FTSE 100 closes 1.30% lower
Mining and oil shares lower
Barratt Developments top Footsie riser
US stocks lower too
FTSE 100 tumbled into the red on Wednesday while US stocks also fell as traders took risk off the table amid trade worries.
The Footsie closed down at around 100 points, or 1.30% lower, at 7,591.
Mid-cap cousin FTSE 250 also ended the afternoon session lower, shedding 209 points, or 1% to 20,642.
"The FTSE plummeted 1% in Wednesday’s session, hitting a nadir of 7587 in response to an escalation of the US – Sino trade war, ending a 4-day rally," said Fiona Cincotta, senior market analyst at City Index.
"A pause in trade rhetoric from the White House, had seen stocks climb over the past 4 sessions, however the threat of tariffs on an additional $200 billion worth of Chinese imports has since sent equity indices lower, on both sides of the Atlantic."
US stocks were also lower but not a bloodbath with losses tempered by the start of earning season just days away with optimism over the second quarter earnings providing some support.
The company said that pre-tax profits for the year were set to come in at around £835mln, 9% higher than £765.1mln in 2017 - driven by a rise in mortgage lending and the government's Help-to-Buy scheme.
Meanwhile, Micro Focus International (LON:MCRO) shed 9.17% to 1,184p to be top Footsie laggard after it repeated full-year revenue guidance of a 6-9% year-on-year decline on a constant currency basis.
3.50pm: Markets remain in the red
Global equities are still under pressure as worries about trade tensions between the US and China continue to weigh.
Evening Market Comment: Markets remain in red, but Dow Jones avoids size of losses seen in Europe... https://t.co/nf46sIRowp— Connor Campbell (@ConnorSpreadex) 11 July 2018
"It was one of those days defined by one single, market-shaking event, the kind that actually end up being quite boring because of the rigidity of trading," said Connor Campbell, financial analyst at Spreadex.
"All that is to say little changed as Wednesday went on, Donald Trump’s threats to US$200bn of Chinese imports keeping the markets a state of fear throughout the session. And while the Dow Jones didn’t fall quite as sharply as promised by its futures, the index still plunged 0.6% after the bell, taking it back below 24800 having hit 3 week peak on Tuesday.
"The day’s losses were actually far worse in Europe. The DAX, perhaps spooked by the sniping between Trump and Angela Merkel, was the worst hit, the German index dropping 1.4%, with the CAC not too far behind with a 1.3% decline. The FTSE, meanwhile, was down 1.1%, just about keep above 7600 having crossed 7700 earlier in the week.
"While the indices remained resolutely in the red, the forex markets completely flattened out as Wednesday progressed. The dollar, previously in the green as investors looked for a safe haven, shed its growth, reverting back to its starting positions against the pound and the euro."
Campbell also shared his thoughts about England's chances against Croatia at the World Cup semi-final tonight on Spreadex's sports betting blog.
"Now that Belgium are out, England are the top scoring side in the competitive with 11 goals. Harry Kane has more than half of those, and is odds on to win the Golden Boot at 1/25," he said.
Football’s packed its bags, booked its tickets, but is it actually coming home? We’ll move a bit closer to finding out when #England take on #Croatia in Wednesday’s #WorldCup #semifinal... https://t.co/Dh2SR3i3wH #CROENG #ComeOnEngland— Connor Campbell (@ConnorSpreadex) 11 July 2018
3.10pm: Jaguar Land Rover workers 'furious' about missing World Cup
Jaguar Land Rover workers at the Halewood plant in Merseyside are outraged they will miss England's World Cup semi-final after management refused their requests to knock off early.
Management said they could not give allow staff to cut their shifts short to watch the England vs Croatia football match because the plant would be unable to catch up with orders.
One employee told the Liverpool Echo colleagues were "furious".
"We thought we would be allowed to watch it. It's disgusting. We're not allowed to support our own country," he said.
In contrast, Rolls Royce workers at Goodwood in West Sussex are being given tonight off to watch the match.
"The Rolls-Royce family is incredibly diverse and cosmopolitan: we have almost 50 nationalities represented at the home of Rolls-Royce," said Torsten Müller-Ötvös, chief executive officer for Rolls‑Royce Motor Cars.
"But as a proudly British company, based in West Sussex, we felt it was right, and important, to honour England's success."
The last time England made the semi-finals of the World Cup was in 1990. Gary Lineker, a former England player turned TV presenter, tweeted:
After 4 weeks in Moscow, I finally get to go to a game. And what a game. Come on England. ????????????— Gary Lineker (@GaryLineker) 11 July 2018
2.30pm: US stocks open lower
US stocks have opened in negative territory after the Trump administration said it was ready to impose more tariffs on China.
The Dow Jones Industrial Average dropped 171 points to 24,748, the S&P 500 declined 16 points to 2,777 and the Nasdaq shed 45 points to 7,714.
Meanwhile, Chicago Fed President Charles Evans said he supported more interest rate hikes this year. He has been previously sceptical of the need for higher interest rates,
"The economy seems so strong it seems natural that businesses and consumers can live with" slightly higher rates, Evans said, in an interview with the Wall Street Journal.
1.40pm: US stock futures point to lower open
US stock futures decreased as fears over a trade war between the US and China weighed on investor sentiment.
Futures for the Dow Jones Industrial Average fell 161 points to 24,766 while futures for the S&P 500 dropped 13 points to 2,783. Nasdaq futures are down 41 points to 7,260.
Trump said late Tuesday that it would assess 10% tariffs on a further US$200bn in Chinese goods.
Facebook shares fell in pre-market trading after saying it could be fined about US$660,000 by a UK regulator over the Cambridge Analytica scandal.
In economic data, the producer price index rose 0.3% June, the Labor Department said, compared to forecast for a 0.2% gain.
1.00pm: Energy shares drop as oil prices decline
Oil prices are lower after OPEC said it expects 2019 demand for its crude falling from this year as non-OPEC members increase supplies.
It sees demand for crude averaging 32.18 million barrels per day (bpd) next year, down 760,000 bpd from this year.
OPEC Sees 2019 Demand For Its Crude Averaging 32.18 Million BPD Down 760,000 BPD From This Year As Non OPEC Supply Rises.— LiveSquawk (@LiveSquawk) 11 July 2018
Brent crude dropped 2.4% to US$76.96 per barrel while West Texas Intermediate crude declined 0.9% to US$73.44 per barrel.
12.20am: FTSE 100 lower in lunchtime trade
The FTSE 100 is down 83 points to 7,608 in lunchtime trading as traders continue to take a cautious approach amid trade war fears.
US President Donald Trump started the process of adding 10% tariffs on a further US$200bn of imports fro China last night.
“While this announcement has been expected ever since US President Donald Trump first hinted at such a response to Chinese retaliatory measures, it is a stark reminder that common sense is not prevailing – as many hoped – and the risk of a full blown trade war is very real. In instructing US trade representative Robert Lighthizer to start preparations for the new range of tariffs, Trump is showing that he is not bluffing and is willing to take this all the way which is very worrying,” said Oanda’s Craig Erlam.
Trump is in Brussels for the NATO meeting, where he accused Germany of being a “a captive of the Russians” because of its dependency on energy supplies. He will then head to the UK, which is hoping to agree a trade deal with the US after Brexit.
Bilateral Breakfast with NATO Secretary General in Brussels, Belgium... pic.twitter.com/l0EP3lzhCM— Donald J. Trump (@realDonaldTrump) 11 July 2018
Worsening trade tensions have hit FTSE 100-listed mining shares including Glencore PLC (LON:GLEN), Anglo American PLC (LON:AAL), Rio Tinto PLC (LON:RIO), Antofagasta PLC (LON:ANTO) and BHP Billiton plc (LON:BHP)
11.40am: Sky dips after Fox ups bid
However, the new offer is almost 7% below Sky’s closing share price on Tuesday of £14.99.
He added: “The dip lower has been bought with the stock moving back close to yesterday’s close and the significant premium suggests that investors feel there could still be further developments to come.”
10.50am: Investors likely to remain cautious amid trade war fears
Investors are likely to remain cautious for the rest of the trading week after the US threatened to impose tariffs on an extra US$200bn worth of Chinese goods, according to Lukman Otunuga, research analyst at FXTM.
"With escalating trade tensions between the world’s two largest economies presenting a significant threat to global economic growth and stability, there are no winners," he said.
"Investors are likely to maintain a cautious stance for the rest of the trading week with global sentiment expected to remain fragile.
"This cautious tone is already reflected in global equity markets this morning with Asian and European stocks tumbling lower. Wall Street could be poised to open lower this afternoon as the risk-off sentiment encourages investors to offload riskier assets for safe-haven investments."
9.50am: Indivior slumps on profit warning, broker downgrade
Shares in Indivior PLC (LON:INDV) are down 32% to 255p after saying sales and profits will be lower than expected this year as it has come under pressure from copycat rivals for Suboxone - its star drug for opiate drug addiction.
The company was also hit by a downgrade by Numis, which cut its rating on the stock to 'hold' rating from 'buy' and its target price to 380p.
Numis highlighted the launch of Dr Reddy’s generic version of Suboxone and said Indivior's launch of Sublocade, an injectable treatment for opioid use disorder, was slower than expected.
"We now expect significant further downgrades to FY18 EPS (c.20% to c.18c, c’sus 31c) with $25m of cost savings targeted and substantial downgrades to FY19 forecasts c.50% to 9c (c’sus 24c) on the slower ramp of Sublocade and anticipated higher costs," Numis said.
"Feeding these changes through our discounted cash flow-based valuation with a slightly higher discount reduces our target price to 380p and so our recommendation drops to 'hold', with further clarity needed on the impact of generics and the performance of Sublocade to consider the recovery trade."
8.45am: Weak start for Footsie
Proactive news headlines:
ReNeuron Group PLC (LON:RENE) has inked a deal worth up to US$5mln ahead of potentially licensing out its ground-breaking hRPC retinal stem cell technology and therapeutic programmes. It has signed an exclusivity agreement with an unnamed US-based speciality pharmaceutical company, which it hopes will lead to a definitive accord later this year.
Eurasia Mining PLC (LON:EUA) has announced that the Ministry of Natural Resources (MNR) has approved its application for a mining permit at Monchetundra Mine in Russia. The AIM-listed PGM (Platinum Group Metals) and gold mining company said the mine permit application has now been delivered to the office of Prime Minister Dmitry Medvedev for final authorisation.
Ariana Resources PLC (LON:AAU) produced record amounts of gold from its Kiziltepe mine in Turkey in the three months to June as its ramp-up continued. Kiziltepe, a joint venture with Turkish firm Procea, produced 7,171 ounces (4,866 oz), a 47% increase quarter-on-quarter.
An Israeli pharma group which has licensed Silence Therapeutics PLC (LON:SLN) chemical modification technology has dosed the first patient in a Phase III trial of its acute kidney injury treatment. Quark Pharmaceuticals also announced it has reached an agreement with the US Food and Drug Administration on the overall study design with a new primary endpoint.
Initial results from a seabed survey of the Newgrange Prospect, offshore Ireland, "support the potential presence of a working petroleum system", according to Dr John O'Sullivan, technical director of Providence Resources PLC (LON:PVR).
Sound Energy PLC (LON:SOU) has appointed chief financial officer JJ Traynor to its board of directors with immediate effect. “I am delighted to welcome JJ to the board of Sound Energy,” said chairman Richard Liddell.
Bushveld Minerals Ltd’s (LON:BMN) partnership with South African electricity utility Eskom has received its first vanadium battery. US firm UniEnergy Technologies built the unit, which will run on a mixed-acid vanadium electrolyte.
European Metals Holdings (LON:EMH) has reported that it has completed roast optimisation testwork and that improved recoveries have resulted in modelled lithium carbonate production from the Cinovec Lithium-Tin Project increasing to 22,500 tpa.
Tlou Energy PLC (LON:TLOU) announced that its non-renounceable entitlement offer to raise up to approximately A$5.5mln (around £3.2mln) has closed, with total applications received of approximately A$3.7mln (about £2.2mln). The group said all the remaining entitlement shares have been placed by the company's brokers to raise the shortfall balance of approximately A$1.8mln (about £1.0mln).
6.45am: FTSE 100 called lower
The Footsie is expected to open lower this morning after news that US president Donald Trump has lined up more tariffs in a deepening of the trade spat with China.
Spread betting firm IG expects the FTSE 100 index to open around 42 points lower at 7,650 after finishing up 4 points at 7,692 yesterday.
Following the close of US markets yesterday, the White House said it would assess 10% tariffs on a further US$200bn in Chinese goods that would hit products from fish to luggage in a move that was viewed by many to encounter swift retaliation from the government in Beijing.
Jasper Lawler, head of research at London Capital Group, said this new, untargeted approach to tariffs by the White House will make it “almost impossible for the US households not to be affected, as tax increases will be felt on everyday products.”
He added: “[T]his second move by Trump proves that he is committed to this trade war. The markets have, so far, been relatively tame in their reaction. This move by Trump could change that, in which case traders will start to be much more selective over which markets to buy into, choosing on the basis of which markets are potential winners and losers from this trade war. The recent complacency is expected to disappear.”
In the US markets, the Dow Jones Industrial Average closed up 143 points at 24,919, while the S&P 500 was up 9.6 points at 2,793 and the Nasdaq closed 3 points up at 7,759 as the lull in trade disputes and the prospect of a positive quarterly earnings season bolstered market confidence, with the extra US$200bn in duties unveiled after the close.
In Asia today, the Japanese Nikkei 225 was down 260 points at 21,935 while Hong Kong’s Hang Seng slumped 456 points at 28,226 following the tariff announcement.
On the currency markets, the pound was down 0.1% at US$1.325 against the dollar and flat at €1.13 against the euro after a 0.3% growth reading of the UK’s GDP for May released yesterday, driven primarily by growth in financial and legal services.
Wetherspoons eyed for CO2 shortage impact
Wednesday is due to see a hefty batch of financial results and trading updates from several key players across a litany of sectors including fashion retail, publicans, and computer services.
There will also be a little bit of a World Cup flavour with an update from Wetherspoons as a persistent CO2 shortage has been cutting off pub drink supplies at what is shaping up to be a lucrative summer for publicans around the country.
On the economic data front, what data there is will be coming from across the Atlantic, with the US wholesale trade figures and forward PPI expected.
Significant announcements expected on Wednesday July 11:
Economic data: US forward PPI; US wholesale trade
Around the markets:
• Sterling: US$1.3257, down 0.1%
• Gold: US$1,250.6 an ounce, down 0.37%
• Brent crude: US$78.86 a barrel, unchanged
• Financial Times: Britain’s Information Commissioner's Office has hit Facebook with its first financial penalty over the massive data leak to Cambridge Analytica.
• The Daily Telegraph: Shares in the world’s largest interdealer broker TP Icap plunged as much as 36% after the company announced it had ousted its CEO John Phizackerley, and slashed its annual cost savings target from £100 million to £75 million by the end of 2019.
• The Times: In his first address as chairman at the Marks & Spencer's annual meeting yesterday, Archie Norman told shareholders that the high street chain is on a “burning platform” and may not exist in the years to come if it does not significantly change.