- FTSE 100 down 17 points
- Deliveroo loses 23%
- Hikma rises on upgrade
1014am: Oil firms down ahead of OPEC+ meeting
Oil companies are under presssure despite crude edging up ahead of this week’s meeting of OPEC+ which is expected to keep production curbs in place to support the price.
UBS said: “While the Suez Canal blockage was not really a major factor this has now been resolved but focus is very much on the OPEC+ meetings on 31-Mar/1-Apr with widespread expectation that there is a roll-over for at least another month of the bulk of the production quotas.”
Meanwhile the FTSE 100 has improved from its worst levels and is now down 17.73 points or 0.26% at 6754.39.
(Deliveroo watch: down 23% at 299.4p)
9.29am: Standard Chartered leads fallers
Leading shares are ending a fairly upbeat quarter on a downbeat note. The FTSE 100 has risen by almost 5% in the first three months of the year, but renewed concerns about rising inflation have seen it slip 23.13 points or 0.34% to 6748.99 on the last day of the quarter.
Standard Chartered PLC (LON.STAN) is down 1.91% or 9.8p at 503.8p following a dip in Asian markets overnight. Just Eat Takeaway.com NV (LON.JET) is also among the leading fallers in the blue chip index, down 1.13% or 75.21 p at 6560.78p after the dismal start to listed life for rival Deliveroo Holdings PLC (LON.ROO), now down 20% at 308.9p in conditional trading compared to the offer price of 390p. Initially the shares fell as low as 271p.
Neil Wilson at Markets.com said: ” It’s a very big early move lower and there will be chatter about what this says about the broader market, investor appetite for listings, the state of the UK economy etc, etc… Chiefly though it reflects the fact that even pricing the IPO at the bottom of the range, Deliveroo was demanding too high a price tag for a loss-making delivery platform in a very competitive space with a questionable path to profitability. The books were covered, it was just plain mis-priced.”
8.33am: Subdued start on bond yield concerns
The FTSE 100 felt the drag from Wall Street and Asia’s main markets as it nudged into negative territory.
The bromide appears to have been administered by government bond yields, which have begun creeping up again amid lingering worries over the inflation outlook.
Mitigating a more pronounced delve into the red was a better-than-expected final read-out of 2020’s GDP data – though the year was, on the whole, remained an unmitigated economic disaster.
The 9.8% collapse in output over 12 months was unprecedented in an historic context, but largely anticipated.
In fact, the performance in the final three months was marginally better than first thought with growth of 1.3%.
Turning to the markets, Richard Hunter struck this upbeat note with his review of the first quarter of 2021 and his assessment of the outlook.
“Markets remain on the front foot with perpetually conflicting elements generally skewed to the upside,” he said.
“Increasingly successful vaccine rollouts, fiscal stimulus packages and signs of nascent economic recoveries have all contributed, despite those very factors also raising concerns of inflation and a subsequent rise in interest rates rather earlier than expected.”
Topping the Footsie on a slow day was Hikma Pharma (LON:HIK), which advanced 3.3% on a Jefferies upgrade to ‘buy’.
BP (LON:BP.), meanwhile, was largely untroubled by a downgrade to ‘underweight’ by Morgan Stanley.
6.50 am: Footsie primed to open lower
The FTSE 100 is expected to open in the red on Wednesday as negative sentiment from global markets overnight reached traders in London.
Spread-betters IG expect the blue-chip index to open 22 points lower after ending Tuesday’s session 36 points higher at 6,772.
Expectations of a slower start follow a sluggish performance for US equities overnight as optimism over a global economic recovery helped push up US treasury yields, piling pressure on stocks.
The Dow Jones Industrial Average ended Tuesday’s session down 0.31% at 33.066 while the S&P 500 dropped 0.32% to 3,958 and the Nasdaq fell 0.11% to 13,045.
The picture was similarly glum in Asia this morning with Japan’s Nikkei 225 down 0.82% while Hong Kong’s Hang Seng fell 0.48%.
US ADP jobs data later today could push yields even higher if evidence of an economic rebound is shown, although the key numbers will continue to be the non-farm payrolls that are due on Friday.
There will also be a restatement of the UK’s GDP reading for the fourth quarter of last year, which is expected to confirm 1% growth for the period and the avoidance of a double-dip recession, potentially raising hopes of an economic rebound once lockdown ends.
On currency markets, the pound was trading 0.13% lower against the dollar at US$1.372, although the US ADP jobs data could provide some catalysts for movement later today.
Around the markets:
Sterling: US$1.372, down 0.13%
Brent crude: US$64.46 a barrel, up 0.5%
Gold: US$1,680 an ounce, down 1.86%
Bitcoin: US$58,653, up 2.1%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mostly lower on Wednesday even as China’s factory activity expanded at a faster-than-expected pace in March.
According to China’s National Bureau of Statistics, the manufacturing Purchasing Managers’ Index (PMI) came in at 51.9, compared to February’s reading of 50.6.
The Hang Seng index in Hong Kong slipped 0.31% while the Shanghai Composite in China fell 0.61%.
In Japan, the Nikkei 225 declined 0.73% but South Korea’s Kospi gained 0.05%.
Shares in Australia were an exception, with the S&P/ASX 200 closing 0.78% higher.
Proactive Australia news:
FYI Resources Ltd (ASX:FYI) (FRA:SDL) has updated the definitive feasibility study (DFS) for its High Purity Alumina (HPA) Project resulting in an increase in forecast net present value (NPV) to more than US$1 billion.
Horizon Minerals Ltd’s (ASX:HRZ) recent drilling has demonstrated strong continuity and grade along a 600-metre strike at Crake Gold Project west of Kalgoorlie in Western Australia with bonanza grade results of up to 1-metre at 67.9 g/t gold.
Strategic Elements Ltd (ASX:SOR) has fabricated a prototype battery pack with 20 scaled-down connected battery ink cells, which successfully produced a 14-volt output solely by harvesting moisture from the air.
Paradigm Biopharmaceuticals Ltd (ASX:PAR) has executed a new collaboration agreement with bene pharmaChem which allows for the further development of injectable Pentosan Polysulfate Sodium (iPPS) and other formulations containing PPS to address unmet needs in new clinical indications.
Twenty Seven Co Ltd (ASX:TSC) (FRA:U9V) is off to an encouraging start at Mt Dimer with multiple high-grade results from the inaugural reverse circulation (RC) drilling campaign including up to 8.15 g/t gold and 26.9 g/t silver extending known mineralisation at relatively shallow depths.
Euro Manganese Inc (ASX:EMN) (CVE:EMN) (FRA:E06) has boosted its balance after closing the first tranche of its A$30 million (about C$29 million) private placement along with an initial investment from EIT InnoEnergy of €62,500 (about C$92,850), the first of three instalments with an aggregate value of €250,000.
BlackEarth Minerals NL’s (ASX:BEM) stage-2 large-scale pilot plant program has confirmed strong stage-1 results with grades of fixed carbon (FC) content of more than 95% reaffirming the potential of Maniry Graphite Project product as being highly attractive for downstream processing and feed for rapidly expanding electric vehicle markets.