- FTSE 100 adds 12 points
- US markets mixed ahead of Fed decision or lackthereof
- Miners fall back on China news
5.05pm: Markets stuck in a holding pattern
The FTSE 100 ended Wednesday up 12 points, 0.2%, at 7,185, while the FTSE 250 fell 14 points to 22,618.
"What little activity there has been in markets has dropped to a barely noticeable level ahead of the [US] Fed meeting, which even the legend Paul Tudor Jones has described as the ‘most crucial in [Jerome] Powell’s career," IG Chief Market Analyst Chris Beauchamp wrote.
Speaking of, the US Dow was down 21 points to 34,279 at midday, while the Nasdaq added 3 points to 14,076, and the S&P 500 shed 2 points to 4,244.
"Markets have been in deep freeze the last few days waiting for tonight’s decision, but those hoping for a misstep from the chairman will probably be disappointed – he knows where the questions will focus and will be determined not to be caught on the hop," Beauchamp wrote.
4.02pm: Renishaw rises but too late to avoid blue chip relegation
As the US Federal Reserve heads closer to the end of its two day meeting and reveals to the world its latest thoughts on inflation, there are some housing statistics to add to the pile of data the bank is considering.
US housing starts rose last month to 1.572mln units, up from 1.517mln in April but below expectations of a figure of 1.630mln. Not in itself nearly enought to turn the dial, but it adds to the picture of a growing economy.
As investors await the news from the Fed, Wall Street is struggling for direction. The Dow Jones Industrial Average is down 0.13%, the S&P 500 has dipped 0.04% while the Nasdaq Composite is up 0.15%.
In the UK, the FTSE 100 is making a late if rather unconvincing rally, up 19.28 points or 0.27% to 7191.76.
Engineer Renishaw PLC (LON:RSW) is one of the leading risers, up 2.97%. But this is far too late to save it from leaving the blue chip index at the close of play on Friday, to be replaced by broadcaster ITV PLC (LON:ITV).
Other risers include gambling group Flutter Entertainment PLC (LON:FLTR), up 3.04%. The company has announced a workforce engagement committee to "foster a meaningful dialogue" between the company and its 14,000 employees worldwide.
Property companies are also lower after the government extended a ban on evicting businesses unable to pay their rent due to the pandemic. The ban was due to expire at the end of this month but will be extended until March next year.
Good news for shops, restaurants and other businesses but not necessarily landlords. Hammerson PLC (LON:HMSO), which owns the Bullring in Birmingham, is down 4% while Land Securities PLC (LON:LAND) has dipped 0.26%.
3.20pm: Sainsbury's lifted by home working talk
Reports that home working was here to stay, with the government proposing some kind of hybrid arrangement, has given a lift to some of the supermarket groups.
With the day's main attraction - the latest pronouncements from the US Federal Reserve - not due until after the UK market closes, the FTSE 100 continues to drift. It is currently up 10.45 points at 7182.93.
3pm: Proactive North America headlines:
Sanatana Resources Inc (CVE:STA) (OTCMKTS:SADMF) reports promising results from first pass scout drill program on the Gold Rush project in Ontario
Snowline Gold Corp (CSE:SGD) (OTCPINK:SNWGF) mobilizes drill rig to Einarson and Rogue projects in preparation for a 3,000 metre program
Fidelity Minerals Corp (CVE:FMN) (FRA:S5GM) (OTCMKTS:SAIDF) unveils encouraging sampling results from Las Brujas gold property, Peru
2.40pm: Wall Street makes mixed start as Fed awaited
The main indices on Wall Street have made a mixed start to Wednesday’s session as traders awaited the latest update from the Federal Reserve.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.14% at 34,249, while the S&P 500 was flat at 4,246 and the Nasdaq climbed 0.19% to 14,098.
Investors seem unsure of which way to turn in the run up to the conclusion of the Fed’s meeting, with any commentary from chair Jerome Powell likely to push markets in one direction or another.
Back in London, the FTSE 100 has managed to push higher into late afternoon and was up 17 points at 7,189.
2.10pm: Mining fall hits FTSE 250 too
The UK market continues to be in the doldrums, with the FTSE 100 up just 4.96 points or 0.069% at 7177.44.
Mining shares continue to prove a drag following weak Chinese data.
But at least it is in positive territory.
Unlike the FTSE 250 which has dipped 0.24% to 22,577.96.
The mid-cap index is more domestically focused, unlike the FTSE 100, but this time at least there is some common ground in the miners' performance.
The biggest faller in the 250 is Blackrock World Mining Trust PLC (LON:BRWM), which is down 4.63% or 29p at 597p. This is hardly a surprise, of course, given the commodity specialist's holdings include the liks of BHP PLC (LON:BHP), Anglo American PLC (LON:AAL) and so on, which are all under pressure today.
12.22pm: Taper or no taper?
It's Fed day, and markets are in a bit of a holding pattern until the US central bank comes out with its latest views on inflation at the end of its two day meeting.
With that in mind, Wall Street is set for a rather cautious start. The Dow Jones Industrial Average is expected to open down 0.13%, the S&P 500 is forecast to dip 0.04% while the Nasdaq Composite is indicated 0.07% higher.
While economists do not expect Federal Reserve chair Jerome Powell and his cohorts to signal a change in policy today, all eyes will be on any comments suggesting it might start easing its support in the light of growing inflationary pressures.
Michael Hewson at CMC Markets said: "The Fed currently believes that the recent increase in inflationary pressures is transitory, and should fall back as the year progresses, and base effects fall away.
"There is certainly a lot of evidence to support this, however central bankers seem to be making an awful lot of assumptions which could come back and bite them if they turn out to be wrong, especially when you look at the number of companies who are passing price increases on to consumers. This is hardly transitory if the rebound in prices overshoots the falls from last year and starts to constrict consumer demand.
"With these concerns very much front of mind it would not surprise if Fed policymakers start to lay the groundwork for a taper sometime in the autumn. If done properly this need not spook the market, as it would acknowledge that the Fed has a plan in place for its reaction function as the economy improves. For now, it would appear the Fed is on autopilot through the summer, and that’s fine for now with markets appearing to be giving it the benefit of the doubt. It wouldn’t take much for this to change if the data starts to consistently surprise to the upside, in turn helping to push yields back up again."
But Sophie Griffiths at Oanda believes any suggestion of tapering could hit market sentiment immediately: "The Fed is not expected to adjust monetary policy today. However, there are growing expectations that Jerome Powell and company could start to gradually introduce the idea of reining in monetary policy. Given that the ultra-loose policy has helped drive stock markets to record highs, signs of this support being tapered back will inevitably result in a sell-off."
Back in the UK - which has seen its own inflationary pressures today with the consumer price index rising above the Bank of England's 2% target - the FTSE 100 is also looking uninspired.
It is now virtually flat, up just 0.49 points at 7172.6.
11.30am: Glencore leads the losers
The leading index is almost as lethargic as a cat in the heatwave.
It is currently up 8.93 points at 7181.41 after its earlier bright start lifted it to a new post-pandemic peak.
Mining shares continue to be a drag.
It is not just the prospect of China clamping down on metal prices. The country issued a host of economic data which, basically, missed expectations and suggested the world's second biggest economy could be slowing down.
Retail sales for May rose 12.4% but this was below forecasts of 13.6%. Industrial production rose 8.8%, again lower than the 9% expected. And investment fell short of the anticipated 16.9% growth, coming in at 15.4%.
Sophie Griffiths at Oanda said: "Miners trade under pressure after Chinese factory orders, retail sales and investment data all missed forecasts. The soft data raised questions over the economic recovery of the world's second-largest economy and largest metal consumer."
10.28am: UK house prices continue to climb - official
More UK housing market data, this time from the Land Registry rather than a mortgage lender and lagging the likes of Nationwide and Halifax.
The report shows prices across the UK jumped by 8.9% in April compared to a year ago, but this was down from the 9.9% rise seen in March and is the first time growth has slowed since July 2020.
Average house prices increased over the year in England to £268,000 (8.9%), in Wales to £185,000 (15.6%), in Scotland to £161,000 (6.3%) and in Northern Ireland to £149,000 (6.0%).
London continued to be the region with the lowest annual growth (3.3%) for the fifth consecutive month.
Nationwide has already reported a 10.9% rise in May following a 7.1% rise in April so next month's Land Registry figures could easily see a reversal of the slowdown in growth as buyers continue to try and beat the ending of the stamp duty holiday.
Meanwhile the FTSE 100 continues to flag after its bright start as inflation continues to dominate market sentiment. The leading index is currently up just 4.29 points at 7176.77 having earlier hit 7217.
9.24am: Sterling strength undermines market
One of the inflation-related factors proving a drag on the market is a strong pound.
With the prospect of rising UK interest rates if the consumer price index remains above the Bank of England's 2% target for any length of time, sterling has added 0.25% to $1.4116.
This has put pressure on some of the dollar earners in the FTSE 100, whose profits are hit by a stronger pound.
Joshua Mahony, senior market analyst at IG, said: "With the Chinese announcing that they will start to periodically release reserves of aluminium, copper, and zinc, we are seeing that the country clearly has intentions to do all it can to quell the rise in commodity prices. Perhaps predictably, mining names make up the bulk of the top FTSE 100 losers, with Glencore, Anglo American, and BHP Group all losing ground."
So overall the FTSE 100 is just about holding on to its gains, up 5.25 points or 0.07% at 7177.73.
9.05am: Pricing pressures grow as lockdown eases
It is not just the US Federal Reserve's attitude to pricing pressures which is exercising investors.
The latest UK inflation figures show the consumer price index jumping above the Bank of England's 2% target for the first time in two years.
With the cost of fuel, clothes and eating out all on the way up as the economy recovers from the pandemic, the index hit 2.1% in May. This is up from 1.5% in April and higher than the expected 1.8%.
Sam Fuller, director of Financial Markets Online, said: “Many had feared that Britain’s economic growth would push up inflation. But few predicted it would spike so far, so fast.
“The recovery has set inflation on a rampage. 2.1% doesn’t sound much but it’s triple what it was just two months ago. Such a rapid rise suggests inflation is headed for dangerous territory.
“For CPI to smash through the Bank of England’s 2% target isn’t just symbolic either. It opens the possibility of the Bank stepping in to put a lid on inflation – and the way the Bank tends to do that is by hiking interest rates, which could quickly dampen the consumer spending on which the recovery depends.
“Some of the surge in inflation can be explained away by temporary supply issues and the one-off effect of May’s big easing of lockdown restrictions.
“But nevertheless the Bank of England will be on red alert. If inflation continues to rise, the likelihood of it weighing in will increase steadily."
As markets digest the figures, some of the early gains have dissipated.
After hitting a new pandemic high of 7217, the FTSE 100 is now up just 15.11 points or 0.21% at 7187.59.
8.30am: Leading shares open higher ahead of Fed meeting
The FTSE 100 kicked off the session in positive territory, but sentiment could turn on a pinhead ahead of key comments from the US Federal Reserve later.
Keenly sought by economists and equity market professionals after the two-day policy meeting will be any guidance on future interest rates – and, by extension, the Fed’s take on inflation.
“At some point, there will need to be a signal that the currently easy monetary conditions will be scaled back,” said Richard Hunter, head of markets at Interactive Investor.
“The expectation is that the subject of tapering some of the relief has at least made its way to the table for discussion, if not immediate action.
“This will follow on from the latest set of data, showing another spike in wholesale inflation and a drop in retail sales which was more than anticipated.
"The increasing success of the vaccination programme and therefore the mobility of the population is being reflected in a move towards spending on services and away from goods, as consumers look to spend in public rather than in private.”
It has been a good week so far for investors in the managed service specialist Westminster Group, which saw its shares rise a further 10% in early trade after landing a second major contract in two days. Since Monday, the stock has advanced more than 50%.
Proactive news headlines
Technology Minerals Ltd (TM) has submitted its prospectus to the London Stock Exchange, starting the firing pistol on its imminent IPO. The prospectus was formally submitted on Monday (June 14). For more information, click here.
Zaim Credit Systems PLC (LON:ZAIM) said it has completed an equity fundraise of £1mln through a share placing in order to provide additional capital for the expansion of its loan portfolio and the development of new products.
W Resources PLC (LON:WRES) said it successfully completed the construction of a new water dam at the La Parrilla mine in Spain to resolve the issue of the high water levels. Dewatering of the mine pit is now underway and once water levels are reduced the team will be in a position to safely regain access to high-grade ore areas.
Filta Group Holdings PLC (LON:FLTA) said it is continuing to experience “an increasing level of demand” for its services across all of its markets as lockdown restrictions are eased and vaccine rollouts continue.
Ceres Power Holdings PLC (LON:CWR.L) has appointed Professor Dame Julia King, Baroness Brown of Cambridge, as an independent non-executive director effective from tomorrow.
Sirius Real Estate Limited (LON:SRE) has raised €350mln through the issue of its first corporate bond.
Braveheart Investment Group PLC (LON:BRH) has appointed Dr Qu Li as a non-executive director to the board with immediate effect. Dr Li is an entrepreneur, investor and businesswoman with over 30 years of experience in corporate mergers and acquisitions, development and restructuring, and financing and investments.
Zephyr Energy Plc (LON:ZPHR) has updated on its recently acquired interests in the Williston Basin, North Dakota, where wells are in the process of being brought online for production.
Alpha Growth PLC (LON:ALGW)(OTCQB:ALPGF) issued a clarification over its recently completed acquisitions of a Bermuda-based insurance company, which it says is not related to the similarly named Northstar Financial Services Bermuda Limited.
Inspiration Healthcare Group PLC (LON:IHC) announced that it is holding a capital markets day for investors at its factory in Croydon today and while the initial event is restricted in terms of numbers of attendees in order to comply with current Covid safety recommendations, the company hopes to hold another event later in the year for a larger number of investors and a presentation will be available on its website after the event.
Oriole Resources PLC (LON:ORR) announced that, following the latest UK Covid-19 restrictions, its annual general meeting on 23 June will now be held as a closed meeting. All shareholders are encouraged to vote using the form of proxy and to assist with voting, the company has provided a pre-recorded online presentation including a Q&A session, available at https://6ix.com/event/oriole-resources-agm/.
6.50 am: Flat start predicted
The FTSE 100 is expected to open slightly higher on Wednesday as traders await the latest decision on interest rates from the US Federal Reserve.
Spread-betters IG expect the blue-chip index to start up 8 points after ending Tuesday’s session 26 points higher at 7,172.
The latest meeting of the Fed will be eyed closely as it will include a new version of the committee’s economic projections and members’ updated forecasts for growth, inflation, and the much-watched ‘dot plot’ of forecasts for where interest rates will be at the end of this and the next few years.
Expectations of a higher start in London followed a slower session for Wall Street overnight which saw the Dow Jones Industrial Average close down 0.27% at 34,299 while the S&P 500 dropped 0.2% to 4,246 and the Nasdaq fell 0.71% to 14,072.
The picture was similarly negative in Asia this morning, with Japan’s Nikkei 225 down 0.5% while Hong Kong’s Hang Seng dropped 0.26%.
On currency markets, the pound was relatively unchanged against the dollar, up 0.02% at US$1.408, although UK inflation figures due later today could provide some catalysts for movement.
Around the markets:
Sterling: US$1.408, up 0.02%
Brent crude: US$74.58 a barrel, up 0.8%
Gold: US$1,859 an ounce, up 0.09%
Bitcoin: US$40,210, down 0.3%
6.50am: Early Markets - Asia / Australia
Stocks in the Asia-Pacific region were mostly lower on Wednesday as Japan’s exports in May rose 49.6% from a year earlier, lower than a 51.3% increase expected by economists in a Reuters poll.
The Shanghai Composite in China fell 0.77% and Hong Kong’s Hang Seng index dipped 0.30%
In Japan, the Nikkei 225 slipped 0.48% while South Korea’s Kospi rose 0.59%.
Shares in Australia fell, with the S&P/ASX 200 trading 0.03% lower after hitting an all-time high earlier in the day.
Proactive Australia news:
Horizon Minerals Ltd (ASX:HRZ) has intercepted significant gold mineralisation while drilling at its 100%-owned Binduli Gold Project, about 12 kilometres west of Kalgoorlie in the heart of the Western Australian goldfields.
Elementos Limited (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) has intersected further shallow zones of tin mineralisation in a drilling campaign designed to increase confidence in the mineral resource at the flagship Oropesa Tin Project in Spain.
Tietto Minerals Ltd (ASX:TIE) has reported further high-grade gold results from infill and extensional drilling at its Abujar-Gludehi (AG) and Abujar-Pischon-Golikro (APG) deposits, part of its 3.02 million ounces Abujar Gold Project in Côte d’Ivoire, West Africa.
Oar Resources Ltd (ASX:OAR) (FRA:F1S) has received firm commitments for a share placement to raise up to $2.3 million at a price of 1.3 cents per share.
Caspin Resources Ltd (ASX:CPN) has discovered several new platinum group element (PGE)-nickel-copper soil anomalies in areas with no previous PGE-nickel-copper exploration at its Yarawindah Brook Project in Western Australia.
Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG) has returned more strong assay results from resource definition drilling underway at the Golden Swan discovery of its Black Swan Nickel Project in Western Australia.
AuKing Mining Ltd (ASX:AKN) has had a stellar reinstatement to official quotation on the Australian Securities Exchange after completing a public share offer to raise around $7 million through the issue of 35 million shares as well as 17.5 million options exercisable at 25 cents expiring June 2023.