- FTSE 100 closes 1.68% higher
- US stocks also up
- Croda higher on restructuring talk
5.10pm: FTSE closes ahead
FTSE 100 index closed convincingly higher on Wednesday with big cap miners doing well as US data pointed to an economic rebound across the pond.
The UK’s index of leading shares finished ahead by over 116 points, or 1.68%, at 7,039.
The midcap FTSE 250 was also up, adding nearly 56 points, or 0.25%, at 22,385.
On Wall Street, the Dow Jones Industrial Average advanced over 150 points, while the Nasdaq and S&P 500 added 86 and 22 points respectively.
“While ADP numbers fell short of some of the loftier expectations today, a 742,000 increase in job numbers is welcome news, and when coupled with strong Markit and ISM services PMI readings it is clear that the world’s largest economy is well on the way to a recovery,” said Chris Beauchamp, chief market analyst at online trading group IG.
“After a struggle in March and April the UK’s headline index is back at the highs for the year, and seemingly-determined to keep going,” he added.
4.01pm: Commodity shares lead the way
The FTSE 100 is still on the front foot, up 100.4 points or 1.45% at 7023.57.
Michael Hewson at CMC Markets said: “Basic resource stocks are leading the way today with the likes of Anglo American, BHP and Rio Tinto benefitting from the continued rise in copper prices, while Irish construction giant CRH has seen its share trade up at new record highs as optimism over the upcoming US infrastructure stimulus plan helped to underpin the shares. The US is one of CRH’s biggest markets.”
But the FTSE 250 is barely changed on the day, down just 2.13 points at 22,327.91.
Leading the mid-cap index is Playtech PLC (LON:PTEC), up 15.8p or 3.36% at 486.8p after the group agreed a deal to become the technology supplier to Holland Casino, a land-based casino group in the Netherlands which want to expand online.
3.20pm: Uncertainty over US services
Mixed news from the US service sector.
The Markit report has come in better than expected in April, with the services purchasing managers index up from 60.4 to 64.7.
US Markit Services PMI Apr F: 64.7 (est 63.1; prev 60.4)
– Composite PMI: 63.5 (est 62.2; prev 59.7)https://t.co/38WJC7Fur9
— LiveSquawk (@LiveSquawk) May 5, 2021
Chris Williamson, chief business economist at IHS Markit, said: “Thanks to the cocktail of a successful vaccine roll-out, the reopening of the economy, ultra-accommodative monetary policy and injection of fresh fiscal stimulus, businesses are reporting the strongest surge in demand seen for at least a decade.
“The upswing in demand has led to one of the strongest months of job creation yet recorded by the survey as business prepares for better times ahead.
“The biggest threat to the outlook remains new virus variants, which will inevitably mean international travel and associated business activity will stay under pressure for some time to come, but in the meantime the domestic economy is faring very well, especially consumer facing industries.”
But the Institute for Supply Management is less upbeat in its survey. Its services index has dropped from 63.7 to 62.7 in April.
US ISM Services Index Apr: 62.7 (est 64.1; prev 63.7)
— LiveSquawk (@LiveSquawk) May 5, 2021
So the Dow Jones Industrial Average is now up just 0.05%, but the FTSE 100 is still performing well, up 92.37 points or 1.33% at 7015.54.
2.39pm: Wall Street opens higher after ADP jobs data
The main indices on Wall Street opened on the front foot on Wednesday after the latest ADP jobs report showed a surge in private sector hiring in April, although less than analysts had expected.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.15% at 34,184, while the S&P 500 climbed 0.47% to 4,184 and the Nasdaq rose 0.85% to 13,748.
Back in London, the FTSE 100 had held onto most of its gains and was up 85 points at 7,008 at around 2.40pm.
1.28pm: Private payrolls jump in US
The US saw a surge in the number of jobs added in April, albeit fewer than expected, according to the latest private payroll report from ADP.
Ahead of the widely-watched official non-farm payroll numbers due on Friday, the ADP survey showed 742,000 jobs were added last month. Analysts had been expected a figure of around 850,000.
But the March figure was revised up from 517,000 to 565,000.
US ADP Employment Change Apr: 742K (est 850K; prevR 565K; prev 517K)
— LiveSquawk (@LiveSquawk) May 5, 2021
— LiveSquawk (@LiveSquawk) May 5, 2021
Following the figures, US market futures have added to their gains, with the Dow Jones Industrial Average expected to open 84 points or 0.26% while the S&P 500 is set to rise 0.43% and the Nasdaq Composite 0.75%.
In the UK, the FTSE 100 is at its peak for the day, up 89.61 points or 1.29% at 7012.78.
12.35pm: US market expected to recover
Wall Street is set to recover after Tuesday’s caution as US Treasury Secretary Janet Yellen rattled the cages with talk of interest rate rises.
The Dow Jones Industrial Average, which ended off its worst levels despite Yellen’s comments, is expected to open 70 points or 0.22% higher at around 34,203 while the S&P 500 is forecast to rise by 0.3%. The Nasdaq Composite, which bore the brunt of Tuesday’s selling and fell 1.88% as growth stocks fell out of favour again, is set to recover by around 0.5%.
On the data front, there is the latest private sector payroll report from ADP, which is expected to show a rise from 517,000 in March. The numbers come ahead of the widely-watched non-farm payroll numbers, due on Friday.
Michael Hewson at CMC Markets said: “Expectations for [the ADP report for] April are for another 850,000 jobs to be added; which on the face of it seems a little low when compared to last month’s non-farm payroll number of 916,000 and the expectation this week that could see 1m jobs added on Friday.
“The ADP report appears to be lagging behind when it comes to adding back headcount, which means that at some point we could well see a bit of a catch-up.”
Also due out is the ISM services report also expected to show a stronger April at 64.1, up from 63.7.
Meanwhile the FTSE 100 remains in positive territory, up 81.52 points or 1.18% at 7004.69.
11.51am: CRH and Fergusson among the risers
Apart from the mining companies it is building materials groups which are helping pull the UK blue chip index higher.
Russ Mould, investment director at AJ Bell, said: “The UK equity market seems unconcerned by the latest stumble in big technology stocks in the US which dragged down the headline NASDAQ and S&P 500 indices on Tuesday night but it is interesting to note that it is cyclical and recovery plays, such as building materials play CRH, the miners, banks and plumbers’ merchant Ferguson which are leading the way. By contrast, long-term growth plays like Just Eat Takeaway.com and Ocado are lagging, alongside consumer staples companies like BAT and Unilever.”
Also helping matters is a positive set of numbers from the eurozone, with companies growing in April at the fastest pace since July last year.
Sophie Griffiths, market analyst at OANDA,said: “Eurozone composite PMI data came in at 53.8 in April, ahead of the preliminary 53.7 reading and up from March’s 53.2. Meanwhile, the service sector moved back into expansionary territory in April despite the ongoing lockdown in parts of Europe. The services PMI printed at 50.5, ahead of the 50.3 preliminary reading and up from 49.5 recorded in March.”
So the FTSE 100 remains above 7000, up 80.43 points or 1.16% at 7003.60.
10.48am: Markets shrug off Yellen comments
Leading shares are holding onto the 7000 level, as commodity stocks provide support and Tuesday’s comments about interest rate hikes from US Treasury Secretary Janet Yellen fade into the background.
The FTSE 100 is now up 83.35 points or 1.2% at 7006.52. Whether it ends the day above the key level remains to be seen – we have been here before.
Joshua Mahony, senior market analyst at IG, said: “European markets are leaving the pessimism of yesterday behind, with commodity-focused stocks helping to drive UK markets higher in early trade.
“Coming off the back of a sharp pullback in European markets, today’s recovery highlights the underlying level of confidence that is building as the vaccination programmes throughout Europe gather momentum..
“Questionable comments from Janet Yellen have failed to dent market sentiment today..[While she] belatedly rowed back on her somewhat hawkish comments, markets thankfully seemed somewhat willing to make peace with the fact that inflation remains a risk going forward.”
9.48am: UK car sales surge, but from low base
New car sales surged in April compared to a year earlier as car showrooms reopened, but the increase – a massive 3,176.6% – is from a very low base.
The SMMT said 141,583 new cars were registered in April compared to 4,321 a year ago during the first lockdown.
But that is 12.9% lower than an average April and well down on the 283,964 registered in March.
The SMMT said the full impact of showrooms reopening had not yet been felt, and it was more positive about the outcome for the year than it was in February.
But there are still headwinds, not least a shortgage of semiconductors which could impact supply in the coming months.
Seán Kemple, managing director of Close Brothers Motor Finance, said: “Just as things are looking up for the motor industry, it’s been slammed by a wave of turbulence caused by a global semiconductor shortage. And given how vital these chips are to the industry, in use in everything from power steering to parking sensors, this will have an impact.
“Car manufacturers like Ford, Mini and Jaguar Land Rover are halting production in the face of severe disruption, which escalated in April. While new car sales have shot up this month, there’s no doubt that demand will be squeezed by an ensuing supply crisis. Already facing a supply bottleneck due to delays caused by Covid-19 and the aftermath of Brexit, the chip shortage will further push back waiting times for consumers ordering new cars and come at a huge cost for a market recovering from substantial losses.”
Alex Buttle, director of used car marketplace Motorway.co.uk, said: “Last month’s 3,000% leap in sales is a relatively meaningless percentage because registrations in April 2020 plummeted 97%, as the country was in the early grip of lockdown and non-essential retailers, including dealerships, were forced to close their doors to the public.
“April numbers are actually down 50% on March registrations. And while pent-up demand is clearly showing itself with showroom doors in England and Wales opening in the second half of April, this upwards trend needs to be consistent throughout 2021 to make up for the 2020-shaped hole in lost sales.”
Meanwhile the FTSE 100 is not interested in negative stories. It has moved even higher, now up 78.92 points or 1.14% to 7002.09.
9.15am: Chemicals group ahead on restructuring news
It plans to look at the ownership structure of its Performance Technologies and Industrial Chemicals (PTIC) businesses, as part of a policy of investing in faster-growth life science and consumer markets which now represent more than 80% of its profitability.
This could mean it remaining within Croda as a stand alone business, or a full or partial sale. It expects a decision by the end of the year.
Meanwhile Croda said trading so far this year had continued to improve, continuing the trend seen in the second half of last year.
It said: “Customer demand is strong across all regions and sectors, including PTIC, in some cases driven by a recovery in end-consumer demand, in other areas by customer inventory build ahead of anticipated economic recovery.”
Croda is up 1.92% or 128p to 6782p.
But the fall in tech stocks on Wall Street has seen Just Eat Takeaway NV (LON:JET) fall 145p or 1.99% to 7125p and Ocado Group PLC (LON:OCDO) drop 1.82% or 36.5p to 1967.5p, making them the two biggest losers in the leading index.
Overall the FTSE 100 is gaining more ground, up 67.59 points or 0.98% at 6990.76.
8.38am: Miners help lift markets
The FTSE 100 appears to have recovered from the bucket of ice water with which it was doused on Tuesday following comments from US Treasury secretary and former Fed chair Janet Yellen.
She said interest rates may have to rise to damp an inflationary upsurge from a red-hot recovery from the pandemic.
“So, we are well in the middle of the reflation theme, which pushes capital from growth to value stocks,” said Ipek Ozkardeskaya, analyst at Swissquote.
The tech stock sell-off on Wall Street and across Asia was reflective of this trend. The Footsie, a haven for lowly-rated recovery plays, should, by extension benefit from the rotation.
On the market, the miners fared well in early trade. They will prosper as a result of an economic rebound irrespective of the inflationary threat, or market fashion and fad.
The “clouds are clearing” as advertising revenues begin to build at broadcaster ITV (LON:ITV), according to Richard Hunter, head of markets at Interactive Investor.
Someone should have informed the price-makers as the stock remained largely unmoved by the group’s quarterly update on trading.
Proactive news headlines
Diagnostics specialist Oncimmune Holdings PLC (LON:ONC) said it has agreed to take back the China and Hong Kong rights to its EarlyCDT product portfolio in a deal that gives its strategic options to tap the US capital markets.
Tharisa PLC (LON:THS), an integrated platinum and chrome producer with operations in South Africa, said it bought Salene Chrome Zimbabwe (Pvt) Ltd for US$3.0mln. Salene Chrome is a development stage, low cost, open pit asset, located in the Great Dyke in Zimbabwe.
Remote Monitored Systems PLC (LON:RMS) said it has begun searching for a new chief executive as it clarified its future direction and strategy targeting growth of sales of its ProLarva face mask and the development of new products at its subsidiary Pharm 2 Farm Limited (P2F).
Redx Pharma PLC (LON:REDX) has appointed a new chief financial officer with both industry and banking experience. Peter Collum, who joins immediately and will be based in the New York area, was CFO and chief business officer of a late-stage biopharma company called Pharmnext, which he joined in 2019 after 17 years with the boutique investment bank, MTS Health Partners.
Eckoh PLC (LON:ECK) has confirmed that trading for its latest financial year has been in line with market expectations with “robust” operating profits despite the challenges of the coronavirus (COVID-19) pandemic.
Mkango Resources Ltd (LON:MKA, TSX-V:MKA) announced that, following the release of the flotation piloting results and commencement of hydrometallurgical piloting, the company will host an investor conference call tomorrow, Thursday 6 May, at 2pm BST, to discuss the release and answer questions.
Zanaga Iron Ore Company Ltd (LON:ZIOC) said the Stage One development of the Zanaga iron ore project could cost between US$2,154mln and US$2,275mln, broadly in line with previous estimates, according to a re-costing exercise.
Applied Graphene Materials PLC (LON:AGM) said it is planning to showcase its latest technological developments in graphene dispersion capabilities over the coming months at two consumer industry events, JEC Composites Connect and the CoatingsTech Conference.
The takeover offer for ADES International Holding PLC (LON:ADES) has now closed, and the remaining shares in the company will now be acquired through compulsory purchase on or shortly after 2 June 2021.
i3 Energy Plc (LON:I3E, TSE:ITE) told investors that its production in Canada outperformed expectations in the first quarter, with output averaging 8,856 barrels oil equivalent per day.
Black Bear Energy Resources Plc (BBER) has hired Tim Lines as the company’s new technical director. The company, in a statement, said Lines will lead the supervision and management of the technical aspects of the company’s critical M&A, drilling, surface facilities, and pipeline initiatives.
Tiziana Life Sciences PLC (LON:TILS)(NASDAQ:TLSA) announced an agreement with Takanawa Japan for a strategic business development plan to identify a clinical partner in Japan and other Asian countries.
NQ Minerals PLC (LON:NQMI, FSE: 44D) said its shares starting trading on the Frankfurt Stock Exchange today, making it one of the first companies with a primary listing on London’s Aquis Exchange to achieve a dual listing.
Scotgold Resources Ltd (LON:SGZ) said some of its directors and an unrelated third party have provided it with a short-term loan of £2mln. The lenders include non-executive chairman Nathaniel le Roux, three non-executive directors and an unrelated third party holding a 3.35% stake in the company.
Coinsilium Group Limited (AQSE:COIN) (OTCQB:CINGF) announce the release of a new investor presentation covering its new ‘venture builder’ business model and its activities in the non-fungible token (‘NFT’) space, available on its website:
https://coinsilium.com/investors/presentations. Chairman Malcolm Palle said: “Coinsilium is now enjoying a period of intense activity ahead of the imminent launch of Nifty Labs, its NFT development studio in Gibraltar. This new investor presentation has been designed to provide a greater market understanding of the scale of the opportunity that lies ahead for Coinsilium, as we recognise that investor awareness and engagement will play a critical role in helping the company achieve its ambitions at the forefront of the burgeoning NFT space.”
Tirupati Graphite PLC (LON:TGR) notified that executive chairman Shishir Poddar and two other board members will provide a live investor presentation via the Investor Meet Company platform on 12 May 2021 at 10am BST.
6.50 am: Firmer start predicted
The FTSE 100 is expected to open higher on Wednesday as market momentum prepared to rebound from yesterday’s declines.
Spread-betters IG expect the blue-chip index to add around 40 points at the open after ending Tuesday’s session down 47 points at 6,923.
The prior day’s session appeared to have suffered from a bout of profit-taking in the wake of a string of strong performances market, with recent comments from US Treasury Secretary Janet Yellen saying that interest rates may need to rise to prevent the economy overheating also pressuring equities.
The sell-off made for a mixed picture on Wall Street overnight, with the Dow Jones Industrial Average closing up 0.06% at 34,133 while the S&P 500 dropped 0.67% to 4,164 and the Nasdaq fell 1.88% to 13,633, dragged down by tech stocks.
It was a similarly negative picture in Asia this morning, with Japan’s Nikkei 225 down 0.83% while Hong Kong’s Hang Seng dropped 0.32%.
On currency markets, the pound was up 0.1% at US$1.39 against the dollar, although US services data due later today could provide a catalyst for movement.
Around the markets:
Sterling: US$1.39, up 0.1%
Brent crude: US$69.36 a barrel, up 0.7%
Gold: US$1,778 an ounce, no change
Bitcoin: US$54,625, down 2.9%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mixed on Wednesday following an overnight session on Wall Street where the S&P 500 fell amid selling in technology and other high-growth stocks.
The Hang Seng index in Hong Kong fell 0.33% while Singapore’s Straits Times index declined 0.82%.
Shares in Australia advanced, with the S&P/ASX 200 trading 0.57% higher.
Markets on the Chinese mainland, Japan and South Korea were closed on Wednesday for holidays.
Proactive Australia news:
Great Boulder Resources Ltd (ASX:GBR) shares have hit a new two-year high as initial results from reverse circulation (RC) drilling at the Mulga Bill prospect within the Side Well Gold Project in Western Australia intersected bonanza grade gold of up to 1-metre at 136 g/t.
Yandal Resources Ltd (ASX:YRL) has hit 1-metre at 20.68 g/t gold from 118 metres, its highest primary gold grade to date at Gordons Dam Prospect within the wider Gordons Gold Project in the Kalgoorlie-Boulder region of Western Australia.
Core Lithium Ltd (ASX:CXO) (OTCMKTS:CXOXF) has drilling contracts signed with major lithium exploration and resource drilling programs set to begin in coming weeks at the Finniss Lithium Project near Darwin in the Northern Territory.
Firefinch Ltd (ASX:FFX) (FRA:N9F) (OTCMKTS:EEYMF) has revealed a new Life of Mine plan (LOMP) for the Morila Gold Mine in Mali, West Africa, outlining annual average production of 160,000 ounces to 2030 through mining and processing of around 37.5 million tonnes at 1.33 g/t for 1.45 million recovered ounces.
Westar Resources Ltd (ASX:WSR) is committed to systematic evaluation and exploration of its portfolio of projects in Western Australia, including extensive drilling, through diligent application of capital and resources.