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FTSE 100 closes firmly ahead as traders shrug off any nerves about US earnings

FTSE 100 index closes up over 80 points
US stocks ahead too
Silver giant Fresnillo top riser


  • FTSE 100 index closes up over 80 points
  • US stocks ahead too
  • Silver giant Fresnillo top riser

5.05pm: FTSE closes ahead

FTSE 100 index closed ahead on Monday as global stocks rallied and the slightly weaker pound also gave the UK benchmark a leg up.

Britain's index of leading shares closed up over 80 points, or 1.33%, at 6,176.

Sterling broke off slightly from its rally and was down a shade against the US dollar at US$1.2613.

"Stocks are showing little sign of nervousness ahead of earnings season tomorrow, with the Nasdaq hitting a fresh record high and the S&P 500 just a short distance away from its highest reading in five months," noted chief market analyst Chris Beauchamp from online spreadbetting group IG.

For UK investors and the Footsie, Beauchamp said the costs of Brexit were "finally beginning to appear on the horizon for ordinary UK citizens", which may well dampen what is already an already weak outlook for consumer spending.

"There seems no stopping the current rally in sterling either, another factor holding back UK stocks, despite signs that it will be a tough summer of Brexit negotiations," he added.

US and Canada 4pm/11 EST

The Dow Jones Industrial Average added over 400 points to 26,482 in early deals as markets appeared bullish ahead of earnings season. In Canada, the S&P/TSX Composite was up around 142 points at 15,856.

Proactive North America headlines:[hhmc]

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4.00pm: The Footsie has a late flourish

The FTSE 100 is finishing the day with a mini-flourish and may yet finish at its high point for the day.

Londons index of heavyweight shares was up 77 points (1.3%) at 6,172, with cyber-security software firm Avast PLC (LON:AVST), up 5.0% at 584p, leading the charge.

“If not quite at their initial highs, the markets nevertheless remained strong all session, including, inexplicably, the Dow Jones,” said a slightly bemused Connor Campbell at Spreadex.

“The US index appears to be benefiting – alongside the overnight Chinese automobile/remdisivir news – from a pivot towards earnings season.

“It has to be something because the domestic situation is more alarming than it has been at any point in the pandemic so far. Florida just recorded 15,299 new cases IN A SINGLE DAY, while the country as a whole has crossed the 70,000 mark, moving closer and closer to the 100,000 daily infections Dr Anthony Fauci warned about a couple of weeks ago,” he added.

2.50pm: US indices on the front foot

As expected, US indices have opened on the front foot.

The Dow Jones index was up 175 points (0.7%) at 26,248 while the S&P 500 was 20 points (0.6%) better at 3,205.

In London, the FTSE 100 is flagging a little after making progress over the lunchtime session, with the index up 62 points (1.0%) at 6,157.

Sentiment should have been given a boost by comments from Andrew Bailey, the governor of the Bank of England, concerning the expected recovery of the UK economy.

Addressing an online audience of school pupils, Bailey said the turnaround in the UK economy has already started, although making a pitch for the “tell us something we dont know” award of 2020, Bailey also told the pupils that “we are very worried about jobs”.

Now #Livestreaming – Andrew Bailey, Governor for the @bankofengland Schools, Teachers and Students, JOIN HERE:

— Speakers for Schools (@speakrs4schools) July 13, 2020

2.00pm: US indices to head higher

The US results season commences this week and although profitability for most companies will have taken a walloping, are US investors downcast?

They are not, judging by indications of which way the indices will move at the outset.

The Dow Jones industrial average is expected to open at 26,289, up 214 points while the S&P 500 is tipped to open 25 points firmer at 3,210.

The NASDAQ Composite, which could spend the night in a pig-sty at the moment and come up smelling sweeter than vanilla, is expected to jump 334 points to 10,951.

In London, the FTSE 100 has also been in buoyant form despite continuing worries about a second wave of coronavirus infections, rising 67 points (1.1%) to 6,163.

Florida just shatters national record with 15,300 new COVID-19 cases

— Daniel Uhlfelder (@DWUhlfelderLaw) July 12, 2020

12.15pm: Defensives out of favour

The FTSE 100 had a strong morning session, hitting noon just 8 points or so below its intra-day high.

The Footsie was up 69 points at 6,165, with just five index constituents failing to make progress. The fact that two of those – National Grid PLC (LON:NG.) and Tesco PLC (LON:TSCO) – are in sectors traditionally regarded as defensive indicates how keen investors are to take on a bit of risk today.

“Global stocks are rising ahead of an earnings storm that will likely deliver the worst plunge in profits since the Great Recession,” declared OANDAs Edward Moya.

“With many traders anticipating roughly a 40% drop in corporate profits, businesses could be ready to deliver a round of job cuts to shore up their balance sheets. Wall Street remains fixated with the recovery trade but that will be hard to hypothesise as the path of virus is unknown. The end result for many traders remains that the Fed is keeping rates near zero for at minimum a couple years, governments will continue to deliver fiscal stimulus, and that recovery ahead might have only got pushed back a quarter,” he added.

Although trailing its bigger Footsie brother a bit, the FTSE 250 is also on the up, rising 175 points (1.0%) to 17,355, led by security services provider G4S PLC (LON:GFS), which is up 12% at 131.5p after it raised profits guidance.

Mid-caps Big Yellow Group PLC (LON:BYG) and Wizz Air Holdings PLC (LON:WIZZ) were out of favour, however, after updates this morning.

Storage specialist Big Yellow slipped 1.1% into the red at 979p after it splurged £18.6mln on a freehold site in glamorous Wapping in east London.

Wizz Air, down 0.8% at 3,258p, chose an interesting time to announce the launch of Wizz Air Abu Dhabi on October 1. The airline will have an initial network of six new routes.

10.30am: Shoppers not enamoured of the new shopping experience

Shoppers are staying away from the UKs shops in droves despite many shops reopening for business in June.

Market research data from Springboard indicates footfall across the UK retail landscape was down 56.6% year-on-year in June. That at least was an improvement on Mays 73.3% collapse.

Footfall in the week commencing June 15 was up 40% on the previous week as some shoppers rushed out to revisit shops that had reopened but footfall growth for the rest of the month slowed, possibly because shoppers were disappointed with the shopping experience in the post-coronavirus environment.

“Long queues coupled with a restricted shopping experience due to social distancing could be the contributing factors to this sudden drop off in footfall,” said Springboards insights director, Diane Wehrle.

Footfall on the high street was down 65.1% year-on-year while shopping centres saw numbers tumble 62.3%.

Retail town parks fared a bit better with footfall down by just 32.3%.

“The fact that much of the workforce continues to work from home, tourists and many students are absent, as well as the government urging consumers to only use public transport for essential travel, means that footfall and therefore sales, will continue to be compromised in these retail destinations,” Wehrle said.

The news was not especially surprising and retail stocks generally took the news in their stride, although JD Sports PLC (LON:JD.), down 2.4% at 632.4p, was the top faller on the Footsie, which nevertheless was up 55 points (0.9%) at 6,150.

10.00am: Miners to the fore

Mining stocks are leading the Footsie higher this morning.

Londons index of leading shares was up 52 points (0.9%) at 6,148, led by Evraz PLC (LON:EVR) – not technically a mining stock but as a steel producer deemed a fellow traveller.

“Even though the pandemic is getting worse, stocks in Asia drove higher and the feel-good factor spilt over to this part of the world. At the back end of last week, it was reported that Gilead Sciences, Remdesivir – a potential treatment for Covid-19 – reduced the fatality rate in patients by 62%. BioNTech, who is working with Pfizer on a potential vaccine for the coronavirus, said they are hoping to get approval for the drug by Christmas,” said CMCs David Madden.

“It seems that optimism surrounding the drug stories has overshadowed the fact that yesterday was another record day in terms of new cases, according to the WHO [World Health Organization],” he noted.

Optimism over the chances of a treatment for the coronavirus is obviously good for the global economy, hence the demand for mining stocks such as Fresnillo Plc (LON:FRES), up 3.1% at 968.8p, and Anglo American PLC (LON:AAL), up 2.4% at 1,970.6p, although softer metal prices are also helping.

The same optimism over a COVID-19 treatment is causing investors to turn to stocks connected to the hospitality industry, such as hotels group Intercontinental Hotels Group PLC (LON:IHG) and contract caterer Compass Group PLC (LON:CPG); the former is up 2.3% at 3,862p and the latter up 2.2% at 1,140p.

8.45am: Positive Monday progress

The FTSE 100 got off to a positive start with traders focused on the positives (the potential signs of economic recovery) rather than the negatives (the ballooning coronavirus epidemic in the US).

Taking its cue from Asias main bourses, the UK blue-chip index advanced 75 points to 6,170.63.

While the markets were buoyant ahead of the upcoming US earnings season, there were still a few reasons to be fearful.

The aforementioned coronavirus (COVID-19) US cases, up 220,000, the largest 24-hour jump so far during the pandemic, provided cause for concern.

And then there are the brewing tensions between the US and the Peoples Republic of China. The perennially paranoid Trump administration has accused Chinese-owned social media apps TikTok and WeChat of engaging in “information warfare” against America.

It also plans to make an announcement this week related to Chinese military drills in the contested waters of the South China Sea.

This might explain why gold, a haven in times of turmoil, headed back above US$1,800 an ounce.

The travel stocks were in demand with Intercontinental Hotels (LON:IHG) leading the Footsie with a 3.3% gain. Also up 3% early on was British Airways owner IAG (LON:IAG).

Fashion chain Burberry (LON:BRBY), whose fortunes are linked to the recovery in Asia, was up 2.8% ahead of its trading statement on Thursday.

On the FTSE 250, guarding group G4S (LON:GFS) shone with a 9% rise after it said its results would be significantly ahead of consensus forecasts.

Proactive news headlines:

Gfinity PLC (LON:GFIN) said its Gfinity Plus rewards programme will go live on Wednesday, allowing gamers to register and be eligible for giveaways and incentives. The esports group said Gfinity Plus will also offer exclusive content, forums and gamification for its online community from August. The company will use its own technical IP for the first time on its websites to provide functions that deepen visitor engagement such as fan forums and the ability to comment on articles. Gfinity Plus will be available to gamers who visit all of the companys digital media sites, starting with before being rolled out to and

Westminster Group PLC (LON:WSG), the security and technology group, has said revenues jumped by around a quarter in its latest half-year in spite of the coronavirus (COVID-19) pandemic uncertainty. The AIM-listed group said trading started the half-year on a positive note, which continued throughout the period even with the disruption from COVID-19. Westminster noted that interim revenues rose by 24% to £7.0mln (2019: £5.6mln) with the company making both a pre- and post-tax profit.

Jubilee Metals Group PLC (LON:JLP) has delivered its sixth consecutive six-monthly period of double digit growth, posting a 54% increase in first-half earnings to £12.8mln. The growth was achieved notwithstanding the loss of the equivalent of approximately two months' of operational time due to restrictions under coronavirus legislation in South Africa, where Jubilee has its operations. The company was also able to boost revenue by 18% to £29.4mln.

Integumen PLC (LON:SKIN) has formalised its collaboration with Avacta PLC (LON:AVCT) to use the latters technology in a coronavirus (COVID-19) detection kit. It has signed a material transfer agreement to use recently-generated affimers that bind the SARS-COV-2 spike protein to pick up the tell-tale signs of the respiratory infection in wastewater. The affimers, small proteins that bind to target molecules, will be coated to Integumens wafer nano-photonic surfaces. The company will test up to six separate variations of the Avacta IP at its facility in York over the “next few weeks” before the validation of the sensors on SARS-CoV-2 at a secure lab at Aberdeen University.

Clinigen Group PLC (LON:CLIN) said the US regulatory authorities have granted its cancer drug, aldesleukin, orphan drug designation for the treatment of the degenerative disease amyotrophic lateral sclerosis, or ALS. The Food & Drug Administration (FDA) decision confers certain benefits if aldesleukin is shown to have a therapeutic effect on people with ALS. These include seven years of marketing exclusivity in the US, as well as tax credits for clinical development costs and fee waivers.

Directa Plus PLC (LON:DCTA) has revealed that its Setcar has bagged its third major contract win since the AIM-listed company bought a controlling stake in November 2019. Setcar has signed a contract to supply total waste management services to Cummins Generator Technologies Romania, a part of the Fortune 500 company, Cummins. The contract is valued at around US$3mln over three years from October 1, 2020.

Corero Network Security PLC (LON:CNS) said the first half of 2020 saw it continue the momentum built up in the second half of 2019 as the work from home boom during the coronavirus (COVID-19) pandemic has heightened awareness of its services. The network security expert said order intake in the first half of 2020 increased by 58% to US$7.9mln from US$5.0mln in the first half of the previous year. Half-year revenue is expected to be up 48% year-on-year to US$6.2mln. By July 12, 20230, annualised recurring revenues (ARR) had increased to US$8.8mln, driven by growth in DDoS (distributed denial of service) protection-as-a-service (DDPaaS) and software subscription orders.

Eco Atlantic Oil & Gas Ltd (LON:ECO) told investors that decisive early action to prioritise cost control has delivered considerable savings during the coronavirus pandemic, whilst the explorer continues to eye plans for new wells in 2021. The company, in its financial results, said it has saved around US$1mln in general and admin expenses, and public company costs. It ended the twelve-month period, March 31, 2020, with C$26.48mln of cash and equivalents.

Coinsilium Group Limited (LON:COIN) has said it is undertaking a strategic review of its business to capitalise on “substantial opportunities in the burgeoning decentralised finance (DeFi) and crypto finance sector” and realign itself to participate in its recently launched IOV joint venture in Singapore. The crypto investment and advisory group noted that the global crypto finance market is showing “strong month-on-month growth”, with active collateral on DeFi platforms now over US$2.1bn.The group said it is currently working on several DeFi models with the aim of launching commercial solutions either independently or through its partner network. Meanwhile, as part of the review, the company said its investment holding company, Seedcoin Limited, has been redomiciled from the British Virgin Islands to Gibraltar in order to realise value from the firm “in the near term by way of a transaction, liquidity event or outright sale”.

Mineral and Financial Investments Limited (LON:MAFL) has detailed its latest investment of US$100,000 in the seed-round for Ideon Technologies which is described as “a world pioneer in cosmic-ray muon tomography”. Ideon, a spin-off Canada's national particle accelerator laboratory, is focused on applying its x-ray-like technology to mineral exploration and resource development ventures. M&FL noted that the technology is capable of providing visibility of up to 1 kilometre beneath the earths surface and may potentially exploration and resource development.

Frontier IP Group PLC (LON:FIPP) said its portfolio group, Pulsiv Solar Limited, is continuing to make “strong commercial and technical progress” with its energy efficiency and power generation technology. The IP investment firm said Pulsiv has started design work, funded by a major multinational, to incorporate its technology in a new product line, and is also in discussions with a number of other large firms about a range of further industrial applications. The investee, in which Frontier owns an 18.9% stake, is also in discussions with investors to raise further funding which, if completed, will be at a “significant premium” to the current book value, which will, in turn, be reflected in Frontiers results for the year ending June 30, 2020.

Regency Mines PLC (LON:RGM) has said it is initiating exploration for the 2020 season at the 50%-owned Dempster vanadium project in Canada. The programme will include a soil and geochemistry program, and the reprocessing of a suite of existing core pulps for indications of major oxides and carbon, both of which would be highly correlated with elevated vanadium results. The company anticipates being in a position to drill in 2021.

Remote Monitored Systems PLC (LON:RMS) has raised £265,000 to support the growth of its GyroMetric and Cloudveil businesses. The monitoring, intelligence and security company has placed 106mln shares at 0.25p each; the shares closed trade on Friday at 0.24p. Existing shareholder BraRead More – Source




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