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FTSE 100 closes in positive territory; Ocado top gainer

Last updated: 04:20 31 Oct 2018 AEDT, First published: 17:25 30 Oct 2018 AEDT

Dollars in shopping basket
  • FTSE 100 closes in the black

  • US consumer confidence reaches 18-year high

  • House builders lifted as Help to Buy extended

 

FTSE 100 closed in positive territory unlike other European indices, while US stocks also headed north.

The UK blue-chip index closed up 9.53 points at 7,035, while the more UK company focused FTSE 250  added over 100 points at 18,667.

The German DAX fell 48 points and the French CAC 40 lost around 11 points.

On Wall Street, the Dow Jones Industrial Average is up about 81 points at the time of writing, while the S&P 500 added around four points at 2,645.
David Madden, at CMC Markets UK, said: "Sentiment in Europe is poor as dealers are fearful about the potential political fight between the Italian government and the EU, adding to that, the growth rate in the eurozone disappointed.

"The situation in Italy has the potential to trigger another round of the debt crisis, and the last thing the currency bloc needs is softening growth, which was confirmed today."

Top riser on Footsie was online retailer Ocado Group (LON:OCDO), which added nearly 5% to 840.60p, while some big miners made up some of the biggest laggards.

Ocado shares jumped  as it and US supermarket chain Kroger Co (NYSE:KR)  signed service and operational terms for the deal they agreed in May.

Under the deal, Kroger will use Ocado’s technology that automates online grocery orders and the British firm will construct robotically operated warehouses in the US.

The US supermarket chain will also take a 5% stake in Ocado.

3.20pm: US consumer confidence hits 18-year high in October

The Conference Board’s US consumer confidence index has risen to an 18-year high in October, suggesting a recent market slump has not affected optimism.

Over the month the index increased to 137.9 from 135.3 in September, with a healthy jobs market cited as one of the main reasons behind the rise.

The future expectations index, which measures what Americans think the economy will look like in six months’ time, also rose to an 18-year high of 114.6 from 112.5.

However, despite the rosy metrics, the recent sell-offs have raised concerns around whether the current 3%+ expansion rate can be maintained, with analysts at German bank Berenberg expecting a “moderation in consumption” in the first half of next year.

Meanwhile, the FTSE 100 had once again dropped back and was down 11 points at 7,011.

2.30pm: House builders rise as ‘Help to Buy’ scheme extended

Several blue-chip housebuilders were on the up in late-afternoon trading after the UK government announced the extension of its flagship home-buying scheme ‘Help to Buy’.

The programme will now run for an additional two years until 2023, although some regional caps would be introduced on the value of properties which could be bought.

One of the beneficiaries was FTSE 100 construction firm Persimmon PLC (LON:PSN), which was up 2.6% at 2,285p, as well as The Berkeley Group Holdings PLC (LON:BKG) which rose 2.6% to 3,471p.

Meanwhile, the FTSE 100 was hovering around its starting point, down just 3 points at 7,023.

1.59pm: Wall Street moves higher after mixed open

Wall Street was moving higher shortly after the open after a bumpy start that seetled into an upward trend.

The Dow Jones Industrial Average was up 130 points at 24,573, while the S&P 500 was up 16 points at 2,658 and the Nasdaq was up 39 points at 7,092.

One of the weak performers this morning was pharma giant Pfizer Inc (NYSE:PFE), which was down 1% at US$42.7 in early trading after providing a downbeat revenue outlook.

Meanwhile, the FTSE 100 was firmly in reverse gear, down 11 points at 7,014.

1.00pm: US poised for higher open

US markets are poised to open slightly higher Tuesday morning, however fears over global trade and a peak in corporate earnings continued to persist.

An ugly reversal yesterday, with the Dow Jones Industrial Average posting a triple-digit loss at close, has prompted fears of the main indices entering ‘correction’ territory (defined as a drop of at least 10% from a recent peak), with the tech-heavy Nasdaq already reaching the threshold as FAANG companies all traded sharply lower in October.

The losses were also accelerated by reports that the White House is prepared to slap tariffs on remaining Chinese imports if talks next month between Donald Trump and Chinese president Xi Jinping fail to yield results.

US company news has been a mixed bag so far, with General Electric (NYSE:GE) slashing its dividend following a disappointing third quarter, while at the other end Coca-Cola (NYSE:KO) reported Q3 earnings and revenue above expectations.

In London, the FTSE 100 had slipped back and was down 7 points at 7,018.

12.00pm: FTSE 100 holds gains as morning ends

Despite morning predictions of a negative start, the FTSE 100 has closed out the morning with relatively comfortable gains, up 17 points at 7,043.

The positive performance has been bolstered by a strong performance from blue-chip oiler BP, with shares up 3.4% at 553.4p in late morning, after the firm raised its quarterly dividend by 2.5% as it doubled its net profit on the back of higher crude prices and production from the ramp-up of major projects.

However, things have been looking less rosy for the pound, which was down 0.41% at US$1.273 against the dollar as continued Brexit uncertainty overshadowed the positive spin UK Chancellor Philip Hammond attempted to put on the latest Budget on Monday.

David Cheetham, chief market analyst at XTB, said that the decline in cable was due in part to a strengthening US dollar but most of the blame laid with the inherent weakness in sterling.

11.40am: October brings sharp contraction in UK retail sales growth

Retail sales growth in the UK slowed sharply in October following a spending splurge by consumers over the summer period.

Figures from the Confederation of British Industry’s monthly retail sales gauge dropped to +5 in October from +23 in September, the lowest level since April.

Alpesh Paleja, principal economist at the CBI, said the challenges facing the retail sector were “significant” with a “double whammy” of sluggish household income recovery and disruption to trading conditions caused by digital technology.

Paleja added that despite relief for small businesses from the recent Budget, “larger retailers will continue to suffer” until business rates are reviewed.

The FTSE 100 was up 10 points at 7,037.

11.20am: Eurozone Q3 GDP slows to 0.2% 

The third quarter gross domestic product (GDP) of the eurozone has slowed to just 0.2%, hampered by disrupted car production in Germany and stagnant growth in Italy, the first time in four years, the Mediterranean nation has not posted growth over a quarter.

Chris Beauchamp, chief market analyst at IG, says that with little insight into how long the European Central Bank (ECB) will continue tightening monetary policy, there was “little reason” to hope for a rebound and the latest figures had done “little for sentiment in Europe”.

Meanwhile, data from the UK’s Insolvency Service has shown that the number of companies registering as insolvent in England & Wales has increased by 19.3% year-on-year in the third quarter.

This is the biggest increase since the second quarter of 2009 during the financial crisis, which was driven by an increase in creditors’ voluntary liquidations.

The FTSE 100 was up 8 points at 7,034.

10.21am: Sterling slumps as Brexit trumps Budget

The pound is trading around at a ten-week low in mid-morning as currency traders continued to look to Brexit uncertainty despite the glimmer of hope offered by the UK Budget yesterday.

Sterling was trading at around US$1.276 against the dollar, down 0.16% from yesterday and 2.2% since the start of October as investors fretted over the divorce talks that have recently run into yet more issues surrounding the Irish border.

The budget has also attracted little enthusiasm due to insinuations by the Chancellor, Philip Hammond, that a new budget would be needed if the UK leaves without a deal next March, calling the most recent announcements into question.

This view has been echoed by Mark Brownridge, director general of the Enterprise Investment Scheme Association, who said the Budget could be “defunct in a matter of weeks depending on what happens in the Brexit negotiations.

Meanwhile, the FTSE 100 has picked up slightly and was up 6 points at 7,032.

9.35am: Bentley boss warns no-deal Brexit could hit profits and investment

The boss of British car maker Bentley has warned that a no-deal Brexit would be “damaging” to profitability as well as limiting the company’s ability to invest and potentially forcing a plant closure for a few days.

Chief executive Adrian Hallmark told Reuters that the company, which is owned by German group Volkswagen, was already preparing by building up stock and implementing other contingencies but was worried about the possibility of 10% tariffs under World Trade Organization rules.

“Best case, it’s an annoying impact on our annual profitability,” Hallmark said, “Worst case, it’s quite damaging on our annual profitability”.

Meanwhile, the UK’s Financial Reporting Council (FRC), has said that company annual reports will need a makeover in order to better serve investors in the digital age.

The regulator said that despite attempts to streamline the reports, some had now grown to over several hundred pages, making them difficult to navigate.

To try and tackle the problem, the FRC is launching a project to challenge existing reporting methods and has called for participants to join an advisory group by mid-November.

In the markets, the FTSE 100 was hovering around neutral, up 1 point at 7,027.

8.40am: FTSE 100 nudges higher buoyed by resurgent BP

The FTSE 100 defied early predictions that it would swing into the red by nudging 15 points higher to 7,040.88 shortly after the open.

A roller coaster ride on Wall Street, which knocked 245 points, or 1%, off the Dow Jones, had been expected to apply the brakes.

Instead for the second day in a row, the UK blue-chip index was rescued by the performance of one its key constituents.

Oil giant BP PLC (LON:BP.), third place in the Footsie ranked by market capitalisation, was up 4.4% in early trade after its third-quarter figures bettered forecasts.

“BP has set the bar high for the oil majors in general, delivering a blockbuster set of earnings which have comfortably outpaced expectations,” said Richard Hunter, stocks guru at Interactive Investor.

“The strength of the oil price over the quarter was of course a factor, particularly with BP’s breakeven level pinned somewhere around $50 per barrel.

“A sharp spike in earnings coupled with an increasingly streamlined operation led to a 124% rise in replacement cost profit year on year and a 73% rise quarter on quarter.”

The closing of its deal with US retail giant Kroger sent shares in the online grocer Ocado (LON:OCDO) 1.6% higher.

On the flipside, Reckitt Benckiser (LON:RB.) fell 4% in the wake of its quarterly update.

Among the small-cap movers, Widecells (LON:WDC) rose almost 40% after it unveiled plans to streamline its WideAcademy operation.

Proactive news headlines:

WideCells Group PLC (LON:WDC) has streamlined its WideAcademy business, saving the stem cells services company around £400,000 a year.

Sunrise Resources PLC (LON:SRES) has completed commercial trials on bulk samples taken from the CS pozzolan-perlite project in Nevada.

SIMEC Atlantis Energy Limited (LON:SAE) has joined a joint venture (JV) that will develop a large scale tidal power project in Le Raz Blanchard, Normandy.

Rosslyn Data Technologies PLC (LON:RDT) has inked a contract to provide data analytics to one of Europe’s largest logistics firms.

Obtala Ltd (LON:OBT) is looking to either seek a strategic partner for or spin out its agriculture business in order to focus on its growing forestry and timber trading divisions. The AIM-quoted company grows crops such as butternut squash and melons at its farms in Tanzania, while it also sells a range of tinned foods and sauces under its Mama Jo’s brand.

Pre-clinical data has shown that Scancell Holdings PLC’s (LON:SCLP) Modi-2 vaccine has the potential to treat different types of cancer than its forerunner.

Frontier IP Group PLC (LON:FIPP) is taking a 25% stake in Des Solutio, a green chemical products firm as part of a spin-out process.

MySQUAR Limited (LON:MYSQ), the Myanmar-language mobile internet technology firm, has raised £600,000 through a share placing.

Rainbow Rare Earths Ltd. (LON:RB.) exported 350 tonnes of rare earths concentrate from its mine in Burundi during the three months to 30 September 2018, an increase of 27%.

Chaarat Gold Holdings Ltd. (LON:CGH) has entered into a special purchase agreement with the Russian mining giant Polymetal for the acquisition of Kapan Mining and Processing Company. Kapan owns a polymetallic mine in Armenia.

Tlou Energy PLC (LON:TLOU) believes it has ‘submitted a compelling and robust proposal’ for a thermal power station at the Lesedi coal bed methane site in Botswana. The company, which was asked to re-tender for the contract, said it had ‘outlined a staged development commencing with up to 10MW of generation as well as outlining project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid in Botswana.

Egdon Resources PLC (LON:EDR) expects fracking to start at the Springs-1 UK site in the first half of next year. Egdon’s conventional oil plans have been hampered by delays to Wressle in Lincolnshire. An appeal has been launched against the rejection of its planning application. The consortium that owns the licence, includes Union Jack Oil (LON:UJO) with a 27.5% stake. Union Jack Oil also owns 22% of Biscathorpe, where Egdon says drilling of a new exploration well should begin before the end of the year, with site construction well advanced.

BB Healthcare Trust PLC (BBH) said, further to its announcement in February 2018 the company has instructed its advisers to make arrangements for the publication of a new prospectus later this year, in order to facilitate the issuance of further ordinary shares pursuant to an Initial Issue and a share issuance programme in 2018 and beyond. The company noted that its portfolio manager, Bellevue Asset Management AG, continues to see significant opportunities to deploy additional capital, in accordance with the company's investment objective and policy. The group also said a portfolio update is available on the following link: https://www.rns-pdf.londonstockexchange.com/rns/6916F_1-2018-10-30.pdf

appScatter Group PLC (LON:APPS) has established a new advisory board which includes the former chief information officer of Lufthansa and a current global lead partner from consultancy firm Deloitte.

88 Energy Ltd (LON:88E) has acknowledged the passing of Brent Villemarette, a non-executive director of the company. The firm said his passing was unexpectedly sudden; however, it was related to a known health condition.

Arc Minerals Ltd. (LON:ARCM) announced that Michael Foster, a non-executive director of the company has been awarded share options in lieu of cash remuneration for services rendered with respect to Casa Mining Limited. The firm said Foster has been issued options over a total of 1.2 mln new ordinary shares which have an exercise price of 4.5p each, representing an approximate 34% premium over the group’s closing mid-market price on 29 October 2018.  It added that the share options are exercisable from 29 October 2018 and expire on 30 October 2021.

Harvey Nash Group PLC (LON:HVN) said further to the declaration that its takeover offer has been declared unconditional, it received letters of resignation from its non-executive directors (other than Adrian Gunn) on 29 October 2018 which took immediate effect.

Europa Oil & Gas (Holdings) PLC (LON:EOG), the UK and Ireland focused oil and gas exploration, development and production company, announced that it will be making a presentation at the Atlantic Ireland Conference in Dublin on Tuesday, 30 October 2018, with a copy of the presentation to be available on the company’s website.

6.25am: Footsie set to hit reverse gear

The FTSE 100 look set to open on the back foot after one of the most volatile sessions of the trading year left the Wall Street in negative territory.

The Dow Jones ended a roller coaster session down 245 points, or 1%.

“The choppy trading came against a backdrop of rising concerns over the global economy given the US-China trade war, a weakening earnings outlook for technology companies and the pace of interest rate rises in the US,” the Financial Times reported.

The UK index of blue-chip shares looks set to open 21 points lower at 7,005.32, with traders largely ignoring the more positive tone set by Asia’s main markets.

After the excitement (or lack of it) generated by ‘Spreadsheet Phil’s’ Budget on Monday, normal service will be resumed in the Square Mile.

Scheduled corporate news includes third-quarter updates from BP (LON:BP), which looks likely to have been buoyed by stronger oil prices, and household goods specialist Reckitt Benckiser (LON:RB.).

Around the markets:

  • Pound worth US$1.2802
  • Gold trading at US$1,228.30 an ounce, up 70 cents
  • Brent crude changing hands for US$77.24 a barrel, down 10 cents

Business Headlines

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  • Trump administration hits out at China chipmaker
  • EU tech bosses speak out against digital services tax - executives oppose 3% levy spearheaded by French president Emmanuel Macron
  • Shell taps its deepwater legacy to fund its future - Anglo-Dutch oil major banks on Gulf of Mexico to help navigate energy transition

Times

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  • Restaurant Group, the company behind the Frankie & Benny’s and Chiquito restaurant brands, is in advanced talks over an audacious £600 million swoop on the Wagamama chain.
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Guardian

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  • Take-up of car finance deals slows as appetite for diesel wanes
  • Apple expected to announce new iPad Pro without home button

Independent

  • Jamie Oliver admits he has ‘no more money’ for restaurant chain
  • Complaints to financial firms hit record level, City watchdog reveals
  • Uber faces Court of Appeal in gig economy workers' rights case

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