• FTSE 100 index closes down 53 points
  • US markets lower on shortened trading day
  • Ocado top Footsie gainer

5pm: FTSE closes down but higher on week

FTSE 100 index closed in the red on Friday as trade worries persist, Black Friday sales started, and US markets saw thin volumes –  the day after Thanksgiving.

The UK’s premier share benchmark finished down around 53 points at 7,362. On the week as a whole, it rose around 0.5%.

The FTSE 250 fell over 179 points on the day, at 20,844.

On Wall Street, the Dow Jones Industrial Average shed around 99 points, while the S&P 500 lost nearly seven points. The Nasdaq was also lower, giving up over 22 points.

David Madden, analyst at CMC Markets, said London saw a “broad sell-off in financial, mining, energy and consumer stocks”.

“The US-China trade story continues to dominate the headlines as the latest twist in the story is the Hong Kong bill – where the US government essentially backs the citizens of Hong Kong. Beijing don’t want to see the Trump administration stick their nose in domestic matters, so dealers are worried it might derail the trade talks. Apprehension about what will be China’s next move is stopping traders from buying into the market.”

Ocado (LON:OCDO) shares zoomed up nearly 10% on the day to 1,325p  after the online  grocer confirmed it had struck a deal with Aeon, Japan’s largest supermarket group – the first with a firm in Asia. The company has now struck deals with companies in France, the US, Canada, and Australia.

3.00pm: US markets open lower

US indices opened lower on what is a truncated trading day in the US.

The Dow Jones was down 88 points (0.2%) at 28,076 while the broader-based S&P 500 was down 6 points (0.3%) at 3,147.

In the UK, the Footsie continues to gently roll downhill; it’s currently off 38 points (0.5%) at 7,379.

About the only market benchmark heading higher in the UK is the FTSE Small Cap index, which is up 10 points (0.2%), thanks largely to an 11.7% rise to 93.3p by newspaper publisher Reach PLC (LON:RCH).

Whether the share price rise was because it managed to slow the decline of its print titles or because it opted to back away from acquiring collapsed rival Johnston Press is hard to say.

2.00pm: Losses lengthen

The FTSE 100 is drifting lower, with lenders and housebuilders prominent among those on the slide.

After a lunchtime trading session that was every bit as placid as the morning session, the Footsie was down 25 points (0.3%) at 7,391.

“It’s been quite the forgettable week and I don’t think today is going to be any more memorable,” said Craig Erlam of Oanda, nutshelling it totally.

“Thanksgiving week is, more often than not, rather slow anyway but this week has been particularly so. It naturally doesn’t help when the economic calendar is so thin and central banks have their house in order, leaving little hope of any action in the final weeks of the year,” he continued.

“Of course, people in the UK may be jealous that others can enjoy the festivities rather than dragging themselves to the voting booths when they’d rather be sipping on mulled wine or doing their Christmas shopping. Instead we’re spending late November/early December watching painful debates and the endless election coverage. Oh joy!”

Amen to that, Craig.

If you are looking for the faintest glimmer of excitement today it is best to look outside the FTSE 350, where a couple of takeovers have got pulses racing.

Northgate PLC (LON:NTG), the vehicle hire group, has agreed a merger with accident management specialist Redde Plc (LON:REDD).

Northgate shares fell 7.3% to 324.5p while Redde shares rose 3.1% to 112p.

Meanwhile, Aggregated Micro Power Holdings PLC (LON:AMPH) shot up 25% to 85p after agreeing to a 90p a share offer from the Asterion Industrial Infra Fund.

12.45pm: More like Bleak Friday

Checking for FTSE 100 index value updates is a bit like watching the spinning wheel of death on Microsoft Windows today.

The first 90 minutes of trading saw some moderate volatility but since then it has been a story of gentle decline, with London’s index of blue-chip shares down 17 points (0.2%) at 7,399.

US markets are open again, albeit only for half a day, following yesterday’s Thanksgiving Day, but there seems little chance of London gaining impetus from that source, as spread betting quotes suggest the Dow Jones will open at around 28,105 (down 59 points) and the S&P 500 at around 3,148, down 6 points or so.

For once, US traders are likely to be more focused on Black Friday than on US-China trade relations.

“It is more than the online videos of scrums outside American shopping malls. Black Friday also serves as an interesting data point on health and trends for consumers,” commented Jasper Lawler at LCG.

“In Europe, which has only adopted Black Friday in the past few years, scepticism seems to be rising about the value offered by Black Friday deals. That scepticism potentially adds a downside skew to the sales figures. Nonetheless, if consumers are feeling optimistic and have some disposable funds, spending at retailers should still get a healthy spike. Rising Black Friday sales, all else considered is a good thing for the global growth picture,” Lawler suggested.

On the UK retail scene, Dixons Carphone PLC’s (LON:DC.) Carphone Warehouse business is being sued by ThinkSmart Limited (LON:TSL), the digital payments specialist.

The AIM-listed tiddler has got the hump with Carphone Warehouse (CPW) because it says the volumes from a flexible leasing contract it has with CPW are well below the numbers targeted in the contract.

According to ThinkSmart, CPW is under an obligation in respect to the marketing and promotion of ThinkSmart’s RentSmart leasing product.

Dixons’ shares have largely shrugged off the development, shedding 1.3% but ThinkSmart, which is seeking around £20mln in damages, is down 21% at 16p, although it is worth noting that this is still almost double the price the shares were at three months ago.

11.15am: London continues to drift

With the US effectively enjoying a long weekend a sense of ennui continues to pervade the London stock market.

After almost recovering to par, the Footsie is now on the slide again but it can’t even be bothered to make a big effort at retreating; the index is just down 13 points (0.2%) at 7,403.

“Stocks are mixed this morning as US-China tensions have ticked up slightly on account of the US’s backing of the Hong Kong bill. The mood is cautious as dealers are fearful there could be an unravelling of some of the good work that has been done in relation to the trade discussions. Beijing view the Hong Kong bill as ‘sinister’ and it has the potential to sour relations,” opined CMC’s David Madden.

“That being said, equities haven’t lost that much ground in the past two sessions so traders are not that concerned for now. Market volatility is tipped to be low as many US traders will remain on holidays seeing as yesterday was Thanksgiving,” he noted.

The Bank of England has reported that the net flow of consumer credit in October was £1.3bn, which was above the £1.1bn monthly average since July 2018 and up from £0.8bn in September.

Lending in the mortgage market continues to be steady, the Bank said. Net mortgage borrowing picked up on the month to £4.3bn from £3.9bn in September, while mortgage approvals for house purchase fell slightly to 65,000.

UK businesses made net repayments of £0.9bn last month, driven by a weakening in borrowing from both banks and financial markets.

“The Bank of England remains accommodative, but it is clear that there has been a levelling out of money indicators. Interest rates are still low but credit is yet to expand as hoped and the expected boost in investment required to up-shift into a post-Brexit environment remains elusive,” said Phil Smeaton, the chief investment officer at Sanlam UK.

“Once the results of the election are revealed, we will receive clarity around future fiscal stimuli and investment spending. If a majority is secured in parliament, we can expect investment, which has been weak, to bounce back as we ride a wave of increased confidence and stability,” he predicted.

10.05am: Back to square one

After a dull start, London’s index of leading shares has pretty much wiped out all of its early losses, helped by the weakness of sterling.

The FTSE 100 was down just 3 points at 7,413. The pound, meanwhile, was off by almost a quarter of a cent at US$1.2889 against the greenback.

Much – possibly all – of the Footsie’s decline could be accounted for by a 4.2% fall to 1,072p by wealth management firm, St James’s Place PLC (LON:STJ) after Goldman Sachs got off the fence and recommended selling the shares.

In other broker action, Bernstein downgraded Royal Mail PLC (LON:RMG) to “market perform” from “outperform”, although that was before it knew that the Communications Workers Union had been unsuccessful in its application to the Court of Appeal to overturn an interim injunction against strike action granted by the High Court

Nevertheless, shares in the letters and parcels delivery firm were down 1.7% at 214.02p.

8.40am: Dull end to the week and month

The FTSE 100 looks set for a negative end to the trading month with the index of UK blue-chips down 32 points at 7,384.64 early on.

Wall Street’s closure for Thanksgiving invariably led to a lacklustre performance this side of the Atlantic; however, Sino-American trade worries also appeared to be driving sentiment.

“The apparent catalyst is fears that the Hong Kong Human Rights and Democracy Act, signed by Donald Trump this week, will irrevocably damage the relationship between the US and China just as it seemed that the ‘phase one’ trade talks were pointing in the right direction,” said Connor Campbell, analyst at Spreadex.

Adding to the general air of negativity was some fairly weak factory output data from Asian powerhouse economies Japan and South Korea, raising the spectre of a global recession.

Closer to home, the day’s big market mover was Ocado (LON:OCDO), the online grocery retailer turned fulfilment and logistics specialist.

Its shares soared 12% – a large movement on the Footsie – after it landed a deal to help streamline the online presence of Japan’s largest supermarket chain

Proactive news headlines:

Aggregated Micro Power Holdings PLC (LON:AMPH) is being taken private in a deal that values the biomass wood fuels and low carbon heat and power specialist at £63.1mln. The 90p a share offer from the Asterion Industrial Infra Fund, which has board backing, represents a 32% premium to last night’s closing stock price.

Kavango Resources PLC (LON:KAV) has hit early-stage signs of mineralisation during drilling on its Kalahari Suture Zone project (KSZ) in Botswana. The exploration intersected disseminated sulphides in two high-level gabbro sills, said the standard-listed junior, which is exploring near the town of Hukuntsi. The sills were intersected at 340 metres and 367 metres respectively and were each about one-third of a metre thick.

Woodbois Limited (LON:WBI) has signed an offtake agreement with a West African timber supplier for all of its production in Liberia. The forestry group said the agreement, which is expected to be formalised in January, will generate “material additional trading revenue” and will have scope for increases.

ADES International Holding PLC (LON:ADES) revealed a 169% year-on-year rise in third-quarter revenue amid improved utilisation and the post-acquisition scale-up of operations. The company reported a utilisation rate of 95% in the first three quarters of the year, versus 83% in the same period of 2018.

Quadrise Fuels International PLC (LON:QFI) made “staged progress” through the past year, expanding the breadth and depth of its market opportunity for its MSAR technology, the company said ahead of today’s AGM. The specialist fuel firm, in a statement, noted that it raised £4.5mln of new funds in the third quarter of the year, enabling it to continue business development activities.

Benchmark Holdings PLC (LON:BMK) said full-year adjusted underlying earnings (EBITDA) from continuing operations are expected to be around £11mln-£12mln, in line with expectations. The maintained guidance will come as a relief to shareholders after the aquaculture health, nutrition and genetics company warned in August of “challenging” conditions in the shrimp and sea bass/ bream markets.

Iconic Labs PLC (LON:ICON) has reshuffled its current board with the appointment of a new executive director and the loss of two non-executives Sam Asante, currently chief operating officer of the media group, previously worked at social media site UNILAD helping to establish commercial operations before moving to product and marketing.

Faron Pharmaceuticals Oy (LON:FARN), a clinical-stage biopharmaceutical company, said it has entered into a liquidity providing agreement with Lago Kapital under which it will quote bids and offers for the company’s share within the framework for the Nasdaq First North Growth Market Finland rules for liquidity provision. The spread of the bid and offer prices is a maximum of 4% calculated on the bid price and the quotes on bid and offer must be at least Euro 3,000 worth of shares. The intention is to promote liquidity in the share, the group added.

Eurasia Mining PLC (LON:EUZ) said it has received notice to exercise warrants over 15,583,333 ordinary shares of 0.1 pence in the company at an exercise price of 0.6p each, and a further notice regarding warrants over 3,026,806 ordinary shares at an exercise price of 0.826p each. The group said all funds for the exercise of the warrant shares have been received and amount to a cash value of, in aggregate, £118,501. Christian Schaffalitzky, the group’s chairman commented: “None of the recently executed warrants or options were executed by directors. The First Equity warrant overhang is now fully removed.  The directors also continue to make progress in ongoing talks in the current price environment for palladium and rhodium”.

GSTechnologies Ltd (LON:GST), the integrated information and communication technology infrastructure solutions provider, announced that William Knight has decided to stand down as a non-executive director from 2 December 2019 to focus on his other business interests. The company said it has commenced the search for a replacement non-executive director, to ensure that the board composition is appropriate following Knight’s departure and further announcements will be made as appropriate.

Pan African Resources plc (LON:PAF) announced that at its annual general meeting held on Thursday, 28 November 2019, all the ordinary and special resolutions, save for ordinary resolution number 13 – to authorise the directors to allot equity securities – were approved by the requisite majority of shareholders present or represented by proxy.

IronRidge Resources Limited (LON:IRR) confirmed that all resolutions put to shareholders were duly passed by a show of hands at the company’s Annual General Meeting, held on 29 November 2019 in Brisbane, Australia.

6.45am: FTSE 100 called lower 

Weak manufacturing data from Japan and South Korea has got traders worried again about the fall-out from the US-China trade war.

After falling 13 points yesterday to close at 7,416, the FTSE 100 was expected to fall a further 31 points this morning to 7,385.

In Asia, indices were in retreat after Japan reported that factory output fell 4.2% in October, while in South Korea industrial output fell 1.7% in October.

Japan’s Nikkei 225 was down 87 points at 23,322 while in Hong Kong the Hang Seng was off 542 points at 26,352.

US markets were closed yesterday for the Thanksgiving Holiday and will have a half-day today to help celebrants recover; those not sleeping off an excess of turkey will apparently be shopping like it is going out of style – which it is on many UK high streets – on what is known as “Black Friday” – the day on which US retailers are said (on average) to move into the black for the year.

The hyperbolic shopping event, whereby UK retailers cannibalise sales traditionally made on Boxing Day, has made its way across the Atlantic and coincidentally coincides with the release by data provider GfK of stats on UK consumer confidence.

Consumer confidence remained at its joint-lowest level since 2013, according to GfK.

The index reading was unchanged from October’s -14, in line with economists’ expectations.

“In the face of Brexit and election uncertainty, consumers are clearly in a ‘wait-and-see’ mode,” said Joe Staton, the client strategy director at GfK.

If high street retailers are stuck between the proverbial rock and a place that is very hard indeed, so are newspaper publishers, so the trading update from Daily Mirror and Daily Express newspapers owner Reach PLC (LON:RCH) “should be interesting”, analysts at Peel Hunt have said.

Over and above the usual issues about the performance of the advertising market and cost-cutting, the “real story” is whether the group is interested in another potential deal.

Last week, Johnston Press, the owner of the i newspaper and The Scotsman, called in the administrators and will be taken over by its lenders after a formal sale process received no offers of “sufficient value”.

There has been speculation that Reach was one of those involved in the auction, which the company didn’t rule out.

Significant announcements expected on Friday:

Trading announcements: McColl’s Retail Group PLC (LON:MCLS), Reach PLC (LON:RCH)

Economic data: GfK UK consumer confidence, UK mortgage approvals    

Around the markets:

  • Sterling: US$1.2917, up 0.04 cents
  • 10-year gilt: yielding 0.678%
  • Gold: US$1,464.70 an ounce, up US$3.70
  • Brent crude: US$62.96 a barrel, down 31 cents
  • Bitcoin: US$7,484, down US$94

City headlines:

The Daily Telegraph

Blackmore Bonds, which has raised at least £25 million for property developments by selling minibonds, has delayed interest payments to investors for a second time.

Demand for shares in Saudi Aramco available to individual investors has exceeded demand but is not set to break records in the kingdom.

Tarmac owner CRH has refused to review pension payout given to its chief executive despite a rebellion by 15% of investors at its annual meeting in April, as well as a wider backlash over lavish pension awards given to bosses.

S&P has forecast that eurozone growth will shift down a gear in 2020, falling from 1.2% this year to 1%.

The French state-owned energy firm EDF has come under fire for relying on an Indonesian company to build its largest British wind farm off the coast of Scotland capable of powering 375,000 homes.

The Guardian

The Institute for Fiscal Studies has criticised the spending plans of the UK’s two main parties, saying neither election manifesto “is a properly credible prospectus”.

The UK should contribute about £20 billion to the UN’s climate fund by 2030 if it plans to pay a “fair share” to help tackle the global climate crisis, according to a report from the IPPR thinktank.

Twelve EU countries, including Ireland, have blocked a proposed new directive that would have forced firms to reveal profits made and taxes paid in each EU country.

The average price of a home in the UK rose by 0.5% in November to £215,734, according to Nationwide building society, despite continued economic and political uncertainty.

Financial Times

The ex-boss of Nissan, Hiroto Saikawa opined that the cars maker has been damaged by Japanese nationalists.

Daily Mail

Legal & General Investment Management, Hermes EOS and BMO are among the investors, who are putting pressure on 15 major companies, including Royal Mail and Just Eat, to improve workers’ pay.

Frankfurt Main Finance, the lobby group behind a ‘cringeworthy’ advert to lure financial workers from the City to Frankfurt, has been forced to admit it has not been a success.

Quindell investors have initiated legal proceedings against the insurance group – now renamed Watchstone – over claims it misled the stock market about its financial health.

Violent anti-democracy protests in Hong Kong have affected visitor numbers at Fortnum & Mason’s new store in the island state; it sold half as much as expected in its first week.

The Independent

TSB has announced the locations of 82 branches that will close next year, with the loss of around 370 jobs across the country, as part of plans to save £100 million in costs by 2022.

The Times

Business confidence rose by three percentage points to 9%, recovering to its highest levels since January, according to the Lloyds Bank Commercial Banking Business Barometer.

Andrew Tinkler, the controversial former head of Stobart Group, claims that he has garnered support for a £70 million takeover of Eddie Stobart, the stricken trucking group.

Tata Steel’s plan to cut 1,000 British jobs in the run-up to Christmas has been slammed as “atrocious”.

The Insolvency Service said the Thomas Cook Aircraft Engineering unit at Manchester would be wound down as the company is liquidated.