FTSE 100 closes ahead but stocks muted amid continued trade spat worries

  • FTSE 100 close up
  • US indices muted
  • Saudi Aramco to eschew American and European markets with its flotation

5pm: Footsie closes ahead

FTSE 100 index closed its account in positive territory, just, on Monday as stocks were muted in the UK and on the other side of the Pond.

The UK's premier share index finished ahead by nearly five points at 7,307, having earlier been in the red.

The more UK-focused exchange, FTSE 250 fared better, adding around 36 points at 20,440.

On Wall Street, the Dow Jones Industrial Average added around 14 points at 28,019; the S&P 500 was around flat and the tech stock laden Nasdaq shed about a point.

David Madden, market analyst at London-based CMC Markets, noted that shares were falling due to reports that the mood in Beijing in relation to a deal was "pessimistic".

"It is believed that China are not happy that President Trump is not interested in rolling back on tariffs. The news hit stocks around Europe but it is a minor setback in the process," he said.

"The trade spat has been going on for over one year, and this is the latest hiccup. It is likely that this is a ploy by China, but for now dealers are keen to adopt a more risk-off approach."

3.40pm: FTSE dips toe in red

London's index of leading shares has dipped into the red, albeit only marginally.

The FTSE 100 index was down one point (0.0%) at 7,302.

There has been little news today to excite traders. The City can't even fantasise about being lavishly treated at an investor roadshow by Saudi Arabia's state-owned oil corporation, Aramco.

It was announced today that plans to market the shares outside the Middle East in the company's forthcoming flotation on Riyadh's Tadawil stock exchange have been scrapped.

The latest development is the sign of waning interest in the flotation, which may yet be the largest in the history of stock markets, with speculation that around US$25bn will be raised in new capital but that's a far cry below the US$100bn that was being banded about as a figure a year or two ago.

The offer shares are being offered at a price range of SAR 30 (30 Saudi riyals) to SAR 32 per share.

2.45pm: That Monday morning feeling … in the afternoon

Londons Monday morning feeling has extended into the afternoon, with leading shares little changed.

The FTSE 100 was up 5 points (0.1%), relinquishing earlier gains despite US indices defying expectations and opening on the front foot.

The Dow Jones rose 10 points to 28,014 and the S&P 500 surged 24 points to 3,120.

“Equity markets have seen little change. Investor focus remains firmly on the steady, but often conflicting, stream of sound-bites regarding the state of US-China trade negotiations. While progress remains slow, we still seem on course for a limited trade deal to be agreed eventually. Such a deal will be critical if the market rally over the last month is to be sustained,” suggested Rupert Thompson, the head of research at the asset manager, Kingswood.

“While US-China trade talks are centre-stage, a US decision on whether to impose tariffs on auto imports is also looming in coming days. This will not be unimportant, particularly for Europe. The general expectation is that Trump will delay the decision for a further six months, pending further negotiations with the EU,” he added.

As is usually the way, the hot corporate news has emanated from outside the FTSE 350.

IQE PLC (LON:IQE), which makes wafer products for semiconductor producers, lost a fifth of its value after reducing full-year revenue guidance for the second time this year.

Amur Minerals Corporation (LON:AMC), the nickel-copper sulphide mineral exploration and resource development company focused on the far east of Russia, shot up 44% to 2.9p as it closed off its convertible loan facilities at a cost of US$853,000.

2.15pm: Ennui continues and looks set to infect the US

US markets are expected to open lower while UK markets remain little changed.

Spread betting quotes suggest the Dow Jones will shed around 25 points to open at 27,979, while the S&P 500 will slip 4 points to 3,116.

In the UK, the FTSE 100 was up 7 points (0.1%) at 7,310.

12.35pm: FTSE 100 modestly higher as Brexit Party's support ebbs to the Tories

That sound you can hear is the noise traders make when they stop snoring … and then go back to sleep again.

The FTSE's rise has at least moved into double-figures; at 14 points (+0.2% to 7,316), it mirrors the size of the lead of the Conservative Party in the latest General Election opinion poll conducted by Survation.

The Tories' gain has been the Brexit Party's pain, with support for the latter slumping to 5%, barely ahead of the Green Party (3%), after party leader Nigel Farage sold out to the Conservatives with his pledge not to field any Brexit Party candidates where the incumbent MP is a Tory.

The collapse in support for the Brexit Party was despite respondents indicating Brexit was the key issue in the election, with 34% naming it as the top priority.

Publication of the poll has shorted up sterling, which is half a cent on the foreign exchange market at US$1.2952.

A strong sterling is generally regarded as a bad thing for Footsie stocks, owing to a large number of big-dollar earners among the index's constituents.

An opinion poll suggesting the Labour Party has little chance – at present – of forming the next government might be expected to give a boost to telecoms giant BT PLC (LON:BT.A), given the party announced last week that it would privatise BT's Openreach (broadband) arm should it be elected.

In actuality, BT was down 0.1% at 192.78p after Barclays Capital shifted to “underweight” from “equal weight” and slashed its target price to 160p from 240p.

Elsewhere among the blue-chips, banking titan HSBC Holdings PLC (LON:HSBA) was 0.2% firmer at 574.8p after US broker Jefferies upgraded the stock to 'buy' from 'hold'.

11.00am: Sloth-like progress for blue-chips

It has been a stultifying start for London's leading equities, which are little changed on balance.

The FTSE 100 was up 7 points (0.1%) at 7,310 while the mid-cap FTSE 250 was a bit more lively, rising 80 points (0.4%) to 20,485, thanks in part to a warm response to the full-year results from Diploma PLC (LON:DPLM).

The fluid seals and lab testing equipment provider saw its shares surge 3.2% to 1,756p after it revealed a 15% year-on-year increase in pre-tax profit to £83.5mln while operating margins improved by three-tenths of a percentage point to 17.8%.

IQE PLC (LON:IQE), the provider of wafer products to the semiconductor industry, made the short-sellers happy with a trading update that lowered full-year revenue guidance to £136 – £142mln from £140 – £160mln previously.

Around 8.7% of the company's shares have been lent to speculators who have sold the shares in the hope of buying them back (and then giving them back to the lender) cheaper at a later date, and they appear to have got their wish as the shares were off 19% at 53.4p.

Shorted IQE on the bell at 56.5. Warns on FY19, expects rev ~7% lower than prev guidance. Guides moderate growth in 2020. F/C was rev £149m then £189m for FY20 so huge miss in FY20.
I think VCSEL wafers becoming commoditised.$IQE.L

— MrContrarian (@MrContrarian) November 18, 2019

9.30am: Sterling's strength weighs on blue-chips

The strength of sterling has put a crimp in the Footsie's progress this morning.

London's index of leading shares, which normally reacts negatively to a strong exchange rate, eked out an 8 point (0.1%) gain at 7,310 in the first hour of trading.

Forex traders are driving up the value of sterling – the pound was more than half a cent better at US$1.2956 – following the latest opinion poll results, which showed the Conservative Party with a 14 point lead over the Labour Party.

The size of the lead diminishes the prospect of there being a hung parliament after the General Election on 12 December. On the other hand, at the same stage of the campaign in the previous General Election, the Tories were 19 points ahead of Labour and they only managed to form a government with the assistance of the DUP.

“Reading a Conservative majority as the best outcome thanks to the relative clarity of where it leaves Brexit – alongside the general right-wing leanings of the market – cable climbed 0.4%, opening just shy of $1.295 for the first time in nearly a month. Against the euro, meanwhile, a 0.3% increase pushed sterling past €1.1706, a level last seen at the start of May,” reported Connor Campbell of Spreadex.

Financial stocks were doing more than their share of the heavy lifting in terms of getting the FTSE 100 into positive territory; asset managers St James's Place (LON:STJ) and M&G PLC (LON:MNG) were 2.3% and 1.9% better respectively, while gains in excess of 2% were seen on insurer Legal & General Group PLC (LON:LGEN) and Hargreaves Lansdown PLC (LON:HL.), as markets reacted positively to a surprise cut in interest rates announced by China's central bank.

One financial stock not having a good day was insurance giant Aviva PLC (LON:AV.), which was the Footsie's biggest faller after it responded to media speculation about the future of its Asian businesses.

The insurance group's shares fell 3.4% to 419.7p after it confirmed it would hold on to the businesses for the time being.

$AV. Aviva decides against sale of Singapore and Chinese businesses via @proactive_UK @avivaplc #AV. #brighterir #AndrewScottTV

— Proactive (@proactive_UK) November 18, 2019

8.45am: FTSE 100 makes a subdued start; retailers buoyed by business rates pledge

The FTSE 100 got off to a marginally better than expected start to the trading week, advancing 10 points to 7,312.64.

The positivity over trade talks that lifted Asias main stock markets was dampened somewhat when China decided to lower borrowing costs – a tacit admission US sanctions are hurting.

Turning to the London market, the retailers were in demand following Boris Johnsons promise of a review of business rates, which, pending his election as PM, could ease some pressure on high street operators.

Dixons Carphone (LON:DC.) led the way with a 3.2% rise, followed by Marks & Spencer (LON:MKS), up 2.2%, and Next (LON:NXT), ahead 1.5%.

The blue-chip indexs biggest faller was silver miner Fresnillo (LON:FRES), off 1.6% after the prices of precious metals fell.

Among the small-caps, Touchstone Exploration (LON:TXP) was an early 14% riser after the groups Trinidad gas well produced at a faster rate than expected.

On the downside, pawnbroker H&T was off 21% after it said it was scrapping its short-term, high-cost credit products.

Proactive headlines

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Feedback PLC (LON:FDBK), the specialist medical imaging technology company, said the first Bleepa medical communications platform pilot study has been initiated with an NHS Trust.

Genedrive PLCs (LON:GDR) test for recognising the risk of antibiotic-induced hearing loss in infants has obtained a European standard CE marking.

Open Orphan Plc (LON:ORPH) said its Venn Life Sciences unit has won a contract for a first-in-human pharmacology trial.

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Pawnbroker H&T GROUP PLC (LON:HAT) has ceased all high-cost short term credit (HCSTC) loans pending a review of its creditworthiness assessments and lending processes.

FutureGov, part of digital transformation services group The Panoply Holdings Plc (LON:TPX), was crowned winner of the 'Best Public Sector IT Project' for its work with three London local councils.

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