FTSE 100 ends just below the flatline; Nasdaq leads Wall Street regression from strong open

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  • FTSE 100 down 2 points
  • TGI Fridays to demerge from Electra Private Equity
  • Wall Street mixed after Nasdaq slips

5.15pm: Kingfisher stock takes a hit

The FTSE 100 ended very near that flatline, down 2 points at 7,018. The FTSE 250, meanwhile, added 7 points to 22,399.

Kingfisher plc (LON:KGF) shares dropped more than 4% to £357.90.

“Latecomers to the bounce in Kingfisher shares have suffered further pain as the post-trading statement enters its second day,” IG Chief Market Analyst Chris Beauchamp wrote. “A big winner from lockdowns, Kingfisher perhaps has a more difficult time ahead of it, since consumers have plenty of other things to spend their money on now, and with the end of the stay at home rule they will no longer spend their free time mulling over DIY projects.”

In the US, the Dow was up 186 points, 0.5%, to 34,268 at midday. The Nasdaq stumbled from early gains to fall 52 points, 0.4%, to 13,484, and the S&P 500 was up just 3 points to 4,162.

“As the penultimate full trading week of May draws to a close, major indices are heading nervously back to the highs of last week, having spent the past 48 hours recovering from Wednesday’s low,” Beauchamp wrote. “The picture today for risk assets looks a lot more positive than it did mid-week, as inflation concerns continue to subside and today’s suite of stronger economic data provides a continued argument to stick with equities.”

3.25pm: TGI Fridays to float in London this year

The FTSE 100 hovered around the flatline before close and was up only 1 point to 7,021.

Electra Private Equity PLC (LON:ELTA) has announced that TGI Fridays is to float on the London Stock Exchange later this year.

The restaurant chain has 87 restaurants, all of which are now back open after the relaxation of restrictions on indoor dining in Britain on Monday of this week.

Early indications of post reopening trading are very positive, Electra said, with TGI Fridays’ Scottish stores recording sales 14% higher on a like-for-like (LFL) basis versus the same period of 2019 since April 26, despite being unable to serve alcohol and being obliged to close at 8pm.

TGI Fridays is valued at £146.2mln on Electra’s books, up from £106.6mln at the end of September 2020.

2.45pm: Proactive North America headlines:

KULR Technology Group Inc (OTCQB:KULR) sees 1Q revenue rocket 439% driven by new orders from military and aerospace customers

Endexx Corporation (OTCMKTS:EDXC) partnership with Grammy winner DJ Khaled looks even better after unveiling BLESSWELL CBD grooming products

Aurania Resources Ltd (CVE:ARU) (OTCMKTS:AUIAF) (FRA:20Q) finds elevated silver-zinc in outcrop at Tiria-Shimpia target in Ecuador

NexTech AR Solutions Corp (NEO:NTAR.NE) (OTCMKTS:NEXCF) (CSE:NTAR) unveils host of new senior hires, executive shuffles

Royal Road Minerals Limited (CVE:RYR) (OTCMKTS:RRDMF) (FRA:RLU) closes sale of its 50% interest in Luna Roja Project in Nicaragua

HempFusion Wellness Inc (TSE:CBD.U) (OTCQX:CBDHF) (FRA:8OO) commends proposal of US Hemp Access and Consumer Safety Act

ESE Entertainment Inc (CVE:ESE) (OTCQB:ENTEF) partners with Kantar to develop esports research and strategy

American Manganese Inc (CVE:AMY) (OTCPINK:AMYZF) (FRA:2AM) prepares for drilling at its Rocher Deboule copper-gold property, BC

CytoDyn Inc (OTCQB:CYDY) taps Vice President, Corporate Controller Antonio Migliarese as its new CFO

Silvercorp Metals Inc (TSE:SVM) (NYSEAMERICAN:SVM) (FRA:S9Y) records upswing in net income and revenue as it posts latest fiscal year resultsrecords upswing in net income and revenue as it posts latest fiscal year results

2.41pm: Wall Street opens on the front foot

The main indices on Wall Street have started in positive territory on Friday as traders aim to end a volatile week on a higher note.

In the early minutes of trading, the Dow Jones Industrial Average was up 0.63% at 34.298 while the S&P 500 climbed 0.51% to 4,180 and the Nasdaq rose 0.43% to 13,594.

One of the early movers on Friday was tractor maker Deere & Co (NYSE:DE), which fell 0.4% to US$353.7 despite strong second-quarter earnings reported before the bell.

Back in London, the higher start in New York had given the FTSE 100 a small boost in late afternoon, with the blue-chip index eking out a 3 point gain to 7,022 at around 2.40pm.

1.10pm: Spain to allow UK travellers in but it remains on Britain’s ‘amber’ list

FTSE 100 stayed put at lunchtime, down 5 points to 7,014.

The Spanish government has ruled that travellers from the UK and Japan can enter the country without providing proof of negative COVID-19 test, starting from Monday.

Spain has exited the state of emergency lockdown earlier this month but there are still some restrictions in place, with masks mandatory on public transport and other indoor and outdoor areas.

However, it remains on the UK’s ‘amber’ list, meaning that people returning to the UK have to present a negative COVID-19 test on arrival, quarantine for ten days and take additional tests on days 2 and 8 of isolation, which adds up to the normal costs of a holiday.

Across the whole of Europe, only Portugal, Gibraltar, Iceland and the Faroe Islands are in the UK’s ‘green’ list, only requiring a negative test on arrival.

Westminster has stressed that travelling to ‘amber’ countries should be done only for essential reasons, albeit it’s legal.

12pm: Wall Street set for positive open

The FTSE 100 dipped in the red again at noon, shedding 3 points to 7,016.

Futures were pointing at a green open for US indices, suggesting a positive ending to a rollercoaster week.

The market will keep an eye for US manufacturing and service sector PMIs for signs of recovery in the US economy and its potential impact on the dollar.

“This week saw assets prices swing wildly with Bitcoin and other cryptos coming under significant pressure in mid-week before dip buyers caused prices to bounce back equally impressively. The stock markets also followed this script, as the major US indices turned flat or almost flat, after a wobble in the earlier parts of the week,” said Fawad Razaqzada, analyst at ThinkMarkets.

“Concerns over inflation and policy tightening have repeatedly been dismissed by the market, although bond yields maintain their recent advance – even if some commodities have started to fall back down with China taking steps to try and temper prices. If yields were to accelerate to the upside, this would bode ill for the overstretched growth companies, especially in the technology sector. So far, investors have been happy to buy every single dip. But inflation concerns could come back to haunt investors at some point down the line, as it has the potential to threaten the economic recovery.”

11am: UK manufacturing keeps growing but prices remain high

The FTSE 100 was back in the green in late morning, though only up 3 points to 7,023.

The IHS Markit/CIPS flash composite PMI for May rose from 60.7 in April to a record high of 62 in May as the economy continues to recover.

It was largely driven by a whopping increase in the headline manufacturing PMI from 60.9 in April to 66.1 in May, which is a record high.

“There are some worrying signs for the manufacturing sector though. Supply issues are continuing to worsen, with the suppliers’ delivery times balance falling from 22.2 to 19.9, a low only surpassed in April 2020,” economists at Capital Economics said.

“There are signs of cost and inflationary pressures building further in the sector as manufacturing input prices and output prices balances both set record highs.”

The services PMI rose from 61.0 to 61.8, boosted by the reopening of indoor hospitality, so it has scope to further grow in June as more restrictions are lifted.

“This is encouraging for our view that GDP will return to its February 2020 before the end of the year and suggests there is an upside risk that it happens sooner,” economists added.

9.50am: Nationwide profits double

The FTSE 100 has dipped further in mid-morning trading, dropping 30 points to 6,989, while sterling is flat at US$1.4187.

As Neil Wilson at Markets.com notes, tech and energy stocks are leading the way whilst yesterday’s gainers of healthcare and industrials are lower.

“The big rejection of the 6800 handle [for the FTSE] on May 13 indicates little appetite for the lower end, but many factors are at work here. Not least, as discussed yesterday, the exposure of basic resources and energy stocks to the growth in emerging markets that could be affected by covid,” he says.

Nationwide, the world’s largest building society, saw its profits nearly double last year as it improved interest income and margin.

Underlying profits rose to £790mln, though bad debts remained high at £190mln. Benefits to members were £265mln, below the £400mln target due to lower savings rates.

“Covid has changed the way we are living, working and spending. People are re-evaluating where and how they want to live,” chief executive Joe Garner told the Evening Standard.

“The biggest thing we should all be worrying about is climate change. We need to get in shape now for that. We should encourage people to green their homes.”

8.50am: Kingfisher a loser on a big day for retailers 

The FTSE 100 made a muted but negative start to the final day of the trading week with London’s price setters largely ignoring Wall Street and Asia’s lead.

Overlooked too was the surge in spending last month as UK emerged from the lockdown strictures with retail sales rising by 9.2% last month.

This wasn’t enough to help Kingfisher (LON:KGF), the B&Q owner, which was down a further 3.5% amid further profit-taking.

Thursday’s upgrade to earnings expectations seems to have been taken as a ‘sell’ signal rather than in a vote of confidence in the DIY giant.

The fund supermarket Hargreaves Lansdown (LON:HL.) fell 1.4% after Citi went to ‘sell’ from ‘neutral’ on the shares.

On the up on Friday was aero-engineer Melrose (LON:MRO). Following its capital markets day on Wednesday, Stifel has upgraded to ‘buy’, which supported a 1.3% rise in the value of the stock.

Proactive news headlines

Grow Group Plc said late on Thursday that it has extended a strategic relationship with Canadian firm Aurora Cannabis Inc (NYSE:ACB) by signing a two-year market access services agreement for the UK following an initial agreement in 2019.

Alpha Financial Markets Consulting PLC (LON:AFM) has raised £31mln by issuing shares at 325p a throw to part-finance an acquisition.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) (FRA:W1D) has been granted a trading halt by the ASX with an announcement pending in regard to a potential capital raising.

Bacanora Lithium PLC (LON:BCN) has updated investors on site activities at its Sonora lithium project in Mexico.

NetScientific PLC (LON:NSCI) said an investee company will share additional data that will underline the potential efficacy of a breakthrough cancer immunotherapy.

Sensyne Health PLC (LON:SENS), which uses AI technology to ethically use mass patient data to support medical research, has signed strategic research agreement with an American healthcare provider.

Gfinity PLC (LON:GFIN) said it has appointed Hugo Drayton, the former group managing director of the Telegraph Group, to its board as a non-executive director (NED) with immediate effect.

Shield Therapeutics PLC (LON:STX) said it remains on track to launch Accrufer, its iron deficiency treatment, in the US by the end of next month.

Induction Healthcare PLC (LON: INHC) has outlined plans to make a transformational acquisition backed by a £25mln placing of new shares.

BlueRock Diamonds PLC (LON:BRD) said the expansion project at Kareevlei remains on track to be commissioned in July, with around 80% of the work completed. Following a full review of the project and its costings the upfront capital and development costs have increased. The company also announced a further cash injection, of £1.61mln, from the Teichmann Group.

Challenger Energy Group PLC (LON:CEG) has changed its name from Bahamas Petroleum Company PLC following the passing of all resolutions at an extraordinary general meeting on May 17.

Pan African Resources PLC (LON:PAF) has increased its production guidance to 195,000 ounces of gold for the twelve months ending June 30.

Sativa Wellness Group Inc (LON:SWEL) said it has raised US$4.6mln after closing the second and final tranche of its non-brokered private placement, meaning a total of 58,590,287 units have been issued at a price of $0.07875 per unit. Each unit consists of one common share in the capital of the Company and one-half share purchase warrant, with each warrant entitling the holder to purchase one common share in the capital of the company at a price of $0.105 apiece until May 20, 2023. 

Diversified Energy Company PLC (LON:DEC) confirmed it has raised US$225mln in a placing and retail offer as it advances its latest acquisition.

Tower Resources PLC (LON:TRP) told investors it has received a favourable ruling from the Upper-Tier Tax Tribunal which upheld a prior decision, from July 2019, and has dismissed an appeal by HMRC.

Emmerson PLC (LON:EML) notified investors that chief executive Graham Clarke and two directors will provide a live presentation for existing and potential shareholders via the Investor Meet Company platform on 25 May 2021 at 12.30pm BST, discussing the company’s annual financial statements and provide detail on plans for the rest of 2021.

88 Energy Limited (ASX:88E, LON:88E) confirmed that its latest corporate presentation will be available on its website.

Tiziana Life Sciences PLC (NASDAQ:TLSA, LON:TILS)  has been notified that Panetta Partners Limited, an entity in which executive chairman Gabriele Cerrone has a beneficial interest, bought 10,000 shares in the market at a price of 71p per share. The acquisition takes Cerrone’s interests from 34.070% to 34.075%, within the 1% incremental threshold of the UK Takeover Code).

Helium One Global Ltd (LON:HE1) has received notices to exercise warrants over a total of 2,482,394 ordinary shares, for which funds of £70,499.99 have been received by the company.
 
e-therapeutics plc (LON:ETX) has posted its annual report and accounts for the past financial year ahead of its 2021 annual general meeting on 16 June in Long Hanborough, Oxfordshire. Shareholders will not be permitted to attend the AGM in person but are encouraged to complete proxy forms appointing the chair of the meeting as their proxy so that they can be represented.

Iconic Labs PLC (LON:ICON) said it is posting a circular in relation to a general meeting that will be held on 15 June 2021 at 2pm in London. It will be available to view on the company’s website.

6.50 am: Slow start anticipated 

UK equities are expected to open modestly firmer ahead of a slew of macroeconomic releases expected this morning.

Spread betting quotes indicate the FTSE 100 will open around 10 points higher at 7,030.

US markets were on the up yesterday with the Dow Jones climbing 188 points to 34,084 and the S&P 500 pushing forwards by 43 points to 4,159.

In Asia this morning the mood has been positive in Japan but negative in Hong Kong.

Japan’s Nikkei 225 is up 217 points at 28,315 after the Japanese consumer prices index fell by 0.4% in April, while the Japan Jibun Bank Composite Flash Purchasing Managers’ Index (PMI) for May declined to 48.1, much lower than expected.

“As we look ahead to the day ahead, the main focus is set to be on the latest flash PMIs for May, from France, Germany, the UK and the US. Before that we have UK retail sales for April,” reported CMC’s Michael Hewson.

“The direction of travel for April retail sales is likely to be for a similarly positive number in the wake of the 12th April easing measures, something that was borne out by a big jump in the recent BRC retail sales numbers which showed a decent improvement in April,” Hewson said.

“We also have the latest flash PMIs for May which if the recent April numbers are any guide are likely to be similarly positive.

“The April PMIs painted a robust picture with services activity hitting a six and a half year high at 61, while manufacturing rose to 60.9, an 8-month high.

“UK companies were reporting higher demand for both goods and services, which in turn is causing some cost-push inflation, while the jobs market is also looking good with firms being encouraged to take on extra staff at a rate not seen in over three and a half years. Today’s May flash PMIs are expected to be similarly positive with services activity expected to rise to 62.2, while manufacturing is predicted to remain steady at 60.8,” Hewson said.

“All in all, optimism is high with the only question being whether or not what we are seeing is sustainable through the summer,” was Hewson’s conclusion.

As for UK company news, Close Brothers Group PLC (LON:CBG) has been in its counting-house, counting up its money ahead of its fiscal third-quarter update.

“Bad debts have stayed under control so far and Close have reported some encouraging lending data up to now. The market will be hoping to see lending accelerating with muted levels of competition at this stage of the cycle. The future path of bad debts will be important, especially with furlough schemes heading toward an end,” said Steve Clayton, the fund manager of the Hargreaves Lansdown Select Fund.

Around the markets

  • Sterling: US$1.4184, down 0.05 cents
  • 10-year gilt: 0.84%, down 1.06 basis points
  • Gold: US$1,877.20 an ounce, down US$4.70
  • Brent crude: US$65.25 a barrel, up 14 cents
  • Bitcoin: US$39,881, down US$226

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Friday following an overnight bounce on Wall Street.

The Shanghai Composite in China fell 0.34% and Hong Kong’s Hang Seng index slipped 0.03%

In Japan, the Nikkei 225 gained 0.80% while South Korea’s Kospi fell 0.12%.

Shares in Australia rose, with the S&P/ASX 200 trading 0.13% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Infinity Lithium Corporation Limited (ASX:INF) (FRA:3PM) non-executive director Remy Welschinger has demonstrated faith in the company with an on-market purchase of shares. 

Maximus Resources Ltd (ASX:MXR) (FRA:M5F) has started a reverse circulation (RC) drilling program of around 4,000 metres targeting several near-mine and regional exploration gold targets across its Spargoville tenements, which is 24 kilometres from Kambalda, Western Australia’s premier gold and nickel mining district.

Predictive Discovery Ltd (ASX:PDI) has progressed its divestment plans for non-core assets, with Manas Resources Limited (ASX:MSR) set to acquire Resolute Mining Limited‘s (ASX:RSG) (LON:RSG) (FRA:RSM) exploration interests in Cote D’Ivoire and concurrent agreement with Predictive to restructure the existing joint venture with Resolute –  while allowing the company to retain an interest in potential discoveries on the JV permits.

Anteris Technologies Ltd (ASX:ARV) has been granted a trading halt by the ASX with an announcement pending in regard to a proposed capital raising.

Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) non-executive director Phil Thick has demonstrated his confidence in the company’s strategy with the purchase of shares in an on-market transaction.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) (FRA:W1D) has been granted a trading halt by the ASX with an announcement pending in regard to a potential capital raising.

Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) is progressing well with the sale of Australian mineral tenements to fund its Advanced Materials business strategy with both transactions expected to complete by the end of September 2021.

S&P/ASX 200 (INDEXASX:XJO) weakened from a strong start this morning, with the index trading down 0.011% to 7,018.8 by about 1 pm.

King River Resources Ltd’s (ASX:KRR) contractors Como Engineers have completed the engineering studies to provide detailed capital and operating cost estimares for the Kwinana high-purity alumina pre-feasibility study (PFS).

Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has signed a non-binding, non-exclusive Letter of Intent (LOI) with Polish company Polvet to progress a commercial agreement to market and distribute Creso’s cannabis-based animal health products for companion animals and livestock in Poland.

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