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FTSE 100 opens in the red after Wall Street bond yield wobble

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  • FTSE 100 down 49 points
  • London-listed firm raise most money in a decade
  • Aggreko agrees to £2.3bn private bid

9am: FTSE 100 opens in the red

FTSE 100 opened lower after Wall Street stocks suffered large losses overnight as higher inflation concerns have triggered a rise in government bond yields.

London’s leading index dropped 49 points to 6,601 in early trading.

“After Fed chair Jay Powell’s comments last night, that the Fed was focussed on its dual mandate of unemployment and inflation, and that the central bank was a long way from meeting either, would under normal circumstances, have been enough to assuage market concerns about a premature tightening of policy,” commented Michael Hewson at CMC Markets.

“By not specifically referencing or expressing concern over the recent move higher in longer term US yields, and looking to hold the markets’ hand, it was perhaps not surprising that the bond sell-off continued, however whether the sell-off is sustained is a different matter entirely.”

The weakness in the tech sector is also acting as a drag on Scottish Mortgage Investment Trust (LON:SMT), which shed 5% to 1,034.06p, considering its relatively heavy weighting towards that sector. Its top holdings include Tesla, Amazon and Alibaba.

In UK company news, London Stock Exchange PLC (LON:LSE) said listed firms raised the most money in more than a decade over the past year as they battled the impact of coronavirus.

LSE shares dropped 5% after it admitting facing increasing competition from Europe, after trading in Amsterdam outstripped the UK for the first time in January.

Aggreko PLC’s (LON:AGK) directors have agreed terms for a cash takeover from two private equity groups TDR and I Squared, valuing the mobile power generator supplier at £2.3bn and prompting a 1% rise to 902p.

Mike Ashley’s Frasers Group PLC (LON:FRAS) said the new Budget allocations “will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created” and the £2mln rates cap on businesses from July 2021 to March 2022 is “a near-worthless support package for large retailers”. Shares were flat though.

Proactive news headlines

SDX Energy Plc (LON:SDX) has secured final approval from the Egyptian authorities to extend its Production Services Agreements for the Meseda and Rabul oil fields, both part of the West Gharib concession.

Touchstone Exploration Inc (LON:TXP, TSE:TXP) announced a jump crude oil and natural gas reserves at its Trinidad exploration properties.

Kodal Minerals PLC (LON:KOD) is close to reaching an agreement with Riverfort Global Capital Ltd to receive up to US$2.5mln in funding.

FinnCap Group plc (LON:FCAP) chief executive Sam Smith and chairman Robert Lister have purchased shares in the company. Smith splashed out £39,650 on 130,000 shares at a price of 30.5p per share, while Lister purchased 65,450 at the same price. Smith’s beneficial interest over 16.14mln shares represents 9.29% and Lister 0.04%.

Thor Mining PLC (LON:THR, ASX:THR) has hired WH Ireland as Nominated Adviser and joint broker to the company with immediate effect.

Horizonte Minerals PLC (LON:HZM, TSX:HZM) has appointed BMO Capital Markets as joint broker alongside Peel Hunt LLP, with immediate effect. This week the company attended the virtual 30th BMO Global Metals and Mining Conference and has made a replay of its presentation available on its website.

Personal Group Holdings PLC (LON:PGH) will announce its preliminary annual results for 2020 on Tuesday 23 March. Chief executive Deborah Frost and chief financial officer Sarah Mace will be hosting a webinar for private investors on Tuesday 30 March at 11.30am.

Guild Esports (LON:GILD) will hold its annual general meeting at 10am on Tuesday 30 March at Craven House, 16 Northumberland Avenue, London, WC2N 5AP, UK. The company will take questions and comments from shareholders submitted in advance of the AGM.  

6am: Market waits for US jobs report for February

UK equities are set to start the final day of the week on the back foot ahead of the US jobs report for February.

Spread betting quotes point to the FTSE 100 opening around 56 points lower at 6,595.

“Last night was heavy on surprises leading to plenty of drama. OPEC+ wrong-footed markets by leaving their production cuts intact for another month, delivering a 150,000 bpd [barrels per day] increase to Russia and Kazakhstan, with oil prices rocketing higher,” commented Jeffrey Halley at OANDA.

“Federal Reserve Chairman Jerome Powell chose not to dampen the inflation fires as well. Sticking to his previous guidance that the recent inflation was transitory, expressing comfort with present moves in the markets and that the Fed was very much focused on assisting the recovery in employment,” Halley added.

US markets took a tumble yesterday with the Dow shedding 346 points to close at 30,924 and the S&P diving 51 points to 3,768.

Red has been the predominant colour on traders’ screens in Asia as well, with Japan’s Nikkei 225 down 223 points at 28,707 and Hong Kong’s Hang Seng 96 points softer at 29,141.

China, which withdrew a target for gross domestic product (GDP) in 2020 during the coronavirus (COVID-19) pandemic, has unexpectedly set a GDP growth target, albeit at a fairly low level of “above 6%” compared to the consensus forecast of 8%.

More economic forecasts should come today as The National People’s Congress is meeting to determine the next five-year plan.

In the US, it’s the first Friday of the month which means US non-farm payrolls, the first to cover a whole month under the Biden administration.

Depending on who you ask, the market consensus is for additions of between 170,000 and 195,000.

In London, Pearson PLC’s (LON:PSON) has already tipped the wink to the market ahead of its final results out today.

The FTSE 100 group said it expects adjusted operating profit for 2020 to be in the range of £310mln-£315mln, compared to £581mln in 2019, on sales down 10% compared to the previous year, so investors will be looking to see where exactly the final figure has fallen within this range.

Significant announcements expected for Friday, March 4

Finals: London Stock Exchange Group PLC (LON:LSE), Pearson PLC (LON:PSON), Essentra PLC (LON:ESNT), AIB Group PLC (LON:AIBG), ConvaTec Group PLC (LON:CTEC), Global Ports Investments PLC (LON:GLPR)

Economic data: US non-farm payrolls, US trade balance

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly lower on Friday as China’s Premier Li Keqiang said that the world’s second-largest economy would target a growth rate of over 6% for 2021.

The Hang Seng index in Hong Kong dipped 0.08% while the Shanghai Composite in China rose 0.06%.

In Japan, the Nikkei 225 slipped 0.23% and South Korea’s Kospi dipped 0.57%.

Shares in Australia fell, with the S&P/ASX 200 closing 0.74% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

ioneer Ltd (ASX:INR) (OTCMKTS:GSCCF) (FRA:4G1) has received firm commitments for its fully underwritten institutional placement to raise A$80 million to assist in accelerating construction of the 100%-owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA.

King River Resources Ltd’s (ASX:KRR) reconnaissance exploration at Kurundi Project in the Tennant Creek/Davenport region of the Northern Territory has returned high-grade gold, silver and copper rock chip samples.

Antipa Minerals Ltd (ASX:AZY) aircore drilling program at the Paterson farm-in project with IGO Ltd (ASX:IGO) (OTCMKTS:IPGDF) in WA’s Paterson Province has extended Poblano gold-copper-silver mineralisation by 500 metres to 1.6 kilometres of strike.

Jindalee Resources Ltd (ASX:JRL) has received further drilling results from a 15-hole program completed late in 2020 which have extended the McDermitt lithium resource in southeast Oregon and confirmed substantial thickness and continuity of mineralisation from surface.

Lithium Australia NL’s (ASX:LIT) (FRA:3MW) (OTCMKTS:LMMFF) LieNA® pilot plant has been given the green light, with the company preparing to test its unique LieNA® spodumene conversion process.

Sipa Resources Limited (ASX:SRI) (FRA:SPO) is set to begin drilling at its recently acquired Murchison Gold Project in Western Australia, pending weather in the district.

Firefinch Ltd (ASX:FFX) (OTCMKTS:EEYMF) (FRA:N9F) has recommenced work at the Koting Deposit and received gold results described as “very positive” from Pit 5 Prospect, both at the operational Morila Gold Project in Mali.

AVZ Minerals Ltd’s (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) Manono Lithium and Tin Project in the Democratic Republic of Congo, Africa, is on the pathway towards construction with plans in place to submit one remaining ESIA proposal to the ACE in DRC for approval this quarter.

Andromeda Metals Ltd (ASX:ADN) has started drilling at the company’s 100% owned Mount Hope Kaolin Deposit on the west coast of South Australia’s Eyre Peninsula.

Contango early riser after acquiring Mali gold project near existing property

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