- FTSE 100 climbs 50 points
- Deliveroo down 3%
- UK PMI best reading for a decade
11.20am: Investors back post-lockdown beneficiaries
The spring weather may have eased off a bit but investors are still in a sunny mood.
The FTSE 100 is up 50.34 points or 0.75% at 6763.97, with companies likely to benefit from a recovery in the economy in the forefront of the action.
Following the day’s positive UK manufacturing news, industrial group Melrose Industries (LON:MRO) is up 4% at 172.95p while aero engine maker Rolls-Royce (LON:RR.) is 3% better at 108.8p on hopes that easing of lockdown may mean travel starts to happen again. On that theme British Airways owner International Consolidated Airlines Group (LON:IAG) is up 4.5% at 207.25p.
Among the other risers, Next PLC (LON:NXT) is up 224p or 2.85% at 8090p after the retailer raised its profit guidance for the year by £30m despite the pandemic. Booming online sales are taking up the slack caused by its shops being shut.
Also higher is Compass Group (LON:CPG), up 32.5p or 2.22% at 1494.
Russ Mould, investment director at AJ Bell said: “It seems investors are very much of the mind that it is still worth backing companies that will benefit from the reopening of the global economy, despite the negative backdrop of France closing schools in its third lockdown and Brazil still struggling to get Covid under control.
“The biggest contributors to the FTSE 100 in index point terms were miners Glencore and Rio Tinto as plays on stronger commodities demand and positive read-across from US President Joe Biden’s plan to invest heavily in infrastructure.
“Next’s results went down well with the market, while catering group Compass was also among the top risers as investors saw better prospects ahead as more people return to offices and education establishments in the near-term and sports and leisure-related demand starts to pick up.
“In backing these companies, investors are effectively looking past any short-term noise and potential setbacks to getting the pandemic under control, and instead looking well into the future and taking the view that earnings will not just start to recover in 2021 but also keep improving thereafter.”
9.58am: UK factories upbeat
Some positive UK manufacturing figures, albeit with a few caveats.
The IHS Markit/CIPS purchasing managers’ index for March came in at 58.9, the best reading since February 2011 and higher than the expected level of 57.9.
The report showed growth in new business from both domestic and overseas markets, but there are continued delivery delays from suppliers and disruption to production schedules.
Rob Dobson, director at IHS Markit said: “Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade. Growth of output, order books and employment all gathered momentum and optimism about the year ahead improved further.
“The domestic market remained the prime source of new orders, as companies reported that the vaccine roll-out and clients’ preparations for the loosening of lockdown restrictions underpinned the expansion. Many expect this process to be supportive during the year ahead as well, raising business optimism and jobs growth to their highest levels for seven years.
“Weak export sales and supply-chain issues are likely to remain constraints on growth moving forward, however, with shipping issues already leading to severe disruption to production schedules, raw material availability and the onward distribution of finished products to clients, especially abroad. The extent to which supply chains have worsened through much of the past year has been unsurpassed during the near three-decade survey history.”
UK #manufacturing #PMI rebounded in March to a decade high, but exports remain a concern: export orders been very poor post-Brexit, almost stalled again in March & contrasting for example with record export growth in Germany & a near-record rise in Italy https://t.co/RksG7gNZvD pic.twitter.com/Ssiv19c0Bd
— Chris Williamson (@WilliamsonChris) April 1, 2021
Sarah Banks, managing director of freight and logistics at Accenture said: “An impressive uptick in demand has led to a record surge in manufacturing output this month, which is certainly encouraging for economic recovery as a whole.
“However, reports of ongoing supply chain issues and shortages of materials have led to marked hikes in shipping costs, as manufacturers struggled to keep up with demand.”
“These figures indicate that many businesses are largely limited in their ability to respond to a modest increase in orders. As the economy rebounds, a sustained surge in demand for freight services and capacity will remain a challenge for months to come.”
Still, with European factories also upbeat, reporting their strongest growth in nearly 24 years, the market is keen to accentuate the positive. So the FTSE 100 has continued to rise, now up 41.31 points or 0.62% at 6754.94.
Deliveroo (LON:ROO) watch: the company is down 3.11% at 278.5p.
9.20am: Markets await manufacturing data
It was labelled the worst IPO in London’s history by the Financial Times, and immediately nicknamed Floperoo or Deliveroops.
Yes, it’s fair to say that Wednesday’s much anticipated market debut of food delivery business Deliveroo (LON.ROO) did not get off to a good start, with a 26% slump on the first day of conditional dealings.
Worries about its treatment of workers and when it would make a profit did some of the damage as did talk its shares had been priced too highly and news that several fund managers refused to get involved.
So is the second day any better? So far, not so much. Its shares are down another 5.15p or 1.79% to 282.3p compared to its flotation price of 390p. Just as well the company chose to start dealings the day before April Fool’s Day and not on it.
Neil Wilson at Markets.com said: “Several reasons are behind the poor performance. In addition to the failure to bring several large funds on board, the dual class share structure, regulatory uncertainty, general profitability concerns and a miscalculation by the bankers on the pricing in relation to wider demand in the market, it also looks like some hedge funds shorted the stock aggressively from day one. Not all stocks have a happy start to life on the stock market – just ask Tim Steiner or Mark Zuckerberg – but it’s not a great advert for London as a destination for tech listings.”
Still, investors elsewhere seem to be in a chirpier mood. The FTSE 100 is currently up 36 points or 0.54% at 6749.63.
Later this morning comes the snapshot of UK manufacturing for March, while in the US there are weekly jobless claims as well as factory data.
8.45am: Next leads FTSE risers
London’s traders opted to focus on the economic positives emanating from the UK vaccine programme rather than the lockdowns on its doorstep with Europe in the grip of a Covid third wave.
The FTSE 100 opened 24 points to the good at 6,738.12, putting it on course to end the shortened week with its head above water.
Topping the blue-chip list of risers with a 4% gain was Next (LON:NXT) whose prelims showed the retailer’s resilience as it traded profitably through the pandemic.
It has relied heavily during the crisis on its digital offering, which is among the strongest of the traditional bricks and mortar clothiers.
“Online and finance now account for over 70% of overall sales, and in the first eight weeks of its new financial year next has reported that online sales are 60% ahead of the figure from two years ago,” said Richard Hunter, head of markets at Interactive Investor.
“The company concedes that it is difficult to predict how much of the change in consumer behaviour to online will stick post-pandemic, although the possibility remains that the new behaviour will have become largely entrenched.”
IAG (LON:IAG), the owner of British Airways and Iberia, founds some support early on after a recent period of selling activity. It opened up 2.2% higher as did Rolls Royce (LON:RR.), another international travel-influenced stock.
Proactive news headlines
Argo Blockchain PLC (LON:ARB) said it has engaged consultancy Guidehouse to research and advise on science-based solutions towards the company’s long-term strategy to eliminate its climate impact.
Belvoir Group PLC (LON:BLV) is buying the owner of the Nicholas Humphreys estate agent and letting chain for £4mln.
FastForward Innovations Ltd (LON:FFWD) said it has taken part in the £14mln pre-IPO funding round for Northern Leaf, the Jersey-based medical cannabis group.
Cobra Resources PLC (LON:COBR) said analysis of the drilling at the Wudinna gold project in South Australia had identified a strike extension of mineralisation at the Clarke prospect.
Horizonte Minerals PLC (LON:HZM) (TSE:HZM) has hailed the achievement of “significant business and project level milestones” in 2020 as it updated investors on the status of its balance sheet and financing.
[email protected] Capital PLC (LON:SYME) said gross origination of client companies increased by 13% in the first quarter from a year ago. The fintech firm’s client list at the end of March stood at 187, up from 82 a year earlier, with the value of the inventory on the system rising to €2.4bn from €1.22bn a year earlier and from €2.13bn at the end of 2020.
Base Resources Ltd (LON:BSE, ASX:BSE) completed a pre-feasibility study (Kwale North PFS) on the potential for the North Dune and Bumamani deposits to extend the mine life at its Kwale mineral sands operation in Kenya. The study concluded that it was not currently viable to mine all of these deposits mainly due to the low heavy mineral grade, high land acquisition costs and elevated slimes content and associated tailings disposal costs.
Pembridge Resources PLC (LON:PERE) said it has made the first payment towards the purchase of the Minto operations in the Yukon, Canada, under a deal inked in 2019.
4D pharma PLC (LON:DDD, NASDAQ:LBPS) hailed 2020 as a “transformational year” for the company. In its full-year results statement, the company listed the publication of the first proof-of-concept data for MRx0518 in last-line cancers and the journey towards a listing on NASDAQ as highlights of the year.
Great Western Mining Corp PLC (LON:GWMO) said drilling has started on its operations in Mineral County, Nevada to test a prospective copper target and is likely to be followed by a second hole on the same prospect.
Westmount Energy Ltd (LON:WTE, OTCQB:WMELF) highlighted it is debt free as it announced the final repayment against convertible unsecured loan notes, which became due on March 31 2021.
Zephyr Energy PLC (LON:ZPHR) has completed the acquisition of non-operated working interests in producing and near-term production wells in the Bakken Formation in North Dakota, US.
TomCo Energy PLC (LON:TOM) told investors that the FEED (Front-End Engineering and Design) study for its oil sands project in Utah will be delayed by six weeks, but when it is complete it will be more robust.
Amur Minerals Corporation (LON:AMC) said that it has received its interest payment for the first-quarter of 2021 based on the US$4.67mln convertible loan note investment to Nathan River Resources (NRR) to resume production at the Roper Bar iron ore project in Australia’s Northern Territories.
Braveheart Investment Group plc (LON:BRH) announces that on 30 and 31 March 2021 Trevor Brown, a director and PDMR of the Company, sold a total of 2,219,189 shares at an average price of 74.77p per share. He now holds 5,424,099 ordinary shares, representing a 14.16% stake in the company.
Genel Energy plc (LON:GENL) said it will hold its annual general meeting on Thursday, 6 May 2021, and has today posted its annual report for the past calendar year and forms of proxy.
Tower Resources plc (LON:TRP,) announced that it has made an annual award of over 88mln share options at an exercise price of 0.45 pence under its long-term incentive plan, and has also issued £30,000-worth of warrants at the same exercise price in lieu of fees to directors and to one of its contractors in respect of the second quarter of 2021.
Eden Research plc (LON:EDEN) confirmed the grant of 10.5mln replacement options awarded under its revised long-term incentive plan to CEO Sean Smith and CFO Alex Abrey.
Trident Royalties Plc (LON:TRR, FSX:5KV) Adam Davidson and Martin Page, CEO and CFO of Trident, will provide a live presentation via the Investor Meet Company platform on Wednesday 7 April 2021 at 5pm BST.
Incanthera PLC (LON:INC) chairman Tim McCarthy and CEO Simon Ward will give a company presentation via a live webinar hosted by London South East on Tuesday 6 April 2021, including a presentation and a Q&A session.
6.50 am: Footsie called higher
The FTSE 100 is set to start the last day of the short week in positive territory, albeit only slightly.
CFD and spreadbetting firm IG sees the blue-chip benchmark up 8 points, making a of price 6,731 to 6,734 with just over an hour to go until Thursday’s open.
On the eve of a four-day holiday weekend it promises to be a quiet, lower volume day.
At the very least it provides a breather for traders that have at time seen whipsaw volatility as sentiments have lurched from giddy optimism triggered by vaccines and economic restart plans whilst ominous commentary of new strains and future ‘waves’ has rarely felt far away.
The pendulum presently swings into a position of positivity, particularly in the United States where stimulus was the keyword the stock market rally on Wednesday.
“While markets in Europe ended the month in a fairly quiet fashion US markets had a much more positive end to proceedings, with the S&P500 edging to within touching distance of the 4,000 level, and a new record high, as a Nasdaq and Russell inspired surge saw US stocks finish the quarter in more or less the same fashion, they started it,” said Michael Hewson, analyst at CMC Markets.
“Optimism over the impact of a further $2trn stimulus package in infrastructure spending merely served to add more fuel to the fire of last month’s US$1.9trn stimulus bill, that came on top of the US$900bn that came at the beginning of the year.”
The analyst added: “There was some concern over how it would be funded, including a corporate tax hike to 28%, and other tax raising measures, however for now markets appear fairly sanguine about these, with the likes of Microsoft leading the gainers after signing a US$21.9bn deal with the US Army for augmented reality headsets.”
Wednesday’s close actually saw the Dow Jones finish in red, down 0.26% to 32,981, whilst the S&P 500 however rose by 0.36% to 3,972.
The Nasdaq advanced 201 points or 1.54% to close at 13,246.
In Asia, Japan’s Nikkei rose by 213 points or 0.73% to 29,392 and Hong Kong’s Hang Seng was up 3-6 points, 1.08%, at 28,680. The Shanghai Composite was also marked higher, adding 0.18% to trade at 3,449.
Around the markets
The pound: US$1.3764, down 0.14%
Gold: US$1,714 per ounce, up 1.81%
Silver: US$24.37 per ounce, up 1.55%
Brent crude: US$63.57 per barrel, down 0.88%
WTI crude: US$59.46 per barrel, down 1.8%
Bitcoin: US$58,864, up 0.48%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were higher on Thursday as Australia’s trade surplus dropped by A$2.1 billion in February compared to January after iron ore exports fell from record highs and tourism services dried up.
The Hang Seng index in Hong Kong gained 1.14% while the Shanghai Composite in China rose 0.29%.
In Japan, the Nikkei 225 was 0.66% higher and South Korea’s Kospi gained 0.72%.
Shares in Australia rose, with the S&P/ASX 200 closing 0.56% higher.
Proactive Australia news:
Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has utilised new technology to produce proprietary CBD-based tea products that have been launched in Switzerland with other European markets, including Germany, earmarked for near-term expansion.
Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SMBSF) (FRA:SO3) has set itself up for success in 2021 following a period of significant change, as it seeks to become a zero-carbon sulphate of potash (SOP) producer.
Queensland Pacific Metals Ltd (ASX:QPM) (FRA:4EA) has entered into a non-binding memorandum of understanding (MoU) with Societe Le Nickel (SLN), a subsidiary of Eramet SA (EPA:ERA) (FRA:ER7) (OTCMKTS:ERMAY) group, for the supply of nickel laterite ore from New Caledonia for the TECH Project.
Brookside Energy Ltd (ASX:BRK) (OTCMKTS:RDFEF) is making strong progress in preparation for drilling of the much anticipated high-impact Jewell 1-13-12 SXH well in the SWISH Area of Interest (AOI) within Oklahoma’s world-class Anadarko Basin.
Cellmid Ltd’s (ASX:CDY) renounceable rights issue has raised $3,816,369, with strong support from existing shareholders and new institutional and professional investors.