Markets

FTSE 100 back above 6,000 level

Footsie is on track to finish a rough week on a positive note
Share dealing
The bargain hunters emerged from hibernation

The top-share index has got its chin back above the 6,000 level, though it remains more than 100 points down on the week.

Coming up to a quarter to one, the FTSE 100 index was up 52 points (0.9%) at 6,002.

Sentiment was given a lift by figures from the Office for National Statistics that showed whole economy labour costs in the first quarter of 2016 declined by 2.7%.

“While the data are currently experimental, Office for National Statistics figures showing a further dip in the annual growth rate in nominal hourly total labour costs and wage costs are likely to reinforce belief that any interest rate hike by the Bank of England is some way off,” commented Dr Howard Archer, the chief UK & European economist at IHS Economics.

“Monetary Policy Committee members are putting great emphasis on the need for earnings growth and labour costs to see sustained, appreciable improvement for consumer price inflation to get back up to its target level of 2.0%,” Dr Archer added.

Lloyds Banking Group (LON:LLOY) was the top blue-chip performer as The Supreme Court ruled in the bank’s favour in respect of certain terms of its enhanced capital notes (ECNs), paving the way for the redemption of all series of the ECNs, as per the regulatory call right earlier this year.

The FTSE Aim 100, the junior market’s counterpart to the Footsie, was up 14 points, or 0.4%, at 3,337.

The broader-based FTSE Aim All-Share index was up 1.4 points (0.2%).

It is almost six months since Life Science Developments Ltd (LON:LIFE) put out a meaningful stock market announcement and that was to profess bafflement over the movement in the share price.

Another one could be on the way, soon, as the investor in life sciences was the top riser, up 31% at 1.77p, in the morning session.

Close behind was ZincOx Resources plc (LON:ZOX), up 28%, as it completed a fund-raising.

It’s been a day for non-news as Churchill Mining PLC (LON:CHL) was lifted 13% to 24.375p as it said had no further news on when the ruling in respect of its spat with Indonesia will be handed down.

Medtech tiddler Akers Biosciences Inc (LON:AKR) had a rush of blood, surging almost 10% to 159p as its house broker reintroduced forecasts, pointing to a sharp uplift in sales this year.

Upscale hotels operator PPHE Hotel Group Limited (LON:PPH) has agreed to sell its wholly-owned Croatian operating companies for around €14.4mln, prompting the shares to retreat 14.5p to 798p.


London Open

The Greek bail-out story returned to prominence of Friday, with a new deal for the southern European country giving markets an early lift.

A bail-out worth some €7.5bn has been agreed by Eurozone finance ministers, giving a fillip to the FTSE 100 index, which was up 67 points (1.1%) at 6,017.

Banks were leading the advance, as the perception grows that the momentum of the Brexit campaign may have been halted by yesterday’s tragic events that led to the death of MP Jo Cox.

Small caps, which have generally been less buffeted by the whole EU referendum saga, were getting nowhere near the level of love of their bigger brethren, with the FTSE Aim All-Share up just a couple of points at 711, though the FTSE Aim 100 index fared a bit better, rising 18 points to 3,341.

Born-again zinc recovery specialist ZincOx Resources PLC (LON:ZOX) saw its shares surge 0.28p to 0.9p as it raised £300,000 by at a penny a pop.

EU Supply PLC (LON:EUSP), the e-procurement software firm, was wanted after chief executive officer Thomas Beergrehn stuck his hand in his sky-rocket to buy 1.4mln shares at 4.25p a share.

The shares climbed 12% to 4.75p.

Shares in Kodal Minerals PLC (LON:KOD), which were hit hard back in April after flooding the market with shares, perked up this morning, rising 6.3% to 0.04p on the back of full-year results.

The pre-revenue company’s loss before tax narrowed dramatically to £465,622 in the year to 31 March, 2016 from £3.96mln the year before.

Vast Resources PLC (LON:VAST), the AIM-listed resource development and production company, announced that, as a cost cutting initiative, it has terminated the brokerage agreement with Dowgate Capital Stockbrokers.

The shares rose 6.5% to 0.17p on the news.

The danger of being over-reliant on one customer was made apparent by this morning’s announcement from CDialogues PLC (LON:CDOG), the provider of mobile marketing services to mobile network operators.

The group has received a notice of termination from Numbase Limited in respect of the four contracts from which CDialogues generates all of its current revenues.

The shares lost more than a quarter of their value as the company initiated a strategic review.

Scancell Holdings PLC (LON:SCLP) said it is working as quickly as possible to secure new supplies of its flagship cancer drug SCIB1 after withdrawing the current batch.

The news hit the shares, which retreated to 13.875p from 18.5p overnight.


Early snapshot

It’s all aboard the Footsie express this morning as the top-share index started like a train.

The FTSE 100 index was up 70 points at 6,021 after 35 minutes of trading, with just a handful of defensive favourites – Randgold Resources, Fresnillo, National Grid, Unilever and British American Tobacco – left on the platform.

Banks were leading the charge with Lloyds Banking Group PLC (LON:LLOY) top of the tree, up 4.9% at 64.375p.


Preview at 6.52am

The FTSE 100 looks set to start the final session of the trading week in positive territory, shrugging off the market’s jitters over Britain’s potential exit from the EU.

The spread betting firms are predicting the index of blue-chip shares will rise around 40 points on opening to 5,990.

Sentiment will no doubt be buoyed by Wall Street overnight as the main stock indices in the US shrugged off some fairly steep early losses to end the session higher.

The Dow Jones Industrial ended a five-day losing streak with a 0.5% gain, while the broader-based S&P 500 was up 0.3%. The tech-focused Nasdaq finished flat.

In Asia the momentum was positive with Japan’s Nikkei given a push by the weak yen, which helped the country’s export stocks.

In China the Shanghai Composite and Hang Seng were trading respectively 0.9% and 0.8% higher.

Here in the UK it is expected to be a quiet day for corporate news with JD Sport’s annual meeting accompanied by an update on trading from the trainer retailer.

  • Brent crude trading 56 cents higher at US$47.75 per barrel.
  • Gold US$8.70 lower at US$1,287.40 per ounce.
  • Market rumour: UFC could soon be in new hands with two rival bids for the organisation expected by the end of the week. Two groups, WME-IMG in conjunction with Dalian Wanda, and China Media Capital, had similar bids in the $4.1bn range.

City Headlines

  • Salesforce.com considered making a takeover bid for LinkedIn before Microsoft won the professional social networking company over with its own $26bn offer – FT.
  • Thousands of investors have been dealt a blow after the Supreme Court narrowly ruled in favour of Lloyds Banking Group’s controversial decision to call in more than £3bn of high income-paying bonds – FT.
  • Britain’s biggest Owner of shopping centres is in talks to buy up the 50% it does not already own of a site near Birmingham for about £410mln – Times.
  • HSBC has agreed to pay more than £1bn to settle a securities fraud class action that stemmed from the bank’s takeover of a US sub-prime lender more than a decade ago – Telegraph.
  • Europe will rely on Russia for record imports of natural gas this year as domestic production plunges following the crash in oil and gas prices, said Gazprom boss Alexei Miller – Telegraph.

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