FTSE 100 rouses itself in the afternoon hours; Wall Street eagerly picks up the baton

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  • FTSE 100 up 34 points
  • Bitcoin bounces back
  • US stocks higher

5.05pm: Positive day for tech

London’s leading index ended Monday up 34 points, 0.5%, at 7,052, while the FTSE 250 added 84 points, 0.4%, to close at 22,484.

“Stocks have resumed their march higher it seems, adding to the gains made in the second half of last week as inflation concerns appear to recede,” IG Chief Market Analyst Chris Beauchamp wrote. “Risk assets are moving higher on a broad front, with almost all major indices in positive territory and oil prices marching upwards as well.”

Meanwhile, in the US, the Dow was up 185 points, 0.5%, to 34,393 at midday. The Nasdaq gained 208 points, 1.6%, to 13,679, and the S&P 500 increased 44 points, 1%, to 4,200.

“Tech stocks have rediscovered some of their momentum today, and with recent positioning data pointing to a notable surge in outflows, it seems that sentiment has been sufficiently reset on the sector to allow a new leg higher to begin,” Beauchamp wrote.

4pm: London’s top share index higher

London’s leading shares are firmer on balance, but equities are definitely being overshadowed by the shenanigans in the cryptocurrency markets.

The FTSE 100 was up 14 points (0.2%) entering the last hour of trading.

“Elon Musk has contributed to the turbulence with his enthusiasm for bitcoin changing by the week, if not the day; however, it was the regulators who were mainly to blame for the plunge. The authorities in China warned against using bitcoin for payments and launched a crackdown on bitcoin mining. There was also tougher talk from the US,” said Rupert Thompson, the chief investment officer at Kingswood, the asset management firm, in his weekly summary of the markets.

“We do not hold bitcoin, or any other cryptocurrency, in our client portfolios and have no intention of doing so for the foreseeable future. Their excessively high volatility rules them out for now, regardless of their longer-term potential,” Thompson said.

3.40pm: IPO flurry 

Back in the UK, the market for new issues remained buoyant as two smaller companies made their stock market bow on Monday. Digital advertising specialist Dianomi PLC (LON:DNM) raced to a 14% first-day premium, while the gain was a more modest 2% for wholesaler Kitwave (LON:KITW). Dianomi’s placing raised £5mln of new money and £32mln for selling investors, with the business commanding an initial valuation of £82mln. Tyneside-based Kitwave, meanwhile, brought in £64mln of new cash (on a valuation of £105mln), which will be used to fund the firm’s acquisition strategy.

3.15pm: Proactive North America headlines:

Recruiter.com Group Inc (OTCQB:RCRT) announces that background check company, KarmaCheck has joined its roster of partner companies

Power REIT (NYSEAMERICAN:PW) buys 35-acre Colorado property for cannabis cultivation and processing through a subsidiary

Roth Capital ups target price for Silvercorp Metals (TSE:SVM) (NYSEAMERICAN:SVM) (FRA:S9Y), to $9.00, reiterates ‘Buy’ rating following recent Q4 results

BioLargo Inc (OTCQB:BLGO) strengthens balance sheet by eliminating nearly all of its convertible debt

Esports Entertainment Group Inc (NASDAQ:GMBL) (FRA:40Y1) says New Jersey Division of Gaming Enforcement formally accepts subsidiary GMBL’s gaming license application

Dalrada Corporation (OTCQB:DFCO) taps Captain David Bacon to its board as it advances its health product lines

2.40pm: Wall Street opens in the green

The main indices on Wall Street have made a positive start to the week by moving into the green in early deals.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.49% at 34,376 while the S&P 500 jumped 0.67% to 4,183 and the Nasdaq rose 0.77% to 13,574.

Also in positive territory was cryptocurrency Bitcoin, which despite heavy losses over the weekend had bounced back on Monday and was up 16.2% in the last 24 hours at US$38,136.

Back in London, the FTSE 100 was more or less flat into late afternoon at 7,019.

2.10pm: FTSE 100 sees morning’s gains dissipate

The morning’s gains mostly disappeared over the lunchtime session.

The FTSE 100 was up 7 points (0.1%) at 7,025, despite some investors taking a punt on gambling stocks such as Entain PLC (LON:ENT) and Flutter Entertainment PLC (LON:FLTR). The former is up 2.0% at 1,611p and is the top blue-chip riser while the latter is 1.7% firmer at 13,145p.

READ Flashpoint iron ore: China summons producers in “anti-speculation” drive

Mining stocks remain out of favour as China attempts to crack down on commodity speculators and they have been joined in the kennel by utilities such as Severn Trent PLC (LON:SVT) and United Utilities Group PLC (LON:UU.) as well as housebuilders such ass Barratt Developments PLC (LON:BDEV) and Taylor Wimpey PLC (LON:TW.), which are nursing losses of between 0.7% and 1.3%.

12.20pm: US indices to open higher

The good times look set to continue to roll in the US, despite lingering doubts over inflation trends.

Spread betting quotes indicate the Dow Jones will open 130 points higher at 34,337 while the S&P 500 is expected to rise 19 points to 4,175.

The tech-heavy Nasdaq 100 is seen advancing 80 points to 13,491.

’Bitcoin has been blessed with a bit of Monday motivation, creeping back up after a big dose of the Sunday blues which saw the cryptocurrency fall to just above 31 thousand dollars,” observed Susannah Streeter at Hargreaves Lansdown.

Bitcoin is up a cool US$2,695 (8.0%) at 36,486 today.

“Its value more than halved compared to the high it reached above $63,000 in mid-April but since yesterday’s low, it’s risen by around 17%, marking yet another sharp twist in its highly volatile journey.

“The crackdown in China is intensifying with cryptocurrency mining the latest target. The suspension of operations of major players sent shudders through the market with bulging crypto wallets becoming distinctly thinner as other cryptos like Ethereum, Dogecoin and Binance Coin also fell sharply in value,” Streeter said.

“Crypto holders who are hoping for a bounce back from the initial sharp fall last Wednesday have been left sorely disappointed.

“It’s become clear Beijing’s stance isn’t a one-off warning but the beginnings of a serious attempt to limit the decentralised power of cryptocurrencies,” she added.

Drugs giant Pfizer Inc is likely to be in focus when trading starts after it revealed it has enrolled volunteers in a study of the company’s COVID-19 booster jab along with its 20-valent pneumococcal conjugate vaccine.

On the macroeconomic front, there is not much of interest unless the Chicago Fed national activity index floats your boat, in which case you’ll be interested to learn that economists expect the index to fall to 1.10 in April from 1.71 in March.

In London, “the warming sentiment towards the UK as an investment destination also seems to be taking hold,” according to interactive investor’s Richard Hunter.

If investors are warming to the UK as an undervalued market it is the sort of growing warmth that supposedly catches a frog unaware as it gradually boils to death in a jar of slowly heating water.

The FTSE 100 has hopped 17 points (0.2%) higher to 7,035.

10.45am: Leisure stocks in favour

Having established higher ground at the outset, the FTSE 100 seems intent on consolidating its ground.

London’s index of heavyweight shares was up 17 points (0.3%) at 7,036, with hospitality tourism-related stocks among the better performers.

Contract caterer Compass Group PLC (LON:CPG) is up 1.7% at 1,565.5p, British Airways owner International Consolidated Airlines SA (LON:IAG) is 1.1% firmer at 197.24p while Holiday Inn hotelier InterContinental Hotels Group PLC (LON:IHG) is 1.5% to the good at 4,895p.

Investors’ enthusiasm for the above shares comes after rumours that – touch wood – Britain remains on course for “liberation day” on June 21.

One company looking forward to that happy day is Cineworld PLC (LON:CINE), which is 3.7% higher at 90p after it updated the market this morning, although broker Peel Hunt said the statement contained “little useful information”.

“It has received the expected US$203mmln tax refund in the US, which underpins our cashflow forecast. In the UK trading on the first weekend post reopening was described as ‘strong’, with Peter Rabbit 2 the most significant film. In the US 97% of sites are open, and the company expects to open RoW operations by the end of the month. Our Hold recommendation is based on the expectation of a rapid recovery in trading and an acknowledgment of the material debt burden,” the broker said.

As observed by Russ Mould, the investment director at AJ Bell, Cineworld’s management did not give any figures on sales or admissions, “so we’re only going on the word of the management that performance was good”.

“Yes, the company said UK trading beat its expectations – but what if they were extremely low in the first place?” Mould wondered.

Despite that, the shares are on the up but that could just be because the weather – at least in the Home Counties – is currently filthy and has been miserable for much of the month.

9.35am: China deflates the commodities balloon a little

The Footsie’s early advance has been tempered slightly by soft mining shares after China’s latest grumble about excessive speculation in commodities markets.

London’s index of leading shares was up 23 points at 7,041, led by AVEVA Group PLC (LON:AVV), which was up 1.4% ahead of tomorrow’s trading update.

Mining companies Fresnillo PLC (LON:FRES) and Antofagasta PLC (LON:ATO) were the biggest fallers on the index, with the former off 1.9% at 865.4p and the latter down 1.3% at 1,519p.

“Commodities remain under some pressure as China continues to make noises about speculative excesses driving up prices. They have raised Dahlian futures margins and fiddled with VAT on imported ores, but in the bigger picture, raw materials remain not far from their recent highs. Given that China is a large net importer of ores, there is a limit to what they will be able to achieve in the medium to long term. However, in the short-term, their rumblings seem to be having the desired effect,” said Jeffrey Halley at OANDA.

On its first day of dealings, digital advertising firm Dianomi PLC (LON:DNM) is trading at 290p, after coming to the market on the back of a share placing at 273p a share.

SIMEC Atlantis Energy Ltd (LON:SAE) shares were the best performers in London, rising 26% to 7.75p after the company said its tidal power generation facility in Naru Island, Japan, has passed the Japanese government’s pre-use inspection tests and is now recognised as an official power generation facility.

8.35am: Positive start but inflation worries linger

A predicted, the FTSE 100 made a cautious but positive start to proceedings, though inflationary worries lingered.

A temperature check will be provided on Friday when the US announces prices and consumer consumption data.

Before that, we have a gaggle of US Federal Reserve officials making speeches that may point to the direction of travel for the central bank.

The fear is that the Fed will begin to taper support and raise rates if the inflationary risk from a rapid economic recovery becomes too pronounced.

“The rising tide which lifted all boats earlier in the year has now become choppy waters, as inflation concerns rise to the surface,” said Richard Hunter, head of markets at Interactive Investor.

“There is increasing evidence of blockages in the economy as the strength of demand outpaces available supply.

“Whether this is raw materials or labour, the pressures are clearly inflationary.

“The question which is currently perplexing investors is whether this is a temporary effect as supply catches up with demand quickly, or whether there are wider factors at play, such as higher prices given the current trend towards deglobalisation, exacerbated by the pandemic.”

On the market, the top Footsie loser was Antofagasta (LON:ANTO). Its shares fell 1.5% after the Chinese tried to take the heat out of the commodity markets by berating speculators for driving prices higher.

Fresnillo (LON:FRES), the Mexico-focused silver miner, should have benefited from the surge in the gold price, but instead was sucked 1.3% lower by the mainstream diggers.

Trainline (LON:TRN) chugged 3.5% lower amid existential worries spawned by the effective re-nationalisation of the major rail operators, which comes with a pledge to simplify pricing.

Around 35% has been wiped from its value in the past month as the government’s strategy has emerged.

Proactive news headlines

NetScientific PLC (LON:NSCI) said ProAxsis, its wholly-owned respiratory diagnostics business, has built a solid platform for growth.

Norman Broadbent PLC (LON:NBB) has reported positive earnings for 2020 despite disruption caused by the coronavirus (COVID-19) pandemic as well as an increase in gross margins. 

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) has received binding commitments to raise A$28mln via a share placing that it said will enable final debt drawdown and access to additional funding through a bank guarantee provided by Sequoia and ramp-up of the Lake Way Project in Western Australia.

SIMEC Atlantis Energy Ltd (LON:SAE) announced that its tidal power generation facility in Naru Island, Japan, has passed the Japanese government’s pre-use inspection tests and is now recognised as an official power generation facility. The company also provided an update on its Uskmouth waste-to-energy conversion project in Newport, Wales.

Frontier IP Group PLC (LON:FIPP) said its portfolio group, Pulsiv, has completed a fundraising and appointed electrical engineer Darrel Kingham as its chief executive officer.

Sensyne Health PLC (LON:SENS) has signed a strategic research agreement with the Colorado Center for Personalized Medicine that will enable the ethical application of clinical AI research to improve patient care and accelerate medical research. 

Pembridge Resources PLC (LON:PERE) has announced the 2021 exploration plans for the Minto copper project in Canada, in which it owns a significant stake. Minto is already an established producer, and the plan is to boost the resource base.

Prince William was given a masterclass in electric racing at Knockhill Racing Circuit over the weekend, driving a car powered by hydrogen fuel cell technology produced by AFC Energy PLC (LON:AFC). The test drive at the Extreme E event was organised ahead of COP 26, the international climate change conference, which takes place in Glasgow later this year.

Westmount Energy Limited (LON:WTE) has noted that Hess Corporation has increased its interest in the Kaieteur Block, offshore Guyana, to 20% from 15%.

Deltic Energy PLC (LON:DELT) has noted that Fugro GB North Marine Limited has been hired to conduct a geophysical and geotechnical site survey ahead of the planned drilling of the Pensacola exploration well. The survey programme is slated for July, before drilling which is anticipated in 2022.

Iconic Labs PLC (LON:ICON) announced the appointment of Marija Hrebac as a non-executive director with immediate effect.

ImmuPharma PLC (LON:IMM) said its chief science officer, Dr Robert Zimmer, is to retire and quit the board at the end of June.

Nuformix PLC (LON:NFX) has appointed Dr Alastair Riddell as non-executive chairman. Simultaneously, Dr Karl Keegan, a non-executive director and Dr Joanne Holland, chief scientific officer, have resigned. Dr Riddell has over 30 years’ experience in the pharmaceutical, life science and biotech industries, with 20 years as a board director. 

Panther Metals PLC (LON:PALM) notified that its annual general meeting will be held on 15 June 2021. The meeting will be held online but the company said it will be using a platform which allows shareholder participation and voting on the poll.

Savannah (LON:SAV) announced that its chief executive, David Archer, will present an overview of the company and its current activities at the London South East Natural Resources Webinar on 25 May 2021, currently scheduled for 7pm.

Impax Asset Management Group plc (LON:IPX) announced the appointment of Berenberg as its joint broker with immediate effect. 

6.50 am: Positive start predicted

The FTSE 100 is expected to get off to a tentative but positive start, mirroring the performances of Asia’s main stock markets, which continue to be haunted by fears of a US inflationary spike.

Consumer consumption and price data later this week will possibly decide whether America’s Federal Reserve begins tapering the ultra-accommodative monetary policy that has supported equity markets.

With a raft of Fed speakers slated to speak this week, including influential board governor, Lael Brainard, we should get some colour on the central bank’s direction of travel ahead of Friday’s data.

Elsewhere, the volatility of Bitcoin, down a further 5.1%, has resulted in a surge in demand for gold, which hit a four-month high of just shy of US$1,900 an ounce before edging back slightly.

Red hot commodity prices continued to cool as China complained about the ‘speculative excesses’ driving them higher.

“Given that China is a large net importer of ores, there is a limit to what they will be able to achieve in the medium to long term,” said Jeffrey Halley, markets analyst at OANDA.

“However, in the short-term, their rumblings seem to be having the desired effect.”

Looking ahead, we’ll get a better insight on the state of the retail sector with updates from Marks & Spencer (LON:MKS), a stalwart of the high street, Shaftesbury (LON:SHB), owner of large tracts of Covent Garden and Soho, and Pets at Home (LON:PETS), which is making a success of its hybrid clicks-and-bricks business model.

Also reporting are the insurer Aviva (LON:AV.), SSE (LON:SSE), the energy group, and platinum specialist Johnson Matthey (LON:JMAT).

Around the markets

  • Pound US$1.4155 (flat)
  • Bitcoin US$35,037.05 (-5.1%)
  • Gold US$1,887.40 (+0.45%)
  • Brent crude US$66.81 (+0.56%)

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Monday after the Dow Jones Industrial Average and the S&P 500 in the US posted their fourth and second consecutive negative week of losses last week.

The Shanghai Composite in China gained 0.18% but  Hong Kong’s Hang Seng index slipped 0.24%

In Japan, the Nikkei 225 gained 0.25% while South Korea’s Kospi fell 0.37%.

Shares in Australia rose, with the S&P/ASX 200 trading 0.16% higher.

Proactive Australia news:

Tamboran Resources Ltd is well on track to raise A$66 million in its Initial Public Offering (IPO) to list on the Australian Securities Exchange (ASX) with firm commitments received from existing shareholders and new investors for A$60 million.

Chimeric Therapeutics Ltd (ASX:CHM) has initiated the treatment of the first patient in the second dose cohort in City of Hope’s Phase 1 clinical trial evaluating the safety and tolerability of its chlorotoxin CAR T (CLTX CAR T) cell therapy.

Australian Potash Ltd (ASX:APC) has received firm commitments from global institutional, professional and sophisticated investors for a $10 million placement at 14 cents per share.

Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) (FRA:W1D) has received binding commitments to raise A$28 million via a share placement to institutional shareholders, sophisticated investors and directors at 35 cents per share.

Oklo Resource Ltd (ASX:OKU) (FRA:JYA) has received highly encouraging results from first pass, shallow aircore drilling at Sari Project, just 10 kilometres east of the recently reported Seko mineral resource within the flagship Dandoko Gold Project in Mali.

Meteoric Resources NL’s (ASX:MEI) (FRA:RNF) 2021 drilling program at Palm Springs Gold Project in WA’s Kimberley region kicked off last Friday with an initial 10 holes for 3,800 metres of combined reverse circulation (RC) and diamond drilling.

AVZ Minerals Ltd (ASX:AVZ) (OTCMKTS:AZZVF) (FRA:3A2) has updated the Manono Lithium and Tin Project resource in the Democratic Republic of Congo (DRC) to 401 million tonnes of spodumene-rich fresh pegmatite at a grade of 1.65% lithium oxide (Li2O), after including results from the recent pit floor drilling program at the Roche Dure pit.

Perpetual Resources Ltd (ASX:PEC) has received program of works (PoW) approval from the WA Government Department of Mines, Industry, Regulation and Safety (DMIRS), for its upcoming white sand only drill program at the Beharra project, 300 kilometres north of Perth in Western Australia.

Caspin Resources Ltd’s (ASX:CPN) diamond drill program at the Yarawindah Brook Nickel-Copper-Platinum Group Elements (PGE) Project in Western Australia has intersected broad sulphide zones.

Brookside Energy Ltd (ASX:BRK) (OTCMKTS:RDEEF) (FRA:8F3) is continuing its drilling operations on schedule at the high-impact Jewell 13-12-1S-3W SXH1 well in the SWISH area of the world-class Anadarko Basin, Oklahoma.

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