FTSE 100 closes ahead as Brexit fears are pushed aside amid US stimulus hopes

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  • FTSE 100 closes 35 points up
  • BP top gainer on Footsie
  • Inchape wanted as second lockdown hits it less hard than feared

5pm: FTSE closes ahead

FTSE 100 closed Thursday in the green as resource stocks were lifted and Brexit worries appeared to be brushed aside amid US stimulus hopes.

Britain’s index of leading shares closed up around 35 points at 6,599.

FTSE 250 though fared less well. The more UK company focused index finished down over 127 points at 19,756.

“Markets are on the rise after a somewhat tumultuous day that saw Brexit disappointment and ECB changes dominate the European session. Fortunately while the UK and EU are looking as far from a deal as ever, the US could be getting their act together in a bid to push a fresh stimulus package across the line,” noted Joshua Mahony, senior market analyst at IG.

Treasury Secretary Steve Mnuchin had said a lot of progress was being made towards a potential deal, added the analyst.

The latest jobs data from the US was disappointing, however, as the jobless claims rate jumped from 716,000 to 853,000 – the highest level in eight weeks.

On Footsie, top riser was oil giant BP (LON:BP.), which gushed up 4.45% to 284.75p as both Brent crude and WTI rose over 4% on the day.

3.55pm: bad day for mid-caps – but not Inchcape or Frasers

The FTSE 100 has largely marked time in the afternoon, a bit like a Jose Mourinho team defending a two-nil lead.

The Footsie was up 48 points (0.7%) at 6,612, with resource stocks to the fore.

The oilers were given a lift by the rising price of crude – Brent broke above the US$50 a barrel level for the first time since March -while among the miners, Rio Tinto PLC (LON:RIO) was 3.1% higher at 5,533p after it declared a maiden ore reserve and updated mineral resource at its wholly-owned Jadar lithium-borates project in western Serbia.

If the Footsie was having a good day – helped by sterling’s terrible performance on foreign exchange markets – the more domestically focused FTSE 250 was on the slide, shedding 168 points (0.8%) at 19,716, despite a 13% rise to 497.6p for Frasers Group PLC (LON:FRAS) after its interims.

Inchcape PLC (LON:INCH), up 7.5% at 678p, was another mid-cap going well after the cars seller said in its trading update that the second UK lockdown had less of an impact on its business than feared.

3.40pm:  Proactive North America headlines:

WeedMD Inc (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) says its Color Cannabis cultivar Pedro’s Sweet Sativa has been awarded Top Sativa Flower in Canada

Gevo Inc (NASDAQ:GEVO) (FRA:ZGV3) sends sustainable aviation fuel to Seattle airport via its supplier Avfuel Corporation

Aurania Resources Ltd (CVE:ARU) (OTCQB:AUIAF) (FRA:20Q) prepares for drilling at Tsenken N1 target in Ecuador as it outlines next steps

Versus Systems Inc (CSE:VS) (OTCQB:VRSSF) (FRA:BMVA) announces 1:16 reverse stock split to aid Nasdaq listing requirements

VUZIX Corp Corporation (NASDAQ:VUZI) (FRA:V7XN) helping CH Four Biogas to scale North American operations and reduce carbon emissions with Smart Glasses roll-out

Vox Royalty Corp (CVE:VOX) (OTCMKTS:VOXCF) hails strong potential for start of mining in 2021 at Bulong, Australia as it updates on royalty partner news

Luckbox expands affiliate marketing programme

Media Central  Corporation Inc (CSE:FLYY) (FRA:3AT) announces LOI to acquire media and marketing company Lazarus Bleau

2.47pm: Wall Street opens in the red

The main Wall Street indices dropped into the red on Thursday morning as a rise in US jobless claims rattled investors.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.54% at 29,907 while the S&P 500 dropped 0.67% to 3,648 and the Nasdaq fell 0.82% to 12,238.

Fragile investor sentiment seems to have been shattered by the initial jobless claims figures for the week to December 5, which reported that 853,000 Americans filed for unemployment, up from 716,000 the week before, as surging COVID-19 cases and new lockdown measures in multiple states began to weigh on the US’s economic recovery.

“After a disappointing November jobs report, the early indications are that December will be even worse. We could even see a drop in employment if today’s jobless claims numbers are anything to go by”, said analysts at ING.

“We strongly suspect that Covid-19 containment measures will intensify and spread to more and more states. In any case there is evidence to suggest that consumers are already voting with their feet. The charts below show the number of restaurant visits are plummeting while hotel reservations are at their lowest level since May and domestic travel is also seeing weakness. This means we run the risk of further significant job losses in the leisure and hospitality industry while the potential for closure of non-essential retail is adding to the worries about the jobs market.

“While there is optimism about a vaccine it will take time before it is distributed to enough people to allow a full return to “normality”. This means we need to be braced for a window of perhaps 3 or 4 months where restrictions will weigh on economic activity. Consequently, we see a growing probability that employment declines in coming months and not just in those sectors focusing on consumer service who are most likely to experience direct restrictions”, they added.

Back in London, the FTSE 100 seemed to have lost some momentum following the negative start on Wall Street but was still up 15 points at 6,579 at around 2.45pm.

2.00pm: ECB expands and extends its stimulus package

The European Central Bank (ECB) has bumped up the size of its COVID-19 stimulus package by €500bn and extended it by nine months.

The central bank left its key lending rates unchanged.

“While today’s policy package may be somewhat unexciting for some market participants, the ECB will be pleased to have largely steered market expectations in the right way. Unexciting if not almost boring – as in “the ECB watches the Eurozone economy’s back whatever betide” – is exactly how the ECB wants to be seen. Stay tuned for the press conference,” said Florian Hense, an economist at Berenberg.

Carsten Brzeski at ING said the “recalibration” by the ECB was in line with expectations.

These announcements all fall into the category ‘recalibration’ and not ‘additional easing’,” Brezski said.

“The ECB’s main aim is to extend the current level of monetary accommodation until mid-2022. The press conference starting at 2.30pm CET will shed more light on the ECB’s current thinking as well as the latest macro-economic projections. Stay tuned,” he added.

It is not often economists agree on something but that’s two now who have said we should “stay tuned” for the press conference later on today.

“The press conference likely will feature a barrage of questions on the recent rally in EURUSD, and whether the ECB is plotting to take evasive action. We reckon Ms Lagarde’s will reply in usual fashion that while the ECB is not targeting the exchange rate, it does matter for price stability, and as such, it enters into the council’s reaction function,” said Claus Vistesen, who did not advise us to stay tuned.

Back in Blighty, the FTSE 100 was up 33 points (0.5%) at 6,598.

1.05pm: Airlines rattled by realisation that British holidaymakers will be unable to travel to EU countries from January 1

The FTSE 100 has remained in positive territory but has had a bit of a wobble, despite sterling slumping below US$1.33.

London’s index of heavyweight shares was up 26 points (0.4%) – about half the rise it had at the end of the morning – at 6,590.

On the foreign exchange markets, traders are passing judgement on the likelihood of the UK and the European Union reaching a deal by Sunday.

Sterling crashed by 1.22 cents to US$1.3284.Against the euro. It was off 1.3 cents at €1.0967.

Tesco PLC (LON:TSCO) shares were 1.4% higher after Tesco chairman, John Allan, suggested in an interview that food prices could rise substantially if a Brexit deal is not reached.

A “no-deal” outcome would trigger tariffs that can be “quite substantial on some food items”, Allen said.

While urging shoppers not to panic buy, Allen also raised the prospect of a shortage of some food items, especially short-life fresh foods, while the EU and Britain get their act together on the logistics front.

“I think that will only be for a limited period, perhaps a month or two before we get back to normal,” Allan said, as producers of pickled and smoked goods and preserves gently rubbed their hands in glee.

Earlier today, the European Commission gave some idea what the contingency measures would be in terms of air, sea, rail and road freight in the event of a deal between the EU and Britain failing to be concluded.

The contingency measures were themselves contingent on Britain reciprocating on the same basis; seeing as Britain’s disinclination to subscribe to what the EU terms “a level playing field” is one of the issues most likely to lead to a deal not being agreed, the European Commission’s contingency plans may prove to be in vain.

The European Union (EU) also confirmed that British holidaymakers would be barred from travelling to EU countries from January 1 of next year while the current COVID-19 safety restrictions remain in place.

At present, the UK is included in the small number of countries not subject to the EU’s restrictions on non-essential travel but this arrangement ends in the New Year.

Low-cost airline easyJet PLC (LON:EZJ) was down 3.3% at 845.4p as traders saw the prospect of a winter surge in bookings heading (figuratively speaking) south.

Sector peer Ryanair Holdings plc (LON:RYA) was off 1.2% at €16.17.

Britons could be barred from EU entry on 1 January when the transition period ends bc of #COVID travel restrictions.. NB this is not a ‘punishment’ from Brussels, it’s all about being subject to different rules once outside the bloc #Brexit https://t.co/89y8xk2YsW

— Katya Adler (@BBCkatyaadler) December 10, 2020

12.25pm: Hesitant start seen for US equities; Airbnb flotation price turns out to be higher than expected 

US indices are expected to make a hesitant start, with attention focused on the hullaballoo surrounding the flotation of Airbnb.

The S&P 500 is expected to open more or less unchanged at 6,373. The Dow Jones industrial average is tipped to edge 37 points higher to 30,105 while the Nasdaq 500 is on course to open a measly 11 points firmer at 12,349.

Airbnb Inc (NASDAQ:ABNB) shares are expected to start trading today after the spare room booking app developer priced its initial public offering (IPO) at US$68, well above the recently indicated target range of US$56 – US$60.

The IPO price values Airbnb at more than US$40bn.

“Technological innovation means that hosts and host management companies are more easily able to manage inventory, availability, and pricing across different platforms, and this is reducing the costs of switching from Airbnb,” cautioned Dan Thomas, an analyst at Third Bridge who sees challenges to Airbnb on several fronts.

“In some markets, we see a trend of hosts acquiring visitors through the Airbnb platform, but then retaining them via cheaper platforms or direct booking discounts,” Thomas said.

“Booking Holdings is a formidable competitor. In FY 2019 it generated almost USD 4.9bn in operating cash. It has been fine-tuning its performance marketing funnel and has shown an appetite for vacation rentals.

“An important question is how much more growth Airbnb can achieve through direct traffic to the platform once the pandemic is over. For the nine months to end September, 91% of all site traffic arrived directly or via unpaid channels which helped preserve the business through an exceptionally challenging period. Pre-pandemic, the level of direct enquiry or via unpaid channels was 77% of Airbnb’s total traffic, a level at which achieving profitability is far more challenging,” Thomas said.

The Airbnb IPO listing range is $56 to $60 per share.

So once you account for service fees, cleaning fees and accommodation taxes it’ll come out to $90 to $100 per share.

— Tanay Jaipuria (@tanayj) December 7, 2020

As for US macroeconomic data, today sees the release of the consumer price index.

Daiwa’s chief economist for America, Mike Moran, thinks that “tame food and energy readings” will limit the headline index to a 0.1% month-on-month gain, but that the reversal of pandemic-related discounting will lead to a 0.2% lift in the core index.

The latter would leave the annual inflation rate close to last month’s reading of 1.6%.

It’s Thursday, so there will also be the weekly jobless claims report where it will be interesting, according to Daiwa, to see whether initial claims sustained the lower reading seen last week.

In London, the FTSE 100 has stretched its gain to 50 points (0.8%) at 6,615, helped by support from the heavily-weighted oil majors, Rohal Dutch Shell PLC (LON:RDSB) and BP PLC (LON:BP.).

The former is up 2.9% at 1,374p and the latter is 2.4% firmer at 279.05p as the oil price heads higher; Brent crude for February delivery is 76 cents more expensive at US$9.62 a barrel.

11.30am: European Commission announces logistic contingency measures in case of no-deal Brexit

The European Commission has released a set of targeted contingency measures in case a Brexit deal is not reached.

The measures are designed to ensure basic reciprocal air and road connectivity between the EU and the UK, as well as allowing for the possibility of reciprocal fishing access by EU and UK vessels to each other’s waters.

These contingency measures aim to cater for the period during which there is no agreement in place. If no agreement is applied, they will end after a fixed period, the European Commission said.

The EU has published contingency measures that keep trucks, trains and planes moving in a No Deal exit. But guess what? They require to Britain uphold a “level playing field” including subsidy controls – the same principle it is willing to sink a deal over… pic.twitter.com/0Siyp5ElVi

— Matthew Holehouse (@mattholehouse) December 10, 2020

Meanwhile, in the House of Commons, MPs are discussing the Brexit negotiations.

Paymaster General and Cabinet Office Minister Penny Mordaunt said it was clear “we remain far apart on the so-called on the so-called level playing field, fisheries and governance” but said she was still optimistic that a deal could be secured.

Earlier, the Foreign Secretary Dominic Raab conceded that failure to strike a trade deal with the EU would cause “some bumps along the road” but gave short shrift to the suggestion, made by Tesco chairman John Allan, that food prices could rise by 5% in the event of no deal being secured.

“Of all the things that will be a challenge, I am not concerned about either supermarket cupboards running bare or the cost of food prices,” Raab said in a radio interview.

The Brexit brinkmanship does not seem to be having much negative effect on the share prices of blue-chip equities, judging by the performance of the FTSE 100.

The Footsie was up 39 points (0.6%) at 6,603, with the advance led by packaging firm DS Smith PLC (LON:SMDS) after its half-year results this morning.

The shares rose 4.0% to 372.9p despite the company reporting a 54% decline in half-year profit before tax. The FTSE 100 company has resumed dividend payments with a 4p interim divi.

“DS Smith saw strong demand for packaging as a result of the surge in online shopping but it seems odd that it is re-starting making dividend payments when revenues and profit are weaker. It appears like a strategy to keep shareholders onside,” said CMC’s David Madden.

10.10am: Ocado fails to meet high expectations with trading statement

The latest survey from the Royal Institution of Chartered Surveyors (RICS) showed a barely perceptible cooling in the housing market.

The net balance of surveyors reporting that house prices have risen over the last three months fell to +66 in November, from +67 in October, but was ahead of the consensus forecast of +63.

The balance is calculated by subtracting the percentage of respondents reporting a fall in house prices from the percentage reporting a rise.

“The housing market remains in a sweet spot, thanks to the government’s decision in July to lift the threshold for stamp duty to £500K, from £125K, until the end of March,” said Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.

“The number of home sales per surveyor climbed to 19.1, from 18.1 in October, thereby greatly exceeding its 13.0 average last year. The new buyer enquiries balance declined to +27 in November, from +42 in October, but as it is technically an indicator of month-on-month growth in demand, it is likely that house purchase mortgage approvals will remain near October’s 13-year high. Indeed, Google Trends data indicate that visitor numbers to property websites have remained 30% above their level a year ago in December,” Tombs said.

“Housing market activity, however, looks set to fall sharply from April onwards, if the government sticks to its plan to end the stamp duty holiday and does not set up a new mortgage guarantee scheme, as the Prime Minister has mooted recently. The rapid rollout of the vaccine should mean that most people are happy once again with their pre-Covid housing decisions. Meanwhile, mortgage rates for high LTV [loan-to-value] loans likely will remain well above last year’s level, as lenders price-in a greater risk that loans will turn sour during a period of high unemployment, choking off demand from first-time buyers. Accordingly, we currently expect house prices to fall by about 2% over the course of 2021, following a 6% rise during this year, if government policies do not change,” Tombs said.

RICS house price balance chart, courtesy of Pantheon Macroeconomics

The FTSE 100 was up 39 points (0.6%) at 6,603 but no thanks to housebuilders; Persimmon PLC (LON:PSN) was down 2.9% at 2,608p and Barratt Developments PLC (LON:BDEV) was 2.6% weaker at 614.2p.

Mortgage lender Lloyds Banking Group PLC (LON:LLOY) was 3.4% softer at 35.98p, making it the second-worst blue-chip performer after Ocado Group PLC (LON:OCDO) underwhelmed with its trading statement covering the 13 weeks to November 29.

“It’s no surprise to see that Ocado’s full-year profit forecast is set to double the previous year. The lockdown restrictions have confirmed the earlier trends that we saw around Spring time which showed positive sales growth for direct to consumer and supermarket companies. Indeed we have already seen a significant shift in consumer behaviour which has boosted growth for those companies in Q2 and to a lesser extent in Q3 but which now look to boost growth again in Q4. Ocado’s sales and earnings growth will depend on customers’ shopping habits but we are likely to see more of the same again in early 2021,” suggested Mark Lynch, a partner at corporate finance house, Oghma Partners.

“We are sadly likely to see more long term problems for Food to Go and food service providers that are unable to service clients as per normal – the sad fact is that the longer the restrictions are imposed the more end-user businesses will go bust. This includes pubs, restaurants and the more food service manufacturing capacity and, to a lesser extent, Food to Go capacity we will see taken out of the market. The consumer market as we knew it is unlikely be the same ever again,” predicted Lynch.

Ocado shares were down 4.9% at 2,211p.

Proactive news headlines

Ceres Power Holdings PLC (LON:CWR) said it has signed a collaboration agreement with Austrian powertrain specialist AVL List that will see the two companies work together on licensing solid oxide fuel cells technology.

Corero Network Security PLC (LON:CNS) said it took more than US$3mln in orders in October and November.

XLMedia PLC (LON:XLM) said it has made a significant step in its expansion into the US sports market with the acquisition of sports gaming and betting business CBWG Sports.

Iconic Labs PLC (LON:ICON) hailed what it said is “material positive progress” in its business activity across the second half of 2020, with contracted revenues now exceeding £135,000 per month compared to £0.1mln for the past year.

Coinsilium Group Limited (LON:COIN) (OTCQB:CINGF) said it has entered the virtual asset and digital collectable market through a technical development and support deal with Vietnamese firm RedFOX Labs.

Primary Health Properties PLC (LON:PHP) has agreed to acquire its management company Nexus Tradeco for £33.1mln in cash and shares, which is expected to save around £4mln per year in costs, boost earnings per share and allow the payment of higher dividends.

Greatland Gold PLC (LON:GGP) has revealed a maiden mineral resource for the Havieron deposit in Western Australia of 4.2mln ounces of gold equivalent, with the initial inferred resource estimate comprising 3.4mln oz of gold and with drilling in four target regions holding the possibility to grow the resource further.

Thor Mining PLC (LON:THR) said it has identified significant magnetic targets from the airborne survey at its Ragged Range Project in Western Australia, with the Sterling prospect approximately 5km long and between 300 and 500 metres in width.

Union Jack Oil PLC (LON:UJO) told investors that its 16.665% owned West Newton B1Z appraisal well, in Yorkshire, has encountered a substantial hydrocarbon column that de-risks the project and is described by the company as “a significant step forward” towards development.

Empire Metals Ltd (LON:EEE) has exercised its option to acquire 75% of the Eclipse gold project in Western Australia.

Caledonia Mining Corporation PLC (LON:CMCL) said it has entered into an option agreement regarding the Glen Hume area. The property is located in the Gweru mining district in the Zimbabwe Midlands that has historically produced significant quantities of gold, the miner said.

Irish explorer Arkle Resources PLC (LON:ARK) in an operations update told investors that trenching has begun at the Inishowen project, in Donegal, as it aims to unearth expansions of gold veins discovered in 2016.

SolGold plc (LON:SOLG) announced that drilling is underway at the Tandayama-America Porphyry Copper-Gold target at the Cascabel project in northern Ecuador.

Oracle Power PLC (LON:ORCP) said after the completion of the field based exploration programme at the Northern Zone gold project, results from the lab are expected in the coming weeks and a maiden drilling campaign is planned for early 2021.

Zephyr Energy PLC (LON:ZPHR) continues its countdown to the start of drilling later this month, with the State 16-2 well in Utah’s Paradox basin “firmly on track” to spud by December 31.

Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) told investors that the Beetaloo joint venture partners have decided to carry out necessary intervention work in the recently drilled Kyalla 117 well without delay.

Netscientific PLC (LON:NSCI) shares rose as its 95%-owned portfolio firm ProAxsis has been awarded a grant from Innovate UK that it said will co-fund a £390,000 project to develop novel protease biomarkers to identify high-risk coronavirus (COVID-19) patients.

Vast Resources PLC (LON:VAST) has received the cash proceeds from the first commercial sale of concentrate produced at its Baita Plai polymetallic mine in Romania.

Shield Therapeutics PLC (LON:STX) provided investors with an update on the status of its efforts to commercialise its Accrufer iron deficiency treatment in the US market.

Bahamas Petroleum Company PLC (LON:BP.) on Thursday updated on an application to the Supreme Court of The Bahamas, made by activists, seeking a  judicial review of the government’s decision in February to grant environmental authorisation for the imminent Perseverance exploration well.

ADM Energy PLC (LON:ADME) announced the completion of its transaction to acquire an additional 2.25% interest in OML 113, taking its stake to 4.9% and expected net share of production to 196 barrels of oil per day.

Induction Healthcare PLC (LON:INHC) said it has a strong sales pipeline that will provide a “solid foundation” for future growth as it provided a progress report alongside its interim results.

C4X Discovery Holdings PLC (LON:C4XD) said it had made significant headway over the past year and it expects more progress on its key programmes in 2021. The company had net cash at 30 November 2020 of £17.3mln after raising £24.2mln over past 15 months.

FastForward Innovations Ltd (LON:FFWD) has reported growth in the value of its net assets in the first half of its current year. For the six months to September 30, the AIM-listed group reported a net asset value (NAV) of 9.43p per share during the period compared to 8.82p at the end of March, while total investment gains for the half-year stood at £1.46mln.

Salt Lake Potash Ltd (LON:SO4) told investors it has made arrangements to raise A$48mln through a share placing. Additionally, the company also seeks to raise a further A$5mln via a share purchase plan.

Adamas Finance Asia Ltd (LON:ADAM) has appointed Hybridan LLP as its sole corporate Broker with immediate effect.

Faron Pharmaceuticals Oy (LON:FARN, First North: FARON) said researchers will deliver virtual presentations assessing trial data for its lead drug and discussing new thinking on tumour targeting. 

Emmerson PLC (LON:EML) said it will be presenting at the UK Investor Magazine Virtual Investor Conference next Tuesday, December 15. The Morocco-focused potash development company’s chief executive, Graham Clarke, will give a presentation at 12pm on recent progress and a summary of the work programmes ahead at its Khemisset potash project, where early construction work is targeted to start in late 2021.

9.50am: UK posts in-line trade deficit in October 

The UK total trade surplus, excluding non-monetary precious metals, decreased by £6.5bn to £0.8bn in the three months to October 2020.

Imports grew by £14.3bn and exports grew by a £7.8bn.

The decrease in the total trade surplus was driven by an increase in the trade in goods deficit; the underlying trade in goods deficit widened by £6.6bn to £29.1bn in the three months to October 2020, the Office for National Statistics said.

For October alone, the total trade deficit widened by £0.9bn to £1.6bn, with imports rising by £0.4bn and exports falling by £0.5bn. The trade deficit was in line with economists’ expectations.

The FTSE 100 was up 41 points (0.6%) at 6,605.

9.20am: UK GDP rises in October

UK gross domestic product (GDP) grew by 0.4% in October, meaning GDP was 23.4% than its April 2020 low.

On the other hand, it was 7.9% below February’s pre-pandemic level.

The services sector grew by 0.2% in October while the production sector grew by 1.3% and the construction sector by 1.0%.

“It’s hard to keep pace with the rollercoaster of restrictions in the UK and consequently, the economic impact. With October seeing a host of tiered restrictions, the slowdown in GDP growth is to be expected. Fast forward to now, England has headed back into localised rules following the second national lockdown, which is inevitably likely to cause a contraction in November’s data print as shops and restaurants once more closed their doors; however, sectors such as manufacturing and construction are emerging from this lockdown in much better shape than they did in March, and December’s GDP should reflect a boost from retail and hospitality in the run-up to Christmas,” said Robert Alster, the chief investment officer at Close Brothers Asset Management.

“This is all against a background of tense Brexit negotiations and the potential ramifications of the deal, or no deal, whichever form it takes. With the OECD warning of a serious short term hit to the UK economy, concerns are already being flagged around possible food shortages and price rises following January 1st; however, with vaccines in the process of being rolled out, there is light at the end of the tunnel as we reach the end of a truly tumultuous year,” he added.

The FTSE 100 was up 35 points (0.5%) at 6,599.

8.45am: Brexit brinkmanship remains in focus

The FTSE 100 defied early predictions to open up in positive territory.

However, the mood remained subdued in the wake of Boris’ posh ‘fish supper’ with Ursula von der Leyen, the president of the European Commission.

Make-or-break negotiations will continue over the next four days between the UK and EU in a bid to hammer out a trade deal.

However, both sides warned there were still significant gaps to be traversed before an accord can be struck with the ‘no deal’ option looking the most likely outcome.

The pound reflected the general pessimism as it dropped 0.7% to US$1.3305.

Profit-takers cut their positions in Ocado (LON:OCDO), the online grocer that fell 3.5% early on, after yet another strong update to its trading fundamentals.

Traders couldn’t be blamed for ‘top-slicing’ after a run that has seen the group more than double in value in the last nine months.

Higher crude oil prices (albeit a rise from fairly weak levels) provided a 2% boost to Shell (LON:RDSB).

A stronger than expected showing from retail conglomerate Frasers Group (LON:FRAS) saw its shares rocket 11%.

6.44 am: Slow start predicted 

The FTSE 100 is set to start Thursday slightly lower as the clock continues to tick closer to the end of the year and the Brexit transition deadline.

CFD and spread betting firm IG Markets sees London’s bluechip benchmark down around 11 points, making the price 6,562 to 6,565 with just over an hour to go until the open.

Attentions pointed in the direction of Brussels and the very last-minute discussions which are ongoing.

“The fact that Prime Minister Boris Johnson felt it worthwhile to travel to Brussels to dine with EU Commission President Ursula Von Der Leyen, does offer some hope that there will be a positive outcome from what have been some tortuous negotiation,” said Michael Hewson, an analyst at CMC Markets.

The analyst added: “Yesterday German Chancellor Angela Merkel set out the EU’s red lines, saying that Brussels would accept a no-deal outcome if the two sides could not figure out a way to overcome this key obstacle.

“What is becoming increasingly clear is that while there is an acceptance that there could be some level of regulatory divergence, it is the arbitration mechanism to resolve any issues that is at the core of the impasse, and where attention really needs to be focussed.  

“With time running out the urgency couldn’t be more immediate with very little time to avoid a no-deal scenario on the 31st December.”

In the United States, meanwhile, Wall Street stock indices all fell on Wednesday as Republicans and Democrats continue to play political football with an evidently much needed economic stimulus package.

The Dow Jones was down 105 points or 0.35% to close at 30,068 whilst the S&P 500 gave up 0.79% to finish the session at 3,672.

The Nasdaq fell furthest, losing 243 points or 1.94% to finish Wednesday at 12,338.

In Asia, Japan’s Nikkei was trading 61 points or 0.23% lower at 26,756 whilst Hong Kong’s Hang Seng slipped 134 points or 0.51% to 26,371. The Shanghai Composite meanwhile traded just a sliver lower at 3,370.

Around the markets

Pound: US$1.3358, down 0.31%

Gold: US$1,837 per ounce, up 0.04%

Silver: US$23.92 per ounce, up 0.11%

Brent crude: US$49.00 per barrel, up 0.32%

WTI crude: US$45.74 per barrel, up 0/3%

Bitcoin: US$18,338, up 0.69%

6.45 am: Early Markets: Asia / Australia

Asia-Pacific shares traded lower today following overnight declines on Wall Street as investors watched Brexit trade talks and the ongoing negotiations in the US for a COVID-19 relief package.

In Japan, the Nikkei 225 declined 0.23% while South Korea’s Kospi was 0.33% lower.

Hong Kong’s Hang Seng index shed 0.54% and in China, the Shanghai composite struggled for direction, last trading down 0.02%.

Australia’s benchmark ASX 200 closed 0.67% lower, making it the index’s first decline in eight sessions.

READ OUR ASX REPORT HERE

Proactive Australia news:

PNX Metals Ltd (ASX:PNX) (FRA:4P1) has signed a non-binding term sheet with Ausgold Trading Pty Ltd to acquire the Glencoe Gold Deposit in the Northern Territory for total staged consideration of $1.875 million.

Bardoc Gold Ltd (ASX:BDC) (FRA:4SF) has taken another key step towards the financing and development of its flagship 100%-owned Bardoc Gold Project in WA, entering into a binding agreement with leading global minerals trader MRI Trading AG for the sale of gold concentrates.

Kazia Therapeutics Limited (ASX:KZA) (NASDAQ:KZIA) (FRA:NV9) has executed a Letter of Intent with the Pacific Pediatric Neuro-Oncology Consortium (PNOC) to launch a clinical trial of multiple therapies, including Kazia’s investigational new drug, paxalisib (formerly GDC-0084), in diffuse midline gliomas including diffuse intrinsic pontine glioma (DIPG).

Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has delivered some of the best intercepts to date at King Cobra along with further strong results from Ban Chang, both of which form part of the flagship Ta Khoa Nickel-Copper-PGE project in Vietnam.

Twenty Seven Co Ltd (ASX:TSC) (FRA:U9V) has signed a binding terms sheet with Revolution Mining Pty Ltd for the acquisition of two additional exploration licences adjoining the Yarbu Gold Project in the highly prospective Marda-Diemals greenstone belt in Western Australia.

Roots Sustainable Agricultural Technologies Limited (ASX:ROO) has secured firm private placement commitments from institutional, professional and sophisticated investors to raise up to A$3,955,851 before costs, which will allow it to aggressively pursue global cannabis opportunities.

Calima Energy Ltd (ASX:CE1) (FRA:R1Y) has received preliminary findings from an in-depth industry study of three wells drilled in 2019 confirming that the liquids-rich Montney fairway extends further north than previously thought.

Netlinkz Ltd (ASX:NET) expects to beat its 2020 guidance of $15.3 million, with receipts from customers expected to be approximately $17 million.

engage:BDR Ltd (ASX:EN1) has raised $1,189,650 in a strongly supported share purchase plan aimed at driving growth in the CTV (Connected TV) and advertising realms.

FYI Resources Ltd (ASX:FYI) (FRA:SDL) in collaboration with Alcoa Australia Ltd will begin a trial of FYI’s wholly-owned high purity alumina (HPA) pilot plant at Welshpool in Western Australia today.

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