FTSE 100 to wipe out yesterday’s losses

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The FTSE 100 is set to wipe out all of yesterday’s losses following yesterday’s rally on Wall Street.

Spread betting quotes indicate the FTSE 100 will open 42 points to the good at 7,005.

Yesterday, the Dow Jones industrial average jumped 433 points to close at 34,021 and the S&P 500 advanced 49 points to 4,113, ahead of US retail sales figures due to be released today.

“It is notable that the US consumer has been much more resilient this year, helped in no small part by significant amounts of fiscal stimulus, while the recovery in the US jobs market has also helped,” said CMC’s Michael Hewson.

“Today’s April numbers aren’t likely to be anywhere near as robust, with a consensus of around 1.1%, which seems pretty much in line, given how well the US jobs market is going; however, we could see an upside surprise given there is some evidence that not all the stimulus payments we saw in March have been spent yet.

“Combined with the continued solid progress in the US vaccine rollout, consumer spending should remain strong, particularly since US theme parks started to reopen in April, and Airbnb also saw a big rebound in its bookings, which suggests consumers are feeling much more confident,” he added.

In Asian markets this morning, both the Nikkei 225 and the Hang Seng are putting their best foot forward.

In Tokyo, the Nikkei 225 is up 622 points at 28,070 while in Hong Kong the Hang Seng is 261 points firmer at 27,980.

On the home front, the focus could be on the pubs and restaurants sector this morning after the latest edition of the Coffer CGA Business Tracker showed that managed pub and restaurant groups recorded a 26% drop in like-for-like sales in April compared to the same month in 2019; the comparison with two years ago rather than one is to take lockdowns out of the equation.

The figure covers three full weeks of outside-only service in England as well as briefer trading in Scotland and Wales, and represents a solid return to trading for the sector, the market research group said.

“Operators enjoyed the benefit of generally good weather and strong consumer confidence in the first fortnight of trading, though low temperatures and rain dampened sales towards the end of the month,” it added.

As for company results, we have interims from the accountancy software giant, Sage Group PLC (LON:SGE).

Sage’s story in recent years has been about moving away from licence sales and professional services and converting its customers to cloud-based services, with an update in January giving management a chance to emphasise how its priority is to grow recurring revenues.

For the final three months of 2020, the first quarter of the FTSE 100 company’s financial year, it reported an 11.3% rise in subscriptions helped generate a 4.7% rise in recurring revenues, offsetting a 24% decline in ‘legacy’ revenues.

“Expectations have been lowered sufficiently,” said UBS at the time, with the prioritisation of recurring revenue growth “is in tune with investors’ priorities”.

However, the UBS analysts still have “medium-term structural concerns” around competitive pressures, while also seeing potential headwinds to earnings from further disposals of non-core assets.

Sage has been a rollercoaster stock in recent years, zooming up above 800s and down to the 500s, with recent levels in the mid-600s posing investors a big question of which way it will swing next.

Around the markets

  • Sterling: US$1.4046, down 0.05 cents
  • Gilt: 0.9%, up 1.05 basis points
  • Gold: US$1,824.20 an ounce, up 20 cents
  • Oil: US$66.91 a barrel, down 14 cents
  • Bitcoin: US$49,446, up US$194

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were higher on Friday after Wall Street put the brakes on a three-day losing streak with the big tech and bank stocks rising on Thursday.

The Hang Seng index in Hong Kong gained 0.85% while the Shanghai Composite in China rose 1.33%.

In Japan, the Nikkei 225 surged 2.4% and South Korea’s Kospi gained 1.12%.

Shares in Australia rose, with the S&P/ASX 200 trading 0.68% higher.

Proactive Australia news:

Davenport Resources Ltd (ASX:DAV) (FRA:D86) has officially changed the company’s name to South Harz Potash Ltd (ASX:SHP) following shareholder approval at the 4th May 2021 general meeting.

Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (OTCMKTS:TMRFF) (FRA:4W0) has closed a non-brokered private placement to raise A$1.9 million for boosting gold exploration.

EcoGraf Ltd’s (ASX:EGR) (FRA:FMK) (OTCMKTS:ECGFF) shares have started trading on the OTCQX market in the United States, following the acceptance of its application.

Core Lithium Ltd (ASX:CXO) (OTCMKTS:CXOXF) announced that the company has been added to the Morgan Stanley Capital International (MSCI) Micro Cap Australia Index with effect from 27 May 2021. 

Aurumin Ltd (ASX:AUN) has received all assays from the recent RC drilling at the Golden Slipper deposit at its 100% owned Mt Dimer Project in Western Australia, which included one of the best unmined results to date.

Fe Limited (ASX:FEL) has ramped up development activities at JWD iron ore deposit with mining contractor Big Yellow beginning earthworks on-site last week with expectations that this component of the first stage of early works will be completed this week.

Silver Mines Ltd’s (ASX:SVL) (OTCMKTS:SLVMF) diamond drilling program at Bowdens Silver Project near Mudgee in Central West New South Wales has intersected up to 3 metres at 1,302 g/t silver within 8 metres at 543 g/t silver from 307 metres.

Strategic Elements Ltd (ASX:SOR) is entering the defence sector with its autonomous vehicle platform and will conduct a feasibility and scoping study with the Defence Science and Technology (DST) Group.

Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has opened its priority offer to shareholders for the IPO of spin-off Codrus Minerals, following conclusion of the exposure period.

Volt Resources Ltd (ASX:VRC) (FRA:R8L) has completed due diligence for the acquisition of a 70% interest in the Zavalievsky group of companies (ZG Group).

Latin Resources Ltd (ASX:LRS) (FRA:XL5) is enhancing its exposure to copper amidst strong market fundamentals by acquiring 2.7 million shares worth C$540,000 in a private placement by Westminster Resources Ltd (CVE:WMR) (OTCMKTS:WMRSF).

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