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FTSE 100 settles for a triple-digit fall

FTSE 100 index sheds 101 points
Aura Energy virtually doubles as it finds a partner to develop in Ma..

  • FTSE 100 index sheds 101 points
  • Aura Energy virtually doubles as it finds a partner to develop in Mauretanian assets
  • Global Petroleum soars ahead of ASX delisting tomorrow

4.00pm: Triple-digit fall for the Footsie

The FTSE 100 shows every appearance of having settled for a hundred point loss in the afternoon session.

The index of Londons leading shares has barely budged from around the 6,185 level for the last two hours; it is currently down 101 points (1.6%) at 6,185.

The top performer was tiddler Aura Energy Limited (LON:AURA), which shot up 94% to 0.35p after it signed a C$4.5mln funding term sheet for the creation of a joint venture vehicle with TSX-listed Chilean Metals for Aura's gold, base and battery metal tenements in Mauritania.

Global Petroleum Limited (LON:GBP) was also up 94%, at 1.55p, ahead of its delisting from the Australian Stock Exchange tomorrow at the close of business.

3.00pm: NASDAQ defies the trend

As expected, US indices opened lower albeit not as severely as expected.

The Dow Jones was down 195 points (0.7%) at 26,089 and the S&P 500 was off 10 points (0.3%) at 3,169.

The tech-heavy NASDAQ Composite, which marches to the beat of a different drum, was 10 points (0.1%) higher at 10,443.

In London, the FTSE 100 was down 100 points (1.6%) at 6,186.

The mid-cap FTSE 250 was faring a bit better, down 169 points (1.0%) at 17,381, helped by a positive reaction to the trading update from contracts for difference trading platform operator, Plus500 Ltd (LON:PLUS).

Plus500s share rose 3.2% to 1,377.5p after the company also announced that interim chief executive officer David Zruia can now drop the “interim” bit from his job title.

While Plus500 was the FTSE 250s best performer, legacy software giant Micro Focus International plc (LONMCRO) was the worst after its interims sent the shares tumbling 16% to 367.5p.

Power generator Drax PLC (LON:DRAW) and engineering group Babcock International Group PLC (LON:BAB) both fell 5.9% on changes to the shareholders' registers.

Jupiter Asset Management revealed its stake in Babcock has fallen below 5% from 5.37% previously while its stake in Drax has risen above the 5% threshold to 5.02%.

1.30pm: US indices to retreat

US shares are set to give up a substantial proportion of yesterdays gains following gloomy economic forecasts for Europe and perturbing news stateside on coronavirus cases.

Spread betting quotes indicate the Dow Jones industrial average will open at around 26,063, down 224 points. The S&P 500 is seen starting at around 3,158, down 22 points.

The European Commission (EC) has lowered its forecasts for the performance of the economy in Europe. The EC now expects the eurozones economy to contract by 8.7% in 2020 before bouncing back somewhat by 6.1% in 2021.

“Already fearful of the COVID-19 situation in the US and Australia – Melbourne has just been put in a six-week lockdown – the European Commissions latest forecasts merely compounded the markets concerns on Tuesday,” said Connor Campbell at Spreadex.

“The broad direction of the blocs GDP revisions was sharply downwards,” he noted.

“Despite Januarys Brexit the EC still has done the kindness of providing the UK with a revised GDP forecast – though its a rather unpleasant present, with the United Kingdom now on track for a 9.7% contraction, against Mays -8.3% estimate,” Campbell reported.

The Johns Hopkins database reported 45,000 new coronavirus (COVID) cases in the US yesterday, which was 8.7% higher than the number reported last Monday.

“The average increase in the seven days through last Friday was 34.9%. The latest data likely are still being depressed by holiday weekend effects— the Saturday and Sunday numbers have been revised up slightly—but the trend rate of increase in total cases clearly has slowed,” said Pantheon Macroeconomics chief economist, Ian Shepherdson.

“An 8.8% drop in reported tests yesterday compared to Monday last week likely contributed to the slower rate of increase in confirmed cases; the trend in test numbers is rising by about 17% per week. The proportion of positive tests jumped to 9.1%, the highest since May 8 but this looks more like noise than signal, as it comes after an unusually low share of positive tests on Sunday,” he added.

Expanded testing, a younger mix of patients, and improved treatment help explain why daily COVID-19 deaths and the fatality rate continue to fall as cases surge. via @reason

— wjappe (@wjappe) July 7, 2020

In London, the ECs (lack of) growth forecast for the UK has not gone unnoticed, with the FTSE 100 index down 101 points (1.6%) at 6,184.

11.35am: Slow recovery in footfall in UK shops despite pubs and restaurants reopening

According to data from the British Retail Consortium (BRC), footfall in shops was down 49.6% year-on-year (YOY) last week.

There was the small consolation that this was a slight improvement on the 53.4% fall the week before.

Footfall on High Streets declined by 55.7% YOY, compared to 58.1% YOY the week before.

Retail Parks saw footfall decrease by 24.6% YOY, a slight improvement on the 28.4% decline seen the preceding week.

Shopping Centre footfall declined by 56.1% YOY, versus a fall the week before of 60.7%.

“It remains a long way back to normality for the retail industry; two weeks after most shops reopened in England, footfall is still only half what it was a year ago,” observed Helen Dickinson, the chief executive of the BRC.

“The reopening of pubs, cafés and other hospitality businesses this Saturday does not appear to have benefited shops much, with the Saturday showing more modest growth than the days prior to these locations reopening. By European standards, the UKs recovery remains slow, and while safety measures introduced by retailers have been well received by customers, many shoppers are still reluctant to visit physical shopping locations,” she added.

Dickinson called on the Chancellor of the Exchequer, Rishi Sunak, to announce measures to boost consumer demand in tomorrows summer statement.

“With the first shop closures being announced, the Government must act fast to protect the three million retail jobs, as well as millions more throughout the supply chain,” she stressed.

The FTSE 100 wass just about keeping its head above 6,200 at 6,210, down 76 points (1.2%).

11.00am: Spending under the Coronavirus Job Retention Scheme rises to £27.4bn

New figures released by the Treasury reveal the UK government has underwritten £45bn of loans to businesses affected by the coronavirus pandemic.

The Treasury has also coughed up more than £27.4bn under the Coronavirus Job Retention Scheme, as of July 5, up from £25.5bn a week earlier.

Latest data shows #Job Retention Scheme is supporting 9.4 million jobs & has cost £27.4 billion so far. Also #UK #government #coronavirus lending to #businesses rises to £45 billion

— Howard Archer (@HowardArcherUK) July 7, 2020

The FTSE 100s losses have lengthened in the second half of the morning session, with the index languishing at 6,204, down 82 points (1.3%).

9.45am: Whitbread leads the market lower

Stock markets elsewhere have seen indices hit record levels but London is not one of them; even so, investors have paused for breath.

The FTSE 100 was down 52 points (0.8%) at 6,234, with the retreat led by hotels and restaurants group, Whitbread PLC (LON:WTB), which is down 4.3% at 2,334p after its trading update.

“The commentary on initial trading post-lockdown is interesting and potentially leaves Whitbread better placed than some of its rivals if the trends it has identifies persist over the longer term,” ventured Russ Mould, the investment director at AJ Bell.

“The company has seen decent demand in regional tourist hotspots but subdued appetite in London and other metropolitan areas.

“Unlike other chains which are more centred on the capital and other cities, Whitbread has sites throughout the country,” he noted.

Housebuilders, which had a good day yesterday after the trading update from Barratt Developments PLC (LON:BDEV), are still in demand today, with Barratt up 3.1% at 546p, Persimmon PLC (LON:PSN) 1.2% firmer at 2,427p and Berkeley Group Holdings PLC (LON:BKG) 0.4% to the good at 4,341p.

Earlier today, Halifax, the mortgage lender, released its house price index for June, which showed prices fell by 0.1% in the month after declining by 0.2% in May.

“The near-term outlook points to a continuation of the recent modest downward trend in prices through the third quarter of the year,” suggested Halifaxs boss, Russell Galley.

James Forrester, the managing director of Barrows and Forrester, believes the impact of an industry-wide lockdown is still lingering.

“However, the positives are that prices remain higher on an annual basis despite the turbulent start to the year. This is a much better indicator of market health and one that should reassure the nations home sellers, as well as bolstering the surge of buyer demand that has already flooded the market since lockdown restrictions were eased,” Forrester said, to the sound of first-time buyers shaking their heads.

All eyes now are on Rishi Sunak, the Chancellor of the Exchequer, to see whether hell make any changes to stamp duty in tomorrows summer statement.

They know this. Of course they do. Why brief it? Chancellor now has only two choices. He MUST either cut stamp duty right away or rule out a cut in the Autumn. To do otherwise could ruin the housing market for months to come.

— Paul Johnson (@PJTheEconomist) July 6, 2020

8.55am: Gains chopped back

There was more than an element of profit-taking to the FTSE 100s early decline on Tuesday following Mondays triple-digit gain.

The UK blue-chip stocks index opened 69 points lower at 6,217.09

While Wall Street ended a busy session more than 450 points higher, there was a pause for breath in Asia after the recent stellar run of markets in the region.

Here at home chancellor Rishi Sunak is fast becoming the mad professor of public finance – or perhaps even the Sultan of Stimulus.

After mooting helicopter money, cuts to stamp duty and training grants for businesses, he has supplemented the £1.5bn package for the arts with a £2bn green energy initiative.

On the corporate news front, its a big day for the retail sector and one of its former rising stars – JD Sports (LON:JD.).

The FTSE 100-listed firm's shares fell 2.6% in the wake of full-year results, which provided a candid assessment of prospects.

“The companys own outlook for the immediate future is mixed,” said Richard Hunter, stockpicker-in-chief at Interactive Investor. “As has been seen with other retailers, city centre stores and shopping centre outlets are suffering from a severe lack of footfall, especially at weekends.

“This is partly offset by the companys out of town presence in retail parks, where consumers are browsing less and rather more likely to purchase the required items immediately.

“Even so, there will be some gross margin sacrifice as certain lines of stock will be sold at knock-down prices for either seasonal or fashion reasons.”

In the hospitality sector, Whitbreads first-quarter trading statement reflected the grim reality of lockdown, though it has taken measures to insulate itself, including raising £1bn from the market. The shares led the losers list with a 4% decline.

Among the small-caps, the mini investment bank finnCap (LON:FCAP) advanced almost 5% after a record start to its new financial year.

Proactive news headlines:

finnCap Group PLC (LON:FCAP) said it recorded its strongest ever first quarter in 2020 with revenues 50% higher than the same period last year, boosted by capital raising activities, which has flourished during the coronavirus (COVID-19) lockdown. The broker helped clients raise significant sums of cash to strengthen their balance sheets, particularly in the tech and life sciences sectors, with Avactas £48mln fundraiser among the highlights of this busy period. The company, which has added M&A and debt advisory to its traditional investment banking services, told investors that market volatility had provided a fillip too by helping drive up trading income. Turnover for the three months ended June 30, 2020, was £9.8mln, up from £6.5mln, while advisory fees were also £6.5mln.

Thor Mining PLC (LON:THR) (ASX:THR) said it has received positive assay results from samples identified as having vanadium potential taken from field sampling in the Colorado mineral claims held by American Vanadium Pty Ltd. Other samples, identified as potentially uranium-rich, are being assayed at a separate laboratory facility which is better equipped for samples of this nature. American Vanadium holds interests in uranium and vanadium-focussed projects, in Colorado and Utah in the United States of America. Thor announced plans to acquire it in June, subject to satisfaction of due diligence requirements.

SkinBioTherapeutics PLC (LON:SBTX) has said its collaboration with Winclove Probiotics on the development of a food supplement is well ahead of schedule. SkinBio is working with Winclove on a probiotic food supplement to help manage the symptoms associated with the skin condition, psoriasis. The good news is that Winclove has already come up with a formulation to be known as AxisBiotix Ps. Before going into commercial production, the product will undergo a human study with patients suffering from mild to moderate psoriasis. SkinBio stressed that the study will be a food supplement study, not a therapeutic trial, and as such should not take as long.

Open Orphan PLC (LON:ORPH) said its hVIVO lab services operation has signed three new contracts, adding to the momentum behind the business. It has landed work with NoBACZ, a spin-out from the University of Cambridge, a new second deal with Nearmedic, and has agreed to run testing for an unnamed Cambridge, Massachusetts biotech. "We are now continuing to sign additional new virology services contracts with third-party customers,” said Open Orphan chairman Cathal Friel in a statement.

In a separate statement, Open Orphan also said it had received notices of exercise of warrants by investors who participated in the Venn loan note financing in December 2018 over 1,749,732 ordinary shares in the company at 0.1p each for 619,448 ordinary shares and at a price of 2.2p for 1,130,284 ordinary shares. The gross proceeds of this exercise received by the company amount to £25,485.72.

Seeing Machines Limited (LON:SEE) has welcomed the passing in the US House of Representatives of the Moving Forward Act, a new automotive safety bill. It promises to drive demand for the companys driver monitoring system (DMS) technology, which use cameras and facial recognition to ensure drivers are paying attention to the road. The Moving Forward Act specifically includes a plan to mandate driver monitoring in cars and trucks sold from 2024. It will also require new vehicles to have automatic braking, lane-keeping, blind-spot detection, event data recorders at the same time.

Rosslyn Data Technologies PLC (LON:RDT), the Big Data technology company, has been earning brownie points by helping its clients manage more efficiently during the coronavirus (COVID-19) lockdown. The group said that while its operations have not been adversely affected by the lockdown, a lot of its customers have had to find new ways of doing things, and Rosslyn's technology has assisted in enabling them to do this. The coronavirus pandemic has also highlighted new risks within the supply chain and Rosslyn said it has been able to assist its clients to better understand where the risks are and enabled them to build increased resilience into their supply chains.

Frontier IP Group PLC (LON:FIPP), a specialist in commercialising intellectual property, has revealed that its portfolio company, Celerum Limited has been sub-contracted to support software development for Aberdeen-based marine logistics firm PlanSea Solutions Limited. The company noted that the work builds on approaches proven in several projects undertaken by Celerum founder Professor John McCall, former Head of the School of Computing, Science and Digital Media at RGU who has more than 25 years research experience in nature-inspired computing (NIC) which looks to develop new software and AI algorithms based on natural processes and behaviours. Examples of NIC include particle swarm optimisation, based on how birds and fish behave in flocks and schools, and genetic algorithms, software techniques based on natural selection and evolutionary genetics. Frontier IP holds a 33.8% equity stake in Celerum.

Collagen Solutions PLC (LON:COS) has inked a new three-year agreement with NovaBone Products, which produces US FDA-cleared synthetic bone grafts. NovaBone is a long-standing customer, since 2015, with the AIM-quoted firm supplying specialised collagen biomaterials specific to their line of bone graft products that are used in orthopaedic and dental applications. The contract begins with a minimum 3-year period and It formalises a longer-term supply arrangement to ensure NovaBone has consistent and increased access to this specialised material to support their continued growth.

Live Company Group PLC (LON:LVCG) said it has agreed two new contracts for its BRICKLIVE events in the group's second quarter as many zoos hosting its events begin to reopen following the coronavirus lockdown. In an update for the quarter, the media and events group said it has agreed to display its BRICKLIVE Ocean content at the Da Vinci Science Centre in Pennsylvania, while it has also signed a deal to display its Paw Patrol tour at the Odysseum museum in Köln in Germany until August. The company also said its BRICKLIVE Animal Paradise tour was now open at the John Bull Zoo in Michigan, while its BRICKLIVE Supersized content was now open at the Marwell Zoo in Hampshire and its BRICKLIVE Ocean exhibit is scheduled to open soon at the Bristol Zoo Gardens. The firms BRICKLIVE Big Cats show is also due to open at the Banham Zoo in Norfolk at the end of July.

Impax Asset Management Group PLC (LON:IPX) saw its assets under management (AUM) rise sharply in the April-June quarter of 2020. At the end of June, the group's AUM stood at £18.1bn, up 25.8% from the end-March figure of £14.4bn. "Despite recent market volatility, Impax has again delivered significant growth, with net inflows of over £960 million for the quarter to 30th June,” declared Ian Simm, the chief executive of Impax in the third-quarter update.

World High Life PLC (AQSE:LIFE) (OTCQB:WRHLF) said its CBD brand, Love Hemp has successfully landed ISO 9001:2015 certification to provide an international mark of quality. The certification confirms the brands quality management standards, efficiency and customer satisfaction. It follows a rigorous and comprehensive company-wide audit by a recognised certification agency, the company noted. The process began in June 2019 and the on-site audit completed in April.

Braveheart Investment Group PLC (LON:BRH) has updated on the development of a coronavirus test by its portfolio firm, Paraytec Limited, in partnership with the University of Sheffield. The investment firm said Paraytec has completed the first four stages of a five-stage process to produce an artificial version of the coronavirus in order to avoid using live versions of the disease during proof-of-concept development of the test, and that the final construction stages of the viral mimic will be reported on in the next phase.

Argo Blockchain PLC (LON:ARB) said it has repaid a debt taken out last year and reported on its expanded cryptocurrency mining capacity following its first month of operation after the latest Bitcoin halving. Over June, Argo said it had mined 180 Bitcoin or Bitcoin equivalent compared to 252 in May, taking the total amount of Bitcoin mined in the first six months of the year to 1,669. Mining revenue in June amounted to £1.41mln from £1.93mln in May, meanwhile, the company generated an average monthly mining margin of around 27% compared to 34% in the prior month.

NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQMLF) (OTCQB:NQMIY) has raised £917,485 at 6.5p per share for general working capital purposes and to accelerate the re-opening of the Beaconsfield gold mine in Tasmania, Australia. The company acquired the Beaconsfield gold mine in June 2020. Beaconsfield has a JORC resource of 1.454mln tonnes at 10.3 grams per tonne gold, giving 483,000 ounces.

Inspiration Healthcare Group PLC (LON:IHC) said it has made two board changes, including the appointment of Brook Nolson, currently a non-executive director of the global medical technology company as its chief operating officer, with immediate effect. The company said Nolson, who has been a board director for the last five years will report directly to its chief executive officer Neil Campbell and will assume responsibility for the day to day operations for the whole group. It also announced that Toby Foster, one of the founding members of the group, has been promoted to the position of managing director of Inspiration Healthcare Limited to spearhead the drive for the future growth of the business following the recent acquisitions of Viomedex and S.L.E. Limited.

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