• FTSE 100 closes near flat
  • Wall Street shares up
  • US President Trump speaks in Washington over Iran

FTSE 100 closes little changed

FTSE 100 closed nearly flat shortly before US president Trump began a staged address in Washington about Iran’s missile retaliation targeting US bases in Iraq.

The UK index of leading shares closed Wednesday up around a point at 7,574, having been lower much of the session.

Mr Trump declared that US forces were “prepared for anything,” but that Iran appeared for now to be “standing down”. He added that the USA planned further sanctions on the country.

On Wednesday, Iran fired missiles at two air bases in Iraq that house US troops. Trump said no Americans were harmed in the attack and there was only “minimal damage” to targeted sites.

Analyst at CMC Markets, David Madden, said: “The markets were volatile today on account of the Iranian attacks on Iraqi bases – that often house US military personnel.

“The strikes were a retaliation for the killing of a military commander by the US last week. The Iranian government hinted that it is not interested in a full-scale war with the US. Tensions might be on the cusp of deescalating, and we have seen some confidence come back into stocks.”

On Wall Street, stocks rose.The Dow Jones Industrial Average added 196 points at 28,779. The S&P 500 added over 21 and the Nasdaq gained over 62 points.

3.45pm: FTSE 100 loiters in the red

The Footsie remained in the red as America has not yet provided any catalysts for the market.

“What could have been an absolute nightmare session was actually fairly boring, investors reacting with relatively sanguine attitude,” Spreadex analyst Connor Campbell said in an email.

The London benchmark had lost 18 points to 7,556 by mid-afternoon just as the White House prepared to release Donald Trump’s comment, while sterling was flat at US$1.3117.

Elsewhere, economists at Capital Economics said the ADP data revealing a 202,000 gain in December’s private employment suggests an upside in the official figures out on Friday.

The latter, which will dominate the Wall Street narrative for the rest of the week, are expected to show a 150,000 gain in non-farm payrolls.

3pm: FTSE 100 dips lower; Wall Street opens modestly higher

The FTSE 100 dipped again in the early afternoon while US indices got off to a modestly positive start.

London’s blue chips were down 21 points to 7,553 as sterling flattened out again at US$1.3125.

The Dow Jones gained 33 points or 0.1% to 28,616, while the S&P 500 was up 0.3% and the Nasdaq Composite gained 0.4%.

Just before the Wall Street opening bell, the White House announced that President Donald Trump will deliver a statement at 11am Washington time.

Jumbo jet-maker Boeing dipped 1% to US$332.50, against analysts’ expectations of up to 4%.

“Whilst we await to see whether it really was a technical/engine problem that led to its plane crashing shortly after take-off in Tehran (I have my doubts – the timing is very, very suspect), there are few who think that the company is out of the woods,” said Neil Wilson from Markets.com.

Back in the Square Mile, British Airways owner International Consolidated Airlines Group (LON:IAG) was flying 1% lower at 612.8p, ahead of Thursday’s update on December traffic and capacity.

Elsewhere in the travel sector, TUI AG (LON:TUI) slid 4% to 931.42 as the tensions in the Middle East may have discouraged holidaymakers from booking their next trip.

1.30pm: All eyes on Trump’s upcoming statement

The FTSE 100 and the pound both dipped underwater as the market holds its breath for President Trump’s upcoming statement on the situation with Iran.

The big caps shed 2 points to 7,571 as sterling was trading 0.2% lower at US$1.3093.

Analysts say Wall Street will pay attention to Boeing, whose 737-800 model crashed shortly after take-off from Tehran’s international airport, killing all 176 passengers and crew onboard, for what is believed to be a technical failure.

Xtb’s David Cheetham expects a 3-4% fall in the stock, which has already been dealing with earlier crashes in Indonesia and Ethiopia and the grounding of the 737 max.

NMC Health PLC (LON:NMC) was the biggest loser in the index, down a whopping 16% to 1,251.5p, after two controlling shareholders announced plans to sell a £373mln stake in order to cover their debts.

The Middle East-focused hospitals owner and operator noted the pricing announcement issued in connection to the sale of shares in the group beneficially owned by Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Khaleefa Butti Omair Yousif Ahmed Al Muhairi, known as Khalifa Bin Butti.

12pm: Wall Street to open in the red

The FTSE 100 had crawled back to parity at noon while Wall Street is expected to open in the red.

London’s blue chips were down just one point to 7,572 while the pound was down 0.2% at US$1.3105.

Analysts said the market were likely to be sitting and waiting for an official White House response on the Middle East tensions when the sun rises in Washington.

US futures trimmed their losses after the big overnight fall reassured by Trump’s tweeting “all is well” and promising a statement on Wednesday morning.

“The rationale for this seems to be that despite the clear escalation in US-Iranian tensions over the past week traders are still of the belief that things won’t get as bad as many have feared,” XTB analyst David Cheetham said. 

“Defence minister Amir Hatami has said that the response will be proportional and it is perhaps telling that the attacks seem to have been directed as to not cause maximum damage.”

On this side of the pond, analysts opinions were not moving stocks much, with Glencore only slightly higher as UBS upgraded to ‘buy’ as it feels 2020 will be “a pivotal year” with easing trade tensions and thermal coal to tighten with demand stable/supply contracting.

Imperial Brands (LON:IMB) got a little joy with an upgrade ‘sector perform’ by analysts at RBC Capital Markets, who felt the tobacco giant has “taken steps to restore credibility with investors”.

Unilever PLC (LON:ULVR), instead, was in the red as it was downgraded to ‘reduce’ by HSBC over questions on its ability to achieve its 2020 margin target, which may potentially be abandoned to fund higher investment.

11am: Commodities stocks pick up

Commodities giants helped the FTSE 100 pare its losses in late morning trading, with sterling also contributing as its gains were trimmed.

London’s big caps were down 16 points at 7,557 as sterling was flat at US$1.3125.

Resources stocks were dominating the market, with miners playing the lead as Polymetal International PLC (LON:POLY), Rio Tinto plc (LON:RIO), BHP Group PLC (LON:BHP), Glencore PLC (LON:GLEN) and Antofagasta Holdings (LON:ANTO) were all up around 1%.
Royal Dutch Shell PLC (LON:RDSA) and BP PLC (LON:BP. were following the Brent and WTI curves, regaining some ground after this morning’s dip.

A barrel of Brent crude is now priced at US$68.88, up 0.89%.

“Heightened geopolitical risk is also underpinning fundamental support for oil prices,” analysts at SP Angel said in an email, pointing out 20% of global oil supply flows through the Strait of Hormuz, a narrow shipping route between Oman and Iran, considered an area of “clear focus” after Iran’s attack on Iraq-based US military forces.

Overall, top riser on the Footsie was BT Group (BT.A), up 2% to 196.77p after the UK telecoms regulator loosened the policy for companies to invest in superfast broadband.

It will help the telecoms giant to roll out fibre to rural areas of the country, with plans to set wholesale prices to encourage competition as well as investment by BT’s arms-length Openreach infrastructure network.

9.45am: Halifax hints at house price recovery

The Footsie remained on the back foot in mid-morning trading on Wednesday under pressure from the US-Iran tensions, with signs of a UK house price recovery not making much difference for the market.

The blue chips lost 31 points to 7,542 while sterling was up a modest 0.2% to US$1.3151.

Mortgage lender Halifax released figures for December house prices, which were up 4% year-on-year and 1.7% month-on-month for an average price of £238,963.

The City remained unphased by these numbers, with shares in FTSE 100 housebuilders Barratt Developments PLC (LON:BDEV), Persimmon PLC (LON:PSN) and Berkeley Group Holdings PLC (LON:BKG) all down around 1%.

December marked the biggest monthly increase in the whole year, even with the general election, while the yearly comparison was favoured by a “particularly” weak end of 2018, analysts said.

David Westgate, chief executive at Andrews estate agents, said the boost was a sign of growing indifference towards Brexit throughout the year.

“January will be the real test of sentiment but for 2019 to have finished on such a high sets a positive note for the year ahead,” he said in an email, mentioning renewed confidence after the election results.

“Low borrowing costs and a strong jobs market will reinforce the renewed sense of optimism many people are feeling.”

8.35am: What goes up …

The FTSE 100 index, as predicted, sank into the red at the open amid worries that US-Iran hostilities may escalate.

The index of UK blue-chips lost 32 points early on to trade at 7,542.16 

A missile attack on US forces in Iraq and the crash of a Ukranian passenger jet in Tehran have put the international community and world markets on red alert.

Tensions in the region were initially ramped by America’s drone killing of Iran’s military leader Qassem Soleimani last Friday.

Brent crude moved higher amid worries oil supply will become tighter as a result, while gold, a haven asset in times of uncertainty, marched back towards the US$1,600 an ounce mark.

“Geopolitics will dominate the session on Wednesday as traders grapple with the US-Iran fracas,” said Neil Wilson, analyst at Markets.com.

“Geopolitics always means uncertainty – we simply cannot know what will happen next, so look carefully at positions as markets are liable to knee-jerk moves.”

The big faller, off 19% early on, was NMC Health (LON:NMC), which owns hospitals across the powder-keg Middle East. Of course, it has the additional worry about questions over its accounting and an activist investor baying for blood.

Off around 2% was Anglo American (LON:AAL), which is proposing to acquire a hole in the ground in North Yorkshire dug by Sirius Minerals (LON:SXX). That latter’s shares rocketed 32% on the news

Proactive news headlines:

Sirius Minerals PLC (LON:SXX) has confirmed that it has received a premium-priced takeover offer from Anglo American plc (LON:AAL), and, it is now in advanced talks with the FTSE 100-listed miner. The offer is pitched at 5.5p per share, which is a 34.1% premium to yesterday’s closing price of 4.1p. In a statement released after the market close on Tuesday, Sirius’s management team said it would be prepared to recommend an offer at that price.

Midatech Pharma PLC (LON:MTPH) (NASDAQ:MTP) has hailed the positive results from a study assessing the potential to deliver one of its drugs via an injection under the skin rather than into the muscle. MTD201, which is being developed to treat carcinoid cancer and the growth hormone condition acromegaly, was able to maintain the correct levels of plasma octreotide over six to eight weeks using this subcutaneous method, researchers found.

Shield Therapeutics PLC (LON:STX) has signed an exclusive agreement worth up to US$63mln for its iron deficiency treatment Feraccru to be sold in China. The deal with ASK Pharm (Beijing Aosaikang Pharmaceutical), covers China, Hong Kong, Macau and Taiwan and will involve an upfront payment of US$11.4mln and up to US$51.4mln in milestone and royalties. ASK Pharm will also pay for the marketing authorisation process and commercialising of Feraccru, which is branded as Accrufer in the US.

Eden Research plc (LON:EDEN) has signed a one-year exclusive evaluation agreement with Corteva Agriscience. The American giant, valued at US$21bn, wants to assess the potential of the UK biopesticides specialist’s encapsulation technology, focusing on formulations for seed treatments.

ADM Energy Plc (LON:ADME) said it has now completed the fundraising it announced on 30 September 2019, which in total raised approximately £412,000, with the final stage raising £150,360 via an issue of 2,148,000 new ordinary shares at a price of 7p each to Zark Capital Limited. Following the issue, Zark will hold 6,000,000 ordinary shares, representing 9.7% of ADM’s issued share capital.

Rosslyn Data Technologies PLC (LON:RDT) said it has won two large contracts for delivery of Knowledge Capture, part of its information management suite of products, with a minimum combined contract value of £0.9mln over their minimum term. In a statement, the leading global big data technology company noted that the latest contract wins add to a growing list of multi-national clients for both the group’s RAPid supply chain analytics and information management solutions, adding £200,000 to the company’s annual recurring revenue.

AdEPT Technology Group PLC (LON:ADT) announced that it has delivered network services to more than 100 hospital and specialist care sites as part of a government contract with the NHS. AdEPT was contracted in 2018 to improve network and bandwidth capacity, to allow for financial savings and better access to clinical systems, after the previous connection managed by BT Group PLC (LON:BT.A) was deemed obsolete.

Impax Asset Management Group PLC (LON:IPX) has seen strong inflows of new money in the first three months of its current year. The sustainable investment specialist said funds under management rose 7% to £16.1bn in the quarter to December with £771mln of new funds and a £289mln gain from market movements.

Nektan PLC (LON:NKTN) has sold its UK B2C business for £200,000 as part of its restructuring plans. In an announcement after the close on Tuesday, the online gaming platform operator said the B2C business was sold by administrators to Grace Media Limited, and the firm had now entered a B2B partnership with Grace Media to facilitate continued delivery of its B2C services to its white label partners, through which it will receive monthly royalties

Genel Energy PLC (LON:GENL) on Wednesday confirmed the receipt of US$6.7mln in oil payments from the Kurdistan Regional Government (KRG). In a statement, the Iraq-based crude producer reported that the partners in the Taq oil field were paid US$6.7mln gross for oil sales in August 2019, and, its 44% net share amounted to US$3.6mln.

W Resources PLC (LON:WRES) has announced the appointment of Oscar Marin Garcia as a non-executive director of the company with immediate effect. The group noted that Garcia has over 20 years’ experience, specialising in retail business in the Extremadura region of Spain and managing family office investments, and is co-founder and CEO of Lider Aliment, SA, a €200mln sales family-owned company. W resources pointed out that Garcia has a beneficial interest in 114,655,600 ordinary shares, representing approximately 1.8% of the company’s share capital.

Malvern International PLC (LON:MLVN) said that, further to its announcement on 23 December 2019, the sale of its Malaysian business to AAA Management Science Academy PLT for a total cash consideration of MYR 400,000 (approximately £75,000), payable over a 13 month period, has duly completed. Sam Malafeh, CEO of Malvern, commented: “We are delighted to have completed this transaction, as we can now bring greater focus to growing our UK and Singapore operations.”

Seeing Machines Ltd. (LON:SEE) said it, has collaborated with BMW Group to integrate its FOVIO driver monitoring technology into the BMW i Interaction EASE. It noted that this integration will be featured at the CES 2020 technology show in Las Vegas at the BMW booth Tech East Outside Area. The firm noted that BMW i Interaction EASE leverages Seeing Machines’ technology as a component of their innovative HMI (Human-Machine Interface) concept, visualized through a windshield projected Head-up Display (HUD). It added that Seeing Machines’ SVP of Fleet and Human Factors, Dr Mike Lenné, will also be conducting daily presentations on BMW’s CES booth from Wednesday through Friday.

Victoria Oil & Gas PLC (LON:VOG) announced that it has terminated its broker services agreement with GMP FirstEnergy. Shore Capital Stockbrokers Limited is now the company’s sole broker and Strand Hanson Limited continues to act as the company’s Nominated & Financial Adviser, the group said.

Bluebird Merchant Ventures (LON:BMV) announced that its Annual General Meeting, held on 28 December 2019 in Jersey, all resolutions were duly passed.

6.45am: FTSE 100 called lower

The FTSE 100 is expected to open lower on Wednesday as a retaliatory missile attack against US military targets in Iraq by Iran overnight kept traders on edge.

Spread-better IG expects the FTSE 100 to open around 37 points lower after a flat performance on Tuesday which saw the index close down 1 point at 7,573.

Hopes of a de-escalation of tensions of the Middle East over the assassination of senior Iranian military commander Qassem Soleimani seem to have been dashed as Iran fired around 15 missiles against US targets in the neighbouring country of Iraq, although to date it is not known whether there are any casualties.

Geopolitical tensions sent US markets lower overnight, with the Dow ending Tuesday’s session 0.4% lower at 28,583 while the S&P 500 fell 0.28% to 3,237 and the Nasdaq dipped 0.03% to 9,068.

However, Asian markets were down sharply in the wake of Iran’s retaliation, with the Japanese Nikkei 225 sinking 1.57% while Hong Kong’s Hang Seng slipped 1.1%.

Fears of further escalation in the Middle East sent oil prices spiking again early this morning, with prices of black gold up 1% at US$68.95 a barrel.

Traditional ‘haven’ assets are also on the rise, with the gold price jumping 1.47% to US$1,593.19 an ounce.

CMC Markets UK’s chief market analyst Michael Hewson says that amid the rising tensions the market is seemingly “content to play it by ear” and see how the tit-for-tat exchange play out.

“While this might seem complacent in terms of some overall valuations it’s not immediately clear what else investors can do apart from hedging their stock market exposure, by moving money into gold, as well as other havens, like US treasuries…For now, gold has been the key beneficiary and is likely to remain so, while a bigger move into US treasuries will only follow if tensions start to rise further, which now seems likely”, he says.

On the currency markets, the pound had remained relatively flat against the US dollar at US$1.3132 with little catalyst for movement, however, today’s house price index data may give some indication of the UK’s economic health that may nudge sterling’s value.

Significant announcements expected for Wednesday January 8:

Trading announcements: Greggs PLC (LON:GRG), J Sainsbury PLC (LON:SBRY), Topps Tiles PLC (LON:TPT)

Finals: Shoe Zone Plc (LON:SHOE)

Economic data: Halifax UK house price index

Around the markets:

Sterling: US$1.3132, up 0.07%

Brent crude: US$69.95 a barrel, up 1%

Gold: US$1,594.87 an ounce, up 1.47%

Bitcoin: US$8,363, up 6.3%

City headlines:

Iran launched its first retaliation for the assassination of Qasem Soleimani early this morning, hitting a giant US airbase in Iraq with a stream of missiles – Times

The global economy is heading towards a “liquidity trap” that would undermine central banks’ efforts to avoid a future recession, according to Mark Carney, governor of the Bank of England – Financial Times

It has emerged that Neil Woodford and his business partner paid themselves almost £14 million in dividends last year, attracting furious reaction from the savers trapped in the fallen stockpicker’s frozen investment fund – Times

The strike-hit South Western Railway franchise faces the prospect of nationalisation after its accounts revealed “significant doubt” that it could see out the year without going bust – Guardian

Legal action against litigation funder Burford Capital over allegations of irregular accounting practices has been withdrawn – Daily Mail

Travelex hackers have demanded a ransom to stop them publishing sensitive customer data including credit card information – FT