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FTSE 100 holds up in countdown to Brexit dinner talk; Wall Street reacts to stimulus doubt

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  • FTSE 100 index adds 17 points
  • Sterling trims gains
  • Wall Street slides on stimulus pessimism

5pm: FTSE manages positive finish

The FTSE 100 closed Wednesday up 17 points, 0.3%, at 6,576, and the FTSE 250 ended 13 points higher, less than 0.1%, at 19,884.

“The future trading relationship between the UK and the EU remains in focus and even though the situation is not looking overly optimistic at the moment, stock markets in Europe are a little higher,” CMC Markets UK analyst David Madden wrote Wednesday. “The British Prime Minister, Boris Johnson, will have dinner this evening with Ursula von der Leyen, the President of the EU Commission, and that has been the talk of the town today. The individuals haven’t sat down yet and already there has been chatter that a deal is not expected to be announced at tomorrow’s EU summit.”

In the US, the Dow Jones gave back its morning gains, dropping 33 points lower, 0.1%, to 30,141 at noon ET. The Nasdaq Composite lost 32 points, 0.3%, to 12,551, and the S&P 500 slipped 5 points, 0.1%, to 3,698.

The slide came after Senate Majority Leader Mitch McConnell told Politico that the two sides are “still looking for a way forward” on a potential stimulus deal.

“The S&P 500 has retreated a little from its record high,” Madden wrote. “Lately, there has been a lot of talk about a coronavirus relief package but from time to time, there are a few minor setbacks. Mitch McConnell of the Republicans claimed that the Democrats keep moving the goal posts in respect to aid so an agreement doesn’t seem likely in the near-term.”   

3.50pm: FTSE 100 holds up in countdown to Brexit dinner talk

FTSE 100 held up well in the afternoon as markets anxiously await for this evening’s talks between Boris Johnson and European Commission head Ursula von der Leyen.

London’s main index added 14 points to 6,573 in the last hour of trading, while sterling trimmed its gains and was up only 0.5% to US$1.3422.

Johnson said the EU is not giving up on terms “no prime minister could accept” but “a good deal is still there to be done”.

During the Prime Minister’s Questions on Wednesday afternoon, he said that the EU is looking for “an automatic right” to retaliate against Westminster if labour and environmental standards differ.

Weeks ahead of the December 31 deadline, the two parties still disagree on major points such as fishing rights, business competition rules and how to police a deal.

If Johnson and von der Leyen find common ground on the sticking issues this evening, UK negotiator Lord Frost and his EU counterpart Michel Barnier will be able to restart their own talks.

3.30pm: Proactive North America headlines:

Loop Insights Inc (CVE:MTRX) (OTCQB:RACMF) and Empower Clinics partner with SimpliFlying to provide travel bubble solutions in the coronavirus era

Binovi Technologies Corp (CVE:VISN) (OTCQB:BNVIF) (FRA:2EYA)  partners with the Babe Ruth League in the US to provide sport vision training to young athletes

Valeo Pharma Inc (CSE:VPH) (OTCQB:VPHIF) (FRA:VP2)  gets Notice of Compliance for Redesca and Redesca HP biosimilars from Health Canada

PyroGenesis Canada Inc (TSX:PYR) (OTCQB:PYRNF) (FRA:8PY) receives Solar Impulse Efficient Solution label for APT-HP plasma torch

Walcott Resources Ltd (CSE:WAL) (OTCMKTS:WALRF) (FRA:WR2) encouraged by potential for low grade, bulk tonnage gold at Cobalt Hill asset

Group Eleven Resources Corp (CVE:ZNG) (OTCMKTS:GRLVF) (FRA:3GE) announces high-grade zinc and silver results from its PG West project in Ireland

American Battery Metals Corporation (OTCQB:ABML)  hires former Tesla manager Kris Gustafson as its lead procurement manager

Thoughtful Brands Inc (CSE:TBI) (OTCQB:PEMTF) (FRA:1WZ1) taps merchant banker and TV personality Bradley C Smith as new director

NexTech AR Solutions Corp (OTCQB:NEXCF) (CSE:NTAR) (FRA:N29) launches augmented reality AI video streaming platform ARoom

Naturally Splendid Enterprises Ltd (CVE:NSP) (OTCQB:NSPDF) (FRA:50N) launches NATERA Plant Based Foods e-commerce website

2.43pm: Wall Street starts on a mixed note

As expected, the main indices on Wall Street opened on a mixed note on Wednesday morning amid lingering uncertainty over US stimulus negotiations, Brexit, and rising coronavirus cases in the US.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.4% at 30,295, while the S&P 500 rose 0.16% to 3,708. Meanwhile, the Nasdaq was the laggard, down 0.05% at 12,575.

Investors mostly seem to be focusing on hopes that a US stimulus deal will be secured soon, with a cliff edge looming at the end of the year as multiple Federal support schemes designed to help unemployed Americans and protect renters from eviction due to expire at the start of next year.

Traders may also be keeping an eye on the Brexit negotiations between the UK and the EU, the outcome of which could cause some fireworks for currency traders and possibly see the pound shift against the greenback.

Back in London, the FTSE 100 was trading mostly sideways, up 25 points at 6,583 just before 2.45pm.

1.35pm: FTSE 100 regains ground

The Footsie regained ground at lunchtime in an unusual joint rally with sterling.

London’s leading index advanced 27 points to 6,585 while the pound was up 0.7% to US$1.3453.

The national coin continues to be boosted by the prospective of a Brexit deal, after Cabinet Office minister Michael Gove said yesterday there was an agreement in principle on all outstanding issues, including the one of Northern Ireland and the Irish border.

“This means that the government has dropped controversial clauses in the Internal Market Bill and ministers will no longer have the power to unilaterally override the Brexit divorce treaty,” said Fawad Razaqzada, analyst at ThinkMarkets.

“But it remains to be seen whether the UK government will be able to secure a final trade deal with the European Union given the vast differences on the issues of fisheries, governance and the ‘level playing field’ remain.”

“With a Brexit deal potentially close to being agreed, this should keep the pound supported, while the ongoing risk-rally should keep the pressure on US dollar. As a result, a breakout above the 1.35 handle could be on the cards for the cable.”

12.35pm: Wall Street to see lukewarm open

FTSE 100 slimmed down at lunchtime, rising only 16 points to 6,575.

On the other side of the pond, US indices are expected to see a lukewarm open, with futures pointing at the Dow Jones and S&P500 barely in the green alongside a dip in the red for the Nasdaq.

US lawmakers are expected to postpone the December 11 deadline by a week so they can take more time to agree on a stimulus package.

Markets are treading water also as they await a potential decision on Brexit after tonight’s meeting between Boris Johnson and Ursula Von Leyen.

“Traders remain optimistic though, although volatility has certainly picked up this last week,” said Craig Erlam, analyst at OANDA.

“The nerves are creeping in and that may ramp up dramatically if talks don’t go well this evening.”

11.30am: Honda pauses production at UK factory after delivery delays

FTSE 100 trimmed its gains in late morning and rose 29 points to 6,588.

Car manufacturer Honda has paused production at its Swindon factory due to delays in deliveries of parts.

The Japanese firm told staff the suspension was starting on Wednesday but work would resume as soon as possible.

The plant, set to close permanently next year, operates on a ‘just in time’ basis to avoid stockpiling, meaning parts arrive only when necessary, although it risks delays.

The news comes as logistics industry representatives wrote to Transport Secretary Grant Shapps to call for action to deal with border delays.

“Although we are hopeful that the current peak of port congestion has passed, high volumes remain and could persist for some months, running into the period of the end of the EU transition,” the letter said, Sky News reported.

“The current situation has arisen in part from imbalances that accumulated over months… Reversing this accumulation is not an overnight task.”

10.30am: Tesco to pay £5bn special dividend after Asian sale

FTSE 100 was steady on Wednesday morning, rising 39 points to 6,598, its highest point since early March.

Grocer Tesco PLC (LON:TSCO) advanced 1% to 227.5p after announcing it will pay a £5bn special dividend to investors in February in relation to the sale of its Thai and Malaysian businesses.

Approval for the deal has been given by Thailand’s trade and competition office, the OTCC, and approved by purchaser CP Group, which follows the approval received from Malaysia’s trade and consumer affairs ministry last month.

This means there are no further conditions outstanding, the supermarket group said in a statement, and the disposal is expected to complete on or around next Friday, December 18.

9.40am: Oxford/AstraZeneca COVID-19 vaccine proved effective in scientific journal

FTSE 100 was on the rise in mid-morning, adding 34 points to 6,593, while sterling rose 0.5% to US$1.3429.

The pound is not giving up on a Brexit deal ahead of tonight’s dinner date between Boris Johnson and European Commission head Ursula von der Leyen, although chief EU negotiator said chances of finally reaching an agreement are “very slim”.

Meanwhile, the big-cap index was buoyed by a peer-reviewed research on The Lancet journal confirming the Oxford/AstraZeneca PLC (LON:AZN) COVID-19 vaccine is safe and effective.

Researchers concluded that its overall effectiveness was 70% based on results from trials of over 20,000 people.

8.35am: Positive start to mid-week

The FTSE 100 was imbued with a little more festive cheer on Wednesday as the UK vaccine rollout continued.

The index of UK blue-chips opened 21 points higher at 6,580.20.

Wall Street finished firmly in the green on Tuesday and the positivity continued in Asia early Wednesday.

The swing factor, for the UK at least, will be the make-or-break Brexit talks between prime minister Boris Johnson and Ursula von der Leyen, the president of the European Commission.

As theirs is a dinner date, the outcome of what is likely to be a tense interaction won’t impact the UK equity market until Thursday.

That said, forex traders will be braced for a sharp fall in the value of the pound if Johnson decides to pull the pin on a ‘no deal’ exit from the EU.

At 8.30am, sterling was changing hands for US$1.3411, up 0.42% and reflecting the faint hope an accord can be salvaged.

“With UK investors also preoccupied by negotiations with the EU, the pound recovered some poise on hopes that a last-gasp deal may yet be agreed before the December 31 deadline. However, the uncertainty has held back some of the otherwise generally positive pandemic sentiment, where the more recent direction of travel has been positive for the flagship index,” said Richard Hunter, head of markets for Interactive Investor.

On the stock market, IAG (LON:IAG), owner of Iberia and British Airways, was on the march following the UK vaccine roll-out. It topped the Footsie with a 3.5% gain amid hopes international travel may soon be back on the agenda.

The house-builder Berkeley Group (LON:BKG) enjoyed a 2.2% bounce ‘early doors’ as the selling pressure, caused by fears of a summary exit from the EU, abated.

Howdens (LON:HWDN) was the top riser of the FTSE 250 with an 8% gain after the builders’ merchant upgraded profit expectations.

Proactive news headlines:

ANGLE PLC (LON:AGL) (OTCQX:ANPCY) has announced that independent data from researchers at The University of Texas MD Anderson Cancer Center, published in the peer-reviewed journal PLOS ONE, demonstrates the performance of ANGLE’s Parsortix system in tandem with multiple downstream molecular characterisation of circulating tumour cells (CTCs). The world-leading liquid biopsy company noted that the study used blood from healthy volunteers spiked with cancer cells from five breast cancer cell lines and one lung cancer cell line to evaluate the linearity, sensitivity, and specificity of the Parsortix system in combination with three downstream techniques for the molecular characterisation of CTCs. The Parsortix system demonstrated strong linearity suggesting that a patient sample would reflect the frequency of CTCs in the patient’s blood. Furthermore, the system was shown to be capable of isolating a single CTC spiked into 5mL of blood. This is significant given the rarity of CTCs and the prognostic significance of even a single CTC during adjuvant treatment of breast cancer, ANGLE said.

S&U PLC (LON:SUS) has said it is in “fine fettle” as the motor finance group revealed trading and profitability have rebounded despite a slowdown in November due to the second coronavirus pandemic lockdown. In a trading update for the period from August 1 to December 8, 2020, the group said demand for used cars and their auction values have “recovered well”, which was reflected in an improved rate of transactions at its Advantage motor finance business with net receivables at £253mln and customer numbers of 63,000.

Amryt Pharma PLC (NASDAQ:AMYT) (LON:AMYT) said it has received marketing approval from the authorities in Brazil for specialist cholesterol drug Lojuxta. The rare diseases specialist noted that the drug is used to treat homozygous familial hypercholesterolaemia (HoFH), a rare condition where the body finds it difficult to remove bad cholesterol from the blood. It has been approved by the regulator ANVISA for use alongside a low-fat diet and other lip-lowering drugs.

SigmaRoc PLC (LON:SRC) has unveiled plans to raise £12.4mln to “accelerate” its near term acquisition and investment pipeline as the construction materials group said it is continuing to perform strongly despite the environment created by the coronavirus (COVID-19) pandemic. The AIM-listed firm said it is planning to raise the funds through a placing of around 24.3mln new shares at a price of 51p each, a 3.3% discount to its closing price on Tuesday, which will be conducted by an accelerated bookbuild to be launched immediately. SigmaRoc said after establishing a “firm operational platform to manage risks posed by the pandemic”, it has now developed an investment pipeline of bolt-on acquisition and small expansion investment opportunities and that the proceeds from the placing will “accelerate its strategic development by executing on opportunities from within this pipeline”.

PCF Group Plc (LON:PCF) said it would use the disruption from the coronavirus (COVID-19) pandemic to undertake a strategic review of its business to reset objectives and targets. The specialist bank added that it has seen a recovery in loan repayments in recent months but is still being cautious over guidance given the uncertain backdrop. Loans in forbearance totalled £23mln at the end of November 2020 compared to £139mln at the peak of the first lockdown but results for the year-end September 2020 were still affected by higher impairments.

SIMEC Atlantis Energy Ltd (LON:SAE) chief executive Tim Cornelius struck a positive and optimistic note as the renewable power firm provided an operations update to investors. “2020 has presented significant challenges for us all but it has also presented many opportunities of which we have been able to take advantage with the support of our shareholders and stakeholders,” Cornelius said. “As a result, 2021 is looking to be a very positive year of milestone achievements across all of our divisions.” The company is expecting to advance planning and final permitting for the Uskmouth power station project in the first half of 2021. Presently, the company is responding to final information requests from the planning authorities, with the assistance of Mitsubishi.

Vast Resources PLC (LON:VAST) has launched a £4.8mln share placing which will satisfy the equity requirement for a larger financing package for the Baita Plai project in Romania The company told investors that the financing term sheet with an international banking institution is advancing and will go to bank’s final credit committee approval on December 15. Among the conditions is the requirement for the company to raise the equivalent of US$6.2mln of additional equity, and, as such the company is now launching the share placing.

Sensyne Health PLC (LON:SENS) is raising up to £27.5mln to “industrialise and scale” its data platform. A total of £25mln is coming from a placing of new shares at 90p each – a transaction that has now been successfully completed. Existing private investors can participate via an open offer of new stock. In the same announcement, Sensyne also said it had struck an exclusive strategic collaboration with Phesi, a US clinical trials data company.

OptiBiotix Health PLC (LON:OPTI),  a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skincare, has said it intends to appoint experienced pharma executive Christopher Brinsmead as a non-executive director, subject to the completion of regulatory due diligence being carried out by the company’s Nomad. The firm noted that Brinsmead has worked in the pharmaceutical industry for over 30 years, holding executive leadership roles with ICI, and Zeneca, before becoming chairman of AstraZeneca Pharmaceuticals UK, President of AstraZeneca UK and Ireland (2001-2010), and President of the Association of the British Pharmaceutical Industry (ABPI) from 2008-2010.

Sativa Wellness Group Inc (LON:SWEL) has said its board of directors have resolved to change the company’s fiscal year-end from July 31 to December 31, effective immediately. By moving the company’s reporting cycle to a calendar quarter basis in line with its operating subsidiaries. Sativa Wellness aims to reduce the time constraints and administrative expenses with having to reconcile multiple reporting periods among other related corporations.  As a result of the year-end change, the company will now report interim financial statements for the three month period ended October 30, 2020 by the end of December 2020 and audited financial statements for the year ended December 31, 2020, by the end of April 2021. Afterwards, the company will revert to a customary reporting calendar based on a December 31 year-end, with fiscal quarters ending on the last day of March, June, September and December each year.

Alien Metals Ltd (LON:UFO), a minerals exploration and development company, said it has released an updated corporate presentation as of December 5 2020. Alien Metals continues to develop its projects in Mexico and Western Australia and continues to develop its exciting portfolio in the strong Iron ore, Silver and Copper commodities. The updated presentation can be found on the company’s website through the following link: www.alienmetals.uk

Tharisa PLC (LON:THS) has said that it’s CEO, Phoevos Pouroulis will provide a live investor presentation via the Investor Meet Company platform on Thursday December 10, 2020 at 2.00pm GMT. Investors can sign up to Investor Meet Company for free and add to meet Tharisa via: https://www.investormeetcompany.com/tharisa-plc/register-investor

Impax Environmental Markets PLC (LON:IEM) has said its monthly factsheet for November 2020 is now available on the company’s website at: https://impaxenvironmentalmarkets.co.uk/wp-content/uploads/2019/05/factsheet-Impax-Environmental-Markets-Plc-november-2020.pdf

6.50am: Front foot start predicted 

The FTSE 100 is expected to start Wednesday on the front foot as Boris Johnson prepares to head to Brussels for crunch talks to thrash out a post-Brexit trade deal before Christmas.

Spread-better IG expects the FTSE 100 to open 32 points higher after ending Tuesday’s session up just 3 points at 6,558.

Johnson is scheduled to meet the head of the European Commission Ursula von der Leyen this evening to see if the two can break an impasse that has settled over the negotiations since the weekend. While a deal is not expected to be sealed at the meeting, any progress will likely give a green light for the negotiating teams to resume their own talks on Friday following Thursday’s meeting of EU leaders where the issue of Brexit is also likely to be discussed.

“With optimism and pessimism being displayed in equal measure, it is apparent that the eventual outcome could well go either way, however, the stars do appear to be aligning for some form of deal by the end of the month, despite reports that suggest a no deal is becoming much more likely than most would like to admit”, said Michael Hewson at CMC Markets.

“The hope is that the [Johnson and von der Leyen] can push back against the more hawkish voices amongst some in the EU who mistakenly think that somehow a no deal outcome is even an option to be contemplated…Perhaps the calculation is that the UK will back down and fold, however, if the PM were to do that there is no guarantee he would be able to sell the sort of compromise that would be acceptable to the EU to the more recalcitrant parts of his party…What is required in the next few hours is less pig-headedness and more pragmatism on the part of all parties. There will be no winners from a no deal outcome, whatever either side might tell you. If anything a no deal would be a kind of mutually assured destruction”, he added.

The blue-chip index in London also seems set to follow optimism in US markets overnight, as positivity over the rollout of coronavirus (COVID-19) vaccines outweighed uncertainty over a new government stimulus package as well as surging case numbers.

The Dow Jones Industrial Average ended Tuesday’s session up 0.35% at 30,173, while the S&P 500 rose 0.28% to 3,702 and the Nasdaq Composite climbed 0.5% to 12,582.

Markets in Asia followed the US lead on Wednesday morning, with Japan’s Nikkei 225 up 1.19% while Hong Kong’s Hang Seng rose 0.88%.

Any news on developments in today’s Brexit talks are likely to catalyse more movement in the pound, which has seen enhanced volatility recently as currency markets fret over the prospects of a deal. Sterling is currently up 0.2% at US$1.338 against the dollar.

Around the markets:

  • Sterling: US$1.338, up 0.2%
  • Brent crude: US$48.66 a barrel, down 0.37%
  • Gold: US$1,861 an ounce, down 0.4%
  • Bitcoin: US$18,196, down 4.9%

6.45am: Early Markets – Asia/Australia

Asia-Pacific shares were mostly higher on Wednesday as a COVID-19 vaccine rollout commenced in the UK, making it one of the first countries in the world to do so.

Japan’s Nikkei 225 rose 1.33%, South Korea’s Kospi index jumped 1.96% and Hong Kong’s Hang Seng index added 0.88%.

In Australia, the ASX 200 rose 0.61% with major iron ore miners advancing as the price of the metal jumped by about 30% in just six weeks and is near its eight-year high thanks to strong demand from Chinese steelmakers.

Chinese shares were an exception to the overall trend with the Shanghai composite falling 0.55% after China’s consumer price index fell in November for the first time in about a decade as food prices declined.

READ OUR ASX REPORT HERE

Proactive Australia news:

Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) has granted an option for Charger Metals NL to acquire part of the company’s Australian exploration assets as a part of its strategy to offload non-core exploration plays to focus on battery supply chains.

Oklo Resources Ltd (ASX:OKU) expects its maiden mineral resource estimate (MRE) at Seko within its flagship Dandoko Gold Project in Mali to be released in quarter one 2021.

Creso Pharma Ltd (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has soared 88% after subsidiary Mernova Medicinal Inc received three new purchase orders as well as a notice to purchase from the Province of Ontario, marking the company’s entry into Canada’s largest recreational cannabis market.

Kazia Therapeutics Ltd (ASX:KZA) has shared top-line final data from its phase 1 study of Cantrixil (TRX-E-002-1) in patients with persistent or recurrent ovarian cancer (NCT02903771) which demonstrates positive efficacy and safety outcomes.

Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) has entered into a collaboration with leading Artificial Intelligence (AI) and Machine Learning company, Max Kelsen, to develop quantum algorithms relevant to the operation of the 12CQ quantum computing processor.

Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (FRA:4W0) has exercised the option to acquire the Elizabeth Gold Project in Canada and has completed an addendum to the original Elizabeth option agreement.

Havilah Resources Ltd (ASX:HAV)(FRA:FWL) closed its share purchase plan (SPP) on December 4, 2020, with applications received for $2.72 million – exceeding the target of $2 million.

Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) (OTCMKTS:PDDTF) intends to re-domicile from Australia to the US via a proposed scheme of arrangement, subject to shareholder, regulatory and court approvals which will cement the company’s position as an important part of the US supply chain.

Kin Mining NL (ASX:KIN) results of up to 5 metres at 27.7 g/t gold from infill reverse circulation drilling at Hobby prospect within the Cardinia Gold Project (CGP) in Western Australia pave the way for a resource upgrade.

Element 25 Limited (ASX:E25) (FRA:QFP) has agreed key commercial terms to sell 50% of the manganese ore produced from the second stage of the Butcherbird Project development to Singapore-based Semeru Energy Ltd.

Emyria Ltd (ASX:EMD) has launched its first product EMD-003 – a cannaboid for mental health – and is confident its drug development program will allow it to accelerate drug registration.

ANGLE says peer-reviewed journal published data demonstrates Parsortix system performance

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