• FTSE 100 closes down 1.6%
  • Bitcoin price briefly tops US$20,000
  • US indices firmly lower

5pm; FTSE closes 101 points lower

FTSE 100 index closed the last trading day of the month firmly lower after markets saw big gains in November.

The UK’s index of the largest companies closed down around 101 points at 6,266 with resource groups taking a knock ahead of the OPEC meets today. Footsie’s intra-day high was 6,404.

On Wall Street, the three major benchmarks were also lower, with the Dow Jones off around 421 points; the S&P 500 down around 35 and the Nasdaq 101 points lower, having been higher at the start of trade.

“After such impressive gains, and with the end of the year so close, it is hardly surprising that a significant amount of fund rebalancing and profit taking is felt across markets, putting some modest pressure on indices,” said chief market analyst at IG, Chris Beauchamp.

The analyst also noted that sterling also looked vulnerable to a downward move as the Brexit process heated up once again.

“The rhetoric from both sides is reaching fever pitch, since despite all protestations to the contrary, real progress on fish and the level playing field appears to be lacking.

“Like equities, sterling has been fairly immune to bad news of late, but after a huge rally, not just since September but since the middle of the year as well, it will need some really good news to avoid a fall into December as the reality of a no deal Brexit begins to take shape.”

4.00pm: Bitcoin frenzy resumes

It’s been a dull end to an otherwise stonking month for equities and the stock market’s thunder has been stolen by Bitcoin.

While the FTSE 100 was sliding 34 points (0.6%) to 6,333, the price of Bitcoin on futures markets rose above US$20,000 for the first time earlier today.

Prices have since subsided but Bitcoin is still up US$1,193 (6.5%) today at US$19,453.

3.00pm: It’s been a hell of a month

The soft start by US indices seems to have had a knock-on effect on the FTSE 100, which is down 20 points (0.3%) at 6,347.

Investors can’t grumble too much, however, as the index started the month at 5,777, so the index has risen 9.9% in a single month, thanks largely to the news about vaccines to combat the coronavirus.

It’s the sort of performance the Footsie has not put in since January 1989.

2.45pm: US stocks start mixed

US stocks opened mixed on Cyber Monday amid subdued trading after the holiday weekend  as traders mull the latest vaccine news and the next set of potential catalysts in December.

The  Dow Jones Industrial Average started the week in New York down over 265 at 29,644. The  S&P 500 shed over 13 at 3,625.

The Nasdaq index, however, was plotting its own course, ahead by around 18 points at 12,224. US stocks are still poised to hit historic monthly gains for November.

According to one report, The Dow Jones is headed for its best monthly result since January 1987, and both the Dow and S&P are looking at their best November returns since 1928.

“Despite it being an action-packed November, there’s still so much to come before the end of December so there’ll be no coasting into the new year,” reckons Craig Erlam, senior market analyst at Forex group Oanda.

“This week its OPEC+, next week ECB, Fed the week after. All the while, the UK and EU are desperately trying to avoid no deal Brexit in a little over four weeks and the US Presidential transition is underway. The vaccine news has been great but it was one of many market risks in the coming weeks.”

Referring to the virus, Erlam also noted that the final weeks of the year carried massive risks of a second peak in quick succession, given how families “inevitably gather around Thanksgiving and then Christmas”.

“Restrictions well into the first quarter look highly likely,” he said.

2.00pm: BP downgraded by HSBC

London’s benchmark of benchmark shares is wavering on or around last night’s level, with weak resource stocks weighing the index down.

The FTSE 100 was down 7 points (0.1%) at 6,361, led lower by precious metals miner Fresnillo PLC (LON:FRES), which was down 5.3% at 1,053p, as gold and silver prices tumble.

“Gold has fallen another 1% even as the US dollar has also extended its declines and the equity markets have started the new week slightly weaker but is the precious metal about to shine again?” wonders Fawad Razaqzada at ThinkMarkets.

“Gold has also now reached ‘oversold’ levels of sub 30 on the Relative Strength Index (RSI), which is a momentum indicator. With gold still in a long-term uptrend, the RSI at these levels would probably discourage some bearish speculators from being too aggressive on their bets. This means that there is also the potential for some short-covering to emerge around these levels,” suggested Razaqzada.

Elsewhere in the resources sector, oil titan BP PLC (LON:BP.) was 2.9% softer at 255.25p after HSBC switched from ‘buy’ to ‘hold’ while keeping its price target at 300p.

Sector peer Tullow Oil PLC (LON:TLW) slipped 2.1% to 28.36p as it was downgraded by BMO Capital Markets from “outperform” to “market perform”; again, the price target was unchanged (at 35p).

12.30pm: Best month in decades likely to end on a dull note across the pond

US stocks, with exception of technology plays, are set to open mostly lower as US markets return to a full day’s trading after the Thanksgiving holiday.

Stock indices have had one of their best months in decades – dating back to January 1987 in the case of the Dow Jones – so there could be some profit-banking going on.

Spread betting quotes point to the Dow opening 166 points lower at 29,744 while the S&P 500 is expected to shed 11 points at 3,627.

As is often the way, the tech-heavy NADSAQ Composite is following its own script and is expected to open 59 points firmer at 12,264.

“Crude prices have been hit in early trade, as weekend OPEC negotiations hint at a somewhat less one-sided debate than many had hoped for,” reported Josh Mahony at IG, after West TexasIntermediate slipped 57 cents lower to US$44.96 a barrel.

“Recent vaccine announcements have helped lift hopes of a sharp rebound in demand for crude, yet the question now is how much energy should be priced based on the future prospective demand or current reality. From an OPEC perspective, the question is whether foster this recovery or send energy prices lower once again. The two-million barrels per day increase that would come in the absence of a deal would deal a serious blow to market sentiment as much as supply/demand levels themselves, indicating that the group are unwilling to support energy prices until demand returns,” Mahony said.

Talking of vaccine announcements and the coronavirus pandemic, Moderna Inc, one of the companies that has developed a vaccine that has shown very high efficacy (94.1%) in tests, is to file for emergency use authorisation from the US Food and Drug Administration.

The company added that it is still running tests on the vaccine and there have been no safety concerns identified as of yet.

Meanwhile, it is going to be a tense few days in the US as medical professionals wait to see whether there is a post-Thanksgiving surge in cases.

There was a decline in new cases over the Thanksgiving holiday but in the opinion of Ian Shepherdson at Pantheon Macroeconomics, “this means nothing” as reporting schedules were sketchy over the long weekend.

“It is clear, though, that cases were peaking just before Thanksgiving, and likely would now be starting to fall. But we have to assume that the movement of millions of people around the country, and the associated family gatherings, will prompt a temporary increase in cases,” Shepherdson warned.

“It’s impossible to know how big the Thanksgiving spike will be, but the experience of the UK and Israel, where the second national lockdowns were pre-announced, suggests that a single weekend of increased socialisation — never mind a surge in travel activity — can make a substantial difference to the case trajectory for a couple weeks or more. The danger period is from the end of this week through the end of next week, allowing for the usual lag between infection, symptoms, and testing,” Shepherdson said.

In the UK, cases and hospitalisations continue to fall, with some of the hardest-hit parts of the country not reporting a halving in new cases since the second national lockdown began on November 5 – Guy Fawkes Night – Shepherdson observed.

In the economics diary in the US today we have the Chicago Purchasing Managers’ Index (PMI) and Dallas Fed manufacturing indices for November, together with the pending home sales report for October.

Back in London, the Footsie briefly sunk into the red but has perked up again to scrape out at 5 point gain (0.1%) at 6,373.

11.20am: JD Sports in relief rally on hopes it will ditch Debenhams ambitions

The Footsie’s advance has stalled in the last hour but at least it is not retreating.

London’s index of leading shares was (still) up 17 points (0.3%) at 6,385, with JD Sports Fashion PLC (LON:JD.), up 6.9% at 783.6p, leading the advance on weekend press reports that it is cooling on the idea of acquiring Debenhams.

READ JD Sports shares slip on reports of Debenhams deal talks from six days ago.

Lloyds Banking Group PLC (LON:LLOY) was up 0.9% at 37.64p after it nabbed it lured HSBC PLC’s (LON:HSBA) wealth and personal banking boss Charlie Nunn over to be its new chief executive.

He will replace the handsomely remunerated António Horta-Osório, who joined Lloyds in 2011 when the share price was around 60p

10.00am: Housing market remains turbocharged – for now

House purchase mortgage approvals increased to 97,532 in October, from 92,091 in September, beating the consensus forecast of 84,000.

Net consumer credit dropped by £0.6bn in October, as it did in September; the consensus forecast was for credit levels to be unchanged month-on-month.

“The stamp duty holiday has turbocharged the housing market, sending house purchase mortgage approvals in October to their highest level since September 2007. They likely will remain at a very high level during the winter, given that Google Trends data show that visits to the three main property websites—Rightmove, Zoopla and OnTheMarket—were up 30% year-over-year in the week ending November 22, unchanged from recent months,” said Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.

Tombs expects the housing market “to weaken sharply” after the threshold for stamp duty is returned to £125,000, from £500,000 at present, at the end of March.

“Indeed, the combination of a weakened labour market and higher mortgage rates, reflecting the greater risks of lending in the current environment, points to lower levels of activity next year and a partial reversal of this year’s surge in house prices. That said, the outlook remains exceptionally unclear, given that government policies might change; the stamp duty holiday could be extended, or the government might follow through on plans to introduce a new mortgage guarantee scheme,2 he opined.

Rightmove PLC (LON:RMV), the property listings website operator, did not seem overly bothered by Tombs’s dire warning; its shares were 2.4% higher at 638.8p.

The FTSE 100 was up 17 points (0.3%).

8.50am: Positive start to the week

The FTSE 100 defied the early gloomy predictions to open in the green on Monday morning – but only just.

The index of UK blue-chips opened 11 points higher 6,378.46.

The optimism may have been spurred by a better than expected fall in UK coronavirus (COVID-19) infection rates, which have dropped by a third during lockdown.

Certainly, London’s move higher seemed to be at odds with the mood in Asia, where the main markets succumbed to profit-taking – with the exception of China, where a revival in manufacturing activity made for a more resilient performance.

Here in the UK, Brexit remains the great imponderable as the clock ticks down to 2021.

“Investors are hoping that a last-gasp compromise will prevent the economic pain of a no-deal to both parties, and for the UK this has particular ramifications given the parlous state of the economy both now and post-pandemic – a further deterioration of the nation’s finances would be a material blow,” said Richard Hunter, head of markets at Interactive Investor.

Heading the Footsie risers list was JD Sports (LON:JD.), up 7.7%, following a report it is ready to step back from its risky rescue of department store group Debenhams.

 A fall in precious metals prices prompted an early markdown for Fresnillo (LON:FRES), the Mexico-focused silver miner.

Worries over OPEC’s next move in the oil market, which forced crude prices down 2% overnight, had an impact on both Shell (LON:RDSA) and BP (LON:BP.), which each fell 2.2% early on.

Among the small-caps, Symphony Environmental (LON:SYM) starred with a 16% gain after gloves and face masks using its antiviral material proved highly effective against Covid.

Proactive news headlines:

Oracle Power PLC (LON:ORCP) has begun field exploration work at the Northern Zone gold project, in the Kalgoorlie region of Western Australia. The project, located some 25 kilometres from the major gold mining centre in Kalgoorlie – home to ‘Super Pit’, Australia’s second-largest gold mine – is seen to host potential gold mineralisation in ‘auriferous veins in granitic intrusions’, the company said. Oracle’s exploration campaign will see the company acquire high-resolution imagery and digital terrain model of entire the project area. It will also conduct a geochemical survey to refine the targeting model.

Symphony Environmental Technologies PLC (LON:SYM) shares shot up 16% in early trading after a highly successful coronavirus (COVID-19) test of antiviral gloves and masks containing the company’s d2pAM antimicrobial technology. The assessment was carried out at the Laboratory of Virology at the University of Campinas, Brazil, and researchers looked at how effectively the protective equipment was able to combat the coronavirus strain MHV. This is the same genus and family as SARS-CoV-1, SARS-CoV-2/COVID-19 and MERS. The results were impressive. The d2pAM glove showed a 99.99% virus-reduction after only one hour of contact. The d2pAM facemask showed a 99% virus-reduction after one hour of contact with the facemask, and 99.9% after two hours.

Mkango Resources Ltd (LON:MKA) (CVE:MKA) is to be the beneficiary of a grant from the Industrial Challenge Fund, delivered by UK Research and Innovation (UKRI). The grant has been awarded to HyProMag Ltd, a subsidiary of Maginito Ltd, a unit of Mkango in which it holds a 25% stake. The project is “Rare-Earth Extraction from Audio Products” and will investigate ways of recycling rare earth magnets from speakers used in automotive and consumer electronics applications.

Premier African Minerals Ltd (LON:PREM) has returned assay results from recent sampling at its newly acquired Mozambique tenement. The best grade returned was 23.7 grams per tonne gold, with several samples carrying grades of between 1.11 grams and 1.72 grams. “This remains an early-stage exploration and no resource conclusions may be drawn at this time,” said Premier African’s chief executive George Roach in a statement.

CentralNic Group PLC (LON:CNIC) saw revenue more than double year-on-year in the first nine months of 2020, with record organic revenue growth of 17%. The acquisitive internet platform operator saw revenue rise by 118% to US$168.5mln in the nine months to the end of September 2020, up from US$77.1mln the year before. Adjusted underlying earnings (EBITDA) jumped 68% to US$22.1mln from US$31.1mln the year before. Operating profit expanded to US$1.88mln from US$99,000 the year before.

discoverIE Group PLC (LON:DSCV) returned to organic revenue growth in September and in the last two months the group has seen orders running ahead of sales. The designer and supplier of customised electronics saw its momentum checked by the coronavirus (COVID-19) pandemic in the six months to the end of September but the second half of its financial year has started well enough for the company to resume dividend payments. Revenue in the reporting period eased to £217.9mln from £232.0mln in the corresponding period of last year.

Scotgold Resources Ltd (LON:SGZ) gas said it is on course to commence Phase 1 production at the Cononish gold and silver mine last today. Phase 1 targets average annual gold equivalent production of 9,910 ounces. Phase 2, which targets the expansion of production to 23,500 ounces, has been brought forward by 11 months to May 2022, the group added.

Custodian REIT PLC (LON:CREI) has acquired four industrial units covering an aggregate 23,250 square foot on Hilton Business Park, Derby, one mile from the A50 which connects the M1 and M6.  The agreed purchase price of £1.975mln was funded from the company’s existing cash resources, resulting in net gearing increasing to the group’s 24.1% loan to value.

OKYO Pharma Limited (LON:OKYO) has said it expects to make an investigational new drug application for a treatment it is developing for dry eye disease (DED) in December 2021. OK-113 inhibits Chemerin, one of a key group of cell surface receptors called G-protein coupled receptors (GPCRs), which play an important role in inflammation and were the basis of the 2012 Nobel Prize in Chemistry. The drug candidate has shown “potent anti-inflammatory activity” in preclinical testing, investors were told in commentary accompanying OKYO’s interim results.

Location Sciences Group PLC (LON:LSAI) has signed up a second US customer for its Verify Audience platform and is continuing its work with the NHS to help analyse how people’s movements are affecting the spread of coronavirus (COVID-19) infections. The marketing location data specialist said US group The Spoken Thought, which trades as Mira, will use the platform to verify audience segments independently and offer customers a visibly differentiated premium product. The two companies have been working together throughout 2020 and this formal agreement will now allow Mira to deliver more accurate high-value audience segments to its customers.

Eco Atlantic Oil & Gas Ltd (LON:ECO) told investors it has successfully negotiated the reissue of four licences in the Walvis Basin, offshore Namibia. The licences awards remain conditional subject to customary final government signature, the company added. It negotiated the reissues and the establishment of a new 10-year life cycle for each of the four new Petroleum Exploration Licenses.

Bushveld Minerals Limited (LON:BMN) has satisfied the conditions required to draw down from the Orion Mine Finance facility announced at the end of September. The vanadium producer is in the process of drawing down funds from the US$30mln production financing agreement and has also informed Orion it plans to issue convertible loan notes to the finance group in return for US$35mln. The production financing agreement will provide funding to continue to grow production at Bushveld’s Vametco project and to repay debt.

Bahamas Petroleum Company PLC (LON:BPC) told investors that, in Trinidad, the Goudron field’s Enhanced Production Sharing Contract (ESPC) has now been signed. The ESPC gives the company with the continuing exclusive right to extract petroleum at Goudron until June 30, 2030. It replaces an existing 10-year production sharing contract which was due to expire at the end of 2020. The company noted that the ESPC had been anticipated earlier this year but was delayed amidst the coronavirus (COVID-19) pandemic.

US Oil & Gas PLC (USOP), in a statement at Friday’s close, announced that the Eblana-9 well, in Nevada, was spudded on November 27. The well is targeting a prospect in Hot Creek Valley that is estimated to host some 28 million barrels of oil in place. It will be a vertical well, drilled down to a depth of 5,300 feet. A total of three horizons are targeted – anticipated at 4,420 feet, 4,920 feet, 5,140 feet.

Gore Street Energy Storage Fund PLC (LON:GSF) has initiated the programme to finance a major expansion of its portfolio of industrial battery assets. The first stage is a subscription and placing of 60mln new shares at 100p each to be sold through an initial placing, offer for subscription and intermediaries offer. Following this initial raise, Gore Street intends to issue up to a further 250mln shares at the same price.

Tharisa PLC (JSE:THA) (LON:THS) boosted revenue by 18.4% to US$406mln in the year to September 30, 2020. The firm’s earnings rose by 119.8% to US$113.1mln, while operating profit rose 262% to US$87.6mln. Earnings per share increased by 305.0% to 16.2 US cents. Net cash flow was US$73mln as the company’s chrome and platinum group metal production in South Africa was supported by strong commodities prices.

Caledonia Mining Corporation PLC (LON:CMCL) has fully equipped the new central shaft at its Blanket gold mine in Zimbabwe, from the base to the collar. The shaft is now on track to be commissioned in the first quarter of 2021. The work has been completed considerably below budget and within a time frame to underpin the company’s expectation of delivering production of 80,000 ounces of gold in 2022.

AFC Energy PLC (LON:AFC) said it has appointed Iain Thomson as its new Head of Communications & Stakeholder Management, effective from January 4, 2021. The provider of hydrogen power generation technologies said it is a newly created role that will see Thomson take on the day-to-day responsibility for the company’s Communications & Investor Relations programme. 

6.50am: Footsie called lower by spread betting firms 

The FTSE 100 looks set to kick off the trading week in the red with coronavirus vaccine hopes giving way to lockdown reality.

Little support is likely to be provided by Asia, where performances were mixed. Sporadic upticks in infection rates across the region added to nerves, while a stronger-than-expected performance from China’s manufacturing sector last month was largely overlooked.

Here in the UK, the political wrangling over the new coronavirus tiering system, which is set to kick in on Wednesday, looks likely to rumble on.

Brexit negotiations, meanwhile, are nearing the take-it-or-leave-it stage, according to the EU’s chief negotiator, Michel Barnier.

The weekend’s main business headlines were dominated by Philip Green’s Arcadia Group, which looks to be heading into some form of administration with as many as 15,000 jobs at risk.

An offer of a £50mln loan from Mike Ashley’s Frasers is been seen in some quarters as little short of a publicity stunt.

Weekend reports also suggest Debenhams could be pushed to the brink with JD Sport apparently ready to back out of a rescue deal.

Looking ahead, the big economic news on a quiet week is likely to be Friday’s US non-farm payrolls.

The rate of growth in the American labour market is set to have almost stagnated with as few as 60,000 new jobs added in November, down from 638,000 in October and 4.8mln in June. This after a record 20.8mln joined the ranks of the unemployed in April.

The corporate diary here in the UK looks a little quieter than recent weeks with Berkeley Homes (LON:BKG), funds supermarket AJ Bell (LON:AJB) and publisher Future (LON:FUTR) representing the main highlights.

Around the markets:

  • Pound US$1.3324 (+0.25%)
  • Bitcoin US$18,554.12 (+4.2%)
  • Gold US$1,772.40  (-0.88%)
  • Brent crude US$47.19 (-2.1%)

6.45am: Early Markets – Asia/Australia

Stocks in the Asia Pacific region were mostly lower on Monday as China’s commerce ministry announced preliminary anti-dumping duties ranging from 107% to 212% on imported Australian wine.

Hong Kong’s Hang Seng index dipped 1.50% while South Korea’s Kospi was down 0.97%. In Japan, the Nikkei 225 fell 0.79%.

Chinese stocks were slightly higher with the Shanghai composite rising 0.10% after the country’s National Bureau of Statistics announced 52.1 as the official manufacturing PMI for November. That was above expectations of a 51.5 level forecast by analysts in a Reuters poll.

Australia’s S&P/ASX 200 was off to a good start but slipped 1.26% to close at 6,518.

READ OUR ASX REPORT HERE

Proactive Australia news:

Horizon Minerals Ltd (ASX:HRZ) has executed a binding agreement for the acquisition of a 50% interest in the high-grade Penny’s Find Gold Project in the Western Australian goldfields for $1.5 million cash from Orminex Ltd (ASX:ONX).

Aeris Resources Ltd’s (ASX:AIS) first drill hole at Anomaly K target of the Tritton copper operations in New South Wales has intersected an 18.8-metre interval containing disseminated and banded sulphides, including a 6.8-metre interval of massive pyrite bands with visible chalcopyrite.

Meteoric Resources NL (ASX:MEI) has received a second batch of assays from a maiden drilling program at Palm Springs Gold Project in WA, which returned wide high-grade gold intercepts at the Southern Extension, including 69 metres at 4.4 g/t.

FYI Resources Ltd (ASX:FYI) has received firm commitments to raise up to $6 million through a strongly supported placement to sophisticated and professional investors to advance its strategy of producing high-purity alumina from an innovative and fully integrated HPA project in Western Australia.

PNX Metals Ltd (ASX:PNX) (FRA:4P1) is undertaking a capital raising exercise comprising a placement and rights issue to raise up to $6.67 million to advance its exploration and development strategy focused on gold and zinc-gold-silver projects in the Northern Territory.

Castillo Copper Ltd (ASX:CCZ) has confirmed the strong potential of its Big One Deposit within Mt Oxide Project in northwest Queensland’s Mt Isa Copper Belt amidst a strong copper market with assays returning shallow copper mineralisation of up to 4.14%.

Ironbark Zinc Limited (ASX:IBG) is progressing towards the bankable feasibility study for its 100%-owned Citronen zinc-lead project in Greenland, with most of the heavy lifting already completed.

Nelson Resources Ltd (ASX:NES) plans to start drilling and Induced Polarisation (IP) surveys at its Woodline Gold Project on the boundary of the Albany Fraser Oregon and the Norseman-Wiluna Greenstone belt in WA.

Maximus Resources Limited’s (ASX:MXR) field geological mapping and review of the Hilditch Gold Project within the company’s northern Spargoville tenements in Western Australia have outlined an extensive alteration domain.

Platina Resources Limited (ASX:PGM) (FRA:P4R) has completed the A$13.7 million sale of its Skaergaard gold and palladium project in Greenland to Canadian-listed Major Precious Metals Corp (CSE:SIZE) (OTCMKTS:SIZYF) (FRA:3EZ).