FTSE 100 trading sideways; US markets set to start higher – Proactive Investors UK

  • FTSE 100 index adds 33 points
  • Positive start for Wall Street
  • Carnival warns coronavirus will hit 2020 earnings

3.35pm: FTSE 100 hovers around 35 point gain; Carnival warns coronavirus will hit earnings

Heading into the final hour of trading on Wednesday, the FTSE 100 was maintaining most of its gains from earlier in the afternoon and was up around 33 points at 7,532 at 3.30pm.

NMC Health PLC remained the top riser among the big caps, up 9.1% at 848.6p while TUI AG (LON:TUI) had remained at the bottom of the pile after dropping 4.4% to 925.4p.

Meanwhile, fellow FTSE 100 constituent, cruise operator Carnival PLC (LON:CCL), has warned that measure to contain the coronavirus outbreak is set to have a “material impact” on its results for the year to November.

The firm has had to suspend activities at ports in China resulting in the cancellation of voyages in other parts of Asia and that a stoppage of all Asian operations to the end of April would hit 2020 results by US$0.55 to US$0.65 per share, including guest compensation. In the year to 30 November, earnings per share came in at US$4.34.

However, the shares rose 3.3% to 3,230p in late-afternoon, as the forecast was seemingly better than investors had feared.

2.40pm: Wall Street starts higher as coronavirus fears abate

As expected, US markets opened higher on Wednesday morning in New York as signs the coronavirus outbreak may be slowing boosted investor sentiment.

Shortly after the opening bell, the Dow Jones Industrial Average rose 0.73% to 29,491 while the S&P 500 was 0.58% higher at 3,377 and the Nasdaq lifted 0.7% to 9,706.

Back in London, the positive start in the US seemed to have provided some lift for the FTSE 100, which was 43 points higher at 7,542 just before 2.40pm.

1.15pm: US markets set to start higher

Wall Street is expected to kick off Wednesday’s session on the front foot as fears over the coronavirus appeared to be subsiding among traders.

OANDA’s Craig Erlam said the first deceleration in new cases of the disease in China was “apparently a clear sign that the dawn is upon us”, however, he added that while it was “far too early to declare victory, but in the era of FOMO trading, investors are doing just that”.

“It’s now hoped that, as far as the economy is concerned, we’re just facing a bad quarter that could wipe around 1% of full year Chinese growth. I’m sure the data over the coming weeks will enlighten us further on this but, should that turn out to be true, that seems perfectly manageable. Although companies in the country may not be so fortunate”, Erlam said.

Meanwhile, Peter Garnry, head of equity strategy at Saxo Bank, said markets will also be preparing for China to resume manufacturing as the outbreak subsides.

In London, the FTSE 100 was up 25 points at 7,524 at around 1.15pm.

12.10pm: FTSE 100 in the green into lunchtime; BP PLC to go carbon neutral by 2050

As lunchtime approached on Wednesday the FTSE 100 had managed to add a little to its early morning gains and was 23 points higher at 7,523 shortly before midday.

The biggest riser among the blue-chips was hospital firm NMC Health PLC (LON:NMC), which was up 8.9% at 847.2p, while at the bottom of the pile was travel firm TUI AG (LON:TUI) which fell 4.3% to 926.2p as investors engaged in profit taking following strong results on Tuesday.

Meanwhile, oil major BP PLC (LON:BP.) moved up 1% to 474.6p after unveiling plans to reach net zero carbon emissions before 2050 as part of an effort to “fundamentally reorganise” its business.

“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it”, said BP’s chief executive Bernard Looney.

“This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change – this is the right thing for the world and for BP”, he added.

Fellow oil supermajor Royal Dutch Shell PLC (LON:RDSB) was also on the rise, up 1.3% at 2,012.5p after a bullish note from HSBC upgraded the stock to ‘buy’ from ‘hold’ saying the company was “holding up under press” amid weakness in crude oil prices and “severe pressure on downstream and petrochemicals margins”.

11.20am: Trapped Woodford investors prepare for relaunch of revamped fund

Investors trapped in a fund of former star stock picker Neil Woodford will finally be able to trade shares in a revamped version of his Income Focus fund which opens tomorrow.

Investors in the renamed ASI Income Focus fund will be able to place trades from midday today ahead of the opening, with new managers Thomas Moore and Charles Luke revealing the fund’s new holdings in an announcement on Tuesday.

“With investors now getting a first look at the revised top 10 holdings and sector positioning, it is clear that the fund has undergone a complete overhaul with none of the top 10 holdings under the previous manager appearing in the new top 10. At a sector level, exposure to financials has doubled while consumer goods stocks are a significant overweight versus the benchmark”, said AJ Bell’s head of active portfolios Ryan Hughes.

“The bad news for investors is that this overhaul has come at a cost with significant underperformance of the FTSE All Share during the transition, not least because of the costs of making the changes to the portfolio. Many will see this as a final kick in the teeth, having suffered from poor performance and then had to pay again for the privilege of exiting the stocks”, he added.

Link Fund Solutions, which supervises the fund’s management, was forced to suspend it last October after Woodford resigned as its manager. The resignation followed the collapse of the stock picker’s flagship Woodford Equity Income Fund as it was forced to block investor withdrawals amid a liquidity crisis.

The FTSE 100 was up 30 points at 7,529 shortly before 11.30am.

9.55am: Scotch whisky exports hit record high in 2019

Overseas sales of Scotch whisky managed to hit a record high last year despite the imposition of US tariffs on the spirit.

Data from the Stoch Whisky Association (SWA) showed that exports over the year increased by 4.4% to £4.9bn as strong sales growth in countries such as India and Taiwan offset the impact of Brexit uncertainty in other markets.

Despite the announcement of a 25% tariff on Single Malt Scotch last year, the US remained the world’s biggest market for the spirit, with its value rising 2.8% in 2019 to £1.07bn despite a 7% fall in export volumes.

However, despite the yearly growth the SWA’s chief executive Karen Betts said the US tariff was “very concerning” and hitting producers hard, particularly those running small distilleries.

“We are continuing to press the UK government to put in place a package of support for distillers to help mitigate the impact of tariffs, including a cut in excise duty in next month’s budget which would allow distillers to re-invest in the UK market while sales are under pressure in the US”, she added.

Meanwhile, on the markets, the FTSE 100 was trading mostly sideways into mid-morning, up 16 points at 7,515.

8.45am: Upbeat start for Footsie

The FTSE 100 opened in positive territory on Wednesday as Asian markets advanced amid hopes the coronavirus outbreak may be starting to plateau.

The UK’s index of blue-chip stocks advanced 18 points at the open to 7,517.10.

WATCH: Morning Report: Anglo Asian Mining clears bank loans and is now debt free

“The number of new cases in mainland China fell to its lowest since January,” said Neil Wilson, analyst at Markets.com.

However, he added: “There’s been a change in how cases are recorded so we should be cautious about taking Chinese claims at face value.”

The morning’s big mover was Anglo-German tour operator TUI (LON:TUI), which fell 3.5% after succumbing to a modest bout of profit-taking. The shares finished a busy Tuesday session 12% higher after a reassuringly solid update on trading. So, Wednesday’s performance was purely a reality check.

On the up, heading 1.1% higher, was Royal Dutch Shell (LON:RDSA), which was provided support by an HSBC upgrade to ‘buy’.

Among the second-liners, engineer Babcock (LON:BAB) moved 2% lower after undershooting guidance.

Proactive news headlines:

Itaconix PLC (LON:ITX) (OTCMKTS:ITXXF) surged on Wednesday as it signed supply and licensing agreements with North American detergent supplier New Wave Global Services Inc for a new dishwasher formulation. The formula is based on Itaconix’s TSI 322 detergent polymer, which the company introduced last month, with the roll-out of the product expected to commence later this year.

Power Metal Resources PLC (LON:POW) will carry out further exploration at its Kisinka copper project in the DRC after being ‘surprised’ by results of termite mound sampling. Minex Consulting will carry out a programme of pitting, sampling, and mapping which, if successful, should confirm a significant copper anomaly as well as testing the cobalt mineralisation.

88 Energy Limited (LON:88E) told investors it expects that the Charlie-1 well will spud in late February. A permit to drill was awarded yesterday for the well and now all necessary permits are in hand. Preparations for the well programme continue on Alaska’s North Slope with the ice road now more than 80% complete and rig mobilisation anticipated in around 10 days.

Iconic Labs PLC (LON:ICON), the multi-divisional new media and technology business, has signed a content and marketing agreement with a UK based wealth management business. Under the terms of the Agreement, Iconic said, through its GSN (Gay Star News) LGBTI+ news website, it will create and distribute bespoke content to support its campaign to increase the client’s social media reach and impact in the key market. For commercial reasons, the group added, the value of this agreement has not been disclosed.

AFC Energy PLC (LON:AFC) is today showcasing what it says is “the future of off-grid power” with the demonstration of a hybrid hydrogen generator system to British private sector construction contractors. The company, in a statement, noted that presently the global diesel generation market has a market in excess of US$20bn, it is a material contributor to greenhouse gas emissions, and is an obstacle in the way of et zero-emission targets.

Anglo Asian Mining PLC (LON:AAZ) has cleared all its bank loans and is now free of debt. The Azerbaijan-based gold miner took out a refinancing loan with Pasha Bank in 2018 and paid off the final instalment on 10 February

Directa Plus PLC (LON:DCTA) revealed it has secured a safety certification for its G+ graphene printing paste technology. The AIM-listed supplier of graphene products said Eco Passport by OEKO-TEX is an independent certification system for chemicals, colourants and auxiliaries used in the textile and leather industry.

Mkango Resources Ltd (LON:MKA) (CVE:MKA) told investors that it has extended areas of uranium-tantalum-niobium mineralisation at the Thambani project, in southern Malawi. Findings from last year’s exploration campaign, including assays from rock samples, confirmed uranium, tantalum and niobium with grades of up to 0.74% U3O8, 0.41% Ta2O5 and 3.24% Nb2O5, the company revealed.

OptiBiotix Health PLC (LON:OPTI) announced that its wholly-owned subsidiary ProBiotix Health Ltd., has signed a licencing agreement with Granja Pocha S.A.for the inclusion of ProBiotix’s patented probiotic strain LPLDL into a functional yogurt product in Uruguay, South America. The life sciences business said that, under the agreement, SACCO S.r.l., which helped develop the yogurt formulation, will supply ProBiotix’s cholesterol and blood pressure-reducing probiotic strain Lactobacillus plantarum LPLDL, under a non-exclusive licence to Granja Pocha for inclusion into fermented milk products, such as yogurts.

Oncimmune Holdings PLC (LON:ONC) expects the commercial traction seen in the first half to continue into the second six months of the financial year as it gears up for the imminent US launch of its cancer diagnostic. Partner Biodesix will unveil EarlyCDT Lung to the American medical audience next month as part of a five-year agreement worth US$28mln.

Primary Health Properties PLC (LON:PHP) has reported a surge in net rental incomes in 2019 following the completion of its merger with healthcare real estate firm MedicX last March. For the 12 months ended 31 December, the FTSE 250 healthcare property group reported that net rental incomes had risen 51.4% to £115.7mln, while adjusted EPRA earnings were 62.2% higher at £59.7mln, £15.6mln of which had been contributed by MedicX.

Frontier IP Group PLC (LON:FIPP) has increased its stake in artificial intelligence (AI) firm Celerum Limited to 33.8% from 10%. The IP investment group said it had acquired the increased stake in return for an investment of £25,000 as well as converting a previous loan of £21,818 into equity and providing £50,000 worth of strategic, business and hands-on software development services.

Zoetic International PLC (LON:ZOE) said it has raised £387,000 from a private individual who will become one of the CBD specialist’s major investors. John Story is acquiring £330,000-worth of convertible loan notes and 950,000 shares at 6p each. The funds will be used to accelerate the contract manufacturing of products in the US where it has inked deals with AATAC, which owns convenience stores, and New Age Beverages Corporation, a NASDAQ-listed distributor of health products.

Chaarat Gold Holdings Ltd. (LON:CGH), the AIM-quoted gold mining company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic, will release a full-year 2019 Production, Operational and Financial Update on Wednesday, 19 February 2020.

BATM Advanced Communications Limited (LON:BVC), a leading provider of real-time technologies for networking solutions and medical laboratory systems, said it will be announcing its full-year results for the twelve months ended 31 December 2019 on Wednesday 4 March 2020

6.50am: Blue-chips called higher 

The FTSE 100 is predicted to open higher on Wednesday as jitters around the ongoing coronavirus outbreak begin to ease.

Spread-better IG is expecting the FTSE 100 to open up around 14 points after ending Tuesday’s session 53 points higher at 7,499.

Markets appear to be shrugging off concerns around the spread of the coronavirus as the number of new cases in China hit their lowest level since January, suggesting that the virus may be reaching its peak infection rate.

The US markets were a mixed picture overnight despite the positivity over the slowing of the pandemic, with the S&P 500 closing up 0.17% at a record of 3,357 while the Nasdaq also notched an all-time high, rising 0.11% to 9,638. The Dow was flat at 29,276.

New York traders were also lifted by comments from Federal Reserve chair Jerome Powell, who said in his testimony to Congress that the US economy appeared to be holding up against headwinds from overseas, as well as solid company earnings and the approval of T-Mobile’s merger with telecoms firm Sprint.

The slowdown in new coronavirus cases also helped lift Asian markets on Wednesday, with Japan’s Nikkei 225 up 0.74% while Hong Kong’s Hang Seng was 0.98% higher.

On the currency markets, the pound was relatively flat, down 0.01% against the dollar at US$1.2954, as investors seemed cautious over the next phase of post-Brexit negotiations following comments from ministers that the UK could impose trade barriers on all EU imports.

Significant announcements expected on Wednesday:

Finals: Plus500 Ltd (LON:PLUS); Primary Health Properties PLC (LON:PHP)

Interims: Dunelm Group plc (LON:DNLM), Oncimmune Holdings PLC (LON:ONC)

Trading updates: Babcock International Group PLC (LON:BAB)

AGMs: RWS Holdings PLC (LON:RWS)

Economic data: US MBA mortgage applications, US crude oil inventories

Around the markets:

  • Sterling: US$1.2954, down 0.01%
  • Brent crude: US$54.87 a barrel, up 1.6%
  • Gold: US$1,565.80 an ounce, flat
  • Bitcoin: US$10,344.75, up 5.9%

City headlines:

  • Former Goldman Sachs banker Eoin Tonge has joined Marks & Spencer as its new finance chief – Daily Mail
  • The Federal Trade Commission has asked Alphabet, Amazon, Apple, Facebook and Microsoft about smaller acquisitions as part of a review into possible anti-competitive behaviour in the technology sector – Financial Times
  • Michel Barnier has told Sajid Javid not to “kid” himself as he dismissed UK demands to grant the City access to the European market for decades after Brexit – Telegraph
  • Ocado will double the amount it is spending on robotic warehouses to £600million this year as it prepares to launch partnerships overseas – Daily Mail
  • Aileen Gillan, Metro Bank’s chief risk officer since 2013, is leaving as part of a revamp of the lender after an accounting scandal and share price crash – Times
  • Struggling fashion chain New Look has narrowed losses despite another fall in sales – Daily Mail
  • The German digital bank N26 has blamed Brexit for its decision to pull out of the UK and close more than 200,000 customer accounts – Guardian

Source: https://www.proactiveinvestors.co.uk/companies/news/912731/ftse-100-trading-sideways-us-markets-set-to-start-higher-912731.html