- FTSE 100 down 4 points
- Lloyds bucks downward banking trend
- InterContinental moved to hold by Deutsche
11.35am: Hotels group leads FTSE 100 fallers
Well that didn’t last long.
The FTSE 100 is having a bit of a bumpy ride so far, and has slipped back into the red on continuing inflation fears and the strong pound hitting exporters.
The leading index is down 4.31 points or 0.06% at 6621.63, with InterContinental Hotels Group PLC (LON.IHG) the biggest faller. Its shares are down 172p or 3.29% at 5054p as downgraded the group following its figures on Tuesday.
Analyst Andre Juillard said: “Following IHG’s 2020 results yesterday, we updated our forecasts…as well as our recommendation – from Buy earlier to Hold, with price target revised from 5,600p to 5,380p. In our view, the business remains robust, and poised for outperforming the broader accommodation market through its exposure to midscale segment, to high growth geographies (North America and China) and through domestic demand. However, much of this seems in the price now, with the stock having run up around 12-13% year to date.”
10.40am: Property groups help leading index to move higher
After its downbeat start the FTSE 100 has perked up a little and edged into positive territory.
The leading index is up 3.64 points or 0.05% at 6629.58 having earlier fallen as low as 6572.28.
Commercial property companies are among the risers, with Land SecuritiesPLC (LON.LAND) climbing 12.9p or 1.97% to 668.4p and British Land Company PLC (LON.BLND) 9.2p or 1.84% better at 510.4p. The sector has been hit during the pandemic with empty office blocks as most people work from home. But they have been lifted by the hope that some form of normality will return before too long, which would mean some offices starting to see more staff return.
Elsewhere water company Pennon Group PLC (LON.PNN) has dipped 0.27% or 2.4p to 896.8p ahead of its possible demotion from the leading index.
Russ Mould at AJ Bell said: “The latest FTSE 100 reshuffle, the results of which are due to be announced after the close on Wednesday 3 March, could be relatively quiet this time around, with just one demotion and one promotion. Pennon and Weir are the two firms that look most likely to swap places, although grocer Morrison could also head out of the UK’s premier index, opening the way for a FTSE 100 debut for specialist distributor .
“Much will depend upon the next few days’ trading but it is noticeable how firms whose business models were initially hit hard by the pandemic, such as Weir, Howden Joinery and ITV are inching their way back up the ranks, as measured by market capitalisation, while those who were seen as relatively unaffected or even beneficiaries of lockdowns, such as Pennon and Morrison are sliding down.
9.15am: Banks and exporters put FTSE 100 under pressure
Leading shares continue to head south despite the hopes that tourists may be able to do likewise before too long if the lockdown restrictions are eased as planned.
The FTSE 100 is down 49.75 points or 0.75% at 6576.19 with banks leading the way lower, partly on concerns that an economic rebound could rekindle a rise in inflation. HSBC (LON.HSBA) is down 10.8p or 2.52% at 417.2p and Standard CharteredPLC (LON.STAN) has fallen 1.83% or 9.3p at 498.1p, not helped by a fall in Asian markets following reports the Hong Kong government was looking to raise the level of stamp duty on the trading of stocks.
But Lloyds Banking Group (LON.LLOY) is 1.31% or 0.51p better at 39.74p following its well-received results and an improvement in its performance during the second half.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Pre-tax profit hit £1.2 billion for the year, which although is a 70% fall compared to last year, but still marks a significant turnaround after a very unpalatable first half.”
The pound continues to strengthen, up 0.4% to $1.4175, as investors bet on a UK revival once the lockdown shackles are off. But this is bad news for Britain’s exporters, since it makes their goods more expensive. So Unilever PLC (LON.ULVR) is down 70p or 1.79% at 3850p and British American Tobacco PLC (LON.BATS) has fallen 1.84% or 48p to 2558p.
But travel companies are still in demand as holidaymakers start to book their freedom breaks, with British Airways owner International Consolidated Airlines Group (LON.IAG) up 5.2p or 2.86% to 186.8p. TUI AG (LON.TUI) is up 4.42% or 17.6p to 415.7p while cruise operator Carnival PLC (LON.CCL) has climbed 4.36% or 65p to 1554.5p, helping the FTSE 250 outperform the blue chip index, up 18.3 points or 0.09% to 21,076.02.
8.32am: Inflation worries hit leading shares
The FTSE 100 opened lower amid worries over rising prices with the markets largely ignoring the assessment given by Fed Chair Jay Powell that the inflation outlook was “soft”.
Here in the UK, the enthusiasm around Boris Johnson’s roadmap out of lockdown has largely dissipated.
That said travel stocks such as TUI () and IAG () were well bid early on, rising 3.2% and 1.3% respectively.
Jet engine maker Rolls Royce (), a beneficiary from any revival of the international airlines, was up 1.5%.
Top of the Footsie leaderboard was Lloyds (), which raced ahead 4.1% after a drop in bad loan charges.
Chris Beauchamp, chief market analyst at IG, wasn’t getting too carried away by the latest results.
“The pandemic might have begun to ease, but the economic consequences will remain with us for quite some time,” he said.
“A route out of lockdown is now planned by the government, but only slowly, and as a result, the economic outlook is not likely to improve any time soon.
“Low rates mean profitability will remain under pressure, but at least any further disruption to the UK high street and consumers is likely to be minimal.”
Finally, demand for disinfectant boosted the fortunes of household goods giant () and with it the share price, which advanced 1.4%.
Proactive news headlines
() said it has “maintained positive sales momentum” across its 2020 financial year despite all of its retail stores being closed for a large portion of the period due to lockdown measures introduced during the coronavirus (COVID-19) pandemic.
() said its Chill brand of tobacco alternative CBD products is set to be stocked by one of the largest tobacco-focused retail chains in the US.
Mode Global Holdings () said it will deliver the first-ever demo of its payments and loyalty solution online on Thursday (Feb 25).
(LON: UKW) said it had agreed to make acquisitions worth almost £100mln.
() said it has entered a partnership with consultancy and strategy services firm Kintail Consulting to address the area of people and culture risk in capital markets.
() told investors that visible mineralisation has been observed in holes during its ongoing drill programme at the Ewoyaa lithium project in Ghana.
(LON:APF, ) has struck a deal to acquire a 70% net interest in a stream on cobalt production from the Voisey’s Bay mine in Canada.
PLC () told investors it has exercised its option to acquire the Coco East property, in north-western Ontario, Canada.
() has begun testing the flotation pilot plant for the Songwe Hill Rare Earths project, in Malawi.
() () has said that its shares will begin trading today on the OTCQX Best Market in the US after being upgraded from the OTCQB Venture Market.
() will host a virtual capital markets presentation for institutional investors and investment analysts later today, providing greater insight on its North American and Insurance businesses and their growth potential. A copy of the presentation slides will be available on the company website after the event.
(LON:AMYT, ) will publish its unaudited financial results for the fourth quarter 2020 and full year ended December 31, 2020 on Thursday, 4 March, 2021 at midday London time (7am EST).
‘s () executive chairman Stephen Hemsley and chief financial officer Chris Dent will be presenting at MelloMonday on 8 March 2021, which will take place as a webinar via Zoom. They will also take questions during the event.
() has made available an audiocast of its latest corporate presentation. It is available on the company’s website and via the following link: https://webcasting.buchanan.uk.com/broadcast/preview/600ff815c4904929abd8221e
6.50 am: Footsie called lower
The FTSE 100 is predicted to start in the red on Wednesday as global markets continued to be rattled by concerns over possible inflation.
Spread-better IG expects the blue-chip index to open down around 50 points after closing on Tuesday with a 14 point gain to 6,625.
Markets appear to be highly uncertain around the outlook for the global economy as certain countries begin considering a return to normalcy following the pandemic, with concerns over inflation proving a particular issue for traders as well as whether some central banks may look to raise interest rates again once businesses begin to reopen.
The lower expected start for the FTSE 100 follows a mixed performance in US markets overnight, with the Dow Jones Industrial Average closing up 0.05% at 31,537 while the S&P 500 climbed 0.13% to 3,881. The Nasdaq was the negative outlier, falling 0.5% to 13,465.
Wall Street was pulled off most of its initial lows by the testimony of Fed chair Jay Powell to the Senate Banking Committee yesterday as he sent no signals he was overly concerned about a recent sharp rise in long term US bond yields while also remaining relatively soft on the inflation outlook.
However, inflation concerns and worries about interest rate hikes hit Asian markets this morning, with Japan’s Nikkei 225 falling 1.43% while Hong Kong’s Hang Seng tumbled 3.13%.
Back in the UK, investors may eye governor Andrew Bailey’s comments at the UK Treasury Select Committee this afternoon for any details on how the central bank views the economic and inflationary outlook for Britain.
On currency markets, the pound was up 0.3% to US$1.416 against the dollar, mostly bolstered by hopes the UK may be one of the first major economies to begin easing restrictions this year.
Around the markets:
Sterling: US$1.416, up 0.3%
Brent crude: US$64.99 a barrel, down 0.58%
Gold: US$1,807 an ounce, up 0.07%
Bitcoin: US$49,916, down 1.98%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were lower on Wednesday following a mixed finish on Wall Street, where the Dow Jones Industrial Average reversed steep losses.
The Hang Seng index in Hong Kong dived 2.91% while the Shanghai Composite in China slipped 1.81%.
In Japan, the Nikkei 225 fell 1.61% while South Korea’s Kospi dropped 2.45%.
Shares in Australia slipped, with the S&P/ASX 200 closing 0.90% lower.
Proactive Australia news:
() (OTCMKTS:CRZNF) has received firm commitments for a placement to raise approximately A$2 million from sophisticated, professional and institutional investors.
() (FRA:GM6) has returned more broad high-grade lead-silver results in the fifth and final batch of assay results from the 2020 drilling program at Abra Base Metals Project in Western Australia.
() (FRA:6MU) has received further strong gold results of up to 3 metres at 26.4 g/t from 32 metres at White Heat prospect within the high-grade Cue Gold Project in Western Australia.
Ltd () has received binding commitments to raise A$12.5 million (before costs) through the placement of 100 million shares at A$0.125 per share to sophisticated and professional investors.
() has launched a $3.1 million capital raising to fund aggressive exploration programs at the Side Well and Whitehead gold projects, both in WA.
() () () (FRA:P4Q) has recorded a 61% increase in group net profit after tax to A$49.1 million in the first half of FY21 compared to the corresponding period in FY20, reflecting its successful transition to a multi-mine, multi-jurisdictional gold producer.
() has acquired a package of highly prospective uranium exploration licences known as the Frome Project south of Lake Frome in South Australia.
archTIS Ltd () has entered a 12-month agreement with the Office of the Australian Information Commissioner (OAIC) for the company’s Kojensi SaaS platform.
() is trading higher after recording a 260% year-on-year rise in net profit for the half-year ended December 31, 2020, which incorporated the results of the Cracow Gold Operations, acquired on July 1, 2020.
() (FRA:XL5) has confirmed very high-grade halloysite, with grades of up to 37% halloysite, and ultra-bright white kaolin in detailed test-work on samples from the company’s 100%-owned Noombenberry Project in WA.