• FTSE 100 finishes down 30 points
  • US stocks mixed
  • Darktrace drops after Mike Lynch news

5pm: FTSE closes in the red

FTSE 100 closed in the red on Thursday with commodities stocks and consumer goods giants bearing the brunt of selling.

The UK’s premier share index finished down nearly 30 points, or 0.43%, at 6,968.30.

On Wall Street, things were mixed.  The tech heavy Nasdaq index gained over 21 points at 14,654 but the Dow Jones Industrial Average fell 30 points at 34,767.

The S&P 500 added nearly a point to 4.359.

Chris Beauchamp, chief market analyst at online trading group IG, noted that the general mood across markets was that buyers were in charge for a third consecutive session, aided by a dovish European Central Bank (ECB), which left interest rates unchanged.

“The FTSE 100 provided one real point of weakness today, left out of the ECB-related excitement and without much in the way of tech to carry it higher. Again it is oil and mining stocks that have held it back, countering strong gains in a variety of other sectors and seeing it drop below 7000 once again,” he said.

“But given the overall encouraging backdrop for stocks we should see the index recover in due course, even if the outlook for the UK remains clouded by rising cases and an avalanche of ‘pings’ that threatens to undermine UK business just as it hopes to benefit from the nation’s re-opening.” 

4.03pm: Handful of big names drag UK blue chip index lower

Leading shares continue to flag after their earlier fairly feeble attempt to stay above the 7000 level.

The FTSE 100 is down 25.25 points or 0.36% at 6973.03, not helped by an uninspiring start on Wall Street.

The Dow Jones Industrial Average is down 0.04% while the S&P 500 has edged up 0.11% and the Nasdaq Composite is 0.39% better.

The Magnum to Dove consumer goods giant Unilever PLC (LSE:ULVR) is helping to drag the UK blue chip index lower, down 5.76% to 4055p after disappointing results.

That disappointment has also seen peer Reckitt Benckiser PLC fall 2.56% to 6199p.

Housebuilder Persimmon PLC (LSE:PSN) has fallen 3.72% to 2899p as its shares went ex-dividend but this week’s latest booming UK house price figures have lifted Taylor Wimpey (LSE:TW.) PLC by 2.8% to 163.55p.

NatWest Group (LSE:NWG) PLC is down 2.66% at 194.25p after the UK government said it planned to sell up to 15% of the bank’s shares, a legacy of the bailouts following the 2008 financial crisis.

Among the risers Paddy Power and Betfair group Flutter Entertainment PLC (LSE:FLTR) put on 4.47% to 12,985p after RBC upgraded its recommendation to outperform.

This also pushed Ladbrokes and Coral owner Entain 3.49% higher to 1854.5p.

Michael Hewson, chief market analyst at CMC Markets UK, said: “We’ve seen another broadly positive day of gains for markets in Europe today, although the FTSE100 has once again underperformed, held back by underperformance in 3-4 of its big cap stocks…

“If this week’s price action has shown us anything it’s that markets appear to be caught in a pincer movement between concerns over rising inflation, and slowing growth, and that looks set to continue.

“This is no better reflected in the latest numbers from Unilever, which have weighed on the FTSE100, as steep rises in costs hit its operating margins, although some of the effect has been mitigated by the company raising prices.

Elsewhere cyber security business Darktrace PLC (LSE:DARK), which joined the stock market at the end of April, is down 10.83% at 640.22p.

Hewson again: “Darktrace shares have plunged on the news that shareholder Mike Lynch lost his appeal against extradition to the US on fraud charges. While Mr Lynch will probably appeal, it once again raises the concern that, as a key shareholder in the company through his Invoke Capital Fund, any fallout from Lynch’s problems with the US could prompt an unwelcome distraction for, and on the business, and Lynch’s involvement in it.”

3.05pm: Carmakers behind rise in jobless claims?

One explanation for the surprise rise in the US jobless claims is to do with the automotive industry.

Car plants have been shutting for re-tooling, and auto employees are temporarily eligible for benefits when this happen, which could help explain the increase.

 

2.42pm: Wall Street off to a mixed start

The main indices on Wall Street opened on a mixed note on Thursday following the unexpected rise in US jobless claims numbers.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.15% at 34,745 while the S&P 500 inched up 0.05% to 4,360 and the Nasdaq rose 0.25% to 14,668.

Back in London, the FTSE 100 was slipping lower in late afternoon, down 34 points at 6,966 at around 2.40pm.

2.24pm: US markets dip lower

Wall Street is slipping back after the jobs figures.

The Dow Jones Industrial Average is now set for a 46 point or 0.12% decline at the open, while the S&P 500 is expected to edge 0.03% lower and the Nasdaq Composite just 0.07% higher.

The FTSE 100 meanwhile is down 10.85 points at 6987.43.

1.46pm: Jobless claims climb

Over in the US, the weekly jobless claims have shown a surprise increase rather than a fall.

The number of Americans seeking unemployment benefit rose to 419,000 last week from 368,000 the previous week, with that figure itself revised upwards by 8,000.

Analyst had been expecting a drop to 350,000.

The four week moving average was up 750 to 385,500.

The increase keeps weekly claims near their level of two months ago, which means there has been little improvement despite signs of the job market recovering.

 

The unexpected rise has taken some of the shine off Wall Street.

The Dow Jones Industrial Average is now set for a 31 point or 0.08% rise at the open. The S&P 500 is expected to add 0.1% and the Nasdaq Composite is indicated 0.16% higher.

Back in the UK the FTSE 100 has slipped into the red, down 9.21 points or 0.16% at 6987.38.

12.58pm: ECB leaves rates on hold

The European Central Bank has kept its interest rates on hold and will continue with its emergency pandemic asset purchase programme.

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.

It said it will continue the pandemic programme up to a total of €1,850bn until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.

But in line with its new inflation target of 2% – it was previously close to but below 2% –  it has issued new guidance:

Back with the FTSE 100, and the leading index has edged a little higher and is now up 6.19 points at 7004.47.

12.12pm: US markets upbeat but Texas Instruments (NYSE:TXN) falls

Wall Street is set for a positive start, with the Dow Jones Industrial Average looking at a third day of gains.

The Dow is forecast to rise by 97 points or 0.27% at the open, while the S&P 500 is expected to climb 0.23% and the Nasdaq Composite is indicated 0.17% higher.

A generally positive reporting season seems to have persuaded investors to shrug off concerns about the Delta variant.

That has continued today to a degree, with AT&T shares up 1.4% in premarket after its results beat forecasts.

But Texas Instruments (NYSE:TXN) is down 4.9%. It too did better than expected in the second quarter but its outlook for the third quarter missed analyst targets, amid a global chip shortage.

After the market closes, results from Twitter are due.

Meanwhile US weekly jobless claims are expected to show a dip from 360,000 to 350,000.

Back in the UK, and the FTSE 100 is clinging on to the 7000 level, just. It is now up 3.12 points at 7001.4.

11.29am: UK orders and output grow says CBI

More signs of strength in the UK manufacturing sector, albeit with growing concerns about material and staff shortages.

According to the latest CBI Industrial Trends survey, output volumes grew at the joint fastest pace on record in the three months to July.

And manufacturers expect an even stronger outcome in the next three months, the strongest growth expectations on record.

Total new orders grew at their quickest pace since 1974. This reflected domestic orders expanding at their fastest rate on record (since 1975), and the first rise in export orders since January 2019.

Business optimism dipped from the previous survey but is still strong by historic standards, said the CBI.

But concerns about the availability of materials and components, skilled labour, and plant capacity as factors likely to limit output next quarter were at their most heightened since the mid-1970s.

These concerns are unlikely to be alleviated by the current pingdemic causing thousands of workers to self isolate.

Today it emerged that COVID-19 app alerts rose to 607,486 in England in the week to July 14, a new record high.

Meanwhile the CBI survey showed the manufacturing sector also continues to face acute cost pressures. Firms reported that average costs growth in the three months to July accelerated to its fastest pace since 1980

Back with the market, and the FTSE 100 is up 15.44 points or 0.22% at 7013.56.

10.21am: NatWest slips on government share sale plans

It’s not usually good for a share price when a big investor decides to sell a chunk of its stake.

And such is the case for NatWest Group (LSE:NWG) PLC.

Its shares are down 2.5p or 1.25% at 197.05p after the UK government unveiled plans to sell up to 15% of the bank over the coming twelve months.

As a consequence of bailing out the bank after the 2008 financial crisis, the Treasury owns a 54.7% stake. It last sold shares in May, disposing of a chunk worth £1.1bn.

Overall the FTSE 100 is managing to keep its head above water, and above 7000.

The leading index is currently up 13.02 points or 0.19% at 7011.3.

AJ Bell investment director Russ Mould said: “The FTSE 100 was pausing for breath on Thursday having done its best to pick itself off the canvas after being felled by COVID-19 and inflation concerns at the start of the week.

“The market could be given some direction by the European Central Bank meeting later which may announce a shift in its plans as it looks to contend with mounting inflation.

“US weekly jobless figures will also be closely monitored later given US central bankers have long signaled that the jobs market is pretty much their lodestar when it comes to making decisions on monetary policy.

“Part of the narrative behind the market rebound in the last couple of days has been the idea that support for economies might be sustained for longer as the world stares down the barrel of rising Covid infections linked to the Delta variant.”

9.51am: Markets pick up but energy companies dip

Leading shares have picked up a little after their uncertain start.

The FTSE 100 is making another valiant attempt at holding on to the 7000 level, up 14.34 points or 0.2% to 7012.62

Builders are providiing some support following the latest upbeat housing figures this week.

Barratt Developments (LSE:BDEV) PLC is 2.75% better while Taylor Wimpey (LSE:TW.) has added 2.45%.

Among the hospitality groups likely to benefit from the reopening, Premier Inn owner Whitbread PLC (LSE:WTB) is up 3.35%.

But energy companies are lacking, er, energy.

British Gas owner Centrica PLC (LSE:CNA) is down 1.38% after it said operating profit was broadly flat at £262mln.

And SSE PLC (LSE:SSE) has dipped 0.17% as it told its annual meeting its renewables output was below target due to unfavourable weather (in the UK? Really?)

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “SSE’s renewable output is some 19% below target for the three months to the end of June. Unfortunately that sort of thing is an inevitable consequence of relying on the, never reliable, British weather for as much as a third of the group’s total output.

“SSE will hope unexpectedly windy and wet conditions later in the year mean it all falls out in the wash.”  

8.55am: Reckitt Benckiser and Persimmon among the fallers

Reckitt Benckiser (LSE:RB.) has fallen back in the wake of Unilever’s disappointing results, down 1.38% to 6274p.

Also heading lower is housebuilder Persimmon (LSE:PSN), down 3.02% to 2920p as its shares go ex-dividend.

But British Airways owner International Consolidated Airlines PLC (LON:IAG) has continued its recovery, up 3.08% at 174.64p.

Overall the FTSE 100 is still marginally in the red, down 3.61 points at 6994.67.

8.38am: Markets pause for breath

Leading shares have made an uncertain start, edging above the 7000 level again before slipping back.

The FTSE 100 is currently down 1.04 points or 0.015% at 6997.24.

It has been an archetypal roller coaster week so far, with Monday’s rout followed by a strong recovery on Wednesday as concerns about the Delta variant began to ease.

So perhaps it is no surprise the market is pausing for breath.

And pictures of empty supermarket shelves due to the pingdemic causing thousands of workers to self isolate is not helping sentiment.

Later investors will be looking out for the latest update from the European Central Bank and the US weekly jobless figures.

Meanwhile consumer goods giant Unilever PLC (LSE:ULVR) is proving a drag on the market.

The Ben & Jerry’s to Dove group has reported a 3.6% fall in half year profits and warned that the rising price of materials meant the range of margin outcomes for the year was higher than normal. It now expects margins to be flat after forecasting an increase three months ago.

Richard Hunter, head of markets at interactive investor, said “Unilever is a trading colossus, so changes to its fortunes tend to be incremental rather than momentous.

“The group, which is home to a vast array of household brands, has had mixed results over the last year as different economies recover at different speeds as they attempt finally to escape the clutches of the pandemic. In addition, the changes in consumer behaviour has differing impacts on its products, which are a mix of household and out-of-home lines…

“In a slight streamlining of its operations, the majority of the tea and certain of its smaller beauty and care brands are being separated, which will enable further focus on its key areas…

“An increase in raw material, packaging and distribution costs is an unwelcome development given the differing speeds of global economic recovery, and the overall pre-tax profit number has slipped by 3.6% due to a combination of cost and comparison factors.

“The progress which Unilever had been making during the pandemic has to some extent been undone by these pressures.”

6.45am: Positive mood set to continue

The FTSE 100 looks set to start Thursday on the front foot as yesterday’s positivity carries over, whilst later attention will turn to central banks.

CFD firm IG Markets sees the London benchmark slightly higher, making a price of 7,014 to 7,016 with just over an hour to go until the open.

Wednesday’s rally is evidently still fresh in memory.

The FTSE 100 added 117 points, 1.7%, yesterday bolstered by recovering airlines and engineering stocks.

Wall Street was also a boon.

In New York, the Dow Jones rose by 286 points, 0.83%, to finish at 34,798. The S&P 500 similarly marked a 0.82% gain to 4,358 and the Nasdaq added 0.92% to close at 14,631. The small cap focussed Russell 2000 rallied further, up 1.81% to 2,234.

Asian trading, meanwhile, saw Japan’s Nikkei moved 0.58% higher to trade at 27,548.

Hong Kong’s Hang Seng was notably stronger rising by 480 points or 1.77% to 27,706. The Shanghai Composite meanwhile edged up 0.3% to 3,573.

As the day progresses attentions may turn to central banking and inflation-centred policy.

“Today’s European open looks as if it could well be a positive one ahead of today’s European Central Bank rate meeting, which given recent comments from ECB President Christine Lagarde, could prove much more insight into ECB policy over the next 18 months than had originally been thought two weeks ago”, said Michael Hewson, analyst at CMC Markets.

“With the Federal Reserve meeting also due next week the next few days are likely to be crucial ones in respect of future policy considerations as Delta variant infections rise across the world.

“We’ve already heard that the ECB will be changing its inflation mandate to try and give itself more flexibility over monetary policy.”

Around the markets

The pound: US$1.3719

Gold: US$1,799 per ounce, down 0.19%

Silver: US$25.14 per ounce, down 0.54%

Brent crude: US$72.06 per barrel, up 3.9%

WTI crude: US$70.21 per barrel, up 4.4%

Bitcoin: US$31,898, up 3.8%