCC Ltd and YA II PN Ltd. The investors will convert US$200,000 (£144,160) into 168.5mln shares at a price of 0.08556 pence per share. 

Woodbois Ltd (LON:WBI) welcomed MCM Sustainable Resource SP as a 3.72% shareholder after being informed by Rhino Ventures that it has sold 60,700,000 voting ordinary shares in the company and immediately thereafter requested conversion of another 75,000,000 of its 750,000,000 non-voting ordinary shares into voting ordinary shares.

Base Resources Ltd (ASX:BSE, LON:BSE) advised that its half-year dividend for the six-month period ended 31 December 2020 of 3 Australian cents per share, unfranked, will be 1.6719p per share when denominated in sterling, based on an AUD/GBP exchange rate of 0.5573 as per the record date of Monday, 15 March. 

Genel Energy PLC (LON:GENL) announced that independent non-executive director George Rose will not be standing for re-election at the forthcoming annual general meeting, having been on the board for more than nine years. The company said the board will continue to keep its size and composition under review, including the balance between independent and non-independent directors in light of the recommendations under the UK corporate governance code.

RM Secured Direct Lending PLC's (LON:RMDL) investment manager will be holding a webinar on Tuesday 30 March at 10am, the day after the trust reports its final results. A recording of the event will be made available on the company's website afterwards.

Curtis Banks Group PLC (LON:CBP) announced that the publication of its full-year results for 2020 has been moved to Wednesday 7 April 2021 after a request from its auditor, PwC. 

Naked Wines Plc (LON:WINE) said it intends to announce a full-year trading update for the 52 weeks ended 29 March 2021, on Thursday 15 April 2021.

SourceBio International PLC (LON:SBI) notifued that it will release its full year results for the year ended 31 December 2020 on Tuesday 13 April 2021. An analyst briefing will take place remotely via video conference call that afternoon. 

6.30am: Flat open expected for FTSE 100

The FTSE 100 is expected to open relatively unchanged on Wednesday morning as traders sit on their hands ahead of the meeting of the US Federal Reserve later.

Spread-better IG expects the blue-chip index will open around 1 point lower after ending Tuesday’s session 54 points higher at 6,803.

The big question for the Fed later is likely to be bond yields, which have moved higher in recent weeks amid concerns that economic recovery spurred by the end of the coronavirus pandemic and related stimulus measures could drive up inflation.

However, some analysts have said it is unlikely the Fed will unveil any measures to reduce inflation just yet.

“A procession of Fed governors from the Chairman down, have maintained a consistent lower for longer mantra over the past weeks. Additionally, they have expressed comfort with steeper yield curves and higher inflation, the latter being a result of an economic recovery, not a wage/price spiral. Notably, they have beat the drums consistently about employment being far from target and total employment remaining massively below pre-covid levels”, said Jeffrey Halley at Oanda.

“If the Fed does not blink tonight, the markets will probably shift their expectations to the June meeting and send US bond yields higher anyway. That may lead to renewed pain in the tech space in the US and elsewhere and see the US Dollar move higher once again as the 2020 short squeeze continues”, he added.

Uncertainty ahead of the Fed also drove a mixed performance in US stocks overnight, with the Dow Jones Industrial Average closing down 0.39% at 32,825 while the S&P 500 fell 0.16% to 3,962. The Nasdaq was the positive outlier, rising 0.09% to 13,471.

The subdued feeling continued in Asia this morning, with Japan’s Nikkei 225 down 0.02% while Hong Kong’s Hang Seng fell 0.26%.

On currency markets, the pound was trading 0.01% higher against the dollar at US$1.389, although the commentary coming out of the Fed later could provide some movement catalysts.

Around the markets:

Sterling: US$1.389, up 0.01%

Brent crude: US$68.83 a barrel, up 0.64%

Gold: US$1,736 an ounce, up 0.27%

Bitcoin: US$56,148, up 4.3%

6.50am: Early Markets - Asia / Australia

Stocks in the Asia-Pacific region were lower on Wednesday as investors wait for the US Federal Reserve’s two-day policy meeting later today.

The Hang Seng index in Hong Kong fell 0.03% while the Shanghai Composite in China dipped 0.08%.

In Japan, the Nikkei 225 slipped 0.02% and South Korea’s Kospi declined 0.64%.

Shares in Australia were muted, with the S&P/ASX 200 closing 0.47% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

Calima Energy Ltd (ASX:CE1) (OTCMKTS:RLTOF) (FRA:R1Y) has received firm commitments totalling A$37 million that will part-finance the acquisition of Blackspur Oil Corp and grow oil and gas production to 5,500 barrels of oil equivalent per day (boed) by the year ending 2022.

Lake Resources NL (ASX:LKE) (OTCMKTS:LLKKF) has refreshed the pre-feasibility study (PFS) for its flagship Kachi Lithium Brine Project based on revised lithium price estimates, which demonstrates a more robust financial outcome than the original conservative PFS price assumptions.

Perpetual Resources Ltd (ASX:PEC) has completed a pre-feasibility study (PFS) that confirms Beharra Silica Sand Project as a compelling low capex and strong free cashflow project underpinned by a 64 million tonnes reserve supporting a 32-year mine life.

Creso Pharmaceuticals Ltd's (ASX:CPH) (FRA:1X8) target acquisition company Halucenex Life Sciences has appointed True North Clinical Research as principal investigator for its proposed Phase II Clinical Trial to test the efficacy of psilocybin for treatment-resistant Post Traumatic Stress Disorder (PTSD) in veterans and first responders.

Andromeda Metals Ltd (ASX:AND) has signed its first legally binding offtake agreement for the Great White Kaolin Joint Venture Project in South Australia, with highly respected Japanese porcelain manufacturer Plantan Yamada, which has factories in Japan and China.

Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has intentions to expand downstream nickel refining capacity in light of recent Ta Khoa exploration success in Vietnam and strong indicative demand for the planned downstream products.

Matador Mining Ltd’s (ASX:MZZ) mineral resource extension and geotechnical drilling at the Window Glass Hill (WGH) deposit of its Cape Ray Gold Project in Newfoundland, Canada, continues to return strong results.

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