FTSE 100 higher as miners, oilers rally; US stocks open on front foot



  • FTSE 100 up 70 points to 7,448



  • US stocks open higher



  • Miners, oilers on the run



  • top faller


 


Big miners gave FTSE 100 a boost on Tuesday, which ended the afternoon session over 57 points higher at 7,434.


Strong commodity prices were behind the big diggers’ gains and copper giant Antofagasta ()  was top riser – up 7.46% at 951p.


In second position was () , which gained  over 6% at 1,171.5p.


On the losing front, bearing the brunt was (), which closed out 5.83% lower at 2,163p.


The subprime lender Provident Financial Group PLC today posted interim numbers and first half pre-tax profits fall by 22% caused by a cut in the number of debt collection agents at its home credit division.


David Madden, at CMC markets, noted that Footsie yesterday had lagged behind the eurozone, but today had bounced back, aided by bargain hunting and  a “steady pound”.


“The bullish move in copper and iron ore prices has driven up the share prices of , BHP Billiton, Glencore, and Anglo American. BP and are in positive territory as the energy market is stronger as Saudi Arabia stated it would cut its oil exports in August,” he added.


Brent crude gained 1.63% to US$48.71 a barrel.


 


15.30pm – FTSE 100 bounces back in style 


After a disappointing Monday, the FTSE 100 has bounced back in style so far today. It’s been in the black since the opening bell and hasn’t looked back since.


The index of blue chip companies is currently up by 0.96%, or 70 points, to 7,448, meaning it has all but erased yesterday’s losses.


Oilers, miners boost Footsie


The rise has been driven by growth in the natural resources, with the heavyweight miners and oilers posting decent gains.


Antofagasta PLC () was the Footsie’s top riser and the biggest beneficiary of higher base metal prices, as it gained 6.2% to 940p.


PLC () (up 5.5% to £11.65), ( (up 3.6% to £13.34) and Glencore PLC () (up 5.6% to 330.1p) also headed higher throughout the day.


Oil prices were on the rise as well today after Saudi Arabia – the world’s largest producer – said it will cut exports next month. That news sent Brent crude up by 1.7% to just shy of US$50 a barrel.


Higher oil prices is obviously good news for the likes of BP PLC () and PLC (), which gained 1.5% (to 446.3p) and 1.4% (to £20.94) respectively.


top faller for second day running


Subprime lender Group PLC () was the biggest faller on the Footsie yesterday, and it seems investors were right to be nervous about today’s interims.


Shares slipped another 5.1% to £21.79 as the firm saw first half pre-tax profits fall by 22% caused by a cut in the number of debt collection agents at its home credit division.


“Whilst I remain disappointed by the higher than expected operational disruption to trading in the home credit business, the new business model was deployed as planned during the first week in July,” said chief executive Peter Crook.


() enjoyed a good run last week, but it’s given up a lot of those gains today.


The cigarette maker is due to complete its US$47bn takeover of Reynolds later this week in a move that will create the world’s largest tobacco firm, but investors were stubbing out today with shares down 3.9% to £52.88.


US stocks open higher


The US markets took a cue from their counterparts here in London at the open this morning.


The Dow Jones is currently up 98 points, or 0.45%, 21,611, while the S&P 500 has gained a solid 8.3 points, or 0.33%, to sit at 2,478.2.


Even the Nasdaq Composite is modestly in the black at 6,413, despite having tech giant Inc () weighing on it.


The Google owner – which has a market cap of US$665bn – is currently 3.3% down at US$947.38 after a hefty US$2.7bn fine from the EU weighed on its second quarter profits. 


 


14.50…BMW to build electric Mini at UK plant


German carmaker BMW has confirmed its plans to build a fully electric version of the Mini at the Cowley plant near Oxford.


The new model of the three-door Mini will go into production in 2019.


BMW had considered several locations for the car, including Born, the Netherlands and a location in Germany before deciding on Britain.


“The electric MINI’s electric drivetrain will be built at the BMW Group’s e-mobility centre at Plants Dingolfing and Landshut in Bavaria before being integrated into the car at Plant Oxford, which is the main production location for the MINI 3 door model,” the company said in a statement.


 


1.30pm…US stocks set for mixed open


The FTSE 100 has carried over the momentum built up during the morning into this afternoon.


It is now up 62 points, or 0.85%, to 7,440; all but wiping out yesterday’s losses.


Miners top the risers list


PLC () was the top riser, up 5.5% to £11.66 after its subsidiary Kumba Iron Ore saw headline earnings almost double to US$348mln in the six months ended 30 June.


Miners more generally were doing well, with stronger base metals prices dragging Antofagasta PLC () (up 4.7% to 927p), ( (up 3.3% to £13.29) and Glencore PLC () (up 3.5% to 323.5p) higher.


Informa PLC () has enjoyed a decent day so far, up 3.7% to 701p, after it posted a decent set of interims and sold a €15m stake in German/ Swiss conference business Euroforum.


Provident Financial Group PLC () was the biggest faller on the Footsie yesterday, and it seems investors were right to be nervous about today’s interims as the subprime lender topped the losers list once again today.


WM PLC () shed 2.5% to 240p despite the latest Kantar Worldpanel data giving up a thumbs up to the UK supermarket sector.


disappointment to weigh on Nasdaq


Looking ahead to the US open, spread bet firms are expecting the Nasdaq Composite to give up some of yesterday’s gains and open 6.5 points in the red at 5,939.


That initial loss will largely be as a result of Inc’s () disappointing second quarter results, with the stock down almost 3% in pre-market trade.


It’s better news for the Dow Jones and S&P 500, both of which look set to recapture Monday’s losses and more.


The Dow Jones is seen as opening 115 points higher at 21,650.9, while the S&P 500 is tipped for a 6 point rise at the opening bell to 2,477.9.


 


12.30pm…Britain’s manufacturing production booms


Manufacturing output in the UK rose at its fastest rate since the mid-1990s over the past three months, according to the Confederation of British Industry in a survey released today.


It said the quarterly balance for manufacturing rose to +31 in the three months to July, the highest reading since January 1995. In the three months to April, the reading stood at +22.


CBI added that expectations for export order growth in the quarter ahead were the strongest in 40 years, despite a moderation over the past quarter.


Rain Newton-Smith, CBI chief economist, said: “Output growth among UK manufacturers is the highest we’ve seen since the mid ‘90s, prompting the strongest hiring spree we’ve seen in the last three years. Cost pressures are easing and firms are upbeat about the outlook for export orders.”


 


12.25pm…Domino’s launches Amazon Echo voice ordering


Domino’s Pizza Group PLC () is well down today – 7.3% to 259p, to be exact – but don’t let that distract you from the fact that you can now order pizzas without lifting a finger.


The pizza delivery firm confirmed in its interims that it has teamed up with Amazon to allow customers to order pizzas just by shouting at their Amazon Echo smart speaker.


Let me demonstrate: “Alexa, order me two pepperoni pizzas from Domino’s please”. Done.


 


12pm… and Sainsbury’s buoyed by latest Kantar data


Shares in PLC () (up 0.6% to 173.5p) and () (up 0.6% to 244.5p) were given a modest boost this morning after the latest data from Kantar gave the supermarket sector another thumbs up.


In the 12 weeks to 16 July, sales grew by 3.9%, boosted by the recent hot weather during which sales of ice creams and sun care products (predictably) soared.


In the same three months, Britons also spent an additional £158mln on alcohol as we took advantage of barbecue-friendly weather.


As for food price inflation that steadied at 3.2% – the same rate as last month – and analysts think prices could soon fall back slightly.


“Consumers will be pleased to hear that price rises are no longer accelerating,” said Kantar’s head of retail and consumer insight Fraser McKevitt.


“One year on from the EU referendum – which had a marked impact on the price of imported groceries – hard-pressed shoppers could soon start to feel upward pricing pressures ease.”


Lidl was once again the fastest growing supermarket in the UK with sales increasing by 19.4% over the three month period.


 


11.30am…One billionaire takes aim at another


Technology mogul Elon Musk has got into a minor spat with founder and fellow billionaire Mark Zuckerberg over the future of artificial intelligence.


Musk is a fan of artificial intelligence, but has recently said it could be the “biggest risk we face as a civilisation” if it’s not regulated appropriately.


AI is becoming a critical part of ’s business, and Zuckerberg took exception to the negativity, calling the comments “pretty irresponsible”.


“I think people who are naysayers and try to drum up these doomsday scenarios — I just, I don’t understand it. It’s really negative and in some ways I actually think it is pretty irresponsible,” Zuck is reported to have said.


Never one to keep quiet, Musk fired back with a tweet in which he referred to Zuckerberg’s understanding of the subject as “limited”.


 


11.20am…Acacia slumps after being hit with US$190bn fine


Without doubt one of the stories of the day involves PLC (), which has been hit with a US$190bn tax bill from the Tanzanian government.


The figure – which is made up of US$40bn in taxes and US$150bn of penalties – is part of Acacia’s ongoing dispute with the authorities in the East African country.


The government there alleges that the miner under-declared the amount of gold it was shipping from its four mines in the country and as such claims it is owed A LOT of money in back taxes.


For its part, Acacia denies any wrongdoing and has maintained its position throughout the saga that it has always fully declared all revenues.


Regardless of who is right and wrong, the number being demanded is pretty incredible; it’s 266 times more than Acacia’s market cap on the FTSE 250.


Despite the almost unbelievable demand from the Tanzanian government, shares are ‘only’ down 9% at the money to 167.8p.


Acacia has lost almost two-thirds of its value since the issue first came to light back in March.


 


10.55am…FTSE 100 on a roll


The FTSE 100 is doing its best to overturn yesterday’s losses. In mid-morning trade, London’s blue chip index is 0.8%, or 61 points, in the black at 7,439.


It opened the week at just over 7,450 so it’s almost back on a level footing after a disastrous Monday, during which it fell as low as 7,358.


Leading it higher is the heavyweight miners, with PLC () (up 4.8% to £11.57), Antofagasta PLC () (up 2.6% to 908p) and () (up 2.8% to £13.24) all boosted by strengthening base metals prices.


Informa PLC () is still the top riser though, up 7.1% to 720p, after it posted a decent set of interims and sold a €15m stake in German/ Swiss conference business Euroforum.


Following closely behind was property developer PLC () which saw its net asset value increase in the first six months of the year as demand for warehouse goes through the roof.


Subprime lender Group PLC () was the biggest faller on the Footsie yesterday, and it seems investors were right to be nervous about today’s interims.


Shares slipped another 2.5% to £22.41 as the firm saw first half pre-tax profits fall by 22% caused by a cut in the number of debt collection agents at its home credit division.


easyJet PLC’s () recent turbulence is showing no signs of stopping, with the budget airline is down another 1.8% to £12.52. This time last week, shares were changing hands for more than £14.


Investors are cautious that airlines are having to lower their ticket prices just to get bums on seats as competition in the sector heats up.


 


10.25am… boosted by increasing demand for warehouses


Property developer PLC () saw its share price zip 4.5% higher this morning to 528p, its highest level for nine years.


The FTSE 100 group revealed that the value of its assets had increased by more than 5% as the growth in online shopping is boosting demand for storage warehouses.


“There is no sign of any slowdown in the growth of internet retailing which is an important driver of demand for modern warehouse space across our markets, both in big boxes used for logistics and smaller, urban warehouses used for last mile delivery,” said chief executive David Sleath.


“With few signs of any meaningful new supply of speculatively developed space and investor appetite for good quality warehouse assets remaining strong, our business is well-placed to continue outperforming the wider market.”


 


9.50am…’Plenty of food for thought at Domino’s’


“With sales, profits and dividends all up, the headline numbers look strong enough at first glance,” said analyst George Salmon.


“However, given there’s plenty of growth potential baked into Domino’s share price, the key figures were always likely to be rising in these results. The worry is that the group might be bumping up against the sides of the tank far earlier than it previously thought.


In the last 12 months, Domino’s opened around 100 stores in the UK. While these openings are driving headline revenues, they are cannibalising sales from existing stores.


“There are other worries too. With household incomes squeezed by inflation, investors will be concerned that consumers are increasingly counting the pennies.


“Add in the continued strength of new types of takeaway ordering system, such as that provided by rival , and there’s plenty of food for thought at the moment.”


 


9.15am…Miners leading the way


It wasn’t a very happy Monday for the FTSE 100 yesterday as it gave up almost 100 points, but the blue chip index has recovered some of those losses in early deals this morning.


The index is currently 41 points, or 0.5%, up on last night’s close at 7,419.


Leading the way were the miners, with PLC () (up 4.9% to £11.58), Antofagasta PLC () (up 2.6% to 908p) and () (up 2.6% to £13.21) all registering decent gains early doors on stronger base metal prices.


Informa top riser


Informa PLC () was the top riser among the big boys though; it gained 6.7% to trade at 720p after its interim results showed that its recently-acquired US-based Penton business is settling in well.


The publishing and events group revealed positive revenue growth, up some 3.7% on an underlying basis and 41.3% higher for reported revenue for the six months ended June 30.


Adjusted operating profit was up 1% underlying, 41% reported whereas earnings per share improved by 12.7% to 24p. Statutory operating profit amounted to £182.2mln, up 28.7% compared to the first half of last year.


takes another whack


Subprime lender Group PLC () was the biggest faller on the Footsie yesterday, and it seems investors were right to be nervous about today’s interims.


Shares slipped another 2.6% to £22.38 as the firm saw first half pre-tax profits fall by 22% caused by a cut in the number of debt collection agents at its home credit division.


“Whilst I remain disappointed by the higher than expected operational disruption to trading in the home credit business, the new business model was deployed as planned during the first week in July,” said chief executive Peter Crook.


Domino’s also out of favour


FTSE 250-listed Domino’s Pizza Group PLC () was also out of favour this morning this morning after the pizza delivery giant saw growth slow in the first half of the year.


For the six months to 30 June, the FTSE 250-listed group saw total sales rise by 10.5% to £546.5mln (H1 2016: £494.5mln), a slowdown on the 17% expansion it registered last year.


Underlying pre-tax profits rose a shade over 9% to £44.6mln (H1 2016: £40.9mln), although that was also down on the 20% growth it recorded in the first half of 2016.


Shares dived by 7.2% to 259p as investors couldn’t stomach the plateauing sales growth.


Fever-Tree fizzes once more


First of all, let me apologise for how many times you’ve read the line ‘Fever-Tree fizzes’ over the past couple of years. It’s an easy pun to pluck for during the morning news rush.


Anyway, AIM-quoted PLC () was fizzing higher this morning after it upgraded its full-year guidance once again as its rapid growth shows no sign of slowing.


During the first six months of 2017, revenues surged 77% to £71.9mln (H1 2016: £40.6mln), ahead of the 69% revenue growth it registered during the same period last year.


The strong performance means that the premium tonic maker now expects full-year results to be “materially ahead of expectations”. Cue a 9.1% jump to £19.05.


 


8.30am…FTSE recovers some of yesterday’s losses


The FTSE 100 recovered from Monday’s sell-off as it opened 37 points to the good at 7,414.47 with the mining sector leading the revival.


(), BHP Billiton () and Glencore (LON: GLEN) were at the head of the natural resources charge.


Top of the Footsie was Informa (), owner of Lloyd’s List, the world’s oldest newspaper, which was up 5% after selling its German conferences business to newspaper group Handelsblatt.


Croda hit after results


There was a little profit taking in the wake of interims from chemicals group Croda (), which was off 2.2% following the release of interim results.


Dropping down a division to the FTSE 250, one of the day’s biggest fallers was Domino’s Pizza Group after a rather anaemic first half showing (read more here). The shares, off a quarter in the last year, fell a further 4% after the interim results statement.


Pick of the small-caps was Amryt Pharma () after the publication of some encouraging trial data on its cholesterol drug, that further ‘copper bottomed’ its efficacy.


 


Proactive new headlines


The new financial year has got off to a strong start at (), the supplier of customised electronics to industry, with revenue up 14% year-on-year on a constant exchange rates basis in the three months to the end of June. 


A newly published long-term study of the Amryt Pharma PLC () drug Lojuxta has further confirmed its efficacy in lowering high cholesterol levels resulting from a rare genetic disorder. The assessment of Lojuxta, also known as lomitapide, followed the progress of patients with Homozygous Familial Hypercholesterolaemia (HoFH). 


The acquisition of Crusader Resources by () continues, as Stratex has agreed to reschedule a previously existing convertible loan owed by Crusader to a director, and to take on share-based payments agreed in relation to the acquisition of a gold asset. 


() has been given permission by local authorities in Western Australia to undertake a 2,000 metre drill programme at its Hanns Camp project. Hanns Camp is prospective for cobalt and for both nickel laterite and nickel sulphide mineralisation. 


() has played down reports that the New York Wheel project could be abandoned after a key contractor was fired last week. Reports from New York said the project is set for major delays after Mammoet-Starneth, the design/build contractor, downed tools in May claiming developer NY Wheel hadn’t paid it. 


() has formally kicked off Guitry, its second palm oil project, in Côte d’Ivoire. Guitry will, like the group’s flagship Ayenouan project, be developed as a vertically integrated palm oil operation including nursery, company-owned estates and a mill producing crude palm oil.


(LON:ATL) has told investors that it has now closed its £5mln ‘green’ bond, with full subscription. The tidal power firm said that together with its recent £4.1mln share placing the company intends to use the new capital to grow the business, repay its more expensive debt and for working capital purposes. 


 


6.45am…rebound predicted


London’s blue chips are set to rally this morning after heavy falls Monday sparked by a good performance by the pound against the dollar and euro.


Financial spread bet firms see FTSE 100 reversing some of the 75 point fall to 7,377 and adding up to twenty points when trading gets underway.


US markets were also under pressure with dips for the Dow Jones  Industrial Average (down 66 to 21,513) and the S&P 500, though Nasdaq managed to eke out a small gain.


Google owner ’s results dominated after-hour trading. Shares fell even though the search engine giant saw second quarter sales rose 21% to US$26bn (£20bn).


Earnings per share also beat expectations but there was some disappointment with the cost per click statistics. The amount paid by advertisers dropped by 23% against forecasts of 15%.


Asian markets were quiet with Tokyo, Hong Kong and Shanghai all little changed heading for the close.


 


City headlines


Smartphone demand hits fresh second quarter record: More smartphones were sold globally during the three months to the end of June than during any other second quarter on record. (Independent)


Bookies lavish entertainment on MPs: Two of the UK’s biggest bookmakers significantly increased the amount they spent on entertaining MPs as the government came under pressure to take action against the gambling industry. (Financial Times)


First Utility enters the broadband market by undercutting the Big Four: The UK’s largest independent energy supplier is taking its challenge to the Big Six energy suppliers to the Big Four broadband giants by offering the market’s lowest priced internet deal. (The Telegraph)


Brexit to push up cost of bangers as UK wholesale meat prices soar: Brexit is set to push up the price of the British banger, as wholesale pork and beef prices soared over the last year as a result of the weak pound and a surge in export demand.


City brokers cheer on Love Island’s success as hit reality show gives ITV a boost: Love Island may have come to an end last night, but analysts at Liberum believe the dating show has given its broadcaster ITV a boost ahead of its first-half results on Wednesday. (Daily Mail)


Bake Off signs Lyle’s golden syrup and Dr Oetker as sponsors for Channel 4 show: The Great British Bake Off has signed ‘seven-figure’ sponsorship deals with Lyle’s golden syrup and Dr Oetker for the next series of the show. (City AM)


 


Commodities/currencies


Gold: US$1,255 up US$1


Oil (WTI): US$46.63 up 29c


£/$:1.3038 pound higher


 


Significant events expected


Trading updates: PLC ()


Finals: PLC ()


Interims:  PLC (), Gresham Technologies PLC (), Informa PLC (), PLC (), PLC (), (), PLC (), Holdings PLC ()

Leave a Reply

Your email address will not be published. Required fields are marked *

*

10 + 4 =