FTSE 100 unable to stay positive after US data raises inflation fears and sends Wall Street lower

0
20
  • FTSE 100 flat after early optimism
  • Tech takes a beating on Wall Street
  • Oil helps FTSE beat the Dow

5pm: FTSE ends flat but still outdoes Wall Street


The FTSE 100 finished 7 points lower, a 0.1% dip, at 6,652. The FTSE 250, meanwhile, lost 115 points, 0.5%, to end Thursday at 21,198.


“European markets have outperformed their US counterparts as questions over tech valuations continue,” IG Senior Market Analyst Joshua Mahony erote Thursday. “UK reliance on retail and commodity stocks help lessen wider worries around rising yields. … Meanwhile, the dominance of commodity stocks has also helped drive FTSE outperformance today, with Premier Oil and Tullow Oil leading the energy risers, while Ferrexpo and Anglo American reflect gains from the base metal perspective.”


Premier Oil, for its part, saw its share price improve more than 9% to GBP28.54.


In the US, the Dow swooned nearly 300 points, 0.9%, to 31,655 at midday. The Nasdaq Composite dropped 281 points, 2.1%, and the S&P 500 declined 54 points, 1.4%, to 3,872.


“US tech stocks are once again at the forefront of the market selling, with recent moves from Jerome Powell to alleviate market jitters falling of deft ears,” Mahony wrote. “After a year that saw tech leave traditional companies in their wake, the past week has seen investors increasingly seek safety on from some of the stocks hardest hit by the pandemic.”


4.15pm: Proactive North America headlines:


Blackrock Gold Corp (CVE:BRC) (OTCMKTS:BKRRF) (FRA:AHZ) names experienced finance industry executive as new SVP corporate development


The Valens Company (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) FY2020 revenue surges 44% to $83.8M as market share increases in key Canadian provinces


Empower Clinics Inc (CSE:CBDT) (FRA:8EC) (OTCQB:EPWCF) unveils three new integrated health centre locations in Ontario with major revenue expectations


WeedMD Inc‘s (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) Starseed Medicinal releases strain-specific products for PAX ERA Vaporizer


American Manganese Inc (CVE:AMY) (OTCPINK:AMYZF) (FRA:2AM) welcomes President Biden’s executive order directing the strengthening of critical supply chains including EV batteries


KULR Technology Group Inc (OTCQB:KULR) partners with the CSA Group to develop a new battery safety and testing procedure


Valeo Pharma Inc (CSE:VPH) (OTCQB:VPHIF) (FRA:VP2) boosts revenue by 76% in 4Q, off the back of several new commercial products


O3 Mining Inc (CVE:OIII) (OTCMKTS:OQMGF) hails drill assays from the Simkar sector at its Alpha property in Quebec


Gold Resource Corporation (NYSEAMERICAN:GORO) (FRA:GIH) reports net income of $4.4M in 2020 after solid production from Mexico


Victory Resources Corporation (CSE:VR) (OTCMKTS:VRCFF) (FRA:VR62) poised to start drilling at Loner property in March this year after receiving permit


Mountain Valley MD Holdings Inc (CSE:MVMD) (OTCQB:MVMDF) sees its first revenue via deal with Circadian Wellness for Qucksome technology


Viscount Mining Corp (CVE:VML) (OTCQB:VLMGF) kicks off field work at Silver Cliff property, Colorado


Nerds On Site Inc (CSE:NERD) (OTCMKTS:NOSUF) says 2Q revenue rises nearly 8% as coronavirus boosts remote working and learning


4.05pm: US markets unsettle FTSE 100


The FTSE100 is virtually flat after Wall Street started heading south.


Better than expected US jobless claims was accompanied by news that durable goods orders rose 3.4% in January, compared to expectations of a 1.1% increase. Good news for the US economy, but also troubling for investors concerned that inflation might start to tick up, prompting central banks to start tightening monetary policy and, ultimately, to look at raising interest rates. US bond yields have continued to rise on the back of the expectation of higher inflation.


So the Dow Jones Industrial Average, after hitting a record high on Wednesday, is now down 109 points or 0.34% at 31,852. Tech stocks are coming under pressure, with the Nasdaq down 1.4%.


So the FTSE 100 is up just 1.26 points or 0.019% at 6660.23.


Among the risers, DS Smith PLC (LON.SMDS) has regained the top spot in the blue chip index from Evraz. It is up 23.2p or 6.04% to 407.2p after reports of a possible GBP5bn bid from packaging rival Mondi.


Mining group Anglo American PLC (LON.AAL) has added 121.5p or 4.28% to 2963p following its figures. But investors have abandoned Hikma Pharmaceuticals PLC (LON.HIK), down 135p or 5.59% at 2282p, and Standard Chartered PLC (LON.STAN), 23.2p or 4.55% lower at 486.2p, after their results.


Elsewhere Cineworld Group PLC has climbed 6.22p or 6.55% to 101.2p on hopes that customers will be able to return before too many more weeks have passed.


And construction group Morgan Sindall Group PLC (LON.MGNS) has built up a 190p or 12.77% rise to 1678p. It reported a 29% fall in pretax profit, partly due to the pandemic of course, but issued an upbeat assessment of the outlook.


Chief executive John Morgan said: “The size and quality of our growing secured workload at well over GBP8bn leaves us well-positioned for the future and we are on track to deliver a result which is materially ahead of our previous expectations and slightly ahead of that delivered in 2019.”


2.46pm: Wall Street gets off to a slow start


The main indices on Wall Street got off to a cautious start on Thursday despite the better than expected fall in US jobless claims.


Shortly after the opening bell, the Dow Jones Industrial Average was flat at 31,962, while the S&P 500 dropped 0.16% to 3,919 and the Nasdaq fell 0.29% to 13,559.


Back in London, the FTSE 100 had squeezed the brakes a little on its ascent into late afternoon, rising 20 points to 6,679 at around 2.45pm.


2.12pm: US jobless claims fall


US jobs figures have come in better than expected.


Last week 730,000 people made jobless claims compared to estimates of around 825,000. That was down from 841,000 the previous week, itself revised down from the first estimate of 861,000. The fall is a promising sign for the labour market although there could be some distortions from the effects of the winter storms hitting the south of the US last week.


Even so, the news has perked Wall Street up a little, with the Dow Jones Industrial Average expected to open around 30 points higher, reversing its early dip.


And the FTSE 100 is holding on to its gains, up 27.36 points or 0.41% at 6686.33.


After DS Smith held the position for most of the day, there is a new name at the top of the leaderboard. Steel producer Evraz PLC (LON.EVR) is up 31.4p or 5.56% at 596.2p after full year net profits rose from US$365m to US$858m, helped by cost cutting.


Chief executive officer Alexander Frolov said: “2020 was an unprecedented year, which changed the world and the way we do business. Intense global uncertainty caused by the outbreak of COVID-19 had a profound effect on economies and pressured global markets. However, thanks to the upswing seen on the global markets in the second half of the year, the Group delivered solid operating and financial results.”


12.53pm: US markets await GDP and jobless figures


Wall Street is set for a cautious opening after a new record high on the Dow on Wednesday. The positive mood surrounding a global recovery is balanced by continuing concerns about rising inflation and when central banks will have to deal with it by raising rates.


Soothing words from US Federal Reserve chairman Jerome Powell only appear to have gone so far in easing these worries.


So US numbers due later will be carefully watched. A second reading of US GDP growth for the fourth quarter is expected to see a revision upwards from 4.0% to 4.2%. There are also figures for growth in durable goods – cars, fridges and the like – which are forecast to rise from 0.5% in December to 1.1% last month. On top of all that come the weekly jobless claims. They are predicted to drop from 861,000 to 825,000, with the caveat that last week’s figures were much higher than expectations.


On the company front come fourth quarter results from pharmaceutical group Moderna, one of the suppliers of coronavirus vaccine.


Michael Hewson, chief market analyst at CMC Markets UK, said: “Unlike its larger peers Moderna’s share price has seen massive gains over the last 12 months, as the small company in Cambridge Massachusetts muscled its way to the forefront of the US response to the Coronavirus pandemic, with its shares up over 500% since last March.


“Unlike AstraZeneca, the Moderna vaccine isn’t being provided at cost, which means the company is likely to make billions of US dollars from its product… In January Moderna raised its lower end estimate for global production to 600m doses in 2021, with the hope it can deliver up to 1bn doses. Moderna’s biggest problem will be economies of scale. Can it build up its production capability to not only deliver on its COVID-19 vaccine, but will it also be able to deliver new vaccine candidates for seasonal flu, HIV and the Nipah virus using the same biotechnology? The company is expected to post a loss of $0.37c a share for Q4, as it looks to invest in large scale manufacturing capacity.”


After the market closes come figures from newly listed Airbnb, which are expected to show a fourth quarter loss of US$132m, down from US$276m the same time last year.


The Dow Jones Industrial Average is forecast to open around 13 points lower at 31,948 while the S&P futures are down 0.3% and Nasdaq is showing a1% decline as tech stocks come under pressure again


Meanwhile the FTSE 100 remains in positive territory, up 20.74 points or 0.31% at 6679.71.


Elsewhere, on the back of news about a US$10bn IPO for alt-milk brand Oatly, new research from money.co.uk has revealed the top green stocks that have saw the biggest growth in 2020.

Outside the UK, Tesla Inc‘s 720% was only surpassed by Plug Power, a developer of hydrogen fuel cell systems, as it surged almost 950%.


But the top risers came in the UK. They were led by PowerHouse Energy Group (LON:PHE), the waste-to-hydrogen developer whose shares rocketed over 1,700% last year; followed by EQTEC (LON:EQT), which is also turning waste into energy and soared over 1,300% over 2020; with hydrogen fuel cell developer Ceres Power (LON:CWR) charging up 383%.


The next in line were FTSE 350 renewable energy companies Drax Group (LON:DRX) and SSE PLC (LON:SSE), up 21% and 4% respectively.


12.09pm: Housebuilders slip back


Housebuilders are under pressure, proving a negative factor for the leading index.


There have been suggestions the companies will face an effective low digit tax rise as their contribution towards improving buildings and removing unsafe cladding in the wake of the Grenfell Tower tragedy.


The ending of the stamp duty holiday at the end of next month, provided there is no change in next week’s Budget, may also be a factor. So Persimmon PLC (LON.PSN) is down 46p or 1.66% at 2718p and Berkeley Group Holdings PLC (LON.BKG) has fallen 68p or 1.58% to 4249p.


Even so the FTSE 100 has stayed positive, up 27.02 points or 0.41% at 6685.99.


10.55am: Oil gains continue


Oil prices continue to move higher despite the latest US figures this week giving a mixed picture,


Any global recovery as the pandemic eases will lead to increased demand for commodities, not least oil, which is helping to support the price despite short term fluctations and the prospect of OPEC increasing supplies. Brent crude is currently up 0.46% at $67.35 a barrel, already ahead of a newly increased forecast from Barclays. The bank lifted its 2021 Brent Crude Oil price outlook by $7 to $62 per barrel as the Texas freeze disrupts output.


Neil Wilson, chief market analyst at Markets.com, said: “Oil prices rose to their highest in over a year despite a surprise build in US crude inventories as the freezing weather in Texas shut refineries. Stockpiles increased by 1.3m barrels, versus expectations for a draw of more than 5m barrels. Stocks at Cushing, Oklahoma, rose for the first time in six weeks as refiners couldn’t take delivery. Bulls were buoyed, however, as US weekly crude output fell by 1.1m bpd, equally the biggest drop on record. The big freeze in Texas has really thrown the weekly numbers out of whack, but it’s clear demand is picking up. Everyone is now looking at the OPEC meeting next week on March 4th and an expected easing of self-imposed supply constraints.”


The rise in crude has helped lift BP PLC (LON.BP) by 7.4p or 2.48% to 306.2p while Royal Dutch Shell PLC (LON.RDSB) saw its B shares add 1.93% or 27.6p to 1456.4p.


All this helped keep the FTSE 100 in a positive mood, up 31.85 points or 0.48% at 6690.82.




9.52am: FTSE 100 gains ground on results and speculation


The FTSE 100 is holding firm in positive territory, with investors continuing to hope for a global economic recovery once the lockdown restrictions begin to ease.


They are also taking comfort from some soothing remarks from US Federal Reserve chairman Jerome Powell, who in his two days of testimony to Congress played down the prospects of inflation starting to rear its head in the short term.


More specifically, the London market is being supported by a number of postive company results, not to mention bid talk.


Anglo American PLC (LON.AAL) has added 93p or 3.27% to 2934.5p after better than expected full year figures, with revenues up 3% and profits edging down from $10bn to $9.8bn. The company has benefited from recent rises in copper, iron ore and palladium prices, and its results have given a lift to the whole sector. AntofagastaPLC (LON.ANTO) has added 34p or 1.86% to 1862.5p while BHP Group PLC (LON.BHP) is 1.83% or 42.5p better at 2366.5p.


Packaging group DS Smith PLC (LON.SMDS) remains the top riser in the leading index, up 35.3p or 9.19% to 419.3p after reports from Bloomberg that rival Mondi PLC (LON.MNDI) was looking at a GBP5bn takeover bid. Mondi has added 36.5p or 2.03% to 1838.5p despite reporting a 30% drop in pretax profits.


BAE Systems (LON.BA) has climbed 0.75% or 3.7p to 499.7p after an increase in revenues and profits and a positive outlook for 2021.


But Hikma Pharmaceuticals PLC (LON.HIK) has fallen 200p or 8.28% to 2217p. The company’s full year results were in line with expectations, with revenues up 6% and operating profit 17% better. But the outlook statement suggested analysts could cut their earnings forecasts for 2021, according to broker Peel Hunt.


Standard Chartered PLC (LON.STAN) was also under pressure, down 24.6p or 4.83% to 484.8p after its figures.


Richard Hunter, head of markets at interactive investor, said: “The figures are fair to middling in comparison to its peers, reflected in a credit impairment figure of $2.3 billion, a cost/income ratio of 66.4% and a return on equity of just 3%, with a target of 7% by 2023. The pre-tax profit figure remains in the black, but has fallen by 57% while underlying earnings per share have more than halved…


“Alongside an upbeat outlook statement, the bank is highlighting the positives but the initial share price reaction has fallen foul of some profit-taking given the bank’s recent share price strength.”


All told, the FTSE 100 is up 24.02 points or 0.36% at 6682.99.


8.54am: Leading shares lifted by bid talk


The FTSE 100 opened higher on Thursday, taking its cue from Wall Street, which was the paragon of positivity overnight.


Driving sentiment was the prospect of a stronger-than-anticipated global recovery allied to the Fed’s pledge of ‘prolonged support’ for the world’s largest economy.


Here in the UK, the Daily Mail is reporting that chancellor Rishi Sunak is likely to be equally supportive when he delivers a ‘giveaway’ Budget next month.


“Help for motorists, hospitality firms and the housing market is expected to be among a string of eye-catching policies,” the report said.


“The chancellor is set to shelve plans for tax rises, including a threatened 5p increase in fuel duty that would have hit millions of drivers.”


The paper also suggests Sunak is assessing “even more dramatic plans for a major stimulus to the economy later this year”.


Top of the early risers was DS Smith (LON:SMDS), which was up almost 9% after it was revealed rival packaging firm Mondi is mulling a GBP5bn takeover bid.


After that, Rolls Royce (LON:RR.) embodied the optimism around international travel as it advanced 4.1%.


The jet engine maker should benefit once the international airlines begin flying again. British Airways owner IAG (LON:IAG) was up 1.7%.


Proactive news headlines


Clipper Logistics PLC (LON:CLG) said it expects to materially outperform market expectations for the next financial year and beyond after winning big new contracts with retailers River Island and Mountain Warehouse.


Digitalbox PLC (LON:DBOX) has said its performance in its current financial year to date has been “ahead of our initial expectations” following an improvement in its performance in the second half of 2020.


AFC Energy PLC (LON:AFC) has launched its dedicated Anion Exchange Membrane (AEM) Fuel Cell test facility hosted at the company’s Surrey headquarters. The facility is fully fitted out and ready to move into full operation.


Incanthera plc (LON:INC) said it has prioritised discussions with two global cosmetic companies after introducing its treatment for solar keratosis to a number of potential commercial partners last year. It said it is also working with a number of potential partners to apply its expertise and technology to develop further targeted products.


Eco Atlantic Oil and Gas Ltd (LON:ECO) has renamed its new renewable energy venture Solear Ltd as it seeks a possible spin-out later this year.


Horizonte Minerals PLC (LON:HZM) told investors it has been awarded a construction licence package for the development of the power line for the Araguaia ferronickel project in Brazil.


Great Western Mining (LON:GWMO, Euronext Growth:8GW) is gearing up for a busy year on the ground in Nevada, with drilling work expected to get underway in April.


RM Secured Direct Lending PLC‘s (LON:RMDL) directors have declared an interim dividend of 1.625p per share in respect of the period from 1 October 2020 to 31 December 2020. The ex-dividend date will be 4 March.


Anglo Pacific Group PLC (LON:APF, TSX:APY) said it has raised a total of US$66mln/GBP47mln from a placing and retail offer at a price of 128p per share. The placing raised GBP43mln, while GBP3mln was drummed up via the offer on PrimaryBid, with an additional GBP374,000 from directors.


Arix Bioscience PLC (LON:ARIX) said James Noble and Axel Wieandt will be joining the board as non-executive directors (NEDs) effective from April 1.


ReNeuron Group PLC (LON:RENE) has appointed Allenby Capital as joint corporate broker with immediate effect, working alongside the company’s existing nominated adviser and joint broker, Stifel.


ReNeuron will also be presenting at today’s Proactive One2One Investor Forum, starting at 6pm. It will also present at the Shares Investor Evening Webinar, on Tuesday 2 March, and the HC Wainwright Global Life Sciences Conference, which is taking place on 9-10 March 2021. The presentations will be made available on the company website shortly after the events.


Redx Pharma plc (LON:REDX) chief executive Lisa Anson will give a progress update at the Cowen 41st Annual Health Care Conference on Thursday 4 March at 4.10pm (11.10am EST). Following the event, a recording will be made available on the investor section of the company’s website.


Litigation Capital Management Limited (AIM:LIT) will host an interim results webinar for retail investors at 9am on Wednesday 17 March, following its interim results announcement on Tuesday 16 March.


Faron Pharmaceuticals Oy (LON:FARN) notified investors that it will publish its audited full-year results for the twelve months ended 31 December 2020 on Thursday 25 March 2021, with the annual report published on the same day.


6.50 am: FTSE 100 called higher


The FTSE 100 is expected to start Thursday on the front foot after US markets shook off the brief recent losses and evidently cheered up.


CFD provider IG Markets sees the FTSE 100 up around 20 points, making London’s blue-chip benchmark 6,683 to 6,686 with just over an hour to go until the open.


It follows a trading rebound on Wall Street, coinciding with comments from Federal Reserve officials which were talking down the threat of higher interest rates.


The Dow Jones rallied to mark a 424 point or 1.35% gain for Wednesday, closing at 31,961m whilst the S&P 500 climbed 1.14% to 3,925 at the end of Wednesday’s session.


At the same time, the Nasdaq notched a 0.99% rise to 13,597 and the small-cap centric Russell 2000 index made the biggest gain, rising 2.38% to 2,284 by the close.


“After a negative start US markets underwent a turnaround in fortune with the Dow leading the way powered by the likes of energy and financials, while tech lagged behind,” said Michael Hewson, analyst at CMC Markets.


He added: “After last night’s record close for the Dow and subsequent rebound in the S&P500 and Nasdaq, markets here in Europe look set to open higher encouraged by the prospects of a continued reopening, and central banks that are in no hurry to pare back their stimulus attempts, as Asia markets reversed yesterday’s declines.”


In Asia, Japan’s Nikkei advanced around 1.6% to 30,168 and Hong Kong’s Hang Seng moved 1.76% higher to 30,241. The Shanghai Composite added 0.6% to 3,585.


Around the markets


The pound: US$1.4156, up 0.11%


Gold: US$1,794, down 0.47%


Silver: US$27.86, down 0.23%


Brent crude: US$67.23, up 2.8%


WTI crude: US$63.37, up 2.75%


Bitcoin: US$50,465, up 1.08%


6.50am: Early Markets – Asia / Australia


Stocks in the Asia-Pacific region were higher on Thursday after the US Dow Jones Industrial Average jumped more than 400 points overnight to a record closing high.


The Hang Seng index in Hong Kong surged 1.51% while the Shanghai Composite in China rose 0.43%.


In Japan, the Nikkei 225 gained 1.67% and South Korea’s Kospi jumped 3.5%.


Shares in Australia rose, with the S&P/ASX 200 closing 0.83% higher.


READ OUR ASX REPORT HERE


Proactive Australia news:


Great Boulder Resources Ltd (ASX:GBR) has surged 75 per cent after receiving shallow high-grade gold results of up to 4 metres at 17.71 g/t gold from Mulga Bill prospect which forms part of the Side Well Gold Project near Meekatharra in Western Australia.


Auroch Minerals Ltd (ASX:AOU) (FRA:T59) has begun an investigation into the potential for lithium mineralisation at the high-grade Nepean Nickel Project in Western Australia.


Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has discovered significant new sulphide mineralisation in a previously untested zone within the Ta Cuong Prospect in Vietnam.


Latin Resources Ltd‘s (ASX:LRS) (FRA:XL5) results from four float samples collected from dam walls have confirmed bright white and ultra-bright white kaolin, emphasising the potential scale of its 100%-owned Noombenberry Project in Western Australia.


Galileo Mining Ltd (ASX:GAL) has the drill spinning in its first diamond drilling program for 2021 at Lantern East prospect within the Fraser Range Nickel Belt in Western Australia.


MMJ Group Holdings Ltd (ASX:MMJ) (OTCMKTS:MMJJF) (FRA:2P9) has recorded a 182% hike in revenues from ordinary activities to A$192,000 in the six months to December 31, 2020.


AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) has awarded a 12-week Front End Engineering and Design (FEED) contract for the Manono Lithium and Tin Project in the DRC to Melbourne-based engineering company, Mincore Pty Ltd.


Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) enjoyed a productive second half of 2020, progressing the development of its 12CQ(R) quantum computing qubit processor chip and A1 Biochip(TM) lab-on-a-chip technology.


Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has discovered significant new sulphide mineralisation in a previously untested zone within the Ta Cuong Prospect in Vietnam.

LEAVE A REPLY

Please enter your comment!
Please enter your name here