• FTSE 100 closes down 29 points
  • Bank of England leaves key lending rate unchanged; QE programme boosted by £100bn
  • US benchmarkets down

5.05pm: FTSE 100 closes lower

FTSE 100 closed Thursday in the red after being higher briefly this morning as health fears dominated sentiment.

The Footsie finished down around 29 points at 6,224.

The midcap FTSE 250 also lagged, dropping over 64 points at 17,518.

“Beijing is currently in partial lockdown and its restrictions have become stricter in the past few days. A number of states in the US have seen an increase in the number of Covid-19 cases, most notably Texas – yesterday’s hospitalisation rate jumped by 11%,” said David Madden, analyst at CMC Markets.

Also in the news the Bank of England, as expected, kept interest rates on hold at 0.1%, while the stimulus bond-buying package was boosted by £100 billion top tackle the havoc wreaked by the pandemic on the UK economy.

“The BoE have also the EU situation to contend with, so the central bankers might be keeping some stimulus up their sleeves in case there is a no-deal scenario come January,” added Madden, referring to the Brexit process.  

Over on Wall Street stocks were also under pressure. The Dow Jones fell 120 points and the S&P 500 lost nearly eight points.

3.45pm: FTSE 100 losses narrow into final hour of trading

As Thursday’s session drew to a close, the FTSE 100 had continued to narrow its losses and was down 30 points at 6,222 shortly before 3.45pm.

Leading the blue-chip risers was bookmaker Flutter Entertainment PLC (LON:FLTR), which rose 4.3% to 11,222p, while at the bottom of the fallers pile was housebuilder Taylor Wimpey PLC (LON:TW.), which fell 5.8% to 143p after it raised £522mln through a placing and retail share offer to give it the firepower to add to its landbank.

Currency markets were also in the red as the pound fell 1.12% to US$1.241 against the dollar, squashing any possible rally coming from the Bank of England’s decision to inject more stimulus into the UK economy earlier today.

2.45pm: Wall Street opens in the red

US blue chip stocks have stumbled at the start of Thursday trading, as expected, amid worries about a second wave of coronavirus cases and a continued rise in weekly jobless claims.

The Dow Jones index fell 106 points or 0.4% to 26,016.17 in early trading, while the broader S&P 500 dipped 4 points or 0.1%.

The tech-laden Nasdaq Composite, however, rose 19 points or 0.2%, with Apple, Amazon and Microsoft all in the green.

Earlier, the US Department of Labor revealed that 1.508mln people filed initial unemployment claims in the week ending on June 13, worse than the consensus forecast of 1.3mln but down by 58,000 over the previous week.

The four-week moving average meanwhile, which aims to smooth out the variations in the data from one week to the next, fell by 234,500 to 1.774mln.

“Today’s numbers suggest that the reopening story may not be generating as much momentum for job creation as the surprise May payrolls number had suggested,” said economists at ING. 

Meanwhile, back in London, the FTSE 100 has trimmed its losses, now down 39 points or 0.6% at 6,214.75.

2.15: Pound pootles lower

Any rally in the pound from the Bank of England’s earlier moves has gone completely into reverse.

Sterling is down 1% to US$1.2429 but this has had no real effect on the blue chip stocks, with the FTSE 100 down 52 points at 6,201.57.

There has been little change on the leaderboards either, with Carnival and Taylor Wimpey the big fallers and Prudential top of the risers.

Among the mid-caps, TP ICAP (LON:TCAP) is the top riser after a bullish note from analysts at Barclays, saying the inter-dealer broker is well positioned to capitalise on growth of over-the-counter (OTC) derivatives. 

READ: TP ICAP well positioned to capitalise on structural growth of OTC derivatives – broker

Elsewhere, an upgrade for Anglo American (LON:AAL) by RBC Capital Markets did not have the same positive effect, with the shares in the red along with most of the big miners. 

“With normality slowly returning, commodity price momentum and mining valuations poised to increase,” the RBC analysts said the Sirius Minerals owner’s diversified asset suite and differentiated growth “provide it with a bright future”.

Insurer Hastings (LON:HSTG) was lower after it was downgraded to ‘hold’ by broker Peel Hunt, which warned that rate of new business could be hit by the coronavirus pandemic.

Sanne (LON:SNN), the fund administrator, was trading roughly sideways after an upgrade to ‘buy’ from Liberum, where analysts see the target of double-digit revenue growth for 2020 as “achievable”.

1.30pm: US markets to retreat again

US indices are expected to open lower, adding to yesterday’s losses, as fears fester over a second wave of coronavirus cases.

Spread-betting quotes point to the Dow Jones opening at around 25,934, down 185 points. The broader-based S&P 500 is seen opening some 17 points lower at 3,096.

In London, the FTSE 100 was down 54 points (0.9%) at 6,199 as investors reacted to the latest move by the Bank of England.

“As largely expected, the Bank of England announced more asset purchases at the June Monetary Policy Committee (MPC) meeting but kept interest rates unchanged at 0.10%. The £100 billion extra asset purchases announced were in line with the consensus anticipated increase,” said Howard Archer at the EY ITEM Club.

“The minutes of the June MPC meeting concluded that ‘at this meeting, a majority of MPC members judged that a further easing of monetary policy was warranted to support the economy and thereby to meet the inflation target in the medium term. While recent demand and output data had not been quite as negative as expected, other indicators suggested greater risks around the potential for longer-lasting damage to the economy from the pandemic,” Archer noted.

“While the Governor and several MPC members have recently indicated that the Bank of England is actively reviewing the case for negative interest rates, it never looked likely that the MPC would opt to go down that route at their June meeting – if at all,” Archer said, adding that it is likely the Bank will fully spell out its thinking on negative interest rates in the minutes for the August meeting.

ING had expected the Bank to top-up the programme by more than £100bn.

“Importantly though, that assumed that the pace of purchases remained the same, at around £10-11bn per week,” ING’s James Smith said.

“At that pace, the £100bn expansion would only sustain purchases until early September; however, in light of the recent stabilisation in markets, the BoE has decided to slow the speed of bond buying. Policymakers have signalled that the new £100bn injection will be completed by the ’turn of the year’, and this implies that the rate of purchases will roughly halve.” 

Smith is not ruling out the possibility of negative interest rates “further down the line” but thinks going negative is still “probably fairly low on the list of favoured tools”.

12.35pm: Blue-chips retreat as sterling rallies a little after latest BoE move

The Bank of England is to increase its asset purchase (quantitative easing) programme by £100bn.

The Bank’s Monetary Policy Committee voted by eight to one to increase the target stock of gilt purchases to £745bn. The purchases will be completed by around the end of this year.

The Bank’s reference lending rate was unchanged.

Sterling perked up a little following the news on the quantitative easing programme, recovering to US$1.2511 from around US$1.2488.

Sterling’s mini-rally was not welcomed by investors, as the FTSE 100 slipped to 6,212, down 42 points (0.8%). A strong exchange rate is generally reckoned to be unhelpful for a sizeable proportion of FTSE 100 stocks.

11.30am: Blue-chips continue to drift

The Footsie is back in negative territory but whether it has been positive or negative today, the index has not strayed far from last night’s close.

The index was down 7 points (0.1%) at 6,247.

“European markets are keeping relatively composed in early trade today, as the overnight US-led declines ease back fade away. While the Fed actions have helped US markets outperform throughout this post-crash recovery, this week has seen a more stable environment in Europe compared with the jitters evident in the US,” said Joshua Mahony at IG.

“Fears over a second wave remain front and centre for investors, with surging hospitalisations across a number of states pointing towards a critical period ahead for market sentiment. With John Bolton the latest source of concern for the Trump re-election campaign, it is perhaps unsurprising to see US markets underperform their seemingly more stable European and Asian counterparts. Between a potential surge in US Covid-19 cases, and a gradual shift in Trump’s re-election odds, US markets are starting to look over-exposed given the size of their rally over the course of Q2,” he opined.

There was some cause for optimism in the form of Fidelity International’s latest Pulse Survey, which shows growing optimism over the path of the coronavirus (COVID-19) outbreak, with business disruption estimated to come to an end within 10 months, according to the global average of responses.

“Against tough economic data, green shoots are starting to emerge. China is leading the recovery, with our analysts expecting a wait of just under 6 months to reach stability, a sign the country’s economic momentum is gathering pace,” commented Fidelity’s Fiona O’Neill.

“The general upbeat picture is confirmed by a noticeable jump in the proportion of Fidelity analysts seeing positive leading indicators in their sectors.

“The energy sector has seen the greatest improvement in fortunes, led by the stabilising price of oil, with 73% of analysts responding that leading indicators are positive, up from just 8 per cent two months ago,” she noted.

Meanwhile, credit card company Visa’s consumer spending index showed a year-on-year decline of 19.9% in May, which was at least an improvement on April’s 27.8% fall.

10.00am: Early losses recouped

London has recovered from an iffy start and the Footsie is now in positive territory – just.

London’s index of leading shares was up 10 points (0.2%) at 6,263, helped by a 5.3% rise to 1,260p by insurance giant Prudential PLC (LON:PRU) after it announced a US$27.6bn US reinsurance agreement alongside a US$500mln equity investment by Athene Holding Ltd into its US business.

National Grid PLC (LON:NG.), up 1.6% at 949.6p, was also doing its bit to boost the Footsie; the shares hardened after the energy distribution company’s full-year results.

“At times of crisis the utility sector is looked upon for some reassurance and stability and in National Grid’s full-year results we do have a reflection of calmness; however, the group hasn’t been immune to the effects of the pandemic and since the outbreak has seen increased demand from the residential sector more than offset by plunging demand from the industrial sector,” observed Heal Miah, an investment research analyst at The Share Centre.

“Consequently, the company announced they expect a £400mln hit to 2021 profits from the crisis. Most of this relates to its North American business where they expect increased late payments and bad debts, additional direct costs and the deferral of rate increases.

“However, investors’ focus with regards to a company like National Grid is always going to be on the dividend and here investors will take some encouragement as the dividends for the full year were raised by just over a penny to 48.57 pence, keeping it in line with RPI growth targets,” he added.

8.45am: Fresh wobble for Footsie

Worries over a coronavirus second wave curbed the enthusiasm of London’s share traders with the FTSE 100 lower in early trading on Thursday.

The index of UK blue-chips opened down 35 points at 6,220.72.

The partial lockdown of Beijing has raised concern that the virus has yet to run its course.

Here in the UK, the Bank of England is expected to expand its asset purchase programme by £100bn to £150bn to soften the economic blow of coronavirus.

“For all the optimism that central bank and government stimulus will help alleviate more permanent economic scarring, there is rising concern that any recovery is likely to be less V-shaped and more a long U-shaped type of rebound, as new cases start to rise in China, and rising infection rates in the US prompt concern about the re-opening of the economy there,” said Michael Hewson of CMC Markets.

Turning to the main movers, cruise operator Carnival (LON:CCL), one of the most volatile stocks on the Footsie, gave away some of its recent gains as its shares sank 5.5% ahead of upcoming results.

Housebuilders were also on offer after Taylor Wimpey (LON:TW.) tapped the market for £500mln to go out buying new land. Its shares fell 5.2%.

The defensive supermarket stocks were well bid. Tesco (LON:TSCO) led the field with a 1.5% gain on after selling its loss-making Polish arm.

Proactive news headlines:

Corero Network Security PLC (LON:CNS) has announced five new customer wins for its SmartWall DDoS protection products over the last two months totalling over US$1.5mln. The new customers consist of a major US telecoms and internet service provider, a European based communication and cloud solutions provider, a major provider of hosting services across Canada, a wholesale telecoms operator which operates across Latin America and a UK-based provider of internet, mobile and telephony services to UK island and overseas territory jurisdictions. Corero said the deployment of its solutions will enable all of the new clients to provide DDoS protected services to their end customers.

Block Energy PLC (LON:BLOE) chief executive Paul Haywood said the company remains “enthusiastically active on many fronts” as the firm updated on developments at the West Rustavi field in Georgia. The group noted that key equipment is arriving at the West Rustavi field and a new contractor is being brought on board to help advance projects. Block pointed out, however, that production remains shut-in due to the coronavirus pandemic although the Republic of Georgia is presently at the beginning of a phased approach to restart businesses following lockdown.

Jubilee Metals Group PLC (LON:JLP) said it has secured the rights to around 150mln tonnes of copper-containing tailings to be refined at its Sable refinery in Zambia. The metals processing firm said the magnitude of the resource offered a “long term sustainable earnings profile” for its Zambian business, adding that the project holds the potential to produce copper concentrates in excess of the Sable refinery’s capacity of 14,000 tonnes per annum of copper cathode. Jubilee said it is aiming to increase the capacity of the refinery to over 25,000 tonnes of copper per year over time.

Synairgen PLC (LON:SNG) said a trial of its treatment for people with coronavirus (COVID-19) is being expanded nationally with participants receiving the inhaled drug in their homes. Meanwhile, results from the study of 100 patients successfully treated with the SNG001 treatment in hospital are set to be released next month. The roll-out of the trial beyond Southampton will be supervised via daily video calls with a doctor or nurse.

Panther Metals PLC (LON:PALM) has completed an open-file desktop review of its wholly-owned Marrakai Gold Project in the Northern Territory, Australia. Panther said the geological review, completed while the tenement was out of bounds because of the coronavirus (COVID-19) pandemic travel restrictions, highlights the potential for further gold mineralisation within the Marrakai project, with the eastern and western portions of the tenement remaining completely untested. The project is located within the Palaeoproterozoic Pine Creek Orogen, which hosts more than 250 gold occurrences and several operating mines.

Tiziana Life Sciences PLC (LON:TILS) (NASDAQ:TLSA) has outlined a busy schedule for 2020 after making significant clinical and pre-clinical progress with assets spanning cancers, autoimmune and inflammatory diseases. The update was provided alongside full-year results for the 12 months to December 31, 2019. In the outlook statement, the company said preclinical studies are ongoing for its new technology to treat coronavirus (COVID-19) infections. Its approach consists of the direct delivery of anti-IL-6 receptor monoclonal antibodies into the lungs using a handheld inhaler or nebuliser. Additionally, Tiziana said it hopes to commence a trial investigating the direct delivery of an anti-IL-6 mAb to the lungs using a portable inhaler.

Polarean Imaging PLC (LON:POLX) has hailed a “year of great accomplishment” in 2019 as the company achieved a “major milestone” with a successful readout for its pivotal Phase III clinical trials in January. Posting its results for the year ended December 31, 2019, the medical imaging specialist noted that it had raised £2.1mln in a share placing in July as well as confirming the third tranche of US$1mln from a US$3mln small business innovation research grant. The company said it ended the year with net cash of US$2mln. Post-period, Polarean said it had received positive top-line results from its clinical trials using hyperpolarised Xenon gas, with both trials meeting their primary endpoint.

88 Energy Ltd (LON:88E) (ASX:88E) has declared its takeover bid for XCD Energy unconditional and said the offer won’t be increased. Earlier this week, 88 Energy reported that it had received acceptances representing 37.58% of XCD’s shares and it now confirms it has passed 59.27%. The company also noted that XCD shareholders which accepted the offer before it became unconditional will receive accelerated payment, before June 26, whilst subsequent acceptances will be paid within seven days of their acceptance being processed.

Quadrise Fuels International PLC (LON:QFI) has told investors it has now agreed in principle to the deployment of its MSAR alternative marine fuel trial equipment for a project managed by Valkor in Utah. Valkor is a partner with AIM-quoted TomCo Energy PLC (LON:TOM) for the enhancement of an oil sands plant in Utah which will be retooled for a production trial. The project will incorporate Quadrise’s MSAR technology which can be used to treat heavy oil products to create a low-cost alternative fuel. Quadrise said it has agreed to the MSAR deployment during Phase 1 of the project for a price of US$150,000 and it agrees to work in good faith with Valkor to finalise the process design and trial agreement.

Meanwhile, in a separate statement, TomCo said trading in its shares have been suspended on AIM and noted that it is in talks with its broker regarding the status of the share placing it announced yesterday.

Ceres Power Holdings PLC (LON:CWR) said it has appointed two non-executive directors to its board representing two of its partners, Bosch and Weichai. Uwe Glock is the chairman of the board of management of Bosch Thermotechnik and joins the board of Ceres following the signing of the AIM-listed company’s relationship agreement with Robert Bosch in January 2020. Qinggui Hao is the investment director of Shandong Heavy Industry Group. He replaces Haoran Hu, who has served on the Ceres board as the Weichai-nominated non-executive director since December 2018.

Diversified Gas & Oil PLC (LON:DGOC), the US-based owner and operator of natural gas, natural gas liquids and oil wells and midstream assets has announced that shareholders who have elected to receive the final 2019 dividend of 3.50 cents per share in sterling will receive an equivalent payment of 2.74p per share, based on the June 9, 2020, exchange rate of GBP0.7842=US$1.00.

BB Healthcare Trust PLC (LON:BBH) said the investment companies team at Kepler Trust Intelligence has produced a new piece of investment bank quality research about the trust, designed to provide a clear and comprehensive reference for long term investors. This note is free to read for UK investors an can be read in full via http://www.trustintelligence.co.uk/investor

Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company announced that the company’s joint broker SI Capital Limited has published a broker note on its Victoria Goldfields joint venture which may be viewed through the following link: https://www.powermetalresources.com/sicapital

Filta Group Holdings PLC (LON:FLTA), a provider of fryer management and other services to commercial kitchens, has announced that its annual general (AGM) will be held on July 14, 2020, commencing at 11.00am, at The Locks, Hillmorton, Rugby, Warwickshire, CV21 4PP. Due to the current coronavirus (COVID-19) restrictions on non-essential gatherings, shareholders are advised not to attend the meeting and to submit their votes in advance by proxy. Copies of the Notice of Annual General Meeting and the group’s Annual Report are available on the company’s website: www.FiltaPlc.com

LoopUp Group PLC (LON:LOOP) has announced that, due to the coronavirus (COVID-19) pandemic, and in compliance with UK government guidelines, the company will now hold its annual general meeting (AGM) with the minimum quorum of two director-shareholders present at LoopUp’s offices at 10.00am on June 24, 2020, to conduct the business of the meeting in line with social distance guidelines and no other shareholders will be permitted to physically attend the meeting. The company requests that shareholders submit their votes in advance, by proxy, by post, and said the results of the votes on the proposed resolutions will be announced in the normal way as soon as practicable after the conclusion of the AGM. To ensure that shareholders still have the opportunity to engage directly with the board, the group said it will hold a special virtual shareholder event during July 2020, following the planned update of the company’s trading for the first half of the year through to 30 June 2020. Further details of this virtual shareholder event will be announced by RNS in due course.

6.45am: Footsie called lower

The FTSE 100 is set to start Thursday on the back foot as volatility remains a feature, with investor attention largely trained on the possibilities that coronavirus (COVID-19) case numbers will rise again in a second wave.

CFD and spread-betting firm IG Markets sees the London benchmark losing around 55 points, as it makes the price 6,194 to 6,197 with just over an hour to go until the open.

Last night, US Federal Reserve chair Jerome Powell spoke of very loose monetary policy to keep markets stimulated and health professionals talked of positive clinical trial data for the drug Dexamethasone as a potential treatment for COVID-19.

But despite this, overnight on Wall Street, the Dow Jones Industrials Average still closed down 170 points, or 0.65% to finish at 26,119, while the broader S&P 500 gave up 0.36% to 3,113. The Russell 2000 index ended trading down 1.77% at 1,426. The Nasdaq Composite, however, managed a positive close to end the session up 0.15% at 9,910.    

In Asia on Thursday, Japan’s Nikkei 225 index was 0.42% lower at 22,361 while Hong Kong’s Hang Seng was down 0.36% at 24,393, but the Shanghai Composite made a positive mark, up 0.19% at 2,942.

“Sentiment in stock markets in East Asia is fragile as the partial lockdown in Beijing has become more restrictive, dozens of flights have been cancelled for example,” said David Madden, an analyst at CMC Markets.

“US index futures are lower on the back of rising infection numbers in states like Texas and Arizona, and with that European indices are called lower.”

Later, in London, the latest Bank of England Monetary Policy Committee (MPC) is expected to keep interest rates unchanged at the historic low of 0.1%. However, after some members called for an extension of quantitative easing (QE) last time out, some economists have suggested a new round of QE could be coming to help support the economy and share prices.

The asset purchase facility is likely to be increased by £200bn over the course of the summer, according to Rabobank in a preview.

Around the markets:

  • The pound: US$1.2554, down 0.01%
  • Gold: US$1,728 per ounce, up 0.04%
  • Brent crude: US$40.52 per barrel, down 1.07%
  • West Texas crude: US$37.66 per barrel, down 1.87%
  • Bitcoin: US$9,414, down 0.39%

Significant events expected on Thursday:

BoE interest rate decision

Finals: National Grid PLC (LON:NG.)

Interims: Blue Prism Group PLC (LON:PRSM), Caretech Holdings PLC (LON:CTH), Safestore Holdings PLC (LON:SAFE)

FTSE 100 ex-dividends to knock 0.39 points off the index: Intermediate Capital Group PLC (LON:ICP)

Economic data: US weekly jobless claims

City Headlines: