FTSE 100 closes 165pts higher
Wall Street starts Thursday strongly
UK Services PMI misses March expectations
BT Group and Vodafone land 5G bandwidth, shares rise
Rank Group issues profit warning as both bingo and casino revenue slides
FTSE 100 joined global equities to close firmly higher on Thursday as the pound weakened and China, US trade war worries eased.
The UK bluechip-benchmark closed over 165 points higher at 7,199, while the FTSE 250 added over 311 points at 19,576.
"Markets across the globe continued to bounce back as optimism increases that the US and China are willing to work towards avoiding an all-out trade war," said Fiona Cincotta, senior market analyst at City Index.
Sterling though lost 0.22% to 1.1439 against the Euro, and 0.58% against the US dollar.
"The pound sunk against the dollar after news that service sector activity grew at the slowest level since Brexit weighed on sentiment.
"Snow disruptions negatively impacted an already struggling sector and the fear now is that any thoughts of a May rate rise from the Bank of England could be firmly pushed back to the Autumn," said Cincotta, who added traders would now look towards the US non-farm payroll figures for further clues on direction.
3:15pm: FTSE 100 continues to rise ahead of Thursday’s close
The FTSE 100 added to the earlier gains through the afternoon’s trading, helped by Wall Street’s strong start to the session.
Standing at 7,164 the index of London’s top 100 stocks was up 130 points or 1.84% for the day. At the same time, the FTSE 250 had gained 268 points or 1.4% to 19,532.
Dow Jones shares rallied 206 points or 0.85% to 24,471 in New York’s early trades, while the S&P 500 and Nasdaq climbed 0.43% and 1.85% respectively.
3:00pm: Investors ploughed US$1bn into gold ETFs in March
Amid March’s market volatility saw more than US$1bn added to gold backed ETF funds during the month, that’s according to the World Gold Council.
Gold-backed ETFs collectively held US$102.8bn of gold, or 2,415 tonnes of physical gold.
The Gold Council, in a note, said that the inflows were dominated by North American funds, adding US$917mln, while US$141mln was invested by Asian funds.
“Gold’s price performance and volatility were driven by global trade tensions, a weaker US dollar, and weak stock market performance. As stock markets tumbled, investors moved into bonds and gold,” it said in a note.
On Thursday, the price of gold was down 0.4% changing hands at US$1,327.
1:30pm: FTSE 100 rises further as Wall Street futures point higher
The FTSE 100 strengthened further into Thursday afternoon’s deals, with the index up 112 points or 1.6% changing hands at 7,148.
It comes as Wall Street premarket dealing suggests that American traders will pick up where they left off on Wednesday.
Dow Jones futures pointed to a near 100 point rise at the open, while the S&P 500 and Nasdaq are also expected to make a positive start.
12:01pm: FTSE 100 keeps hold of morning’s gains despite worrying stats for UK economy
The FTSE 100 continued to look northwards heading into Thursday lunch, up 85 points or 1.2% changing hands at 7,119.
Investors are weighing the apparent macro-market positives, or at least the improved perceptions and sentiments, with the domestic concern evident in the expectation missing service PMI number which earlier today missed expectations.
“Whilst the number is no doubt a disappointment, there are some mitigating circumstances to consider, with the weather an obvious place to start,” said David Cheetham, chief market analyst at broker XTB.
“The snowfall seen in March no doubt had some negative impact on retail and other parts of the sector but it alone is unlikely to account for the entire decline.
“Broader concerns are the clear impact of a weaker pound and above target inflation which has seen cost pressures remain strong and the survey also revealed that employment intentions and new orders were weak.”
Cheetham, however, added that the services PMI mark would likely have limited impact on Bank of England policy makers, who are widely expected to raise interest rates at their next meeting in May.
“Firstly, the data itself remains fairly comfortably above the 50 mark that denotes the line between contraction and expansion and therefore suggests continued expansion, and perhaps even more importantly, economic activity isn’t the main driving force for the BoE at present,” he added.
As the FTSE 100 held most of the morning’s gains, the more domestically exposed FTSE 250 was also quite healthy - up 198 points or 1.03% at 19,463.
Setting aside the domestics, traders will shortly look to the United States for the next instalments in the ‘Trump trade war’ soap opera.
10:15am: FTSE 100 stays strong, shrugs off weak UK economy stats for snowy March
Such are the macro-market forces beneath the FTSE 100 the benchmark is evidently shrugging off a big miss in key monthly economic stats – albeit, the meteorological factors were unlikely to be a surprise given that most of us were snowed in at one time or another in March.
Nonetheless, it was the worst month recorded for US services PMI since the Brexit vote.
The index of London’s top 100 shares was up 85 points or 1.22% changing hands at 7,119.
At the same time, however, the more domestically exposed FTSE 250 was trading up 156 points or 0.8% at 19,420.
10:00am: Services PMI says March was worst month for UK economy since Brexit vote
The latest monthly statistics measuring changes in services sector activity, UK services PMI, has fallen way short of expectations.
For the month of March, the Markit services purchasing managers index (PMI) marked 51.7 which is below both the forecast of 54 points and February’s 54.5 reading. Notably, it was the worse month since the Brexit vote.
Service PMI miss...let's blame the weather— Neil Wilson (@marketsneil) April 5, 2018
Referencing the abnormal extreme weather, Markit chief economist Chris Williamson said the UK economy had “iced up” in March. He added that, according to the PMI survey signals, the UK GDP growth rate may be seen at just under 0.3%, down from 0.4% in the preceding quarter.
“With parts of the country hit by some of the heaviest snowfall in years, it was not surprising to see UK business activity disrupted in March,” said Chris Williamson, Markit chief business economist.
He added: “Bad weather curbed business activity growth in March, leading to the weakest expansions of output and new orders for 20 months.
“Jobs growth also slipped to a one-year low. However, while some rebound is expected in April amid better weather, a deterioration in business expectations suggests the underlying trend remains one of weak growth compared to that seen late last year.
“Price pressures meanwhile remained stubbornly high as input cost inflation picked up again.”
9:45am: FTSE 100 continues advance as markets find comfort amid US vs China trade spat
The FTSE 100 continued its advance as Thursday morning progressed, with the benchmark rising 90 points or 1.28% to trade at 7,124.
Plainly, sentiments are somewhat sunnier today.
Investors in Royal Bank of Scotland Group Plc (LON:RBS) were evidently unmoved by Moody’s downgrade to certain credit ratings (whilst affirming others), as the British bank’s shares were moving with the sector – up 4.1p or 1.59% to 261.6p.
Vodafone secured 50 Mhz of spectrum in the Ofcom auction, for a cost of £378.2mln, whereas BT’s EE network landed 40 Mhz at a costs of £302.6mln. Elsewhere, Hutchinson and Telefonica UK (the companies behind Three and O2, respectively) also secured 5G bandwidth on broadly similar terms.
The FTSE’s mining majors were rebounding from Wednesday’s trauma, as the global trade fears subsided somewhat.
Meanwhile, as the Brent crude price notched slightly higher, back above US$68, integrated oil majors Royal Dutch Shell Plc (LON:RDSB) and BP Plc (LON:BP) were both on the front foot – up 1.6% and 1.29%, trading at 2,318p and 488p respectively.
Elsewhere, UK bingo hall and casino operator Rank Group Plc (LON:RNK) saw its shares slide around 14% in Thursday’s early deals, to trade at 183p, after it revealed a drop in revenue and cautioned over full year profit.
8:30am: FTSE 100 rallies more than 1% as market fears over US-China trade war ease
London’s FTSE 100 was up 81 points or 1.15% after Thursday’s early deals, changing hands at 7,114.
As expected, traders made the most the newfound positive sentiments in the wake of Wall Street’s dramatic recovery – driven, in part, by comments for senior US economists suggesting that public rhetoric may be part of negotiation tactics and that the threats of tariffs on agricultural and industrial products may not materialise.
“I still believe that the world’s two largest economies will find a middle ground,” said Hussein Sayed, FXTM chief market strategist.
“Although China may feel more pain if tariffs are to be applied, Trump’s political base will be severely damaged if Beijing imposed 25% tariffs on soybeans.
“Farmers gave Trump their votes, and he cannot pay them back by hitting their biggest importer.”
Proactive news headlines:
Jubilee Metals Group PLC (LON:JLP) and its partner BMR Group PLC (LON:BMR) have had their licence at the Kabwe project in Zambia restored, paving the way for development work to start. Conditions attached to the licence reinstatement are that construction of the processing plant starts within 3 months, it is commissioned by 30 September and first production is achieved by end 2018.
ANGLE PLC (LON:AGL) said the first patient has been enrolled in a clinical trial to support Federal Drug Administration (FDA) clearance of its Parsortix system. The AIM-listed biopsy company said the patient had been enrolled in its ANG-002 clinical study for metastatic breast cancer, with the company aiming to be the first ever to receive FDA Class II clearance for a product harvesting intact circulating tumour cells (CTCs) from patient blood for analysis.
88 Energy Ltd (LON:88E, ASX:88E) has informed investors of the death of Paul Basinski, who was the founder of joint venture partner Burgundy Xploration. Basinski was a storied frontier exploration geologist who was credited as one of the first to identify the potential of the Eagle Ford shale play, in Texas, which ultimately became one of the main sources of the US shale boom.
W Resources PLC has raised £1.5mln, before expenses, via a placing of 300,000,000 ordinary shares at a price of 0.5p each to new and existing shareholders accelerate development on its Portuguese projects. The AIM-listed firm said the placing comes following the US$35mln BlackRock loan deal, announced in February.
ITM Power plc (LON:ITM) has announced the award of a grant from the Massachusetts Clean Energy Center (MassCEC) to undertake a multi-MW Power-to-Gas (P2G) feasibility study for the US start, The AIM-listed energy storage and clean fuel company said the study will assess the potential for P2G energy storage and hydrogen fuel for the Massachusetts region in collaboration with Holyoke Gas and Electric (HG&E), a local gas and electricity utility.
Blockchain and ICO consultant Coinsilium Group Limited (LON:COIN) has been signed up to help with Gibraltar-registered virtual healthcare platform TrustedHealth’s token sale. TrustedHealth is setting up a network to allow patients to virtual consultations with specialists in diseases such as brain and lung cancer. Payments will be with TDH tokens carried on the Ethereum blockchain.
Live Company Group Plc (LON:LVCG) said a second permanent BRICKLIVE centre, based around fun with LEGO bricks, is to open in China. Brick Live Centre Education Development (Beijing) Limited, a joint venture of which Live Company (LVCG) is a member, has agreed to open a BRICKLIVE centre in Shanghai in the autumn of this year.
Gfinity Plc (LON:GFIN) said it is continuing its relationship with motor racing giant Formula 1 as it announced season two of its F1 esports series.The AIM-listed esports broadcaster said Formula 1 would be events partner for season two of the series, which uses the FIA Formula One World Championship game published by Codemasters, that is due to start on 13 April 2018.
FairFX Group Plc (LON:FFX) has started to issue its own Mastercard branded cards alongside an online loan service for business customers. The e-bank said having the ability to issue its own cards is cheaper and will enhance its whole product suite.
Hot on the heels of its announcement of contract wins earlier this week, Corero Network Security PLC (LON:CNS) is to raise £4mln in fresh capital, paving the way for a new £3mln debt facility to be agreed.
KEFI Minerals plc (LON:KEFI), in its quarterly operations update, told investors that it expects the strong support for the Tulu Kapi gold project will be reinforced by the Kenyan government following the appointment of Dr Abiy Ahmed as the country’s new prime minister earlier this week. Abiy Ahmed was previously vice president of the regional government for Oromia, where Tulu Kapi is located.
Savannah Resources Plc (LON:SAV) has revealed what are described as “excellent” results from exploratory drilling at Mina do Barroso lithium project in Portugal. A new area of high grade lithium mineralisation has been discovered at the site. This zone, referred to as ‘Grandao Extended’ was unearthed through drilling to the west and southwest of the main Grandao deposit.
Harvest Minerals Limited (LON:HMI), the AIM-listed natural fertiliser producer, said a video providing an overview of its Arapua Fertiliser Project, Brazil, and the work currently being conducted on site is now available to view on the company's website.
6:50am: FTSE 100 set for strong start after Wall Street equity fight-back
Investors will be celebrating the market’s bounce-back-ability on Thursday, as London’s FTSE 100 is set to make a strong start to trading.
US markets turned around dramatically late in Wednesday’s volatile session which saw the Dow Jones swing more than 700 points – opening down about 500 points before closing up 230, 0.96%, at 24,264.
The S&P 500 ended some 1.16% higher at 2,644 and the Nasdaq marked a 1.45% rise by the close of play.
Wednesday’s shock revival came four days later than Easter Sunday. It was apparently coincided with reports that President Trump was willing to be more flexible on trade, albeit in regards to the North American Free Trade Agreements (NAFTA) rather than China.
Evidently, market sentiment was suitably buoyed though agriculture stocks, which would be the victims of the tariffs threatened by China, remained on the back foot.
“Investors showed remarkable levels of optimism given the escalation of tension from China regarding the trade war in the previous session,” said Jasper Lawler, analyst at London Capital Group.
“The markets clearly believe right now that China’s tit for tat response will act as a deterrent for Trump, with both parties expected to focus on how to row back with the least friction possible, as time still exists to de-escalate the tensions before tariffs are due to come into force.”
He added: “However, a reality still exists that Trump could be infuriated with China’s response cornering the hot-headed President to push for broader, deeper tariffs, escalating tensions further.
“Whilst so far, this doesn’t appear to be the case, given how unpredictable Trump can be, expect the unexpected is fast becoming a suitable mantra.”
Further volatility may well be around the corner, nonetheless, sentiments have at least temporarily improved.
In Asia, Japan’s Nikkei rallied 378 points or 1.73% to trade at 21,688 while Hong Kong’s Hang Seng and the Shanghai Composite are yet to catch up with any of the bullishness, as Chinese equity markets are closed for a public holiday.
Australia’s ASX 200, meanwhile, rose 30 points or 0.53% to change hands at 5,792.
In London, the FTSE 100 is expected to start around 93 points higher with IG Markets calling the benchmark at 7,121 to 7,125 with just over an hour to go until the start of share trading.
Around the markets
- Sterling: US$1.4063, down 0.11%
- Gold: US$1,328 an ounce, down 0.3%
- Brent crude: US$68.34 a barrel, up 0.32%
- Bitcoin: US$6,848, up 0.87%
- Mark Zuckerberg insists he's still the best person to lead Facebook - Evening Standard
- 'UK FORCED to rely on other nations!' Ex-Defence Minister BLASTS Melrose takeover of GKN – The Express
- Trains take Direct Line to Amsterdam -The Times
- US-China trade war could hit German automakers, plus Tesla, Ford – Reuters
- At Quarter End, Tesla Suddenly Got Busy - Wall Street Journal
- Delta Air says breach at tech firm may have exposed some customer data - Reuters
- Google uses wind and solar to offset all of its operational energy use – Engadget
- Panera's data breach puts attention on risks of loyalty programs - Washington Post
Significant events due for Thursday April 5:
Ex-dividends: To knock 8.1 points off FTSE 100 index - Aviva PLC (LON:AV.), Direct Line Insurance Group PLC (LON:DLG), Ferguson Plc (LON:FERG), GKN PLC (LON:GKN), Old Mutual PLC (LON:OML), Pearson plc (LON:PSON), Smith & Nephew PLC (LON:SN.), Smiths Group PLC (LON:SMIN), DS Smith PLC (LON:SMDS), St James’s Place PLC (LON:STJ), Taylor Wimpey PLC (LON:TW.)
Economic data: UK services PMI survey; US weekly jobless claims; US Challenger job cuts report; US international trade numbersJoin Proactive’s Crypto, Blockchain and Cannabis Telegram group here