FTSE 100 holds gains; Wall Street sees mixed start

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  • FTSE 100 rises 25 points
  • Sterling makes modest headway against the US dollar
  • US stocks open mixed

In percentage terms, the FTSE 100 and FTSE 250 are moving in lockstep, which does not happen.

Usually the sterling exchange rate does something to send them on separate paths; a strong exchange is generally reckoned to be advantageous to the mid-caps in the FTSE 250 but a nuisance to the heavyweights in the FTSE 100.

Today, sterling is almost a fifth of a cent higher at US$1.4174, having opened the day in deficit against the greenback.

Meanwhile, the FTSE 100 is up 25 points (0.4%) at 7,095 while the FTSE 250 is also up 0.4% – or 88 points – at 22,921.

In truth, neither index is exactly setting the heather on fire today but over in the world of cryptocurrencies, prices continue to move “up and down like the Assyrian empire”.

Blockchain analyst Chainalysis have made the world a safer place by releasing a research report estimating which countries around the world benefited most from Bitcoin’s 2020 boom.

Surprisingly, the answer is not “none of them, as the whole planet suffered”; almost as surprisingly, the UK ranks as the fourth-highest country globally to benefit from Bitcoin gains in 2020. That’s “gains” as in increases in monetary value for investors; so far as I can tell there is no offsetting of the ecological toll of Bitcoin mining.

The UK sits 2nd in unrealised gains. That sounds like the story of my investing career.

2.42pm: Wall Street gets off to a mixed start

Wall Street has opened on a mixed note on Monday morning amid a lack of major news across global markets.

In the early minutes of trading, the Dow Jones Industrial Average was up 0.1% at 34,789 while the S&P 500 rose 0.02% to 4,230. The Nasdaq, meanwhile, was on the decline, falling 0.05% to 13,808.

Despite the uncertainty among most traders, companies favoured by Reddit’s ‘memestock’ community were seeing strong rises on Monday morning.

Cinema chain AMC Entertainment Holdings Inc (NYSE:AMC) surged 14.8% to US$55 in early deals, while GameStop Corp (NYSE:GME) jumped 4.4% to US$259.28 and BlackBerry Ltd (NYSE:BB) rose 3.3% to US$14.32.

Back in London, the FTSE 100 was holding onto its gains into late afternoon, rising 24 points to 7,093 at around 2.40pm.

1.50pm: FTSE 100 consolidates

Mining stocks continue to slow the Footsie’s progress after Chinese exports in May proved to be less exciting than hoped.

London’s index of heavyweight shares was up 25 points, nevertheless, at 7,094.

Joining commodity plays on the naughty step was Scottish Mortgage Investment Trust PLC (LON:SMT), which was down 0.8% at 1,217p as the tech bandwagon that the trust rode so successfully runs out of steam.

Reckitt has hardly moved after announcing a £2.2bn disposal of its infant formula and child nutrition (IFCN) business in China to Primavera Capital.

The company has booked a £2.5bn loss on the sale.

READ Reckitt Benckiser books £2.5bn loss on sale of China infant formula division

“Reckitt’s deal to sell its China baby formula business helps to draw a line under one of the biggest strategic mistakes in its history,” said Russ Mould, the investment director at AJ Bell.

“Reckitt will be eager to put this episode in its rear-view mirror and focus on addressing another thorn in its side, namely slow growth.

“It has well-known brands but that doesn’t guarantee sales. Consumers want a bargain, and they can get very similar products from supermarkets’ own-label brands at a cheaper price than Reckitt’s goods.

“That suggests Reckitt will have to spend heavily on marketing to keep its brands front of mind when consumers go shopping. The business will also have to be better at product innovation.

“Strong sales of its healthcare products during Covid were a welcome shot in the arm, but the business cannot be complacent as it seems highly likely that health and hygiene sales in the coming years won’t match those of 2020,” Mould said.

12.30pm: Previously state-owned companies take over the world 

It’s the march of the previously state-owned companies this morning with BT Group PLC (LON:BT.A) joining Royal Mail PLC (LON:RMG) in the Footsie’s upper echelons.

BT’s ascent has been enough to push the FTSE 100 a tad higher to 7,090, up 21 points on the day.

Royal Mail, up 3.2% at 610p, remains the best blue-chip performer but BT, up 2.1% at 180.75p, is not far behind.

Generally, however, traders are sitting on their hands, possibly because the policymakers of the Bank of China and the European Central Bank are set to hold policy-making meetings this week.

On the other hand, the grass is less green across the Channel.

“European stocks are easing back from all-time highs, with commodity stocks leading the declines. The tailwind from the weaker-than-expected non-farm payroll report has faded, and sentiment has taken a turn for the worse following downbeat Chinese trade data,” reported Sophie Griffiths at Oanda.

“Miners are trading down around 1%, tracing base metal prices lower after Chinese export data sparked concern. Last month, Chinese imports grew at the fastest clip in a decade, fuelled by surging commodity prices. Imports jumped 51.1% YoY in May, up from April’s 43.1% rise, but still fell short of expectations of a 51.5% rise.

“Exports surprised to the downside, unnerving investors. Exports grew 27.9% YoY, below the expected 32.1% and behind April’s 32.3% recorded. While global demand is recovering, exporters are dealing with higher raw material and freight costs in addition to a stronger yuan. The yuan trades at a three-year high versus the US dollar,” she added.

Across the Atlantic, the S&P 500 is set to open around three points lower at 4,227 and the Nasdaq 100 37 points weaker at 13,733 but the Dow Jones is tipped to add 38 points at 34,794.

As in the UK, the US market seems to be in a lull period with no major economic releases expected today and little in the way of heavyweight corporate news, unless Apple Corp’s (NASDAQ:AAP) Worldwide Developers’ Conference counts.

11.15pm: Live updates from the World Paint-Drying Championships

It’s back to the world paint-drying championships in London with the FTSE 100 seemingly stuck at around the 7,085 level.

It’s at 7,086 to be precise, up 16 points, with Royal Mail PLC (LON:RMG) leading the advance with a 3.2% rise to 609.8p.

The stock was welcomed back early to the FTSE 100 after RSA was taken over, since when it has justified its place, rising above the £6 level in just over three years.

READ: Royal Mail gets early promotion to FTSE 100

Among the mid-caps, IWG PLC (LON:IWG) slumped 13% to 318.2p after a profit warning.

The office space rental specialist said it had seen a strong recovery in some of its markets since its first-quarter trading update, including positive occupancy momentum in the US, the overall improvement in occupancy across the whole croup has been lower than previously anticipated as a result of the prolonged impact of COVID-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets.

9.50am: Average UK house price hits record level

Proceedings in the London Stock Market have been more exciting than yesterday’s final day of the England/New Zealand test match … but only just.

The FTSE 100 has crawled 15 points higher to 7,084 thanks largely to demand for housebuilders following the release of the Halifax House Price Index for June.

Annual house price inflation is now at its strongest level in nearly seven years, the Halifax reported.

Yeah, tell me about it, retorted a whole generation of frustrated wannabe house buyers.

The average UK property price is at a record high of £261,743.

“House prices reached another record high in May, with the average property adding more than £3,000 (+1.3%) to its value in the last month alone. A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5%, meaning the average UK home has increased in value by more than £22,000 over the past 12 months,” said Russell Galley, the managing director at the Halifax.

“Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday,” Galley added.

Yeah, tell me about it, retorted a whole generation of frustrated wannabe house buyers.

“All UK regions bar the North East saw an acceleration in year-on-year house price inflation last month. The strongest growth was once again recorded in Wales (up 11.9% over the past year), closely followed by the North West and Yorkshire & Humber, both of which posted double-digit annual growth. For Wales and the North West, these are the biggest percentage gains since April 2005, and for Yorkshire & Humber since June 2006,” Galley revealed.

“The South of England, traditionally the driving force of national house price performance, is for once lagging somewhat behind the rest of the country. This is especially the case in Greater London, where average prices are still 3.1% higher than a year ago but growing more slowly than the rest of the country,” he added.

Is this what is meant by levelling up?

Away from the housebuilders, AstraZeneca PLC (LON:AZN) drifted lower by 0.9% to 7,981p, after releasing the results of a head-to-head comparison of its Calquence treatment for leukaemia.

The ELEVATE-RR head-to-head trial in previously treated patients showed less cardiovascular toxicity and fewer discontinuations due to adverse events for Calquence versus ibrutinib, AstraZeneca said.

The market metaphorically shrugged its shoulders but another piece of news involving AstraZeneca had a galvanising effect on the share price of NetScientific PLC (LON:NSCI), the backer of biotech start-ups.

NetScientific’s shares leapt 21% to 90.5p after its ProAxsis subsidiary struck a licensing deal with AstraZeneca over the validation and global commercialisation of an assay associated with coronavirus vaccines.

8.45am: Footsie building a lead brick by brick

The start to the week in London has been every bit as dull as expected, with the housebuilders dragging the Footsie into credit.

The FTSE 100 was up 12 points (0.2%) at 7,081, led by Taylor Wimpey PLC (LON:BDEV), which is up 2.4$ at 733.6p.

In fact, the top three performers on the Footsie are all from the housebuilding sector; has the Chancellor of the Exchequer extended the stamp duty holiday deadline again?

(No.)

Offsetting the housebuilders are mining stocks, most of which are in retreat. Anglo American PLC (LON:AAL), down 1.8% at 3,197.5p, is retreating fastest after completing the demerger of its thermal coal operations in South Africa.

Reckitt Benckiser Group PLC (LON:RKT) edged up 0.3% to 6,508p after announcing the sale of its infant formula milk business in China for US$2.2bn.

UK supermarket giant Tesco PLC (LON:TSCO) was 0.6% firmer at 226.45p after it announced it would not extend its alliance with French supermarket giant Carrefour beyond the end of this year.

Proactive news headlines

NetScientific PLC‘s (LON:NSCI) ProAxsis subsidiary has struck a licensing deal with AstraZeneca PLC (LON:AZN) over the validation and global commercialisation of an assay associated with coronavirus vaccines.

Seeing Machines Limited (LON:SEE) hailed “additional momentum” in the US market for mandatory driver monitoring system (DMS) technology following the introduction of the 21st Century Smart Cars Act to the US Congress.

Mkango Resources Ltd (LON:MKA, TSX-V:MKA) and Grupa Azoty PULAWY have agreed to develop a rare earth separation plant in Poland, strengthen Europe’s security of supply for rare earths, used in electric vehicles, wind turbines and other green technology.

Imperial Corporate Capital PLC has concluded its first limited partnership offering after repaying all investors with interest.

Clipper Logistics PLC (LON:CLG) said it now expects its earnings for its 2022 and 2023 financial year’s to be “ahead of company-compiled consensus” by mid-single-digit percentages following what it said was a strong performance in its current year as well as new acquisitions and extensions of existing contracts.

Alien Metals Ltd (LON:UFO) said final results from the maiden drilling program on its Hancock iron ore project, part of the Hamersley iron ore project in Western Australia, confirmed four high-grade Direct Shipping Ore (DSO) mineralisation prospects.

One Media IP Group PLC (LON:OMIP) has acquired a percentage of the producer royalties to more than 100 tracks produced by Steve Levine, including music performed by Culture Club, Louise, 911 and the Honeyz.

Arecor Therapeutics PLC (LON:AREC) has signed an additional agreement with an existing client to develop a new ready-to-use (RTU) product formulation for a product that is currently administered intravenously.

AEX Gold Inc (AIM:AEXG)(TSXV:AEX) said a team of geologists and drilling engineers have arrived on site at its Nalunaq property in South Greenland.

Directa Plus PLC (LON:DCTA) has highlighted progress in its partnership with NexTech Batteries Inc after the latter formed an Italian subsidiary.

88 Energy Limited (LON:88E) has agreed to buy out its partner, the Alaska Peregrine Development Company, on Project Peregrine in Alaska. The decision will enable 88 Energy to press on with the exploration programme.

Great Western Mining Corp PLC (LON:GWMO) said it completed its first-phase drilling programme for gold and silver at the Olympic gold project in Mineral County, Nevada ahead of schedule and within budget. 

RedX Pharma PLC (LON:REDX) chief executive Lisa Anson has hailed “strong progress” with the company’s pipeline of drug candidates in the first half of its current year.

Silence Therapeutics PLC (AIM:SLN)(NASDAQ:SLN) announced that it will present data showing the potential for SLN124 to address a range of haematological diseases by targeting the liver-expressed gene TMPRSS6 during two poster sessions at the European Hematology Association (EHA) Virtual Congress to be held on June 9-17, 2021.

Sirius Real Estate (LON:SRE), the German business park specialist, increased its final dividend by 10% for the year to 31 March 2021 as assets and profits rose in spite of the restrictions imposed by the coronavirus.

Scancell Holdings PLC (LON:SCLP) notified that Vulpes Life Sciences Fund, a vehicle closely associated with non-executive director Martin Diggle, has purchased 400,000 company shares at an aggregate price of 19.25p apiece. Following the purchase, Vulpes has a total interest of almost 117mln shares, representing 14.4% of the total voting rights of the company.

Zephyr Energy PLC (LON:ZPHR) said it expects to receive substantial cash flows over the next twelve months from the Williston basin, South Dakota, while also targeting the first production from the Paradox Basin in Utah.

Tower Resources PLC (LON:TRP) said that its assets in Africa are seeing renewed interest with the price of Brent rising to more than US$70 per barrel again.

Destiny Pharma PLC (LON:DEST) welcomed the communique from the G7 health ministers’ meeting on 4 June that conveyed a strong message highlighting the global threat of the “silent pandemic” of antimicrobial resistance (AMR). 

Europa Metals Ltd (LON:EUZ) announced “excellent” initial assay results from a pre-feasibility study drilling programme at its Toral lead, zinc and silver project in Spain.

Westmount Energy Limited (LON:WTE) (OTCQB:WMELF) shares moved higher on Monday as the company highlighted an announcement from the Guyanese Maritime Administration Department that the Stena Carron drillship re-commenced exploration drilling operations at the Jabillo-1 wellsite on the Canje Block, offshore Guyana on June 5.

Landore Resources Limited (LON:LND) revealed results from a drilling programme at its BAM gold deposit at the Junior Lake Property in Ontario, Canada, including wide zones of ore-grade gold mineralisation within the gabbro ‘hanging wall’ unit, including 13.14 metres at 2.99 grams of gold per tonne.

DeepVerge (LON:DVRG) has conditionally raised £10mln through a placing and subscription at 30p. 

Nuformix PLC (LON:NFX) said it has received a notice of allowance for a US National Phase Patent Application No 17/051,592 entitled “Crystalline Tranilast Salts And Their Pharmaceutical Use”. Anne Brindley, chief executive, said the allowance notice means the patent will proceed to be issued and is an “important endorsement” of the company’s discoveries while also strengthening the patent estate for its lead asset, NXP002.

Metal Tiger PLC (LON:MTR, ASX:MTR), a natural resources investor, said it bought 3.0mln shares in Southern Gold Ltd (ASX:SAU) for about A$225,000 (£123,000), taking its stake in the South Korea-focused gold explorer to 19.1%.

Savannah Resources PLC (LON:SAV) was informed that David Archer, chief executive, acquired a total of 150,000 shares at a price of 3.7p each. This took his total beneficial interest to 40.16mln ordinary shares, representing 2.38% of the company’s issued share capital.

Panther Metals PLC (LON:PALM) said it has applied for two further exploration tenements, E39/2249 and E39/2250, as part of an expansion program at its Red Flag Nickel-Cobalt project in Western Australia.

Afarak Group PLC (LON:AFRK) will hold its annual general meeting on 29 June in Helsinki, Finland. Shareholders may participate only by voting in advance by way of proxy and asking questions in advance as it will not possible to attend the meeting in person. 

Advanced Material Development‘s graphene-based electromagnetic interference (EMI) shielding technology was featured in the lastest issue of Racecar Engineering magazine. AMD’s EMI Shielding solutions were mentioned in the setting of the “exceptionally harsh” conditions in contemporary Formula One cars, where many sources of EMI can otherwise decrease sensor accuracy and skew transmission and receipt of readings. 

Ceres Power Holdings PLC (LON:CWR) will host an online ‘teach in’ on its solid oxide electrolyser (SOEC) technology for analysts and investors at 3pm BST on 1 July, 2021. No new financial information will be disclosed at this event, which is being held on the InvestorMeetCompany platform.

Samarkand Group PLC (LON:SMK) will present an overview of the company and its current opportunities and strategy at the London South East, Aquis Stock Exchange Special webinar, which is taking place on 8 June 2021 at 6-8pm BST.

6.35am: Indecisive start expected as Yellen reignites interest rate debate

UK equities are set to make a hesitant start to the week after the latest Chinese trade data revealed export growth slowed more than expected.

Spread betting quotes point to the FTSE 100 edging a couple of points higher at the outset to 7,071 after US Treasury Secretary Janet Yellen said overnight she would not be averse to higher interest rates as they would signal the economy is on the mend.

Friday saw the release of the US jobs data for May and although the number of jobs additions fell a little short of expectations, the Dow Jones still rose 179 points to finish the week at 34,756 while the S&P 500 jumped 37 points to 4,230.

In Asia this morning, Japan’s Nikkei 225 is 103 points to the good at 29,044 but Hong Kong’s Hang Seng is down 223 points at 28,695 in the wake of the disappointing Chinese trade figures.

Exports in May were up 27.9% year-on-year (YOY), which was well shy of the 32.0% increase economists had expected.

“The main reason for the shortfall is that all export items related to semiconductor chips have slowed. Auto processing products and parts, the biggest export item, fell 4% YoY in terms of export value. This is most likely the result of the semiconductor chip shortage,” explained Iris Pang, the chief economist for Greater China at ING.

Imports were up 45.3% YOY, which Pang said was largely reflecting higher commodity prices as import volumes actually declined.

“This week’s highlights will be China Inflation data on Wednesday, and US Inflation data on Thursday, with an ECB rate decision thrown in for good measure,” reported Jeffrey Halley at OANDA.

“We actually receive a flood of inflation prints from around the world, but it’s the big three that really matter. It would take a massive upside surprise move the inflation arm wrestle in favour of the inflationistas. Given the stubbornness of the US yield curve to steepen, the risk, if anything, is that lower to on market prints see it flatten, which should be another boost for equities if we needed another one. The US Dollar would also suffer in this scenario,” he suggested.

In London today, the corporate cupboard is fairly bare, with prelims from Sirius Real Estate Ltd (LON:SRE) and interims from Redx Pharma PLC (LON:REDX) ostensibly the only trading updates scheduled.

Around the markets

  • Sterling: US$1.4145, down 0.11 cents
  • 10-year gilt: 0.795%
  • Gold: US$1,888.30 an ounce, down US$3.70
  • Brent crude: US$71.58 a barrel, down 31 cents
  • Bitcoin: US$36,254, up US$357

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Monday as China’s exports rose 27.9% in May as compared with a year earlier, lower than forecasts by analysts in a Reuters poll for a 32.1% year-on-year jump.

The Shanghai Composite in China slipped 0.07% and Hong Kong’s Hang Seng index fell 0.54%

In Japan, the Nikkei 225 rose 0.31% while South Korea’s Kospi gained 0.48%.

Shares in Australia dipped, with the S&P/ASX 200 trading 0.7% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

Okapi Resources Ltd (ASX:OKR) has started a drilling program at two priority targets within the Enmore Gold Project in north-eastern New South Wales.

Global Energy Ventures Ltd (ASX:GEV) (FRA:WS9) has started developing a pilot-scale compressed hydrogen (C-H2) cargo ship to capitalise on green hydrogen opportunities across Europe and the Asia Pacific.

Emyria Ltd (ASX:EMD) has revealed that clinical data from one of its personalised care plans for opioid users has been validated in a world-first data linkage project.

Kazia Therapeutics Ltd’s (ASX:KZA) (FRA:NV9M) (NASDAQ:KZIA) phase-II study of paxalisib in Primary CNS Lymphoma has been initiated at Dana-Farber Cancer Institute in Boston, Massachusetts, with the first patient enrolled to the study.

QMines Ltd (ASX:QML) (FRA:81V) is well placed to benefit from the expected uptick in copper demand over the next decade, driven by electric vehicle makers and green environmental policies – particularly in Europe.

Platina Resources Ltd (ASX:PGM) (OTCMKTS:PTNUF) (FRA:P4R) is moving towards the exploration phase at Xanadu Gold Project after executing binding purchase agreements and commencement of tenement transfers.

Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (OTCMKTS:TMRFF) (FRA:4W0) has kickstarted a drilling campaign at its Elizabeth Gold Project in southern British Columbia, Canada.

FYI Resources Ltd (ASX:FYI) (OTCMKTS:FYIRF) (FSE:SDL) has adopted an environmental, social and governance (ESG) framework in a bid to improve shareholder outcomes from its kaolin and high purity alumina (HPA) assets.

South Harz Potash Ltd (ASX:SHP) non-executive director Len Jubber has demonstrated his confidence in the company’s potash strategy by purchasing shares in an on-market transaction.

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