• FTSE 100 index closes 90 points down
  • Wall Street stocks lower
  • Miners out of favour but travel-stocks rally

5pm: Footsie closes 1.5% lower

FTSE 100 index closed lower on Thursday as the tech sell-off across the Pond spooked traders.

Britain’s blue-chip benchmark closed the day down around 90 points, or 1.52%, at 5,850, while the mid-cap FTSE 250 plunged over 223 points at 17,480.

On Wall Street, all three major benchmarks fell despite better than expected jobless claims data in the US for the week to August 29, which showed 881,000 Americans filed for unemployment benefits, against estimates of 940,000.

“To an extent today’s sharp slump in tech stocks appears to be a case of shifting assets, with better-than-expected jobs data and rising expectations of a Trump election win boosting the case for investment in those stocks heavily hit throughout this crisis,” said Joshua Mahony, senior market analyst at online trader IG.

“With continuing claims below 14 million for the first time since April, and initial claims at a five-month low, there is plenty of optimism as we head towards tomorrow’s jobs report. Nonetheless, not all good news is good for markets, with some fearing how improved economic data could restrict the size of any future stimulus packages.”

US and Canada 11am EST/4pm

Wall Street got off to a weak start on Thursday as tech giants led markets lower.

The Dow Jones Industrial Average shed over 343 points at 28,756. The broader-based S&P 500 index lost over 71 at 3,509. The tech heavy Nasdaq exchange lost over 435 points at 11,620.

3.30pm: Gains ebbing away

After US indices opened lower, London’s FTSE 100 is in danger of relinquishing the morning’s hard-won gains.

The index of leading shares was up just 22 points (0.4%) at 5,963, with some of the backsliding attributable to sterling regaining some of its poise against the greenback; the pound, down a cent against the US currency earlier today, is now down a mere two-thirds of a cent at US$1.3289.

Enthusiasm for miners is conspicuous by its absence, with BHP Group PLC (LON:BHP), down 4.2% at 1,667p, the biggest blue-chip faller.

In contrast, travel-related stocks found favour after more than 70 airport businesses based at Heathrow brought a group action against the UK tax authorities, in the hope of securing reductions in business rates.

There definitely seems to be a concerted effort by the industry to get on the government’s case with industry figures calling on the country’s leaders to pull their fingers out and get coronavirus testing sorted out at Britain’s airports.

Meanwhile, a trading update from Dart Group PLC (LON:DTG), the company behind the Jet2 brand, sent the shares 5.2% higher at 713p. The company said summer 2021 is expected to see a higher level of seat capacity, closer to 2019 levels.

 

Low-cost airline easyJet PLC (LON:EZJ) rose 8.1% to 638.6p in sympathy while TUI AG (LON:TUI) – like Dart, an airline owner and package tour operator – was 7.6% firmer at 347.6p.

Wizz Air PLC (LON:WIZZ) jumped 5.6% to 3,790p while among the large-caps, British Airways owner International Consolidated Airlines (LON:IAG) was 9.8% better at 222.8p.

2.45pm: Negative start for Wall Street 

Despite expectations of a mixed open, the main Wall Street indices slipped into negative territory in the early minutes of Thursday’s session despite a better than expected jobless claims report.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.15% at 29,056 while the S&P 500 fell 0.5% to 3,562 and the Nasdaq dropped 1.48% to 11,878.

The tech-heavy Nasdaq had been predicted to open in the green earlier today, however investors seemed content to engage in profit-taking following a seemingly endless march higher form the main indices.

The Nasdaq’s performance may have been affected by Facebook Inc (NASDAQ:FB), which sank 2.77% to US$294.11 in early deals after the social media giant said it will ban new political ads in the week leading up to the presidential election on November 3 in an effort to reign in misinformation on its platform.

Market sentiment also remained unmoved by jobless claims data for the week ended August 29, which showed 881,000 Americans filed for unemployment benefits during the period, down from just over 1 million in the previous week and below estimates of around 940,000.

Back in London, the FTSE 100 had lost a little steam and was 19 points higher at 5,960 at 2.45pm.

12.15pm: Footsie resumes assault on 6,000 but US stocks look set for a pause for breath

The charge towards 6,000 is back on!

The FTSE 100 bucked its ideas up in the latter part of the morning, advancing to 5,991, up 50 points (0.8%), helped by the strength of the dollar on foreign exchange markets.

Sterling is down by almost a cent against the greenback at US$1.3253, which is music to the ears of the finance directors of many FTSE 100 companies.

“The dollar doesn’t know when it’s beaten, with the greenback staging another recovery within days of hitting a fresh low. The dollar index is pushing 93 and has its eyes set on the late August highs around 93.50. This isn’t good news for gold, which appeared to be finding its feet prior to the ISM PMI on Tuesday and its all been downhill from there,” noted OANDA’s Craig Erlam.

Talking of the US, the word on the street is that leading US shares might take a pause for breath when trading starts this afternoon.

Not the NASDAQ Composite, obviously; that’s like a helium balloon in a lift travelling upwards in the Empire State Building (400 yards a minute, reportedly) and is set to open at just under 12,300, up 44 points.

The dear old Dow is tipped to dip to 29,070, down 30 points from last night’s close while the S&P 500 is seen opening its account 15 points lower at 3,566.

“On Wall Street, the record rally continues and appears unstoppable. It is not only tech stocks benefiting from the renewed risk appetite, but increasingly other sectors too, which is a healthy sign,” said Milan Cutkovic, a market analyst at AxiCorp.

Technically, it is impossible for an index to rally – i.e. recover from a setback – when it is at an all-time high, but we get what Cutkovic means.

“Recent economic data have raised hopes for a relatively swift recovery. While the pandemic keeps the uncertainty at a high level, investors are not overly worried about the increase in COVID-19 cases, as governments and central banks worldwide have taken decisive measures.

“Furthermore, the US Centers for Disease Control and Prevention told states to prepare for a coronavirus vaccine by November.,” Cutkovic continued.

“It is an aggressive goal but reiterates that the race to find an effective vaccine is making progress,” he concluded.

US traders have numerous macroeconomic releases to look forward to, including the non-manufacturing ISM (Institute for Supply Management) and final services purchasing managers’ index (PMI) for August, and July’s final trade data.

“Moreover, after yesterday’s big downside surprise in the ADP employment index (428k), and ahead of tomorrow’s August payrolls report, this afternoon will bring Challenger job cuts figures and, in particular, weekly initial jobless claims numbers,” observed Daiwa Capital Markets.

10.30am: Jobs cull underway in the services sector as it prepares for props to be removed

The market has reacted negatively to the downward revision of the “flash” estimate of the August Services Purchasing Managers’ Index (PMI).

The FTSE 100 remains in positive territory, up 36 points (0.6%) at 5,977 but the assault on the 6,000 level looks off for the time being.

The August reading of the PMI was revised down to 58.8 from a “flash” estimate of 60.1 but this still represented the second month in a row that the PMI came in above the neutral level of 5.0.0.

Services PMI

“A further surge in service sector business activity in August adds to signs that the economy is enjoying a mini-boom as business re-opens after the lockdowns, but the concern is that the rebound will fade as quickly as it appeared,” said Chris Williamson, the chief business economist at IHS Markit, which compiles the survey.

“The current expansion is built on something of a false reality, with the economy temporarily supported by measures including the furlough and Eat Out to Help Out schemes. These props are being removed.

“The burning question is how the economy will cope as these supports are withdrawn. Worryingly, many companies are already preparing for tougher times ahead, notably via further fierce job cutting, the rate of which re-accelerated in the service sector in August to a pace exceeding that seen at the height of the global financial crisis,” he added.

Duncan Brock, the group director at the Chartered Institute of Procurement and Supply (CIPS), said businesses continued to be optimistic August even though obstacles to stronger growth lingered on.

“Export business remained subdued as overseas sales declined for the seventh month in a row, hampered by unsettled supply chains and continuing restrictions on logistics and travel. The distressing employment numbers also darkened the mood with a high number of job cuts this month. Government support was a blessing to many firms but as this comes to an end, many service providers are resorting to redundancy schemes under the weight of operating in a tough marketplace,” Brock said.

“With rising input costs for fuel and essential safety equipment and a potential downturn in business again, the ripple effect of this pandemic will be felt throughout the winter. Firms need to make some lasting headway to give this recovery some energy, so policymakers should be waiting in the wings to offer more support if needed,” he concluded.

9.40am: Footsie’s gains pared after Services PMI reveals jobs carnage

The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) for August rose to 58.8 from 56.5 in July.

The rate of expansion accelerated to its fastest for more than five years as more parts of the sector emerged from lockdown.

On the downside, the rate of job shedding across the service sector was the steepest since May, IHS Markit said.

London’s index of leading shares was up 36 points (0.6%) at 5,994, led by Melrose Industries PLC (LON:MRO), which was 11% higher at 111.5p after well-received interim results.

READ Melrose Industries makes large loss but says trading is improving

The owner of aerospace and automotive engineer, GKN, spoke of an improvement in the trading environment and this seems to have encouraged investors to take a flyer on sector peer Rolls-Royce Holdings PLC (LON:RR.), which is up 5.6% at 229.7p.

8.55am: Early boost for Footsie

The FTSE 100 index opened firmly in positive territory on Thursday but fell short of the 6,000-mark in the early exchanges.

London’s blue-chip benchmark rose 48 points to 5,988.72.

Optimism was sparked by US stimulus hopes, while traders were also buoyed by a New York Times report that suggested a coronavirus (COVID-19) vaccine may be available in limited supply by November.

Wall Street closed on a high with the Dow Jones Industrials Average up over 450 points, but the sentiment could turn very quickly if the US unemployment number on Friday – and initial weekly jobless claims today – suddenly balloons.

And as Richard Hunter, an analyst at Interactive Investor pointed out: “The contrast between the real economy and the US market, in particular, is becoming increasingly stark, as each of the major indices are now in positive territory in the year to date.

“Despite the unquestionable economic impact which the pandemic has had and continues to have, with unemployment still an issue and signs of the job market cooling, a glance at the 2020 charts would suggest that Covid-19 had never happened.”

Melrose Industries (LON:MRO), owner of aero engineer GKN, led the Footsie by quite a margin with a 10% jump after its interims.

It seems investors were willing to look beyond the huge loss, taking heart instead from the guardedly optimistic update on current trading.

Melrose’s update had a knock-on impact on struggling jet engine maker Rolls Royce (LON:RR.), which fell 5% higher.

ITV’s (LON:ITV) imminent expulsion from the FTSE 100 didn’t deter bargain hunters who drove shares in the broadcaster 4.7% higher.

Proactive news headlines:

CMC Markets PLC (LON:CMCX) has lifted market guidance again, with current year net operating income expected to be ahead of the current market consensus. The trading platform operator issued a trading update covering the period since July 1 in which it said the consistently strong performance across the business had continued, with the net income operating income run rate running only slightly below the preceding three months – the first quarter of CMC’s fiscal year – when volatility was running high as a result of uncertainty caused by the spread of the coronavirus (COVID-19). Client income has continued to exceed the corresponding period of 2019 while client income retention has remained well above the guidance of more than 80%. The stockbroking business also continues to perform strongly.

Allergy Therapeutics PLC (LON:AGY) is expanding its licensing agreement with vaccine groups Saiba and DeepVax in a move that will take it into oncology. The move builds on a collaboration in the area of virus-like particle (VLP) technology that has seen the UK group develop a peanut allergy candidate which has shown early promise. The plan is to expand the tie-up to target solid cancer tumours, atopic dermatitis, asthma, and psoriasis.

Gfinity PLC (LON:GFIN) said it has agreed to distribution deals with three leading global broadcasters, alongside its partner Abu Dhabi Motorsport Management (ADMM), for the new V10 R-League virtual racing competition, the first championship in a global racing series partnership between the two firms. Under the agreements, the V10 R-League will be available on BT Sport, ESPN and STARZPLAY Arabia, while highlights will be broadcast across team and talent channels in a distribution plan covering both broadcast and digital formats. BT Sport and STARZPLAY Arabia have signed multi-year commercial agreements for exclusive rights in the UK & Ireland and the Middle East and North Africa (MENA) regions respectively, while ESPN’s agreement means season one and two of the V10 R-League will be broadcast in the US and made available in Canada, Latin America, the Netherlands, the Caribbean and Oceania.

Braveheart Investment Group PLC (LON:BRH) has highlighted progress in the development of a coronavirus test by its investee company Paraytec and the University of Sheffield. The investment group said having previously completed work packages relating to the construction of a viral mimic and the capture SYSTEM for the test, Paraytec’s development of a signal generation module, which contains a synthetic coronavirus binding protein molecule bonded to fluorescent nanospheres, has now been completed. Meanwhile, Braveheart said work has been initiated and continues to progress on building an optical detection system, which is used to detect and quantify the fluorescent nanospheres that bind the CAPTURE Module in the presence of the virus.

Oncimmune Holdings PLC (LON:ONC) said an approach to managing lung cancer that uses the EarlyCDT Lung test pioneered by the group has been deemed “highly cost-effective” by healthcare economists. The study, led by academics from Leeds University, assessed the treatment of people with indeterminate pulmonary nodules (IPNs). It looked at the deployment of the £70 Oncimmune blood test in combination with computed tomography and compared it with using the CT scans on their own. Not only did the approach have a “positive impact on the outcomes of those patients observed”, but it also provided a cost-effective method of managing patients.

Curtis Banks Group PLC (LON:CBP) said its recurring fee model has protected its business against the worst of the effects of the coronavirus (COVID-19) pandemic. The self-invested personal pensions (SIPP) plan provider said revenue in the first half of 2020 was unchanged from a year earlier at £24.5mln. Adjusted profit before tax nudged up by 0.6% to £6.3mln from £6.2mln in the first half of 2019.

Shanta Gold PLC (LON:SHG) has provided investors with a pair of updates which together bolster the New Luika gold mine, where production and exploration activities are ongoing. The AIM-quoted gold firm has confirmed it has total group-wide mining reserves of 653,000 ounces plus 3.2mln ounces of total resources. Shanta noted that this marks as its highest ever reserves and resources and that the company has a proven track record of delivering low-cost programmes to replace mined ounces. Meanwhile, in a separate update, Shanta said the ongoing 2020 exploration drilling programme at New Luika has loaded some 75,000 ounces of new gold resources into the inventory.

IQGeo Group Plc (LON:IQG) said it has won an US$800,000 (£600,000) new contract for software licences and services with a large tier 1 telecoms network operator. The contract comprises a software licence subscription to be recognised over the next three years and certain implementation services to be recognised over the next two years. The customer will be using the IQGeo Platform and Workflow Management software to improve construction process efficiency and productivity to support a major investment in expanding its fibre network infrastructure.

Diversified Gas & Oil PLC (LON:DGOC) shares will be included in the FTSE 250 index following the latest reshuffle of the index which takes place later this month. Chief executive Rusty Hutson said he expects it will further increase DGOC’s market exposure and it will broaden the company’s investor base. The profitable, dividend-paying America-focused gas and oil producer has risen in prominence in recent years driven by a series of transactions that consolidate portfolios of established fields in the Appalachia basin, across states such as Pennsylvania, Ohio, West Virginia and Kentucky.

Deltic Energy PLC’s (LON:DELT) interim results highlighted a strong balance sheet, with £12.8mln of cash at the end of June 2020, and confirmed that its North Sea venture with Shell remains on-track. The partners are committed to meeting the licence terms for the P2252 asset, which primarily includes the Pensacola prospect, and that would see a contingent well commitment become firm by December 2020. A Pensacola well could come as soon as next year.

Argo Blockchain PLC (LON:ARB) has reported higher revenues and mining margins in August, highlighting a continued strong performance in the price of Bitcoin. In a monthly update, the cryptocurrency miner reported revenues of £1.49mln in August, up from £1.25mln in July, while its average monthly mining margin rose to 44% from 34% month-on-month. The company said it had mined 166 Bitcoin and Bitcoin equivalent during the month compared to 165 in July, which it attributed to “minor fluctuations in mining difficulty throughout August”. However, Argo said it continues to mine at cost-efficient settings and was “pleased with the overall mining performance given market conditions”. The company also announced the appointment of finnCap as its corporate broker with immediate effect.

Greencoat UK Wind PLC (LON:UKW), the leading listed renewable infrastructure fund, invested in UK wind farms, has announced a new share issuance programme to be conducted over the next 12 months through several tranches, with the initial placing and initial offer for subscription launching on Thursday. Under the share issuance programme, the FTSE 250-listed company said it may issue up to a maximum of 750 million new ordinary shares over the next 12 months. It added that the net proceeds from the initial tranche are expected to be used to repay amounts drawn under the company’s debt facility agreement. The net proceeds from each subsequent tranche will be used to (i) repay amounts drawn under the facility and/or (ii) apply proceeds to make further investments.

Ferro-Alloy Resources Limited (LON:FAR), the vanadium mining and processing company with operations based in Southern Kazakhstan said it has allotted 6,250,000 ordinary shares of no par value by way of a direct subscription into the company for cash at a price of 8p per share, raising a total of £500,000.

Metal Tiger PLC (LON:MTR) said it has participated in a “significantly oversubscribed” fundraising by Southern Gold Limited, which has raised A$10.2mln. The natural resources investment firm said it has subscribed for 14.5mln new shares in Southern Gold at A$0.12 each for a total of A$1.74mln, the group has also received 7.28mln 2-year warrants with an exercise price of A$0.18 each. Metal Tiger said Southern Gold plans to use the proceeds of the fundraising to execute multiple drilling campaigns on multiple targets in its growing gold-silver project portfolio in South Korea over the next two years.

Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company has announced that Iain Macpherson has stepped down as a non-executive director of the company with immediate effect. Paul Johnson, Power Metals’ chief executive officer commented: “I would like to thank Iain for his contribution to the Company, particularly during the restructuring and refinancing undertaken in February 2019 and subsequently, as we have worked together to build Power Metal into a diverse, well-financed and energetic junior resource exploration company. On behalf of the Board I would like to wish Iain well in his future endeavours.”

ImmuPharma PLC (LON:IMM), the specialist drug discovery and development company, has announced that L1 Capital Global Opportunities Master Fund has converted $150,000 (plus accrued but unpaid interest) of the convertible security issued pursuant to the convertible security deed dated June 10, 2020. The conversion price is 11p per share resulting in the issue by the company of 1,045,046 new ordinary shares of 10p each.

Amur Minerals Corporation LON:AMUR), the nickel-copper sulphide mineral exploration and resource development company focused on the far east of Russia, announced that, under the fixed term loan note agreement entered into with Plena Global Opportunities announced on 12 March 2020, the investor has elected to convert 6,500,000 warrants at an exercise price of 1.43p per share providing the company £92,950. The investor has 4,723,776 warrants remaining. The company repaid the loan note in full on May 4, 2020.

Silence Therapeutics PLC (LON:SLN), a leader in the discovery, development and delivery of novel RNA therapeutics for the treatment of serious diseases, has said its management will present a company overview and host one-on-one meetings during the following four upcoming virtual investor conferences: Wall Street Investor Forum Virtual Conference on Thursday, September 10, 2020, at 12.00pm EDT (5.00pm BST); H.C. Wainwright 22nd Annual Global Investment Conference on Tuesday, September 15, 2020, at 11.30am EDT (4.30pm BST); Morgan Stanley 18th Annual Global Healthcare Conference on Thursday, September 17, 2020, at 12.30pm EDT (5.30pm BST); and Oppenheimer Fall Healthcare Life Sciences & MedTech Summit on Tuesday, September 22, 2020, at 10.00am EDT (3.00pm BST). Live webcasts of the presentations can be accessed via the Investors section of the company’s website at www.silence-therapeutics.com. An archived replay of the webcasts will be available for 60 days on the company’s website after the conference.

6.50am: Optimism regained

The FTSE 100 is expected to begin Thursday on the front foot with yesterday’s optimism spilling over following records again overnight on Wall Street.

Hopes are rising on both the economic and medical fronts as speculation and reports pointed to stimulus and coronavirus (COVID-19) vaccine breakthroughs potentially around the corner.

In London, the blue-chip benchmark is predicted to start the day up around 21 points, with CFD provider IG Markets making the index at 5,955 to 5,958 with just over an hour to go until the open. Ex-dividends today clip some 4.76 points off the index.

As the session progresses attention will fix firmly on the United States and its mooted stimulus package.

“Sentiment was lifted because of hopes of a US stimulus package being agreed upon, even though no major progress has been made on that front,” said David Madden, an analyst at CMC Markets.

“Nancy Pelosi, of the Democrats, said there are still ‘serious differences’ between what both sides are requesting. It would appear that traders welcomed the talk between Pelosi and Steven Mnuchin, US Treasury Secretary, even though they didn’t amount to anything – a conversation is at least a step in the right direction. The topic of the relief fund has been doing the rounds for weeks now,” he added.

Thoughts of stimulus and evidently strengthening vaccine hopes drove US stock benchmarks higher on Wednesday. The Dow Jones Industrials Average gained 454 points or 1.59% to close the session at 29,100. The S&P 500 added 1.54% to 3,580, and the Nasdaq Composite rose by 0.98% to 12,056. Elsewhere, the small-cap Russell 2000 index climbed 0.87% to 1,592.

In Asia this morning, Japan’s Nikkei 225 index advanced 244 points or 1.05% to 23,491, but Hong Kong’s Hang Seng slipped 0.4% lower to 25,020, and the Shanghai Composite notched slightly lower to 3,401.

Around the markets:

  • The pound: US$1.3311, down 0.29%
  • Gold: US$1,940 per ounce, down 0.05%
  • Silver: US$27.37m per ounce, down 0.04%
  • Brent crude: US$44.35 per barrel, down 2.7%
  • WTI crude: US$41.53 per barrel, down 2.87%
  • Bitcoin: US$11,344, down 4.6%

6.45am: Early Markets – Asia/Australia

Stocks in the Asia-Pacific region were mixed on Thursday after the US Nasdaq Composite topped 12,000 for the first time ever on Wednesday.

Mainland Chinese stocks shed earlier gains with the Shanghai Composite down 0.46% in the evening, while Hong Kong’s Hang Seng index was 0.67% lower.

In Australia the S&P/ASX 200 notched higher by 0.82% even as trade data for July showed exports declining 4% month-on-month.

Proactive Australia news:

Imugene Limited (ASX:IMU) (OTCMKTS:IUGNF) has received Western Institutional Review Board (WIRB) approval to commence a Phase I clinical trial of its checkpoint immunotherapy candidate, PD1- Vaxx in the US for non-small cell lung cancer.

Ioneer Ltd (ASX:INR) has confirmed the timeline for its Rhyolite Ridge Lithium-Boron Project in Nevada, aiming to be permitted and ready to begin construction as early as quarter two 2021.

American Rare Earths Ltd (ASX:ARR) has completed sampling at La Paz Rare Earths Project in the US, which has demonstrated that host mineralisation extends beyond the previously established resource parameters.

engage:BDR Ltd (ASX:EN1) has set up a new programmatic integration with WeatherBug, a top-3 ranked weather publisher based in the US.

Predictive Discovery Ltd’s (ASX:PDI) extensive power auger drilling program across its Bankan Project in Guinea has identified plus 0.25 g/t gold composite intercepts on three more drill lines – expanding the NE Bankan gold mineralised footprint from 1.3 kilometres to 1.6 kilometres in length.

Opyl Ltd (ASX:OPL) has developed a software that uses artificial intelligence (AI) to make a probability of success prediction on the likelihood of a vaccine, drug, diagnostic or medical device succeeding in clinical trials.

Pantoro Ltd (ASX:PNR) has received wide, high-grade drilling results from the OK Underground Mine at the Norseman Gold Project in Western Australia, which have confirmed a second ore zone available for mining.

Kangaroo Island Plantation Timbers Ltd (ASX:KPT) has signed an Early Contractor Involvement (ECI) agreement with Maritime Constructions Pty Ltd of Port Adelaide bringing it a step closer to developing the Kangaroo Island Seaport.

Pharmaxis Ltd (ASX:PXS) (OTCMKTS:PXSLY) (FRA:UUD) has been awarded A$1 million in Australian Government funding to advance work on the company’s drug discovery for the treatment of the devastating genetic disorder Duchenne Muscular Dystrophy (DMD).

Pure Minerals Ltd’s (ASX:PM1) wholly-owned subsidiary Queensland Pacific Metals Pty Ltd (QPM) has formulated an operating strategy for pilot plant trials for its TECH Project, which includes plant start-up in the December quarter of 2020.