FTSE 100 closes up but misses record high



  • FTSE 100  just shy of record close



  • Dow hits new record after dull start 



  • FTSE 250 closes down 39 at 19,949


 


FTSE 100 closed out at 7,542, within spitting distance of the previous record close of 7,547 set this year.


The UK blue-chip bench mark was up almost 11 points at the close, as US shares also turned higher and made gains after a weak start.


In contrast, the more UK company focused FTSE 250 lost 39 points at 19,949. Elsewhere, Brent crude eased back 0.69% and stood at $51.93 a barrel at the time of writing.


Against the Euro, the pound was up 0.05%, while it shed 0.43% against the US dollar.


Top dog on Footsie was house builder (), which added 1.93% to 195.20p, while the top loser, for the second day in a row,  was bookmaker Paddy Power Betfair (LON:OOB), which released first-half figures in full today after releasing some yesterday. Shares shed 4.11% to 7,240p on the day.


Revenues and earnings were higher than last year but the rate of growth slowed. On the positive side, the integration between the businesses was going well and the interim dividend was increased by 25%.


3.30pm: Footsie up as Dow hits new record


The Footsie saw its rally accelerate into the last trading hour ahead of the London close as the Dow Jones overcame early caution to modestly extend its record run into an eleventh straight session.


Around 3.30pm, the FTSE 100 index was 13 points higher at 7,545, just off the session peak of 7,549.04, and well above the day’s low of 7,518.45.


On Wall Street, after a dull opening, the Dow Jones recovered to hit a new all-time peak at 22,127.49, before easing back to add 2 points at 22,120 after an hour of trading.


However, the broader S&P 500 stayed flat and the tech-laden Nasdaq composite slipped 0.1%.


The rally by the Dow came following data showing the number of US job openings rose to a fresh record in June, increasing to 6.16mln from 5.7mln in May.


3.05pm: Footsie ticks higher


The FTSE 100 index ticked modestly higher in late afternoon trading as an opening retreat by US stocks proved less than feared, with the Dow Jones taking a breather having scored a tenth successive session of record gains yesterday.


Around 3.05pm, the UK blue chip index was up 3 points at 7,535, just below the session peak of 7,539.88,, albeit having been stuck in a 20 point trading range all day, with the low at just 7,518.45.


In early deals on Wall Street, the Dow Jones was 14 points lower at 22,104, while the broader S&P 500 and tech-laden Nasdaq composite lost around 0.1%.


Joshua Mahony, market analyst at IG said: “Fresh off the back of last week’s volatility, we are seeing a subdued start to proceedings this week, with the VIX falling below 10.”


He added: “With this week representing 10-years since the 2007 financial crisis began, it is notable that we are seeing volatility at the lowest levels seen in a decade.


“That being said, with the Dow having notched ten consecutive daily gains, the lack of major volatility in US markets is not much of a problem as long as markets are moving in the right direction.


Activity was also subdued on currency markets today, with sterling basically flat against both the dollar and the euro at US$1.3004 and €1.1012 respectively.


2.15pm: London house prices are crazy


This clearly shows the unrealistic increases in London house prices over the last twenty years:


12.40pm: Dull progress; US stocks seen flat


The Footsie stayed weak at lunchtime, having been stuck in a tight trading range all session, with US stocks expected to start today little changed after a ninth successive session of record gains yesterday.


Around 12.35pm, the FTSE 100 index was down 9 points at 7,523, below the session peak of 7,535.93, having only reached a low of 7,518.445.


US stock futures pointed to the Dow Jones Industrial Average and broader S&P 500 index again holding near their all-time closing highs hit in the previous session.


Craig Erlam, senior market analyst  at Oanda said: “Earnings season has been a key focal point for traders in recent weeks, with the stellar performances in the US providing the catalyst for new record highs in equity markets.


“But with many of the largest companies having now reported, attention is slowly shifting back towards central banks and what we can expect from them in the coming months. “


 He said: “The jobs report on Friday put the spotlight back on the Federal Reserve but once again, the report ticked every box except on wages, a crucial component of future inflationary pressures.”


But Erlam added: “The Fed may find raising interest rates again this year more challenging than they did the previous two occasions and that’s what markets are clearly anticipating.”


JOLTS job openings is the only notable US economic release today, although some oil inventory data from API later in the session should also be of interest, with crude trading a little higher today.


Later in the day we should also hear from OPEC and non-OPEC producers after their meeting in Abu Dhabi, in which compliance with the cuts was discussed having slipped recently.


Erlam noted: “Any signs that the agreement is facing difficulties could be quite bearish from Brent and WTI crude.”


Oils gain, miners weak


Oil majors were higher with the firmer crude price, with Royal; Dutch Shell A shares up 0.9% at 2,218p and BP PLC (LON:BP) ahead  0.6% at 471.2p.


But among other commodity issues, miners were lower after trade data from top metal consumer China disappointed, with PLC () shedding 1% at 3,599p and () off 0.2% at 1,393p, although both were off earlier lows.


InterContinental Hotels PLC () was the top FTSE 100 faller, however, down 3.8% at 4,245p as its first half results disappointed, with hotels peer () shedding 0.8% at 3,873p.


Other international stocks were also lower impacted by recent gains in the pound, with luxury goods firm PLC () down 1% at 1,790p, and consumer products firm PLC ( off 0.6% at 7,441p.


On currency markets today, however, the pound eased 0.1% lower versus the dollar at US$1.3026, and lost 0.2% against the euro at €1.1028, consolidating the recent advances.


11.25am: Brexit blamed for staff shortages


Brexit worries was being blamed again after the Recruitment and Employment Confederation (REC) said the availability of staff in the UK last month suffered its biggest fall in a year and a half.


In a report released overnight, REC chief executive Kevin Green said: “The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home.”


He added: “Employers are not just struggling to hire the brightest and best, but also people to fill roles such as chefs, drivers and warehouse workers.”


London in particular was feeling the strain, the REC survey showed, with hiring growing at a slower pace than anywhere else in the UK.


Weak growth in wages, exacerbated for EU workers by the drop in value of the pound since the June 2016 Brexit vote has had an impact on staff recruitment.


On currency markets today, sterling was 0.1% lower versus the euro at €1.1037, while it remained flat versus the dollar at US$1.3034.


In late morning trading, the FTSE 100 index was around 6 points lower at 7,525, stuck in a tight trading range between the session high of 7,533.97 and low of 7,518.45.


10.15am: Retail interest


Retailers featured among the minority blue chip gainers in mid-morning trading despite data published overnight showing that UK retail sales grew more slowly in July, albeit after a strong figure in June.


The British Retail Consortium’s latest survey showed UK retail sales increased by an annualised 0.9% on a like-for-like basis last month, down from growth of 1.2% in June which had been the highest non-Easter reading of the year, thanks to good weather.


Total retail sales growth in July slowed to show a 1.4% increase, in line with the 12-month average, and better than the falling sales seen in much of this year.


The BRC said the 2.3% growth in food sales on a like-for-like basis between May and July was mainly driven by rising prices, while non-food sales shrank by 0.7%.


Blue chip high street clothing and homes firm Marks & Spencer PLC () saw its shares rise 0.3% to 329.5p, while DIY retailer PLC () gained 0.5% at 306.8p ahead of the B&Q owner’s latest trading update due this Thursday.


However, the FTSE 100 index remained weaker around 10.15am, down 12 points at 7,522, weighed by a retreat from heavyweight mining stocks.


8.35am: Modest retreat


The FTSE 100 index eased back in early morning trading, despite fresh record highs overnight on Wall Street, as miners reversed some of yesterday’s gains following weak trade data from top commodities consumer China.


Around 8.30am, the UK blue chip index was down about 6 points at 7,525, having closed over 20 points higher yesterday within sight of its own all-time highs. 


Jasper Lawler, head of research at London Capital Group said: “Asian stocks were mixed while the offshore Chinese yuan spiked after data showed July export and import growth in China had fallen well below forecasts.


“Export growth is at its lowest since February while import growth was the lowest this year. There is a perhaps misplaced assumption from most market participants that Chinese authorities will keep the economic party going until at least the People’s Party Congress in October.”


He added: “Europe’s hefty trade relationship with China makes the figures worrisome for future earnings growth.”


Aside from weakness in the mining sector, InterContinental Hotels PLC () was the top FTSE 100 faller, down 2% to 4,321 as the operator of the Holiday Inn chain reported slower global rooms revenue growth for the second quarter, hurt by a decline in the US due to a later Easter this year.


On currency markets, the pound was fairly flat versus the dollar at US$1.3043, but sliiped 0.1% lower against the euro at €1.040


Proactive news headlines:


Eye-tracking and facial recognition specialist () has told investors it expects to beat market expectations when it reports its full-year results next month. For the 12 months ended 30 June, the Australia-based, London-listed group generated total revenues “in excess of” A$13mln. That’s more than double what it posted last year on a like-for-like basis.


 () has agreed to acquire digital banking and current account group CardOne for £15mln in a deal the currency card specialist flagged last week. A conditional placing to raise a net £25mln at 58p per share will fund the acquisition, with up to a further £1mln to come from an open offer.


() has unveiled what it highlights as a ‘record drill result’ at the Kun Manie project in Russia’s far east, where it is advancing a drill programme designed to expand the project. The company kicked off the programme in May, and it has so far drilled out some 13,142 metres – with just over 6,000 metres at the IKEN area and 7,136 metres at the KUB area. It accounts for around 65% of the planned programme.


Ltd () is moving in a new direction, with the acquisition of an interest in oil and gas assets in Indonesia. In a deal worth US$3.2mln, paid out of existing cash resources, the company is acquiring an initial 23% stake in the Perlak field which is said to have a long history of oil production.


() said the European Commission (EC) has approved an update to the product information for a key oncology product that would allow doctors to consider its use in children. The label change relates to Cardioxane, which is given to protect the heart against certain chemotherapies called anthracyclines.


The revised product strategy at mporium Group PLC () is driving improved performance, the digital marketing services provider told investors, as it unveiled a narrower half-year loss despite a substantial increase in the size of the work force.


() has undertaken a boardroom clear-out following last week’s shock profit warning and revelation of undisclosed consultancy payments to directors. Pieter Totté, executive chairman, has resigned with immediate effect along with finance director David Newman.


The AIM-listed incubator company  () has added a new investment to its portfolio. It is taking a 21% stake in The Vaccine Group, a spinout company from the University of Plymouth. In return it will provide commercialisation services, industry expertise and “strong links” to the pharmaceutical sector.


IronRidge Resources Ltd () has appointed a new exploration manager to support the group’s ongoing expansion in Africa. Joe Clarry takes up the role which will see him work closely with the existing management team to oversee the Company’s diverse and extensive project pipeline throughout Ghana, Chad, Ivory Coast, Gabon and Australia.


Emerging markets income company Limited (LON:AQ) has announced the appointment of Yan Naung Lynn to its International Advisory Council (IAC), with immediate effect. It added that, in his role on the IAC, Yan will be focused on investment opportunities in the region of Southeast Asia, with particular expertise in Myanmar.


7.00am: Quiet start predicted


London’s blue chips are set for a quiet start even though there was another record high on Wall Street overnight.


Financial spread bet firms predict the FTSE 100 will give back up to 20 points when trading gets underway and reversing the gain to 7,531 on Monday when, briefly, the London index threatened to top its own record high.


Asian markets were mixed overnight due to a weak dollar and that will drag on London, suggested traders.


In the US, by contrast, the Dow Jones Industrial Average posted its ninth straight record close, adding 25 to 22,118.


The more representative S&P 500 also closed at a new high and has now gained 11% this year so far.


In Asia, Tokyo fell, Hong Kong rose and Shanghai was flat.


Business headlines:


PLC () has been more open to the question of splitting off the “racier” Asian division. The Pru’s decision to put a £10bn block of UK annuities up for sale has prompted fresh speculation that a break-up is on the cards, writes the FT.


The booming jobs market shows no signs of abating, according to figures from recruitment agencies that show the fastest rise in jobs placements for more than two years, reports the Times.


The Oxford academic who will conduct a wide-ranging independent review of Britain’s energy costs will spend only 30 days on the project. Dieter Helm has been given until the end of October to advise the government on how it can keep electricity costs as low as possible while hitting climate targets, reports the Times.


Tesla’s ambition to flood the roads with its first mass-market electric car is guzzling up the cash, forcing the company to raise $1.5bn in the debt market. The bond offering will mark Tesla’s first foray into the junk bond market. It burnt through $13mln a day in the second quarter and is expected to go through $2bn altogether this year.


Global Blue, the tax refund payment firm, is paving the way for a €4bn (£3.6bn) flotation at the turn of the year, possibly in London. No location has yet been chosen for the initial public offering, although it will be a European stock exchange and not in Asia or New York, according to the Telegraph.


One of Monitise’s largest shareholders has warned the UK-listed company is being “sold down the river” after US suitor upped its offer by just £5m, reports the Telegraph. The financial technology business has lifted its original bid for Monitise from 2.9p to 3.1p per share in an attempt to appease investors at Cavendish Asset Management.


A booming City and rising house prices provided a double boost to Britons holding assets in 2016 as they pushed the nation’s wealth through the £10tn mark, according to a new survey. Lloyds Bank’s private banking arm said total household wealth in the UK increased by £892bn last year – with the property and financial markets each responsible for half the rise, reports the Guardian.


Commodities/currencies:


  • Gold: US$1,265 up US$1

  • Oil (WTI): US$49.25 up 14c

  • £/$: 1.3024 – £ up slightly

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