- FTSE 100 down 116 points
- Wall Street heads lower
- US jobless claims much higher than expected
3.55pm: Leading shares dragged down by US data
For the second day running, the UK market was drifting fairly listlessly until the latest US data put a spanner in the works.
On Wednesday it was much stronger than expected US retail sales, which prompted worries about inflationary pressures and upset investors.
This time it is worse than expected jobs figures, with the number of people claiming unemployment benefits last week coming in higher than forecast. There were also weaker housing figures, with housing starts falling 6% in January. The Dow Jones Industrial Average has fallen 220.97 points or 0.7% to 31,392.05 on the news.
So a rise in mining shares was not enough to prevent the FTSE 100 sliding well into the red. Things were not helped by a drop in banking shares following disappointment at the results from Barclays PLC (LON.BARC), down 9.1p or 5.9% at 145.26p.
Smith & Nephew PLC (LON.SN) was also under pressure after the wound care and knee and hip implants specialist reported a 7.1% underlying fall in final quarter revenue. Its shares have fallen 89.5p or 5.71% to 1478p.
The pound has remained strong, edging ever closer to $1.40. It hit $1.3986, up 0.8% before dipping back to $1.3936, still up 0.5%. While that would be good news for any UK tourists to the US, if there were any, it is not so good for exporters as it makes their products more expensive. So tobacco company Imperial Brands PLC (LON.IMB) is down 81.5p or 5.42% at 1423.5p.
The FTSE 100 is 1.73% or 116.39 points lower at 6594.51, close to the low of the day.
2.45pm: Wall Street opens on the back foot
The main indices on Wall Street slumped on Thursday morning after the latest US jobless figures proved a nasty surprise for markets.
In the early minutes of trading, the Dow Jones Industrial Average was down 0.69% at 31,391 while the S&P 500 dropped 0.77% to 3,901 and the Nasdaq fell 1.13% to 13,807.
Back in London, the FTSE 100 was still in the doldrums into late-afternoon, falling 86 points to 6,624 at around 2.45pm.
2.05pm: US data hits markets
The FTSE 100 falls have accelerated after worse than expected US jobs figures.
Jobless claims rose to 861,000 last week, up 13,000 from the previous week’s figure which has been revised upwards to 848,000 from 793,000.
The disappointment has knocked market sentiment, with the FTSE 100 down 1.35% or 90.8 points at 6620.10.
12.57pm: Walmart disappoints as investors await data
Wall Street is set to open lower ahead of more key US economic figures and following a disappointing update from Walmart Inc (NYSE.WMT).
The retail giant reported fourth quarter earnings of $1.39 a share compared to expectations of a figure of $1.51. The company – no longer the owner of Asda following the UK supermarket’s sale to the Issa Brothers for £6.8bn – said earnings were expected to fall in 2022 following planned divestitures. Walmart shares are forecast to fall around 4.6% at the open.
So the Dow Jones Industrial Average is set to fall 89 points to 31,521, wiping out Wednesday’s gains. Among the economic data due, the weekly jobless claims are expected to fall from 793,000 to 765,000 while there is also manufacturing and housing figures.
David Madden at CMC Markets UK said: “Should the [jobless] reading fall below 779,000 it would be the lowest level since early December.
“The Philly Fed manufacturing index is expected to slip from 26.5 to 20.0. Earlier in the week, the US empire manufacturing index for February jumped to 12.1, its highest reading in five months. The building permits and housing starts updates are predicted to be 1.67 million and 1.65 million respectively.”
Back in London the FTSE 100 is still in the red, down 40.86 points or 0.61% at 6670.04.
11.20am: Leading shares hit day’s low
The FTSE 100’s decline continues, with the leading index now at its lowest point of the day, down 0.75% or 50.03 points at 6660.87.
The two way pull between banks – negative after the results from Barclays PLC – and the miners – positive in the wake of strong commodity and oil prices – remains on the side of the former. Barclays is now down 3.95% or 6.1p at 148.26p.
Meanwhile the FTSE 250 is also lower, down 74.38 points or 0.35% at 21,075.11.
Among the market’s brighter spots is Moneysupermarket.com (LON.MONY), up 16.8p or 6.27% at 284.8p. Full year revenues at the price comparison website fell by 11% to £345mln due to coronavirus disruption, while rofits dropped 24%. It said the outcome for the current year depended on how quickly the UK economy comes out of lockdown. But investors liked the fact the company held its dividend despite the decline in earnings.
Recent market arrival Moonpig Group PLC (LON.MOON) has added 14.8p or 3.41% to 449.2p. The online greeting card and gifts retailer said the week ahead of Valentine’s Day was the strongest in its trading history.
Elsewhere MGC Pharmaceuticals Ltd (ASX:MXC) (LON:MXC) (OTCMKTS:MGCLF) has jumped 89.73% or 4.28p to 9.05p. The company, the first cannabis- sector business to float in London, was in demand after it signed an exclusive supply and distribution agreement with Swiss PharmaCan AG, for the sale and distribution of its food supplement ArtemiC products.
9.45am: Banks drag down leading index
Miners are dominating the day’s risers but cannot seem to rescue a flagging FTSE 100.
Rising commodity prices and positive updates this week from some of the major companies have combined to support the sector, but not the wider market. An economic recovery as the global vaccination programme rolls out will increase demand for commodities, and investors are jumping in to make the most of the subsequent rally in metal prices.
However Smith & Nephew PLC and Barclays PLC (LON.BARC) continue to drag down the market following their figures. Barclays is now down 4.36p or 2.83% to 150p, while Lloyds Banking Group (LON.LLOY) is 0.92p or 2.35% lower at 38.01p and NatWest Group PLC (LON.NWG) has fallen 2.3p or 1.29% to 175.85p.
So the FTSE 100 is currently down 22.4 points or 0.33% at 6688.5.
“Having started on Monday wide awake and making some bumper gains it feels like the FTSE 100 has hit the snooze button for the rest of the week,” said AJ Bell’s Russ Mould.
“The latest day of destiny for investor sentiment feels like it is coming on Monday when Boris Johnson is set to reveal the pace at which coronavirus restrictions will be eased in England.
“Other asset classes continue to surge, with the extreme cold in the US disrupting oil production and driving up prices of the black stuff beyond pre-Covid levels, while bitcoin continues to surge having taken out the $50,000 level.”
8.32: FTSE slips in early trading
Leading shares are marginally in the red in early trading after drifting higher initially.
The FTSE 100 has dipped 0.11% or 7.22 points to 6703.68 with Imperial Brands PLC (LON.IMB) among the leading fallers, down 3.75% or 56.5p at 1448.5p as it feels the effect of the strong pound.
Barclays PLC (LON.BARC) is down 1% or 1.54p at 152.82p following its results which showed a better than expected 30% drop in full year profits. But it has cautioned about the outlook given the continuing effects of the pandemic.
Susannah Streeter, senior investment and markets analyst, at Hargreaves Lansdown said:‘’Pre-tax profit of £3.1 billion is no mean feat for Barclays given the pummelling the banking sector has had from the economic damage wreaked by the coronavirus.
“But looking ahead Barclays will need to be nimble on its feet to withstand the blows from the ongoing economic fall out of the Covid crisis. Although it foresees a meaningful improvement in returns in 2021, it has warned that further rates cuts or negative rates could adversely affect the group’s prospects.
“But it’s also warning about too rapid a rate rise in the future, which could hurt the fragile recovery, hit business confidence and lead to more loans turning bad.”
Healthcare group Smith & Nephew PLC (LON.SN) has fallen 98p or 6.25% to 1469.5p after a 12% drop in full year revenues and a decline in operating profits from $815m to $295m.
Later investors will be looking to the latest indicator from the US economy, with weekly jobless claims expected to show a decline to the perhaps the lowest level since December.
Oil prices remain firm after the severe storms in Texas, with US stocks expected to fall when figures are released later. David Madden at CMC Markets UK said: “The EIA report is predicted to show that US oil stockpiles will fall by 2.42 million barrels, while US gasoline inventories are tipped to increase by 1.39 million barrels. The data is likely to be skewed by the adverse weather in the southern part of the country.
“Oil eked out a new 13 month high yesterday on account of the big freeze in Texas, production was impacted. It was reported yesterday that Saudi Arabia is keen to increase output when the global economy recoveries, but if the report is accurate, we are unlikely to see any changes to production in the near term.”
— IGSquawk (@IGSquawk) February 18, 2021
Proactive news headlines
ANGLE PLC (LON:AGL) has highlighted new research published by the University Medical Centre Hamburg-Eppendorf in Germany which it said has demonstrated the ability of its Parsortix liquid biopsy system to harvest circulating tumour cells (CTCs) with a mesenchymal phenotype, which can be used to detect the metastatic biomarker cysteine-rich angiogenetic inducer 61 (Cyr61) in breast cancer patients.
MGC Pharmaceuticals Ltd (ASX:MXC) (LON:MXC) (OTCMKTS:MGCLF) has signed an exclusive master supply and distribution agreement with leading European nutraceutical producer and distributor, Swiss PharmaCan AG, for the sale and distribution of the company’s food supplement ArtemiC™ Product line.
Supermarket Income REIT PLC (LON:SUPR), the grocery property investment trust, has bought another slew of properties on which supermarket giant Sainsbury’s trades. The company, through its 50%-owned joint venture (JV) with the British Airways pension scheme, has doubled its its ownership of the property portfolio to 51%. The JV paid £115mln for the properties.
Empire Metals Limited (LON:EEE) has reported the second phase of reverse circulation drilling at the Eclipse gold project in Western Australia saw a total of 4,589 metres of drilling in 44 drill holes confirmed the existence of a number of parallel veins in addition to the main Eclipse vein.
Oriole Resources PLC (LON:ORR) said an independent desktop remote sensing study has identified gold targets at its 90%-owned district-scale licence package in central Cameroon. The AIM-listed company said the study covered the entire 3,592 square kilometre area, with an initial 12 priority gold targets identified for follow-up.
Scirocco Energy PLC (LON:SCIR) has expanded the scope of its investment strategy which, in March 2019, set out to participate in opportunities for long-term, sustainable value in European energy market.
FastForward Innovations Limited (LON:FFWD) saw its shares advance rapidly after it drew attention to an announcement from investee company Little Green Pharma after it announced a deal to supply medicinal cannabis oil products to enrolled patients in a study by the University of Sydney on the changes to the quality of life of patients with a chronic disease who are prescribed medicinal cannabis.
Panthera Resources PLC (LON:PAT) has engaged law firm Fasken to advise it on a potential dispute with the Republic of India over continued delays to the granting of a prospecting licence for the Bhukia project.
Brunner Investment Trust PLC (LON:BUT) outperformed its benchmark comparison index in the year to the end of November. It also proposed an increased in the full-year dividend for the 49th year in succession, maintaining its status as a “dividend hero”.
Primary Health Properties PLC (LON:PHP) has reported a strong increase in earnings over 2020 as the coronavirus (COVID-19) pandemic increased demand for its assets as healthcare providers came under strain.
Sirius Real Estate Limited (LON:SRE) has appointed Kremena Wissel to the newly created executive role of Chief Marketing and Impact Officer with specific responsibility for ESG.
Canadian Overseas Petroleum Ltd (LON:COPL) said a US$65mln senior credit facility has been approved by the lender, described as a ‘US based global investment firm’.
Woodbois Limited (LON:WBI) said it has received a request from Rhino Ventures for the conversion, on a one-to-one basis, of 100,000,000 of its 951,365,095 non-voting ordinary shares into voting ordinary shares after Rhino Ventures disposed of 100,000,000 ordinary shares in the timber company, under an agreement from August 2020. Paul Dolan, chairman and CEO of Woodbois, said: “We are grateful for the long-term support of Rhino who will continue to own over 21% of the voting ordinary shares and 100% of the non-voting ordinary shares and we welcome our resulting new shareholder.”
Silence Therapeutics PLC (LON:SLN NASDAQ:SLN) president and CEO Mark Rothera will present a company update at the virtual 2021 SVB Leerink Global Healthcare Conference on Friday, February 26 at 2.20pm (9.20am EST). A live webcast of the presentation can be accessed via the investors section of the company’s website at www.silence-therapeucs.com and an archived replay of the webcast will be made available afterwards.
Franchise Brands PLC (LON:FRAN) executive chairman Stephen Hemsley and chief financial officer Chris Dent will provide a live presentation relating to the company’s final results for 2020 via the Investor Meet Company platform on 9 March 2021 at 11am. Questions can be submitted pre-event or at any time during the live presentation.
AdEPT Technology Group PLC (LON:ADT) will on 9 March hold two identical virtual capital markets day presentations. The company said the objective will be to provide “greater context to the AdEPT story and demonstrating the company’s strategy in action”. Available to all existing and potential shareholders, the morning event is intended for institutional investors and the afternoon event is intended for retail investors, which will be on the Investor Meet Company platform.
Alliance Pharma PLC (LON:APH) will announce its results for 2020 on Tuesday 23 March. A conference call for analysts will be held at 10.30am, with a recorded webcast of the analyst conference call, including investor presentation slides, to be made available during the afternoon at this link: https://webcasting.buchanan.uk.com/broadcast/60180f8da6bfbf43d06ac2ea. The recorded webcast will also be made available at the investor section of Alliance’s website.
6.45am: Positive start predicted
The FTSE 100 is seen starting Thursday in positive territory as global stock benchmarks remain somewhat in limbo.
In London, CFD and spreadbetting firm IG Markets makes the blue-chip benchmark 21 points higher, at 6,721 to 6,724 with just over an hour to go until the open.
It comes as crude oil prices rise further due to a cold snap in the United States and as demand continues to eek higher, altogether boosting energy stocks.
Elsewhere though the market factors have been more predictable.
David Madden, market analyst at CMC Markets UK, said: “The minutes from last month’s Fed meeting were published last night and it showed the central bank is keen to have an accommodative policy to help assist the economy.
“It wasn’t exactly new information but the message was that monetary policy is unlikely to change anytime soon as the economy still has a long way to go before the Fed reaches its targets.”
Wall Street benchmarks saw mixed trading. The Dow Jones traded higher, rising 90 points or 0.29% to 31,613, whilst the S&P 500 was more or less flat ending the day at 3,931.
The Nasdaq, meanwhile, swung to an 82 point or 0.58% decline with a close of 13,965.
In Asia, this morning, Japan’s Nikkei traded down 0.19% at 30,236 as Hong Kong’s Hang Seng pulled back 1.13% to 30,732. The Shanghai Composite meanwhile moved up, rising 0.56%,
Around the markets
The pound: US$1.3850, down 0.05%
Gold: US$1,783, up 0.39%
Silver: US$27.26, down 0.37%
Brent crude: US$65.14 per barrel, up 2.8%
WTI crude: US61.72, up 2.78%
Bitcoin: US$52,105, up 3.57%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mixed on Thursday as Australia’s unemployment rate decreased to 6.4% in January, compared against December’s 6.6%.
The Hang Seng index in Hong Kong dipped 1.16% while the Shanghai Composite in China rose 0.55%.
In Japan, the Nikkei 225 slipped 0.19% and South Korea’s Kospi was 1.5% lower.
Shares in Australia rose marginally, with the S&P/ASX 200 closing 0.01% higher.
Proactive Australia news:
Paradigm Biopharmaceuticals Ltd (ASX:PAR) has received ethics approval for its phase 2 clinical trial to evaluate the treatment effects of Pentosan Polysulfate Sodium (PPS) against placebo on synovial fluid biomarkers in participants with knee osteoarthritis (OA) pain.
Infinity Lithium Corporation Ltd (ASX:INF) (FRA:3PM) has raised A$15 million through a strongly supported placement and will issue more than 79.47 million shares at A$0.19 per share to advance the San José Lithium Project in Spain and its integrated supply strategy in Europe.
Bellevue Gold Ltd’s (ASX:BGL) (OTCMKTS:BELGF) stage one feasibility study has found that its Bellevue Gold Project in Western Australia is expected to be ranked amongst Australia’s top-25 gold mines based upon annual production.
Fe Limited (ASX:FEL) (FRA:B4T) has received firm commitments for its $5.5 million placement via the issue of around 123.4 million shares at $0.045 per share to sophisticated and professional investors (before costs of raising).
AVZ Minerals Ltd (ASX:AVZ) (OTCMKTS:AZZVF) (FRA:3A2) has received further strong results from mineral resource drilling at Manono Lithium and Tin Project in the Democratic Republic of Congo with 172 metres at 1.63% lithium and 1,134ppm tin returned from the pit floor ‘wedge’ at Roche Dure.
Strategic Elements Ltd (ASX:SOR) has started developing a ‘Sensor Fusion’ stack for integration into a new generation of autonomous robotic security vehicles that will make them more intuitive and more responsive to their environment.
Marvel Gold Ltd‘s (ASX:MVL) (OTCMKTS:GRXMF) (FRA:GR2) results from the first eight holes of a resource expansion drill program at the Tabakorole Gold Project in southern Mali has confirmed an extension to the southeast.
Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) and its 90%-owned subsidiary Envirostream Australia Pty Ltd’s field testing of fertiliser blends containing manganese micronutrients derived from spent alkaline batteries recycled by Envirostream have demonstrated successful uptake of these micronutrients in a field setting.