FTSE 100 Closes Higher; Miners Lag And Brexit Wranglings Continue

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FTSE 100 closed higher as Brexit wranglings continued, and the Irish border issue continues to be a sticking point.

The UK index of blue chip shares finished more than 38 points higher at 7,338.

Meanwhile, the mid-cap index - the FTS2 250 -  was also higher, up over 81 points to stand at 19,935.

It has looked like a deal involving that no part of the island of Ireland would be taken out of the single market and customs union.

But the DUP (on which the May government relies) leader Arlene Foster later  said Northern Ireland must brexit in the same way as the rest of the UK.

In the currency markets, things were mixed. Against the Euro, the pound gained 0.28%, while, against the US dollar, it shed 0.14%.

In stocks, cruise ship operator Carnival plc (LON:CCN) was top dog on Footsie, sailing 3.51% higher in London to 4,931p.

Miners were down in the dumps today. Top loser was silver giant  Fresnillo plc (LON:FRES), which was down over 2.6% to stand at 1,273p.

 

FTSE 100 edges higher..

The top-shares have edged higher in the afternoon session, though London’s gains pale in comparison to those on Wall Street.

The FTSE 100 index was up 39 points (0.5%) at 7,340, while the mid-cap FTSE 250 was up 98 (0.5%) at 19,952.

The top riser in London remained TyraTech Inc (LON:TYR), after its deal to sell its Vamousse head-lice treatment business to Alliance Pharma plc (LON:APH).

The shares were up 82%, topping the 71% rise on Physiomics Plc (LON:PYC), the Oxford-based biotech firm.

There has been no new news flow from the latter today, but investors are still piling in after last week’s massive rise on the back of news that it has entered into a master services agreement with drugs giant Merck.

Investors also carried on piling into recovery stock TechFinanciaks Inc (LON:TECH), the trading platform solutions provider.

The shares have more than doubled in the last week and were up 42% today. Last week the Israeli technology firm announced it was selling two subsidiaries for US$400,000, but possibly of more interest to speculators was what might be called the “blockchain effect”.

The company pledged to continue to apply its technology and knowledge to support the innovative CEDEX project that intends to use blockchain technology to revolutionise the diamond-trading market.

2.45pm: Wall Street quick out the traps

US markets opened strongly, as expected, after President Trump’s tax bill got the thumbs-up from the US Senate on Saturday.

The Dow Jones Average, which took a dive on Friday after former national security adviser Michael Flynn promised to cooperate fully with the special counsel's investigation into Russia's alleged involvement in last year's presidential election, soared 250 points in early deals to 24,479.

The broader-based S&P 500 was up 23 at 2,665.

Back in the UK, the FTSE 100 was up 37 at 7,338.

2.00pm:  FTSE 100 surrenders some gains

More than a fifth of the FTSE 100 constituents are now in the red, trimming the index’s gain to 32 points.

Despite expectations of the Dow storming 200 or so points higher when Wall Street opens in an hour’s time, the top-share index has ebbed to 7,332, 38 points below its high for the day.

Pay-TV and internet service provider Sky PLC (LON:SKY) was one of the best performing blue-chips, up 3.1%, on hopes that the Walt Disney Co could acquire Fox’s 39% stake in Sky, triggering a mandatory bid.

Reports suggest 21st Century Fox has resumed talks to sell bits of its business to Disney.

Among the mid-caps, Premier oil PLC (LON:PMO) rose 2.3% to 74.66p in the wake of a research report from Canaccord Genuity.

The broker has upgraded Premier to ‘buy’ from ‘hold’.

Tiddler Windar Photonics PLC (LON:WPHO), which provides systems that boost the efficiency of wind turbines, hauled what it called da “milestone contract win”.

The shares flew 15% higher to 99.5p after the company said it has received a follow-on order from one of its Chinese partners for 300 WindEye LiDAR systems for the Chinese market.

Windar’s directors believe more orders could follow in 2018.

Noon: Sterling's rally takes some of the gloss off Footsie

Some of the gloss has come off the FTSE 100, reflecting a recovery in the value of sterling on foreign exchange markets.

Coming up to noon, the Footsie was up 34 at 7,335, some 36 points behind its intra-day high.

“The pound reversed its early losses against the dollar to climb 0.3%, while taking 0.6% off the euro,” noted Connor Campbell at Spreadex.

Brexit: 50-50 chance of breakthrough says leading MEP - The UK and EU are trying to resolve differences in Brussels so that talks can move to future trade. https://t.co/m8KEhi21wA

— John McLaren (@dodgyscouse) December 4, 2017

“That’s because the sterling appeared to receive a double dose of good news this Monday. First November’s construction PMI followed in the footsteps of its manufacturing peer, handily beating expectations at 53.1. Then there were reports that the UK had conceded there will be no ‘regulatory divergence’ for Ireland on the single market and customs union, potentially unclogging one of the major blockages preventing the unlocking of trade talks,” he added.

Howard Archer, whose typing has improved immeasurably since he became chief economic advisor to the EY ITEM Club, was not entirely won over by the Construction PMI data.

“Despite showing activity at a five-month high in November, the Purchasing Managers' Index (PMI) still points to the construction sector finding life very challenging in the fourth quarter after output contracted in both the third (by 0.9% q/q) and second (by 0.5% q/q) quarters. The latest hard data shows that construction output slumped 1.6% month-on-month in September and was up just 1.1% year-on-year,” Dr Archer noted.

“The struggles of the construction sector in recent months have been the result of heightened economic, political and Brexit uncertainties, fuelling corporate caution over committing to new projects. Persistent lacklustre economic activity has also weighed down on construction activity,” Dr Archer continued, adding that November’s improvement in activity was entirely due to house building activity picking up appreciably.

Talking of house building, the sector’s big guns were up in the wake of the Construction PMI release: Persimmon PLC (LON:PSN) rose 1.0%; Taylor Wimpey PLC (LON:TW. rose 0.8%; and Barratt Developments PLC (LON:BDEV) advanced 0.7%. In contrast, the market as a whole was up 0.4%.

11.00am: Footsie trades sideways despite monster advance expected on Wall Street

The FTSE 100 has traded sideways for about the last two hours, waiting for US markets to open.

The top-share index was up 58 at 7,359 after the US Senate on Saturday morning gave the thumbs-up to President Trump’s tax coder overhaul.

Spread betting quotes indicate the S&P 500 will open about 17 points up from Friday’s close of 6,242.

Just nine FTSE 100 stocks were in the red at 11.00am, including precious metal miners Randgold Resources Limited (LON:RRS) and Fresnillo PLC (LON:FRES).

The former was down 0.5% at 6,850p, despite RBC Capital Markets upgrading the stock to ‘sector perform’ from ‘under-perform’ and lifting its target price to 6,600p from 5,800p, while the latter was down 1.8% at 1,285p.

It seems no one wants to seek the haven of gold when stock markets are on the rise.

In contrast, miners focussing on less glittery metals were wanted, particularly the giants of the sector BHP Billiton plc (LON:BLT), up 1.9%, and Rio Tinto PLC (LON:RIO), up 1.7%. 

10.00am: Flying start soon gives way to consolidation

UK stocks moved into consolidation mode after a strong start, triggered by the US Senate passing a bill that will overhaul the tax code.

The FTSE 100 was up 54 at 7,355, with US-focused operators such as tool-hire firm Ashtead Group PLC (LON:AHT) and cruises operator Carnival PLC (LON:CCL) leading the way – both up 3.2%.

Clothing sellers Next Plc (LON:NXT) and Marks & Spencer Group PLC (LON:MKS) were looking threadbare early doors after comment from Goldman Sachs; the former was down 1.7% and the latter down 1.2%.

Next remains a ‘sell”, with Goldman’s analysis of the impact of ‘click & collect’ sales indicating that the UK has around 15% too much retail space.

The US investment bank also rates M&S a ‘sell’ and has slashed its price target from 330p to 275p; the shares currently trade at around 306p.

Household goods maker Reckitt Benckiser Group PLC (LON:RB.) was also under the weather after broker action, shedding 50p at 6,328p after AlphaValue abandoned its ‘buy’ rating and moved to ‘add’.

In macroeconomic news, the IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) for November rose to 53.1 (seasonally adjusted) from 50.8 in October.

A value of 50 signifies the switch from contraction to expansion in activity.

The latest reading was the highest for five months. 

8.30: FTSE 100 off to a fast start after US Senate narrowly passes Trump's tax giveaway bill

The FTSE 100 got off to a decent start ahead of Brexit negotiations in Brussels with the index of blue-chip shares posting a 56-point gain to advance to 7,356.44.

The move was ascribed to Donald Trump’s tax victory rather the mooted deal that would pave the way to the UK’s departure from the EU.

The President’s bill was signed off by the Senate over the weekend and could have direct and positive ramifications for dollar earners listed here in the UK.

That might explain why plant hire firm Ashtead (LON:AHT), jet engine maker Rolls Royce (LON:RR.) and defence contractor BAE Systems (LON:BA.) were in demand early on. Between them then posted gains of between 1.8-2.3%.

Precious metals groups Fresnillo (LON:FRES) and Randgold Resources (LON:RRS) were hit by the fall in the gold price overnight. Traders ignored an upgrade to ‘market perform’ by RBC Capital Markets.

The pocket rocket stock of the day was TyraTech, which has offloaded its head lice product and is returning the cash buying stock back at 3p a share, or more than double Friday’s close. The shares shot up 85% early on.

Proactive news headlines:

Alliance Pharma plc (LON:APH) is acquiring a pesticide-free head lice product line for up to US$17.5mln – giving the growing healthcare company a third international brand. It is paying an initial US$13mln for Vamousse, which it is acquiring from TyraTech PLC (LON:TYR) (LON:TYRU) , the AIM-listed developer of the range. This will be followed by a deferred pay-out of as much as US$4.5mln based on sales targets.

Galileo Resources PLC (LON:GLR) is shortly to commence drilling at the Star zinc project in Zambia, held in joint venture with BMR Resources. The company expects the results to go towards a new resource update that will be prepared by consultants CSA Global.

Highlands Natural Resources Plc (LON:HNR)  has seen oil and gas production from the Powell and Wildhorse wells at East Denver rise further. Oil and gas production from a month of flow-back testing has now stabilised at 1,771 barrels daily compared to 1,333 barrels reported last week.

BATM Advanced Communications Limited (LON:BVC) has entered into an agreement to sell a wholly-owned building situated at Yokneam, Israel for roughly US$9.7mln, some US$5.9mln above its book value.

Silence Therapeutics PLC has sold a 30% stake in fellow RNA interference specialist Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) at a £2.9mln profit. In January it paid £9.2mln for 6.83mln Arrowhead shares. In a recent deal it offloaded 2.036mln for £5.6mln, booking the gain in the process.

Ergomed Plc (LON:ERGO) said its pharmacovigilance subsidiary PrimeVigilance will be organising and presenting at the International Society of Pharmacovigilance's Intelligent Automation in Pharmacovigilance seminar.

Rose Petroleum PLC (LON:ROSE) has boasted of the ‘excellent quality’ of its initial results from the recent 3D seismic exploration programme in the Paradox basin, Utah. Processing of the full seismic data is ongoing, albeit ‘now nearing completion’, though Rose is pleased with the results seen thus far.

Europa Oil & Gas Holdings PLC (LON:EOG) has agreed to sell its stake in the offshore UK P2034 licence to Egdon Resources Ltd (LON:EDR) in a deal worth up to £1.45mln. It effectively expands Egdon’s footprint offshore North Yorkshire, where it already has a project immediately adjacent to P2034.

Solo Oil PLC (LON:SOLO) has highlighted ‘technical progress’ for the group’s Helium One investment, in Tanzania, where the group has been working to advance potential drill locations. Operations have involved soil and seep geochemistry data, and work designed to enhance and reprocess existing seismic data in order to gain more detailed structural and stratigraphic mapping.

Chaarat Gold Holdings Limited (LON:CGH) remains on track to deliver a resource update for the Tulkubash heap leach project in the Kyrgyz Republic in January 2018, following the return of assay results from recent drilling. A feasibility study is due in the first quarter.

Lionsgold Limited (LON:LION) announced, after the close on Friday, that it has raised an additional £200,000 on the same terms as its share placing announced last week. Big Pic in November.

Tertiary Minerals plc (LON:TYM), which saw its shares surge higher on Friday, said after the close that it was not aware of any other reason for the movement other than the recently announced memorandum of understanding (MoU) signed with global commodities group Possehl. The MoU provides for the companies to enter into an offtake agreement to support Tertiary’s three fluorspar projects. Big Pic in November.

Bacanora Minerals Ltd. (BCN)  has announced that Martin Vidal, president and a director of the company, has resigned his positions with effect from 30 November 2017.  The London and Canadian listed lithium exploration and development company said Vidal will remain with the company in an advisory/consultancy capacity going forward.

appScatter Group  PLC (LON:APPS), the recently-listed business-to-business Software as a Service platform  has said three directors of the company, including its non-executive chairman, Clive Carter purchased shares in the company on December 1. The firm said Carver purchased 20,408 ordinary shares at a price of 49.0p each taking his total holding to 208,300 ordinary shares, representing 0.33% of the company's issued ordinary share capital. appScatter said its sales director, Jason Hill, and Michael Buchen, a non-executive director also purchased shares at 49p each as well.

6.45am: Strong start predicted

The FTSE 100 looks set to claw back some of last week’s losses as Prime Minister Theresa May heads to Brussels with a Brexit deal she hopes will lead to trade talks.

But a poll over the weekend suggested the public was baulking at the €50bn divorce settlement and now wants a second referendum to sign off the terms of the split.

This and Dublin’s hard-ball tactics over the Irish border appear to have muddied the waters – giving the ‘remainers’ a glimmer of hope.

Against this uncertain political backdrop, the index of blue-chip shares is expected to be marked 52 points higher to 7,352.49 when proceedings get underway.

Looking Stateside, Donald Trump’s tax bill may still need to garner support in the House of Representatives, but its formal ratification by the Senate provided a morsel of good news for the embattled President.

Unexpected turn

Last week it emerged ex-national security adviser Michael Flynn may be prepared to testify against his former boss, saying the president had directed him to make contact with the Russians in the run up to last year’s elections.

“This unexpected revelation has once again raised the prospect that the president might be at risk of being impeached if the allegations are proven,” said Michael Hewson, analyst at CMC Markets.

“In any case whatever happens next it is likely to take some time for events to play out which suggests that the US President is unlikely to be going anywhere soon.”

Back here in the UK, the flow of scheduled corporate news looks set to slow with updates from bus and rail company Stagecoach (LON:SCG) and the building materials giant Ferguson (LON:FERG) among the bigger businesses reporting.

Around the markets:

  • Pound worth US$1.3455
  • Gold US$1277.10 an ounce, down US$5.10
  • Brent crude US$63.45 a barrel, down 28 cents

Business Headlines

Financial Times

Yorkshire Water investors look to sell £4bn stakes.

Gas-supply shortages are hitting north and central China as Beijing tries to accelerate a shift away from coal rather than miss environmental targets this year.

Macquarie is hunting for acquisition targets in Europe’s asset management sector as the Australian financial services group attempts to strengthen its position in the region’s investment industry.

CVS Health, America's biggest drugs chain, is to buy Aetna for US$69bn.

Australia probes impact of Facebook and Google on media.

Times

The government took an ideological decision to bail out Stagecoach on the east coast main line railway rather than allow the franchise to transfer to public hands, a former transport secretary has argued.

Rio Tinto has plucked its new chairman, Simon Thompson, from its existing board after one mooted external candidate triggered an investor backlash.

AstraZeneca fears US$35mln hit from higher duty.

Daily Telegraph

Britain’s manufacturing sector will outperform the wider economy this year and next as surging export orders outweigh Brexit uncertainty at home.

BT faces mounting pressure from regulators, rivals and its telecoms provider customers to cut the price of ultra-fast broadband services proposed by its network subsidiary Openreach.

Facebook’s new London office its largest base outside the US.

Guardian

21st Century Fox ‘restarts talks’ for possible sale to Walt Disney.

UK government warned over sharp rise in child and pensioner poverty.

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