- FTSE 100 gains 223 points
- Sterling is under pressure
- Mixed open in the US amid political and economic turmoil
2.57pm: Wall Street opens mixed
The main Wall Street indices opened on a mixed footing on Wednesday morning as political developments and bleak economic data were combined with some positive vaccine news to contrast sentiment among traders.
Shortly after the opening bell, the Dow Jones Industrial Average rose 0.33% to 30,494, while the S&P 500 dropped 0.09% to 3,724 and the Nasdaq fell 0.85% to 12,708.
The gloomier attitude by some may have been caused by the latest US ADP jobs figures, which showed the American private sector lost 123,000 jobs in December, much worse than predictions of 75,000 jobs added.
Large businesses were the biggest cause of the drop, cutting 147,000 jobs while medium businesses added 37,000 and small businesses cut 13,000. The effects of the pandemic also seemed to be bleeding through with the service industry cutting 105,000 jobs during the month.
Also at the front of traders minds will be the upcoming counting of the US electoral college votes in Congress later which could produce political fireworks as a handful of Republican congressmen plan to object to the results.
However, traders may have also been given a positive boost by more news on the vaccine front after Moderna Inc (NASDAQ:MRNA) received approval for its COVID-19 vaccine from EU regulators. Shares in the pharma firm jumped 2.9% to US$112.36 in early deals.
Back in London, the FTSE 100 was in an altogether brighter mood, rising 223 points to 6,834 shortly before 3pm.
1.35pm: Sterling dips in the red
The Footsie would not stop its rally in the early afternoon and soared 196 points to 6,808.
Meanwhile, sterling dipped in the red so it was trading 0.1% lower at US$1.3612.
“As well as the huge stimulus measures supporting the markets, the recent development and now the rolling out of COVID vaccines means investors are looking forward to more normal times ahead and are overlooking short term risks posed by the latest lockdowns,” said Fawad Razaqzada, analyst at ThinkMarkets.
“In addition, the fact that a no deal Brexit has been avoided has further boosted the appetite for risk, which is why the FTSE has started the new year in a bullish mood and the pound has been able to hold its own relatively well in the face of another likely contraction in first-quarter GDP due to the fresh national lockdown.”
“Monetary policy is going to remain loose for a while yet and even if central banks were to start tightening their belts, this won’t happen until at least the latter parts of the year and in any case will be limited. So, with global monetary policy set to remain extraordinary loose for some time to come, and as we hopefully near the end of the pandemic, investor sentiment could remain positive towards risk assets for the foreseeable future.”
However, sterling isn’t doing so well post-Brexit compared to its peers: according to Rabobank, it’s because the consensus had been expecting a ‘skinny’ deal for some time while the agreement has left services mostly out in the cold.
Analysts hope that talks regarding equivalence for the financial services sector will continue this year, but the lockdown measures continue to weigh on the pound.
12.40pm: Wall Street to see mixed open
The Footsie bagged more points at midday and soared 174 points to 6,791.
Wall Street is expected to see a much tamer session, with futures pointing at a green open for the Dow Jones and a red one for the S&P 500 and the Nasdaq.
The US is focusing on politics once again as the results of the dual Senate election in Georgia should be announced later today.
The upper house is currently controlled by the Republicans and the Democrats need to win both seats to have a tiny majority in the Senate.
“The elections are going down to the wire and it was reported that Raphael Warnock of the Democrats is projected to win his race,” noted David Madden at CMC Markets.
“Joe Biden has big plans with respect to infrastructure spending so Democrats taking the Senate would make his life a lot easier.”
According to Marshall Glitter at BDSwiss Group, a win by both Democrats would mean a weaker dollar because the Fed is in no mood to hike rates any time soon.
“I think they’ve switched to targeting unemployment rather than inflation, and it will take a long time before US unemployment gets back to where it was,” he said.
“Meanwhile, higher inflation and steady low yields equals lower real yields which equals a weaker dollar.”
11.50am: Honda once again halts production at Swindon plant due to delays
FTSE 100 continued its rally at lunchtime and added 153 points to 6,767.
Honda has once again halted production at its plant in Swindon due to delays in receiving parts.
Activities were paused on Tuesday and Wednesday and are expected to resume on Thursday, the BBC reported.
It is the second time it happens in a month, after Brexit-related delays hit the Japanese car manufacturer’s factory in early December.
The plant, set to close permanently next year, operates on a ‘just in time’ basis to avoid stockpiling, meaning parts arrive only when necessary, although it’s a practice that risks delays.
10.45am: Paperchase close to administration as lockdown hits high street
FTSE 100 was stubbornly up despite the lack of good news across the markets, jumping 116 points to 6,728 in late morning.
Meanwhile, Paperchase may become the first high street victim of 2021 as it emerged the stationery shop is on the brink of administration.
The firm, which employs 1,500 people and has an estate of 127 stores, filed a notice to appoint administrators with PwC lined up for the job, upsetting fancy notebook lovers across the UK.
I’m going to need Paperchase to be okay…
I’m not exaggerating when I say choosing my annual Christmas wrapping stuff from them is the highlight of my year.
— Megan ????? (@LuckyPenumbra) January 6, 2021
In this way, Paperchase will have ten days to hear restructuring proposals while being protected from creditors.
Gutted about #Paperchase tho. Where will I buy my vast array of overpriced sparkly novelty unicorn/llama notebooks I only ever half fill, now?
— Natasha Devon ???? (@_NatashaDevon) January 5, 2021
“The cumulative effects of lockdown one, lockdown two – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country,” it told the Evening Standard.
9.45am: Service sector activity falls again in December
FTSE 100 was on the rise in mid-morning, advancing 57 points to 6,670, though the service sector activity fell again in December.
Business activity declined for the second month in a row due to business disruptions, restrictions on trade and temporary closures amid the pandemic, while margins were under pressure from sharply rising input costs and ongoing price discounting across the service economy.
The UK Services PMI came in at 49.4 last month, up from 47.6 in November but still below the 50.0 no-change threshold.
The downturn recorded on average in the final quarter of 2020 of 49.5 contrasted with a solid pace of recovery during the third quarter, when it was 57.1.
On the bright side, business expectations for the next 12 months strengthened in December, with 59% of the survey panel forecasting a rise in activity over the course of 2021, while only 13% predicted a decline.
“With a third national lockdown underway, service providers will be braced for a sustained period of subdued UK economic conditions and deferred client spending in the first quarter of this year,” said Tim Moore, Economics Director at IHS Markit, which compiles the survey.
“However, business optimism on a 12-month horizon was relatively upbeat in December and reached its highest level for almost six years, underpinned by hopes that a successful vaccine roll-out will help to deliver a strong economic rebound in the second half of 2021.”
8.50am: New year still showing promise
The FTSE 100 index resisted the pull lower of US stock futures as it continued its positive start to the new trading year on Wednesday buoyed by the Brexit deal and coronavirus vaccine optimism.
The index of UK blue-chip stocks opened 32 points higher at 6,643.89.
Wall Street, by contrast, looks set to open in the red today, reacting to the likely success of the Democrats in the Georgia run-off elections. The win has been declared for Raphael Warnock, while fellow Democrat Jon Ossoff holds a slender lead in a second contest.
Victories for both would hand the party control of Congress and the White House.
This would be a bitter-sweet result – for international stock markets at least. On the one hand, it could also pave the way for greater US government stimulus. However, the new Biden administration will also be handed the mandate to roll back some of Donald Trump’s more business-friendly legislation.
At the moment US futures traders appeared to be fixating on the latter rather than the former.
Back here at home, the isostatic rebound continued, even in the face of new estimates that one in fifty Britons had coronavirus between December 27 and January 2.
That scary statistic points to the problems expected to be encountered by the National Health Service in the coming weeks and helps explain the third national lockdown.
The Square Mile appeared to be immune to the bad news and its inhabitants appeared ready to accept prime minister Boris Johnson at his word as he said the UK should be able to dispense 2mln jabs a week by mid-February.
The banks were well bid early on amid a rise in bond yields with Standard Chartered (LON:STAN) leading the way with a 5% gain. NatWest Group (LON:NWG) and HSBC (LON:HSBA) were up 4.2% and 4.1% respectively.
The news obviously wasn’t as bad as feared from steak bake purveyor Greggs (LON:GRG), which jumped 6.6% after sounding the earnings alarm.
Proactive news headlines:
Gaming Realms PLC (LON:GMR) said it has been awarded a provisional iGaming supplier licence by the Michigan Gaming Control Board (GCB) as it focuses on efforts to expand its presence in the US. The developer and licensor of mobile bingo games said the licence will allow it to provide its Slingo Originals game content to online casino operators in the state once iGaming is approved to go live by the GCB, which is expected to happen imminently.
88 Energy Ltd (LON:88E) has told investors it is advancing “full steam ahead” towards the spudding of the planned Merlin exploration well in the Project Peregrine project area, Alaska. The explorer confirmed the completion of a snow road and said that rig construction is now underway. Spudding is on track to take place in ‘mid to late February’.
Seeing Machines Limited (LON:SEE) said it has signed a licence agreement for its Occula neural processing unit with digital imaging solutions firm OmniVision Technologies. The AIM-listed firm, which designs artificial intelligence-powered operator monitoring systems, said the agreement represents the first execution of a silicon licence for Occula, which allows the development of low-cost, high-performance edge-AI to power future human-machine interfaces. Seeing Machines added that it will work with OmniVision to deliver “optimised, highly integrated solutions to the global Driver and Occupant Monitoring System markets, leveraging existing and new customers globally”.
TomCo Energy PLC (LON:TOM) has told investors that operations are now underway for the Greenfield Energy venture’s POSP restart project. The company confirmed that the mining operation started on January 4, 2021, and oil sand baring ore will start being processed at the POSP facility by the end of this week. It noted that the POSP will be ramped-up during January and February, meanwhile, all other elements of the project remain as previously announced.
Bahamas Petroleum Company PLC (LON:BPC) has been cleared to continue drilling the Perseverance-1 exploration well offshore Bahamas. The company noted that in a court hearing Justice Petra Hanna-Weekes refused to grant any orders that would affect Bahamas Petroleum’s current operations. At the same time, she granted the application by environmentalists which seek leave to bring judicial review proceedings in respect of various decisions taken by the Government of The Bahamas in relation to Bahamas Petroleum’s licences. Bahamas Petroleum chief executive Simon Potter described it as a “very positive outcome” for the company.
Advanced Oncotherapy PLC (LON:AVO) has entered into a financing agreement that is designed to ensure its cancer therapy is more widely available as it looks to ‘democratise’ the proton beam treatment. A deal with vendor financing specialist DiaMedCare covering projects in Europe and the US will provide smaller clinics with the option of acquiring the technology on flexible terms. DiaMedCare will acquire AVO’s LIGHT systems and lease them back to customers that are commissioning the new compact LIGHT systems. It will also be able to bridge manufacturing costs until delivery to customers, Advanced Oncotherapy added.
Clipper Logistics PLC (LON:CLG) said it experienced “unprecedented levels of activity” in its logistics operations in both the UK and continental Europe over the Black Friday and Christmas trading periods. In a trading update, the firm said that over November and December revenues for its logistics business were 50% higher year-on-year, with “strong growth” in both its e-commerce and non e-fulfilment services, continuing what Clipper said was a strong performance in the first half of its financial year. The company also noted that it has fulfilled its one-billionth item of personal protective equipment (PPE) ordered online through a portal established with eBay in spring last year, adding that the service has now been beyond local health care providers including GP surgeries and nursing homes to educational and other communal establishments.
Open Orphan PLC (LON:ORPH) said a top-three global pharmaceuticals company has renewed its contract with the group’s Venn Life Sciences division until the end of the year. The team in the Breda office, in the Netherlands, will provide chemistry, manufacturing and control consultancy (CMC) services to one of the client’s vaccine development programmes.
Silence Therapeutics PLC (LON:SLN) (NASDAQ:SLN) has announced the appointment of Craig Tooman as the company’s chief financial officer (CFO) and member of the Executive Leadership Team, effective immediately. The company, a leader in the discovery, development and delivery of novel short interfering ribonucleic acid (siRNA) therapeutics for the treatment of diseases with significant unmet medical need, noted that Tooman has a successful career in the biopharmaceutical industry spanning more than 30 years, including 15 years of experience as a public company CFO. Most recently, he was CFO and COO at Vyome Therapeutics, and prior to this was CFO and then CEO of Aratana Therapeutics where he successfully negotiated a merger with Elanco. In a separate statement, Silence Therapeutics also announced that Dr Michael H. Davidson has joined its board as a non-executive director.
Destiny Pharma PLC (LON:DEST) has announced the appointment of Dr Stephanie Bewick as its chief business officer. The clinical-stage innovative biotechnology company, which is focused on the development of novel medicines that can prevent life-threatening infections, noted that Dr Bewick brings 20 years’ experience in business development at public and private biotech companies as well as mid-sized pharma, both in-house and as a consultant. Most recently, she was vice president, Business Development at Summit Therapeutics, a NASDAQ-listed infectious disease company, leading the out-licensing and in-licensing activities, pipeline positioning and technology valuation. She holds a BSc (Hons) Neuroscience from the University of Edinburgh and a PhD from the University of Bristol.
Personal Group Holdings PLC (LON:PGH) said it has appointed interim chief financial officer Sarah Mace to the position on a permanent basis with immediate effect. Mace was appointed as interim CFO of the employee services group in October after joining the firm as financial controller and company secretary in 2014.
Power Metal Resources PLC (LON:POW), the AIM-listed metals exploration and development company announced that it has received notices to exercise warrants over 15,747,400 new ordinary shares of 0.1p each at an exercise price of 1.0p per ordinary share; the exercise of 6,250,000 warrants at an exercise price of 0.7p per ordinary share; and the exercise of 5,500,000 warrants at an exercise price of 0.75p per ordinary share. Subscription monies of GBP124,974 have been received by Power Metal in respect of these exercises.
Oracle Power PLC (LON:ORCP), the AIM-listed natural resources and power project developer, announced that it has received a conversion notice from the investors in respect of a further GBP100,000 of the GBP1.5mln share subscription announced on the 9 July 2020. Accordingly, under the conversion, the company will issue, in aggregate, 21,820,720 new ordinary shares of 0.1p each in the capital of the company to the Investors. Following the conversion, GBP700,000 remains outstanding for conversion under the share subscription.
Jubilee Metals Group PLC (LON:JLP), the AIM and Altx traded metals processing company announced that it has received notification from a holder to exercise 19 417 476 existing warrants of the company, representing 0.9 % of the enlarged issued share capital of Jubilee at a price of 3.375p (68.92 rand cents) each. The exercise of warrant shares amounts, in aggregate, to a cash value of GBP655,340 (13,382,039 rand).
European Metals Holdings Limited (LON:EMH) (ASX:EMH) (NASDAQ:ERPNF) said it has issued 1,463,734 new ordinary shares (represented by Depository Interests or DI’s) in the company at a price of AS72.42 cents per DI in relation to the full drawdown of the fund facility agreement with 6466 Investments Pty Ltd as announced on December 31, 2020. The funds will be used to assist in funding new initiatives and ongoing operations.
Primary Health Properties PLC (LON:PHP) said that, further to its announcement on January 4, 2021, in relation to the general meeting to approve a proposed management internalisation, the company has announced that the transaction has completed. Accordingly, Harry Hyman (formerly managing director) has been appointed as chief executive officer, Richard Howell (formerly finance director) has been appointed as chief financial officer, and Paul Wright has been appointed as company secretary in place of Nexus Management Services Limited.
ReNeuron Group PLC (LON:RENE), a UK-based global leader in the development of cell-based therapeutics, said it would host a conference call for analysts at 10.00am GMT on Wednesday, January 6, 2021, to discuss the company’s recent half-year results, fundraising and outlook for the year ahead. A recorded webcast of the analyst conference call, including investor presentation slides, will be made available during the afternoon of January 6, 2021, at this link: https://webcasting.buchanan.uk.com/broadcast/5fd23c59ca22cd76f9d3c662. The recorded webcast will also be made available at the investor centre of ReNeuron’s website: http://www.reneuron.com/investors/investor-centre/.
Crossword Cybersecurity PLC (LON:CCS), the technology commercialisation company focused on cybersecurity and risk management, has announced that its first webinar panel discussion for 2021, following the success of its 2020 series, will take place on Tuesday, January 12, 2021, at 3.00pm GMT. “Cyber Security: skills shortage, automation deficit or poor hiring practices – what’s the reality?” will bring together academics, customers and industry professionals to discuss one of the biggest challenges in the industry. The discussion will be chaired by Dr Robert Nowill, executive chair of the board at The Cyber Security Challenge, with a panel including Amanda Finch, CEO at The Chartered Institute of Information Security; Darren Argyle, CISRO at Standard Chartered Bank; and Stuart Jubb, managing director for Crossword Cybersecurity’s consulting division. Investors can register for this informative and lively webinar here: https://app.livestorm.co/crossword-cybersecurity-plc/cyber-security-skills-shortage-or-automation-deficit-whats-the-reality
Amryt Limited (LON:AMYT) (NASDAQ:AMYT), a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases said it will participate in the virtual H.C. Wainwright BioConnect 2021 Conference to be held January 11-14, 2021. A webcast of Amryt’s presentation will be available on-demand from 6.00am EST on Monday, January 11, 2021, and can be accessed via the following link: https://journey.ct.events/view/15a39863-6e27-42a0-b9b8-d659b8c751c6
6.50am: Everything’s turning blue
The FTSE 100 is expected to open higher on Wednesday morning as counting continues to decide the results of crucial US Senate run-off elections in the state of Georgia.
Spread-better IG expects the blue-chip index to rise 36 points at the open after ending Tuesday’s session 40 points higher at 6,612.
Expectations for a positive open in London followed a solid performance for US markets overnight, with the Dow Jones Industrial Average closing 0.55% higher at 30,391 while the S&P 500 climbed 0.71% to 3,726 and the Nasdaq Composite rose 0.95% to 12,818.
The trajectory followed initial results from the vote in Georgia, with analysts giving a slight edge to Democrat candidates Jon Ossoff and Raphael Warnock over Republican incumbents Kelly Loeffler and David Perdue.
A Democrat victory will leave the party in control of both houses of Congress and the presidency, increasing the chances for Joe Biden to enact more of his legislative agenda following his inauguration on January 20.
Things were looking less positive in Asia this morning, with Japan’s Nikkei 225 down 0.38% while Hong Kong’s Hang Seng fell 0.21% following reports of mass arrests of pro-democratic politicians in the city earlier today.
Currency markets, meanwhile, were mostly flat on Wednesday morning, with the pound little changed at US$1.362 against the dollar.
Around the markets:
- Sterling: US$1.362, flat
- Brent crude: US$53.86 a barrel, up 0.49%
- Gold: US$1,945 an ounce, down 0.28%
- Bitcoin: US$35,260, up 16.3%
6.45am: Early Markets – Asia / Australia
Asia-Pacific markets were mostly lower on Wednesday as service sector activity in China expanded at a slower pace in December compared to November.
The Caixin/Markit services Purchasing Managers’ Index came in at 56 compared to November’s reading of 57.8.
In Japan, the Nikkei 225 declined 0.38% and South Korea’s Kospi shed 0.70%.
Stocks in Australia were lower, with the S&P/ASX 200 down 1.12%.
Mainland Chinese stocks showed some resistance, with the Shanghai composite gaining 0.25% while Hong Kong’s Hang Seng index dipped 0.05%.
Proactive Australia news:
Elementos Limited’s (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) campaign to convert existing inferred resources into indicated resources at its flagship Oropesa Tin Project in Spain is gathering momentum.
Australian Vanadium Ltd (ASX:AVL) (OTCMKTS:ATVVF) (FRA:JT71) subsidiary VSUN Energy has engaged CADDS Group to undertake local design and consultancy for its 5kW/30kWh residential Vanadium Redox Flow Battery (VRFB), which recently arrived from China.
Aeris Resources Ltd (ASX:AIS) continues to grow the gold bounty within the Cracow operations in Queensland with a 260% increase in resources at Roses Pride deposit.
Great Southern Mining Ltd (ASX:GSN) has the reverse circulation (RC) drill turning at Mon Ami Gold Project as part of a 5,400-metre program across the company’s Laverton region gold projects in Western Australia.
Auroch Minerals Ltd (ASX:AOU) (FRA:T59) will begin a reverse circulation (RC) drilling program next week at its high-grade Nepean Nickel Project, 25 kilometres south of Coolgardie in Western Australia.
Anteris Technologies Ltd (ASX:AVR) (OTCMKTS:AMEUF) (FRA:DDF) has unveiled an up to $20 million funding package to provide additional working capital as it advances the development of DurAVR(TM), its 3D single-piece aortic valve for the treatment of aortic stenosis.
Vango Mining Ltd (ASX:VAN) is trading higher after results at Marymia Gold Project revealed a bonanza grade intersection from the Trident Extension zone of 9 metres at 26.2 g/t gold from 137 metres, including 2 metres at 102.2 g/t from 139 metres.
SenSen Networks Ltd (ASX:SNS) (OTCMKTS:SNNSF) has raised A$7.15 million through a well-supported placement to institutional and sophisticated investors to fund its strategic business plan to accelerate revenue and enhance its delivery capabilities to its global customers, especially in the US.
Paradigm Biopharmaceuticals Ltd (ASX:PAR) will be presenting during the prestigious 39th Annual JP Morgan Healthcare Conference next week.
Miramar Resources Ltd (ASX:M2R) has been granted its first exploration licence in the Bangemall region, which the company believes is prospective for Proterozoic craton-margin nickel-copper-platinum group elements (PGE) mineralisation.
Inca Minerals Ltd (ASX:ICG) has requested to activate final grant of three exploration licences for the Frewena tenements in the Northern Territory adjacent to a recent copper discovery.