- FTSE 100 down 22 points
- US stocks lose nearly all their early gains
- UK public finances scarred by pandemic costs
5.02pm: FTSE softly lower at market close
The FTSE 100 closed Tuesday down 22 points, 0.3%, at 7,030, while the FTSE 250 shed 45 points, 0.2%, to 22,439.
The DAX has been the outperformer on a largely slow day, with the German Ifo hitting a two-year high,” IG Senior Market Analyst Joshua Mahony wrote. “On the UK front, reflation stocks have performed well, while miners continue to lose ground.”
In the US, the Dow tumbled from a promising start to settle 6 points down at 34,388 just after noon. The Nasdaq was up 3 points to 13,644, and the S&P 500 dipped 2 points to 4,195, both indices following the pattern set by the industrials.
4.08pm: Commodity companies lead fallers
Leading shares have drifted off their best levels, with investors seemingly clocking off for the long weekend a little early.
The FTSE 100 is down 9.46 points or 0.13% at 7042.13, having earlier reached the dizzy heights of 7067.
Tech shares are providing some support as the Nasdaq Composite remains in positive territory.
Software group Aveva PLC (LON:AVV) is 2.23% higher at 3348p following well received results.
Richard Hunter, head of markets at interactive investor, said: “Revenues for the year slipped just 1.6%, which is something of a recovery given the 12% decline reported at the half-year stage. Overall pre-tax profit was sharply lower, however, with the general uncertainty of the pandemic weighing on customer spending decisions, and increased expenses…
“However, the transformational $5bn acquisition of US company OSIsoft is a strong strategic move…Indeed, combining the performance of the two previously separate companies over the last year paints a rather different picture, with revenues ahead by 2.2% and adjusted profit by 13%.”
3.25pm: US house prices soar but home sales and confidence figures miss forecasts
Mixed news from the US economy.
House prices saw their highest growth in more than 15 years in March, up 13.2% year on year.
That compares to a 12% rise in February, and marks the biggest gain since December 2005.
But new home sales in April came in below expectations, down from a revised 917,000 in March to 863,000, compared to forecasts of 950,000.
Consumer confidence was also worse than predicted.
The Conference Board’s consumer confidence index for May came in at 117.2 compared to expectations of a figure of 119.
The April figure was also revised down from 121.7 to 117.5.
This has dampened some of the enthusiasm on Wall Street, with the Dow Jones Industrial Average now up just 0.05%, the S&P 500 0.06% better and the Nasdaq Composite up 0.22%.
In the UK the FTSE 100 remains virtually flat, down 3.36 points at 7048.23.
3pm: Proactive North America headlines:
Midwest Energy Emissions Corp (OTCQB:MEEC) says US District Court Magistrate Judge issues recommendation that its pending patent litigation should be allowed to move forward
Great Panther Mining Limited (TSE:GPR) (NYSEAMERICAN:GPL) (FRA:G3U) provides operational update for Tucano mine in Brazil
KushCo Holdings Inc (OTCQX:KSHB) and Greenlane complete key regulatory condition for proposed merger
2.44pm: Wall Street opens on the front foot
The main indices on Wall Street opened in the green on Tuesday as a reduction in inflation concerns meant investors were more comfortable re-entering equities markets.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.27% at 34,493 while the S&P 500 climbed 0.31% to 4,210 and the Nasdaq rose 0.47% to 13,725.
Over in the crypto markets, Bitcoin was struggling to make any headway despite an earlier rally and was down 1% over the last 24 hours at US$37,658. Investors will likely be hoping any new news from the second day of the Consensus conference could bump up prices.
Back in London, the FTSE 100 was more or less flat at 7,051 at around 2.40pm.
2.14pm: Mining companies suffer some subsidence
With recent weakness in commodity prices, the leading index is getting no support from mining companies.
So ahead of the Wall Street open the FTSE 100 is down 7.61 points or 0.11% at 7043.98.
12.36pm: Positive start forecast for US markets
Wall Street is expected to add to Monday’s gains when US markets open.
With US Federal Reserve member James Bullard calming some of investors’ inflation worries, Asian markets moved higher and in Europe, Germany’s Dax hit a new peak – helped by the €18bn merger of two of the country’s biggest property developers Vonovia SE and Deutsche Wohnen.
So the Dow Jones Industrial Average is forecast to open 89 points or 0.25% higher, while the S&P 500 is set for a 0.3% rise at the start, and the Nasdaq Composite is expected to add 0.46%.
Sophie Griffiths at Oanda said: “US futures are heading higher, extending gains from the previous session. As base metal prices extend losses and the Fed continues to sing from the dovish hymn sheet, tech stocks look set to extend their lead.”
On the economic front, US new home sales for April are expected to show a drop from 1.02mln to 950,000 while the May consumer confidence index is forecast to fall from 121.7 to 119.
Back in the UK and the FTSE 100 has dipped 2.92 points to 7048.67.
12.15pm: Renishaw and Royal Mail set to swap FTSE places
But it is putting up a fight, with its shares adding 1.86% or 100p to 5475p.
Unfortunately for the company, the business likely to take its place is also doing well. Royal Mail Group PLC (LON:RMG) continues to benefit from recent good results and positive broker comment, and has added 5.64% to 581p.
Russ Mould at AJ Bell said: “The latest FTSE 100 reshuffle, the results of which are due to be announced after the close on Wednesday 2 June, could be relatively quiet this time around, with just one demotion and one promotion. Royal Mail and Renishaw are the two firms that look most likely to swap places, although cybersecurity specialist Avast, engineer Weir and even Real Estate Investment Trust British Land are currently within 5% to 8% of the market cap cut-off for relegation to the FTSE 250.
“In the seemingly unlikely event that any of that trio slips through the trapdoor, the most likely beneficiaries based on their current market valuations are ITV, Dr Martens and Electrocomponents.
“There is still a week to go before the final calculations by index compiler FTSE Russell, so a lot could still change, especially if markets become more volatile. Renishaw made it into the FTSE 100 on the very last day before the cut-off last time around (2 March), thanks to an announcement from senior management that they were putting the firm up for sale.”
Meanwhile the FTSE 100 continues to do pretty much nothing, down just 0.62 points at 7050.97.
11.22am: Demand short-lived after shops re-open
Retail sales were below expectations in recent weeks, according to the the latest CBI Distributive Trades survey.
Volume of sales was +18 between the end of April and the middle of May, a period when retailers were open but the hospitality and leisure rules had not been fully relaxed.
This was down from +20 previously.
UK CBI Retailing Reported Sales May: 18 (est 25; prev 20)
UK CBI Total Distributed Reported Sales May: 43 (prev 30)
— LiveSquawk (@LiveSquawk) May 25, 2021
Ben Jones, Principal Economist at the CBI, said: “The fact that sales were in line with seasonal norms is a definite improvement from earlier in the year, but this month’s survey was perhaps a touch disappointing after April’s stronger results.
“Some retailers have suggested the increase in demand after the initial reopening of non-essential retail in early April was either short-lived or less strong than expected. And non-store sales remain well above seasonal norms, suggesting that some consumers who migrated to online shopping during the pandemic have not fully shifted back to old habits.
“As the economy moves toward a new normal, it’s clear that the pandemic has exacerbated pre-existing challenges for some retailers. The trend away from bricks-and-mortar retail has accelerated, while rent arrears and accrued debts have added to the cumulative burden of costs. The lockdown may be over, but its impact on the sector will be felt for a good while yet.”
Meanwhile UK trade with Europe has been hit by both the pandemic and, unsurprisingly, Brexit.
Total trade in goods with the EU fell 23% in the first quarter of 2021 compared to the same period in 2018 (a comparison picked by the Office for National Statistics to show changes before the Brexit transition period.)
Trade with non-EU countries slipped just 0.8%.
All this has failed to move the dial much, with the FTSE 100 edging up just 0.64 points to 7052.23.
10.23am: Groceries group in demand
Ocado PLC (LON:OCDO) has jumped 1.96% or 38.5p to 2001p, outpacing rivals, after the latest grocery market figures.
Its market share edged up from 1.6% to 1.8% in the 12 weeks to 17 May, according to research group Kantar, making it the fastest growing retailer in the survey. It also showed the biggest gain in sales at 15.4%, albeit this was well down on the 52.9% growth seen a year ago.
The share price rise makes it one of the gainers in the leading index, which after another brief flurry into positive territory, is down 3.23 points or 0.04% at 7048.36.
AJ Bell investment director Russ Mould said: “The FTSE 100 was struggling for direction… on Tuesday morning, not unfairly given the continuing uncertainties over vaccines versus variants, the risks of inflation and the continuing volatility in the commodity and cryptocurrency markets,”
9.29am: Market slips lower
The continuing cost of COVID-19 for the UK has been shown again by the latest government borrowing figures.
Public sector net borrowing hit £31.7bn last month, making it the second highest level for April on record.
The first highest of course was last year, when the cost of tackling the first wave of the pandemic and supporting the economy meant around £47bn worth of borrowing.
On the positive side, this latest figure is less than the £39bn the Office for Budget Responsibility had expected, although it is still much higher than the £26.3bn borrowed in March.
Danni Hewson, AJ Bell financial analyst, said: “There are glimmers of good news in today’s government borrowing figures. Whilst spend is still considerably greater than income, that income is recovering, up 7% compared to April last year. As the country heads to another “new normal” people are getting back in the car again, back to the pub again and back to the business of buying houses. Fuel Duty was up by more than a third compared to the same time last year as the first lockdown began. Alcohol Duty up 15% and Stamp Duty up a whopping 70% despite the holiday extension. And as the economy picks up so too has income tax, PAYE tax returns up 16% last month compared with April 2020.
“There is another quirk helping numb the pain of record debt levels and that’s interest rates. Despite national debt now standing at £2.71 trillion pounds, up by more than £280bn compared to April 2020, its monthly interest bill was only £0.1bn higher last month than for the same period last year, fuelling economists rhetoric that recovery won’t require massive tax hikes or the salami slicing of spending. That spending is already falling as reopening continues apace.
“There are concerns. Borrowing was higher April than it was in March. Measures like furlough are still providing a huge amount of support and recovery is fragile. Consumer confidence that’s been boosting spend and investor sentiment will be shaken by news of new guidance for some areas seeing a high level of cases of the Indian Covid variant. Yes, recovery is fragile, and clarity is vital if it’s not to be derailed.”
The uncertainty means the early gain on the FTSE 100 – tentative though it was – has faded away completely.
The blue chip index is now down 10.18 points or 0.14% at 7041.41.
That is a not very flattering reaction to news that the engineering group has appointed ex-3M man Paul Keel as its new chief executive, with Andy Reynolds Smith stepping down from the position with immediate effect.
The company said its expectations for the full year remained unchanged from the half year results announcement in March, and it remained committed to splitting off its medical business.
8.49am: Leading shares make subdued start
The FTSE 100 made a subdued start to proceedings as traders in London took a more circumspect approach than their counterparts in Asia.
There the markets were buoyed by comments by a leading Federal Reserve official, who appeared to allay fears the central bank may be ready to act on the inflationary threat.
“I think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should do it when we’re still in the pandemic,” said James Bullard, head of the St Louis Fed.
The morning’s big riser among the blue chips was the software group AVEVA (LON:AVV), which advanced 4.6% after the industrial software group staged a strong second half revenue recovery.
“[The company] has noted that the new financial year is off to a positive start, with largely normalised trading conditions,” said Richard Hunter, head of markets at Interactive Investor.
“This should play well into its strength in an unquestionably growing arena.”
A recovery in the US tech sector in the wake of the Bullard comments around monetary policy and inflation had a knock impact back here in the UK.
On the FTSE 250 there was a second wave of buying of shares in Royal Mail (LON:RMG), which advanced 4.6% after Monday’s uber bullish call by JP Morgan, which was followed Tuesday by an upgrade by Peel Hunt.
Finally, shares in Greencore (LON:GNC) were about as popular as a day-old version of the sandwiches it makes as traders hit reverse gear to mark them down 10% in the wake of what on the face of it looked like a solid set of interims.
Proactive news headlines
MGC Pharmaceuticals Ltd’s (ASX:MXC) (LON:MXC) (OTCMKTS:MGCLF) major clinical trial programs planned for CimetrA, CannEpil and CogniCann in 2021 are actively progressing across Australia, Israel and Brazil.
Cellular Goods PLC (LON:CBX) said it is on track to roll out its first consumer cannabidiol product range in August this year followed by a product range for the after-sport recovery market next spring.
Silence Therapeutics PLC (LON:SLN, NASDAQ:SLN) said it has received the final US$40mln from an US$80mln cash and equity investment from AstraZeneca, adding that it expects to be working on up to five drug targets in the next three years with the Anglo-Swedish giant.
Gaming Realms PLC (LON:GMR), a mobile gaming content developer and licensor, said it has been awarded an interactive gaming manufacturer licence by the Pennsylvania Gaming Control Board, marking the group’s third US state licence.
Tiziana Life Sciences PLC (LON:TILS, NASDAQ:TLSA) said it has begun treating a patient with secondary progressive multiple sclerosis using nasally-administered Foralumab, the company’s fully-human anti-CD3 monoclonal antibody.
Argo Blockchain PLC (LON:ARB) said it has joined the newly-formed Bitcoin Mining Council (BMC), an organisation comprised of North American cryptocurrency miners designed to promote energy transparency and improve sustainable mining practices.
Alien Metals Ltd (LON:UFO) has begun the second phase of drilling on the Hancock licence, part of the Hamersley direct shipping iron ore project in the Pilbara region of Western Australia. The programme follows on from a highly encouraging maiden drilling program recently completed.
Iofina PLC (LON:IOF) said the next few years are set to be transformational for the company as it targets moving into new areas. In its results statement covering 2020, the iodine producer confirmed that last year was a record-breaking one for the company while the first quarter of 2021 saw record revenues, partly as a result of the sale of excess inventory.
IronRidge Resources Ltd (LON:IRR) has hit additional broad and high-grade lithium pegmatite drill intersections at new targets adjacent to the Ewoyaa lithium project in Ghana. Highlights include 50 metres at 1.36% Li2O, 24 metres at 1.3% Li2O, 21 metres at 1.29% Li2O, and 17 metres at 1.48% Li2O.
Chaarat Gold Holdings Ltd (LON:CGH) provided an updated JORC-compliant bankable feasibility study for its Tulkubash oxide gold project in the Kyrgyz Republic and said it is in the process of starting exploration works for the 2021 season.
The AIM-quoted company also said it was in talks to complete the financing package for the project, but warned that this could be affected by current events in the mining sector of the former Soviet republic.
AfriTin Mining Limited (LON:ATM) said the outstanding balance of the 2019 convertible loan note has now been settled in full, with £2.2mln of the £3.8mln converted into shares and the balance settled in cash, with the outstanding 2020 loan note facility of £2.25mln also settled in full, in cash. The Orange Trust will, after converting its 2019 notes, increase its holding in the company from 5.9% to 6.6%.
Destiny Pharma PLC (LON:DEST) will use the Investor Meet Company platform to allow shareholders to follow proceedings of its annual general meeting on June 3, and hear from the company via the live presentation and Q&A session immediately following the AGM. The Company will also provide an online recording, available on the platform and the company’s website after the meeting.
Polarean Imaging PLC (LON:POLX) announced that it will attend the ‘Mello Healthcare; Invest in Good Health’ online conference on Tuesday, 25 May, from 5.30pm to 9.30pm. Chief executive Richard Hullihen will present and take questions from participants.
Impax Asset Management Group PLC (LON:IPX) chief executive Ian Simm and chief financial officer Charlie Ridge will give a presentation its results for the six months to 31 March 2021 in a webinar on Friday 28 May 2021 at 11.45 am BST. The online presentation is open to existing and potential shareholders and registration is free.
Medica Group PLC (LSE:MGP) has shared its annual report and accounts ahead of its annual general meeting on 16 June, with shareholders urged to register their proxy appointment electronically and attend the meeting remotely. The company provided clarification on the final dividend, which will be paid on 23 July 2021 to shareholders on the register as at 25 June.
Xpediator PLC (LON:XPD) announced that its previously advised ex-dividend and record date for the declared final dividend of 1.05p have been updated, with the ex-dividend date now 17 June 2021 and the updated record date will now be 18 June.
6.50 am: Footsie called higher
The FTSE 100 is predicted to continue its winning streak to four days on Tuesday after a positive session on Wall Street.
London’s blue chip shares index is set for a 12-point gain, according to the IG spread betting platform, having closed up 33.5 points or 0.5% at 7,051.59 the day before.
Overnight, US stock indices all finished in the green, led by the tech sector, which pushed the Nadsdaq Composite up another 1.4% to just over 13,661.
The S&P 500 rose 1% and the Dow Jones finished 0.5% higher as Wall Street confidence slowly improves after the mid-month inflation wobbles.
Coming up on Tuesday there will be results from FTSE 100 groups including industrial software group AVEVA Group PLC (LON:AVV) and West End landlord Shaftesbury PLC (LON:SHB), and later in the morning grocery market data from Kantar.
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were higher on Tuesday as Singapore’s economy expanded by 1.3% year-on-year in the first quarter, official data showed.
The Shanghai Composite in China surged 1.80% and Hong Kong’s Hang Seng index rose 1.38%
In Japan, the Nikkei 225 gained 0.49% while South Korea’s Kospi lifted 0.68%.
Shares in Australia rose, with the S&P/ASX 200 trading 0.64% higher.
Proactive Australia news:
Paradigm Biopharmaceuticals Ltd (ASX:PAR) (OTCMKTS:PBIGF) has received written feedback from the US Food and Drug Administration (FDA) regarding the investigational new drug (IND) submission for its pivotal study evaluating Pentosan Polysulfate Sodium (PPS) in knee OA.
Emmerson Resources Limited (ASX:ERM) (FRA:42E) is trading higher after delivering new high-grade gold results from drilling at Black Snake prospects within the Tennant Creek joint venture in the Northern Territory.
Eclipse Metals Ltd (ASX:EPM) has received further indication of the Greenland Government’s support for its Ivittuut Project through confirmation of a four-year extension to the mineral exploration licence.
Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) has received high-grade reverse circulation (RC) drilling results from White Heat and Numbers prospects within the flagship Cue Gold Project in Western Australia, demonstrating the potential for further gold discoveries
Nanollose Ltd (ASX:NC6) has dispatched the first shipment of refined microbial cellulose (MC) to Birla Cellulose’s pilot facilities in India for further processing and testing prior to being blended with other cellulosic feedstock and spun into lyocell fibre.