FTSE 100 closes in the red, Wall Street fares no better
- FTSE 100 dips 47 points
- Wall Street follows world markets lower
- Ocado the weakest blue-chip
5.15pm: Both sides of the Atlantic struggling
The FTSE 100 ended Tuesday down 47 points, 0.7%, at 6,923, despite a promising start to the day. The FTSE 250 lost 167 points, 0.7%, to 22,330.
Markets have been rocked by a wave of volatility on an otherwise inconspicuous day, with sharp declines in the DAX and Treasury yields, and cryptos giving way to dollar and gold gains,” IG Senior Market Analyst Joshua Mahony wrote. ” …Airlines have received a welcome lift as Europe moves closer to resuming non-essential travel, with the UK government expected to spell out exactly what countries fall into each category of the traffic light system. Nonetheless, the resumption of flights does bring its risks, with more infectious and evasive variants from around the world likely to grow in numbers once travel restarts.”
To that end, easyJet plc (LON:EZJ) shares improved 0.3% to 1,039.50p.
In the US, the Dow was down 157 points, 0.5%, to 33,956 at midday. The Nasdaq slid 342 points, 2.5%, to 13,552, and the S&P 500 gave back 48 points, 1.1%, to 4,145.
4.03pm: Midday dip dooms chance of winning day
Having spent the morning steadily accumulating gains, the Footsie lost them in an instant over lunchtime trading and is now in the red.
Shares in Barclays currently trade at 171.4p, down 2.3% on the day.
3.10pm: Treading water
London’s index of leading share is treading water in the afternoon session, despite the strength of oil stocks and precious metals miners.
The FTSE 100 was up just 2 points (0.0%) at 6,972, led – if that’s the word – by precious metals miner Fresnillo PLC (LON:FRES), up 4.6% at 861.8p, and Polymetal International PLC (LON:POLY), up 3.8% at 1,552.5p.
“Silver broke out of its triangular formation yesterday to record its best one-day performance since early February when it briefly touched $30. Gold meanwhile remains rangebound as it struggles to find a bid strong enough to challenge key resistance at $1800,” said Ole Hansen, the head of commodity strategy at Saxo Bank.
“Rising growth expectations together with the prospect for government-supported infrastructure plans as well as the green transformation and reflation focus have all helped drive a strong rally across industrial and platinum group metals in 2021. Silver has been caught between two chairs with the market struggling to work out whether the impact from industrial metals should hold a bigger sway than struggling gold. The latter due to its sensitivity towards movements in rates and the dollar, both of which are up until recently,” he added.
Also breaking out of a triangular formation, or maybe it was just looking at the story through the round window, were travel-related stocks.
TUI AG (LON:TUI), easyJet PLC (LON:EZJ) and British Airways owner International Consolidated Airlines Group SA (LON:IAG) were on the rise on Tuesday as the UK prepares to announce which countries have made it on the ‘green list’.
Weekend reports suggested it might be between ten or 12 countries, including Malta, Gibraltar, Portugal and Israel.
Spain, Greece, France, the Seychelles and Iceland have also been rumoured as potential candidates.
TUI jumped 2.2% to 440.3p while easyJet added 0.6% at 1,042p and IAG advanced 1.2% to 203.95p.
2.50pm: Proactive North America headlines:
Marvel Discovery Corp (CVE:MARV) (OTCPINK:IMTFF) acquires new ground in palladium-rich region of Ontario
Genprex Inc (NASDAQ:GNPX) initiates site recruitment for Acclaim-2 clinical trial for its lung cancer drug REQORSA
BioSig Technologies Inc (NASDAQ:BSGM) increases patient case goal to 1,500 procedures by end of 2021
Todos Medical Ltd (OTCQB:TOMDF) receives US FDA certificate of free sale for its new five-day Tollovid dosing regimen
KULR Technology Group Inc (OTCQB:KULR) estimates 400% year-over-year revenue increase in preliminary 1Q results
Talon Metals Corp (TSE:TLO) (OTCMKTS:TLOFF) (FRA:TAO) keeps hitting high-grade nickel-copper mineralization at the CGO East area at Tamarack
Klondike Gold Corp (CVE:KG) (OTCPINK:KDKGF) (FRA:LBDP) kicks off 2021 exploration program in the Yukon with drilling at the historic Virgin and Lindow areas
Green Battery Minerals Inc (CVE:GEM) (OTCMKTS:GBMIF) (FRA:BR2) hires consultant Norda Stelo for environmental gap analysis report on its Quebec graphite project
Benchmark Metals Inc (CVE:BNCH) (OTCQB:CYRTF) (FRA:87CA) further advances flagship British Columbia project after trilateral agreement with First Nations
Tocvan Ventures Corp (CSE:TOC) (FRA:TV3) unveils preliminary metallurgical results as it moves towards bulk sample at Pilar project, Mexico
Great Panther Mining Limited (TSE:GPR) (NYSEAMERICAN:GPL) (FRA:G3U) notes nomination of experienced executives Ms Curran and Ms Williams to board of directors
2.42pm: Wall Street opens in the red as momentum slows
The main indices on Wall Street started Tuesday’s session on a lower footing as investors in New York appeared to be running out of steam.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.22% at 34,038 while the S&P 500 dropped 0.54% to 4,170 and the Nasdaq fell 1.1% to 13,741.
Seeing better luck was pharmaceuticals giant Pfizer Inc, which was up 0.3% at US$39.93 in early deals after it upgraded forecasts in its quarterly results.
Back in London, the FTSE 100 had lost some of its momentum but was still up 17 points at 6,986 at around 2.40pm.
2.00pm: Mysterious mini-relapse
The gains of the morning have disappeared in London; it’s not only the weather that can change in a heartbeat.
The FTSE 100 was down 3 points (0.0%) at 6,967. despite the pound losing more than half a cent against the US dollar – which is usually good for blue-chip equities.
The Footsie was not alone in its sudden reversal; European markets also stumbled, prompting talk among traders of a “micro flash-crash”.
— Streetinsider.com (@Street_Insider) May 4, 2021
It’s not exactly Black Monday – more mystifying Tuesday – and it has not stopped investors from continuing to support property companies, with Land Securities Group PLC (LON:LAND) and British Land Company PLC (LON:BLND) on the up as they look forward to further easing of lockdown restrictions.
Irish stockbroker Goodbody seems to have chosen a propitious moment to initiate coverage of LandSecs.
“LandSec’s reinvigorated strategy to focus on London while sweating income from retail can provide it with the best of both worlds in terms of good capital and income returns, provided rents are re-based. This will give the company cyclical exposure to London while income can be topped up through high-yielding retail,” suggested Goodbody’s property analyst, Colm Lauder.
“However, to inspire a more confident outlook, LandSec have a number of issues to address including ramping up disposals and moving retail tenants to new re-based rents which should stabilise income streams and yields. This will give the company, like other large landlords, an important role as the UK economy re-opens following the annus horribilis of 2020. Nonetheless, with a superior London offering, British Land remains our preferred pick in the large-cap space,” he added.
12.45pm: US indices to open mostly lower
US indices are expected to open mostly lower except for the narrowly-based Dow Jones 30-share index.
The Dow is tipped to edge 19 points higher to 23,132 but the more broadly-based S&P 500 is seen giving up 4 points at 4,189 while the tech-heavy Nasdaq 100 is expected to slide 20 points to 13,759p.
Drugs giant Pfzier Inc, which unlike its Anglo-Swedish counterpart AstraZeneca is not providing its COVID vaccine at cost, has lifted earnings guidance on the back of better-than-expected take-up of its vaccine.
DuPont de Nemours Inc, the speciality materials, chemicals and agricultural products conglomerate, also lifted its full-year outlook after its first-quarter sales and earnings beat the market’s expectations.
Today will see the release of US factory orders and the US trade balance.
Factory orders for March are expected to have risen 1.3% in March after falling 0.8%, while the trade deficit is expected to widen to US$74.3bn from February’s US$71.1bn.
In the UK, the FTSE 100 was up 58 points (0.8%) at 7,028, having made steady progress throughout the day.
Brent crude for July delivery is US$1.17 dearer at US$68.73 a barrel, even though OPEC+ is to start reversing its production cuts this month,
“However, given the improving demand picture, the market isn’t seeing this as a cause for concern,” said Sophie Griffiths at OANDA.
BP was up 3.8% at 414.45p and Shell was 3.2% firmer at 1,340p.
— Gas Strategies (@GasStrategies) May 4, 2021
11.45am: ONS reveals decline in business closures
The Office for National Statistics reported that the number of business closures in the first quarter of 2021 was lower than it was a year earlier.
The number of businesses removed from the Inter-Departmental Business Register (IBDR) was 7% lower year-on-year.
The largest falls in closures were in the accommodation and food, and health and social care industries, the Office for National Statistics (ONS) revealed.
It reported 12 main industrial groups showed a reduction in closures, while four showed an increase year-on-year in the quarter.
The number of businesses added to the IDBRin the UK was 14% higher than a year earlier and is highest first-quarter figure since the start of the series in 2017.
— Office for National Statistics (ONS) (@ONS) May 4, 2021
The FTSE 100 was up 51 points at 7,020.
11.20am: Mortgage borrowing hits record level (Pope confirms commitment to Catholicism)
Net mortgage borrowing clocked in at £11.8bn in Marc, the highest level since records began in 1993.
The number of mortgages approved for home purchases in March at 82,700 was lower than the recent peak level of 103,100 in November 2020 but was higher than the 73,000 approvals seen in February of last year – the month before the pandemic changed everything.
Individuals continued making net repayments of consumer credit in March (£0.5 billion). The effective rate on new personal loans remained low at 5.03%, compared to 7.03% in January 2020, the Bank of England said.
Households continued depositing significant amounts, with an additional £16.2bn placed in March, the bank added. Deposit interest rates remained at historically low levels.
Private non-financial companies repaid £6.2bn of finance to capital markets in March, compared to a monthly average net issuance of £4.5 billion since March 2020. Net bank borrowing by small and medium sized businesses was £0.7bn in March, while large businesses made net repayments of £1.4bn.
“You can feel the optimism bubbling over in the new saving and borrowing figures, as the vaccine rollout continued apace and the country prepared to reopen for business,” said Sarah Coles, a personal finance anlyst at Hargreaves Lansdown.
“Mortgage borrowing set new records in March, and while saving levels remained high, debt repayments started to tail off, as we dusted off our credit cards ready for a summer of spending.
#Mortgage approvals for #house purchases actually slowed to an 8-month low in March but latest survey evidence points to the new supportive measures announced by the Chancellor in the early-March budget giving the #housing market renewed vigour. https://t.co/Dp4bTMHgBc
— Howard Archer (@HowardArcherUK) May 4, 2021
“The boom in mortgages is partly explained by buyers rushing for the old stamp duty deadline. In the end, the deadline was shifted to June, but buyers were already committed and keen to get the whole thing over and done with as soon as possible. We know from subsequent months’ data that renewed optimism among buyers means the boom in house-hunting has continued and because it hasn’t been accompanied by the same enthusiasm for house-selling, prices are on the march again,” she added.
The FTSE 100 was up 49 points at 7,109.
10.05am: Strong manufacturing PMI reading
The Markit/CIPS manufacturing purchasing manager’s index (PMI) rose to 60.9 in April, from 58.9 in March.
Economists had pencilled in a figure of 60.7, unchanged from the previously announced “flash estimate”.
The April reading is the highest since July 1994’s record high. A level above 50 indicates an expansion in activity.
Manufacturing production increased for the eleventh successive month. Output growth was attributed to a loosening of lockdown restrictions, improved demand and rising backlogs of work. Solid and accelerated expansions of output were seen across the consumer, intermediate and investment goods industries, with the consumer goods category the strongest performer overall,” said IHS Markit, which compiles the data.
“Further loosening of COVID-19 restrictions at home and abroad led to another marked growth spurt at UK factories. The headline PMI rose to a near 27-year high, as output and new orders expanded at increased rates. The outlook for the sector is also increasingly positive, with two-thirds of manufacturers expecting output to be higher in one year’s time. Export growth remains relatively subdued, however, as small manufacturers struggle to export,” said IHS Markit director, Rob Dobson.
“The sector also remains beset by supply-chain issues and rising inflationary pressures. Disruption following Brexit and COVID-19, especially at ports, caused a further near-record lengthening of supplier delivery times. The resulting input shortages kept producer price inflation among the highest over the past four years. Manufacturers have generally
passed on these costs to customers, as highlighted by a survey-record rise in selling prices, but it is hoped that this inflationary backdrop will subside once supply and demand come back into line as covid-related logistic delays ease,” he added,
Duncan Brock, the group director at the Chartered Institute of Procurement & Supply (CIPS) said the manufacturing sector was “flooded with optimism” in April.
“It was primarily the home market that fuelled this upsurge in activity though more work from the US, Europe and China demonstrated there were also improvements in the global economy. This boom largely benefited corporates as output growth at small-scale producers continued to lag behind,” Brock said.
“As businesses raced to meet the need for increased capacity, the lost jobs of 2020 returned in greater numbers and employment creation continued in earnest at similar levels to last month and at a pace rarely surpassed in the survey history.
“However, the still significant delays in the delivery of goods due to the pandemic, Brexit and the Suez blockage in some sectors hampered further progress on two counts.
“The slow delivery of goods motivated supply chain managers to increase their order numbers and try to build up recently unravelled stocks leading to further hold-ups and the injection of more inflationary pressures into the economy. Price rises were amongst the highest in the last three decades and shortages in some essential materials intensified. This in turn led to customers paying more and at a rate not seen since records began in late-1999. This is likely to filter down to consumers before too long,” Brock added.
Samuel Tombs of Pantheon Macroeconomics said Markit’s survey implies that manufacturing output now is very close to its January 2020 level, having been 3.7% below it in February.
“Admittedly, growth is not quite as rapid as implied by the PMI, which rose in April to its second-highest level since records began in 1992,” he said.
“The PMI was boosted again, counter-intuitively, by supply chain disruptions. The suppliers’ delivery times balance—which falls when delays increase and is inverted for the PMI calculation—remained very low, despite rising to 22.2 in April, from 21.7 in March. What’s more, UK manufacturers still are underperforming their European peers, due to Brexit; the PMI remained below the Eurozone’s 62.9 for the fourth consecutive month. Nonetheless, the jump in the output index to 59.2, from 56.6 in March, left it just over one standard deviation above its 2010-to-19 average, and manufacturers were the most upbeat about future growth in output since April 2014,” Tombs added.
The FTSE 100 was up 38 points at 7,007.
8.40am: Footsie springs a pleasant surprise
The FTSE 100 defied early, gloomy predictions to open firmly in the green with the market doubling down on stocks they expect to benefit from a return to business as usual.
Last week’s results, including a surprise increase in the net interest margin, are still filtering through the research rooms of the City, so there may also be a broker upgrade or two floating around out there.
Also well bid was airline group IAG (LON:IAG), up 3.9% ahead of its figures later this week and kept airborne by the hope international travel corridors will soon be thronging, which is part of the reason behind an upgrade on the shares from JPMorgan.
Hotelier Whitbread (LON:WTB), shopping centre owner British Land (LON:BLND) and builder Persimmon (LON:PSN), up 3.6%, 3% and 2.2% respectively, are all seen as potential winners as UK PLC gains momentum.
“With most major economies in the midst of a slow grind towards normality, markets continue to search for beneficiaries of the recovery,” said Richard Hunter, head of markets at Interactive Investor.
He believes there are further reasons to be cheerful for those invested in the Footsie, which has advanced 8.5% thus far this year.
“As an investment destination, the UK continues to benefit from a warming of sentiment from international investors and is still seen as something of a value play compared to many of its overseas peers,” Hunter explained.
“In particular, the influence of the banks, oils and miners within the premier index are seeing the benefit of an increasing move towards cyclicals, as evidenced by some recent updates suggesting that an inflexion point in their fortunes may have been reached.”
Proactive news headlines
Samarkand Group PLC (LON:SMK) said it has acquired Zita West Products Limited (ZWPL), a UK nutritional supplement brand for the fertility and pregnancy market, as well as a 51% stake in mother and baby nutritional product and probiotics maker Babawest Ltd for a total consideration of around £2.4mln.
Live Company Group PLC (LON:LVCG) said it has acquired a 16.3% stake in Start Art Global Ltd, an online and digital art sales platform that it said also had the potential for the creation of non-fungible tokens (NFTs).
One Media IP Group PLC (LON:OMIP) has acquired the writer’s share to the royalties of more than 250 tracks of Kid Creole and the Coconuts, the band behind hits such as “I’m A Wonderful Thing, Baby”, “Annie, I’m Not Your Daddy” and “Stool Pigeon”.
Silence Therapeutics PLC (LON:SLN, NASDAQ:SLN) has launched a new online game to raise awareness of the rare blood disorder, thalassemia, ahead of International Thalassemia Day on May 8. ‘Blood Run Beta’ (www.bloodrunbeta.game) is free and now available for people to play and learn more about the daily impact of thalassemia and one of its most common symptoms – fatigue. The gene silencing specialist is working on SLN124, a drug that targets the illness.
Ncondezi Energy Ltd (LON:NCCL) has completed on a previously-announced US$500,000 bridge loan from certain company directors to finance the construction of subsidiary Ncondezi Green Power’s 400kWp solar PV plus 912kWh battery storage project in Mozambique.
Mkango Resources Ltd (LON:MKA, TSX-V:MKA) said it is capable of producing significantly higher recoveries and concentrate grades from the 51%-owned Songwe Hill rare earths project in Malawi than previously expected, according to the results of a flotation pilot plant programme.
Cannabidiol (CBD) specialist Zoetic International PLC (LON:ZOE) said it has raised £6mln before expenses from existing and new investors that will allow it to terminate a financing agreement and fund the commercial roll-out of its main product.
Panther Metals PLC (LON:PALM) has received a renewal of its permit to explore at the Dotted Lake project in Canada, allowing it to progress on plans for up to eight diamond drill holes, ground IP geophysics and revised trenching plans.
Zephyr Energy Plc (LON:ZPHR) is hitting the ground running in North Dakota where all recently acquired wells are now expected to be online for production ahead of schedule by the end of July.
Live Company Group PLC (LON:LVCG) said it has acquired a 16.3% stake in Start Art Global Ltd, an online and digital art sales platform that it said also had the potential for the creation of non-fungible tokens (NFTs). The firm said it will acquire its minority stake in Start Art for £1mln in cash, which it plans to fund through a share placing of new shares at a price of 5p each, a 13.8% discount to its closing price last Friday, to raise a total of £1.5mln.
Vast Resources PLC (LON:VAST) has appointed Nicolae Turdean as Romanian country manager. Turdean has decades of experience in the mining industry, predominantly in Romania. He will work alongside the newly appointed expert management team at the Baita Plai polymetallic mine and in conjunction with Vast chief executive Andrew Prelea.
Kodal Minerals PLC (LON:KOD) has received confirmation that the feasibility study and mining development plan have been ratified and approved by the Direction Nationale de la Geologie et des Mines, after a review of the feasibility study and proposed mining development for the company’s Bougouni lithium project.
Caerus Mineral Resources PLC (LON:CMRS) has granted Jubilee Metals PLC (LON:JLP) a six-month exclusive period to assess all of Caerus’ surface-based mining waste and tailings assets in Cyprus with a view to converting them into one or more joint ventures.
Custodian REIT PLC (LON:CREI), the commercial property company, said 91% of rent due was collected in the pandemic-affected 12 months to the end of March 2021. Net asset value per share rose to 97.6p from 96.4p three months earlier.
Sativa Wellness Group Inc (LON:SWEL) said innovations to expand its products and services in the wellness sector, as well as the expansion of its clinics, are “working well” as it updated investors on its performance over the last year.
Tirupati Graphite PLC (LON:TGR) said its research centre has developed a ground-breaking graphene-aluminium (Al-Gr) composite, which exhibits significantly higher conductivity and strength properties over aluminium and could be used as a substitute for copper.
Panthera Resources PLC (LON:PAT) said it decided not to extend a term sheet with Galaxy Gold Mines Pvt Ltd following the recent change in the Indian mining law, effectively ending the partnership to advance the Bhukia joint venture gold project.
Greatland Gold PLC (LON:GGP) announced the appointment of Canaccord Genuity to provide corporate broking services with immediate effect. Canaccord Genuity will work alongside the Company’s existing brokers Berenberg, Hannam & Partners and SI Capital.
Critical Metals PLC (LON:CRTM) notified that it has issued 200,000 shares at exercise price of 10p apiece for total gross proceeds of £20,000 after receiving warrant exercise notices. Russell Fryer, CEO of Critical Metals, commented: “I am appreciative of the continued support from our shareholders and this further exercise of warrants gives additional strength to the company’s cash position as we continue to pursue acquisition opportunities.”
6.50 am: Tentative start seen
The FTSE 100 is predicted to open up in a tentative fashion after the long weekend and ahead of the expected signing of a new trade deal between the UK and India.
London’s blue-chip benchmark is heading for a five-point decline, according to spread-betters on the IG platform.
Yesterday, while UK traders relaxed in the wind and rain of the bank holiday, Wall Street had a mixed time, with the Dow Jones up 238 points or 0.7% to above 34,000 mark and the S&P 500 rising 0.3% but the Nasdaq dropping 0.5%.
US bond yields also moved lower, the US dollar gave up much of its month-end gains from last week and gold powered higher to the brink of $1,800.00 an ounce.
The blame for all this was ISM manufacturing PMI data missing expectations quite noticeably.
“If nothing else, it shows just how much financial markets are wedded to the US recovery story leading the world out of the pandemic recession,” said market analyst Jeffrey Halley at Oanda.
The UK will have its own dose of manufacturing PMI data later this morning, with the market expecting a reading of 60.7 for April.
Ahead of its Monetary Policy Committee’s decision later in the week, the Bank of England will also be releasing a range of lending data.
There are also sure to be headlines about Prime Minister Boris Johnson’s video conference meeting with Indian counterpart Narendra Modi as the pair are set to agree on various final details on the pathway towards a new free trade deal, which Downing Street said would create 6,500 British jobs and contain more than £533mln of new Indian investment into the UK, in sectors such as health and technology.
A new trade partnership is expected to lower non-tariff barriers on fruit and medical devices, with the expectation that this will allow British businesses to export more easily to India.
Around the markets
Pound – down 0.2% at US$1.3877
Gold – up 1.0% at US$1,786.67
Oil – Brent crude down 0.2% at US$67.40
Bitcoin – down 3.4% to US$56,049.27
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were higher on Tuesday as Reserve Bank of Australia decided to maintain its current policy settings, including keeping the cash rate at 0.1%.
The markets in China, Japan and Thailand are closed on Tuesday for holidays.
The Hang Seng index in Hong Kong rose 0.47% while South Korea’s Kospi gained 0.34%.
Shares in Australia advanced, with the S&P/ASX 200 trading 0.47% higher.
Proactive Australia news:
Archer Materials Ltd’s (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) shares are trading about 5% higher intra-day after executing a new quantum computing agreement with International Business Machines Corporation (NYSE:IBM).
Meteoric Resources NL (ASX:MEI) is “intersecting the right rocks and alteration styles”, managing director Andrew Tunks says of the first drill hole to test a major IP chargeability anomaly detected in late 2020 at Juruena Gold-Copper Project in Brazil.
Kin Mining NL (ASX:KIN) (FRA:8KM) has received further wide, high-grade assays from ongoing reverse circulation (RC) drilling at the Cardinia Hill deposit within the Cardinia Gold Project (CGP), near Leonora in Western Australia.
Technology Metals Ltd (ASX:TMT) (FRA:TM6) has defined a simplified process flowsheet for the Yarrabubba Iron-Vanadium Project in Western Australia’s Mid-West to deliver high purity magnetite at a 75 to 90 micron grind size and at a rate of 1.5 million tonnes per annum.