Britain

FTSE 100 closes in red as trade fears rear up again; Wall Street closed for Thanksgiving

5.15pm: FTSE 100 closes in red

FTSE 100 index closed in the red on Thursday as stocks had no cue from Wall Street, which is closed for Thanksgiving.

Also weighing on sentiment is news that President Trump has signed the Hong Kong bill, essentially backing the rights of protestors in the region, leading to trade tensions between the US and China ramping up a notch.

The FTSE 100 closed down around 13 points at 7,416. The FTSE 250 index, meanwhile, a more UK-focused gauge, fared better, adding 69 points to finish at 21,023.

"It is always hard to draw any real conclusions about risk appetite on such days, but oil prices have drifted lower, a useful proxy for how markets have viewed the signing of the Hong Kong bill in the US,” said Chris Beauchamp, chief market analyst at IG Index.

"But the speed with which everyone has rushed to declare the event as a mortal risk to trade talks should give investors pause for thought – China may be willing to let the move slide, if it remains purely symbolic, and it is not the obvious crises that turn into flashpoints. Only time will tell," he added.

3.15pm: Virgin leads mid-caps to new highs

The Footsie is continuing to fight its way back towards parity for the day, now down just over 13 points at 7,417.

Earlier struggles were in part because of a stronger pound today, with sterling hitting a six-month high against the euro to top 1.1763, but is now flattened off. Versus the dollar, the pound is up 0.1% at 1.2903.

Meanwhile, after hitting a 15-month high earlier in the week, the FTSE 250 crawled into the green early in the morning and quietly caterpillared sideways for most of the day to extend its gains, up 0.2% at 20,998.52.

The more domestically focused index is led on the day by Virgin Money UK PLC (LON:VMUK) despite its full-year results being littered with seemingly bad news, including ditching the dividend.

An unprecedented surge in payment protection insurance (PPI) requests in August plus what the bank euphemistically called “legacy conduct” provisions ensured the company remained in the red with a pre-tax loss of £232mln, but the shares rocketed 22% to 174.4p.

Analysts at UBS said the new financial guidance confirmed management were executing their promised strategy and net interest margin was rising.

“Expectations were pitched fairly low heading into todays announcement so the companys solid if unspectacular performance across several metrics has been treated with a sigh of relief," said Russ Mould at AJ Bell.

1.10pm:

The FTSE 100 is clawing back early losses but taking its time about it.

The glacial recovery of the Footsie, down 27 points (0.4%) at 7,404 – about 20 points above its low point for the day, has been helped a bit by broker comment on the property sector.

Land Securities PLC (LON:LAND), up 1.4% at 961.2p, has been upgraded to 'overweight' from 'equal weight' by Morgan Stanley.

The US investment bank made the same move with British Land PLC (LON:BLND), sparking a 0.9% rise in the share price to 579.4p.

Top of the blue chips today is Ocado Group PLC (LON:OCDO), up 2% to 1,188.25p after it moved to add new, more nimble delivery depots to ward off competition from US startup Takeoff Technologies. (Read more about Ocado's mini-warehouse here.)

Talking of the US, if spread betting quotes are to be believed, had Wall Street been open today, the benchmarks would have gone with the flow of stocks markets globally today and retreated from their recent highs.

11.30am: UK economic sentiment improved in November after Brexit withdrawal agreement

The European Commission's Economic Sentiment Indicator (ESI) for the UK rose to 90.9 in November, from 89.8 in October.

Samuel Tombs, who covers the UK at Pantheon Macroeconomics, said the November reading was indicative of confidence recovering.

“The emergence of a new EU Withdrawal Agreement that could pass through the House of Commons appears to have lifted sentiment modestly across the economy,” he observed.

“Note that the October EC survey was conducted almost solely before the EU Council meeting on October 17/18, when Mr Johnson got his deal,” he added.

“The sentiment indicators for the services and retail sectors picked up in November to -17 and -14, respectively, from -21 and -22 in October. Sentiment among manufacturers also improved, albeit by less than one-point to -17. These confidence levels still are well below their long-run averages and are consistent with sluggish year-over-year growth in GDP of only just above 1.0% in Q4, but the direction of travel is important,” Tombs stressed.

The FTSE 100 was down 28 points (0.4%) at 7,402.

10.30am: Sterling weighs down the Footsie

The FTSE 100 and FTSE 250 have gone their separate ways this morning, with the former on the down-path after a rally by sterling.

The FTSE 100 was down 41 points (0.6%) at 7,388 while the mid-cap FTSE 250 was up 14 points (0.1%) at 20,969.

“European stock markets are in the red today as US-China trade tensions have ticked up a little on the back of President Trump signing the Hong Kong bill – which essentially supports the rights of the protestors in the region,” reported CMC's David Madden.

“Beijing have accused Washington DC of sinister intentions as they view it as the US sticking their nose into internal affairs. This is a new dimension to the US-China relationship, and it has the potential to derail the trade talks. Traders are fearful that China will lash-out at the US, which is why stocks are lower this morning,” he added.

Adding to tensions in the area, North Korea has reportedly launched two ballistic missiles into the sea between it and Japan.

On the home (or homes) front, the Nationwide House Price Index for November rose 0.5% on a seasonally adjusted basis from October, after falling 0.2% the previous month.

The index was up 0.8% year-on-year, the largest increase since April.

“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty. To date, the slowdown has largely centred on business investment, while household spending has been more resilient,” said Robert Gardner, Nationwide's chief economist.

Howard Archer, the chief economic advisor to the EY ITEM Club, noted that the monthly rise was bigger than expected.

“The Nationwide measure has tended to be at the low end of house prices. Latest data from the Halifax put annual house price inflation at 0.9% in October while the Land Registry/ONS put it at 1.3% in September,” Archer said.

“It should be borne in mind that there have been appreciable differences in house price performances across the regions with the overall national performance dragged down by London and the South East. Indeed, a regional breakdown of the third quarter data by the Nationwide show that at the top end there were year-on-year gains in Northern Ireland (3.4%), Wales (2.9%), North West (2.5%), West Midlands (2.1%) and the North (2.0%).

#UK Economic Data: Nationwide #House Price Index, Nov: #HPI ↑+0.5% m/m, +0.8% y/y. Average #Price £215.7K ↑+£0.36K m/m, ↑+£1.69K y/y.

— Zoom Stocks (@ZoomStocks) November 28, 2019

“In contrast, prices fell year-on-year in the third quarter in London (1.7%), Outer Metropolitan (1.5%) and the Outer South East (0.6%).

“The overall increase for the UK over the third quarter was 0.3%,” Archer said.

The response from housebuilding stocks was mild and mixed; Barratt Developments PLC (LON:BDEV) and Taylor Wimpey PLC (LON:TW.) ebbed a bit while Berkeley Group Holdings PLC (LON:BKG) and Persimmon PLC (LON:PSN) rose a little.

8.35am: Little to give thanks for

The FTSE 100 continued to flip-flop on Thursday – flopping 36 points lower to 7,393.85 early on.

The mood swung from one of optimism over trade to pessimism after President Trump signed a human rights bill effectively backing the pro-democracy protestors in Hong Kong.

Jasper Lawler, analyst at CMC Markets, was sanguine about the potentially inflammatory move by the White House.

“The thinking goes that the bill is mostly symbolic and doesnt affect the phase-one trade deal,” he explained.

“The Hong Kong bill only becomes a reason to take profits from this years equity bull market if China over-eggs its response. We think there is a low chance of that happening. China is shaking its first with one hand while the other is outstretched for a handshake.”

Closer to home, sterling nudged higher after the only poll to correctly predict the current hung parliament gave the Conservatives a clear lead in the election race.

With a large majority on December 13, Boris Johnson would then be able to comfortably push through his Brexit deal – or so the theory goes.

The builders have turned out to be a reliable proxy for whether the market expects the UKs exit from the EU to be disruptive to the UK economy.

The early 1.3% advance of Taylor Wimpey (LON:TW.) suggests the acute financial pain is dissipating from the process.

Leading the fallers list and helping knock around 8 points from the blue-chip index were Johnson Matthey (LON:JMAT) and Vodafone (LON:VOD), which began trading without entitlement to a dividend.

The days big move was provided by small-cap drug developer ImmuPharma (LON:IMM), which doubled in value after it announced a licensing deal with a US speciality drugs firm to develop is flagship treatment for lupus.

Proactive news headlines:

Immupharma PLC (LON:IMM) has landed a licensing deal worth almost US$100mln for Lupuzor, its treatment for the autoimmune disease lupus. US speciality drugs group Avion Pharmaceuticals will fund the US$25mln costs of a reformatted phase III clinical trial next year following agreement of the trial design with the US Food & Drug Administration. The UK group will receive up to US$70mln of milestone payments, with US$5mln due on regulatory approval of the product and a further US$65mln dependent on sales targets.

Oracle Power PLC (LON:ORCP) saw its shares soar on Thursday following news that influential Emirati Sheikh Ahmed Bin Dalmook Al Maktoum will invest £500,000 into the company. The AIM-listed energy group said following the investment Al Maktoum will hold an 11.5% stake in the company, with warrants that will allow him to expand this stake to 22.3%. Al Maktoums investment forms part of a larger placing to raise £700,000 by issuing shares at 0.25p each, an 8.7% premium to Oracles closing price on Wednesday.

OPG Power Ventures PLC (LON:OPG) told investors it has successfully continued its strategy of deleveraging whilst focusing on its profitable long-life assets in Channai. The India-based power generator, in results for six months ended 30 September, reported an 8.9% increase in profit from continuing operations to £7.4mln, while earnings per share rose by 23.1% to 1.97p. First-half revenue amounted to £78.4mln, compared to £77.9mln in the same period of last year, and, pre-tax profit was reported at £9.7mln for the period.

Faron Pharmaceuticals Ltd. (LON:FARN) said regulators have given the company the green light to expand a phase I/II clinical trial of its cancer immunotherapy to the US. It follows the Food & Drug Administrations approval of Clevegen as an investigational new drug. American patients will now be recruited to Farons MATINS study, which will assess the tolerability, safety and potential efficacy of the new treatment in people with certain types of solid tumour.

W Resources PLC (LON:WRES) has kicked off tungsten and tin production at its La Parrilla mine in Spain, with its boss saying he is “pleased with the initial concentrate grades”. In an update on Thursday, the tungsten, tin and gold miner said that its new concentrator has been completed and is producing tungsten grades to “shipment criteria levels”, which are expected to improve as the plant reaches steady-state production.

Bahamas Petroleum Company (LON:BPC) has said it is on-track to start drilling on-schedule as it updated on two key developments in country. In a stock market statement, the exploration company highlighted that a new Bahamian-domiciled mutual fund is to be established to exclusively hold shares in Bahamas Petroleum. Separately, BPC also updated on the environmental authorisation process which is said to be “proceeding to schedule”, consistent with the drilling timetable.

discoverIE Group PLC (LON:DSCV) has delivered a 22% rise in first-half profits as its target markets continued to grow their share of its revenue stream. For the six months ended 30 September, the customised electronics maker delivered an underlying operating profit of £17.7mln, 22% higher than the prior year, while revenues climbed 10% to £232mln.

Vast Resources PLC (LON:VAST) has re-jigged the ownership structure of its Chiadzwa diamond concession in Zimbabwe. Consultancy partner Botswana Diamonds PLC (LON:BOD) will now have a 2.5% stake and Vast 97.5% in a special purpose vehicle (SPV) that will house the assets in Maranges diamond fields. As part of this new agreement, BOD will supply consultancy services free of charge for five years while Vast will provide all capital requirements up to US$10mln.

Tharisa PLC (LON:THS) posted sharply lower profits in the year just ended as lower production and weaker chrome prices hit revenues. Production of both platinum metals and chrome dipped due to disruption at the Tharisa mine caused by investments in the pit and fleet. PGM production was 139,000oz, down 8%, while chrome output was 11% below the previous year at 1.29Mt.

Providence Resources PLC (LON:PVR) has confirmed it will now hold a larger stake in the Avalon exploration prospect, offshore Ireland. Following Total SAs decision to exit Frontier Exploration Licence (FEL) 2/19, which hosts Avalon, the Irish authorities have now rubberstamped the reassignment of the French oil majors project equity to the remaining partners, Providence and Sosina. Providence will now retain an 80% interest in FEL 2/19 and it will now be the operator of the project.

Primary Health Properties PLC (LON:PHP), a leading investor in modern primary healthcare facilities, has announced that, following the successful merger and integration of MedicX Fund, its deputy chairman and senior independent director Helen Mahy has informed the board that she does not intend to stand for re-election at the company's Annual General Meeting scheduled for April 2020 and will accordingly retire from the board at that time. The group said its Nomination Committee, therefore, will shortly commence a process to identify a suitable replacement for Mahy as an independent non-executive director and the company will make a further announcement in due course.

Anglo Pacific Group PLC (LON: APF) (TSX:APY) has announced the appointment of RBC Capital Markets as the company's joint corporate broker with immediate effect. It added that RBC will work alongside the Company's Joint Corporate Brokers, Berenberg and Peel Hunt LLP.

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