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FTSE 100 climbs higher on Friday as investor sentiment gets a boost this week

  • FTSE 100 closes up 66 points on the day
  • US indices higher
  • Sterling loses ground

5.05pm: FTSE 100 closes ahead

FTSE 100 index closed the last day of the trading week higher after making steady gains this week.

Britain's blue-chip benchmark finished 68 points higher, or 1.10% at 6,292 with the weaker pound also giving a leg-up to the index's dollar earning constituents.

Over the week as a whole, the premier UK index added around 3%.

Chris Beauchamp, chief market analyst at spreadbetting group IG, said some better data, central bank action and sense of an earnings recovery later in the year had accounted for market gains this week.

"Sentiment remains sceptical that the market can keep moving higher, which provides one of the best reasons to expect further gains over the longer term; one thing is for certain, for now the market appears it can handle the prospect of the long-term existence of coronavirus, provided there are enough government and central bank stimulus measures in place to offset the economic impact of lockdowns," he said.

On Wall Street, stocks also headed north. The Dow Jones Industrial Average added over 77 points at 26,157, while the S&P 500 added over nine at 3,125.

2.50pm: Who's afraid of quadruple witching?

As expected, US indices opened higher on what is known as “quadruple witching” day when lots of expiring derivative positions are rolled over.

“It is quadruple witching for US stocks today as large options and futures positions will be expiring along with rebalancing of major indices such as S&P. Therefore, there are expectations of large volumes and increased volatility and potentially a pull-back in US equities, but we do not think the support for equities will suddenly drop away as there are still huge amounts of cash in the system waiting to buy dips,” said Rony Nehme, the chief market analyst at Squared Financial.

pic.twitter.com/BtGbqxbhmB

— Hipster (@Hipster_Trader) June 19, 2020

The Dow Jones industrial average was up 269 points (1.0%) at 26,349 and the S&P 500 was 35 points better at 3,150.

In London, the FTSE 100 was 86 points (1.4%) to the good at 6,310.

The mid-cap FTSE 250, which gets less of a lift from a weak exchange rate (as is the case today), was trailing in its big brothers wake but was still up 144 points (0.8%) at 17,662p, led by Hyve Group PLC (LON:HYVE), the events organisor, which is up 6.8% at 125p.

Traders bought into the trade show specialist after it revealed it had received its first insurance pay-out relating to a cancelled event.

Oilfield services outfir John Wood Group PLC (LON:WG.) was down 0.2% at 226.4p despite it being a good day for oil stocks generally, thanks to the recovery in the oil price.

The group said its first-half revenues and profits have fallen due to the coronavirus (COVID-19)pandemic and a drop in oil prices but added that it continues to win new contracts.

1.40pm: US indices to open higher

US indices are expected to shake off yesterdays lethargy and open firmer this afternoon.

Spread betting quotes point to the S&P 500 kicking off some 30 points higher at 3,145. The Dow is expected to rise 295 points to 26,375 or thereabouts.

To nobodys great surprise, the chief executive of Wirecard has resigned after a black hole was uncovered in its accounts. Around €1.8bn has gone missing, which is a hell of a black hole.

“Of course Wirecard is at fault if there is fraud but the environment helped. A decade of rising stock prices fuelled by easy money have a habit of covering up corporate misbehaviour. We suspect Wirecard wont be the last corporate perp to be found out in the post-coronavirus economy,” said Jasper Lawler of LCG.

“We will be paying extra attention to short-seller reports- and suspect they will have more influence now. Financial companies, unlike other industries, rest on trust to handle money. Without a very concise explanation in short order, we fear Wirecard is headed to zero,” Lawler said.

In London, a strong oil price and a weak sterling exchange rate is proving a happy combination for equity bulls.

Sterling has slipped by just a sixth of a cent to US$1.2405 while the price of Brent crude for August delivery has risen US$1.07 to US$42.58 a barrel.

The FTSE 100 was up 87 points (1.4%) at 6,311.

12.50pm: European fiscal stimulus hopes lift sentiment

Londons index of leading shares continues to hover around 6,300, buoyed by oilers, which are wanted on the back of stronger oil prices.

The FTSE 100 was up 84 points (1.3%) at 6,308.

“Crude prices are rising on optimism EU leaders are nearing a much need fiscal stimulus plan and on optimism that the US and China will likely play nice throughout their coronavirus pandemic battered economic recoveries. The EU 750-billion-euro recovery fund will support the economic recovery in Europe and help the prospects for stronger crude demand later this summer. Globalisation is also important for crude demand and if the US and China can continue a healthy trade relationship that should also be positive for oil prices,” suggested OANDAs Edward Moya.

Despite buoyant European markets today, there are still reasons to be cautious after the number of confirmed new coronavirus (COVID-19) cases in the US rose by 27,800 yesterday, up from 22,900 a week earlier – a 21.3% increase.

“The trend is clearly rising, and new cases likely will jump by more than 30K today, for the first time since May 1. Almost all the increase is in the South, though cases are rising in California, Oregon, and Utah too,” commented Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

“The proportion of positive tests jumped to 5.8% yesterday, the highest since May 27, and the trend appears to be rising. Test numbers continue to increase slowly,” he noted.

“The flat trend in U.K. cases continues. Deaths and hospitalisations are falling, though the rate of decline of the latter has slowed,” he added.

11.15am: Oil price rally lifts the Footsie

The Footsie is back knocking on the door of 6,300 as investors shrug off a wishy-washy US session yesterday.

The FTSE 100 was up 70 points (1.1%) at 6,294 having briefly risen as high as 6,313, thanks to a major leg-up from oil giants BP PLC (LON:BP.) and Royal Dutch Shell (LON:RDSB).

BP is up 3.0% at 323p and Royal Dutch Shell is 1.9% better at 1,328p as the price of oil heads north.

The Brent crude continuous contract is trading at US$42.63 a barrel on futures markets, up USS$1.21 (2.7%). Its the first time the oil price has moved above US$42 since June 8.

“With every $1 increase in Brent crude providing a 0.3% boost to FTSE 100 earnings, this week's $4 rise helps lift earnings sentiment for the UK index. With OPEC+ pushing any non-conforming states to lay out a plan for how they will catch up on missed output cuts, we are seeing market sentiment improve around the potential the full 9.7m bpd [barrels per day] target to be met,” said IGs Joshua Mahony.

#oil #brent #crude

And like clockwork we just hit $40 crude, will close my long at $42 (from $22) but can see us heading to $45 before we cool down a tad.

It bodes well for producers #RDSB #RRE & #UOG pic.twitter.com/nmVPEZuHyG

— ???????????????????????????????????????????????? (@Martin_AIM_77) June 19, 2020

10.00am: Footsie makes steady progress

Londons leading shares made steady progress throughout the first half of the morning trading session.

The FTSE 100 was up 42 points (0.7%) at 6,267.

“The better than expected bounce back in UK retail spending in May provided some reasons for positivity; however, the month-on-month increase is worth keeping in perspective given April represented the height of the lockdown and spend remains well down on pre-pandemic levels,” said Russ Mould, the investment director at AJ Bell.

“More sobering is the news that UK public debt exceeded GDP [gross domestic product] for the first time since the early 1960s.

“Although it is very cheap for the Government to borrow right now, the news highlights the challenge it will face in maintaining spending to support businesses and the public at a time of acute need while also making some attempt at balancing the books,” he added.

The UKs public sector net borrowing excluding banks (PSNBex) rose to a record level of £55.2bn in May from £5.7bn a year earlier, although Aprils shortfall was revised significantly to £48.5bn from the first guess of £62.1bn.

“The downward revision to Aprils deficit highlights that the public finances are going to be subject to major revisions over the coming months,” observed Howard Archer, the chief economic advisor to the EY ITEM Club.

“The budget deficit (PSNBex) amounted to £103.7 billion over the first two months of fiscal year 2020/21, up from £16.7 billion in April-May 2019. To put this into perspective, it is already up £48.9 billion on the total PSNBex of £54.8 billion that the Office for Budget Responsibility (OBR) had forecast in the March Budget,” Archer said.

Welcome pick-up in #UK #consumer confidence over first half of June as easing of #lockdown restrictions but still at relatively low level & key question is will the improvement continue? UK consumer sentiment strongest since #COVID lockdown began – #GfK https://t.co/TDgwjCnhoG

— Howard Archer (@HowardArcherUK) June 19, 2020

Meanwhile, Kalum Pickering at German bank Berenberg has weighed in on the UK retail sales figures for May, which were not as bad as feared.

“Household spending makes up 70% of GDP. The jump in retail sales bodes well for the near-term economic outlook. The UK economy contracted by c25% between February and April. The strong uptick in retail even before the opening up on non-essential stores on 15 June suggests the economic recovery started in earnest in May already,” Pickering speculated.

8.30am: Good start to Friday

The FTSE 100 made a positive start to the last day of the trading week as fears over a coronavirus (COVID-19) second wave appeared to recede.

The index of UK blue-chips advanced 27 points higher to 6,250.76.

A fairly buoyant set of UK retail sales figures for May also seemed to calm the nerves a little.

However, Samuel Tombs, of Pantheon Macroeconomics, struck this cautionary note: “Mays recovery in retail sales should not be interpreted as a sign that the economy is embarking on a healthy V-shaped recovery from COVID-19. For a start, volumes still were 13.1% below Februarys pre-COVID level. In addition, retail sales account for only a third of households overall spending.”

He also noted that unofficial indicators of households overall spending remained very weak. Barclaycard, for instance, reported that spending fell 26.7% year-over-year in May, not vastly better than Aprils 36.5% decline.

On the stock market, it was a down day for the miners, whose fortunes are very much hitched to China, which is currently struggling to contain a coronavirus outbreak in Beijing.

Evraz (LON:EVR) was off 1% as were Rio Tinto (LON:RIO) and BHP (LON:BHP).

Buyers came out for Taylor Wimpey (LON:TW.) after its £500mln cash call on Thursday. Its shares were marked 2.3% higher.

On the FTSE 250, the retail sales figures gave Pets at Home (LON:PETS) a 4.5% boost.

Proactive news headlines:

Learning Technologies Group PLC (LON:LTG), the provider of services and technologies for digital learning and talent management, has said it continues to see demand in line with expectations. At the companys virtual annual general meeting held on Friday, chairman Andrew Brode will tell shareholders that the company is in “a strong and resilient position”, ready to further consolidate the digital learning and talent sector. In a review of 2019, Brode described it as an excellent year for the company, and that it was “particularly pleasing to see our Content & Services business return to organic constant currency growth, as expected”.

Catenae Innovation PLC (LON:CTEA) said its partner Newcastle Premier Health has successfully completed a proof-of-concept pilot trial of the Cov-ID app. Cov-ID is GDPR compliant identity documentation exchange system to record an individual's coronavirus (COVID-19) test status through a mobile application. The project is a joint initiative by a consortium of companies led by the Z/Yen Group, and it is expected the fully validated product will be rolled out to businesses.

Directa Plus PLC (LON:DCTA) has said its G+ graphene-enhanced facemasks, Co-mask, are now available for retail sale at a new, dedicated website. The Co-mask range of G+ masks has been designed to be suitable for use by commuters, in the workplace, and during sport and exercise. The company pointed out that G+-enhanced fabric is naturally bacteriostatic, which means that it stops bacteria reproducing on the mask while the fabric itself is dermatologically tested and hypoallergenic.

Gore Street Energy Storage Fund PLC (LON:GSF) is to receive an investment worth £2.83mln from JXTG Nippon Oil & Energy Corporation, Japans largest oil company. Also, the UK listed trust will raise funds from a separate placing and retail offer via PrimaryBid. The price of the subscription, placing and retail offer has been set at 96.1p, in line with the trusts net asset value and a small discount to last nights closing price. Alex O'Cinneide, chief executive of the companys investment adviser Gore Street Capital, said the subscription from JXTG provides the basis for a long-term collaboration.

Tiziana Life Sciences PLC (LON:TILS) (NASDAQ:TLSA) has received a US patent for a breakthrough oral formulation of a monoclonal antibody that has been hailed as offering a “transformational avenue for immunotherapies”. The patent protects the “lyophilised and stabilised free-flowing powder” of Foralumab contained in enteric-coated capsules for oral treatment of disease. This first-in-class formulation allows Tiziana to work on drugs for Crohns, multiple sclerosis and Alzheimers disease that can be administered by mouth rather than requiring a painful intravenous line or injection.

In a separate statement released after the market close on Thursday, Tiziana Life Sciences also announced that Gregor MacRae is standing down as a director of the company with immediate effect. Gabriele Cerrone, chairman of Tiziana commented: "I thank Gregor for his contribution to the Board and the Company and wish him well in his other interests. We are currently in the process of recruiting a new, seasoned non-executive director with extensive NASDAQ audit committee experience and hope to make a formal announcement shortly".

IQ-AI Limited (LON:IQAI) said its subsidiary, Imaging Biometrics (IB), has had its MRI DSC perfusion technology, first made available through the companys IB Neuro product, recognised as the national standard in the US for use in high-grade brain tumours. DSC, which stands for dynamic susceptibility contrast, is the most common perfusion MRI technology used for the evaluation of brain tumours. The company said the recognition was the outcome of the DSC-MRI Standardisation Sub-committee of the Jumpstarting Brain Tumor Drug Development Coalition, which provides evidence-based best practices for routine clinical use from both an MR acquisition and post-processing perspective. Additionally, IQ-AI chief executive Trevor Brown said the company has recommenced the process to find a buyer for its Stonechecker software, with discussions now underway with two parties.

Woodbois Limited (LON:WBI), the timber and veneer group, said it has negotiated a debt restructuring in principle with the majority of its convertible bondholders. Owners of 75% of US$30mln of outstanding bonds have agreed to convert into voting and non-voting shares and a zero-coupon convertible bond subject to equity funding also being carried out. Discussions are underway as well with the holders of its internal trade finance facility (ITF), including Lombard Odier, which is also a substantial shareholder, the group added. Woodbois said the aim is to retire the ITF as part of the planned restructuring and fundraise. Operationally, Woodbois said it wants to increase capacity at its veneer plant in Gabon to increase margins. Sawmill operations have restarted in Gabon while the groups operations in Mozambique recommenced last month on a 50:50 profit share basis.

Regency Mines PLC (LON:RGM) has struck a deal to acquire a 50% interest in Weirs Drove Development Ltd (WDD), a developer of energy storage and solar projects in the United Kingdom. The venture starts with an initial site in Cambridgeshire. This flagship project, in Burwell, will be for 30 megawatts and benefits from an offtake with a subsidiary of Shell New Energies, Litejump Ltd. Regency is acquiring the stake via its Flexible Grid Solutions division and it is paying £25,000 in cash for the acquisition and commits to lend £100,000 once the first project becomes shovel ready which is expected soon. To support this new activity, Regency is raising £200,000 with a share placing arranged by the company at a placing price of 1p per share, a 5.3% premium to Thursdays closing price. The principles of Weirs Drove Development participated in the share placing, taking £30,000 of the shares.

Avation PLC (LON:AVAP) said it has entered commercial agreements to lease five aircraft that were formerly used by Virgin Australia, which went into administration in April. The company said it has agreed to lease two former Virgin Australia ATR 72-500s to another commercial airline in Australia until the end of 2021 at current market leasing rates. Avation also said it had signed a conditional letter of intent for another former Virgin Australia ATR 72-500 with an airline customer for an operating lease period of five years at current market rates. Meanwhile, the firm has entered finance leases for the sale of its last two Fokker 100 aircraft over September at a price 6% above book value.

Ncondezi Energy Limited (LON:NCCL) has provided a general update on the progress of its coal-fired power project and coal mine in Tete, Mozambique. The AIM-listed company said it has agreed to additional work requirements and updated its development programme which has been subRead More – Source

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