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  • FTSE 100 closes up 61 points
  • Trump whistleblower complaint provides pause for US markets
  • Carnival sinks after profit warning

5.30pm: Footsie closes higher

FTSE 100 closed firmly higher on Thursday, boosted by continued weakness in the pound amid Brexit uncertainties and as traders this side of the pond basked in Trump trade optimism even though the glow had faded in New York.

The UK’s premier share index finished 61.09 points higher at 7,351.08, which was below the session peak of 7,387.09 but  well above the low of 7,277.15. The FTSE 250 ended in the blue, up 43.69 points at 19,818.61.

UK investors welcomed comments on Wednesday by President Trump at the United Nations General Assembly meeting in New York where he suggested China wanted to make a deal “very badly”.

“It could happen. It could happen sooner than you think,” he was quoted as saying, referring to trade negotiations between the two super economies.

Connor Campbell, financial analyst at Spreadex noted that the commodity sector boosted the Footsie on the day, “influenced by Trump’s trade deal rumours, alongside the continued misery of sterling”.

“The pound failed to make any in roads regarding a recovery of yesterday’s losses; instead the currency spent much of the day flat, paralysed by all the recent talk of a general election,” he added. Cable was almost flat against the dollar at US$.1.2340.

But on Wall Street, having reacted to those Trump comments yesterday, it was a different story on Thursday, with stocks sliding as the focus switched to the US President’s scramble to deal with a whistleblower complaint  that alleges he sought foreign interference in the US election.

Democrats opened an impeachment inquiry against Trump on Tuesday, accusing him of seeking foreign help in the hope of smearing former vice president Joe Biden and of using military aid to Ukraine as a potential bargaining tool.

Around London’s close, the Dow Jones Industrial Average was off 88.58 points at 26,882.62, while the broader S&P 500 index fell 12.83 at 2,971.80.

3.35pm: Carnival makes for fourth blue-chip profit warning in late-afternoon

As the final hour of trading began, the FTSE 100 has stayed firmly on a positive footing with gains hitting 90 points to reach 7,380 just after 3.30pm.

However, all was not well among the index’s constituents as cruise operator Carnival PLC (LON:CCL) sank 7.3% to 3,385p after becoming the fourth blue-chip firm to issue a profit warning on Thursday.

In its results for the third quarter, the owner of the Costa and P&O cruise lines said it expected earnings for its 2019 financial year to be lower than previous estimates in June due to higher fuel prices.

Carnival joins education publisher Pearson, tobacco firm Imperial Brands and British Airways owner IAG to make a quarter of FTSE 100 fallers that have all seen their shares tumble after ringing the earnings alarm in today’s session.

2.50pm: Lower open on Wall Street as traders mull Trump whistleblower complaint

Despite expectations of a higher start, US stocks turned lower on Wednesday morning as new complaints around Donald Trump’s potential election interference began to surface.

Shortly after the opening bell, the Dow was down 0.05% at 26,958 while the S&P 500 fell 0.2% to 2,978 and the Nasdaq dipped 0.38% to 8,046.

Initial positivity around US-China trade negotiations appears to have been overshadowed by a newly released whistleblower report released by the House of Representatives Intelligence Committee stating that the US president was “using the power of his office to solicit interference from a foreign country in the 2020 US election”.

The report went on to say that Trump, alongside his personal lawyer and ex-New York mayor Rudy Giuliani and US attorney general William Barr had been involved in efforts to pressure foreign countries to investigate his election rivals, particularly former Vice-President Joe Biden.

However, the cautious start on Wall Street did little to dim the FTSE 100’s positivity, with the blue-chip index up 81 points at 7,371 in mid-afternoon.

2.00pm: US second-quarter GDP left unchanged at 2%, jobless claims rise amid GM strike

GDP growth for the US in the second quarter has been left unchanged at 2%, confirming that the world’s largest economy slowed down between April and June from a first-quarter growth rate of 3.1%.

Growth was buoyed by strong consumer spending in the spring, which accounts for around 70% of economic activity, while a decline in business investment was revised upwards to a 1.4% fall from a previous drop of 1.1% as heavy industry was dented by the trade war with China.

Meanwhile, claims for jobless benefits in the seven days to 21 September ticked up by 3,000 to 213,000, reflecting an ongoing strike by workers at the Michigan plants of US carmaker General Motors Co (NYSE:GM).

However, despite the industrial action at GM jobless claims were still hovering around a 50-year low.

In London, the FTSE 100 was up 88 points at 7,378.

1.00pm: US markets seen higher amid trade optimism

Positive noises over US-China trade negotiations were once again proving a catalyst for buying on Wall Street, with the main indices predicted to open higher on Thursday morning.

Comments from Trump that a deal with China could happen “sooner than you think” and that the People’s Republic wanted a deal “very badly” boosted stocks overnight on Wednesday and the trend seems set to continue, while little interest appears to be being paid to the newly created impeachment inquiry into the US president by Democrats in the House of Representatives.

One of the big movers in pre-market trading was plant-based burger maker Beyond Meat Inc (NASDAQ:BYND), which rose 18.8% to US$164.34 after fast-food giant McDonald’s Corp (NYSE:MCD) said it would trial the burgers at a number of its Canadian outlets.

Meanwhile, the latest revised reading for the US’s second-quarter gross domestic product (GDP) alongside weekly jobless claims, both due before trading kicks off, may provide some catalysts for the dollar, with a strong picture of the US economy likely to cause more issues for sterling, which is down 0.15% against the greenback at US$1.2335.

Meanwhile, in London, the FTSE 100 was up 80 points at 7,370.

12.30pm: FTSE 100 holding onto gains at lunchtime; 17,000 Thomas Cook passengers to return home

Over lunchtime, the FTSE 100 was holding onto its gains after notching up impressive gains in the morning session and was 78 points higher at 7,368 at around 12.30pm.

Meanwhile, the saga of collapsed travel giant Thomas Cook continued on Thursday as 17,000 passengers are expected to return to the UK as part of an airlift organised by the Civil Aviation Authority (CAA).

The repatriation, codenamed Operation Matterhorn and the largest operation of its kind in peacetime, has already seen around 46,000 people return home since Thomas Cook collapsed on Monday, stranding 150,000 of its UK customers.

It has also emerged that the tour operator’s German sister airline, Condor, had been saved from the collapse thanks to a €380mln bailout loan from the German government.

While Condor’s staff will be breathing a sigh of relief, it is unlikely to bring smiles to Thomas Cook’s former staff and may raise more questions around the UK government’s refusal to step in and save the company from insolvency.

11.05am: FTSE 100 gains into late-morning

As the morning progressed the FTSE 100 showed no signs of slowing down, logging a gain of around 81 points at 7,371 just after 11am.

Trade optimism is once again providing buoyancy for markets as news of a deal between the US and Japan have many hoping for a more amenable atmosphere for upcoming trade talks between the US and China.

Chris Beauchamp, chief market analyst at IG, said the developments were helping to lift equities covering a “broad variety of sectors, not least those connected to China”.

“If this keeps up, then the volatility of the past few days will seem like the digestion of September’s gains ahead of a fresh push higher, rather than the beginning of a hefty sell-off such as we saw in May and August”, he added.

However, David Madden at CMC Markets said positive trade overtures by the US, particularly from Donald Trump himself, were likely to leave some traders “sceptical” as the US president had a “habit of changing his tune” on China.

In economic news, new data from the Society of Motor Manufacturers and Traders (SMMT) showed that car production in the UK mounted something of a comeback in August with a 3.3% increase in output to 92,158 units.

However, the industry trade body said the increase was not enough to offset what it said were “substantial losses” in April when production fell by 56,999 units.

Production was also down 17% in the year-to-date at 866,918 units, the first time output in the period has fallen below 1mln since 2014, and the biggest year-on-year decline since 2011.

“While growth is always welcome, today’s figures mask the underlying downward trend and strengthening global headwinds facing the sector, including international trade tensions, massive technological upheaval and, in the UK, political and economic uncertainty”, said SMMT chief executive Mike Hawes.

The biggest faller among the blue-chips in late-morning was Pearson, which had sunk 18.5% to 702 on the back of its early profit warning.

At the top of the risers, meanwhile, was media and publishing house Informa, which was 2.9% higher at 848p.

9.55am: BA owner IAG flies lower

British Airways owner International Consolidated Airlines Group SA (LON:IAG) was one of the key blue-chip stocks on the slide into mid-morning after a wave of strikes from BA’s pilots and competition from budget rivals bit into its earnings.

Strikes by BA pilots led to the cancellation of 2,325 flights in a few days during September, while the refunding a rebooking affected passengers landed IAG with a bill of around €137mln.

On top of this, threatened strikes by workers at Heathrow Airport saw IAG bag a further hit of €33mln.

A €45mln deduction is also expected from the latest booking trends among low-cost airlines, where IAG’s Vueling and LEVEL brands operate.

As a result of the difficulties, the company said it expected profits for the 2019 financial year to be €215mln lower than expected, sending the shares down 2.4% to 468.7p shortly before 10am.

However, IAG’s cloudy skies did little to darken the FTSE 100’s positivity, with the index climbing 62 points to 7,352.

The index is being supported by ongoing optimism over world trade as well as rises among some of its big hitters including oil supermajor Royal Dutch Shell PLC (LON:RDSB), which was up 1.1% at 2,354p, and banking giant HSBC Holdings PLC (LON:HSBA), which ticked up 0.9% to 621.5p.

8.40am: FTSE 100 opens in positive territory

Unperturbed by the parliamentary hostilities after the Commons recall, or rattled by the prospect the US president being impeached, the FTSE 100 opened 21 points higher at 7,310.59.

Driving the UK benchmark was the fall in the value of the pound, which tends to boost foreign currency earners and renewed optimism over US-China trade negotiations, which helped turn the tide on Wall Street.

“The rebound was also helped by reports that Japan and the US have reached an initial agreement on trade, which in turn saw US treasuries and gold prices sell off sharply, sending yields sharply higher,” said Michael Hewson of CMC Markets.

The big mover on the Footsie was Pearson (LON:PSON), which tumbled 15% after sounding the earnings alarm. (READ MORE on the Pearson story here)

Imperial Brands (LON:IMB) fell 8% after issuing a warning in the wake of the America scare over vaping. (MORE on Imperial here)

Proactive company news

Norman Broadbent PLC (LON:NBB) has returned to profit in its first half in what it said was a “major landmark” following a change to its business model.

Freight management services provider Xpediator PLC (LON:XPD) saw increased revenue and operating profit in all parts of the business in the first half of 2019.

Circassia Pharmaceuticals PLC (LON:CIR) published the road-map to profitability as it reported strong growth in first-half sales alongside a reduction in costs and cash outflows.

Location Sciences Group PLC (LON:LSAI) is forecasting increased sales into its second half after revenues for the first six months of its financial year rose by over 90%. In a separate announcement, the company unveiled plans to raise between £250,000-£750,000 by issuing 33.3mln new shares to investors.

Resource development company Savannah Resources PLC (LON:SAV) is confident of the prospects for the lithium market despite some short-term volatility in prices.

Equals PLC (LON:EQLS) followed up a five-year deal signed with Mastercard yesterday with good sales over the first half of the year.

Jersey Oil and Gas PLC’s (LON:JOG) half yearly results boast a strong cash position of £15.5mln and a positive outlook as chief executive Andrew Benitz hailed a “transformational” phase.

United Oil & Gas PLC (LON:UOG) boss Brian Larkin highlighted a continuation of “pace and quality” in its activities as the AIM-quoted firm released financial results for the first six months of 2019.

Cabot Energy plc (LON:CAB) has told investors that it has exited the Cascina Alberto onshore exploration licence in The Po Valley, Northern Italy, alongside partner Shell.

Eurasia Mining PLC (LON:EUA) has applied to explore another chunk of acreage within the Monchetundra project licence area in Russia.

IronRidge Resources Limited (LON:IRR) said it expects to compile a maiden resource estimate for the Cape Coast lithium portfolio in Ghana sometime in the first quarter of next year.

Erris Resources PLC (LON:ERRIS) wil continue with a ‘disciplined approach’ to expenditure on its projects in Ireland and Scandinavia given the tough backdrop for junior miners at present.

6.45am: Flat start predicted

The FTSE 100 index is predicted to have a flat start on Thursday as traders shrug off the political drama on both sides of the Atlantic.

Angry exchanges in the House of Commons, including Boris Johsnon inflammatory reaction to his defeat in the Supreme Court, have ramped up the likelihood of a potentially fiery Brexit-fuelled election. 

The pound fell to 1.235 against the dollar overnight but held above that level.

“This means that investors expect nothing to change over the past couple of weeks in the UK’s political debacle regardless of suspended or unsuspended Parliament,” said market analyst Ipek Ozkardeskaya at London Capital Group. 

On the other side of the coin, she said sterling will likely start feeling the pinch of snap election talks that could bring more uncertainty to the mix, though the Labour Party will likely reject an early vote before the October 31st deadline is off the table.

London’s blue chip stock benchmark will rise around two points to around 7286, according to spread betters on the IG platform.

There will be a weight from several FTSE 100 companies going ex-dividend, including Hargreaves Lansdown and Prudential.  

US stocks rebounded overnight, with the Dow Jones up 163 points or 0.6% to 26,970.71, while the S&P 500 rose 0.6% and the Nasdaq fared best, up 1.05%. 

This was despite the impeachment talk around President Trump.

Investors instead chose to focus on the progress made in trade discussions with Japan and the possibility of a trade deal with China. 

Trump said that there is a “good chance” of reaching an agreement with China after it announced it would buy soybeans and pork from US farms earlier this week.

“But Donald Trump remains the major risk to the conclusion of any agreement. A tweet would suffice to shatter the market sentiment, again,” Ozkardeskaya said.

Mitchells & Butlers pint half full or half empty?

There flow of company news will include an update from All Bar One and Harvester pubs and restaurants owner Mitchells & Butlers PLC (LON:MAB), which last time we heard from it was bragging about outperforming the market.

Well, it makes a change from its years trying to mollify analysts worried about its debt mountain which, like most mountains, seems to have been around forever.

The debt position is still a concern, for sure, but is heading in the right direction; at the end of April net debt had been whittled to a still eye-watering £1.63bn from £1.72bn a year earlier.

In Thursday’s trading update, however, analysts might be more interested in like-for-like sales growth rather than debt reduction, as this was picking up pace when the company issued a third-quarter trading update at the end of July.

Like-for-like (LFL) sales in the 10 weeks to 27 July were up 2.8% year-on-year, despite drink sales being 0.3% lower on a year earlier, which was probably a reflection on the 2018 period including the World Cup and a glorious summer.

Year-to-date, LFL sales were up 3.6%, with drink sales up 3.1% and food sales up 3.9%. Analysts think growth for the full-year could fall somewhere between 3.0% and 3.5%.

Analysts will likely be looking to see whether Mitchells and Butlers can keep the fizz in their drinks sales, as growth flattened in the final ten weeks until 31 July to only down to 0.3%, with food sales picking up the slack.

Alfa not a beater

In the hot seat is Alfa Financial Software Holdings PLC (LON: ALFA) as it releases results for the first half of the year.

Investors already know about most of the bad news after Alfa’s profit warning last week, which sent the shares tumbling 17%.

The company, which recently dropped out of the FTSE 250 after a 47% slump over the past 52 weeks, cut its profit expectations to £5mln in the six months to end-June, down 41% from the year before.

The maker of software for the asset finance industry revised its full-year profit for 2019 to between £63mln and £65mln, which is significantly below previous expectations.

Investors will be scrutinising the results for details about the declining spend by customers on optional upgrades and non-critical work, which Alfa said was partly responsible for the profit disappointment along with delays to project implementation.

Alfa said that consumers are spending less because of a “broader macro uncertainty”, which is unlikely to lessen tomorrow as eyes are fixed on a parliamentary motion for a general election.

The outlook may be sweetened by smaller successes, as Alfa reports beginning work with two new EMEA customers in advance of finalising licence agreements.

Thursday September 26:

Finals: Grit Real Estate Income Group Ltd (LON:GR1T), Orient Telecoms PLC (LON:ORNT)

Interims: Alfa Financial Software Holdings PLC (LON:alfa), Circassia Pharmaceuticals PLC (LON:CIR), Ebiquity PLC (LON:EBQ), Northbridge Industrial Services Plc (LON:NBI), Pelatro PLC (LON:PTRO)

Trading statements: Mitchells & Butlers PLC (LON:MAB)

AGMs: Kromek Group PLC (LON:KMK), Sure Ventures PLC (LON:SURE)

FTSE 100 ex-dividends: Hargreaves Lansdown Plc (LON:HL), WM Morrison Supermarkets PLC (LON:MRW), Smurfit Kappa Group plc (LON:SKG), Prudential PLC (LON:PRU), Reckitt Benckiser Group PLC (LON:RB), Schroders PLC (LON:SDR)

Economic data: US weekly jobless, US GDP, US inflation