FTSE 100 closes shade higher as investors still fret about trade – Proactive Investors UK

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FTSE 100 closes shade higher as investors still fret about trade – Proactive Investors UK
  • FTSE 100 closes higher

  • Sainbury’s top loser

  • Bitcoin dips back below US$11,000

FTSE 100 closed marginally ahead as the new trading week began, while FTSE 250 was in the red as investors still fret about trade.

On Wall Street, stocks were heading higher, albeit with not much gusto, with the Dow Jones Industrial Average up over 48 points at 26,767.

The S&P 500 added nearly three to 2,953, while the tech heavy Nasdaq is up 1.7.

“Dealers are turning their attention back to the trade standoff between the US and China, and the G20 meeting at the end of the week will be in focus as President Trump with meet with China’s Xi Jinping,” said David Madden, market analyst at CMC Markets UK.

“The excitement of Mario Draghi’s statement and the Fed’s meeting last week, has been replaced by worries about global trade,” he added.

Footsie closed around nine points higher at 7,416, while the FTSE 250 was off nearly 25 at 19,299.

Supermarkets took the brunt of losses on the UK premier exchange ahead of tomorrow’s grocery market share numbers from the market research group Kantar. Sainsbury (LON:SBRY) was top laggard, down 4.01% to 188p. Micro Focus was top gainer, up 3.75% 2,077p.

3.25pm: Supermarkets nervous ahead of tomorrow’s market share data

London’s index of leading shares is back in the red, albeit only marginally so.

The Footsie was down 6 points (0.1%) at 7,402, with supermarkets prominent among the fallers ahead of tomorrow’s release of the grocery market share numbers from the market research group, Kantar.

J Sainsbury PLC (LON:SBRY) was the worst performer, shedding 3.6% at 230.8p with market leader Tesco PLC (LON:TSC) the next hardest hit, with a 2.5% decline to 230.8p.

Resurgent Wm Morrison Supermarkets PLC (LON:MRW) got off relatively lightly with a 1.4% decline to 197.5p.

In terms of news flow, there was precious little for traders to get their teeth into.

You know it is a dull day when British Airways owner International Consolidated Airlines Group (LON:IAG) offering to buy back €500mln of 0.25% convertible bonds is the biggest blue-chip news of the day. Shares in IAG were down 1.5%.

Also on the slide was telecommunications giant BT Group PLC (LON:BT.A) after a broker downgrade.

The shares relinquished 4.81p at 196.54p after Deutsche Bank cut its rating to ‘sell’ from ‘hold’.

2.35pm: US indices open modestly higher

The Footsie has crawled back into positive territory after a moderately firm start by Wall Street.

The Dow Jones industrial average was up 44 points (0.2%) at 26,763 while the S&P 500 was up 3.7 points (0.1%) at 2,954.

Back in the UK, the FTSE 100 was up 10 points (0.1%) at 7,418, helped by an ebbing in the value of the pound against the US dollar; sterling was down by just over a quarter of a cent at US$1.2715.

Has the Fed Doomed the Dollar? Not so fast! https://t.co/elTehf0zdF pic.twitter.com/FzMfMPapTL

— Kathy Lien (@kathylienfx) June 24, 2019

Meanwhile, bitcoin enthusiasts have been chirping up again after the cryptocurrency moved back above US$11,000 on Saturday.

“Bitcoin’s decisive break above the psychologically important $10,000 mark – with $11,000 breached over the weekend and in sight again today – is being driven by institutional investors and the afterglow from Facebook’s Libra news, despite the regulatory and political pushback against Mark Zuckerberg’s global money plans,” said interactive investor’s cryptocurrency analyst, Gary McFarlane.

“Also, the recommendations, as expected, from the global G7-instituted Financial Action Task Force, which will see crypto exchanges and others required to provide full know-your-customer (KYC) details on clients and all parties to crypto transactions, has done little to dampen bitcoin buying,” he added.

All that being said, the bitcoin price is currently back below US$11,000, at US$10,822, down 2.3% on the day.

1.15pm: Footsie remains becalmed

For most of the day, the Footsie has not so much been stuck in neutral as not even bothered to turn the engine on.

The top shares index was down 6 points (0.1%) at 7,402, with investors hesitant to commit themselves ahead of this Friday’s meeting of the great and the good (and Donald Trump) at the G20 summit.

There has been little in the way of corporate news flow to get the juices flowing.

Retailers are out of favour, with supermarkets J Sainsbury PLC (LON:SBRY), Tesco PLC (LON:TSCO) and Wm Morrison Supermarkets PLC (LON:MRW) down 3.6%, 2.5% and 1.4% respectively.

Clothing and food flogger Marks and Spencer Group PLC (LON:MKS) was off 1.4% while B&Q owner Kingfisher PLC (LON:KGF) was 2.5% lighter.

On the sunnier side of the Footsie street, car insurer Admiral Group PLC (LON:ADM) was the top blue-chip riser, with a 3.8% gain at 2,192p.

Barclays has gone to ‘overweight’ from ‘underweight’ – we’ve all been there but perhaps not in terms of our ratings for Admiral. Barclays‘ target price had been hiked to 2,300p from 2,041p.

The bank has been less complimentary to cruise ships operator Carnival PLC (LON:CCL), which it has downgraded to ‘equal weight’ from ‘overweight’ following Thursday’s profit warning.

The shares sank 2.7% to 3,390p as Barclays cut its price target to 4,330p from 5,235p.

11.30am: All quiet on the Western front

London’s index of leading shares remains tightly tethered to Friday’s closing level.

The FTSE 100 was up 2 points at 7,409, having traded all day in a narrow range spanning from 7,400 to 7,430.

Things are not looking much more exciting across the pond, where stock indices are expected to open modestly higher.

“US index futures are pointing towards a little changed start to the week’s trade. Rhetoric between Washington and Beijing continues to mount ahead of the G20 summit at the end of the week. Some time back this was expected to see a conclusion drawn to the trans-Pacific trade spat, but now it seems as if only a brief side meeting will be held between the US and Chinese leaders. Given the latest tone from Beijing, there’s no suggestion that China will back down quickly in its demands for a reasonable compromise and this could well serve to weigh on stocks in the longer term,” commented James Hughes, at Axi Trader.

“The potential escalation of military activity between the US and Iran is also likely keeping a lid on gains for now, although the upside pressure on oil prices could see upside for petrochemicals stocks which in turn has the potential to buoy the wider index,” he added.

On the corporate news front, the management clear-out at struggling banknote printer De La Rue PLC (LON:DLAR) continues, with chairman Philip Rogerson and senior independent director Andy Stevens announcing plans to step down from the board.

It’s less than three weeks since the company parted ways with its chief executive officer, Martin Sutherland.

De La Rue’s shares were up a penny at 303.5p.

On Thursday we wrote to Philip Rogerson, De La Rue’s Chairman:”we have concluded that all stakeholders would be better served if you now stand


down from the board.” Reneging on releasing shareholder value, the final straw. This morning, DLAR announces Rogerson is standing down.

— Richard Bernstein (@CrystalAmberRB1) June 24, 2019

Shares in Aussie online retailer MySale Group PLC (LON:MYSL) halved after it put itself up for sale.

A sale is not the only option being considered by management; delisting from AIM is another option.

10.00am: Back to square one

Early gains for the Footsie quickly evaporated, and wait-and-see are the watchwords ahead of Friday’s meeting of the G20 summit.

London’s index of leading shares was down a point at 7,406.

“The FTSE 100 was flat in early trading on Monday with the potential catalysts not scheduled until this coming Friday when the G20 summit is held,” said Russ Mould, the investment director of AJ Bell.

“All the attention will be on Donald Trump and his Chinese counterpart Xi Jinping and whether they can dial down the mood music on trade which of late has been set at death metal levels.

“The outcome could help set the tone for the markets over the remainder of the summer,” Mould suggested.

Calls for USDCNY to hit 7.00, G20 to be a nothing-burger and lots of dancing around key issues cos no one has a clue what’s in store for 2H19 pic.twitter.com/CkGiSaNRJp

— EfficientMarketHype (@EffMktHype) June 24, 2019

Most of the excitement – in fact, all of the excitement – was to be found among the small caps where Regency Mines PLC (LON:RGM) was the top performer, up 25% at 0.075p, after ending its long search for a chairman and chief executive combo.

Sector peer,Thor Mining PLC (LON:THR) was 13% higher at 0.875p after it said lab tests have affirmed the good tungsten grades from its drilling programme at Bonya in Northern Territory, Australia.

8.45am: London off to a better start than expected

The FTSE 100 got off to a better than expected start, opening 20 points higher at 7,427.97 and taking its cue from Asia’s main markets, which closed in positive territory.

If the UK is braced for thunderstorms and a brief heatwave this week, then the markets are expecting something akin from the G20 Summit, being held in Osaka.

Starting Friday, it should provide a forum for the US and China to talk trade (always a volatile negotiation for the markets). Analysts expect the run up to the meeting in Japan, and comments from either side of the table, to pre-occupy the market.   

“No one thinks the US and China will do a deal in Osaka, but there is some hope that we will have a positive development that marks a shift in the rhetoric and a re-energising of talks following the breakdown in the recent discussions,” said Neil Wilson, analyst at Markets.com.

Philip Morris’ reported move into the UK e-cigarette market would appear to have upset the applecart with shares in British American Tobacco (LON:BAT) and Rizla owner Imperial Brands (LON:IMB) off 1% each.

Carnival (LON:CCL), which sounded the earnings horn last week, navigated more choppy waters with shares in the cruise line group sinking 2.4% early on.

Tesco (LON:TSCO) and Sainsbury (LON:SBRY) were off 2% and 1.9% respectively after French rival Carrefour beat an expensive retreat from China. German rival Metro, meanwhile, was the subject of a low-ball bid from a Czech billionaire.

6.35am: FTSE 100 set for subdued start

The FTSE 100 looks set to make a subdued start to the trading week with City wheeler dealers keeping their powder dry ahead of the G20 meeting of the world’s largest economies.

The gathering, which kicks off on Friday, is expected to be the backdrop for talks between the US and China aimed at heading off an escalation of trade hostilities.

President Trump and Xi Jinping are set to meet on the sidelines in a bid to stave off a further US$300bn of American tariffs.

Recent data appears to show the sanctions are hitting their mark, with China’s manufacturing sector hardest hit.

“Even though the language between the two sides has mellowed, the relationship is far from fixed, and dealers might approach the G20 summit with some caution,” said David Madden, analyst at CMC Markets.

Gold above US$1,400

With investors fretting over the outcome of trade talks and real interest rates headed towards zero, gold nudged over US$1,400 an ounce overnight.

Brent crude, meanwhile, found support above US$65 a barrel in the aftermath of the missile attack on a tanker in the Gulf of Oman, which has led to tensions between the US and Iran.

The recent stream of UK corporate news looks set to slow to a trickle with just one blue-chip – the distribution group Bunzl (LON:BNZL) – reporting.

Meanwhile, it is crunch time for FirstGroup (LON:FGP) and its 10% shareholder and activist investor Coast Capital with a general meeting on Tuesday to bring their clash to a head.

Coast is looking to get shareholders in the transport group to vote on its proposal to sack six of the company’s 11 directors and replace them with seven nominees of Coast’s choice, including former UK transport minister Steve Norris. This follows May 2018’s sudden departure of FirstGroup’s then boss Tim O’Toole.

Around the markets: US$1.2748; gold US$1,403.40 an ounce, up US$3.77; Brent crude US$65.47, up 27 cents a barrel

Today’s main news

Interims: Porvair PLC (LON:PRV)

Finals: Cake Box Holdings PLC (LON:CBOX), Civitas Social Housing PLC (LON:CSH), D4t4 Solutions PLC (LON:D4T4), Fastjet PLC (LON:FJET), Zoo Digital Group PLC (LON:ZOO)

AGMs: Futura Medical PLC (LON:FUM), Rockfire Resources PLC (LON:ROCK), United Oil & Gas PLC (LON:UOG)

Economic data: CBI distributive trades report; German IPO business climate survey

Business Headlines 

Financial Times

  • Hammond decides against quickly naming BoE chief – move discussed by officials could have tied next prime minister’s hands
  • Lloyds freezes 8,000 offshore accounts in Jersey
  • US Fed quizzes Deutsche on ‘bad bank’ plans
  • Cox disputes Johnson’s no-deal tariff claim – attorney-general says UK would struggle to maintain existing EU arrangements

Times

  • Regulator gave banker key role in RBS scandal inquiry – FCA lacked sufficient knowledge of commercial lending
  • Slowing wage growth to drag back consumer spending, claims report
  • Philip Morris, one of the world’s biggest tobacco manufacturers, is considering opening hundreds of stores in Britain in a drive for sales of alternatives to cigarettes
  • Calls to stop Facebook dominating global finance

Daily Telegraph

  • Mobile operators should face scrutiny from cartel watchdogs over High Court claims of attempted price fixing and collusion, according to the leader of a cross-party group of MPs
  • Johnson Matthey chief: ‘Diesel will be around for a long, long time’
  • Airbus could avoid criminal charges by shutting UK firm
  • Buyers seeking British Steel break-up circle the embattled business

Guardian

  • Facebook‘s Libra cryptocurrency ‘poses risks to global banking’
  • Police arrest five in Patisserie Valerie investigation

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