FTSE 100 ahead but off best levels, while mid-cap index set for another record close

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  • FTSE 100 up 31 points
  • UK construction growth best since 2014
  • Mixed open for US stocks

3.56pm: Aveva up, Aviva down

After hitting a 12 month high earlier, the FTSE 100 is now back off its best levels but is still up 31.11 points or 0.45% at 6916.43 as vaccine optimism continues and the next stage of lockdown easing approaches.

In a pleasing sort-of symmetry, software group Aveva (LON:AVV) is the biggest blue chip riser, up 115p or 3.17% at 3745p, while the biggest faller is insurer Aviva (LON:AV.), down 14p or 3.33% at 406.4p.

Aveva may well be benefitting from an opening rise on the tech-heavy Nasdaq market and it has also just won a Frost & Sullivan award for its food and beverage systems, while Aviva is quoted without the right to its latest dividend.

Meanwhile the FTSE 250 is heading for another record close, up 71.32 points or 0.32% at 22,231.89.

And in another pleasing symmetry the top riser in the mid-cap index is, yes, a software group, and the biggest faller an insurer.

Bytes Technology Group PLC (LON:BYIT) is up 146p or 3.42% at 442p while Direct Line Insurance (LON:DLG)  is down 15.5p or 4.81p at 306.8p (like Aviva, going ex-dividend).

3.19pm: Markets seek direction

The pattern on Wall Street remains the same as the trading session continues and investors try to work out the significance of the higher than expected US jobless claims. The Dow Jones Industrial Average is down 0.22% but the S&P 500 is up 0.1% and the Nasdaq Composite 0.66% higher.

Charles Hepworth at GAM Investments reckons the claims figures will have less and less impact on the market as the general economy improves.

He said: “On the back of strong payroll numbers last week, today’s US weekly jobless claims threw something of a curve ball into the rosy outlook we have seen recently..more people filing for claims compared to last week and more people in general filing than expected.

“This is likely to be a number that the markets become less and less focused on as the vaccine roll-out continues at pace and the expectation is that companies will re-hire lost labour as the economy becomes less constricted by virus restrictions.”  

Meanwhile the FTSE 100 remains becalmed around the same level, up 23.57 points or 0.34% at 6908.89.

3pm: Proactive North America headlines:

First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) (FRA:18P) hires commodities industry executive to market its refined cobalt production to EV and battery manufacturers

Empower Clinics Inc (CSE:CBDT) (FRA:8EC) (OTCQB:EPWCF) partners with top US digital marketer to launch direct-to-consumer e-commerce solutions

The Valens Company Inc (TSX:VLNS) (OTCQX:VLNCF) (FRA:7LV) expands cannabis distribution network into Manitoba

NetCents Technology Inc (CSE:NC) (FRA:26N) (OTCQB:NTTCF) says it processed a record $19M in cryptocurrency transactions in March

Zinc8 Energy Solutions Inc (CSE:ZAIR) (OTCPINK:MGXRF) (FRA:0E9) announces the planned deployment of its Zinc-air Energy Storage System (ZESS) at the University at Buffalo

Victory Resources Corporation (CSE:VR) (FRA:VR61) (OTCPINK:VRCFF)  begins drilling at Loner property

Melkior Resources  Inc (CVE:MKR) (OTCMKTS:MKRIF) (FRA:MEK1) completes 1,449 metres in maiden drill program at Val D’Or

Heritage Cannabis Holdings Corp (CSE:CANN) (OTCQX:HERTF) (FRA:2UE) taps Merida Capital to accelerate its US product distribution initiative

O3 Mining Inc (CVE:OIII) (OTCQX:OIIIF) appoints communications expert Mélissa Desrochers to its board of directors

Algernon Pharmaceuticals Inc (CSE:AGN) (OTCQB:AGNPF) (FRA:AGW) plans meeting with the US FDA to prepare for upcoming Phase 3 Ifenprodil coronavirus trial

BetterLife Pharma Inc (CSE:BETR) (OTCQB:BETRF) (FRA:NPAU) adds former FDA Psychiatry Division director as regulatory advisor

AgraFlora Organics International Inc (CSE:AGRA) (OTCMKTS:AGFAF) (FRA:PU31) CEO says recent asset sales give ‘us the financial flexibility’ to enter lucrative markets

Idaho Champion Gold Mines Canada Inc (CSE:ITKO) (OTCQB:GLDRF) (FRA:1QB1) reports elevated gold, silver, and base metals values from sampling at Champagne project

2.45pm: Wall Street makes mostly positive start

The main indices on Wall Street have made a mixed but mostly positive start to Thursday’s session despite a higher than expected rise in US jobless claims.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.07% at 33,422 while the S&P 500 rose 0.32% to 4,093 and the Nasdaq climbed 0.92% to 13,815.

Back in London, the FTSE 100 had lost a little momentum but was still up 25 points at 6,910 at around 2.45pm.

1.40pm: US jobs data surprises

More Americans were seeking unemployment benefit last week than expected.

The US weekly jobless claims came in at 744,000, a rise of 16,000 on the previous week and much higher than the forecast fall to 680,000.  On top of that the previous week’s figure was revised up by 9,000 to 728,000.

The unemployment rate was steady at 2.6% for the week.

 

US Weekly Initial Jobless Claims Report – DOLhttps://t.co/tRHpu7676z pic.twitter.com/XUQUbAu0H5

— LiveSquawk (@LiveSquawk) April 8, 2021

So far there has been little market reaction, with the Dow Jones Industrial Average flat and the Nasdaq and S&P 500 moving higher.

The FTSE 100 is up 30.57 points or 0.44% at 6915.89.

 

Not a great jobless claims report. 744K. More than expected. Up from last week. And last week’s number was also revised higher.

— Paul R. La Monica (@LaMonicaBuzz) April 8, 2021

12.43pm: US markets await jobs data

Wall Street futures are pointing to a mostly postive start for US markets.

The Nasdaq Composite is forecast to open 0.89% higher, the S&P 500 up 0.34% but the Dow virtually flat. On Wednesday the Dow and S&P were positive, the Nasdaq marginally negative.

Sophie Griffiths market analyst at OANDA said: “Looking ahead, US futures are pointing to a mildly upbeat start, heading towards fresh record highs as the Fed sticks to stimulus. The tech-heavy Nasdaq is set to outperform its peers, boosted by a fall in US treasury yields and the prospect of ultra-low interest rates for longer. We continue to see further signs the rotation trade out of growth and into value has run out of steam for now.”

Later come US weekly jobless claims. Griffiths said: “The US labour market has been in focus over the past week following blowout non-farm payroll figures and better than expected JOLTS job openings. Initial jobless claims are expected to show 680,000 in the week ending 2 April, down from 719,000. A strong report could boost optimism surrounding US economic recovery and lift the greenback out of the red.”

That would be interesting in the light of the doveish comments from the US Federal Reserve, which continues to believe it is necessary to keep the monetary taps flowing to support the US economy despite the signs of recovery and worries about inflation.

Back in the UK the FTSE 100 remains steady, up 29.46 points or 0.43% at 6914.78.

12.18pm: Vaccine fears recede again

AstraZeneca PLC (LON:AZN) cannot have been happy to see the newspaper headlines about blood clot fears surrounding its COVID-19 vaccines, with people under 30 advised to seek a different jab.

But with many saying the benefits outweighing the risks, and Labour leader Kier Stamer saying he had  the Astra vaccine for his first jab and would have it for the second, the company’s shares have recovered from their earlier falls.

They are now up 2.65% or 188p at 7290p having fallen as low as 7045p earlier in the day.

The Astra revival has helped the FTSE 100 perk up a bit, with the leading index now 25.66 points or 0.37% higher at 6910.98.

The FTSE 250 has also moved into positive territory again, up 17.2 points or 0.08% at 22,177.77 after Wednesday’s record high.

Laith Khalaf, financial analyst at AJ Bell, said: “The fact an index hits a record high is not itself a buying signal, but the attraction of investing in medium-sized companies are plain to see in the long-term performance figures. Over twenty years, the FTSE 250 has wiped the floor with the big blue chips of the FTSE 100, and indeed those of the much-vaunted S&P 500, which has found itself in so much favour with investors of late.

“Indeed, the FTSE 250 has been the best performing segment of the main UK market since the turn of the century.”

10.59am: Catalytic converter company pleases market

Johnson Matthey PLC (LON:JMAT) is leading the risers in the blue chip index after its said its full year performance was likely to be at the top end of market expectations. The City is expecting profits to come in between £405mln and  £502mln.

After COVID-19 disrupted its first half performance, the second was “materially stronger” after increased activity in the automotive sector (it makes catalytic converters to strip emissions from car exhausts.)

It also said it was undertaking a strategic review of its health business.

The news has lifted its shares by 3.29% or 102p to 3201p.

Laura Hoy, equity analyst at Hargreaves Lansdown, said:  “With the transition to electric vehicles well under way, [catalytic converters] could eventually become obsolete and that’s prompted the group to embark on a major strategy shift.

“[It] is pivoting its business toward supplying materials for batteries and hydrogen fuel cells, an expensive, but necessary transition…

“We wonder if potential sale proceeds [from the health business] would be used to ramp up its electric vehicle transition, or if management is hoping to unearth a new growth opportunity outside autos. The former makes sense, considering its entrenchment in the auto industry.”

The rest of the UK market has started to drift a little aimlessly. The FTSE 100 is up 13.81 points or 0.2% at 6899.13 while the FTSE 250, obviously uncomfortable being in record territory, is off 30.59 points or 0.14% at 22,129.98.

And Citi strategist Robert Buckland has sounded a note of caution about the current strong market runs.

He said: “Economic recovery hopes may drive global equities higher in the short run. But rising bond yields and a stronger US dollar suggest that liquidity conditions are starting to tighten. Our flat equity market targets to end-year mean that we would prefer to buy any dips..

“The UK is our favourite value trade, while expectations of a stronger dollar mean we also overweight US equities. We are underweight emerging markets and Europe ex UK. Our global sector strategy favours cyclicals over defensives.”

 

9.44am: UK construction survey beats forecasts

Britain’s builders saw stronger growth in March than expected, with the sector expanding at its fastest rate since September 2014.

The IHS Markit/CIPS UK Construction Total Activity Index came in at 61.7 in March, up sharply from 53.3 in February and much higher than the forecast level of 55. The recovery was supported by strong rises in house building, commercial work and civil engineering. 

Housebuilding was the best-performing category, with growth the fastest since July 2020

 

UK March Construction PMI Report – Markit https://t.co/T3JGF8KRDR pic.twitter.com/16IAAmwd0j

— LiveSquawk (@LiveSquawk) April 8, 2021

Tim Moore, Economics Director at IHS Markit, which compiles the survey said: “March data revealed a surge in UK construction output as the recovery broadened out from house building to commercial work and civil engineering.

“Total activity expanded to the greatest extent for six-and-a-half years as residential spending remained robust, commercial projects restarted and infrastructure contract awards moved ahead.

“Improving confidence among clients in the commercial segment was a key driver of growth, with development activity rebounding in sectors of the economy set to benefit the most from the improving pandemic situation. The increasingly optimistic UK economic outlook has created a halo effect on construction demand and the perceived viability of new projects.”

But for those worried about the growing risk of inflation, the survey showed that problems could be in store.

Moore said: “Constrained supplier capacity and stretched transport availability continued to pose challenges for the construction sector in March. Short supply of products and materials pushed up purchase prices at the fastest rate since August 2008.”

The FTSE 100 has slipped further following the report, although it is still in positive territory. The index is up just 5.02 points or 0.073% at 6890.34.

9.26am: Investors positive on recovery

Leading shares continue on their merry way, with commodity stocks among the risers on the growing prospects of a strong economic recovery from the pandemic.

The FTSE 100 is up 20.15 points or 0.29% at 6905.47, albeit off the day’s high of 6926.

Neil Wilson at Markets.com said: “The FTSE 100 hit its highest level in over a year this morning.  Trading above 6,920 the FTSE is at its highest since the pandemic struck and global stock markets plunged at the end of February 2020. The blue chips are back at last: UK equities entered 2021 at a big discount to peers but have not enjoyed the same bounce as US or some European markets.

“The FTSE 250 is also at a record high – at last UK equities are bouncing strongly on a combination of strong UK growth expectations, ongoing monetary policy support and expectations for a strong global recovery. The move comes after another positive session on Wall Street sent the S&P 500 to another all-time closing high. Yields are supportive after the minutes from the Fed’s meeting in March showed policymakers are no hurry to taper or tighten monetary policy.”

Anglo American PLC (LON:AAL) has added 2.88% or 86p to 3074p after it announced the demerger of its South African thermal coal operations to a new holding company, Thungela Resources Limited .Thungela’s shares will be listed in London and Johannesburg.

Mark Cutifani, Anglo chief executive, said: “Anglo American has been pursuing a responsible transition away from thermal coal for a number of years now. As the world transitions towards a low carbon economy, we must continue to act responsibly – bringing our employees, shareholders, host communities, host governments and customers along with us. Our proposed demerger of what are precious natural resources for South Africa, allows us to do exactly that.

“We are confident that Thungela will be a responsible steward of our thermal coal assets in South Africa, benefiting from an experienced and diverse management team and board.”

8.41am: UK markets make bright start

After a strong start to the foreshortened week, the FTSE 100 is closing in on territory last seen over a year ago.

The index of blue-chips is within striking distance of 7,000 and may well benefit from a rotation out of the tech and into the more staid, international, low-growth stocks in which London specialises.

The mid-caps, rather like a central defender in the opposition half, was in nose-bleed territory.

After its record close on Wednesday, the FTSE 250 opened 18.45 points higher at 22,179.55.

In a boost to international market sentiment, the US Federal Reserve minutes from the March meeting showed officials were generally happy with the trajectory of the world’s largest economy.

That said, there appears to be no imminent plan to rein back stimulus plans so early in the recovery.

On the market, the big update of the day was provided by ASOS (LON:ASC), whose shares, like the online retailer itself, continued to make upward progress. They nudged ahead 2.4% in the early exchanges.

“There may be challenges to come, but for the moment ASOS is firing on all cylinders as pandemic lockdowns largely play to its strengths,” said Richard Hunter, head of markets at Interactive Investor, responding to a 24% increase in half-year sales.

Topping the Footsie risers’ column was Johnson Matthey (LON:JMAT) whose performance for the year exceeded forecasts. Shares in the platinum specialist advanced 5.4%.

On the debit side, Aviva (LON:AV.) shares fell 3.4% after they began trading without entitlement to dividend payment.

6.30am: FTSE 100 to start on the front foot 

FTSE 100 is expected build on Wednesday’s gains at open amid an optimistic environment.

London’s leading index is called 22 points higher at 6,907 on Thursday at the opening bell.

“The minutes from the March meeting showed that while Fed officials seemed happy with the direction of travel of the US economy, they wanted to see much clearer evidence of further progress before dialling back on the stimulus button. This adherence to what the Fed now calls “outcome-based guidance” is all part and parcel of the US central bank’s new policy of not reacting to perceptions of a direction of travel, but waiting until both goals of higher inflation and full employment has been achieved,” said Michael Hewson at CMC Markets.

“While this is all well and good for now with US 10-year yields retreating from their recent highs it should be remembered that last night’s minutes came before last week’s bumper payrolls report and very positive ISM updates. These reports bode well for further strength in the second quarter, and while the Fed wants to give the impression of a central bank that is prepared to be patient, waiting too long also presents dangers.”

Back to the UK, construction PMI for March are scheduled to come out on Thursday, with consensus expecting the figure to rise to 55 from 53.3 in February.

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly higher on Thursday after the S&P 500 hit a record closing high overnight in the US.

The Hang Seng index in Hong Kong gained 0.95% and the Shanghai Composite in China rose 0.22%.

In Japan, the Nikkei 225 slipped 0.17% while South Korea’s Kospi gained 0.14%.

Shares in Australia advanced, with the S&P/ASX 200 trading 0.95% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Twenty Seven Co Ltd’s (ASX:TSC) (FRA:U9V) shares gained 33% after assays delivered up to 23 g/t gold and 33 g/t silver at Mt Dimer.

Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) (OTCMKTS:PDDTF) has increased the global mineral resources estimate for its flagship Piedmont Lithium Project in North Carolina, USA, to 39.2 million tonnes at 1.09% lithium oxide.

Theta Gold Mines Ltd (ASX:TGM) (OTCMKTS:TGMGF) is trading higher after delivering a maiden underground mining reserve for the high-grade TGME Underground Project in South Africa – 490,000 ounces of gold at 5.49 g/t gold.

Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) has begun developing biochip components that are less than 10 nanometres in size – for reference, the average human hair is around 75,000 nanometres wide.

Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) has extended the Big Sky high-grade anomaly target at Cue Gold Project to more than 1.2 kilometres in recent aircore drilling.

Yandal Resources Ltd (ASX:YRL) substantial holder DGO Gold Ltd (ASX:DGO) has increased its stake in the company to 14.26% from 8.69%.

Alchemy Resources Ltd (ASX:ALY) (FRA:45A) has outlined an aggressive drill program at its fully-owned Karonie Project in Western Australia’s Goldfields, with 20,000 metres to be drilled.

Tietto Minerals Ltd (ASX:TIE) is on track to become West Africa’s next gold miner after delivering a “compelling” pre-feasibility (PFS) study for its flagship Abujar Gold Project in Cote d’Ivoire.

Westar Resources Ltd (ASX:WSR) has completed an 11,038-metre aircore drilling program at the Coolaloo Gold Project near Mt Magnet in Western Australia testing high-priority targets, with samples submitted to a laboratory in Perth.

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