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FTSE 100 slips from best levels after Budget; US stocks seen rallying despite poor jobs data

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  • FTSE 100 up 39 points
  • US stocks seen rallying at open
  • Chancellor of Exchequer raises corporation tax

1.30pm: Sunak finishes, US jobs disappoint

Away from the Budget, there have been some disappointing US jobs figures.

Ahead of the much-watched non-farm payroll numbers on Friday, private payroll numbers from ADP show that just 117,000 jobs were added in February. That is below expectations of a 225,000 figure and a sharp decline from the January level of 195,000, itself revised upwards.

As for the non-farms, they are expected to rise by 133,000 last month from a 49,000 increase in January.

The news has seen Dow Jones Industrial Futures come off their best levels, now showing a 0.3% increase after an earlier 0.7% increase.

Back to the Budget and Rishi Sunak has sat down after just over 50 minutes.

The scores on the doors as he finished were as follows: the FTSE 100 is up 39.06 points or 0.59% at 6652.81 (14 points lower than when he started) while sterling is at virtually the same level, up 0.06% at $1.3962.

1.15pm: Market slips from best levels

Leading shares have come off the boil a little as the Chancellor gets to the tricky bit of paying for the amount spent on the pandemic.

He is putting up corporation tax for large businesses – but not small – from 19% to 25%. But this will not kick in until 2023 when the economy is forecast to be recovering.

Even so, the FTSE 100 has come off its best levels, up 41.77 points or 0.63% at 6655.52.

Housebuilders have moved higher after the confirmation of the extension of the stamp duty holiday, and a new mortgage guarantee scheme. 

12.45pm: Market continues in positive territory

Leading shares are hovering in positive territory as the Chancellor steps up to deliver his Budget speech.

The FTSE 100 is up 53.22 points or 0.8% at 6666.97 and sterling is 0.05% higher at $1.3961 as he begins.

He starts by laying out a three part plan to cope with the pandemic and afterwards: to continue doing whatever it takes, to fix the public financess and to build the UK’s future economy.

Follow our live Budget blog for all the details.

12.00pm: US markets seen higher

The FTSE held firm as lunchtime approached, supported by expectations for early gains across the Atlantic on Wednesday, although some nervousness ahead of the impending UK Budget kept the UK index off its best levels.

With around 30 minutes to go until the Chancellor of the Exchequer stands up, the UK blue-chip index was ahead 65.36 points at 6,679.11.

US stocks are expected to rise on Wednesday, rallying amid fresh optimism for an economic rebound as the roll-out of coronavirus (COVID-19) vaccines steps-up and there is progress toward a deal on President Biden’s new stimulus package.

Futures for the blue-chip Dow Jones Industrial Average and the broader S&P 500 index were both 0.7% higher, while the tech-laden Nasdaq-100 index futures added 0.8%, all recovering after a weaker session on Tuesday.

Wall Street has been volatile in recent days but on Wednesday sentiment was buoyed by signals that the Democrats will seek to bridge differences over jobless benefits and other issues as they aim to complete the $1.9 trillion relief package in coming days.

And there was also a boost after President Biden said the US would have enough COVID-19 vaccines for all American adults by the end of May, two months earlier than had previously been expected.

The bond market has also calmed in recent days after a surge in yields rattled investors last week, leading to sharp declines in stocks. Top central bank officials have said the rise in yields reflected optimism about economic prospects.

Federal Reserve governor Lael Brainard said Tuesday that the recent tumult in the bond market is on her radar screen. However, she signalled that the Fed will not be dialling back on support for the economy until it is on a stronger footing, reiterating comments made by other officials.

Investors will eye data from the Institute for Supply Management on the US services sector, due at 10.00am ET. The figures are expected to show sector activity expanded for a ninth consecutive month in February. And the Fed’s beige book report, due at 2.00pm ET, will also offer the latest anecdotal evidence on the state of US businesses as they gear up for a reopening of the economy.

11.05am: Leading shares await Chancellor’s speech

As investors await the Budget and the goodies the Chancellor is reportedly planning for the various sectors hit hard by the pandemic, leading shares continue to be positive, albeit off their best levels.

The FTSE 100 is currently up 62.82 points or 0.95% at 6676.57, a little down on the day’s peak of 6705.3.

Those likely to benefit from any Budget largesse, as well as the reopening of the economy after lockdown, continue to do well, including Whitbread PLC, British Airways owner International Consolidated Airlines Group and the housebuilders (who are also getting a boost from Persimmon‘s results).

Edging lower in the leading index is Avast PLC (LON.AVST), the anti-virus and cybersecurity business. Its revenues rose 7.9% and earnings climbed 2.6% to $495.5m, but its forecast for the coming year looks a little on the low end of expectations.

Chief executive Ondrej Vlcek said: “The Group delivered another strong year of top line organic growth, high levels of profitability and cash flow generation.”‘In a year when more people and businesses turned to technology to keep their lives and their work enabled, Avast has played a vital role in safeguarding our customers’ digital data and privacy. I am proud of the way the Company has met the challenge of the pandemic head on, putting our duty to act as a responsible business at the heart of our approach.

“Underpinned by a strong prior year billings performance, we expect to deliver FY 2021 organic revenue growth in the range of 6 percent to 8 percent.”

The current consensus is 8% with UBS expecting 6.9%.

Elsewhere Pennon Group PLC (LON.PNN) has put on 4.8p or 0.52% to 922.4p but the water company is likely to lose its place in the leading index at the latest reshuffle, as is WM Morrison Supermarkets PLC (LON.MRW), up 0.5% or 0.85p at 170.25p.

9.55am: Rebound in services supports market

The latest UK service sector survey shows an improvement last month after hitting an eight month low in January.

The IHS Markit/CIPS PMI came in at 49.5 in February, up sharply from the previous month’s level of 39.5. A reading below 50 indicates contraction, so we shouldn’t get too excited. The survey has been below this key level since November last year, but the survey did indicate the slowest decline in service sector output over this period.

IHS Markit said: “February data indicated that a degree of stability returned to the UK service sector after the sharp downturn in output at the start of 2021. Restrictions on travel, leisure and hospitality due to the national lockdown continued to curtail overall activity, but there were some pockets of growth in technology and business services.

“Staffing levels decreased at the slowest pace since the coronavirus disease 2019 (COVID-19) pandemic first hit employment numbers last March. Furlough arrangements again softened the degree of job shedding among consumer service providers, while there were also reports that improving optimism towards the business outlook had helped to stabilise employment. Vaccine roll out progress and confidence about the prospect of looser restrictions on trade resulted in a fourth consecutive monthly rise in business expectations across the service economy.”

Leading shares are holding on to most of their gains following the data. The FTSE 100 is currently up 77.79 points or 1.18% at 6691.54.

9.17am: Market optimistic about Chancellor’s statement

The FTSE 100 is holding on to its gains ahead of the Budget and the latest UK service sector survey.

With the US markets down on Tuesday but Europe and Asia in a positive mood, the London market is taking its cue from the latter, with the leading index now up 80.44 points or 1.22% at 6694.19.

Investors will be looking to the Chancellor to see whether his expected help for the beleaguered hospitality and travel sectors will be enough to cope with the continuing shutdown. Michael Hewson, chief market analyst at CMC Markets UK, said: “While a lot of what we can expect looks to have been pre-leaked, including the extension of the furlough scheme through September, we can still expect to see significant movements in the likes of house builders, travel, pubs and the retail sector as he outlines a series of measures to support those sectors that have borne the brunt of the three lockdowns, and who will need further assistance into the summer months, and possibly beyond that.”

Housebuilder PersimmonPLC (LON.PSN) is already on the way up, its shares climbing 71p or 2.62% to 2781p despite a 25% fall in full year profits after it said housing demand remained strong.

Richard Hunter, head of markets at interactive investor, said: “Despite a spike of 75% since the March lows of 2020 as the pandemic kicked in, the shares remain down by 5% over the last year, as compared to a decline of 1.5% for the wider FTSE100.

“However, immediate comparisons with the previous year will become easier and there is little question that Persimmon is seeing the benefit of continued momentum from a strong end to 2020. As such, the market consensus of the shares as a strong buy is likely to remain in place, having also recently strengthened to make Persimmon as the preferred play in the sector.”

8.43am: Leading shares off to a flier

The FTSE 100 made a storming start to proceedings ahead of the Budget, which, despite weekend reports of a tax grab, looks likely to be largely fiscally supportive of the pandemic-ravaged UK economy.

Events on Wall Street, which endured another soft session after last week’s inflation wobble, were shrugged off again by London traders.

Crude oil prices helped, as some poise was recovered after the sell-off ahead of OPEC+ meeting Thursday. Royal Dutch Shell (LON:RDSA) and BP (LON:BP.) rose 1.8% and 1.7% respectively.

Polymetal’s (LON:POLY) prelims appeared to please the market as the gold miner topped the Footsie with a 3.3% gain – but for how long with the price of the yellow metal continuing to drift?

Covid bounce-back stocks Whitbread (LON:WTB) and IAG (LON:IAG) were ahead 3% and 1.9% respectively.

Micro Focus (LON:MCRO) was the pick of the FTSE 250 as it advanced 14.5% after inking a big commercial agreement with Amazon Web Services.

Proactive news headlines

Argo Blockchain PLC (LON:ARB) has been burning the (figurative) midnight oil, mining 129 Bitcoin (or equivalent) in February, up from 93 in January.

Gore Street Energy Storage Fund PLC (LON:GSF) told investors that it is now participating in the National Grid‘s new dynamic containment service, and will have most of its operational portfolio in the service from the start of April.

Inspired Energy PLC(LON:INSE) has completed the acquisitions of BWS Holdco (Businesswise) and General Energy Management (GEM). The company said its corporate order book has risen above £73mln as a result of the acquisitions, which are expected to enhance earnings in fiscal 2021.

Jersey Oil and Gas PLC (LON:JOG) has reported key findings from a concept selection report for the proposed Greater Buchan Area project, in the North Sea, highlighting the potential for 172mln barrels of oil resources to be developed from a fully electrified platform.

Westmount Energy Limited (LON:WTE, OTCQB:WMELF) awaits results of Exxon’s Bulletwood-1 exploration well offshore Guyana, as maritime reports reveal that the Stena Carron drillship is leaving the well site.

Genedrive PLC (AIM: GDR) said new clinical guidance on screening to prevent antibiotic hearing loss (AHL) in babies should drive demand for its breakthrough diagnostic device.

Allergy Therapeutics PLC (LON:AGY) posted record profits for the six-month stage as the group, which, as the name suggests, specialises in allergy treatments for conditions such as hay fever, emerged from the period in rude health.

SourceBio International PLC (LON:SBI) announced it will expand its laboratory operations in San Diego, California, to include COVID-19 qPCR testing services.

PCF Group PLC (LON:PCF) said managing director Robert Murray is to retire at the end of this month after 27 years with the company. His duties will be assumed by Garry Stran, who was recruited in December to be the company’s chief operating officer.

IQGeo Group Plc (LON:IQG) has appointed geospatial industry veteran Richard Weiss as European regional manager.

Love Hemp Group PLC (LON:LIFE, OTCQB:WRHLF) notified investors that its name change from World High Life has become effective from today.

Evgen Pharma PLC (LON:EVG) said the open offer element of its fundraising concluded with all the available shares taken up. The fundraising remains conditional on shareholders approval at a general meeting at 10am today.

FastForward Innovations Ltd (LON:FFWD) is making a new corporate presentation available on its website today at http://www.fstfwd.co.

Tharisa PLC (LON:THS) will be hosting a live interactive presentation via the Investor Meet Company platform on Wednesday, 10 March at 3pm GMT. “In view of the significant increase in demand for the metals required for reducing global emissions, with platinum group metals playing a key role, the interactive presentation will provide investors with an opportunity to speak to the management of one of the largest producers of PGMs globally,” the company said.

4D pharma PLC (LON:DDDD) said members of its management team will present at three upcoming investor conferences: Chardan’s Virtual 3rd Annual Microbiome Medicines Summit on Monday March 8 at 11:45am ET (4.45pm GMT); the HC Wainwright Global Life Sciences Conference that is on-demand starting from Tuesday, March 9 at 7am ET (12pm GMT); and Oppenheimer’s 31st Annual Healthcare Conference on Tuesday, March 16 at 8.40am ET (12.40pm GMT).

6.50am: Index expected to extend gains 

The FTSE 100 index is expected to extend its March gains on Wednesday, ahead of the big Budget announcement from Chancellor of the Exchequer Rishi Sunak this afternoon. 

London’s blue chip equity index was being called 40 points higher by spread-betters on the IG platform, having added 25 points or 0.4% to finish at 6,613.75 the day before. 

Overnight, Wall Street’s main indices all finished lower, with the Dow Jones down 0.5%, the S&P 500 falling 0.8% and the Nasdaq sliding 1.7%.

Allied to increasing coronavirus vaccine optimism, European and US stock futures are being lifted by hopes for the US stimulus package, after approval by the House and now awaiting a green light from the Senate.

“Most of the bets are on the positive side—meaning traders are hoping for support for the relief package from the Senate as well,” says Naeem Aslam at Avatrade.

Joe Biden has also assured Americans that the US will have a large supply of coronavirus available to help every individual in the country by the end of May, which also boosts confidence. 

But in the UK the focus is all on the Budget. 

“It is widely expected that the Chancellor will be using the budget to extend a vast package of covid-19 support, which is likely to last until the end of September. Of course, the Chancellor is betting on a hope that the economy will return from its coronavirus crisis by that time,” said Aslam.

“The furlough scheme was due to end in April, but now, it will run in its current form until the end of June. After that, it is expected to phase out slowly. The key idea over here is to avoid any cliff-edge by withdrawing the furlough support rapidly. 

“Obviously, all of this means a higher bill for the Treasury. The Chancellor will maintain the need to balance the budget once the economy is back on the recovery track. Traders expect to see a future tax rise path that could help repair the damage that has occurred to public financing.”

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were higher on Wednesday as Australia’s GDP rose 3.1% in the December quarter.

The Hang Seng index in Hong Kong surged 2.01% while the Shanghai Composite in China rose 1.66%.

In Japan, the Nikkei 225 gained 0.51% and South Korea’s Kospi rose 1.03%.

Shares in Australia were up, with the S&P/ASX 200 closing 0.82% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Orthocell Ltd (ASX:OCC) has received notification from the Australian Government Department of Health that CelGro® Dental has been included on the Australian Prostheses List.

Auroch Minerals Ltd (ASX:AOU) has signed a drilling contract with Seismic Drilling Services Pty Ltd that locks in a drill rig for the next 12 months to be used across Auroch’s three high-grade nickel sulphide assets in Western Australia.

Lake Resources NL (ASX:LKE) (OTCMTS:LLKKF) has appointed SD Capital Advisory Limited and GKB Ventures Limited as joint financial advisors to structure and arrange project finance, with a focus on Export Credit Agencies (ECA’s) for the development of the company’s flagship Kachi Lithium Brine Project in Argentina.

PolarX Ltd (ASX:PXX) (FRA:PX0) has successfully staked and registered 96 new federal lode claims to consolidate tenure at Humboldt Range Project in Nevada, USA, more than tripling the size of the land under tenure in the Fourth of July area.

Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is focusing its strategic intent on taking the next step at Big One Deposit within Mt Oxide Project in northwest Queensland’s world-class Mt Isa copper-belt and is starting to prepare the groundwork to potentially recommence mining operations.

Alcidion Group Ltd (ASX:ALC) has signed a contract with New Zealand’s Te Manawa Taki (TMT) region District Health Boards (DHBs) for a pilot implementation of Better’s OPENeP Electronic Medication Management solution.

AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) has received further strong results from several new mineralised zones outside the life-of-mine open pit design at the Manono Lithium and Tin Project in the Democratic Replic of Congo.

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