FTSE 100 closes at third successive high
Tesco and M&S shares fall after trading updates
Anglo American and Just Eat gain on broker upgrades
FTSE 100 closed at a new peak for the third day in a row, despite retailers taking a bashing and what was a choppy day of trading.
The blue-chip benchmark finished the day up over 14 points at 7,762, while M&S said like-for-like revenues fell 1.4% in the 13 weeks to 30 December.
Clothing and homeware fell 2.8%, while food, seen as its most successful sector, was down 0.4%.FTSE 250 finished down 22 points at 20,737.
"The FTSE moved in and out of positive territory in trading on Friday. Retailers weighed on the index, meanwhile energy stocks and miners dominated the upper reaches," said analyst Fiona Cincotta, at City Index, summing up trade.
Marks & Spencer (LON:MKS) was top laggard on Footsie, shedding over 7% to 301.20p after a disappointing Christmas trading update.
The firm, seen as a bellwether on the High Street, said like-for-like revenues fell 1.4% in the 13 weeks to December 30. Clothing and homeware fell 2.8%, while food was down 0.4%.
Top riser was takeaway app Just East, which gained 4.72% to 803.80p.
4.00pm: FTSE climbs ahead of the close
Ahead of the closing bell, the FTSE 100 is up 15 points to 7,763 with mining shares among the biggest risers.
Anglo American shares are up after Jefferies upgraded its rating on the stock to ‘buy’ from ‘hold’ and raised its target price to 2,000p from 1,500p.
Sector peers Glencore, BHP Billiton and Rio Tinto received a boost after JPMorgan lifted target prices on the stocks.
Connor Campbell, financial analyst at Spreadex ,said: “Despite a largely unpromising day for retail sector reports – M&S and Tesco are down 6.8% and 4.4% respectively – the FTSE just about managed to hold onto its record highs this Thursday.
“A green set of mining stocks and the pound’s plunge against the euro has helped prevent the UK index from fully succumbing to the waves and waves of retail woe, as has a 5% climb from FTSE 100 newbie Just Eat, which itself benefited from a ratings upgrade from Barclays."
3.40pm: BoE's credit conditions survey 'reassuring'
The Bank of England’s credit conditions survey showed lenders reined in the amount of unsecured credit available to consumer in the fourth quarter and expect a decrease in the first quarter.
Howard Archer, chief economic advisor to the EY ITEM Club, this offers "reassuring news" for the central bank amid concerns about a consumer credit boom.
"The credit conditions survey for the fourth quarter of 2017 should go down well at the Bank of England given its view that recent rapid growth in consumer credit has created a 'pocket of risk'," he said.
"It should also take some comfort from banks reportedly tightening their lending standards for granting unsecured consumer credit."
Unsecured consumer credit growth dipped to 9.1% in November from 9.5% in October, 9.8% in September and 10.0% in August.
Archer added: “It remains to be seen just how much effect the Bank of England’s interest rate hike has had on dampening consumers’ willingness to borrow.While the increase was just 25 basis points and interest rates are still at historically very low levels, there could well have been a significant psychological impact on potential borrowers given that it was the first interest rate hike since 2007.”
3.10pm: Euro strengthens after ECB signals end to QE
The euro has popped higher against a basket of currencies following the release of the European Central Bank’s meeting minutes earlier.
The central bank said it would look at a broader revision of its policy guidance to reduce its focus on bond purchases and raise the emphasis on interest rates, the account of the December meeting showed.
The ECB will also revisit its communication stance in early 2018 and gradually adjust its language to reflect improved growth prospects, the account revealed.
These remarks was seen to suggest that policymakers would soon start preparing markets for a tightening of stimulus measures.
“While this is far from a definitive announcement, it’s a clear signal that monetary policy tightening has entered mainstream ECB thought," said John Dolan, senior dealer at FEXCO Corporate Payments.
“On this evidence, the end of loose monetary policy is coming, and coming faster than previously assumed."
However, Dolan thinks the ECB is still concerned about inflation and the stubbornly low pace of wage rises.
“So for all the hawkish nods and winks in today’s minutes, the QE money presses are still expected to keep turning until September."
The euro rose 0.64% versus the pound, 0.88% against the dollar and 0.85% against the yen.
2.40pm: US stocks open in the green
US stocks rose at the open but the gains were mostly modest as investors looked ahead to the start of the new earnings season on Friday.
Investors also continued to keep an eye on US Treasuries after China's foreign-exchange regulator dismissed a Bloomberg report that suggested the country as considering paring back US bond purchases.
The Dow Jones Industrial Average rose 52 points to 25,420, the S&P 500 increased 5 points to 2,753 and the Nasdaq added 13 points to 7,166.
In economic data, US weekly jobless claims unexpectedly rose while the US producer price index fell 0.1% in December against forecasts for a 0.2% rise.
Eastman Kodak Co. (NYSE:KODK) shares fell after a 200% surge so far this week after announcing that it is launching a cryptocurrency.
2.00pm: Weekly US jobless claims unexpectedly rise
US jobless claims rose by 11,000 to a seasonally adjusted 261,000 last week, the highest level since last September, the Labor Department revealed.
Economists had expected claims to fall to 245,000 from 250,000 the previous week.
Claims have now risen for four straight weeks but does not necessarily suggest a material shift in labour market conditions since the data tends to be volatile during this time of year.
“The severe cold snap can also be blamed for keeping people out of work,” said Dennis de Jong, managing director at UFX.com
“Any figures that remain under the 300,000 barrier will be viewed as positive, and President Trump can be comfortable for now knowing that the jobs market will likely remain tight for the foreseeable future.”
1.30pm: US stock futures point to higher open
US stock futures climbed ahead of the start of fourth quarter earnings season.
Dow Jones Industrial Average futures rose 40 points to 25,390, S&P 500 futures edged up 4.4 points to 2,755 and the Nasdaq increased 12 points to 6,688.
US stocks were lower on Wednesday after Bloomberg reported that China was considering paring back US bond purchases.
China’s foreign-exchange regulator has dismissed the report on Thursday as “false news”, sending the yield on the 10-year benchmark down about 2 basis points to 2.543% - the first decline in six sessions.
Eastman Kodak Co. (NYSE:KODK) shares pulled back following a 200% surge so far this week in pre-market trading after announcing that it is launching a cryptocurrency.
12.30pm: Implications of South Korean crypto ban
Bitcoin has taken a hit following South Korea’s move to clampdown on cryptocurrency trading but is it simply a minor road bump or is it something far more serious for the crypto boom?, ask ETX Capital’s Neil Wilson.
“The move by South Korea comes as China quietly moves to end Bitcoin mining,” Wilson noted.
“Although relatively small in its impact on the market, it serves to highlight how authorities are tightening the noose.”
He said South Korean developments support the argument that governments will "gradually but inexorably squeeze cryptos".
“Forced back underground, cryptocurrencies would still appeal to a narrow field of criminals and terrorists who wish to remain off-grid, but it would not support the investment thesis that is being touted at present,” Wilson said.
12.00pm: FTSE higher in lunchtime trading
The FTSE 100 clawed back gains, rising 12 points to 7,762 at midday, supported by a weaker pound and an increase in commodity prices.
Sterling dropped 0.36% against the dollar to US$1.3458 and fell 0.29% versus the euro to €1.1272.
An increase in gold and copper prices boosted mining shares, including Rio Tinto PLC (LON:RIO), Anglo American (LON:AAL) and BHP Billiton plc (LON:BLT).
Anglo American (LON:AAL) shares were also supported by an upgrade by Jefferies.
Card Factory declined after saying it expects full year profit to fall due to wage inflation and a weaker pound.
11.00am: Bitcoin loses value on South Korea trading ban
Bitcoin prices has lost 10.57% to US$13,316 following news that South Korea is planning to ban cryptocurrency trading.
It comes after police and tax authorities in the nation raided local cryptocurrency exchanges over alleged tax evasion.
“There are great concerns regarding virtual currencies and [the] justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” justice minister Park Sang-ki said.
The local price of Bitcoin in South Korea plunged as much as 21% after the minister’s remarks.
10.30am: Eurozone industrial production rises more than forecast
Eurozone industrial production rose 1.0% in November compared to a month earlier, Eurostat revealed.
That compares to analysts’ expectations for a 0.8% increase and October’s 0.4% month-on-month rise.
Compared to the same month a year ago, industrial production grew 3.2% in November against expectations for a 3.0% rise and following a 3.9% year-on-year increase in October.
10.00am: Bank of England's credit conditions survey
The Bank of England has release its quarterly credit conditions survey for the fourth quarter.
It revealed household demand for secured lending for house purchases rose slightly while demand for secured lending for remortgaging increased significantly.
The availability of unsecured credit to households fell again and is expected to remain unchanged over the next three months.
Demand for credit card lending was broadly unchanged but demand for other unsecured lending fell significantly.
Default rates on secured loans to households fell significantly in the fourth quarter and are expected to drop further in the first quarter.
9.30am: Card Factory shares slide
Card Factory shares are under the cosh this morning after saying it expects full year profit to decline due to wage inflation and a weaker pound/
It predicts profits of between £93mln and £95mln, down from £98.5mln in 2017.
The impact of foreign exchange and wage inflation is expected to result in £7mln-£8mln of additional costs.
“We downgraded our forecasts in a sector note yesterday from £99m to £97m and we will clearly revisit our forecasts,” said Liberum.
“We maintain our ‘hold’, reduce our target price further to 260p, but suspect the shares likely to soften today. We also cut our dividend expectation by 20% yesterday from 25.5p per share to 20.2p.”
Shares fell 16% to 236.50p.
8.40am: FTSE rises at the open
The FTSE 100 opened in positive territory as the pound weakened against the dollar and the euro.
Sterling is down 0.22% versus the dollar at US$1.3477 and down 0.07% versus the euro at €1.1297.
On the company front, Bunzl PLC (LON:BNZL) shares gained after the distribution and outsourcing group said the US tax reform will result in its effective tax rate falling to 24% in the financial year ending 31 December.
Online takeaway company Just Eat PLC (LON:JE.) was a high riser after Barclays upgraded the stock to ‘overweight’ and lifted its target price to 1,000p from 700p, citing strength in the its core platform model and an attractive valuation.
Anglo American PLC (LON:AAL) was also pulled higher on a broker upgrade with Jefferies raising its rating to ‘buy’ from ‘hold’ and lifting its target price to 2,000p from 1,500p, saying its balance sheet is no longer a concern and the mining sector fundamentals are “very strong”.
Marks & Spencer Group PLC (LON:MKS) was on the back foot after reporting a drop in food and clothing sales over the Christmas trading period.
Housebuilder Barratt Developments PLC (LON:BDEV) shares dropped despite reporting an increase in total completions and forward sales for the first half as Liberum repeated a ‘sell’ rating on the stock, citing low profit margins.
Proactive news headlines:
Banking and compliance software company Lombard Risk Management plc (LON:LRM) has agreed to a 13p a share takeover offer from Vermeg Group. The shares shot up to 12.5p from last night’s close of 6.55p on the news. The terms value Lombard at around £52.08mln. Vermeg has received irrevocable undertakings to accept the offer from shareholders accounting for around 38.8% of the issued share capital of Lombard.
Connemara Mining Company PLC (LON:CON) has reported high gold grades from one of three holes drilled recently at its Mine River prospect in Wicklow and Wexford in Ireland. Assay results from the hole at the Tombreen target indicated an 8m section grading 4.53 g/t gold, which included 2m at 16.1 g/t. No Big Pic yet.
Oil and gas services group ADES International Holding Ltd (LON:ADES) told investors it has successfully extended two existing rig contracts in the Gulf of Suez area. The contracts for the Admarine II and Admarine IV rigs are with the Gulf of Suez Petroleum Company (GUPCO), a joint venture between BP PLC (LON:BP. and the Egyptian General Petroleum Company, was due to expire at the end of 2017.
Supply shortages helped Aussie-based mineral sands miner Base Resources Limited (LON:BSE) achieve record prices for its spread of base metals. Base produces ilmenite, zircon and rutile from the Kwale mine in Kenya and a combination of two bulk rutile sales and higher zircon prices increased the average revenue per tonne to a record US$323 per tonne (US$271) in the three months to December.
Kromek PLC (LON: KMK), the radiation detection technology company focusing on the medical, security and nuclear markets, has announced the immediate appointment of Cantor Fitzgerald Europe as joint broker to the company. Cenkos Securities will remain as Kromek’s nominated adviser and joint broker.
Harvest Minerals Limited (AIM:HMI), the AIM listed fertiliser development company, has announced that Shard Capital Partners will replace Mirabaud Securities as joint broker to the company. Beaufort Securities remains as joint broker to the company.
Horizonte Minerals Plc (LON:HZM) (TSX: HZM) announced that it has completed the second and final tranche of its equity fundraising after successfully placing 60,587,500 ordinary shares in the Canadian portion, raising gross proceeds of C$3,635,250. When combined with the £7mln announced on 19 December 2017, the company said it has raised a total of £9.2mln, an increase on the previously announced quantum of £8.5mln.
HemoGenyx Pharmaceuticals PLC (LON:HEMO), the biotechnology company developing novel therapies to transform bone marrow, or blood stem cell, transplantation for the treatment of blood diseases, said it has welcomed New York Lieutenant Governor Kathy Hochul to its labs at the SUNY Downstate Medical Center Biotech Incubator.
6.50am: FTSE to open higher
London’s FTSE 100 is seen slightly higher ahead of Thursday’s open, after most equity benchmarks adjusted lower overnight.
The FTSE 100 had finished Wednesday at a record high mark of 7,748.
It was talk out of China that weighs on equities, with reports that the People’s Republic is now evaluating its US bond buying policies.
On Wall Street, the Dow Jones slipped just 16 points or 0.66% to close Wednesday’s trading session at 25,369. The S&P 500, meanwhile, was down only 0.1% at 2,748 and the Nasdaq ended the day down 0.14% at 7,153.
“While reports like the ones out of China aren’t particularly anything new, it’s been a while since they were last let out for air so to speaK,” said Michael Hewson, analyst at CMC Markets.
“As far back as 2008 there have been concerns that China could use its holdings of US debt as some form of leverage, or as a threat with which to threaten the US, and these threats or concerns have soon passed so it’s hard not to imagine that this time won’t be any different.
“After all its not a zero sum game and China would harm itself as much as the US if they went on a buyers strike, and overnight these reports were denied by government sources in Beijing, as SAFE, China’s State Administration for Foreign Exchange saying, to coin a ‘Trumpism’ that they were probably ‘fake news’.
“It is true that China is one of the biggest external holders of US treasuries, along with Japan, which means that they do have enormous influence over how the market can and does move.
The analyst added: “With concerns starting to rise about a rise in inflation due to the recent strength in oil prices it is understandable that bond markets might be nervous if a normally large buyer of US treasuries either stops buying them or even starts to sell large amounts.”
In Asia, Japan’s Nikkei fell lost 0.3% to trade at 23,710 and Hong Kong’s Hang Seng was practically flat, down just 3 points at 31,070.
The Shanghai Composite, meanwhile, saw positive territory, albeit no by much, up 2 points or 0.07% at 3,423.
Australia’s ASX 200, meanwhile, was down about 30 points or 0.48% at 6,067.
London’s FTSE 100 was tipped to rise, however, with CFD and spreadbetting firm IG Markets calling the blue-chip benchmark up 13 points, at 7,751 to 7,753 with just over an hour to go until the start of trading.
Around the markets
Sterling: US$1.3493, down 0.1%
Gold: US$1,318 per ounce, up 0.07%
Brent crude: US$69.10 a barrel, down 0.14%
Bitcoin: US$13,217, down 11.23%
Bitcoin tumbles as South Korea mulls trading ban - Financial Times
Record £400000 fine for Carphone Warehouse over data breach in 2015 - The Times
Apple pays extra £136m in tax after HMRC investigation - BBC News
CFDs on bitcoin? You're not sophisticated enough, says FCA - Financial Times
China just reminded the United States that Beijing is its banker - CNBC
Power Outage Dims Lights on Tech at CES Show in Las Vegas – Bloomberg
New York City plans to divest $5bn from fossil fuels and sue oil companies - The Guardian
Senators want 'massive' fines for data breaches at Equifax and other credit reporting firms - Los Angeles Times