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FTSE 100 cruises to the close, US traders manage to right the ship after jobs data miss

  • FTSE 100 index rises 78 points
  • Wall Street finds its footing after slow start
  • US ADP report misses estimates

5pm: Smooth sailing for FTSE

London’s leading index finished the Wednesday session up 78 points, 1.2%, at 6,463.4, while the FTSE 250 climbed 33 points, 0.2%, to 19,877.8.

“The FTSE 100 is outperforming its continental counterparts thanks to a rally in pharma, commodity and banking stocks,” CMC Markets UK analyst David Madden wrote Wednesday. “BP and Royal Dutch Shell are up on the day on the back of the rebound in the underlying oil market. BHP Group, Anglo American and Rio Tinto are the biggest rises in the mining sector. AstraZeneca and GlaxoSmithKline are higher on the back of the optimism in relation to the Pfizer-BioNTech vaccine being granted authorisation in the UK.”

Another stock on the up and up is G45 plc (LON:GFS), which gained 17% to £246 after receiving a revised and final takeover offer from privately held Gardaworld. The company increased its previous offer from 190p per share to 235p per share, which would value G45 at £3.7 billion.

In the US, traders had very nearly reversed the morning’s downward slide by midday. The Dow, down nearly 225 at one point, was only 20 points, less than 0.1%, lower at roughly noon ET. The Nasdaq Composite was a mere 3 points lower at 12,352, and the S&P 500 cracked its way into positive territory, picking up 2 points to 3,664.2.

“Stocks are a touch lower this afternoon on the back of profit taking from the record level seen in the S&P 500 last night,” Madden wrote. “The ADP employment report showed that 307,000 jobs were added last month, and that undershot the 410,000 that economists were predicting. The October report was revised higher to 404,000 from 365,000. Lately there has been some concerns that the US economic recovery is fading, and one could argue that is the case judging by the ADP update.”

3.35pm: FTSE 100 firmly higher in late afternoon

Heading into the final hour of trading on Wednesday, the FTSE 100 was firmly higher, having consolidated its gains to rise 64 points to 6,448 shortly after 3.30pm.

Sitting at the top of the pile in late afternoon was London Stock Exchange Group PLC (LON:LSE), which rose 9.7% to 8,764p following reports that the exchange operator is set to secure approval from EU antitrust regulators for its US$27bn acquisition of data analytics firm Refinitiv.

Meanwhile, notable fallers were cybersecurity group Avast PLC (LON:AVST), which dropped 3.4% to 468.6p, followed by property website Rightmove PLC (LON:RMV) which was down 3.1% to 625.6p.

On currency markets, the pound is coming under a bit of pressure towards the end of the trading day, down 0.7% at US$1.332 against the dollar as negotiations over a post-Brexit trade deal between the EU and the UK enter a crucial 48 hours and the December deadline ticks ever closer.

3.30pm: Proactive North America headlines:

Todos Medical Ltd (OTCQB:TOMDF) sees its November 2020 sales surge 269% month-over-month as COVID-19 testing demand rises

Codebase Ventures Inc (CSE:CODE) (FRA:C5B) (OTCQB:BKLLF) says portfolio holding Arcology updates working roadmap in response to positive Testnet results

Vuzix Corporation (NASDAQ:VUZI) (FRA:V7XN) upgrades support for Zoom, Skype for Business, Webex Teams Connector apps and boosts camera control

Nova Royalty  Corp (CVE:NOVR) (OTCMKTS:NVARF) updates on First Quantum’s Taca Taca project in Argentina, where it has just bought a 0.24% NSR

O3 Mining Inc (CVE:OIII) identifies four strong targets at Alpha property in Québec, validating its AI collaborative work

NexTech AR Solutions Corp (OTCQB:NEXCF) (CSE:NTAR) (FRA:N29) launches artificial intelligence division to complement augmented reality slate

Pacton Gold Inc (CVE:PAC) (OTCPINK:PACXF) (FRA:2NKM) names experienced mining industry executive as its new interim CEO and president

CytoDyn Inc (OTCQB:CYDY) says first patient enrolled for its Phase 2 clinical trial using leronlimab to treat NASH

Brain Scientific Inc (OTCQB:BRSF) files provisional US patent application for a new, long-term monitoring EEG cap

Bragg Gaming Group Inc’s (CVE:BRAG) (OTCMKTS:BRGGF) ORYX Gaming to sponsor the prestigious World Gaming Executive Summit

2.44pm: Wall Street falls at the opening bell

The main US indices fell into the red on Wednesday morning as traders on Wall Street stepped back and caught their breath after yesterday’s surge.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.69% at 29,619 while the S&P 500 fell 0.4% to 3,647 and the Nasdaq sank 0.94% to 12,238.

Sentiment is unlikely to have been lifted by the lower than expected ADP jobs figures for November released before the open, while analysts also pointed out that investors may be bracing for another surge in coronavirus cases as well as any developments regarding US government stimulus.

“It is hard to get excited stocks given the elevated levels and uncertainty over how much stimulus Congress will be able to deliver before the end of the year.  Traders remain focused on whether the Thanksgiving holiday provides a spike in new cases and hospitalisations.  The likelihood of further restrictive measures in the US over the next couple of months seems high and that could be the tipping point for Congress to act”, said OANDA’s Edward Moya.

Meanwhile, in London, the FTSE 100 had gained some momentum despite the soft start on Wall Street and was up 59 points at 6,444 at 2.40pm.

1.55pm: US ADP jobs data falls short of forecasts

The latest batch of US ADP jobs data showed the American private sector added 307,000 jobs in November, down from the revised figure of 404,000 in October and well below analyst estimates of 440,000.

The addition of the new jobs, the slowest rate of growth in four months, came mainly from the leisure and hospitality industry, which added 95,000 jobs in the months, followed in second place by education and health which added 69,000.

The slowdown in hiring is likely to signal to many that the surge of coronavirus cases in the US has damaged the jobs market heading into the festive season, while the figure is also likely to be considered a glum precursor to Friday’s non-farm payrolls data from the government.

Back in London, the FTSE 100 was edging ever higher into mid-afternoon, rising 33 points to 6,417 shortly before 2pm.

12.40pm: Wall Street heads for softer start

Following on from its strong rally on Tuesday, the US market looks set to take a step back on Wednesday as investors take pause and possibly take some profits.

Spread better quotes expect that the Dow Jones Industrial Average will drop 96 points at the opening bell, while the S&P 500 is expected to fall 6 points and the Nasdaq is predicted to decline 15 points.

Traders in New York seem content to sit back and what to see what happens after yesterday’s strong run, particularly in regard to possible US stimulus negotiations which reportedly are starting up again in Washington DC between Democrats and Republicans.

One stock that may attract market attention at the opening bell is that of Pfizer Inc (NYSE:PFE), which was up 3.9% at US$40.95 in pre-market trading following news that its coronavirus vaccine, developed in partnership with BioNTech, has been approved for use in the UK by regulators.

Also in focus will be the US ADP jobs report, which is expected to show that 410,000 jobs were added last month, an increase from the 365,000 posted in October.

Back in the UK, the FTSE 100 has continued its slow advance into lunchtime, rising 18 points to 6,403 at around 12.45pm.

Primark owner Associated British Foods PLC (LON:ABF) was among the leaders in the blue-chips in early afternoon, up 3% at 2,241p, while drinks bottler Coca-Cola HBC AG (LON:CCH) rose 2.7% to 2,242p.

Meanwhile, at the bottom of the index was supermarket J Sainsbury PLC (LON:SBRY), which fell 3.3% to 208.9p. Grocery stocks have come under pressure today after Tesco PLC (LON:TSCO) said ti will repay £585mln in coronavirus business rates relief from the UK government.

The move has raised worries that other supermarkets will be pressured to follow suit, adding pressure to their cash balance and, by extension, investor dividend payments. Shares in fellow grocer WM Morrison Supermarkets PLC (LON:MRW) also fell 1.5% to 180p at lunchtime.

11.07am: FTSE 100 trading sideways; Primark owner Associated British Foods PLC higher amid post-lockdown shopping rush

At the morning portion of the session entered its final hour, the FTSE 100 was trading mostly sideways just about in positive territory and was up 13 points at 6,398 at around 11am.

Meanwhile, the UK’s department stores and clothing giants are experiencing something of a mini boom today as shoppers rushed back through their doors as lockdown measures were relaxed this morning.

One such beneficiary was Associated British Foods PLC (LON:ABF), owner of discount clothing chain Primark, which saw its shares rise 2.9% to 2,240p in late-morning as reports emerged of shoppers queuing up to buy its wares after weeks of government-enforced closure.

 Also seeing a flood of customers was fellow high street store chain Debenhams, although the surge has come a little late for the group, which said yesterday that it will be entering liquidation after administrators failed to find a buyer for the department store.

Speaking of corporate collapses, private fashion firm Bonmarche has become the latest UK retailer to collapse into administration, the second time the firm has gone bust in just over a year.

Both Debenhams and Bonmarche are the latest domino’s in a line of retailer failures so far this week which was kicked off on Monday by the collapse of TopShop owner Arcadia group.

9.48am: Hospitality sector cheers news of vaccine approval

The news of the UK’s approval of the Pfizer/BioNTech vaccine is still trickling through the market, although the news appears to have provided a boost to some firms in the struggling hospitality sector.

Shortly before 9.45am, shares in cinema chain Cineworld Group PLC (LON:CINE) were up 3.5% at 64.2p, while All Bar One owner Mitchells & Butlers PLC (LON:MAB) rose 2.8% to 236.5p and Wagamama proprietor Restaurant Group PLC (LON:RTN) climbed 6.1% to 73.1p.

However, the blue-chip FTSE 100 seemed less enthused by the news, rising just 17 points to 6,402, although some analysts have said the muted market reaction may be because the approval was expected and therefore already priced in.

Michael Hewson at CMC Markets also highlighted that the real challenge for the UK will now be distributing the vaccine across the population, and that the fact that the Pfizer vaccine requires two jabs for full protection from the virus means “it’s likely to be several months before we start to see a possible economic benefit in terms of an easing of restrictions”.

AJ Bell’s Russ Mould added that now the vaccine has been approved investor attention will “naturally shift on to the next thing which could be the aftermath of Brexit, whether Joe Biden can push through his policies as the new US President, when the next giant wave of stimulus will come from the US, and so on”.

8.45am: Small progress for Footsie

The FTSE 100 paused for breath in early trade on Wednesday after Tuesday’s ‘buy British’ splurge, which resulted in a triple-digit day for the stocks benchmark.

The UK blue-chip index opened just 3 points in the green at 6,387.50.

With a degree of initiative not seen thus far during the coronavirus crisis, the UK has taken the lead in becoming the first country to approve a coronavirus (COVID-19) vaccine. It means the BioNTech/Pfizer jabs can be rolled out ahead of Christmas to priority groups.

Still, this wasn’t enough to motivate traders in early exchanges with down-to-the-wire Brexit negotiations now starting to unsettle the livestock.

While Goldman Sachs was yesterday proclaiming Britain would achieve what it termed a “skinny” free trade deal with the EU, the wider City was less convinced.

Delivering a rather pleasing Advent surprise, Tesco (LON:TSCO) is returning £585mln in Covid business rates relief.

The gesture was greeted with a collective ‘meh’ inside the Square Mile as the shares remained rooted to their closing levels.

The builders led the fallers, giving back the gains they made Tuesday after better-than-expected house price data.

Barratt Developments (LON:BDEV) was the top laggard, off 3.7%, followed by Persimmon (LON:PSN) and Berkeley Group (LON:BKG).

Proactive news headlines:

Angling Direct PLC (LON:ANG) said it will beat its own profit expectations this year after sales continued to be strong in spite of the second coronavirus (COVID-19) lockdown restrictions. All its 38 stores will reopen fully today with the end of the lockdown in England, said the fishing equipment specialist. During the second lockdown, the group’s shops operated on a call and collect basis, but even at this restricted level demand was strong said the AIM-listed firm and it did not use the government’s job retention scheme.

Belvoir Group PLC (LON:BLV), the UK’s largest property franchise, said trading has been ahead of even its pre-coronavirus (COVID-19) expectations in the ten months of its financial year do far. Gross profit in the property and the financial services divisions grew year-on-year by 10% and 11%, respectively, the firm said in a trading update. Management services fee income (MSF) from its lettings arm rose on 2019 and level in sales with helped by the acquisition of the Lovelle chain and a strong bounce-back once the first lockdown ended. Agreed house sales are running significantly ahead of the previous record level and strong sales revenue should continue during the last two months of the year, it added.

Capital Limited (LON:CAPD) has landed what it described as a transformative new deal with Centamin, inking a conditional open-pit waste mining services contract for the Sukari gold mine in Egypt. The 120mln tonne open-pit waste mining contract sees the AIM-quoted company provide load & haul and ancillary services. At the same time, Capital has also extended an existing contract with Centamin for drilling services at Sukari. Altogether the contracts are forecast to generate incremental revenues of US$235mln-£260mln over a four-year period (starting January 1 2021).

IXICO PLC (LON:IXI) saw its full-year earnings more than double as revenues hit record levels thanks to multi-year contracts for phase III clinical trials. Results for the year ended September 30, 2020, showed the artificial intelligence (AI) data analytics firm reported underlying earnings (EBITDA) of £1.3mln, up from £0.5mln in the prior year, while revenues rose to £9.5mln from £7.6mln. The company also reported a 36% increase in its contracted order book to a record level of £21.7mln, adding that it has secured net £15.4mln of additional multi-year contracts across all phases of clinical development, including its single largest contract signed in April in Huntington’s disease (HD) for £10.5mln.

Inspiration Healthcare Group PLC (LON:IHC) said a respiratory device used in neonatal intensive care can now be validated across the EU after being granted a European patent. The protection covers Project WAVE, which uses a technology acquired under licence last year from an unnamed “major US West Coast university”. WAVE has already secured US Patent Office sign-off, while the UK Medicines and Healthcare Products Regulatory Agency has approved it for clinical testing.

Bango PLC (LON:BGO) said it has signed a partnership to distribute memberships for IN10 Media Network’s international global documentary focused video-on-demand (VOD) platform, DocuBay. The AIM-listed firm said under the agreement its Bango Resale technology and partnerships will power DocuBay’s growth plans to increase availability to more audiences around the world, expanding its global presence and user base. Through the partnership, Bango said telecommunications companies, retailers and other mass-market consumer businesses can now offer their users bundled subscriptions to DocuBay’s entertainment suite using its technology.

Genel Energy PLC (LON:GENL) told investors that the first crude oil liftings have taken place from the Sarta field in Kurdistan. The company owns a 30% interest in the field which began producing in November. Presently, the field is producing from one well – Sarta-3 – which is flowing more than 5,000 barrels of oil per day. The performance is in line with expectations.

TomCo Energy PLC (LON:TOM) has confirmed the completion of work programmes to upgrade the capacity of the Petroteq oil sands plant (POSP) at Asphalt Ridge in Utah, USA. The work, conducted under the Greenfield Energy venture, is part of a project to demonstrate the commerciality of processes to recover oil from oil sands. Operations to restart the plant is now underway as scheduled, the company added. This programme will take up to two weeks to complete.

Ariana Resources PLC (LON:AAU) said it has reached a conditional agreement for the sale of its remaining projects in Turkey to Zenit Madencilik ahead of the planned completion of its agreements with Özaltin Holding and with Proccea Construction concerning a proposed expanded joint venture (JV). The AIM-listed company said its operating subsidiary has agreed to sell its three remaining Turkish projects to Zenit for US$2mln in cash, payable over 20 months. The projects are considered to be satellites of the Kiziltepe mine processing plant. Ariana added that the sale agreement will become effective on the satisfactory completion of the JV deals with Özaltin and Proccea.

Seneca Global Income & Growth Trust PLC (LON:SIGT) has said that Pzier/BioNtech’s coronavirus (COVID-19) vaccine might mark the tipping point for a switch away from tech and towards value-based strategies. The value-focused trust said its net asset value (NAV) total return per share was 12.4% in November as markets rallied following the Pfizer announcement, adding that it is now possible to imagine a timetable for recovery from COVID-19 even if it takes many months. “Whereas before 9 November this was not possible and so the reaction of investment markets makes sense,” it added. SIGT posted a total return of 10.5% in the six months to October 31, 2020, compared to 3.6% for its benchmark.

Zephyr Energy PLC (LON:ZPHR) has provided an update on its project in the Paradox Basin in Utah, USA, where the company is preparing to spud the ‘dual-use’ State 16-2 well before the end of the year. The Rocky Mountain oil and gas company focused on responsible resource development, said it has now received all the final approvals required to proceed with the spud of the State 16-2 well. These approvals include surface rights and rights to drill from the Utah School and Institutional Trust Lands Administration, federal Right of Way approvals from the Bureau of Land Management, and Application to Drill approval from the Utah Division of Oil, Gas and Mining.

Tissue Regenix Group PLC (LON:TRX) has said first delivery of its new OrthoPure XT product has taken place with further orders expected to be shipped early next year. The regenerative medicines specialist noted that this represents a quick turnaround from approval (it received its CE Mark in June) to the sale of the first decellularized tendons. Interest in Tissue’s technology was such that it landed its first UK order in August with a speciality supplier of orthopaedic and biologic products.

InnovaDerma PLC (LON:IDP) has announced that, as planned, Joe Bayer will step down from his executive chairman role to become the group’s non-executive chairman with immediate effect and has notified the board that he will resign as a director with effect from January 31, 2021.  The UK developer of beauty, personal care and life science products said Bayer, previously the firm’s interim CEO, will remain an employee of the group until May 31, 2021, to ensure an orderly handover of responsibilities.

Redx Pharma PLC (LON:REDX), the drug discovery and development company focused on cancer and fibrosis, said it has conditionally raised around £25.5mln before expense from a placing an open offer to shareholders. The company said it was placing 45,603,575 new ordinary shares with both new institutional investors and existing shareholders and up to a further approximately £2.2mln by way of the open offer. The transaction will be effected at a price of 56p per ordinary share, the group added, representing a discount of approximately 2.6% to Redx’s closing price of 57.5p on December 1, 2020. The net proceeds of the transaction will allow the company to continue to progress its pipeline, it said.

Woodbois Ltd (LON:WBI) said it has “continued to make solid progress” across both its trading and production businesses as well as making “two notable hires” over the last few months. In an operational and corporate update, the Africa-focused forestry and timber firm said since its third-quarter update in early October global demand for sustainably produced hardwood has “started to rebound” and that its production division has increased output in October and November by 41% over the previous quarter’s average.

ImmuPharma PLC (LON:IMM), a specialist drug discovery and development company, has announced that Dr Tim Franklin, its chief operating officer, will be presenting at the prestigious Biotech Showcase Digital 2021. The event will be virtually held between January 11 and 15, 2021. As part of ImmuPharma’s participation, an on-demand Company presentation has been provided in advance to the opening of the event. This will allow registered attendees to get access to presentation material prior to the start of the showcase on January 11, 2021. Biotech Showcase, produced by Demy-Colton and EBD Group, is an investor conference focused on driving advances in therapeutic development by providing a sophisticated networking platform for executives and investors that fosters investment and partnership opportunities. The conference takes place each year during the course of one of the industry’s largest gatherings and busiest weeks.

6.50am: Time for a breather

The FTSE 100 is expected to start Wednesday’s session on the back foot as global markets look set to take a breather following a strong performance on Tuesday.

Spread-betters IG are forecasting that the FTSE 100 will start down around 21 points after ending Tuesday’s session 118 points higher at 6,384.

Predictions of a lower start in London followed a positive performance in the US overnight, which saw the Dow Jones Industrial Average close up 0.63% at 29,823 while the Nasdaq Composite rose 1.28% to a record close of 12,355 and the S&P 500 climbed 1.13% to also end at a record high of 3,662.

The surge was partially attributed to renewed efforts by politicians in Washington DC to restart economic stimulus talks after negotiations stalled ahead of November’s general election.

“Yesterday a group of bipartisan politicians put forward a US$908bn relief package. One Senator described it as an ‘interim’ proposal. In advance of the Presidential election, Nancy Pelosi of the Democrats and Mitch McConnell of the Republicans were very far apart with regards to working out a package. Pelosi was pushing for a US$2.2 trillion scheme, while McConnell was driving for a US$500bn programme. Yesterday, McConnell talked about a US$1.4 trillion package so things seem to be heading in the right direction”, said David Madden at CMC Markets.

Asian markets were more mixed on Wednesday following the rally on Wall Street, with Japan’s Nikkei 225 up 0.07% while Hong Kong’s Hang Seng dropped 0.35%.

On currency markets, the pound was relatively flat against the dollar at around US$1.342, with any news on Brexit negotiations and the possibility of a last-minute trade deal likely to be the main driver of any movement.

The US ADP jobs report later today may provide a catalyst for movement should the figures apply pressure to the dollar.

Around the markets:

  • Sterling: US$1.342, unchanged
  • Brent crude: US$47.10 a barrel, down 0.7%
  • Gold: US$1,812 an ounce, unchanged
  • Bitcoin: US$18,813, down 3.6%

6.45am: Early Markets – Asia/Australia

Asia-Pacific shares were mostly higher on Wednesday as Australia’s economy expanded 3.3% quarter-on-quarter in September after a 7% quarter-on-quarter contraction in the June quarter.

Australian shares were marginally up, with the S&P/ASX 200 closing 0.03% higher.

Chinese stocks were higher with Shanghai composite rising 0.12% while Hong Kong’s Hang Seng index dipped 0.07%.

In South Korea the Kospi gained 1.60% and Japan’s Nikkei 225 rose 0.05%.


Proactive Australia news:

Peninsula Energy Ltd (ASX:PEN) sees a clear pathway to restart uranium production at its flagship Lance Project in Wyoming, USA, which is the only US-based uranium project authorised to use the industry-leading, low-cost, low pH In-Situ Recovery (ISR) process.

Chalice Gold Mines Limited (ASX:CHN) has received firm commitments for a $100 million placement to sophisticated, professional and institutional investors.

Pan Asia Metals Ltd (ASX:PAM) plans to start drilling the Doyenwae prospect within Minter Tungsten Project in New South Wales after receiving State Government approval for a six-hole reverse circulation (RC) drilling program of 1000-1200 metres.

Australian Vanadium Ltd (ASX:AVL) (OTCMKTS:ATVVF) (FRA:JT71) has signed a non-binding Memorandum of Understanding (MOU) with US Vanadium LLC (USV) in relation to offtake from the Australian Vanadium Project in Western Australia.

Aeris Resources Ltd’s (ASX:AIS) second drill hole at Anomaly K target within the tenement package comprising the Tritton operations in New South Wales has intersected a 3.4-metre zone of massive sulphides.

Kingston Resources Ltd (ASX:KSN) reverse circulation (RC) drilling at its 75%-owned Livingstone Gold Project in WA has returned high-grade assay results of up to 17 metres at 3.07 g/t from the Homestead prospect.

Nexus Minerals Ltd (ASX:NXM) (FRA:YAK) has completed the tenement sale of its Triumph Gold Project to Gibb River Diamonds Ltd (ASX:GIB) (FRA:PHO)

Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) has awarded the definitive feasibility study for its planned spodumene concentrate operations in North Carolina, USA, to a combined team including Primero Group and Marshall Miller & Associates.

Creso Pharma Limited (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has received three new purchase orders for its anibidiol® line of animal health products totalling CHF277,000 (A$414,000).

Zelira Therapeutics Ltd (ASX:ZLD) (OTCQB:ZLDAF) (FRA:G1G), in partnership with SprinJene®, a leader in natural oral care products, has launched its first over-the-counter (OTC) proprietary CBD toothpaste in the US.

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