FTSE 100 ends modestly lower as late rally curtailed; sterling still resillient
- FTSE 100 ends 5 points lower
- US stocks slip back after Friday's leap
- Sterling holds firm although Tory lead narrows
- Tesco leads UK blue-chip gainers
4.50pm: Subdued close for Footsie
The FTSE 100 index ended a touch lower as a late afternoon rally ran out of steam in tandem with a lacklustre showing on Wall Street and further gains by the pound as traders positioned for what is still currently expected to be a Conservation election victory on Friday.
At the close, the UK blue-chip index was down 5.76 points, or 0.1% at 7,233.90, have fallen back from a session peak of 7,255.73 while holding above the days low of 7,217.80.
In New York, around Londons close, the Dow Jones Industrials Average was down 62.62 points, or 0.2% at 27,952, with the broader S&P 500 index and the tech-laden Nasdaq Composite index both off 0.1%, giving back some of the strong gains made on Friday following upbeat US jobs data as traders look ahead to this weeks US rate decision.
Chris Beauchamp, chief market analyst at IG commented: “It has been a mixed day for most indices, with equities not entirely able to follow up on Fridays strong gains. Anyone looking at trying to get a decent pre-Christmas rally going will have to contend with trade war headlines, with attention now fixed on 15 December and the imposition of the next round of US tariffs on China.
“These have been widely-trailed, so their impact may be limited, but it would represent another escalation in a trade war that should have been winding down by now. Perhaps a Christmas truce is all we can hope for, but with the election getting ever closer Donald Trump must be keen to find a solution, and soon.”
He added: “As we head towards the Fed meeting on Wednesday the dollar appears to be regaining strength. A significant part of today has seen the greenback edge lower from Fridays highs, but already the dollar basket is beginning to recover. The Fed may well be back to making policy for a Goldilocks world, where job growth is strong but wage growth is not excessive. Whether it will be enough to avoid further criticism from the White House remains to be seen.”
3.30pm: Labour Party closes the gap a little on the Tories
London's index of leading shares has ventured into positive territory after sterling ebbed a little following publication of the latest General Election opinion poll.
An opinion poll by ICM for the Reuters news agency ahead of Thursdays election shows the Conservative Party's lead over the Labour Party narrowing to six points.
Support for the Conservatives stood at 42%, unchanged from ICMs previous poll a week ago. The Labour Party was up one point at 36%, Reuters reported.
2.50pm: The Footsie struggles back to ground zero
As expected, US markets opened lower after the handsome gains racked up last Friday in the wake of US jobs figures.
The Dow Jones industrial average was down 31 points (0.1%) at 27,984 and the S&P 500 was 4 points (0.1%) lighter at 3,142.
In the UK, the FTSE 100 was more or less back to Friday night's close as sterling saw its rise against the US dollar reined in slightly.
“Global equities remain hostage to the incessant swings in sentiment over the state of the US-China trade talks,” opined Rupert Thompson, the head of research at asset management firm Kingswood.
“The big question looming is whether sufficient progress will be made to allow the US to postpone the implementation of the tariffs scheduled for 15 December. We assume it will and that a limited deal will be agreed over coming weeks/months,” Thompson said.
The shares initially halved on news of the chief executive's departure, a dramatic scaling back of production expectations and the binning of the dividend; the shares are now down by two-thirds.
“While the sharp decline highlights the unexpected nature of this announcement, it is part of a wider trend of decline which has seen the stock loss 75% since the September peak,” said Joshua Mahony at IG Group.
“Issues found within both Enyenra and Jubilee oil and gas fields in Ghana have had a material impact upon expected output, with investors likely to worry over the 'faster than anticipated decline' in production,” Mahony added.
Tullow Oil #TLW
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Mkt Cap £2bn
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2.00pm: US benchmarks expected to give back a soupcon of Friday's gains
US markets look to start the trading day in as desultory fashion as their UK counterparts did.
Spread betting quotes suggest the 30-share Dow Jones will open at around 27,980, down 35 points from Friday's close; the S&P 500, meanwhile, is expected to open a bit below 3,143, down three points,
In the UK, the FTSE 100 continues its slow-motion journey, down 8 points (0.1%) at 7,232.
The shares surged 12.2% after chief executive Hamish Paton, chairman Stephan Wilcke and chair of the remuneration committee Clare Salmon offered their resignations en masse, with effective leaving dates to be confirmed.
12.30pm: All quiet on the Western front
The Footsie continues to do its impression of a stopped clock.
For the last hour or so the index has moved in a narrow band ranging from 7,230 to 7,235; it's currently at 7,230, down 10 10 points (0.1%) on the day.
Among the mid-caps, Senior Plc (LON:SNR) has responded to media speculation and confirmed it has been reviewing all strategic options for its Aerostructures business, which includes an early-stage assessment of a potential sale of the division.
The shares were up 6.2% at 189p following the news, making it the top riser on the FTSE 250.
11.10am: Pre-election stupor continues
London's leading shares remain in sleepwalk mode as the countdown to Thursday's General Election continues.
Miners, banks and retailers are going well, despite which the FTSE 100 is down 11 points (0.2%) at 7,229.
“The UK election on Thursday has been a long time coming and could finally break the Brexit impasse, one way or another. Polls haven't been particularly reliable in the past and I don't think anyone would be shocked to see another hung parliament, given how the last few years have gone, but traders appear to be feeling pretty confident about it,” surmised Craig Erlam at Oanda.
Commodity stocks are wanted despite a fall in the Chinese trade surplus announced over the weekend.
“The trade surplus fell to US$38.7bn, from a trivially revised US$42.5bn in October, below the consensus, US$44.5bn. The surplus declined to US$31.6bn, on our adjustment, from US$34.9bn,” reported Pantheon Macroeconomics.
“The drop in exports was in line with our expectations, with a minor downtick of 0.2% m/m [month-on-month], after the 0.5% increase in October but the import turnaround caught us off guard, with a rise of 1.7%, after Octobers 0.9% increase,” Pantheon admitted.
“November was not a tariff-increase month, whereas October was, so the m/m profile probably was flattered. Moreover, imports from the US jumped 4.2% in, after edging down 0.1% in October, as China attempts to woo the U.S. into a phase one deal. Its fair to say, though that imports from other countries were generally strong too,” the forecasting unit continued.
“Tech products were largely responsible for the rebound in imports excluding soybeans, metals and energy. At the same time, the overall story in volumes terms is weaker, with imports likely merely sneaking higher, while exports continued falling substantially,” it added.
The new offer is worth 740p per share; Just Eat shares trade at 783.8p, up 0.9%, so clearly the market is expecting someone to come back for seconds – or thirds.
10.15am: Sterling's strength weighs on blue-chips
With the Conservative Party apparently cruising to a workable parliamentary majority in election week, sterling has hardened, which is bad news for UK blue-chips.
Sterling was up a quarter of a cent against the US dollar but with so many big dollar earners among the FTSE 100, this was not a welcome development for the UK's index of big-cap shares, which was down 16 points (0.2%) at 7,223.
“The pound nudged ahead to US$1.3162 as the latest polls showed the Conservative Party extending its lead ahead of the General Election later this week,” reported Russ Mould at AJ Bell.
“The key question for investors is by how much UK shares could bounce on a Tory majority win. This scenario would remove various negative factors which have been weighing on markets such as Labour renationalising transport companies. Yet there is still Brexit to tackle which sustains some level of uncertainty among investors,” he added.
Life assurance and pension funds consolidator Phoenix Group Holdings PLC (LON:PHNX) was the worst-performing blue-chip, shedding 3.8% at 712.9p after analysts had a weekend to mull over Friday's announcement of the planned acquisition of ReAssure Group.
Scientists from the two organisations will work together to improve the productivity of synthesising single compounds and compound libraries based on unique, structured data harvested from the DeepMatter's DigitalGlassware technology.
8.45am: Weak start for Footsie
Shares in the supermarket giant were up 5.1% at 244.1p after it confirmed it had received enquiries from interested parties wondering whether the group's businesses in Thailand and Malaysia are up for sale.
Despite Tesco's surge, the Footsie was down 11 points at 7,228 despite what Connor Campbell at Spreadex called “some general positive chatter regarding a trade deal” between the US and China.
“Assistant Commerce Minister Ren Hongbin said that China wants to reach an agreement that satisfies all sides as soon as possible; however, given Sunday 15th December is set to see the US impose tariffs on another US$156 billion in Chinese goods, as soon as possible still might not be soon enough. Especially since, at present, there are no plans for face-to-face talks between Trump and Xi Jinping,” Campbell noted.
Tullow has slashed its output guidance for 2020 and has parted company with Paul McDade, its chief executive officer, and Angus McCoss, its exploration director.
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