• FTSE 100 index gains 38 points
  • Rolls-Royce leads the market higher
  • US indices get off to robust start

5pm: FTSE 100 hits three-week high, closes above 6,000

London’s leading index ended the week on a high note, finishing up 38 points, 0.65%, at 6,016.7. The FTSE 250 gained 128 points, 0.7%, to 18,074.4.

A strong morning from markets in the US carried UK traders over the finish line. 

“Optimism about a stimulus package in the US has lifted sentiment on this side of the Atlantic,” CMC Markets UK analyst David Madden wrote Friday. “There has been a lot of back and forth in relation to what US politicians are pushing for, but ultimately there is hope that some sort of a relief package will be agreed upon. The FTSE 100 hit a three week high, and mining, pharma and energy stocks have been the biggest gainers in terms of index points. Commodities like copper and oil have enjoyed a bullish run this week, hence the upward move in commodity companies.”

Rolls-Royce Holdings PLC (LON:RR. continued to roar back from a 17-year low last week. The company has seen its stock gain 120% since that point, including 14% on Friday to £223.20. 

“There has been no significant news about the company in the past week, but some traders have speculated about a possible takeover bid, but there is nothing official along those lines,” Madden wrote. “It is not surprising to see a rebound after the shares fell to its lowest mark since 2003, but a rally of this magnitude — without any very bullish news — is unusual.

In the US, the Dow gained nearly 225 points, 0.8%, to 28,650.2. The Nasdaq improved 137 points, 1.2%, to 11,557.7, and the S&P 500 increased 34 points, 1%, to 3,481.

“Sentiment on Wall Street is a little bullish as the chatter of a coronavirus relief package is doing the rounds,” Madden wrote. “There have been a few twists and turns in relation to the proposed stimulus scheme, but dealers are cautiously buying to the market in the belief that some progress will be made. The Democrats and the Republicans are still divided so one could argue that traders are getting ahead of themselves.”

3.30pm: Proactive North America headlines:

BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF) says it is on track for very strong fourth quarter and 2021 after Pure Therapy Products acquisition

Algernon Pharmaceuticals Inc (CSE:AGN) (OTCB:BTHCF) names Dr Mark Swaim to its medical and scientific advisory board

Great Panther Mining  (TSE:GPR) (NYSEAMERICAN:GPL)  unveils solid production figures for 3Q and says it is on track for full-year guidance

NexTech AR Solutions Corp (CSE:NTAR) (OTCQB:NEXCF) capitalizing on stay-at-home economy with total bookings for 3Q blowing past FY 2019 revenue

Byrna Technologies Inc (OTCQB:BYRN) (CSE:BYRN) posts tenfold year-over-year revenue growth in 3Q on munitions sales surge

3.10pm: A great week for Rolls-Royce; a weak end to a good week for IAG

The FTSE 100 was up 49 points at 6,027 and showing every sign of finishing the day – and the week – in positive territory.

And what a week it has been for Rolls-Royce Holdings PLC (LON:RR.), the internationally famous engineer (even if it is largely famous for the cars it doesn’t make.

On Thursday of last week, it ended months of speculation by announcing a 10 for 3 rights issue at 32p a share o raise roughly £2bn and also announced a bond issue to raise a further £1bn.

Since then, the shares have stormed up to 217.9p and with an 11.5% rise were the best blue-chip performers today.

Last month, it was the stock that short-sellers made the most money on; that’s unlikely to be the case this month, even if we are only a third of the way through the month.

It’s been a good week for British Airways owner International Consolidated Airlines Group SA (LON:IAG) but not a good Friday; the stock, down 4.3% today at 102.9p, was the worst performer among Footsie constituents but it is still well above the 94p level at which it started the week.

2.50pm: Wall Street starts higher amid rising hopes for stimulus

Optimism over a possible US stimulus package continued to inform risk appetite on Wall Street at the start of the week’s final trading session, with the main three indices starting on the front foot on Friday morning.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.48% at 28,563, while the S&P 500 rose 0.55% to 3,465 and the Nasdaq climbed 0.66% to 11,496.

“Investors have clearly been sensitive to the on/off fiscal stimulus talks, as US equities appear primarily driven by expectations surrounding the outcome of these intense discussions. Amid the drama between the White House and Democrats which add to the political shenanigans leading up to the November presidential elections, it’s evident that investors are clinging on to any sliver of hope that the world’s largest economy will see additional fiscal aid”, said FXTM market analyst Han Tan.

“An agreement over the next stimulus package would certainly justify the recent climb in US equities, while potentially encouraging these indices to restore more of its prior record gains. However, these advances are not yet fully assured, as elevated political uncertainty and a stalling global economic recovery could still drag riskier assets lower”, he added.

Back in London, the FTSE 100 had lost a little momentum into late-afternoon, rising 47 points to 6,024 shortly after 2.45pm.

2.15pm: G4S confirms second bid approach

The Footsie kicked on over the lunchtime session, despite sterling strengthening on foreign exchange markets against the greenback.

The FTSE 100 was up 58 points (1.0%) at 6,036.

On the forex markets, sterling was up by a third of a cent at US$1.2973.

London Stock Exchange Group PLC (LON:LSE), up 0.2% at 8,864p, was underperforming the market despite agreeing to sell its Milan stock exchange business for around €4.3bn to Euronext, in order to complete its US$27bn acquisition of Refinitiv.

READ LSE agrees €4.3bn sale of Milan stock exchange

In other acquisition news, G4S PLC (LON:GFS) shares were up 5.2% at 212p after it responded to press speculation by confirming it had received an expression of interest from Allied Universal Security Services LLC regarding a possible offer for the company.

The controversial security services provider already has an offer on the table from GardaWorld worth 190p a share.

 

12.25pm: US indices 

It looks like being a risk-on day in the US as hopes of progress on a fiscal stimulus package keep the bulls interested.

Spread betting quotes indicate the Dow Jones industrial average will rise 110 points to 28,536 while the broader-based S&P 500 should kick on 12 points to 3,459.

The tech-heavy NASDAQ Composite is seen advancing 167 points to 11,588.

Although the markets seem to be enthused by the prospect of a stimulus deal, Craig Erlam at OANDA is still not buying it.

“The Democrats have little reason to cede too much ground and the Republicans seem extremely reluctant. Democrats are unlikely to be blamed in the event that stimulus isn’t forthcoming, especially after Trump cancelled talks earlier this week, and they have a growing lead in the polls. They may find it easier to resume after the election, even if that comes at a cost now,” Erlam said, in a shocking assessment that implies politicians might take actions for political ends rather than the greater good of the people who voted them in.

“Of course, this may all be the usual brinkmanship but the fact that this is still happening in October, so close to election day and as large companies prepare to lay off thousands of workers gives me the impression there’s more to it. For that reason, investors may be a little over-optimistic and could pay the price short-term.

“That said, it’s interesting to see this optimism against the backdrop of Biden’s lead widening in the polls. Perhaps we’re focusing too much on stimulus prospects and not enough on the desire of investors not to see long, drawn-out and hostile legal challenges after the election. Should Biden’s lead continue to grow, it may be a rally of relief, rather than a celebration of the result, itself,” Erlam continued.

On the macroeconomic front, traders will be keeping an eye out for US wholesale inventories, where the consensus forecast is for a 0.5% increase, led by durables.

In London, the FTSE 100 was up 25 points (0.4%) at 6,003.
 

11.10am: Gfinity in pole position 

The Footsie is in a bit of a holding pattern, consolidating earlier gains.

London’s index of leading shares was 40 points higher (0.7%) at 6,018.

“The mood in Europe is largely bullish even though the number of new Covid-19 cases is rising at a fast rate. The prospect of some form of stimulus in the US is trumping the health crisis, even though a political settlement is far from agreed upon. Things are still up in the air when it comes to the relief package in the US, as President Trump is keen for smaller individual relief schemes, while Nancy Pelosi, the House Speaker, is driving for a large all-or-nothing package. Pelosi said she is hopeful that a deal can be struck and that is fuelling the broadly positive sentiment in Europe,” said David Madden, a market analyst at CMC Markets.

Gfinity PLC (LON:GFIN) was the top riser in London as the esports media group said it is putting itself up for sale as part of a strategic review to “continue on its current pathway towards profitability” targeted for the first quarter of the 2021 calendar year.

The shares shot up 30% to 4.35p.

Shares in the hospitality sector have had a hard time of it in recent months but there was a bit of cheer for investors in Marston’s PLC (LON:MARS), the pubs group.

Its shares were up 16% to 48.1p after the Competition and Markets Authority cleared the proposed joint venture, with Carlsberg – the best news the shareholders have received in the last few weeks … probably.

9.45am: Footsie on a Roll(s)

London’s index of leading shares has popped its head above 6,000, despite the UK economy growing more slowly than expected in August.

The FTSE 100 was up 32 points (0.5%) at 6,010 with aeroplane engine maker Rolls-Royce Holdings PLC (LON:RR.) leading the advance, with a 23% gain to 240.9p.

There’s been no stopping the stock this week; the share price has more than doubled, with investors getting back on board after the engineering giant finally announced its proposed recapitalisation eight days ago.

Investors are also chasing the shares of property stocks higher after Land Securities PLC (LON:LAND) said 62% of the rent that was due on September 29 was paid within five working days, compared to a 95% payment rate in the same period of last year.

Of the £42mln of payments outstanding, £9mln relates to customers who have withheld payment pending documentation of agreed concessions, LandSecs said.

Shares in LandSecs were up 3.1% at 568.8p while sector peer British Land PLC (LON:BLND) saw its shares head 34.0% higher to 381.9p after it said it will restart dividend payments next month.

Collection rates for the June quarter have improved, British Land revealed, with 57% of retail rents paid up and 98% for offices compared to 36% and 88% back in early July, while the landlord has collected 50% of retail rents for the September quarter and 91% for offices.

Elsewhere, sentiment does not seem to have been unduly dented by underwhelming gross domestic product numbers (GDP). As many have observed, GDP data was always subject to revisions and fluctuations even before the pandemic hit, so investors may not be putting too much store in the accuracy of the latest reading.

UK GDP

“UK growth disappointed in August with GDP rising only 2.1%, well short of expectations for a 4.6% increase. While the recovery continues, its pace has slowed substantially over the last three months with the 2.1% gain in August down from increases of 6.4% in July and 9.1% in June,” said Rupert Thompson, the chief investment officer at asset management firm, Kingswood.

“GDP remains as much as 9.2% below its level in February. These numbers show the recovery slowing significantly even before the recent re-imposition of local restrictions and lockdowns and can only increase the pressure on the government – both over any new restrictions and the need to increase support for the most affected sectors,” he added.

8.40am: Positive end to the week

The FTSE 100 shrugged off the disappointment of the latest UK GDP figures to open in positive territory on Friday.

The UK blue-chip index started 29 points higher at 6,007.04.

The UK economy grew at just 2.1% in August, well short of the 4.6% predicted ahead of the data readout. That was despite a boost from the hospitality sector and initiatives such as ‘eat out to help out’ as output remained 9.2% below pre-coronavirus (COVID-19) pandemic levels.

Looking ahead, Tom Stevenson, investment director at Fidelity International, said: “While there are positive indications from the Bank of England of growth returning to pre-pandemic levels before Christmas, this is far from a done deal.

“The furlough scheme comes to an end this month and there is a real danger that fear of unemployment triggers a negative feedback loop of precautionary saving and dampens consumer confidence.

“COVID-19 cases are rising quickly in some parts of the country, with further localised lockdowns expected to be announced on Monday. This will undoubtedly hit output as the country braces itself for a long, difficult winter.”

On the market, bargain hunters drove Rolls Royce (LON:RR.) 14% higher in early trade – though it has a lot of ground to make up. Little over a year ago the shares were riding high at just below 800p. The recent rights issue, to bring in £2bn of rescue funding, saw stock sold at 32p.

Anyway, an interesting article in the Investors Chronicle, beloved by thousands of cautious private investors, suggests BAE Systems (LON:BA.) will ride to Rolls’ rescue. We’ve heard less plausible speculation.

Proactive news headlines:

Alien Metals Ltd (LON:UFO) told investors its technical team has successfully completed follow-up geological mapping and sampling programme at the Hamersley iron ore projects. Detailed mapping was conducted over four of the project’s five priority projects during a site visit. Observations in the field indicate that the BHP 19 and BHP 20 prospects may be part of same larger system, the company noted. Additionally, prospects were seen at the Brockman project area.

Remote Monitored Systems PLC (LON:RMS) has said its Gyrometric business is “well-positioned” to meet the challenges of UK technologies services required to achieve an increase in the country’s offshore wind turbine capacity proposed by prime minister Boris Johnson earlier this week. In an update late on Thursday afternoon, the AIM-listed company said Gyrometric is continuing detailed technical discussions with one of the world’s largest manufacturers of offshore wind turbines about the installation and testing of the company’s technology on a large wind turbine in early in 2021.

Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company said it has been notified that yesterday Value Generation Limited, a company beneficially owned by Paul Johnson, its chief executive officer, purchased on market 500,000 ordinary shares of 0.1 pence each in the company at a price of 1.15p each (£5,750 invested).  In addition, yesterday Johnson purchased 500,000 ordinary shares through his Self-Invested Personal Pension (SIPP) at a price of 1.15p per share (a further £5,750 invested). Following the above purchases, the group noted, Johnson has a beneficial interest in a total of 58,000,000 Power Metals ordinary shares, representing approximately 7.09% of the issued share capital of the company.

Oracle Power PLC (LON:ORCP) has said it believes discussions within the Private Power and Infrastructure Board (PPIB) over its Thar Block VI Project are progressing well. Oracle and its consortium partners made a presentation to the PPIB last month, setting out in detail the implementation plan for Thar as an industrial park, centred around the development of a large mine, along with a mine-mouth power plant, a coal gasification (urea/fertiliser) and coal-to-liquids plant. Oracle said this “critical meeting” represented one of the final steps ahead of the view to finalising the award of the letter of intent (LOI) from the PPIB for power.

Minds + Machines Group Limited (LON:MMX) said it is commencing a formal investigation to determine whether certain revenue has been correctly recognised, with a focus principally on a specific contract with multiple elements that was entered into in 2019. The group said the investigation relates to whether all requirements for the recognition of revenue had been met prior to December 31, 2019, and June 30, 2020, or whether such amounts should have been classified as a refundable deposit against future sales or deferred revenue at those dates. 

Kodal Minerals PLC (LON:KOD) has said it welcomes the appointment of the interim government in the Republic of Mali. In a statement released after Thursday’s market close, the group noted that alongside the appointment of the government, sanctions imposed by the Economic Community of West African States (ECOWAS) were lifted. “Kodal welcomes the appointment of the interim government and looks forward to working with the government and progressing the mining licence application for the Bougouni Project and moving into a development phase for the project,” the group said.

DeepVerge plc (LON:DVRG) said the Takeover Panel has extended the deadline for the publication of its formal offer document for Modern Water PLC (LON:MWG). It will be released next week (week commencing October 12). DeepVerge has agreed to pay £21.5mln for Modern Water.

Amryt Pharma PLC (NASDAQ:AMYT) (LON:AMYT), a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases, has announced that it will host a virtual Analyst and Investor Event on Tuesday, November 3, 2020, from 08.30am EST (1.30pmGMT) – 10.30am EST (3.30pm GMT) to present full data from its pivotal EASE Phase 3 trial of FILSUVEZ® (previously AP101 /Oleogel-S10) for the potential treatment of dystrophic and junctional Epidermolysis Bullosa. The virtual event will take place shortly after Amryt presents EASE top-line trial data at the 29th EADV (European Association of Dermatology and Venereology) Virtual Congress 2020 on October 31. To register for the virtual analyst and investor event click here: https://lifescipartners.zoom.us/webinar/register/6715959628430/WN_nkzMw5ZSQEadC54WaduS9w

Kromek PLC (LON:KMK), a worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, has said it’s Annual General Meeting (AGM) will be held at 10.30am on October 31, 2020, at Kromek Group PLC, North East Technology Park (NETPark), Thomas Wright Way, Sedgefield, County Durham TS21 3FD. The group said recognises that the AGM represents an important opportunity to engage with shareholders, and provides a forum for shareholders to ask questions of, and speak directly with the board. However, in light of current social distancing measures, and following the local restrictions imposed by the Government in the North East of England, the AGM this year will be run as a closed meeting and shareholders will not be able to attend. The group will make arrangements to ensure that the AGM is quorate and the format of the AGM will be purely functional. Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the AGM.

Falcon Oil & Gas Ltd. (LON:FOG) (CVE:FO) has announced that its Annual General and Special Shareholder meeting will be held via teleconference on December 10, 2020, at 4.00pm (Dublin time).

7.05am: GFP rises by 2.1% in August

UK gross domestic product grew much less than expected in August, with a rise of 2.1%, compared to expectations for a 4.6% increase.

Services’ output grew by 2.4%, manufacturing rose by just 0.7% and construction grew 3.0%.

The news had little effect on calls for the opening of the FTSE 100; the index is still expected to start a few points below the 6,000 level after rising nearly 32 points yesterday to close at 5,978.

6.50am: 6,000 level in sight again

UK equities are set to open higher on Friday ahead of the release at 7.00am of the latest UK gross domestic product (GDP) data.

Spread betting quotes point to the FTSE 100 adding 18 points to yesterday’s 31.78 point gain to open at around 5,996.

US markets had a good day on Thursday after it appeared that talks on an economic stimulus package were back on the agenda.

“The Democrats appear to have called President Trump’s bluff on his standard negotiating tactic of abruptly ending talks to gain concessions from the other side. The House Democrats, while open to some direct bailouts of the airlines, have held their ground and tied more stimulus directly to a larger package, rather than a cherry-picking vote-winning approach favoured by the President. President Trump himself appeared to backtrack on a stimulus package as well if it is ‘skinny’,” said Jeffrey Halley at OANDA.

According to Nordic investment bank, Danske Bank, however, “it seems we are in the same place as in July with no deal in sight near term, unless the White House is willing to listen to the Democrats’ demands”.

The Dow Jones Industrials Average rose 122 points to finish at 28,426 while the broader-based S&P 500 climbed 27 points to 3,447.

“Overnight, the Caixin survey of Chinese services for September came in at 54.8 – the highest level in three months. The consensus estimate was 54.5, and the August reading was 54,” reported CMC’s David Madden.

The Hang Seng index in Hong Kong was down 3 points at 24,190 on Friday, while elsewhere in Asia, Japan’s Nikkei 225 was off 78 points at 23,564.

Back in the sceptred isle, in around 10 minutes the GDP figures will be released, with economics expecting the UK economy to have grown by 4.6% in August, after expanding by 6.6% in July.

On the corporate front, bus, coach and tram operator Stagecoach (LON:SGC), which dropped out of the FTSE 250 back in the summer, will be putting out an update on trading since its early May year-end, having suffered from the lack of traffic amid the coronavirus but been propped up by the government.

Analysts at RBC Capital Markets said there was a lack of positive catalysts in the near-term and wondered “if the family could take it private given the (low) share price”.

Around the markets

  • Sterling: US$1.2953, up 0.14 cents
  • 10-year gilt: yielding 0.289%, down 1.53 basis points
  • Gold: US$1,915.60 an ounce, up US$20.50
  • Brent crude: US$43.23 a barrel, down 11 cents
  • Bitcoin: US$10,893, down US$1

6.45am: Early Markets – Asia / Australia

Stocks in mainland China jumped after returning to trade on Friday from holidays with the Shanghai composite surging 1.67%.

The market opened with the news of a positive survey which confirmed services sector activity in China expanding in September.

Data from the Caixin/Markit services Purchasing Managers’ Index for September came in at 54.8. PMI readings above 50 signify expansion, while those below that level indicate contraction.

Australia’s S&P/ASX 200 and Hong Kong’ Hang Seng index remained near the flat line while in Japan, the Nikkei 225 dipped 0.29%.

READ OUR ASX REPORT HERE

Proactive Australia news:

Red River Resources Limited (ASX:RVR) has hit a 12-month high after setting another new quarterly copper production record at the Thalanga Operation in Northern Queensland during the September quarter.

K2fly Ltd (ASX:K2F) has raised invoices totalling $1.64 million in the first quarter of FY21, marking a 15% improvement over the equivalent quarter of the previous financial year.

Anteris Technologies Ltd‘s (ASX:AVR) early results from the first-in-human study of its proprietary DurAVR™ aortic valve have found that patient outcomes exceeded the results of what is normally expected following a Surgical Aortic Valve Replacement (SAVR).

Core Lithium Ltd’s (ASX:CXO) early reconnaissance exploration work has discovered visible gold at surface at the new Pickled Parrot Prospect (PPP) within Bynoe Gold Project in the Northern Territory.

Ora Banda Mining Ltd (ASX:OBM) has boosted overall Davyhurst Gold Project resources to 2.17 million ounces following a maiden resource estimate of 43,000 ounces at Riverina South project.

Boadicea Resources Ltd (ASX:BOA) investors have responded strongly to news of the payment of an 8-cent unfranked dividend with shares hitting a new five-year high.

Creso Pharma Ltd’s (ASX:CPH) (FRA:1X8) wholly-owned Canadian subsidiary Mernova Medicinal Inc has received and delivered a second purchase order valued at C$138,960 from the Nova Scotia Liquor Corporation (NSLC).

Infinity Lithium Corporation Ltd’s (ASX:INF) flagship San José Lithium Project in Spain remains well-positioned to fulfil a critical role in the EU’s lithium-ion battery supply chain against a backdrop centred on the EU Green Deal, a net-zero carbon footprint by 2050 and an economy reliant on renewable energies.

PolarX Ltd (ASX:PXX) continues to grow the Zackly East prospect within its Alaska Range Project in the US state of Alaska with drilling returning more wide, locally high-grade intersections of gold and copper.