FTSE 100 closes 12 lower at 7,411
Dow Jones jumps to new record early on
Commodity stocks weak on oil, metal price falls
StanChart, , RSA lower after results
The FTSE 100 closed in the red along with other European indices as commodities weakened and UK construction activity showed a sharp decline.
The UK blue-chip index closed out on a wet Wednesday around 12 points lower at 7,411.
The UK company focused also closed 22 down at 19,841.
Markit’s UK construction purchasing managers’ index (PMI) fell to 51.9 last month from 54.8 in June, but was forecast to only ease to 54.0.
Brent crude was down 2.19% at the time of writing, at US$51.47 a barrel, while gold also lost 0.11%.
In companies, the biggest laggard on Footsie was emerging markets focused () as the financial gaint saw shares tumble over 6% at 795p.
The group’s failure to resume dividends overshadowed its growth in the first half.
David Madden, at spreadbetter CMC Markets, said: “The bank saw rising revenue and profits, and the loan impartment charges slumped but it still wasn’t enough to coax buyers.”
The group suspended the dividend in 2015 in order to save cash but investors appear to now feel it is time to reinstate it.
On the winning front, investment and pensions titan plc () was top riser on FTSE100, adding 2.84% to 203p.
2.45pm: Dow Jones tops 22,000
The FTSE 100 index held off its lows but remained lower in late afternoon trading, as weakness in commodity issues offset the expected opening record advance in early deals on Wall Street.
Around 2.45pm, the UK blue chip index was down 21 points at 7,402, but was holding above the day’s low of 7,388.92.
In New York, the Dow Jones Industrials surpassed the 22,000 level for the first time ever in opening trade, up over 50 points to 22,018.
Meanwhile the tech-laden Nasdaq Composite was higher helped by a jump in tech giant Inc (LON:AAPL) following strong results released after-hours yesterday, although the broader S&P 500 index slipped back from opening gains.
On currency markets, the pound stayed 0.1% higher versus the dollar at US$1.3223, and was flat against the euro at €1.1179 in cautious trade ahead of the Bank of England’s ‘Super Thursday’ interest rate decision and quarterly inflation report.
The Bank of England shouldn’t wait until after Brexit to raise rates, says thinktank https://t.co/uQtXfjg7N6 pic.twitter.com/3RwzGcp2TY
— Bloomberg (@business) 2 August 2017
In a preview, Chris Beauchamp, chief market analyst at IG, said: “The last Monetary Policy Committee (MPC) meeting saw a surprise shift in the plate tectonics among policymakers, with three of eight members voting for an increase in UK interest rates. The meeting however may be the hawks’ only hurrah for a long time yet.”
He added: “One of those voting for higher rates, Kristin Forbes, has now left the committee, and her replacement, Silvana Tenreyro, is likely to be a dove, having voiced her concerns about a balance between growing inflation and weaker output growth. Thus the balance is likely to shift back to 6-2, from 5-3.”
2.00pm: ADP data below forecast
The Footsie remained lower in early afternoon trading, despite continued expectations for early US gains, while the dollar hovered around a 15-month low after a private-sector jobs report came in weaker than expected.
Around 2pm, the FTSE 100 index was off 18.5 points at 7,405, holding above the day’s low of 7,388.92, despite sterling slipping back slightly from earlier stronger gains.
Against the dollar, the pound was up 0.1% at US$1.3220, and versus the euro it was off 0.1% at €1.1182 as traders awaited the bank of England’s ‘Super Thursday’ announcements tomorrow.
The ADP private-sector jobs report showed 178,000 jobs were added to the US economy in July, up from 158,000 in June, but below the consensus estimate of 190,000.
178,000 private sector #jobs added in July per ADP National Employment Report. View report here: https://t.co/GChVPX6m8g #JobsReport pic.twitter.com/y40yedRzhq
— ADP (@ADP) 2 August 2017
The ADP data is seen as a precursor of the strength of Friday’s US July non-farm payrolls, although the two jobs reports sometimes vary widely.
12.30pm: Footsie retreat, but US stocks seen up
The FTSE 100 index fell back again in lunchtime trading, still weighed by weakness in commodity issues and some less than well-received corporate results, despite expectations for opening gains today on Wall Street thanks to Inc () results last night.
Around 12.30pm, the UK blue chip index was down about 29 points at 7,394, just above the session low of 7,392.28.
Futures for New York’s three major indices all pointed higher, however, with the Dow Jones seen up around 0.2%, on course to add a sixth consecutive session of gains having closed at yet at another new record high of 21,936.92 on Tuesday. The S&P index was seen up 0.1% and the Nasdaq Composite was called 0.8% higher.
Shares in iPhone-maker are expected to benefit from strong earnings reported after the US market close yesterday. On the US corporate calendar today, electric car maker Tesla Inc () is set to report its second quarter earnings after the close tonight.
‘s results were stronger than expected for a traditionally ‘soft’ quarter. Here’s why: https://t.co/r8gcWXD8YZ pic.twitter.com/PyX6AHMTq6
— Reuters Business (@ReutersBiz) 1 August 2017
Connor Campbell, financial analyst at said: “The index should receive a helping hand from , which surged to its own record high after hours with a 6% increase as Tim Cook hinted that the iPhone 8 won’t be delayed as feared (of course an 11.9% surge in Q3 profit didn’t hurt either). “
He added: “Elsewhere the ADP non-farm employment change figure – forecast to rise from 158k to 187k month-on-month – will ostensibly give investors an idea of what to expect from Friday’s jobs report.”
UK blue chip results a drag
In London, another batch of blue chip results again provided direction, but mainly on the downside today.
Standard Chartered was the worst blue-chip performer, losing 4.3% at 809.8p as the lack of an interim dividend with the emerging markets-focused lender’s first half results disappointed investors.
Miner PLC () was another big faller, down 2.3% at 3,421.5p despite unveiling plans for a US$1bn share buy-back and more than doubling its interim dividend after strong first half results, reflecting weakness in commodity stocks and metal and oil prices declined.
And PLC (), off 2% at 644p and builders merchants PLC (), down 1.8% at 1,503p were also loser after results.
Away from the blue chips, Johnston Press PLC (LON:JPR) was also big faller, losing 5.8% to 10.35p after the publisher of the Scotsman and Yorkshire Post newspapers saw another large dip in classified print advertising although performances were much better in digital and at the i newspaper.
But well-received results boosted bookie William Hill PLC (LON:WMH), up 9.3% to 276p after the group said its number of customers has started growing again in the first half of 2017.
11.45am: More BA misery
Travellers on British Airways – owned by PLC () – faced delays at Heathrow and Gatwick today after a temporary check-in problem, according to The Guardian website.
The disruption came about two months after more than 670 flights were cancelled due to a power failure over the spring bank holiday weekend.
IT systems problems for @British_Airways this morning, delays boarding and now apparently ‘loading’ systems are down, we wait on the tarmac
— Matt Watts (@mtjwatts) 2 August 2017
A statement from British Airways said: “Customers are being checked in as normal after an earlier problem was resolved. We are sorry for the temporary check-in problems, which caused some delays for our customers first thing this morning.
“This issue is now resolved and our staff are working flat out to help customers get away on their holidays.”
11.15am: Crude weakness impacts
Weaker oil prices were also weighting on the Footsie in late morning trade, with Brent crude losing 0.7% to US$51.41 as barrel, as heavyweight commodity stocks posted falls.
Around 11.15am, the FTSE 100 index was down 20 points at 7,403, just easing off the morning low of 7,3 92.99.
Oil prices fall on surprise rise in U.S. inventories, high OPEC output https://t.co/qiEhYtp9id pic.twitter.com/PdRMFmyaBV
— Reuters Top News (@Reuters) 2 August 2017
Craig Erlam , senior market analyst at Oanada, said: “One drag on stocks in Europe and possibly in the US later has been the oil moves over the last 24 hours, with Gold, Silver and Copper adding to the downside in the commodities sector.
“Yesterday’s oil drop was initially triggered hours before the inventory data, which added further downside pressure later in the day, and it seems expectations now ahead of the EIA inventory numbers have increased a little.”
He added: “Last week’s substantial decline in inventories – albeit a smaller one than API reported a day earlier – came as reports suggested that Saudi Arabia was cutting exports to the US with the end goal appearing to be to cut inventories and grab markets attention.
“While this clearly had the desired impact initially, this week’s numbers – should EIA report something in line with API – could raise questions about the effectiveness of the measures or whether they’re being sustained.
“As it stands, Brent remains above $50 while WTI is above $47.50, as long as that remains the case, it would appear traders are anticipating further inventory declines.”
10.35am: Footsie remains lower
The FTSE 100 index stayed weak in mid morning trading as international stocks took a turn lower as the pound pushed higher against the data despite weak UK data ahead of the Bank of England’s ‘Super Thursday’ tomorrow.
Around 10.30am, the UK blue chip index was 28 points lower at 7,395, just off the session low and well below the early peak of 7,434.71.
On currency markets, sterling was 0.2% higher versus the dollar at US$1.3239, but drifted 0.1% lower againt the euro to €1.1179 ahead of the latest BoE policy decision, MPC meeting minutes, and quarterly inflation report releases tomorrow,
Today’s UK data showed growth in Britain’s construction industry tumbled to an 11-month low in July, as a lacklustre outlook for the economy and heightened political uncertainty deterred new orders.
The Markit/CIPS UK Construction Purchasing Managers’ Index fell to 51.9 last month, down from 54.8 in June, and below forecasts that had pointed to a reading of 54.5.
Naeem Aslam, chief market analyst at Think Markets UK Ltd said: “The UK July construction PMI data was much lower than the expectations.
“However, the sterling dollar pair failed to acknowledge this and the pair is still moving higher. The primary is also the dollar weakness and this is an important factor.”
He added: “The only thing which can break the Sterling strength is if the BOE ‘s governor is way too dovish tomorrow and provides no hints in relation to change in the bank’s policy.”
On the corporate front, another batch of blue chip results from the likes of RSA insurance PLC (), miner PLC () and emerging markets-focused lender () attracted the most attention once again.
Standard Chartered shares fell 5% although it reported a 93% leap rise in half-year underlying pretax profit to US$1.8bn as the bank failed to resume dividends, highlighting the scale of the challenge it faces to increase revenues.
8.50am: Pause for breath
The FTSE 100 paused for breath early on as traders took stock of the gains made over the previous two days with index of blue-chip share down just under 10 points at 7,414.16.
Defence shares were in demand after a solid set of interims from (). It was up 3.5%, followed by Group (), which advanced 2.4%.
The main faller was (), which was down 2.8% following first-half results that prompted a round of profit-taking.
The doubling of the dividend and a US$1bn share buyback weren’t enough to encourage buyers to come out in force for () as the shares drifted 2%.
Proactive news headlines:
Hurricane Energy Plc (LON:HUR) has decided to sideline plans to raise a further US$$5mln of capital via an offer to shareholders. The UK offshore oiler had intended to give existing shareholders the opportunity to invest at the same price as the investors that got involved in the company via its recent US$530mln funding, allowing long term holders to manage the dilution somewhat.
Be Heard Group PLC (LON:BHRD) added 8.5% as the digital marketing services group said it is confident of hitting full-year targets after its first half revenue soared. The AIM-listed firm saw its net revenue leap 155% higher to £8.4mln in the first half of 2017 from £3.3mln the year before, thanks in part to a full six months’ worth of contributions this time round from acquired MMT and Kameleon, plus a first-time contribution from Freemavens, acquired in February of this year.
Adept Telecom PLC (LON:ADT) which gained 3.7%on news it is to become the largest supplier of IT systems to London’s schools with the acquisition of Atomwide Limited for £12mln. Atomwide has a customer base of more than 4,000 schools and over two million users including a long-term relationship with the London Grid for Learning.
Stratex International plc (LON:STI) rose 6.5% as it agreed to dispose of the Posse Iron Ore mine in Brazil for R$8mln or about £1.94mln. The consideration will be paid over a 17 month period conditional on R$1.0mln (£0.24mln) being paid before 10 August after which payment will be in 15 equal monthly payments.
Chief commercial officer Laurence Cook is the new chief executive officer of blur Group PLC (LON:BLUR), replacing founder Philip Letts. Cook joined blur in November and has been instrumental in driving customer acquisition in the Enterprise sector, blur’s stock market statement said.
Portfolio analytics software provider StatPro Group PLC (LON:SOG) has seen strong organic growth in revenue this year from its flagship Revolution product. The cloud-based StatPro Revolution platform saw organic revenue growth of 16% in the first half of the year, as the group as a whole reported a 2% organic rise in revenue.
Aminex plc (LON:AEX) has announced the appointment of a new chief operating officer and a head of legal, with Aaron LeBlanc and Brian Cassidy respectively joining from the start of September.
Action Hotels PLC (LON:AHCG) has opened its second Bahrain hotel – in the city’s diplomatic area. Branded ibis Styles, the venue has 95 rooms, including 24 family suites and offers easy access to the international airport and the World Trade Centre.
6.45am: Early gains seen
UK blue-chips were set to continue yesterday’s firmer trend, following a solid showing on Us markets overnight.
The FTSE 100 was seen opening around 13 points higher at 7,436, based on spread betting quotes; yesterday, the blue chip index rose 52 points.
In the US, where investors are keeping half an eye out for Friday’s jobless figures for July, stocks moved ahead confidently.
The benchmark S&P 500 rose 6 points to 2,476 while the more narrowly-based Dow Jones industrial average climbed 73 to 21,964.
Heading towards the close of trading, Asian markets were also higher, with the Nikkei 225 in Japan 119 points better at 20,105 and the Hang Seng in Hong Kong 185 points firmer at 27,725.
On the UK corporate front, today has a number of big names reporting, among them mining giant Riot Tinto PLC (), temporary heating and power provider PLC (), building materials seller PLC (), emerging markets-focused bank () and bookmaker ().
Around the markets
Sterling: US$1.3207, up 0.02 cents
Yield on 10-year gilt: 1.215%
Gold: US$1,272.20 an ounce, down US$7.20
Brent crude: US$51.35 a barrel, down 44 cents
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