- FTSE 100 slides 27 points
- FCA warns younger investors of the dangers of investing in highly volatile securities
- US markets flat, GameStop to report after the close
5:20pm: Coronavirus continues to be the word on traders’ lips
The FTSE 100 ended Tuesday 27 points lower, a dip of 0.4%, at 6,699, while the FTSE 250 dropped 124 points, 0.6%, to 21,332.
“Concerns that Europe’s economic rebound will be hampered are playing on traders’ minds,” CMC Markets UK analyst David Madden wrote Tuesday. “Germany’s lockdown will last until 18 April, other countries have adopted tighter restrictions too in an effort to tackle the problem of rising Covid-19 cases… The mood isn’t awful, traders aren’t running for the hills but there is a sense of fatigue that the restrictive climate will drag on a bit longer. Most European indices are in the red this afternoon.”
Fears that a recovery for the travel industry may be pushed back has hurt airline stocks, including easyJet plc (LON:EZJ), which lost 3.3% to £910.40.
In the US, the Dow was down 13 points to 32,719 in the early afternoon. The Nasdaq ticked down just 6 points to 13,371, while the S&P picked up 4 points to 3,945.
The S&P 500 is essentially flat on the session as traders are sitting on their hands,” Madden wrote. “Jerome Powell, the head of Fed, is just about to testify before the House Financial Services Committee in relation to the CARES act. Other US central bankers, Lael Brainard and John Williams are due to speak this evening. Mr Powell is likely to praise the fiscal response from the government but point out that the jobless rate still needs to fall further.”
3.20pm: Proactive North America headlines:
VolitionRx Limited (NYSEAMERICAN:VNRX) CEO says company in ‘strongest-ever financial position’ to pursue ‘many milestones’
PsyBio Therapeutics Corp (CVE:PSYB) starts process development of its biosynthetic formulation of norbaeocystin, an analogue of psilocybin
Snowline Gold Corp (CSE:SGD) (OTCMKTS:SNWGF) reveals details of its Tosh Gold Project in the Yukon
Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) (FRA:5GE2) expects drilling to begin in May at Lovelock mine battery metals project in Nevada; to submit permit amendment application
American Battery Metals Corporation (OTCQB:ABM) establishes new development center in Nevada
Todos Medical Ltd (OTCQB:TOMDF) enters into an automation and reagent supply agreement with MAJL Diagnostics
Versus Systems Inc (NASDAQ:VS) (FRA:BMVB) to add new functionality to its Dynamic Regulatory Compliance prizing engine to support uses in Mexico
3.05pm: Thrill seekers, seek elsewhere
Appropriately enough, perhaps, on the day that GameStop brings out its results, Britain’s Financial Conduct Authority (FCA) has warned about younger investors taking on big financial risks.
A survey by the City watchdog found that a new, younger, more diverse group of consumers is getting involved in higher-risk investments, possibly without fully realising what they are getting into.
On the plus side, not many of them are in danger of losing their house as a result of a misguided investment as so few of them can afford a house in the first place.
Forex and crypto investors seek thrills and social status, says FCA study
A new study commissioned by the United Kingdom’s Financial Conduct Authority found that the profile of cryptocurrency traders skews towards thrill-seeking, trading on gut “instinc… https://t.co/zO1poptNY9 pic.twitter.com/l6CiXpY3e4
— Newscrypto V͇̿I͇̿P͇̿ (@newscryptobtc) March 23, 2021
There’s not much danger of investors of any age losing their shirt or getting a cheap thrill in the boring old traditional equity market judging by the FTSE 100’s arthritic performance today.
The index is down 34 points (0.5%) at 6,692, with many of those defying the trend being traditional defensive stocks such as United Utilities Group PLC (LON:UU.), up 2.6% at 909.2p or British American Tobacco PLC (LON:BATS), up 2.0% at 2,885.5p.
2.20pm: Sterling’s weakness fails to galvanise the Footsie
London’s index of leading shares remains happy to nurse small losses in the afternoon session.
The former is down 3.5% at 296.6p and the latter is 3.0% weaker at 1,441p, reflecting a 2.2% decline in the price of Brent crude.
Working in the Footsie’s favour is sterling’s weakness against the US dollar; the pound is down by around eight-tenths of a cent at US$1.3788.
The latest CBI industrial trends survey also offered a gleam of sunlight, as the orders balance rose to a 23-month high of -5% in March, compared to -24% in February and -38% in January.
“This was driven both by improved domestic and foreign demand. Output expectations for the next three months improved substantially to a 43-month high. Output over the three months to March was reported to have edged up,2 observed Howard Archer, the chief economic adviser to the EY ITEM Club.
“The CBI reported that output grew in eight out of 17 sub-sectors, led by electrical engineering and plastics products,” Archer said.
“Manufacturers are much more optimistic about the outlook. The balance of manufacturers expecting output to rise over the next three months increased to a 43-month high of +30% in March from a -2% in February and -24% in January, which had been the weakest level since mid-2016.
“A balance of +30% of manufacturers expect to raise prices over the next three months, up from +3% in February and +4% in January. This is broadly in line with the long-term average for the price balance of +3%,” Archer reported.
Our analysis of the March #CBI Industrial Trends Survey which showed substantial improvement in #manufacturing domestic & foreign orders, sharply higher output expectations for the next 3 months & slightly higher output over the past 3 months https://t.co/6JLKZrdefa
— Howard Archer (@HowardArcherUK) March 23, 2021
1.45pm: Wall Street opens in the red
The main indices on Wall Street began Tuesday’s session on the back foot ahead of Congressional testimony from both Fed chair Jerome Powell and Treasury Secretary Janet Yellen.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.17% at 32,675 while the S&P 500 dropped 0.14% to 3,934 and the Nasdaq fell 0.07% to 13,368.
Computing giant Microsoft Corp (NASDAQ:MSFT) was also in the green, up 1.2% at US$238.68 amid chatter it could swoop in with a billion-dollar bid for video gamer chat platform Discord.
Back in London, the FTSE 100 had recovered some of its losses into mid-afternoon but was still down 12 points at 6,714 at around 1.45pm.
12.00pm: US markets to open lower
It is looking like a “risk-off” day for US markets today although the tech rally still has some legs.
Spread betting quotes point to the Dow Jones industrial average tumbling 107 points to 32,264 and the S&P 500 falling 12 points to 3,929 but the tech-heavy Nasdaq 100 is expected to eke out an 8 point gain to 13,095.
US Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are set to face law-makers in Congress today.
“It will be interesting to see whether Yellen will push for more spending given the sky-high government debt. Powell will probably reiterate the same message he did ad the FOMC presser last week, namely that although the economy is progressing well, it is still far from complete and so the Fed will continue to provide monetary support,” suggested Fawad Razaqzada at ThinkMarkets.
When trading starts, attention may be focused on Microsoft, which reportedly is in talks to buy Discord, the chat platform favoured by gamers, for a mind-boggling US$10bn+.
Talking of gamers, GameStop is set to declare its earnings after the close of trading today, which will either get the stock’s many fans on Reddit excited or they could go on ignoring the earnings (or lack of same) of the retail dinosaur.
In London, the FTSE 100 was 21 down points down at 6,705, as it seemed to be an hour or so again when I last checked; as Groucho Marx said in “A Day at the Races” when taking the pulse of a patient, “either this patient is dead or my watch has stopped”.
The fall would be heavier still were it not for utility stocks, most of which are at least 2% higher, which probably tells you all you need to know about the London market. Excitement City, Arizona, it is not – at least for the blue-chips.
The shares were 61% higher at 112p after the company announced the US launch of a test that will determine how likely a person is to have a severely negative reaction to contracting the SARS-CoV-2.
— Oxford BioDynamics (@OxBioDynamics) March 22, 2021
10.30am: “Third wave” fears on the rise
UK blue-chips remain lower on balance but are faring better than their European counterparts, where the coronavirus “third wave” is undermining sentiment.
The FTSE 100 was down 21 points (0.3%) at 6,706.
“Though other European countries have extended their lockdowns or imposed new restrictions in the last week or two, perhaps none have done it with as chilling words as Angela Merkel,” said Connor Campbell at Spreadex.
“Extending Germany’s partial lockdown over the Easter period, Merkel stated that the country was in a ‘very serious’ situation, going as far to say that it is ‘basically in a new pandemic’ thanks to the new found dominance of the British variant.
“And Britain should perhaps prepare itself for similar news. After all, yesterday Boris Johnson warned that we would feel the effects of the European third wave ‘in due course’,” Campbell added.
Apprehension over another resurgence in COVID, albeit on a day when the Office for National Statistics said weekly deaths in England and Wales have fallen below the five-year average, has led to more selling of stocks deemed highly sensitive to delays in lifting lockdown restrictions.
Breaking: weekly deaths in England and Wales have fallen below the five-year average in week ending 12 Mar.
First week without excess deaths since early September.
More on this on @skynews v soon. pic.twitter.com/hnfE6gkjSR
— Ed Conway (@EdConwaySky) March 23, 2021
So, cruise ships operator Carnival PLC (LON:CCL) is down 5.2% at 1,574p while cinemas owner Cineworld Group PLC (LON:CINE) is 5.9% lower at 104.75p despite the group announcing it is to start reopning US cinemas next week.
“It was been a horrendous year for the cinema group but most importantly, it survived the ordeal. In November, it secured US$750 million in financing through a loan extension. The financing scheme was crucial to the company’s survival but net debt is now a staggering US$4.9 billion so Cineworld will have a very difficult task on their hands once business gets back to normal, which could be several months yet,” said CMC’s David Madden.
8.40am: That’s an underwhelming way to celebrate an anniversary
The FTSE 100 opened in negative territory a year on from the first national lockdown as the market priced the economic impact of current restrictions.
The effect in the last 12 months has been to wipe out almost 700,000 jobs with the under-25s disproportionately affected.
According to Office for National Statistics figures the most recent trend has been upward with 200,000 new roles added in the first three months of 2021.
“Furlough is still doing a lot of heavy lifting in the labour market,” Sam Beckett, the head of economic statistics at the ONS, told BBC’s Today Programme.
“There are around five million people still on furlough, it’s down from its peak of nine million but has been rising recently.”
The news provided a lift for the house building sector, with Bellway (LON:BLWY) and Barratt (LON:BDEV) shares also in demand.
Proactive news headlines:
Teleradiology specialist Medica Group PLC (LON:MGP) is expanding into the fast-growing clinical trials market with the £15.6mln acquisition of RadMD, a US-based imaging contract research organisation (iCRO).
PowerHouse Energy Group PLC (LON:PHE) has identified 77 sites in the UK as potential locations for facilities using its waste-to-energy DMG technology. In an update to the market on the company’s progress, Powerhouse said the development of the UK pipeline will form the springboard for the international expansion of the Powerhouse business model.
Oriole Resources PLC (LON:ORR) said it reached an agreement with joint venture partner IAMGOLD Corp (IAMGOLD) over the funding of exploration work at the Senala gold project in Senegal. IAMGOLD will carrying forward an underspend of US$172,000 from the third year of exploration work into Year 4.
Caerus Mineral Resources PLC (LON:CMRS) has made good progress with analysis in regards to its projects in Cyprus, and is well ahead of schedule with compilation and creation of a substantial database and Geological information System based on records held by the Mines Department of Cyprus and the Geological Survey. With 14 former producing mines on the Caerus licences, there is a sizeable volume of useful historic information to be processed to provide the basis for 3-D modelling and interpretation of the project geology.
LoopUp Group PLC (LON:LOOP) said it has delayed the publication of its results for the year to December 31, 2020, saying that a routine technical review by the group’s auditor, Grant Thornton, has not been completed in time for the preliminary release, regarding the amortisation treatment of intangible assets from the acquisition of MeetingZone in 2018. The company said this is a non-cash, technical accounting review and reconfirmed its in line 2020 results which include revenue of £50.2mln compared to £42.5mln in 2019, and earnings (EBITDA) of £15.3mln, up from £6.4mln the year before. The group added that it is working with its auditors to complete the review and will provide clarity on a revised date for our preliminary results as soon as possible.
Panthera Resources PLC (LON:PAT) has noted that the Government of India has passed a new bill (MMDR2021) to amend the Mines and Minerals (Development and Regulation) Act of 2015 (MMDR2015). MMDR2021, which has now been passed by both houses of Parliament, is expected to become law in the second quarter of this calendar year. The company believes that the new MMDR2021 may have an impact on its joint venture partner, Metal Mining India Pvt Ltd, in terms of its right to secure approval for its prospecting licence applications (PLAs) for the Bhukia and Taregaon projects.
Amryt Pharma PLC (LON:AMYT, NASDAQ:AMYT) said it has received positive feedback from the American drug regulator as it seeks sign-off for its Myalept drug for use in patients with partial lipodystrophy (abnormal distribution of fat).
Alliance Pharma PLC (LON:APH) tripled its dividend for 2020, saying the new year has started well as it integrates the substantial acquisition of Biogix and eyes other opportunities to add to its portfolio.
Chariot Oil & Gas Limited (LON:CHAR) has agreed to acquire a renewable and hybrid power developer in a deal worth up to US$2mln, paid mostly in shares.
Alpha Growth PLC (LON:ALGW)(OTCQB: ALPGF) announced it has completed the share purchase acquisition of Bermuda-based holding company Northstar Group and its wholly-owned Providence Life Assurance Company.
Belvoir Group PLC (LON:BLV) said its chief executive Dorian Gonsalves and its chief financial officer Louise George will provide a live presentation to retail investors reporting on the roup’s final results for the year ended December 31, 2020 via the Investor Meet Company platform on 12 April 2021 at 4.30pm BST.
KRM22 PLC (LON: KRM) said it has posted to shareholders the Annual Report & Accounts for the year ended December 31, 2020, as well as a notice of the Annual General Meeting to be held on April 28 2021 at 10am.
6.50 am: Footsie expected to open on the back foot
The FTSE 100 is expected to fall on Tuesday amid continued concern about a slowing in the European vaccine program one year on from the first UK coronavirus lockdown.
Ahead of unemployment data later, London’s blue chip stocks have been called 42 points lower by spread-betters on the IG platform, following the 17-point gain to 6,726.1 at the start of the week.
The index will join Asian stock markets in the red, with the Hang Seng and the Shanghai Composite both down more than 1.4%, and the Nikkei 0.6% lower.
Overnight, the major US stock benchmarks finished higher, led by the big tech stocks of the Nasdaq, where the composite index rose 1.2%, ahead of the S&P 500 at 0.7% and the Dow Jones at 0.3%.
“For all the optimism over the vaccine program, it is only as strong as its weakest link, and that link is currently in Europe, with Germany this morning imposing a five-day lockdown over the Easter period in an attempt to stem the pace of transmission,” said market analyst Michael Hewson at CMC Markets.
“This presents a problem for the travel sector and the potential for a speedy recovery, given the slow nature of the rollout due to supply, as well as hesitancy concerns.
“When set against rising infection rates across Europe, it is likely to mean that even in the event of a successful rollout in the UK, it’s highly unlikely that international travel will be able to return in any meaningful way while a large part of Europe remains behind the curve in inoculating its populations.”
The latest UK unemployment numbers for January and February are again likely to paint a distorted picture of the UK labour market as the furlough scheme remains in place, a year on from the first lockdown reluctantly imposed by Boris Johnson.
The ILO measure for the three months to January is expected to increase to 5.2% from 5.1%, while February’s jobless claims numbers will be in focus after falling to 7.2% in January from 7.4% in December.
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were lower on Tuesday as Chinese search giant Baidu made its debut in Hong Kong.
The Hang Seng index in Hong Kong slipped 1.53% while the Shanghai Composite in China dipped 1.26%.
In Japan, the Nikkei 225 fell 0.61% and South Korea’s Kospi declined 0.97%.
The S&P/ASX 200 in Australia closed 0.11% lower.
Proactive Australia news:
Tietto Minerals Ltd (ASX:TIE) has hit 1-metre at 118.29 g/t gold from 205 metres within 3 metres at 41.46 g/t at Abujar‐Gludehi (AG) deposit within the 3.02-million-ounce Abujar Gold Project in Côte d’Ivoire, West Africa, with the company on track to deliver a pre-feasibility study (PFS) this quarter.
YPB Group Ltd (ASX:YPB) has signed a three-year master service agreement (MSA) to supply an integrated product authentication, track and trace, and consumer engagement solution to Australian natural health and products company Phytologic Holdings Pty Ltd.
Creso Pharma Ltd‘s (ASX:CPH) (FRA:1X8) target acquisition company Halucenex Life Sciences has secured an additional supply of 700 milligrams of pharmaceutical-grade psilocybin from its manufacturing partner for use in its upcoming clinical trial program, adding to the 11.6 grams previously secured.
Roots Sustainable Agricultural Technologies (ASX:ROO) plans to progress its plant and hemp-based meat alternative options in the USA after completing a survey of global suppliers and pricing for hemp-based protein products in collaboration with Hempoint.
Piedmont Lithium Ltd (ASX:PLL) (OTCMKTS:PDDTF) (FRA:PL4) plans to undertake a US public offering of up to 1.5 million American Depository Shares (ADS), with each ADS representing 100 of its ordinary shares.
Walkabout Resources Ltd (ASX:WKT) (FRA:N6D) is keen to push ahead with its flagship Lindi Jumbo Project in Tanzania amid increasing demand for graphite from clean and green tech applications and is hoping to start production this year.