FTSE 100 off best levels but hospitality and travel shares recover ground

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  • FTSE 100 adds 15 points
  • UK unemployment falls to 4.7%
  • Just Eat completes US deal

9.53am: Market shrugs off Freedom Day delay

The delay to “Freedom Day” unveiled on Monday saw various consumer sectors sell off, but this morning there is something of a recovery.

British Airways owner International Consolidated Airlines PLC (LON:IAG) is up 1.93%, while EasyJet PLC (LON:EZJ) has climbed 1.76%.

Hotels group Whitbread PLC (LON:WTB) is 1.29% better while Wagamama owner Restaurant Group PLC (LON:RTN) has added 2.43%.

 AJ Bell investment director Russ Mould said: “The hospitality and travel stocks which had sold off ahead of the delay to ‘Freedom Day’ in the UK made partial recoveries as investors welcomed some form of clarity over the new 19 July unlocking date.

“The move had been widely trailed in advance and therefore did not come as a huge shock to the market.”

Retailers are also rising, with Primark owner Associated British Foods PLC (LON:ABF) up 3.75% and B&Q business Kingfisher PLC (LON:KGF) climbing 1.92%.

The FTSE 100 is off its best levels but still up 15.56 points or 0.22% at 7162.24. Meanwhile the FTSE 250 is less buoyant, just 0.08% higher at 22,763.

Inflationary worries could come to the fore again later. As the US Federal Reserve begins its two day meeting, the latest US retail sales and producer prices figures will give the central bank something to think about as it discusses signs of pricing pressures in the economy.

9.02am: Food delivery business seals US acquisition

Just Eat Takeaway.com NV (LON:JET) is one of the biggest risers in the UK blue chip index.

Do investors believe we will all go back to ordering takeaways now that “Freedom Day” when lockdown restrictions end has been delayed by a month?

More likely they are welcoming the news that the company has completed its £5.75bn takeover of US rival Grubhub, first announced around a year ago.

The move marks the company’s entry into the US food delivery market.

Jitse Groen, Just Eat chief executive, said: “I have always believed that the combination of Takeaway.com, Just Eat and Grubhub is a winning combination. The new company is the market leader in Europe, Canada and Australia, with very strong positions in the most important markets in the United States.”

Just Eat is 122p or 1.92% higher at 6483p.

Overall the FTSE 100 has added to its early gains and is now up 27.55 points or 0.38% at 7173.67.

8.39am: Leading shares move higher at open

The FTSE 100 got off to a subdued but positive start, buoyed by the progress made on Wall Street in a rather odd final hour.

Both the Nasdaq and S&P 500 ended in record territory after a surprise rally, though Dow stood more or less pat.

It was hard to understand the late rebound given the Fed’s Open Markets Committee is expected to discuss the staged curtailing of monetary support at a two-day meeting starting Tuesday.

Certainly, the bond markets were beginning to pre-empt this and a possible rise in US interest rates as prices eased and yields ticked higher on the benchmark 10-year US Treasury.

Here at home, the latest economic data revealed the unemployment rate had ticked down to 4.7% from 4.8% with payrolls increasing 200,000 between April and May, buoyed by demand for the hospitality sector.

The tech-heavy Nasdaq’s performance appeared to prompt buyers of Scottish Mortgage Trust (LON:SMT), one of Silicon Valley’s biggest investors, and Allianz Technology Trust (LON:ATT), which rose 1.4% and 2.2% respectively.

A mini commodities sell-off hit miners with Anglo American (LON:AAL), off 1.7%, and Antofagasta (LON:ANTO), the copper specialist, down 1.4%. The former was also the focus of a downgrade by RBC Capital.

Proactive news headlines

Keywords Studios PLC (LON:KWS) has said that following a leave of absence for health reasons in March, its chief executive Andrew Day has decided to bring forward a longer-term retirement plan and will be leaving his role as CEO and his position as a director with immediate effect.

Westminster Group PLC (LON:WSG) said it has been awarded a long-term contract to provide security services to five airports in the Democratic Republic of the Congo.

Panther Metals PLC (LON:PALM) announced the completion of data processing from airborne geophysical programmes on its wholly owned projects in Western Australia and the Northern Territory.

BATM Advanced Communications Limited (LON:BVC; TASE:BVC) has landed a US$4.1mln cybersecurity contract from a unnamed “long-standing government defence department customer”.

Frontier IP Group PLC (LON:FIPP) said its portfolio company, Pulsiv, has appointed Adam Westcott as its chief financial officer.

Eckoh PLC (LON:ECK) believes lasting changes to the working environment, particularly an increase in work-for-home patterns, will drive opportunities and demand for its secure payments and customer contactproducts.

Condor Gold PLC (LON:CNR)(TSE:COG) has commenced a 1,700 metre infill geotechnical drilling programme within the permitted La India open pit in Nicaragua. Two diamond drill rigs have been deployed. The drilling is likely to add significant new resources to the planned open pit. 

Eurasia Mining PLC (LON:EUA) is proceeding with its plans to create a series of joint venture companies with partner Rosgeo. On 26 March 2021, Eurasia signed a binding agreement to create a joint venture with Rosgeo in which Eurasia will own a 75% equity stake in nine platinum group metal and battery metals assets, four of which are post the Russian feasibility study stage, and which have state approved reserves. 

Kavango Resources PLC (LON:KAV) has identified an electro-magnetic anomaly in Target Area C in the Hukuntsi section of the  Kalahari Suture Zone project. Designated Target C1, the conductive anomaly is located 11km from Target A2, which was first announced in April last year.

Tavistock Investments PLC (LON:TAVI) returned to profit in its latest financial year as higher gross margins combined with lower overheads.

SigmaRoc PLC (LON:SRC), a buy-and-build construction materials group, signed a joint venture agreement with a major Calais-based high-grade limestone and construction materials company. 

Norman Broadbent PLC (LON:NBB) has appointed recruitment veteran Peter Searle as executive chairman. He will take up the role immediately after the recruitment and business group’s Annual General Meeting on June 25. 

Pelatro Plc (LON:PTRO) is aiming to raise at least £2.15mln of new capital through a share placing plus a share offer to retail investors on the PrimaryBid platform. Some 5.37mln new shares are being sold in a placing, priced at 40p per share. Shares sold via PrimaryBid will be priced on the same terms.

Teleradiology specialist Medica Group PLC (LON:MGP) has appointed a veteran of the technology sector as its new senior independent director and chair of the audit committee. Barbara Moorhouse will replace Steve Whittern at the company’s annual meeting on Wednesday (June 16).

6.50 am: FTSE 100 called higher after Wall Street rally 

The FTSE 100 is expected to open in positive territory after a record close for both Nasdaq and S&P 500.

In Asia, opinion was split with Japan and Australia performing well, while China’s main markets were led lower by flattening commodity prices.

The early action in London is likely to be subdued ahead of a two-day meeting of America’s Federal Open Markets Committee (FOMC), which, according to some reports, will assess whether it is time to scale back its US$120bn asset purchase scheme.

Inflation rather than stimulus has become the watchword in recent weeks as the world makes a rapid (possibly too rapid in the eyes of economists) recovery from the global pandemic.

Anticipating possible interest rate rises, the 10-year US Treasury yield nudged higher overnight.

“[There has been] some pre-FOMC position shuffling is occurring across asset classes at the moment,” said Jeffrey Halley, markets analyst at OANDA.

“Equities continue on their merry way higher, with the S&P 500 and Nasdaq tracing new record highs overnight.

“The Dow Jones is lagging, perhaps as its components could be perceived as more vulnerable to the rising inflation data being seen across the world. US yields moved higher across the curve overnight, notably in the 30-year tenor.

“Given the recent gains in bond prices, though, the price action looks more corrective and cautious, with US Retail Sales and PPI to come this evening before the main event tomorrow US time.”

Here at home, updates from Boohoo (LON:BOO), the online fashion giant, and plant hire firm Ashtead (LON:AHT), are top of the list of the companies reporting on Tuesday.

Around the markets

  • Pound: US$1.4113 (flat)
  • Bitcoin: US$40,301.64 (+2.5%)
  • Gold: US$1,866.20 (flat)
  • Brent crude: US$73.09 (+0.3%)

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Tuesday after the Nasdaq and S&P 500 both rose to all-time closing highs overnight on Wall Street.

The Shanghai Composite in China fell 0.90% and Hong Kong’s Hang Seng index dipped 0.93%

In Japan, the Nikkei 225 gained 0.95% while South Korea’s Kospi rose 0.14%.

Shares in Australia surged, with the S&P/ASX 200 trading 1.02% higher.

Proactive Australia news:

Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD) is advancing preparations for its Currajong 1 exploration well, the first well in its 2021 drilling campaign in the Canning Basin, with the Ensign 963 rig mobilised to site.

Meteoric Resources NL (ASX: MEI) (FRA:RNF) has upgraded the Juruena Project resource in Brazil to 1.9 million tonnes at 6.3 g/t for 387,000 ounces of gold, an increase of 50% over the previous resource.

MGC Pharmaceuticals Ltd’s (ASX:MXC) (LSE:MXC) (OTCMKTS:MGCLF) cannabis-derived epilepsy product CannEpil® has been added to the Primary Care Reimbursement Service (PCRS) in Ireland which makes it free of charge for patients prescribed the treatment.

Latitude Consolidated Ltd‘s (ASX:LCD) (FRA:1KX) first-pass drilling points to previously unidentified and untested northwest-southeast striking mineralisation at Suzie North exploration target within the Murchison Gold Project in WA.

Vango Mining Ltd (AXS:VAN) is well-positioned to further advance its 100%-owned Marymia Gold Project in Western Australia after raising A$6.1 million in an equity raising to sophisticated and professional investors.

TNT Mines Ltd’s (ASX:TIN) latest exploration program has uncovered a large gold anomaly around 1.2 kilometres south of the Eureka Pit in Western Australia.

Emyria Ltd (ASX:EMD) has filed additional patents supporting its EMD-004 cannabinoid-based drug development program targeting irritable bowel syndrome (IBS)

Fe Limited (ASX:FEL) has fired the first blast of ore and waste in the JWD Iron Ore Project pit as part of early development

Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) has signed a non-binding letter of intent (LOI) with Australian Missile Corporation (AMC) to support Australia’s Sovereign Guided Weapons Enterprise.

Kazia Therapeutics Ltd (ASX:KZA) (NASDAQ:KZIA) has teamed up with a medical college from Cornell University to launch a phase two clinical study investigating Kazia’s investigational new drug paxalisib in combination with ketogenesis.

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