- FTSE 100 index jumps 119 points
- UK PMI rises to 52.4 in January from 49.3 in December
The services PMI jumped to 52.9 from 50.0
The manufacturing PMI stayed below 50.0 but rose to 49.8 from 47.5 in December
9.45am: PMIs rise more than expected
The preliminary reading of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) for January rose to 52.4 from 49.3 in December.
A reading above 50 indicates an expansion of activity.
It was the highest level for the composite index, which combines manufacturing and services, since September 2018 and comfortably topped the consensus forecast of 50.6.
The services PMI jumped to 52.9 from 50.0, which was also the highest level since September 2018, and better than the 51.0 economists had been expecting.
The manufacturing PMI stayed below 50.0 but rose to 49.8 from 47.5 in December and was the highest reading since last April.
The FTSE 100 was up 120 points (1.6%) at 7,627 despite many pundits suggesting the PMI readings had weakened the case for the Bank of England to cut interest rates this month.
9.05am: Almost a clean sweep for the risers
Just three Footsie stocks were in the red as the UK’s benchmark index got off to a flying start.
The FTSE 100 was up 90 points (1.2%) at 7,597.
Online meals ordering platform operator Just Eat has shed 3% at 854.5p after it emerged that the UK Competition and Markets Authority has reconsidered its position regarding the Just Eat/Takeaway.com merger and now believes that an investigation is warranted.
Shares in OnTheMarket were up 0.7%.
The FTSE 100 index pushed higher in early trade on Friday as the market shook off its coronavirus-related lethargy to claw back lost ground.
The index of UK blue-chips advanced 70 points to 7,577.31
Still, all eyes remain on China as it ushers in its new year. The celebration tends to translate into a major spending boost, though there are well-founded worries 2020 will be subdued.
S&P Global Ratings reckons the SARS-like outbreak if it spreads, could shave 1.2 percentage points off China’s economic growth this year. Meanwhile, the World Health Organisation came within a hair’s breadth of declaring a global emergency with potential cases now apparently turning up in the West.
“It may not be long before they tip the other way – tens of millions in quarantine and reported cases all over the region sounds like an emergency to me,” said Neil Wilson of Markets.com.
Again, not good for the People’s Republic, Asia, or the world economy.
Unsurprisingly, the miners have been sold down heavily this week, relying as they do on China’s fast-growing economy for support.
British Airways owner IAG (LON:IAG) was also flying higher, up 2.2% as it too recovered ground lost earlier in the week.
Proactive news headlines:
Norman Broadbent PLC (LON:NBB) revealed that the turnaround at the professional services firm has continued, with the second half of 2019 proving better than the first. The group returned to profit in 2019, it confirmed in a trading statement, on the back of a 22% increase in revenues to £11.5mln from £9.4mln in 2018. Group net fee income climbed 15% to £7.6mln from £6.6mln the year before.
Pan African Resources plc (LON:PAF) expects to produce 185,000 ounces of the yellow metal for the full-year as the South Africa-focused gold miner said sales at the halfway stage were 92,941 ounces, up 14.7%. The company, which owns the Barberton operations in Mpumalanga Province, said its development project, the Evander 8 Shaft Pillar will reach commercial production “in the next few weeks”. This will add “further high-margin” output in the second half, it said.
Tekcapital PLC’s (LON:TEK) portfolio firm Salarius has inked a partnership deal for its MicroSalt product with US ingredients supplier Hanks Brokerage. Hanks supplies products to food manufacturers, restaurant chains and food service distributors, with the deal for MicroSalt to be focused on sales in the southwestern US.
Columbus Energy Resources PLC (LON:CERP) told investors it is now preparing to test the Saffron well in February. The Trinidad oiler, in a statement, told investors that it has now completed the Saffron well logging and initial results support the decision to proceed with the remainder of the well programme.
88 Energy Ltd (LON:88E) has raised A$5mln of new capital ahead of next month’s drill programme at the Charlie appraisal well. The explorer, in a statement, said the capital injection would cover any potential costs above those carried by Premier Oil PLC (LON:PMO) via its farm-in to Charlie.
Anglo Pacific Group PLC (LON:APF) (TSX:APY) announced that Mike Blyth has indicated his intention to retire as a non-executive director of the company after its Annual General Meeting to be held on 11 May 2020. Patrick Meier, chairman of Anglo Pacific, commented: “Mike has played a vital role on the board and his experience, commercial acumen and attention to good governance has proven invaluable to Anglo Pacific. He has been an exceptional Chair of both the Audit and Remuneration Committees and we will miss his wise counsel. It has been a privilege to work alongside Mike and we wish him well.”
Yellow Cake PLC (LON:YCA), a specialist company operating in the uranium sector with a view to holding physical uranium for the long term, announced that on 23 January 2020, it purchased 30,000 ordinary shares in the company on the market, through Numis Securities, in accordance with the terms of its share buyback programme announced on 22 January 2020. It said the shares acquired will be held in treasury.
Ades International Holding PLC (LON:ADES) said that, on 23 January, Investec Bank purchased 70,000 of the group’s ordinary shares at an average price of US$12 per share, representing 0.16% of its issued share capital, on the company’s behalf as part of the share buyback programme announced on 29 November 2019.
BlueRock Diamonds PLC (LON:BRD), the AIM-listed diamond producer, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa, announced that it is hosting a shareholder conference call on Wednesday 29 January 2020 at 7.00pm (BST) in line with its commitment to maintaining positive engagement with its shareholders.
Shield Therapeutics PLC (LON:STX), a commercial stage pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru/Accrufer, said it will be presenting at two investor presentations next month, providing an overview of the business and the progress being made by the company. It said Tim Watts, the group’s chief financial officer, will present at the Proactive One2One Biotech Forum on Thursday 6 February 2020 at the Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB. Shield said it will also have a stand and present at the Growth & Innovations Forum 2020, to be held on Tuesday 11 February at the Business Design Centre, 52 Upper Street, Islington, London, N1 0QH.
6.45am: Footsie called higher
After US investors were sanguine yesterday about evidence that the coronavirus has spread beyond China, UK investors are to try some of this optimism lark.
Spread-betting quotes indicate that the FTSE 100 will open around 51 points higher, wiping out the bulk of yesterday’s losses, at 7,559.
“With Singapore reporting its first case of Wuhan flu, and even the UK investigating some Chinese visitors presenting flu-like symptoms, it is probably safe to say that this disease has now gone global. That’s the bad news. The relatively good news is that it doesn’t seem to be generally fatal to healthier, younger people,” commented Robert Carnell – age and health unknown – at ING.
“I don’t want you to infer from my summary that I don’t think older, or less healthy members of the population are more expendable,” he added, perhaps overdoing the double-negative.
“But they are at higher risk during a regular flu season anyway, and the fatality numbers so far are small compared with a regular flu year. What I am really getting at is this, this is not the Spanish flu (the 1918 one),” he explained.
After a soft start yesterday, US stocks closed mixed. The Dow Jones average shed 26 points to finish at 29,160 but the S&P 500 climbed 4 points to 3,326.
With Chinese markets closed ahead of the Lunar New Year, focus in Asia was on Japan, where the Nikkei 225 was 9 points better at 23,804.
Gold, the investment of choice for worry-warts, is trading US$5.30 lower at US$1,560.10, so if investors are panicking they are disguising it well.
Back in the UK, the corporate news agenda is light, which means you might be able to sneak out for a crafty pint., inspired by the trading announcement from Marston’s PLC (LON:MARS), the pubs group that knows how to use a possessive apostrophe.
The group has responded to City concerns about its debt levels by choosing not to open any new pubs in 2020; Marston’s recent strategy has been to build new pubs with decent kitchen and dining facilities rather than acquiring existing boozers.
Investors will also look for any news on asset disposals, following the sale of 137 of its pubs for £45mln late last year.
The market will also keep an eye out for UK flash PMIs on Friday after Tuesday’s labour market data suggested that things are not getting any worse for the UK economy and may have even started to turn around.
Friday’s dataset could be “crucial” in confirming or refuting a bounce in the economy, according to analysts.
“If the pick-up in sentiment is confirmed in the flash PMIs… then it could be enough to convince the Monetary Policy Committee that the economy has turned a corner and that it does not need to cut rates from 0.75% at its meeting on 30th January,” said Thomas Pugh from Capital Economics.
Currently, the odds are in favour of the committee voting through a small cut.
Significant announcements expected on Friday:
Economic data: UK flash PMIs
Around the markets:
- Sterling: US$1.3125, unchanged
- 10-year gilt: 0.617%, up 4.05 basis points
- Gold: US$1,560.10 an ounce, down US$5.30
- Brent crude: US$62.24 a barrel, up 20 cents
- Bitcoin: US$8,328, down US$63
- Financial Times
- Travel restrictions have been extended to at least nine cities in China to contain an outbreak coronavirus that has thus far claimed 25 lives.
- Asos bounced back from a difficult year, registering 20% growth in sales in its most recent trading period.
- It is almost impossible to predict the final costs of Britain’s planned HS2 high-speed railway because work is at such early stages, the public spending watchdog has advised.
- The Times
- The Competition and Markets Authority has launched an investigation into the £10 billion merger between Just Eat and Takeaway.com.
- Sky boosted its ranks of subscribers by 77,000 in the fourth quarter of last year, helping Comcast, its American owner, to beat Wall Street forecasts.
- Daily Mail and General Trust said that digital advertising revenues had risen by nearly 20% over the past quarter, with more than 15 million people visiting its website every day.
- CMC Markets’ shares gained 2.6% yesterday after the online financial trading business said net revenues for the 12 months to the end of March were expected to exceed expectations.
- PPHE Hotel Group said it was on track to hit full-year expectations on the back of a £100 million investment programme in some of its top venues.
- Andrew Bailey, the incoming Bank of England governor, has admitted that he is concerned about how ill-prepared the UK is for a prolonged fall in the stock market or house prices.
- About 3,000 management jobs are being cut at Wm Morrison as part of a shake-up of its stores that will also involve the hiring of thousands of shop-floor workers.
- Mothercare has admitted that it failed to generate as much cash as it had hoped from a final round of steeply discounted clearance sales before it shut its chain of UK shops for the last time a fortnight ago.
- The Daily Telegraph
- Goldman Sachs has vowed to turn down lucrative work advising on stock market listings if the companies involved are all-male and lack diversity.
- Hotel Chocolat posted upbeat sales over Christmas boosted by a posh hot chocolate machine and a vegan range, but the retailer warned its overseas expansion had run up higher costs than expected.
- Shares in Blue Prism surged by 20% on Thursday after the software company revealed customer numbers almost doubled last year.
- There will be no Boris bounce in investment flows towards Britain until the post-Brexit trade deal is nailed down, European business leaders and officials have warned in Davos.
- RBS’s online bank Bó is likely to see major changes after it emerged that the banker who spearheaded the launch of the money saving app is set to leave.
- Former Unilever boss Paul Polman, Innocent Smoothies co-founder Richard Reed and US real estate developer Jeff Gural, three millionaires who signed a Davos letter demanding higher taxes on the rich, have been accused of hypocrisy by low-tax campaigners.
- Microsoft boss Satya Nadella has claimed that data privacy “must be seen as a human right” if internet users are to feel safe online, pointing to Europe’s GDPR as the benchmark for global regulation.
- The Guardian
- PwC, the global accounting firm battling to distance itself from a financial scandal engulfing Africa’s richest woman, Isabel dos Santos, was auditing the books of Angola’s state oil company during a period that is now under criminal investigation.
- Restaurant chain Handmade Burger Co has collapsed into administration for the second time, leading to the closure of all 18 outlets and the loss of 283 jobs.