FTSE 100 inches into the green amid higher start on Wall Street

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  • FTSE 100 up 6 points
  • Royal Mail upgrades forecasts
  • US stocks open higher

2.45pm: Wall Street opens in the green

The main indices on Wall Street got off to a positive start on Wednesday as stimulus optimism and reassuring US inflation data drove sentiment higher.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.77% at 32,078, while the S&P 500 climbed 0.79% to 3,905 and the Nasdaq rose 1.28% to 13,241.

The strong start followed data that showed US headline inflation rose to 1.7%, a 0.2% increase year-on-year and lower than analysts had predicted.

The softer figure may help alleviate anxieties among some investors in the bond market, where rising yields have held back equities in recent days.

Meanwhile, online video game platform Roblox Corp (NYSE:RBLX) will be hoping for a positive session as it begins trading on the public market today. The shares were provided a reference price of US$45 each on Tuesday evening, giving the company an expected market cap of around US$30bn.

Back in London, the FTSE 100 had inched into positive territory in late afternoon, rising 6 points to 6,736 at around 2.45pm.

1.35pm: Royal Mail pens in higher forecasts after strong letters performance

FTSE 100 was sitting tight at lunchtime and was down 12 points to 6,718.

Meanwhile, Royal Mail PLC (LON:RMG) added 2% to 481.76p after boasting better than expected letter volume and revenue trends.

The postal service estimates full-year revenue to be over £900mln than last year, so around £12bn, with adjusted operating profit more than doubling to £700mln.

The FTSE 250 group is also about to complete a management restructuring programme, which should cost £90mln instead of £140mln as originally expected.

It plans to deliver the targeted savings of £130mln annually, with around £15mln realised in the current financial year.

12.40pm: Wall Street to open higher ahead of US$1.9 trillion stimulus package green light

FTSE 100 kept treading water at midday and shed 13 points to 6,717.

Conversely, Wall Street futures are pointing at a green open as Joe Biden is expecting to finally see his US$1.9 trillion stimulus package passed through the House of Representatives later on Wednesday.

“While traders have been looking for this package as means to turbocharge the US economic recovery, there are plenty of questions over the impact it could have upon inflation,” commented Joshua Mahony, analyst at IG.

“Inflation expectations have already been soaring in the US, and the passing of this huge stimulus package adds further fuel to the fire. While Powell will try to soothe concerns that the Fed will need to tighten policy in the event of rising prices, the key questions is whether this package will accelerate the widespread expectations for a significant bounce in 2021 inflation levels.”

In a busy day for markets, Bumble Inc. (NASDAQ:BMBL) is set to release its first results after the Valentine’s Day IPO, same as Reddit darling AMC Entertainment Holdings Inc (NYSE:AMC).

11.35am: Tesla adds US$100bn to market capitalisation

The Footsie was little moved despite the rebound of US tech stocks.

London’s leading index was down 10 points to 6,719 in the late morning, while the Nasdaq 100 raced 4% higher and the Composite index rose 3.7% late on Tuesday.

“We can put some of this down to short covering, but equally it seems the market cannot make up its mind in terms of rotation and bond yields,” said Neil Wilson at Markets.com.

Some of the illustrious tech risers were some of the most favoured stock last year, such as Peloton and Zoom, while Tesla (NASDAQ:TSLA) jumping 20% and adding US$100bn to its value.

The electric car maker now has a market capitalisation of US$645bn.

As a result, tech-focused investor Scottish Mortgage Investment Trust PLC (LON:SMT) clawed back some of the recent losses and added 1% to 1,130.5p, while the ARKK Innovation ETF rose 10%.

10.15am: Wagamama owner The Restaurant Group seeks £175mln to weather closures 

FTSE 100 held its losses in mid-morning and was down 10 points to 6,719. Sterling, instead, was flat at US$1.3898.

Wagamama owner The Restaurant Group PLC (LON:RTN) has proposed to raise £175mln to bolster the balance sheet in case of new waves of COVID-19 infections and to potentially expand the estate if there are convenient opportunities.

It is the sixth biggest secondary raising of the year so far in the UK and nearly a fourth of the company’s value, which currently stands at £674mln.

The pubs and restaurants operator said the short-term outlook is uncertain while restrictions are in place, though average standalone delivery and takeaway sales have been rocketing.

The current cash burn is £5.5mln per month, while the small-cap firm had available facilities of £470mln at the end of December.

“There’s no denying the last year has been debilitating for much of the hospitality sector. For a business already bruised by the glut of casual dining enterprises and slap in the middle of a restructuring, it could have been terminal,” analysts at AJ Bell commented.

“But the route ahead looks less knotted up. Reopening is just weeks away. Rental payments on half of its leasehold sites are now operating on a turnover structure.  And cash has already been spent making sites Covid secure. The biggest questions about the group’s future potential can only be answered once consumers are free to return.”

9.05am: Miners remain under pressure

FTSE 100 opened in the red on Wednesday, losing 14 points to 6,715 in early deals.

The big-cap index was pressured by mining stocks, which are still deep in the red even though copper’s losses have stalled after two days of decline.

Rio Tinto (LON:RIO) shed 3% to 5,640.5p, BHP (LON:BHP) and Fresnillo (LON:FRES) were down 2% to 2,149p and 916.2p respectively, while Antofagasta (LON:ANTO) dipped 1% to 1,717.25p.

In company news, Just Eat Takeaway.com NV (LON:JET) advanced 2% to 7,000p after posting a 391% jump in revenue to €2bn, although loss before tax ballooned 67% to €147mln due to integration costs, while the food delivery service expects further order and market share growth in the coming months.

Spirax-Sarco Engineering Plc (LON:SPX) reported a 4% decline in full-year revenue and a 1% rise in pre-tax profit, while increased its dividend by 7%. Shares in the steam management engineer enjoyed a 3% uplift to 11,380p.

Life insurer Legal & General PLC (LON:LGEN) has set aside a further £110mln for possible early deaths due to the new strains of COVID-19, while the pandemic reduced operating profits by £228mln in the year to end-December, which included £76mln for Covid-related claims. The stock was flat at 281.6p.

Proactive news headlines

Alien Metals Ltd (LON:UFO) said it has entered an exclusivity arrangement to potentially buy a historic silver tailings project within the Elizabeth Hill mining licence in Western Australia.

Sativa Wellness Group Inc (LON:SWEL)(CNSX:SWEL) said its coronavirus (COVID-19) testing business has achieved over £1.1mln worth of bookings in less than four months since opening its first clinic in Bath, UK.

Induction Healthcare Group PLC (AIM: INHC) said Induction Booking, an appointment service tailored to the healthcare sector, has passed the one million bookings milestone in just a few months.

Neuro-imaging specialist IXICO PLC (LON:IXI) has been drafted in to support an Alzheimer’s clinical trial – its second contract in this field in the space of just under a week.

FastForward Innovations Ltd (LON:FFWD) said it has agreed to sell its entire interest in cannabis firm EMMAC Life Sciences as part of a takeover of the investee by North American cannabis consumer products group Curaleaf Holdings Inc (CSE:CURA, OTCQX:CURLF).

Destiny Pharma PLC (LON:DEST) said Bill Love, its chief scientific officer, has joined the UK Research and Innovation (UKRI) COVID-19 Research and Innovation Taskforce.

Horizonte Minerals PLC (LON:HZM, TSX:HZM) has completed a bought deal private placement of special warrants in Canada, raising gross proceeds of US$9.2mln (£6.6mln).

Pembridge Resources PLC (LON: PERE) said Minto Explorations Ltd has secured a sale price for its copper in a move that will minimise cash flow risks andallow it to benefit from higher metal prices sooner.

Aminex PLC (LON:AEX) told investors that joint venture partner Ara Petroleum is going to shoot 3D seismic at the Ruvuma project ahead of the Chikumbi-1 well programme.

Genel Energy PLC (LON:GENL) noted the latest payments received from the Kurdistan Regional Government for oil sales made in January.

Canadian Overseas Petroleum Limited (XOP:CSE, LON:COPL), announced that it has issued 12,500,000 common shares of the company pursuant to an exercise of warrants.

Salt Lake Potash Ltd (LON:SO4, ASX:SO4) advised that a new corporate presentation, including an update on the Lake Way project completion and expected ramp-up to the anticipated full production run-rate of 245ktpa in the June 2022 quarter, is now available to view on the company’s website.

6.40am: FTSE 100 to start lower as momentum fades

The FTSE 100 is expected to open lower on Wednesday as London’s traders looked to step back in the wake of yesterday’s tech stock rally in US markets.

Spread-better IG expects the FTSE 100 to start down around 55 points after ending Tuesday’s session 11 points higher at 6,730.

Investors look set to take a breather in the wake of yesterday’s tech stock rally on Wall Street, which saw several big names in the sector rise strongly as pressure on equities from rising bond yields eased slightly.

Hopes has also been raised of imminent US stimulus as a US$1.9 trillion relief package heads to the House of Representatives with a vote expected later today.

On Tuesday, the Dow Jones Industrial Average closed up 0.1% at 31,832, while the S&P 500 climbed 1.42% to 3,875 and the Nasdaq rose 3.69% to 13,073.

However, this momentum showed signs of fading in Asian markets earlier today, with Japan’s Nikkei 225 rising just 0.05% while Hong Kong’s Hang Seng was up 0.04%.

On currency markets, the pound was trading down 0.3% against the dollar at US$1.384, although US inflation data later today could provide some catalysts for movement.

Around the markets:

Sterling: US$1.384, down 0.3%

Brent crude: US$66.71 a barrel, down 1.2%

Gold: US$1,711.22 an ounce, down 0.24%

Bitcoin: US$53,748, down 0.79%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Wednesday following an overnight session on Wall Street where bond yields declined and tech stocks made a comeback.

The Hang Seng index in Hong Kong gained 0.12% while the Shanghai Composite in China rose 0.42%.

In Japan, the Nikkei 225 rose 0.03% but South Korea’s Kospi fell 0.48%.

Shares in Australia declined, with the S&P/ASX 200 closing 0.84% lower.

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Proactive Australia news:

Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SBMSF) (FRA:SO3) is continuing the process of evaluating renewable energy options of solar, wind and geothermal energy with a view to becoming zero carbon in the production of sulphate of potash (SOP) at its Colluli Project in Eritrea.

Fenix Resources Ltd (ASX:FEX) has reached annual nameplate road haulage rates of 1.25 million tonnes from the new Iron Ridge mine to the port storage facility in Geraldton.

Australian Vanadium Ltd (ASX:AVL) (OTCMKTS:ATVVF) (FRA:JT71) has completed pilot-scale pyrometallurgical test-work at the Metso testing facilities in the US, confirming world-leading vanadium extraction with high combined vanadium roast/leach extractions of up to 94.9%.

Latin Resources Ltd‘s (ASX:LRS) (FRA:XL5) 100%-owned Noombenberry Project in Western Australia is shaping up to be a very large and high-quality deposit as the second batch of drill results continue to show bright to ultra-bright kaolinite and high-grade halloysite.

Netlinkz Ltd (ASX:NET) and Uni Systems Information Technology have signed a Memorandum of Understanding (MoU) to establish a partnership based on Netlinkz’s Virtual Secure Network (VSN) patented overlay technology platform that makes connectivity simple, fast and secure.

Eclipse Metals Ltd (ASX:EPM) has verified extensive high-grade zones of cryolite-fluorite mineralisation beneath the pit at its Ivittuut Project in Greenland during ongoing evaluation of historical exploration and analytical data by independent mining consultants Outokumpu Oy.

Lithium Australia NL’s (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) wholly-owned subsidiary VSPC Ltd has received notice of acceptance for the patent application for its proprietary cathode material manufacturing process from IP Australia.

Twenty Seven Co Ltd (ASX:TSC) (FRA:U9V) is focused on creating value for shareholders from its three core projects – Mt Dimer, Yarbu and Rover – delivering exploration upside in a prime Western Australian gold mining jurisdiction.

Epsilon Healthcare Ltd (ASX:EPN) is the new name for THC Global Group Ltd after shareholders approved the change last month.

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