FTSE 100 little moved as US markets open broadly lower

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  • FTSE up 14 points
  • Just Eat hit by competition plans in Germany
  • US markets get off to a negative start

2.41pm: Wall Street broadly lower at the opening bell

The main indices on Wall Street started Wednesday’s session on a lower note as disappointing results from Netflix overnight weighed on tech stocks.

In the first minutes of trading, the Dow Jones Industrial Average was down 0.08% at 33,794, while the S&P 500 dropped 0.16% to 4,128 and the Nasdaq fell 0.36% to 13,735.

Netflix itself was also a heavy faller at the opening bell, down 7.9% at US$506.42 after missing its subscriber goals for the first quarter.

Also looming in the background are the ever-present jitters over COVID-19 as investors continue to fret over the presence of new variants and rising cases in several countries.

Back in London, the FTSE 100 was inching higher into late afternoon, rising 14 points to 6,873 at around 2.40pm.

2.26pm: Industrials among day’s fallers

Ahead of the US market open, leading shares have drifted back off their best levels.

The FTSE 100 is up just 13.11 points or 0.19% at 6872.98, with Just Eat Takeaway.com NV (LON:JET) still leading the fallers, down 309p or 3.9% at 7621p.

Industrial groups are also on the way down, with Weir Group PLC (LON:WEIR) 63p or 3.23% lower at 1885p and Melrose PLC (LON:MRO) off 3.65p or 2.25% at 158.55p.

12.43pm: Netflix to unsettle tech stocks

Wall Street is set for a mixed open, with the Dow Jones Industrial Average and S&P 500 virtually flat with rises of just 19 points and 1.5 points respectively, and the Nasdaq Composite showing a 0.12% or 21 point fall.

Tech shares are likely to come under pressure after Netflix issued disappointing results after the US markets closed.

It reported just under 4mln new subscribers in the first quarter, compared to expectations of a 6mln rise. And estimates of 1mln new sign-ups in the second quarter was well below the previous forecast of 4.4mln and sharply down from 10mln for the same period last year.

No surprise investors are not chilling, marking Netflix shares down 8.5% in pre-market trading.

Sophie Griffiths, market analyst at Oanda, said: “US futures are pointing to .. the tech-heavy Nasdaq underperforming its peers in the wake of Netflix‘s results…

“The first big-tech company to report, investors were looking at these numbers to set the scene for the coming week as other big companies announce their earnings. Weaker subscriber numbers and poor projected customer growth ahead points to a sharp deceleration in the stay-at-home trade, which boosted tech across 2020.”

Back in the UK and the FTSE 100 has gained a bit of impetus again, up 32.16 points or 0.47% to 6892.03.

11.49am: Hikma higher, Just Eat drops

Leading shares may be losing some of their early lustre but investors are buying into Hikma Pharmaceuticals PLC (LON:HIK).

The company is the biggest riser in the blue chip index, up 61p or 2.57% at 2439p after it said it had resumed the launch in the US of its generic version of GlaxoSmithKline’s Advair Diskus treatment for asthma and pulmonary diseases.

The move follows the Food and Drug Administration approving its application after an amendment relating to enhanced packaging controls to meet new industry standards.

Hikma chief executive Siggi Olafsso, said: “We appreciate the FDA’s timely review and approval of our amendment and are now immediately resuming the launch of our high quality, substitutable generic version of Advair Diskus. We are very pleased to improve availability of this critical medicine for patients and healthcare providers in the US.”

Heading the other way is Just Eat Takeaway.com NV (LON:JET).

Its shares are down 331p or 4.17% at 7599p – the biggest faller in the leading index – following a report in the Financial Times that Uber Eats is launching in Germany to compete with what it called Just Eat’s dominance of the market in the country.

Just Eat has also expanded its new worker model into Liverpool, with an expected 1,500 jobs on the payroll by the end of the year, with all contracted workers are entitled to hourly pay, minimum/living wage, pension contributions and certain statutory benefits including holiday pay and sick pay

Speaking of Just Eat, an update on rival Deliveroo (LON:ROO) which you may recall floated at 390p a share recently only to see its price plunge. It is now at 240p, down 1.15% or 2.8p.

Overall, after hitting a peak of 6908, the FTSE 100 is now at 6881.9, up 22.03 points or 0.32%.

Joshua Mahony, senior market analyst at IG said: “Markets are caught between optimism over vaccination progress at home, and the fact that global efforts to combat the pandemic remain reliant upon economic restrictions until vaccines are widespread.

“With just 6% of the global population having received a jab, the experiences in Brazil and India highlight the difficulties controlling the virus in the absence of widespread protection.”

10.45am: UK housing market sees biggest rise since 2014

If anyone is worried about inflation, they only have to look at the housing market.

UK house prices jumped by a higher than expected 8.6% in February compared to a year ago, according to the Office for National Statistics.

That is the biggest rise since October 2014 and is up from 8% in January.

The average house price in the UK was £250,000 in February compared to £230,000 the same time last year.


Of course the prospect of an end to the temporary stamp duty holiday in March played a part, although the government later extended that in England, Wales and Northern Ireland until the end of June.

Added to that is the trend to move to bigger homes – often outside the major cities – thanks to the increase in home working brought about by the pandemic.

Andrew Montlake, managing director of mortgage broker Coreco said: “This latest data is yet more evidence of how the Stamp Duty holiday has turbocharged the property market. Even when [it] finally comes to an end, we expect the mortgage guarantee scheme to continue to support demand among first-time buyers, which will ripple up through the market and maintain a certain level of transactions.”

George Franks of London estate agents Radstock Property said: “Demand has gone through the roof and that, coupled with exceptionally competitive mortgages rates and low supply, has driven average prices ever higher. Yes, tax hikes and rising unemployment will almost certainly temper demand at some point, but changing living requirements will counteract that to an extent. 

The news has seen housebuilders edge higher, with Barratt Developments PLC (LON:BDEV) up 1.02% or 7.8p to 773.6p and Persimmon PLC (LON:PSN) put on 15p or 0.48% to 3154p.

Overall the FTSE 100 has come off its best levels but is still in positive territory, up 16.48 points or 0.24% at 6876.35.

9.40am: BP and Shell head higher

OIl companies are giving some support to a UK market which looks in a bit better shape than on Tuesday.

The FTSE 100 is currently up 38.87 points or 0.57% at 6898.74.

BP PLC (LON:BP.) is 2.06% or 6p better at 297.75p while Royal Dutch Shell PLC (LON:RDSA) is up 24.4p or 1.81% at 1374.6p.

The moves come despite a 0.32% slip in Brent crude to $66.36 a barrel, but on the whole the oil price is holding up despite renewed worries about a rise in the number of COVID-19 cases worldwide hitting travel and the prospects of economic recovery. Concerns about supply disruption from Libya is also in investors’ minds.

Meanwhile the news that petrol prices helped fuel UK inflation in March is probably helping the keep the oil giants buoyant.

AJ Bell investment director Russ Mould.said: “After suffering its most substantial fall in two months, investors will be relieved to see the FTSE 100 dust itself off and get fight back on Wednesday as it looks to regain some of the big losses.

“The move higher comes despite one of the market’s big fears – inflation – ticking up in the UK. It probably helps that the CPI measure came in short of expectations and it is also worth remembering that a modest climb in prices is a sign of the economy getting back on its feet…

“Shares linked to the reopening, including airlines and other travel-related businesses, managed a bit of a rebound but we will almost certainly see more swings in sentiment as we move from spring into summer.”

Another factor is when central banks decide to act on the nascent signs of inflationary pressures, despite the US Federal Reserve consistently playing down the idea it is worried about rising prices.

Neil Wilson at Markets.com said: “How markets respond over the coming weeks will depend a lot on the vaccine programme and the path of new cases, as well as signals from central banks. The ECB meeting [on Thursday] carries some degree of risk for markets, particularly if the governing council or [president Christine] Lagarde offers any hints of hawkishness – it’s too easy to underestimate the strength of the hawks and the ECB’s willingness to exit pandemic emergency mode before the Fed.”

8.29am: Will leading index hit 7000 again any time soon?

Like a goal disallowed by VAR with all the attendant emotional stress, the planned European Super League came and went in a flash.

So too the 7000 level on the FTSE 100, although most people will be hoping we see that again rather sooner than any more football break-away plans.

After Tuesday’s 140 point fall, the leading index is at least heading in the right direction in early trading.

With UK inflation figures causing little surprise, the FTSE 100 is up 21.59 points or 0.31% at 6881.46.

Richard Hunter, head of markets at interactive investor, said: “A marginal upswing in inflation will keep the bears at bay for the moment. Investors have been questioning the longer term impact of such an accommodative monetary environment for some time, but there is little in the UK number to accelerate such concerns. Fuel and transport costs inevitably rose following a strong spike in the oil price this year, with the overall figure held back by declining food prices, some of which are below pre-pandemic levels.

“More broadly, general investor caution has also made its way to the FTSE100, which has dipped over the last couple of trading sessions. however, the index remains ahead in the year to date by 6.4%, and will also be subject to a busy corporate reporting season next week which may determine any shorter term progress.”

Antofagasta PLC (LON:ANTO) has just reported and its shares have not progressed, quite the reverse. They are down 0.84% or 15.5p at 1825.5p. It said copper production was down 5.7% in the first quarter, as expected, with gold production down 9.2%.

It said second half production is forecast to be slightly stronger than the first, and full year guidance was unchanged.

But it added: “Guidance assumes COVID-19 restrictions will remain in place for all of 2021. However, because of the new wave of COVID-19 cases and the nationwide lockdown imposed in late March, major maintenance at Los Pelambres originally planned for Q2 and which requires a large number of additional workers on-site is under review so that some of the non-critical activities can be rescheduled to later in 2021.”

Among the risers Avast PLC (LON:AVST) is leading the way. The cybersecurity firm has climbed 2.66% or 12.7p to 490.3p on further consideration of Tuesday’s results.

And British Airways owner International Consolidated Airlines PLC (LON:IAG) has recovered some of the losses incurred when reports of new COVID-19 variants hit travel shares, and is uup 2.06% or 3.98p at 197.08.

7.56am: Fuel and clothing prices rise

The UK’s inflation rate has risen in March, but marginally less than expected.

The consumer prices index rose to 0.7% from 0.4% in February, compared to forecasts of an increase to  0.8%.

Fuel costs helped push the figure higher, as anyone who has filled up with petrol recently can probably attest. Clothing prices were also higher, with food prices falling.

Laith Khalaf, financial analyst at AJ Bell, said: “The spike in inflation is nothing to worry about – yet. We always knew inflation was going to rise once we started lapping the beginning of the pandemic, in particular the steep falls in energy prices witnessed in the spring of last year. Petrol prices were 4.3p higher in March than a year ago, when they stood at 119.4p. In May 2020, they dropped to 106.2p, so this upward pressure on inflation will continue to grow in the coming months, even if fuel prices are relatively stable now.

“But CPI is still way below target, and this isn’t the kind of embedded, long term inflation that will cause sleepless nights for anyone at the Bank of England. The Bank has looked through much higher inflation before, so interest rate rises remain very much in the long grass. The big question is whether the economic recovery, combined with fiscal and monetary stimulus, will start to foster a more sustained, inflationary trend that has the potential to get out of hand. This risk isn’t likely to come home to roost anytime soon, with unemployment expected to rise later this year, thereby acting as a drag on rising wages. But beyond that, the worry is that the powder keg of cheap money could ignite an inflationary spiral.”

Proactive news headlines

Argo Blockchain PLC (LON:ARB) revealed that it has signed a contract with Navier Inc, a specialist designer and builder of cryptocurrency mining facilities, to co-develop the company’s new facility in Helios, Texas.

Parity Group PLC (LON:PTY) reported an encouraging start to trading in 2021 and said it anticipates more growth in the second half as business confidence returns.

Spectra Systems Corporation (LON:SPSY) said it has executed an agreement with a central bank customer to include a new capability for its sensors to detect “exotic counterfeits”, with the new contract resulting in an immediate US$1.2mln of development funding.

Savannah Resources PLC (LON:SAV) has raised £10.3mln, before expenses, through an oversubscribed placing and direct subscription and that the net proceeds will mainly go towards progressing its flagship Mina do Barroso project in Portugal.

Sativa Wellness Group Inc (LON:SWEL) revealed that its subsidiary, PhytoVista Laboratories, has been granted accreditation to ISO/IEC 17025:2017, general requirements for the competence of testing and calibration laboratories.
Tirupati Graphite PLC (LON:TGR) said it has opened its second mine in Madagascar at the Vatomina project, where it remains on track to start commissioning the first 9,000 tonnes per annum (tpa) processing plant in the second quarter.

Panther Metals PLC (LON:PALM) announced it has raised £200,000 in a private placing. The company has sold 1.66mln new shares priced at 12p each.

Galantas Gold Corporation (LON:GAL) increased the ceiling on its proposed private placing to C$8mln from C$6mln, due to strong investor demand.

Anglo Asian Mining PLC (LON:AAZ) said the government of Azerbaijan approved the first of two five-year extensions of the production sharing agreement for its Gedabek contract area, while it is also in talks to obtain an extension of the territory of the existing contract areas and for new contract areas in the country.

ADM Energy PLC (LON:ADME) has inked agreements with two service providers which may collaborate in the future development of the Barracuda field.

Inspiration Healthcare Group PLC (LON:IHC) announced that its subsidiary SLE has received regulatory approval from the National Medical Products Administration to sell the enhanced version of the SLE6000 in China.

Coinsilium Group Limited (LON:COIN) said its portfolio company and advisory client Indorse is planning a public alpha release of Nifty Scanner, a digital asset analysis software solution for non-fungible tokens (NFTs).

ADES International Holding PLC (LON:ADES) has confirmed that its deal to be acquired by Innovative Energy Holding Ltd has now been declared unconditional – and, as of yesterday, there had been acceptances representing 95.98% of the company’s shares.

Anglo Pacific Group PLC (LON:APF, TSX:APY) announced the timetable for dividends to be paid in 2021 and gave notice that its annual general meeting will be held at 10am on 26 May at the company’s registered office in London. Shareholders will not be permitted to attend the AGM in person and should therefore vote by proxy, including on the proposed 3.75p final dividend. 

6.33am: Leading shares set to open higher

The FTSE 100 is expected to add a few points at the start of Wednesday’s session as investors await the latest batch of inflation data for the UK.

Spread-betters IG expect the blue-chip index to open up around 4 points after ending Tuesday’s session down 140 points at 6,859.

The market seems to be struggling to recover from its recent sell-off as investors consider whether the post-pandemic economic recovery will be as smooth as initially expected amid surges in cases in multiple countries and the increased fear of new variants potentially upending vaccine efforts.

The downward trend was evident on Wall Street overnight, with the Dow Jones Industrial Average closing 0.75% lower at 33,821, while the S&P 500 dropped 0.68% to 4,134 and the Nasdaq fell 0.92% to 13,786.

It was a similar picture in Asia this morning, with Japan’s Nikkei 225 down 1.99% while Hong Kong’s Hang Seng dropped 1.84%.

Meanwhile, the latest UK inflation data will give investors some clarity on whether to expect a sharp rise in inflationary pressures in the coming months as the British economy recovers from lockdown.

This could mean more rises from UK bond yields, which in turn will provide additional downward pressure on equities.

On currency markets, the pound was down 0.07% against the dollar at US$1.392, although the inflation data later could provide some catalysts for movement.

Around the markets:

Sterling: US$1.392, down 0.08%

Brent crude: US$66.09 a barrel, down 0.72%

Gold: US$1,783 an ounce, up 0.72%

Bitcoin: US$55,593, up 0.71%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly lower on Wednesday as the World Health Organization warned that the COVID-19 global infection rate is approaching its highest level ever.

The Hang Seng index in Hong Kong fell 1.66% while the Shanghai Composite in China gained 0.10%.

In Japan, the Nikkei 225 slipped 1.96% and South Korea’s Kospi dipped 1.45%.

Shares in Australia fell, with the S&P/ASX 200 trading 0.59% lower.


Proactive Australia news:

Antipa Minerals Ltd (ASX:AZY) has received binding commitments for a non-underwritten placement to raise $22 million and will undertake a share purchase plan (SPP) of up to $3 million, resulting in a total capital raising of up to $25 million.

Emyria Ltd (ASX:EMD) has received firm commitments from sophisticated and strategic investors in a well supported $5 million placement.

Imugene Ltd (ASX:IMU) (OTCMKTS:IUGNF) has achieved a clinical milestone for its HER-Vaxx cancer immunotherapy in Phase 2 gastric cancer clinical trial.

Alta Zinc Ltd (ASX:AZI) (FRA:8EE) continues to be encouraged by exploration at Gorno Project in northern Italy with multiple high-grade zinc and lead intersections, along with silver, received from drilling the Ponente area of the Gorno Mine.

Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) has received further strong results at its flagship Cue Gold Project in Western Australia with regional aircore drilling at Target 14 within the new gold corridor west of Lena returning up to 12 metres at 8.7 g/t from 66 metres.

Matador Mining Ltd (ASX:MZZ) (OTCMKTS:MZZMF) (FRA:7MR) has generated multiple new priority geophysical gold targets near the Window Glass Hill (WGH) deposit within the Cape Ray Gold Project in Newfoundland, Canada.

EcoGraf Ltd’s (ASX:EGR) proposed Kwinana Battery Anode Materials Facility has been granted major project status, which recognises the importance of the development and supports the Australian Government’s Critical Minerals Strategy and Western Australia’s Future Battery Industry Strategy.

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