- FTSE 100 closes down 25 points
- US markets closed for Thanksgiving
- Broker downgrade hits AO World
4.50pm: Bring on Black Friday
The FTSE 100 index finished a dull Thanksgiving Thursday in the black as the lack of any lead from Wall Street, closed for the US holiday, saw the focus remain on the dire economic straits caused by the coronavirus pandemic.
At the close, the UK blue-chip index was 25.16 points, or 0.4% lower at 6,362.93, above the session low of 6,349.92, but well below the opening peak of 6,412.65.
However, the FTSE 250 index was even worse off, plunging 173 points, or 0.9% to close at 19,396.34.
Joshua Mahony, senior market analyst at IG, a global leader in online trading, commented: “The outperformance in the more internationally focused FTSE 100 over the FTSE 250 highlights growing fears over the direction of travel for the UK economy.
“Weakness across banking and airline stocks highlight the fear that the UK will continue to struggle in its bid to get back to normality despite the recent vaccine optimism that has permeated through markets.
“Undoubtedly value stocks have plenty of upside to come, yet we could be at a point where investors will be left wondering just how long they have to wait until they can judge that actual recovery for themselves.”
Mahoney added: “While markets have largely been willing to overlook any dour data points in anticipation of a vaccine-fuelled recovery next year, the incessant rise in coronavirus cases does provide a sticking point for market sentiment. While traders have been willing to overlook short-term weakness in favour of future growth, we do need to see signs that recent lockdown measures are making a tangible difference to the trajectory of the virus.”
“With Angela Merkel warning that the German partial lockdown would last until at least 20 December (and potentially January), the economic cost is swiftly racking up. In the US, record high cases in Texas and California were joined by a seven-month high in New York cases after they topped 7,000 a day.
“While many have cheered the prospect of a less divisive approach from Joe Biden, there is also a fear that he could hurt the US economy by enacting a nationwide lockdown after taking office,” the analyst concluded.
3.15pm: Quiet end to a torpid day
The day is fizzling out and has been since about 10.00am, notwithstanding a brief bit of excitement at the time of the lockdown tiers announcement.
The FTSE 100 was down 25 points (0.4%) at 6,366.
3.10pm: Proactive North America headlines:
Canada Silver Cobalt Works (CVE:CCW) (OTCQB:CCWOF) (FRA:4T9B) raises C$4.95M as it closes flow-through placing
2.40pm: Sterling’s fall provides a lift to blue-chips
A half-hearted rally by the Footsie is underway, helped by sterling losing ground on foreign exchange markets.
London’s index of leading shares, which includes among its number a large number of dollar earners, was down 20 points (0.3%) at 6,371.
On foreign exchange markets, as traders wait for more developments in the Brexit negotiations, the pound was down by half a cent against the US dollar at US$1.3335 after the European Union’s (EU) negotiator Michel Barnier claimed the EU would pull out of Brexit talks if the UK refuses to compromise on the outstanding issues.
If things are a bit flat in equity markets, the excitement in cryptocurrencies continues, with Bitcoin losing slightly more than one-tenth of its value at US$16,914.
“Bitcoin [is] giving us a timely reminder of the two-way risk that comes with volatile cryptocurrencies and while the old saying goes that markets tend to take the stairs up and the elevator down, with cryptos those stairs are steep and the elevator plunges,” said OANDA’s Craig Erlam.
“Crypto trading is a high-risk sport, one speculators in the space will be more than used to by now and while I wouldn’t be surprised to see another plunge in the price, I equally wouldn’t be remotely shocked to see record highs in tomorrow’s headlines. Bitcoin is back and as volatile as ever and it’s only just getting going,” Erlam added.
1.30pm: Enough to drive you to drink
The composition of the lockdown tiers in England has not whetted investors’ appetite for pubs group shares.
Mitchells & Butlers PLC (LON:MAB), which had been only modestly lower following the publication this morning of its full-year results, saw its decline extend to 3.4% (to 216p) after the government revealed that just about everywhere in England apart from the deep south – if such a thing exists – will either be in tier 2 (high alert) or tier 3 (very high alert) when the current lockdown restrictions ease.
Fuller’s, which had been modestly higher following its half-year report, fell back to 680p, down 2.9%.
Cinemas operator Cineworld PLC (LON:CINE), 2.5% lower at 53.62p, also did not react well to the new lockdown measures, and neither did escape rooms operator Escape Hunt PLC (LON:ESC), which tumbled 4.4% to 16.5p.
The FTSE 100 was down 33 points (0.5%) at 6,357 – pretty much around where it has been for about three hours.
12.10pm: Lockdown tiers are announced
Health secretary Matt Hancock has made an announcement about the new lockdown tiers in England.
The full run-down is below.
Tier 1: Medium alert
- South East
- Isle of Wight
- South West
- Isles of Scilly
Tier 2: High alert
- North West
- Liverpool City Region
- Warrington and Cheshire
- North Yorkshire
- West Midlands
- Shropshire and Telford & Wrekin
- East Midlands
- East of England
- Cambridgeshire, including Peterborough
- Essex, Thurrock and Southend on Sea
- Bedfordshire and Milton Keynes
- all 32 boroughs plus the City of London
- South East
- East Sussex
- West Sussex
- Brighton and Hove
- Bracknell Forest
- Windsor and Maidenhead
- West Berkshire
- Hampshire (except the Isle of Wight), Portsmouth and Southampton
- South West
- South Somerset, Somerset West and Taunton, Mendip and Sedgemoor
- Bath and North East Somerset
- Wiltshire and Swindon
Tier 3: Very High alert
- North East
- Tees Valley Combined Authority:
- Redcar and Cleveland
- North East Combined Authority:
- South Tyneside
- Newcastle upon Tyne
- North Tyneside
- County Durham
- North West
- Greater Manchester
- Blackburn with Darwen
- Yorkshire and The Humber
- The Humber
- West Yorkshire
- South Yorkshire
- West Midlands
- Birmingham and Black Country
- Staffordshire and Stoke-on-Trent
- Warwickshire, Coventry and Solihull
- East Midlands
- Derby and Derbyshire
- Nottingham and Nottinghamshire
- Leicester and Leicestershire
- South East
- Slough (remainder of Berkshire is tier 2: High alert)
- Kent and Medway
- South West
- South Gloucestershire
- North Somerset
In his statement to the House of Commons, Hancock singled out Liverpool for praise, saying it was an example of a city that had shifted from tier 3 to tier 2. Hancock said areas in tier 3 would be encouraged to use mass testing and he urged people to take advantage of the testing services.
The FTSE 100 was down 33 points (0.5%) at 6,358.
11.40am: Thanksgiving ennui continues
It has been a quiet morning, as is often the case when US markets are on holiday.
The FTSE 100 was down 36 points (0.6%) at 6,355 and had been trading sideways for an hour or so in the absence of fresh catalysts.
There is always a certain weariness about European markets on Thanksgiving Day, knowing that they are almost certainly condemned to a directionless session with little volume and not much movement, and even when there is it is likely to be quickly unwound once the Americans get fully back in the saddle from Monday. Perhaps this year they will be thankful for the rest after the craziness of 2020 and all the volatility that has come with it,” suggested Chris Beauchamp, the chief market analyst at IG.
“November has not been exactly quiet either, with stock markets finding their springboard to a fresh rally thanks to the election and vaccine news. That rally has cooled this week, leaving indices to drift back from their recent highs but without any real conviction. Without the US today and (mostly) tomorrow we can look forward to more drift, especially since investors are expecting more gains in December,” he predicted.
While pubs groups Mitchells & Butlers and Fuller’s have been in focus this morning, those of a more abstemious nature have been checking out soft drinks maker, Britvic PLC (LON:BVIC), which is up 0.7% at 816.5p following its full-year results.
In the year to September 30, 2020, revenue was 9% lower at GBP1.4bn while adjusted underlying earnings (EBIT) tumbled 23% to GBP165ml but the firm expressed confidence in the soft-drinks market.
Bit of a mixed bag from Britvic results, revenue down, pre-tax profits up, divi down. Shares up 4% at opening but I wouldn’t chase them higher at this stage. Trading conditions still tough.
— Rodney Hobson (@RodneyHobson) November 26, 2020
10.25am: Profit-takers take a bite out of Bitcoin
London’s slow start continues but there has been a bit of activity in the cryptocurrency markets with profit-taking taking a chunk out of the Bitcoin price.
The FTSE 100 was down 31 points (0.5%) at 6,360.
Meanwhile, profit-takers have taken a bite out of Bitcoin, which is down 8.3% at US$12,217, bringing an end – temporarily at least – to the cryptocurrency’s remarkable ascent this year.
Back in the world of equities, Polymetal International PLC (LON:POLY) was 2.7% higher at 1,604.5p after agreeing to take a strategic stake in Cyprus-focused tiddler, Chesterfield Resources PLC (LON:CHF).
Polymetal is paying GBP2.1mln to acquire a 22.5% stake in Chesterfield at 9p a pop. That’s small beer to Polymetal but big news for Chesterfield, which was 21% higher at 13p on the news.
9.50am: Half and half for pubs groups
The Footsie has continued to drift lower in the second hour of trading, with the fall amplified by a number of big names trading ex-dividend.
London’s index of heavyweight stocks was down 20 points (0.3%) at 6,371, with Imperial Brands PLC (LON:IMB), down 4.1% at 1,430.5p leading the retreat, as the shares are now trading without the right to receive the third-quarter dividend.
It’s been a tough year for pubs and the market cut Mitchells some slack as it posted an adjusted loss of GBP32mln for the 52 weeks ended September 26, versus a profit the year before of GBP197mln for the All Bar One owner.
The shares were down 0.7% at 222p – not much more than the market in general.
“The pub company is walking on a tightrope and management are determined they will make it to the other side without plunging to the depths. The negative issues facing the company are akin to a tornado which is right in front of the business, waiting to strike,” said Russ Mould, the investment director of AJ Bell, in florid mood.
“The warnings about its ability to remain a going concern are extremely worrying and management will be hoping that the Government doesn’t plunge large swathes of the country into higher category tiers when it updates later today on the country’s restrictions,” Mould said.
“A lot of Mitchells & Butlers‘ pubs are reliant on being rammed full of people such as All Bar One and O’Neill’s which are tailored to the party crowd, so not exactly social-distancing friendly. The idea of the country operating in tiers until at least Easter, therefore, poses a major threat to pub and bar trading for many months to come.
“Mitchells & Butler’s saving grace could be the widespread availability of food in its establishments. That could be the pulling power it needs to get people through the doors, assuming that people are happy to venture outdoors,” Mouls suggested.
As for Fuller’s – now purely a pubs group having offloaded the brewing business some time back to Asahi – its shares rose 2.9% to 720p after it revealed that during the final two months of the half-year reporting period, the group made an operating profit of GBP2.0mln “despite severe restrictions in place”.
“The results from M&B and Fullers highlight the dramatic impact of Covid19 with currently both businesses effectively shuttered and the majority of staff on furlough; however, despite the outlook for a bleak future, both businesses have been supported by the government furlough scheme and helped by largely having a freehold portfolio they are well-positioned to come out of the pandemic in an enhanced competitive position and with lessons on efficiency that should ensure an improving performance,” suggested Mark Lynch, a partner at corporate finance house, Oghma Partners.
“The question remains though whether demand from customers will return – the evidence of August and September is a resounding yes. Whilst the outlook is difficult, it now seems that better days lie ahead for those that survive this winter,” he added.
98% of its staff – those it has not let go – are on furlough or flexi-furlough, the company revealed.
8.30am: Contrarian beginnings
London’s leading equities saw mixed progress on what is expected to be a quiet Thursday, what with the US celebrating Thanksgiving today.
The FTSE 100 initially headed higher but has since reversed course and was down 10 points (0.2%) at 6,381.
Investors are still picking through the bones of yesterday’s UK spending review announcement by Rishi Sunak, the chancellor of the exchequer.
“Though the government was eager to advertise the funds being spent on infrastructure and tackling Covid-19, one of the key takeaways was the likely fiscal consolidation in the years ahead, with the announcements including a public sector pay freeze in 2021-22 and major cuts to the overseas aid budget. The UK is seemingly looking to fiscally consolidate, which is brave at this point but with no election for four years one can understand the political motivation,” said Jim Reid at Deutsche Bank.
On the company news front, the reaction to third-quarter results from insurance giant Aviva PLC (LON:AV.) was tepid, with the shares off 0.9% at 324.8p.
“Aviva has delivered a generally upbeat statement and outlook, with the added highlight of positive dividend news,” said Richard Hunter at interactive investor.
“A new policy includes a payment of 7p with a proposed final dividend of 14p. For the future, the size of the payout is set at sustainable levels, although dividend growth may not be at historically high rates. Even so, the news puts the implied yield in excess of 6%, which is a breath of fresh air to income-starved investors who have seen the requirement for yield largely evaporate as the pandemic has bitten. The implied yield may not return Aviva to the previously heady heights of around 9%, but the new framework is nonetheless welcome and likely to prove resilient in tougher times,” he added.
Among the mid-caps, Bodycote PLC (LON:BOY), down 6.2% at 719.5p, was getting it in the neck after announcing more restructuring.
Having cut its automotive & general industrial (AGI) headcount by around a thousand so far this year, the FTSE 250-listed engineer said there will be a “similar restructuring programme” at the aerospace, defence & energy (ADE) division as it plans to consolidate its footprint into fewer, larger facilities.
Proactive news headlines:
Remote Monitored Systems PLC (LON:RMS) said commercial production of anti-viral masks at its Pharm 2 Farm (P2F) subsidiary is expected to start in January 2021. The company received notification yesterday that the production machinery is expected to undergo final acceptance testing in mid-December at the manufacturer’s premises in Spain. It will then be shipped, installed and commissioned at P2F’s Biocity premises in Nottingham.
Jersey Oil and Gas PLC (LON:JOG) is taking full ownership of Licence P2170, which hosts most of the Verbier discovery and is one part of the Greater Buchan Area (GBA) development project. The company said the deal simplifies licence ownership ahead of the planned GBA farm-out process. It sees Jersey acquire partner CIECO V&C (UK), a joint venture between Japanese firms ITOCHU Corporation and JOGMEC (Japan Oil, Gas and Metals National Corporation). The 12% stake in Licence P2170 is CIECO’s sole asset.
IQ-AI Ltd (LON:IQAI) said its subsidiary Imaging Biometrics (IB) has released an upgraded version of its IB Clinic software platform. The company said that the new release incorporates multiple new enhancement requests for the platform received from clients, as well as workflow efficiencies engineered by IB’s developers. “Ultimately, this release underscores IB’s commitment to quality and helping clinicians improve care for their patients”, IQ-AI said.
Genel Energy PLC (LON:GENL) has declared ‘first oil’ at the Sarta field, where the company has a 30% stake alongside Chevron. Production has begun at Sarta with first oil flowing from the Sarta-3 well into the Early Production Facility, Genel said. The Sarta-2 well is on track to be completed in December and will come onstream from January. Genel said it continues to expect that the Sarta field will achieve stable production levels during the first quarter of 2021.
Savannah Resources PLC (LON:SAV) announced that another step has been taken in the environmental impact assessment (EIA) process for its Mina do Barroso lithium project. The company has submitted additional and revised information in response to the anticipated request it received from Agencia Portuguesa do Ambiente (APA), the Portuguese regulatory body. This additional submission further underlines Savannah’s commitment to developing and operating Mina do Barroso in a low impact, responsible and sustainable way that will bring long term social, environmental, economic and demographic benefits to all of the project’s stakeholders and to Portugal, Savannah said.
US Oil & Gas PLC (USOP) told investors that groundworks are now complete for the Eblana-9 well at the Hot Creek Valley project in Nevada. An access road is complete and the well pad has been constructed, the group said, a rig has been mobilised to site and the well will spud soon. The company noted additionally that a ‘permit to drill’ now been awarded by the Nevada Division of Minerals and a rig contract has been signed.
Norman Broadbent PLC (LON:NBB), the executive search specialist, has strengthened its balance sheet with a GBP250,000 six-year loan facility. The facility has been secured under the British Business Bank’s Coronavirus Business Interruption Loans Scheme (CBILS) from its bankers, Metro Bank. The facility can be drawn down at any point before January 16, 2021, with a 12-month interest-free period following drawdown, after which an interest rate of 4.75% per annum over Metro Bank‘s base rate on the drawn down amount will apply.
W Resources PLC (LON:WRES) has highlighted a consolidation of recoveries from its La Parrilla tungsten and tin project in Spain in its fourth quarter to date as a result of ongoing plant improvements at the site. In an update on its fourth-quarter progress, the AIM-listed mining firm said it has achieved record recovery rates in November of 40% tungsten trioxide (WO3) and 53% tin (Sn), while mine grades were “consistently exceeding” 1,050 parts per million (ppm) WO3 and 350ppm Sn, which it said is “significantly greater” than the preceding three quarters.
Vast Resources PLC (LON:VAST) said it has completed the first delivery of concentrate produced from its Baita Plai polymetallic mine in Romania. The delivery follows an announcement on Monday when the company announced the acquisition of the remaining 20% interest in the mine following the passing of a resolution at a general meeting.
Union Jack Oil PLC (LON:UJO) told investors that the final commissioning of the Wressle oil field, in near Scunthorpe, Lincolnshire, has been deferred to January. It comes amidst anticipated supply chain disruption including ongoing coronavirus pandemic related restrictions and the upcoming festive holidays. In a statement, Union Jack said Wressle is at an advanced stage with site reconfiguration works completed and the installation of surface facilities currently ongoing.
AEX Gold Inc. (LON:AEXG) (CVE: AEX), an independent gold company with a portfolio of gold licences in Greenland, said it has appointed Rothschild & Co as its retained financial advisor to support the company as it progresses the development of its asset portfolio. Eldur Olafsson, CEO of AEX, commented: “We are delighted to be have secured the services of Rothschild & Co as strategic advisors to the Company. This important relationship, with an advisory house of Rothschild’s calibre and outstanding track record, provides further validation of our business and our potential to create significant value for AEX’s stakeholders.”
Impax Asset Management Group PLC (LON:IEM) said it expects to announce its results for the year ended September 30, 2020, on Thursday, December 3, 2020. There will be a meeting and conference call for analysts on the day of the results at 8.30am. A copy of the presentation will be made available on the company’s website from 7.30am on December 3, 2020.
Tharisa PLC (LON:THS) said it will be announcing its results for the year ended September 30, 2020 on Monday, November 30, 2020. The results will be presented at 10.30am (Johannesburg Time) (8.30am London Time) via conference call. Web dial-in: https://mm.closir.com/slides?id=553426; Phone: South Africa +27 87 2500 455; United Kingdom +44 203 984 9844; USA +1 718 866 4614; Germany +49 30 25 555 323; France +33 1758 50 878; Sweden +46 10 551 30 20; Participant code: 553426.
IronRidge Resources Limited (LON:IRR,) confirmed that all resolutions put to shareholders were duly passed by a show of hands at the company’s Annual General Meeting, held on November 26, 2020, in Brisbane, Australia.
6.50am: Traders to be thankful
The FTSE 100 is set to start Thursday slightly higher on what will is likely to be a quieter day, as across the pond America celebrates the Thanksgiving holiday.
CFD and spreadbetting firm IG sees London’s blue-chip benchmark rising by around 16 points, as it makes a price of 6,395 to 6,398 with just over an hour to go until the open.
On the eve of Thanksgiving, it appeared investors and Wall Street traders were cashing out after the recent coronavirus (COVID-19) success vaccine positivity, ahead of the public holiday.
“Yesterday, there was a sense that some dealers were winding down for the week, even though the NYSE will be open for limited trading on Friday. Any of the financial markets that are open today will probably experience low volatility,” said David Madden, an analyst at CMC Markets.
Into the somewhat checked-out market, the Federal Reserves released its monthly meeting minutes, from its early November get-together, indicating the central bank’s policymakers may mull further stimulus, via asset purchase mechanisms.
On Wall Street, the Dow Jones Industrials Average finished Wednesday down 173 points or 0.58% at 29,872. The broader S&P 500 closed at 3,629, down 0.16%, whilst the Nasdaq Composite was up 0.48% ending the session at 12,094.
In Asia on Thursday, Japan’s Nikkei 225 index was up 240 points or 0.91% trading at 26,537, whilst Hong Kong’s Hang Seng moved 0.23% higher to 26,731. The Shanghai Composite was down a sliver at 3,360.
Around the markets:
- The pound: US$1.3393, up 0.1%
- Gold: US$1,810 per ounce, up 0.18%
- Silver: US$23.30 per ounce, down 0.22%
- Brent crude: US$48.78 per barrel, up 1.9%
- West Texas Intermediary: US$45.92 per barrel, up 2.2%
- Bitcoin: US$17,959, down 5.11%
6.45am: Early Markets – Asia/Australia
Stocks in Asia were higher on Thursday as JD Health, a unit of Chinese e-commerce giant JD.com said it is looking to raise more than US$3 billion on its Hong Kong debut.
Japanese stocks surged, with the Nikkei 225 rising 0.91% and South Korea’s Kospi advancing 0.94%.
Mainland Chinese stocks gained 0.10% while Hong Kong’s Hang Seng index rose 0.25%.
Shares in Australia lagged, with the S&P/ASX 200 slipping 0.70% even as November continues to be strong with the index still trading about 12% higher for the month.
Proactive Australia news:
TNT Mines Ltd (ASX:TIN) is watching intently as Warriedar Mining has started reverse circulation (RC) drilling at Eureka Gold Project, around 50 kilometres north of Kalgoorlie in the Western Australian Goldfields.
Maximus Resources Ltd (ASX:MXR) has completed a reverse circulation (RC) drilling and reconnaissance program at gold prospects within the Spargoville tenements in WA’s Goldfields with broad alteration zones intersected.
Lake Resources NL‘s (ASX:LKE) (OTCMKTS:LLKKF) (FRA:LK1) high purity ‘clean’ lithium carbonate produced from Kachi brines has been sent to Novonix Ltd‘s (ASX:NVX) (OTCQX:NVNXF) Novonix Battery Technology Solutions in Nova Scotia, Canada, to produce NMC622-based lithium-ion battery test cells.
Andromeda Metals Limited’s (ASX:ADN) updated mineral resource estimate for its 75%-owned Great White Deposit near Poochera on the west coast of South Australia’s Eyre Peninsula has increased by 33% over the previous estimate.
Pure Minerals Ltd (ASX:PM1) is trading higher on entering a non-binding Memorandum of Understanding (MOU) with Samsung SDI Co Ltd for the supply of nickel from the TECH Project, 100%-owned by its wholly-owned subsidiary Queensland Pacific Metals Pty Ltd (QPM).
Creso Pharma Limited (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) is set for the Therapeutic Goods Administration’s (TGA) final decision confirming an interim recommendation to down schedule the distribution of cannabidiol (CBD) products in Australia and this is expected in late December 2020.