FTSE 100 closes higher as traders optimistic on China/US talks breakthrough – Proactive Investors UK

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FTSE 100 closes higher as traders optimistic on China/US talks breakthrough – Proactive Investors UK
  • FTSE 100 closes 45 points up

  • Optimism over Trump-China trade boosts sentiment

  • Dow, S&P 500 and Nasdaq all higher

FTSE 100 closed higher Wednesday as US shares gained ground on optimism about China/US trade talks.

The UK blue-chip benchmark added around 45 points at 6,906, while FTSE 250 surged even higher – up nearly 238 points.

David Madden, analyst at CMC Markets UK, said: “Equity markets have rallied on the back of the conclusion of US-China trade talks.

“We were told the negotiations ended on good terms, but we will have to wait a few days before additional announcements are made.

“It was confirmed that China intends to buy more US products, and that has added to the bullish sentiment.”

On Wall Street, the Dow Jones Industrial Average is up 130 points at the time of writing, while the S&P 500 is up around 14 points. The tech heavy Nasdaq added around 64 at 6,961.

2:40pm: FTSE 100 backs off gains as MP crank up Brexit pressure on Theresa May

The latest sideshow Brexit vote in parliament has brought political uncertainties after a trading session that for the most part was happily following other global equity markets higher.

As the Dow Jones was starting Wednesday with a 130 gain, the news came that Westminster MPs had voted in favour of proposal that will likely crank up pressures should Theresa May’s Brexit agreement fail to pass in parliament next week.

At 308 votes to 297, Westminster backed the proposal that effectively requires May to report a new Brexit plan to parliament within three days if MP’s don’t favour her present agreement with Brussels.

In the City, the FTSE 100 backed off earlier gains but still held positive territory.

Standing at 6,916 the London index was up 54 points or 0.8%.

1:30pm: FTSE 100 up over 1% as Wall Street looks set for positive start

The FTSE 100 rose further in early afternoon trading as the equities rally looked set to extend over the Atlantic ahead of the Wall Street open.

In London, the index was up 73 points or 1.07% changing hands at 6,935.

 “US index futures are eyeing further modest gains ahead of Wednesday’s open, with optimism over China-US trade talks outweighing President Trump’s latest sabre rattling over the Mexican border issue,” said James Hughes, analyst at AXI Trader.

“Economic data remains thin on the ground in the hours ahead, although last night’s higher than expected US consumer borrowing figures did illustrate that higher interest rates aren’t overtly hampering demand for credit.”

12:15pm: FTSE 100 on the front foot as Wall Street eyed higher

By lunch the FTSE 100 had kept hold of the morning’s gains, as the market eyed a positive start to the session in New York.

At 6,927 the London index was up 67 points or 0.99%.

The Dow Jones is presently indicating a 62 point rise for the open, while the S&P 500 and Nasdaq are also seen moving higher.

10:45am: FTSE 100 stays higher, Trump-China and housebuilders distract from Brexit

There were three notable prongs of interest for traders through Wednesday morning – Trump-China trade optimism, housebuilder positivity, and, of course, Brexit impasse.

At 6,924 the FTSE 100 was up 63 points or 0.92%. It is the benchmark’s best day of the year so far, all nine days of it.

Following the holiday downtime Brexit uncertainty was again causing anxiety, and, naturally there’s plenty if speculation around future possibilities.

Josh Mahony, IG Markets analyst, said: “While yesterday’s vote in parliament looks to have made it marginally more difficult to bring about a no-deal Brexit, the fact is that in the absence of any alternative a no-deal remains the default outcome.

“Expect to see the topic of a ‘people’s vote’ grow if Theresa May’s plan gets voted down, yet the crucial question is whether it would include a remain option or not.”

10:15am: Crude oil prices boosted by Saudi-Russia deal and bargain hunting

Along with equities, Crude oil prices also advanced in London with Brent up 1.87% and West Texas Intermediary rising 2.18%.

“Brent crude prices are continuing to gain ground this week with the London contract heading for the US$60 mark this morning,” said Fiona Cincotta, analyst at City Index.

“Though traders are explaining this away with the fact that Saudi Arabia and Russia have agreed to reduce production this quarter an element of the rise has to do with new position taking at the start of the year and bargain hunting after the oil price flirted with the US$50 level in late December.”

BP plc (LON:BP. and Royal Dutch Shell plc (LON:RDSB) were up 0.6% and 0.57% trading at 523p and 2,401p respectively.

9:30am: FTSE 100 rally continues as global trade optimism persists

The FTSE 100 continued to rally through Wednesday’s morning’s trade and recovery back above 7,000 marker is looking closer, albeit probably not close enough to reach today.

Standing at 6,924 the London index was up 63 points or 0.9%.

Evidently, as the market hopes for a friendlier relationship between Trump and China there remains optimistic sentiment, albeit somewhat cooler than yesterday.

“Now that the talks in Beijing have officially come to a close – one day later than expected, something that has been treated as hugely significant – investors are on tenterhooks to know what, if anything, was agreed between the two superpowers,” said Connor Campbell, analyst at online broker Spreadex.

“So far there isn’t a lot to go on; however, the signs appear to be positive.”

8.35am: Positive start for Footsie

The FTSE 100 made a confident start, advancing 46 points to 6,907.16, with sentiment buoyed by the possibility of a halt to Sino-American trade hostilities.

“Talks being extended into a third day is being interpreted by the markets as a sign of progress,” said Jasper Lawler, analyst at CMC Markets.

“Comments coming from both parties continue to indicate that the talks are, so far going very well.

“A deal is likely to still be a long way off, with many twists and turns still to overcome along the way.

“However, the extension is a step in the right direction, sending a signal that the two sides are in serious negotiations and are working hard to resolve the issues.”

Here in the UK, the housebuilders were in demand after a guardedly optimistic assessment of prospects from Taylor Wimpey (LON:TW.), which updated on trading.

Its shares rose 3.5% in the aftermath and dragged with them stock in rival Persimmon (LON:PSN), which advanced 3.4%.

There was little to get excited by in Sainsbury’s (LON:SBRY) Christmas stock-take with the price drifting 1% early on.

“The headline sales figures are not pretty,” said Richard Hunter of Interactive Investor.

“Overall sales declined in the quarter, as compared to a growth figure in the corresponding period last year and, equally, light of analyst expectations.”

Faring a little better from the world of retail was the fashion chain Ted Baker (LON:TED), whose shares spiked 7% in the wake of a better than expected festive season.

Proactive news headlines:

Remote Monitored Systems PLC (LON:RMS) has reported that its sUBSidiaries, Geocurve and GyroMetric, saw increased sales and revenues across 2018. Big Pic in November. The chief financial officer of Silence Therapeutics PLC (LON:SLN), David Ellam, has left the gene editing specialist with immediate effect.

OptiBiotix Health plc (LON:OPTI) has inked a distribution agreement that will see its cholesterol and blood pressure product sold in Russia and Kazakhstan. In the latest of a series of similar commercial deals, the company is teaming up with SilvExpo, a local pharmaceutical and nutraceutical business.

Columbus Energy Resources PLC (LON:CERP) confirmed that it achieved the targeted end of year peak production rate of 1,000 barrels of oil per day, with the help of the asset acquisition. The Trinidad-focused company, in a statement, said that output hit 1,021 bopd in late December while the average rate for the fourth quarter amounted to 670 bopd.

The chief financial officer of Silence Therapeutics PLC (LON:SLN), David Ellam, has left the gene editing specialist with immediate effect. Silence’s group head of financial planning and analysis, Rob Quinn, will take on Ellam’s responsibilities for the time being whilst a permanent successor is found.

Sunrise Resources Plc (LON:SRES) has raised £350,000 through a share placing to support activities at the CS pozzolan-perlite project in Nevada. It is selling some 291.6mln new shares priced at 0.12p each.

Salt Lake Potash Limited (LON:S04) (ASX:SO4) said it has now completed a placing of 31.0mln new ordinary shares to raise gross proceeds of A$13.0mln, first announced on 9 November 2018. The group said the second tranche comprising 1,702,381 ordinary shares were placed at a price of A$0.42 each, including 952,381 shares sUBScribed for by Salt Lake’s CEO, Tony Swiericzuk, and 750,000 shares by its chairman, Ian Middlemas. Proceeds will be used to fund the construction of the Williamson Ponds and dewatering of the Williamson Pit, as well as ongoing development of on-lake infrastructure, exploration and feasibility studies, and general working capital, the company said.

6.45m: FTSE 100 poised to go higher

The FTSE 100 is poised to open higher this morning as the latest US-China trade talks continued to buoy market sentiment.

Spread-betting firm IG expects the FTSE 100 to open around 46 points higher following a positive finish yesterday when the index closed up 50 points at 6,861.

“The US – China trade talks being extended into a third day is being interpreted by the markets as a sign of progress. Comments coming from both parties continue to indicate that the talks are, so far going “very well” said Jasper Lawler, head of research at London Capital Group.

“A deal is likely to still be a long way off, with many twists and turns still to overcome along the way. However, the extension is a step in the right direction, sending a signal that the two sides are in serious negotiations and are working hard to resolve the issues.”

The positive trade picture helped lift Wall Street in Tuesday’s session, with the Dow Jones Industrial Average closing up 256 points at 23,787 while the S&P 500 closed up 24.7 points at 2,574 and the Nasdaq closed up 73.5 points at 6,897.

The rally continued across Asian markets today with the Japanese Nikkei 225 up 211 points at 20.415 while Hong Kong’s Hang Seng surged 614 points to 26,490.

On the currency markets, sterling was up 0.14% at US$1.273 against the dollar and up 0.02% at €1.11 against the euro.

Slew of retailer trading updates to continue

The post-Christmas deluge of trading updates will continue on Wednesday, with several well-known high street brands to report alongside ‘big four’ supermarket Sainsbury’s.

For the FTSE 100 supermarket, which is looking to complete a £12bn merger with Wal-Mart Inc (NYSE:WMT) owned Asda, UBS‘s analysts are looking for a generally “robust” performance with its update, although they are concerned that weaker consumer confidence will hit sales in its clothing and general merchandise divisions.

There will also be an appearance from housebuilder Taylor Wimpey as investors brace for any potential impact from what seems to be a shift in the UK housing market.

Significant announcements expected on Wednesday:

Trading update: J Sainsbury plc (Q3) (LON:SBRY), Taylor Wimpey PLC (LON:TW.), Ted Baker PLC (LON:TED), Topps Tiles Plc (LON:TPT), Majestic Wine PLC (LON:WIN), Greggs plc (LON:GRG), B&M European Value Retail SA (LON:BME)

Economic data: UK productivity data

Around the markets:

  • Sterling: US$1.273, up 0.14%
  • Brent Crude: US$59.3 per barrel, up 1.09%
  • Gold: US$1,281.6 per ounce, down 0.25%
  • Bitcoin: US$4,004, up 0.84%

City headlines:

  • Financial Times: Deutsche Bank has slashed bonuses of investment bankers after the division recorded one of its worst years and its shares slumped to a record low.
  • The Times: Senior Conservatives inflicted the first Commons defeat on a government finance bill in more than 40 years and vowed to fight a guerrilla campaign to stop a “disastrous” no-deal Brexit.
  • The Daily Telegraph: Germany’s manufacturing sector suffered its worst year-on-year contraction since the financial crisis in November, stoking fears that Europe’s largest economy could be heading for recession.

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