- FTSE 100 up 19 points
- Standard Life Aberdeen gets Deutsche boost
- US jobless claims jump unexpectedly
2.50pm: Leading shares edge higher
Leading shares are just about keeping their heads above water, with the FTSE 100 up 19.03 points or 0.28% at 6781.7.
The mood has been helped a little by the Dow Jones Industrial Average showing a bit of life, up 0.36% or 119.21 at 33,134.58. However both the Nasdaq Composite and the S&P 500 are both in negative territory.
Among the risers Standard Life Aberdeen PLC (LON.SLA) is up 4.4p or 1.56% at 286.7p after analysts at Deutsche Bank moved from hold to buy with a target price raised from 310p to 335p.
They said: “Standard Life Aberdeen has been through the trenches since its merger, but the new chief executive and the new group targets offer a clear focus as to how the current headwinds can be addressed. Even on our assumption of only partial delivery, we now see core fund management profits doubling over the next three years – with further upside in 2024. This in turn implies a 33% uplift to our 2023 core profit forecast.
“Whilst we recognise that we could be a little early given that the improved earnings will only begin to emerge next year, we believe that net flows have already started responding to an improved investment performance. Extra evidence of this in the next few months in our view skew the risks more towards the upside than the downside. Meanwhile, the valuation (a look-through PE of just 7.4x on the core business) appears to give no credence to a possible recovery.”
2.25pm: Proactive North America headlines:
Blackrock Silver Corp (CVE:BRC) hits high-grade silver and gold at its Tonopah West project in Nevada
Vuzix Corp (NASDAQ:VUZI) (FRA:V7XN) M400 Smart Glasses deployed at New York distribution center
Delta 9 Cannabis Inc (TSX:DN) (OTCQX:DLTNF) announces grand opening of its eleventh cannabis retail store, and eighth in the Province of Manitoba
1.45pm: Wall Street opens mostly in the red
The main indices on Wall Street got off to a mostly lower start on Thursday after US jobless claims disappointed traders.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.04% at 33,029, while the S&P 500 dropped 0.47% to 3,955 and the Nasdaq fell 1.14% to 13,371.
Back in London, the FTSE 100 had managed to inch into the green in mid-afternoon, rising 9 points to 6,771 at around 1.45pm.
12.40pm: US jobless claims disappoint
US weekly jobless claims have come in higher than expected at 770,000, up 45,000 from the previous week’s figure of 725,000 (itself revised up by 12,000). The market had been expecting a fall to 700,000.
So the Dow Jones Industrial Average is now expected to open around 20 points lower, rather than the rise initially forecast.
Meanwhile the FTSE 100 is content to drift, down 12.45 points or 0.18% at 6750.22.
12.14pm: Pound dips after Bank decision
The Bank of England has kept interest rates on hold at 0.1% and kept its asset purchase programme at £895bn.
It said that global GDP growth had been stronger since its February report, and the US fiscal stimulus package should give additional support.
But on the UK economy it said; “The outlook for the economy, and particularly the relative movement in demand and supply during the recovery from the pandemic, remains unusually uncertain. It continues to depend on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments.
“The MPC will continue to monitor the situation closely. If the outlook for inflation weakens, the Committee stands ready to take whatever additional action is necessary to achieve its remit. The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”
It said coronavirus restrictions could be lifted more rapidly than it expected in February while the Budget contained measure to support the economy which had not been reflected in the Bank’s last report. UK GDP fell by less than expected in January, but was still around 10% below its level in the fourth quarter of last year.
The FTSE 100, which was down nearly 15 points immediately ahead of the announcement, is now down 7.29 points or 0.11% at 6755.38. Sterling has dipped from $1.3958 before the report to $1.3941, down 0.23%.
11.40am: Investors wary of US bond yields
On Wall Street both the Dow Jones Industrial Average and the S&P 500 hit record highs in the wake of Wednesday’s Federal Reserve comments. But a subsequent rise in US Treasury yields to the highest since January last year has left things a little more up in the air, and US markets are heading for a mixed start.
The Dow is forecast to open around 18 points higher at 33,033 and the S&P 20 points lower at 3954. The Nasdaq Composite, which missed out on the records, is set to fall 167 points to 13,358.
Before the open come US weekly jobless claims, which are expected to show a fall from the previous figure. Dave Madden, market analyst at CMC Markets UK, said: “The US jobless claims reading at 12.30pm (UK time) is predicted to fall from 712,000 to 700,000. The report will be closely watched because there hasn’t been a reading below the 700,000 mark since March 2020.”
After the bell come third quarter results from Fedex, whose second quarter figures in December showed a strong performance thanks to the growth of ecommerce during the pandemic. Nike is also due to report its latest quarterly results.
Meanwhile the FTSE 100 is down 14.82 points or 0.22% at 6747.85.
11.12am: Market drift continues
The FTSE 100 really does not know which way to go.
It is basically in a holding pattern, perhaps waiting to see what the Bank of England has to say about the prospects for the economy and monetary policy (maybe even a mention of, whisper it, negative interest rates.)
Whatever the case, the leading index has dipped back into negative territory, down 2.48 points or 0.037% to 6760.19.
The Federal Reserve’s positive comments about US economic growth has given a lift to commodity companies.
10.22am: Markets remain cautious
Leading shares continue to struggle for direction.
The FTSE 100 has now edged into positive territory but the move is not in any way convincing. The blue chip index is up a meagre 7.5 points or 0.11% at 6770.17.
Uncertainty over how to take the latest US Federal Reserve pronouncements is one factor, as is concern about the reported delays in the UK vaccination programme.
AJ Bell investment director Russ Mould: “In some ways Fed chair Jay Powell and his colleagues delivered what the market wanted which was a commitment to keep interest rates low. However, it is now a question of the credibility of this argument.
“Powell has delivered a similar message a few times and yet investors’ nagging fear about inflation and the implications for rates have continued to see bond yields surge.
“He seemed to have some impact on US stocks – with the Dow Jones surging to a new record level. The FTSE was also outstripped by European markets ahead of a key decision on the safety of the AstraZeneca vaccine by the EU regulator.
“Not helping UK stocks was a certain amount of nervousness ahead of the Bank of England’s decision on rates and news of a vaccine shortfall which could stall the UK’s so far rapid inoculation of its population.”
Vodafone Group PLC (LON.VOD) is 0.52p or 0.38% higher at 137.44p after the IPO of its Vantage Towers business. Vantage has floated on the Frankfurt Stock Exchange and its shares – priced at the lower end of the initial range – are up 0.27% at €24.07.
9.37am: Markets uncertain as US yields rise
Leading shares are drifting rather aimlessly as investors try to assess the fallout from the latest comments from the US Federal Reserve.
The Fed’s relatively calm reaction to rising bond yields has had the result of pushing them even higher. The yield on 10 year US Treasury bonds has risen from 1.64% to 1.77%, the highest since January 2020. That has also lead to some uncertainty in the US markets after both the Dow Jones Industrial Average and the S&P 500 hit record highs in the wake of the Fed announcements. The US futures are suggesting a mixed start at the open, which has left markets elsewhere lacking direction.
So the FTSE 100 has slipped 1.23 points or 0.018% at 6761.44. The Bank of England is due to make its own interest rate pronouncements at noon, although no changes are expected given that the UK economy is not picking up the pace as fast as the US appears to be doing.
BT Group PLC (LON.BTA), which was in demand on Wednesday after its EE mobile business won spectrum in the latest 5G auction, has retreated 45p or 2.95% to 148p. Ofcom has released its latest report on rolling out broadband in the UK which BT said was in line with its expectations.
National Grid PLC (LON.NG) is down 22.8p or 2.74% at 808.6p after paying £7.8bn for US-owned Western Power Distribution and announcing the sale of its gas assets to concentrate on electricity.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “From a strategic standpoint, it makes sense as the world shifts away from fossil fuels usage. Not only are homes consuming more, but the boom in electric cars represents an opportunity for NG, and the WPD acquisition puts it one step closer to seizing it.
“But having the capacity to deal with a surge in electricity usage and being allowed to profit from it are two different things. Ofgem has been a thorn in NG’s side when it comes to making the most of the electric revolution. The body recently recommended NG further separate itself from managing the grid that it owns earlier this year.
Of course, the deal will still have to jump through a number of regulatory hoops before completion and there’s no guarantee that National Grid Gas will have suitable prospective buyers. But if all goes to plan this could put NG unquestionably at the centre of the UK’s pivot to electric.”
Elsewhere Ocado Group PLC (LON.OCDO) has now fallen 48p or 2.3% to 2035p following its update.
But Just Eat Takeaway.com NV (LON.JET) has added 46p or 0.66% to 7038p after a positive update from analysts at UBS. They said: “We hosted a Fireside Chat with JET chief operating officer. Investor debates centred on logistics model, drivers for improving profitability and gig economy regulatory landscape. We expect investors to focus on the results from the 2021 reset and see encouraging early signs: acceleration in orders growth to +88% in the first 2 montths of 2021 and share gains.”
8.39am: Markets lack direction
The FTSE 100 made a subdued start to proceedings with traders seemingly not knowing which way to jump after Fed chair Jerome Powell’s latest comments on the inflationary outlook.
He said the central bank won’t raise interest rates until the US economy has fully recovered from the impact of the global pandemic.
While Wall Street ended Wednesday’s session in positive territory, with the momentum continuing into Asia’s main markets earlier, American stock futures are now hinting at a flip-flop as bond yields move higher.
Back here in the UK, fund manager M&G (LON:MNG) topped the Footsie losers’ board early on. It opened 3.5% lower after it started trading without entitlement to a very hefty dividend payment.
Perhaps that explained the shift in emphasis in the sector with Standard Life Aberdeen (LON:SLA) now top of the list for income hunters. More likely it was the move to ‘buy’ from ‘hold’ by the analysts at Deutsche Bank. The shares were up 2.4%.
Turning to the grocery sector, market was unmoved by the latest trading update by Ocado (LON:OCDO). It would seem a 39% sales surge isn’t enough to excite the City these days. The stock was unmoved.
Richard Hunter, head of markets at Interactive Investor, said: “The market consensus of the shares has for some time reflected the fact that the shares may be up with events, as new developments are awaited, and currently stands at a weak hold.
“The company overall may be well-positioned to continue its successful trajectory, but Ocado’s ability pleasantly to surprise will be increasingly difficult to deliver.”
Proactive news headlines
XLMedia PLC (LON: XLM) said it has agreed to buy the business and assets of Sports Betting Dime (SBD) for about US$26.0mln (£18.5mln), enhancing its market position in the rapidly growing regulated US sports betting market.
Cornerstone FS Plc has announced plans to raise £2.2mln in its IPO, which would value the fintech company at £12.3mln.
Ceres Power Holdings PLC (LON:CWR) said it has raised £181mln to accelerate the development of its solid oxide electrolysis and fuel cell technology. In another separate release after Wednesday’s close, the hydrogen-focused commpany reported revenues and other income of £33mln for the 18 months to 31 December, 2020.
Supermarket Income REIT PLC (LON:SUPR) said it has decided to increase the target size of the issue up to £150mln.
Cloud-based editing software developer Blackbird PLC (LON:BIRD) has been enlisted by news and sports group LiveU to “speed up the production process and engage viewers with enriched live and video-on-demand content”.
Tissue Regenix PLC (LON:TRX) said the initial phase of its expansion at a site next to its existing operation in San Antonio, Texas, is complete.
Plant Health Care plc (LON:PHC) said it intends to raise up to US$10mln via a placing and subscription at a price of 14p per share. It said the funds will be used to invest in the development of its PREtec product and accelerate new product launches, making hirings to support accelerated growth, and strengthen the balance sheet.
Thor Mining PLC (LON:THR, ASX:THR, OTCQB: THORF) said three priority targets have been identified for drilling at its Wedding Bell and Radium Mountain uranium-vanadium project in Colorado.
Capital Ltd (LON:CAPD) lifted its final dividend 86% as it reported a net cash balance of $5.0mln at its December year after 12 months where revenue and profit both grew strongly.
ADES International Holding PLC (LON:ADES) said it is today posting a circular and notice of an extraordinary general meeting of the company to decide whether or not to accept last week’s US$516mln offer from Innovative Energy. The meeting will be held on Monday 12 April 2021 at 2pm (4pm Cairo time) at the ADES premises in Sheikh Zayed City, Egypt, and the circular will be made available on the company’s website.
S&U PLC’s (LON:SUS) chairman, deputy chairman finance director and the chief executive of Advantage Finance will provide a live presentation of the company’s full year results for the year ended 31 January 2021 via the Investor Meet Company platform on 31 March 2021 at 3.30pm. Questions can be submitted in advace by existing and potential shareholders.
SDX Energy PLC (LON:SDX) will host a retail investor call on Monday 22 March at 3pm, to present the full year results for 2020, followed by a Q&A with chief executive Mark Reid and chief financial officer Nick Box.
6.50 am: Spread betting firms call Footsie higher
The FTSE 100 is set to start Thursday in positive territory ahead of Bank of England rates decision.
Spreadbetting firm IG sees London’s blue-chip benchmark up around 24 points, making the price 6,790 to 6,703 with just over an hour to go until the open.
At midday, the Bank of England will announce its latest policy decisions, albeit the expectation is for no changes – leaving the interest rate at 0.1% and the asset purchase scheme at £895bn.
The ‘decision’ will follow last night’s update from the US Federal Reserve which, as expected, kept hands-off but highlighted improving growth in the United States.
“The update was the best of both worlds as the Fed expects higher growth but at the same time, it doesn’t see the need to hike rates anytime soon,” said David Madden, analyst at CMC Markets.
“The economy is now projected to grow by 6.5% in 2021, up from the 4.2% forecast issued three months ago. Higher growth will come at a cost – higher inflation – but the Fed feels there will be a transitory increase above 2% but it will not justify a rate hike.”
On Wall Street, the Dow Jones rose 189 points or 0.58% to close Wednesday’s session at 33,015.
The S&P 500 moved up 0.29% to 3,974 and the Nasdaq ended Wednesday up 0.4% at 13,525.
In Asia, Japan’s Nikkei advanced 302 points or 1.01% to 30,216 and Hong Kong’s Hang Seng climbed further, adding 475 points or 1.64% to 29,505.
The Shanghai Composite was up 0.37% to 3,458.
Around the markets
The pound: US$1.3966
Gold: US$1,751 per ounce, up 0.15%
Silver: US$26.56 per ounce, up 0.66%
Brent crude: US$67.54 per barrel, down 0.6%
WTI crude: US$64.17 per barrel, down 0.6%
Bitcoin: US$58,771, up 4.61%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mostly higher on Thursday as investors reacted to the US Federal Reserve’s decision to keep short-term borrowing rates near zero.
The Hang Seng index in Hong Kong gained 1.52% while the Shanghai Composite in China rose 0.42%.
In Japan, the Nikkei 225 advanced 0.95% and South Korea’s Kospi gained 0.66%.
Shares in Australia fell, with the S&P/ASX 200 closing 0.73% lower.
Proactive Australia news:
Great Southern Mining Ltd (ASX:GSN) has discovered two large gold-copper systems at Leichhardt Creek prospect within the wider Edinburgh Park Project in north Queensland following recent mapping and geochemical sampling.
Paradigm Biopharmaceuticals Ltd’s (ASX:PAR) successful Phase 2A Ross River Virus (RRV) clinical trial results have been peer-reviewed and published online in the journal, BMC Musculoskeletal Disorders.
Chimeric Therapeutics Ltd (ASX:CHM) has successfully completed dosing of the first patient cohort in the phase 1 dose-escalation study to evaluate the safety and maximum tolerated dose of its Chlorotoxin CAR T (CLTX CAR T) treatment in patients with recurrent or progressive glioblastoma (GBM).
Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG1) is extending the Golden Swan resource drill drive by 50 metres and this is expected to reduce mine development time at the Black Swan Nickel Project in Western Australia.
Marvel Gold Ltd’s (ASX:MVL) (FRA:GR2) new broad results from recent RC drilling at Tabakorole Gold Project in southern Mali are expected to enhance the 910,000-ounce mineral resource and grade within the existing strike of the deposit.
Carnavale Resources Ltd (ASX:CAV) (FRA:YBB) has completed its $2.1 million placement with the allotment of 300 million ordinary fully paid shares at $0.007 per share to high net worth overseas, sophisticated and professional investors.
Roots Sustainable Agricultural Technologies Ltd (ASX:ROO) has secured a new sales contract for its proprietary Root Zone Temperature Optimisation (RZTO) technology valued at A$51,700 from Puerto Rico-based cannabis farm Caribbean CBD Farm Inc.