- FTSE 100 closes ahead – just
- Wall Street stocks up
- Kingfisher and Burberry among the better performers
5pm: Footsie closes in positive territory
FTSE 100 closed higher on Tuesday, having been lower earlier, but mining and financial stocks put a lid on gains.
The UK index of the biggest shares closed the afternoon session up around 11 points, or 0.17%, at 6,730. Midcap FTSE 250 was also ahead, advancing over 172 points to close at 21,382.
“European stock markets are extending yesterday’s stellar rally but the gains registered today are far more modest,” said David Madden, market analyst at CMC Markets.
“The dip in government bond yields has acted as the green light for the equity bulls and lately, spikes in yields have sent tremors through stock markets. The positive mood is being fuelled by the hopes the US government will implement the $1.9 trillion relief package soon. Hopes connected to the economic recovery story have lifted sentiment too.”
Top riser on Footsie was cybersecurity giant Avast PLC (LON:AVST), which added 5.71% to 443.80p, after it announced the sale of its Family Safety Mobile business to Smith Micro Software for $66 million.
3.45pm: Blue-chips in the red zone
It’s all gone a bit Pete Tong for the FTSE 100 as London enters its last hour of trading.
After residing in positive territory for most of the day, London’s index of heavyweight shares is down 13 points (0.2%) at 6,706, largely as a result of the weakness of miners.
Sterling’s strength is doing the Footsie no favours either; the pound is up by four-fifths of a cent at US$1.3905.
The mid-cap FTSE 250, which is choc-full of companies that probably benefit from a strong exchange rate, is up 148 points (0.7%) at 21,358, with the advance led by the Baillie Gifford US Growth Trust PLC (LON:USA), which is up 9.8% at 313p as the US tech giants, in which it is heavily invested, bounce back strongly today.
Domino’s Pizza Group PLC (LON:DOM) is the second-best midcap performer after its full-year results.
The shares are up 9.0% at 338.2p, helped by news of the company’s £45mln share buyback scheme.
“News that trading around the New Year period was ‘exceptional’ would suggest that people stuck indoors under lockdown got their kicks through a takeaway,” said AJ Bell’s investment director, Russ Mould.
“Its full-year results are full of punchy comments about earnings growth and come with a grand strategic plan.
“Sadly, we’ve heard all this before, and its previous strategic growth initiatives haven’t exactly gone well,” Mould griped.
“Domino’s needs to address the threat of growing competition from non-pizza operators. The rise of food ordering apps from Just Eat and Deliveroo mean it is just as easy to order a McDonald’s or a Chinese meal as it is to shop with Domino’s.
“The new executive leadership team will want to look as if they are ambitious, but really this business needs fine-tuning rather than a turbo-charge,” Mould declared.
3.20pm: Proactive North America headlines:
Canntab Therapeutics Limited (CSE:PILL) (OTCQB:CTABF) (FRA:TBF1) wins Australian patent related to its proprietary cannabidiol formulations
PharmaDrug Inc (CSE:BUZZ) (OTCPINK:LMLLF) subsidiary adds drug repurposement expert Moshe Rogosnitzky to its scientific and clinical advisory board
Energy Fuels Inc (NYSEAMERICAN:UUUU) (TSE:EFR) (FRA:VO51) says first shipments of natural monazite ore arrived at its White Mesa Mill in Utah
GlobeX Data says seeing heightened interest in its Sekur products in the wake of recent Big Tech security breaches
Recruiter.com Group Inc (OTCQB:RCRT) positioned to help lead the ‘Great Rehire’ as it reports 41% revenue growth in 2020
GGX Gold Corp (CVE:GGX) (OTCQB:GGXXF) (FRA:3SR2) reports further drill results from COD vein at Gold Drop; announces C$300,000 private placing
2.53pm: Wall Street moves higher in early deals
The main Wall Street indices moved higher on Tuesday morning despite tech stocks being slated for a downward drop.
In the early minutes of trading, the Dow Jones Industrial Average rose 0.49% to 31,956, while the S&P 500 climbed 1.17% to 3,865. The Nasdaq also managed a rebound, defying expectations to jump 2.3% to 12,902.
The broad rally may be being driven by fresh optimism over US stimulus as the US$1.9 trillion package heads to the House of Representatives for approval.
Markets also seemed to have mostly shrugged off fears over inflation and rising bond yields which have characterised recent activity.
Back in London, the FTSE 100 had fallen back slightly in contrast to Wall Street and was up 10 points at 6,729 just after 2.45pm.
1.40pm: A little bit of retail sunshine
The FTSE 100 has had its wings clipped over the lunchtime session, with its gain trimmed back to 19 points (0.3%) at 6,738.
A couple of retail plays are among the Footsie’s top performers on the day when the British Retail Consortium released its Retail Sales Monitor for February.
Total sales volumes were up 1.0% year-on-year after January’s 1.3% decline.
In truth, retailer & wholesaler Burberry Group PLC (LON:BRBY), up 3.1% at 1,978.5p, is not exactly a hostage to fortune in terms of its reliance on the UK retail market and its strong showing is probably more to do with growing optimism over the global economy as countries crack on with their vaccination programmes.
“While non-essential retailers have remained shut, households appear to have become more confident, as Covid-19 infections have declined rapidly and vaccines have been rolled out quickly. Overall consumer spending also appears to have recovered, albeit less decisively,” reported Pantheon’s Samuel Tombs.
“Barclaycard reported today that households’ total spending was down 13.8% year-over-year in February, less than January’s 16.3% decline. In addition, the BoE’s CHAPS data show that, in the first 25 days of February, aggregate consumer spending was 73.9% of its level in February 2020, an improvement from January’s 65.8% level. The BoE’s data are not seasonally adjusted, but the fairly modest 4pp [four percentage points] uplift in spending between January and February last year suggests that half of last month’s improvement represents an underlying recovery,” Tombs said.
“Looking ahead, retail sales likely will jump next month, shortly after non-essential retailers reopen their stores on April 12, but before most of the services sector has reopened. The Chancellor’s decision last week to roll forward the key measures supporting households’ incomes until the end of Q3 also will help to underpin the recovery. Even so, we place little weight on an overheating scenario for the economy, whereby households rapidly spend down the savings that they have accumulated over the last year. Most of the cash has been hoarded by high-income households, who have a low marginal propensity to spend out of changes in their wealth, and the jump in mortgage rates over the last year has created a strong incentive for households to pay down debt when their loans can be refinanced,” Tombs said.
Meanwhile, Danni Hewson, a financial analyst at AJ Bell, is talking about a dangerous sounding phenomenon known as “revenge shopping” – the pent-up consumer demand that will be unleashed once lockdowns are over.
It’s not clear upon whom this revenge will be exacted, unless it refers to massive purchases of unflattering T-shirts featuring “slack and sink without trace” guru Dido Harding.
“British retailers will be hoping this revenge is a dish best served warm, at least as warm as the spring weather allows. Heading out to see friends for the first time may give us an excuse for a new ‘something’ that isn’t loungewear. Returning to the office will necessitate a new haircut. Indeed, any opportunity to travel beyond our four walls should deliver an economic shot in the arm,” Hewson said.
“The latest BRC figures shine a light on the fact that change brings opportunity. February’s jump in sales will foster hope that the road ahead will be lucrative for non-essential retailers even if that hope is served with a side of caution. The landscape has changed rapidly over the last year. Online has become habit and habits are hard to break,” she noted.
12.15pm: Dow to plough on
The Dow Jones index is set for another strong showing today, continuing its spell in the sun as investors cool on those once oh-so-sexy technology stocks.
Spread betting quotes point to the Dow surging 166 points to 31,968 while the broader-based S&P 500 is tipped to climb 40 points to 3,861.
At the same time, the tech-heavy Nasdaq 100 is expected to open little changed.
“The reflation trade is full-on, as investors are migrating from growth to value stocks in a fast fashion, leaving their favourite tech darlings abated by aggressive waves of sell-off and the index performances summarise well the underlying migration,” said Ipek Ozkardeskaya at Swissquote.
“Nasdaq closed Monday’s session 2.41% lower, while the Dow ended near 1% higher, reaching a new all-time record regardless of its tech peers’ despair.
“Apple and Netflix plummeted more than 4%, Facebook dived 3.39% and Amazon fell 1.62%
“Tesla plunged another 5.84% eating up all gains recorded for the past three months,” Ozkardeskaya recounted.
On the macroeconomic front in the USA, the National Federation of Independent Business (NFIB) optimism index climbed to 95.8 in February from 95 in January but was well below the consensus forecast of 97.0.
“The details are stronger than the headline, which is constrained by smaller increases than we expected in the economic and earnings expectations components, and a small decline in sales expectations but the key labour market numbers jumped, with the proportion of firms reporting jobs hard to fill soaring seven points to a record high,” reported Ian Shepherdson, the chief economist at Pantheon Macroeconomics..
“The proportion of firms reporting that finding qualified labour is their biggest problem has now recovered most of the drop triggered by Covid, and both actual and expected employee compensation are rising. The labour market, in short, looks nothing like the wasteland seen after the crash of 2008, and the potential for wage inflation to rise as the economy recovers is much greater,” Shepherdson suggested.
In London, the FTSE 100 continues to make steady headway after a sleepy start. The index is up 47 points (0.7%) at 6,766, with Scottish Mortgage Investment Trust PLC (LON:SMT), up 3.8% at 1,096p doing its bit for the cause.
As SMT is largely seen as a proxy for the performance of tech shares, this suggests that investors are expecting a bit of bargain hunting in the sector today, not least by the Chinese authorities, which according to reports have been buying up tech stocks to stabilise the market.
10.40am: Anglo-German trade slumps post-Brexit
It’s been a while since Brexit dominated the headlines but news today that trade between Germany and the UK slumped in January attracted interest.
German imports from the UK were down 56.2% to €1.6bn from January 2020, while exports to the UK were 29.0% lower at €4.3bn, according to Germany’s Federal Statistics Body.
Coincidentally, Germany’s DAX index hit a new high today, which is more than can be said for the FTSE 100, although the Footsie has perked up a bit to notch up a 26 point (0.4%) rise at 6,745.
Apparently, the popularity of German stocks is down to increased interest in old economy stocks as fund managers rotate out of technology stock.
“The firesale in many big tech names has been driven by fears of how higher yields will damage the attractiveness of these high flyers and the improved prospects for stocks that will benefit from reopening economies, but with many now much cheaper (compared to where they were) some will be eyeing up the sector, even if only for a quick rebound,” suggested Chris Beauchamp at IG.
“The situation in the Nasdaq looks similar to late October, the last major pullback in the index, and with the mood-music around big tech turning distinctly sour the conditions are there for just the kind of rebound that will catch many by surprise,” he predicted.
Mining stocks are generally out of favour, with the exception of precious metals plays, which are rising in line with the firmer gold and silver prices.
Gold is trading 1.4% higher ans silver is up 1.9%.
9.30am: Miners slow the Footsie’s progress
The FTSE 100 has struggled into positive territory despite being weighed down by mining stocks, which are out of favour today.
M&G rose 5.3% to 215.9p after posting its first set of full-year results since it was demerged from Prudential.
“New chief executive Stephen Bird is setting out a new strategic direction for the company after it agreed to sell its Standard Life brand to insurer Phoenix Group last month. The outcome of a branding review will be announced later this year. The asset manager is currently in the process of streamlining the business, exiting from Nordics real estate and Indonesia, while the sale of Parmenion is on the horizon,” said Rob Murphy of research consultancy, Edison Group.
“As widely expected by many, the dividend has been rebased with a final dividend of 7.3p per share, bringing the full-year payout to 14.6 pence down a third compared with 21.6p a year earlier,” he added.
8.45am: Pause for breath after yesterday afternoon’s late sprint
As expected, the FTSE 100 got off to a quiet start after City traders paused for breath following Monday’s strong start to the trading week.
Yet again, vaccine optimism gave way to niggling worries over inflation as the global economic recovery takes hold.
ITV (LON:ITV) may have pulled off a ratings winner with Monday’s Harry and Megan interview with Oprah Winfrey; however, the same could not be said of the broadcaster’s prelims.
“ITV was unable to ride the wave of opportunity which enforced lockdowns provided to some broadcasters, due largely to the nature of its business model,” said Richard Hunter, head of markets at Interactive Investor.
“In particular, the company is still heavily reliant on advertising revenue, even though the multi-year strategy to lessen this dependence is ongoing.”
On the flipside, Domino’s Pizza (LON:DOM) appears to be one of the few firms in the food sector to be benefiting from the lockdown after it served up with bumper profits and plan to return £45mln to investors via a share buyback. The stock jumped 11.6%.
Proactive news headlines
Argo Blockchain PLC (LON:ARB) (OTCQX:ARBKF) said it has completed a fundraising that it says will allow it to complete a follow-on investment in Pluto Digital Assets as well as pursue strategic opportunities in crypto mining, capital investment, decentralised finance (DeFi) and Web 3.0 initiatives, and general working capital purposes.
Diagnostics specialist genedrive plc (LON:GDR) said it has inked a deal with a US military contracting specialist that will distribute its BioPlex range, which provide rapid tests for threats from pathogens.
Kromek Group PLC (LON:KMK) has been awarded a contract worth a minimum of US$960,000 by a customer that wants to use Kromek’s technology in a new radiation technology product.
The company also announced it has founded a new 49%-owned portfolio company, Twelve Bio, that is a spin-out from the Novo Nordisk Foundation Centre for Protein Research at the University of Copenhagen and is developing novel engineered Cas12a nucleases for therapeutic gene editing.
KR1 PLC (LON:KR1) said it has invested US$200,000 into a seed funding round at Automata Network alongside trading firm Alameda Research and other investors such as IOSG Ventures, Divergence Ventures and Genesis Block, for a yet-to-be-determined amount of Automata (ATA) tokens.
Frontier IP Group PLC (LON:FIPP) said its portfolio company AquaInSilico, in which it owns a 29% stake, will receive a US$250,000 grant as an Ocean Innovator through the United Nations Development Programme’s Ocean Innovation Challenge.
Arix Bioscience PLC (LON:ARIX), the biotech backer, saw a sharp increase in its net asset value (NAV) per share in 2020. The company’s NAV stood at £328mln at the end of December, up from £202mln a year earlier.
Directa Plus PLC (LON:DCTA) announced it has received an eighth positive test result confirming that its graphene nanoplatelets are not absorbed through human skin. This is vital for the use of graphene in textile markets where customers have to be certain of the safety of the apparel they produce and market, the company said.
Westmount Energy Limited (LON:WTE) told investors it is expecting that operations for Jabillo-1, the next well at the Canje block, offshore Guyana, will start tomorrow.
Ncondezi Energy Ltd (LON:NCCL) has signed a Master Services Agreement with Synergy Consulting to provide financial and transaction advisory services in regard to the integrated 300MW coal fired Ncondezi power project and coal mine in Tete, Mozambique.
Canadian Overseas Petroleum Ltd (LON:COPL, CSE:XOP) has raised £14mln through a share placing with the proceeds earmarked for its new North American assets, which are being acquired in the Atomic Oil & Gas deal (due to close next week).
Critical Metals PLC (LON:CRTM) has received warrant exercise notices to subscribe for 4,000,000 new ordinary shares in the company at an exercise price of 10p per ordinary share for total gross proceeds of £400,000. Chief executive Russell Fryer said: “It is encouraging to see further support from our shareholders endorsing the confidence they have in the Company’s strategy to identify and acquire brownfield mining opportunities in the strategic metals sector. We continue to consider a number of operators or near-term production operators within the natural resources development and production sector in the continent of Africa, with a number of targets having been identified with preliminary discussions continuing.”
Zoetic International PLC (LON:ZOE) said it has secured a put option financing agreement with US investment manager LDA Capital. The cannabidiol (CBD) group said the agreement will allow it to access up to £35mln over a 36-month period as well as retain the optionality to control the timing and amount of capital draws, which it said will guarantee operational flexibility for the group as it looked to further expand its international footprint.
Cadogan Petroleum PLC (LON:CAD) in a statement noted that it has agreed, at the request of borrower Proger Managers & Partners, to postpone the Loan reimbursement until 19 March – it also noted that as of the maturity date, February 25, the due reimbursement was €14.85mln.
AFC Energy (LON:AFC) told investors that it has appointed FTI Consulting as its retained public relations and financial communications adviser.
6.50 am: Timid start predicted
The FTSE 100 is readying for a timid opening on Tuesday after last night saw a mixed session for US stocks and a cautious speech from the Prime Minister.
London’s big-cap stocks index will fall around 14 points, according to spread-betters on the IG index, following the gain of 8.6 points or 1.3% to 6,719.13 at the start of the week.
Wall Street’s blue-chip benchmarks started higher but ended in distinctly different directions. The Dow Jones finishing up 306 points or 1% to a record high of 31,802.44, but the broader S&P 500 closing down 0.5% and the Nasdaq tumbling another 2.4% to almost a three-month low.
“Tech stocks have lost some of their appeal as their high valuations are being called into question, especially when travel and leisure stocks have a brighter future because economies are on track to re-open in the months ahead,” said market analyst David Madden at CMC Markets.
“Last week, the healthy US non-farm payrolls report acted as a nice boost to the dollar. Seeing as things are moving forward on the fiscal stimulus front – the Senate supported the $1.9trn package – there is growing hope the largest economy in the world will bounce back reasonably well.
“EUR/USD suffered greatly at the hands of the dollar while GBP/USD only lost a small bit of ground versus the greenback. The UK’s vaccination rate is north of 35%, hence why the CMC GBP index gained ground yesterday.”
Back in the UK, there was a cautionary speech from Boris Johnson overnight that the public should not get over-confident as the reopening of schools is likely to have an impact on infection rates and so could affect his ‘roadmap’ for lifting restrictions.
This comes with consumer confidence at a one-year high on the back of the speedy vaccinations roll-out.
Around the markets
- Pound – up 0.2% to US$1.3845
- Oil – up 0.5% to US$68.44
- Gold – up 0.5% to US$1,694.02
- Bitcoin – up 7% to US$$53,809
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mixed on Tuesday after European and U.S. stocks began the new week in a positive mood on Monday.
The Hang Seng index in Hong Kong gained 0.28% while the Shanghai Composite in China dipped 1.53%.
In Japan, the Nikkei 225 rose 0.99% but South Korea’s Kospi fell 0.67%.
Shares in Australia gained, with the S&P/ASX 200 closing 0.47% higher.
Proactive Australia news:
Horizon Minerals Ltd (ASX:HRZ) has discovered new high-grade mineralisation in its first air-core drilling program at Windanya Gold Project around 45 kilometres north of Kalgoorlie in WA’s Goldfields region.
Aeris Resources Ltd (ASX:AIS) continues to enhance the copper potential of Constellation discovery within its 100%-owned Tritton tenement package in western New South Wales with high-grade copper results received from six holes of an 11-hole drilling program.
Australian Strategic Materials Ltd (ASX:ASM) (OTCMKTS:ASMMF) has signed a key MoU with the Chungcheongbuk-do (Chungbuk) Provincial Government and Cheongju-si City Government to locate its Korean Metals Plant (KMP) within the Ochang Foreign Investment Zone in South Korea.
PVW Resources Ltd (ASX:PVW) has fast-tracked an auger drilling programme originally scheduled for next quarter at its Kalgoorlie Project testing near-surface gold anomalism on two tenements following the availability of a Kalgoorlie-based auger drill rig to complete the work.
Creso Pharma Ltd (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has signed a non-binding letter of intent (LOI) with ImpACTIVE Holdings Ltd to distribute the company’s suite of hemp CBD based human health products, CannaDOL and cannaQIX®, in Canada and the US.
Legend Mining Limited (ASX:LEG) has kicked off the 2021 field season with diamond drilling, and the second rig is scheduled to arrive next week at Mawson prospect within the Rockford Project, Fraser Range, Western Australia.
Yandal Resources Ltd (ASX:YRL) has intersected high-grade gold mineralisation at Flinders Park and other prospects within the Ironstone Well Gold Project in Western Australia, demonstrating the potential for large gold discoveries within a more than 20-kilometre-long strike zone.
Cirralto Ltd (ASX:CRO) has confirmed May 1, 2021, as the launch date for the new functionality of its Spenda Business Payments Service utilising the MasterCard Business Payment Aggregator (BPA) and the Visa Business Payment Solution Provider (BPSP) agreements with Fiserv.
AVZ Minerals Ltd (ASX:AVZ) has signed a binding offtake agreement with Shenzhen Chengxin Lithium Group Co for the supply of spodumene concentrate (SC6) from the Manono Lithium and Tin Project in the DRC.
American Rare Earths Ltd’s (ASX:ARR) (FRA:1BHA) wholly-owned US subsidiary, Western Rare Earths, has received all the necessary permits and approvals to begin its 2021 core drilling campaign at the La Paz Scandium and Rare Earth Project in Arizona, USA.