November 30, 2020

FTSE 100 ends the week lower, Wall Street holds into vaccine hopes – Proactive Investors UK

https://www.proactiveinvestors.com/companies/news/933883/ftse-100-ends-the-week-lower-wall-street-holds-into-vaccine-hopes-933883.html
  • FTSE 100 index sheds 22 points
  • US stock indices broadly higher
  • Synairgen gets boosts from study results

5.10pm: FTSE fades in afternoon trading

The FTSE 100 slipped 22 points, 0.4%, to 6,136.4, and the FTSE 250 ticked 32 points, 0.2%, lower to 19,270.

“It has been a relatively quiet session today when you take into consideration that aggressive moves that were seen during the week..,” CMC Markets UK analyst David Madden said in a statement. “The health crisis is back at the forefront of traders’ minds given the number of Covid-19 cases in Germany, the UK and Italy. Several major economies in Europe have lockdowns in place and with the ways things are going, extensions could be issued.”

Despite positive vaccine news, Europe is not out of the woods yet, Madden noted.

“In recent years, stock markets have become addicted to monetary easing, and it seems the ECB are going to loosen their policy further next month. The -BioNTech vaccine story is still lingering, but there is now the realisation that even if things go well with respect to regulatory approval, the pandemic will not be resolved quickly.”

In the US, markets were broadly higher. The Dow was up 274 points, 1%, to 29,355.1 at noon ET. The Nasdaq Composite was up 68 points, 0.6%, to 11,778.5, and the S&P 500 gained 31.7 points, 0.9%, to 3,568.5.

Travel stocks continued to ascend on vaccine optimism. () gained 5.5% to $38.87, Inc () picked up 5.6% to $36.30 and Southwest was up 3.8% to $43.52.

3.47pm: FTSE and FAANGS in the red

London’s blue chips are still in line to finish an otherwise positive week on a sour note, in contrast to the rest of their peer Europe and the US.

The Footsie is down 14 points or 0.2% at 6,324.67, which would make for almost a 414-point gain for the week, or bang on 7%.

Doing slightly better, the FTSE 250 is up just over one point at almost 19,304.

With the vaccine bullishness dissipating, and an unclear US election aftermath, markets don’t have much direction.

“European indexes are mixed as investors reduce bullish bets as virus lockdown efforts will likely remain in place throughout the holidays,” said market analyst Edward Moya at Oanda.

Stateside, President Trump’s administration has issued an order barring American investments in Chinese firms owned or controlled by the military.

Wall Street’s major indices are all in the green, though the FAANG stocks are all in the red.

“US stocks are rising as investors anticipate President-elect Biden will have a conciliatory tone with China and on high hopes that any day Moderna’s vaccine trial will match ’s results from earlier in the week,” said Moya.

“The last two months of President Donald Trump’s reign will likely see a wrath of executive orders that will make it difficult for the Biden administration to smoothly implement their initiatives and unwind Trump’s aggressive measures.”

He said Trump’s order on investments in Chinese firms is likely to be the beginning of the latest round of efforts to pressure China. 

“US-China relations are at all-time low and will not see any easy solutions to human rights, spying and IP theft, but a less confrontational approach is welcomed.  China’s delayed congratulations to Biden is positive to risk appetite as it signals a complete restart in trade negotiations, climate policies, and support in dealing with Iran and North Korea.”

There was also data showing consumer confidence has taken another hit, according to the index maintained by the University of Michigan, which is down to 77.0 in November from 81.8 a month earlier.

This appears to have been driven by a combination of rising fears about the virus and concerns over the election results, said ’ Andrew Hunter, “although the latter is unlikely to have any notable impact on consumption”.

Current confidence was broadly unchanged, with the headline fall driven by a sharp drop in the expectations index to 71.3, from 79.2, which the researchers suggest is partly driven by rising concerns over the spread of the coronavirus.

“Those fears may have been partly soothed by Monday’s more positive headlines on a potential vaccine breakthrough, which came too late to have much impact on the provisional November survey,” said Andrew Hunter.

“Nevertheless, with more and more states starting to impose new restrictions on activity, this highlights the growing downside risks posed by the pandemic for the next few months.”

2.43pm: Wall Street opens in the green

As expected, the main Wall Street indices began Friday’s session on the front foot as market sentiment continued to be positive despite rising coronavirus infections across the world.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.66% at 29,272, while the S&P 500 rose 0.69% to 3,561 and the Nasdaq climbed 0.63% to 11,783.

Meanwhile, the latest data from the US producer price index (PPI) showed a 0.5% increase year-on-year, higher than the 0.4% increase that had been expected.

While overall core PPI was low at 1.1%, economists at Pantheon Macroeconomics said that it will “likely increase further, given that the three-month annualised rate is 3.8%”.

“But the likelihood of a further Covid hit to spending, especially in the services sector, over the next couple months, means that any upward pressure will be modest”, Pantheon added.

Back in London, the FTSE 100 had recovered some of its losses but was still down 25 points at 6,314 shortly before 2.45pm.

1.55pm: Oil supermajors in charge

Fluctuations of London’s oil supermajors have dragged on the FTSE 100 on Friday, along with a swathe of the index’s miners and its overseas-earning heavyweights.

Shell () and BP () have both swung lower, dragging the Footsie with them, while miners such as Rio Tinto () and BHP ().

While recent coronavirus vaccine developments have been very encouraging for the oil market, analyst Sam Wahab at SP Angel noted, “there are still concerns in the short-term regarding lockdown risks across Europe, while rising Libyan oil production is a risk on the supply front”.

“For yet another month, OPEC revised down its expectations for global oil demand as the renewed spike in coronavirus cases in major economies is slowing down the oil demand recovery,” he added.

Not much links the other big fallers such as Halma, , Relx, Intertek, Compass, Diageo, Rentokil and Ferguson.

The Footsie is down 35 points or 0.6% to 6,303.67.

If trading closed now the index would have gained almost 390 points or 6.6% over the week, its best performance since April.

The FTSE 250 meanwhile is marginally in positive territory at 19,303.72.

Leading the way are Capita (), CMC Markets (), Spirent () and ().

Many in London are already looking ahead to next week, which in company news includes updates or results from Vodafone, Imperial Brands, Royal Mail and easyJet

Over on Wall Street, stock futures markets are pointing to gains for the Dow Jones, S&P 500 and Nasdaq Composite.

12.30pm: FTSE on its own

The FTSE 100 is on its own, dropping back further into the red while European equity markets are up and Wall Street is expected to start on the front foot.

London’s blue chip benchmark is down 35 points or 0.55% at 6,304.06, even though the pound has retreated slightly.

A Downing Street spokesman said Brexit talks will be paused over the weekend and resume in Brussels next week, with “differences” still remaining in trade talks on a level playing field and fisheries.

Looking across the Atlantic, traders are expecting the Dow Jones, S&P 500 and Nasdaq to all open with solid gains.

The rebound in sentiment outside London “seems a bit strange”, said market analyst David Madden at CMC Markets, “seeing as the number of new coronavirus cases in the UK, Germany and Italy are worrying”.

He added: “The health crisis is becoming more of a serious issue in the US too as cities like New York and Chicago could be in for stricter restrictions.”

Though he said the pandemic might not have the same negative impact on equities that it used to, seeing as there has been great progress made with potential vaccines.

10.45am: Still searching for direction

London’s blue chip index is the only one of the main European equity benchmarks in the red this morning.

The Footsie is down only six points or less than 0.1% at 6,332.57, however, as two of the reasons for the early declines, Shell () and BP (), now flat and in positive territory respectively as the worse of the crude price declines were erased.

A lack of direction for the index was shown by the huge daily fluctuations in value stocks, said IG market analyst Joshua Mahony, pointing to sharp gains for the travel-related shares.

“Economic strife over the coming months will likely stifle the market rebound despite the impending vaccine, with today’s indecision highlighting that ongoing battle between optimism and the current reality,” he said. “Meanwhile, retail is at risk as we head towards the festive period in lockdown.”

Mahony said while the potential emergence of an effective vaccine provides a reason for optimism, traders are having to weigh up whether the prospect of an eventual return to normality can allow them to overlook the major hurdles that remain in the meanwhile. 

“With Donald Trump seemingly preoccupied with the battle to overturn the election result, it seems as though the Coronavirus has been left to proliferate throughout the US in recent weeks. The fear is that this incessant rise in US cases and deaths will ultimately force Joe Biden into a nationwide lockdown come January, with the fractured nature of the country meaning that any such restriction could be less effective than elsewhere.”

Across the Channel, the latest eurozone GDP estimate shows there was a 12.6% rise in the third quarter compared to the second, after a contraction of 11.8% three months earlier. GDP was down 4.4% year-on-year in Q3 after a fall of 14.8% in Q2.

9.50am: FTSE erases losses

The FTSE 100 has trimmed nearly all of its early losses, with a mix of travel-related and financials stocks among the larger rises.

Despite a rallying pound, the Footsie is now down five points at 6,333.59, more than 400 points higher over the week.

“European markets were mixed as investors figure out what to do next after the exuberant vaccine-induced rally and following a soft session on Wall Street,” said market analyst Neil Wilson at Markets.com. 

“Whilst there is great hope for next year because of the vaccine, we are from out of the worst of the pandemic – US cases are surging at record levels and lockdown measures persist in Europe. 

“The question for investors is whether they think there are enough incremental buyers on the side lines to drive markets higher. The question is really one for the bond market – the wall of cash sitting idle will be deployed if rates stay low and go even lower.”

As it has often has been this week, Rolls-Royce () was top of London’s blue chip leaderboard, with hotel operator Whitbread () and British Airways owner IAG () also on the front foot after the positive vaccine news this week, which is expected to help things return to normal next year.

Whitbread was helped by an upgrade from analysts at Barclays to ‘overweight’, while JPMorgan Cazenove upped its share price target for Rolls-Royce.

Banks, life insurers, asset managers and banks are prominent among the risers, with NatWest (), (),  (), Aviva () and St James’s Place () in the top ten.

Bank shares have been among the most hard hit by the pandemic and investors hope the vaccine news could mean that dividends are more likely to return soon.

Also, there were reports overnight that NatWest could be mulling a takeover of Sainsbury’s Bank.

The fallers are led by Smith & Nephew (LON:SN.), the hip and knee replacement group, as rising coronavirus cases around the world suggests there will more delays for elective surgical operations.

Clothing retailer Next (), which recently hit a six-month high, was second on the Footsie fallers list, with Primark owner AB Foods () not far behind. This was despite raising its target price for the pair.

The pound is up 0.4% against the US dollar at 1.3174.

8.45am: Fresh falls as pandemic worries remain

The FTSE 100 index, as expected, started Friday on the back foot as the deadly realities of the coronavirus (COVID-19) pandemic again offset the early week euphoria over the success of ’s vaccine candidate.

In early trading, the UK blue-chip index was 38.66 points lower at 6,300.28, albeit still posting a gain of nearly 400 points over the week so far, having closed last Friday at 5,910.

Richard Hunter, head of markets at interactive investor, commented “Some of the lustre from earlier in the week has been slightly tarnished, with investor sentiment now more measured in the face of the issues facing the Covid-19 vaccine.

“While the world waits for further progress on the vaccine in terms of testing, regulatory approval and then distribution, the second wave ominously rolls on. California has now joined Texas in exceeding one million cases, while reimposed restrictions in the likes of Detroit and Chicago are a stark reminder that while there may be light at the end of the tunnel, the pandemic’s human and economic impacts continue.

“In addition, there seems to have been a continuation of the impasse regarding a fiscal stimulus package in the US, while over the course of the week there has been some profit-taking in big tech, in anticipation of the economic pendulum swinging back to benefit more traditional sectors.”

He added: “While more volatility can be expected as the finer details of any vaccine release emerge, there has nonetheless been notable progress in improving sentiment over the course of the week.”

However, it wasn’t all doom and gloom on Friday the 13th, as small-cap Synairgen () shot 15% higher to 116 after it said its inhaled formulation of drugs to treat patients with coronavirus (COVID-19) could be an effective tool for patients who have a combination of respiratory viruses during winter months, according to recent trials in hospitalised patients.

Further positive results of the SG016 trial, where 101 patients hospitalised with COVID-19 were given either the inhaled drug, known as SNG001, or a placebo, have been published in The Lancet Respiratory Medicine journal.

Patients who were given the company’s inhaled formulation of interferon beta-1a had greater odds of improvement and recovered more rapidly than placebo, and the drug was safely tolerated.

Meanwhile, small-cap construction firm Galliford Try () gained 12.6% at 92.50p after it said it expects to return to paying a dividend at the half-year stage after it had an “excellent” start to its financial year.

Trading from the start of its financial year on July 1, 2020, is expected to see the construction group return to profitability, it said in a statement alongside its annual general meeting on Friday

Proactive news headlines:

 () has said its inhaled formulation of drugs to treat patients with coronavirus (COVID-19) could be an effective tool for patients who have a combination of respiratory viruses during winter months, according to recent trials in hospitalised patients. Further positive results of the SG016 trial, where 101 patients hospitalised with COVID-19 were given either the inhaled drug, known as SNG001, or a placebo, have been published in The Lancet Respiratory Medicine journal. Patients who were given the company’s inhaled formulation of interferon beta-1a had greater odds of improvement and recovered more rapidly than placebo, and the drug was safely tolerated.

() told investors Friday it has increased the size of its exploration target at the Baita Plai polymetallic mine in Romania. The company said that the size of the Antonio North area has increased to 1.4mln to 2.8mln tonnes, from 0.2mln to 0.5mln tonnes previously, which takes the estimate for the whole project to 3.2mln to 5.8mln tonnes from 1.8mln to 3mln tonnes. The increase is the result of a review of historical data which has only recently become available.

() has told investors that a detailed survey has begun for the Donovan 2 copper-gold project in Mexico. Capstone Mining (), which is earning into the project, has commissioned a detailed close-spaced surface Induced Polarisation (IP) geophysical survey across the majority of the tenement. The aim is to add detail to the project’s northern anomaly and to extend historic geophysical work undertaken by Alien.

() has announced the appointment of Derek Baird to its senior management team as President for North America. Baird will join the UK clinical artificial intelligence company on December 1, 2020, and will focus on driving the commercial development of the North American operations, building Sensyne’s presence in the US and recruiting a US-based team. He joins the firm from AVIA, a digital transformation partner for health systems and payers, where he served as senior vice president for growth, and has previously held senior roles at healthcare software company Health Language, clinical decision support system products provider Zynx Health and ambulatory electronic health records provider Practice Partner.

Chaarat Gold Ltd. () has said it is maintaining its current production guidance in an update on the current situation in Armenia, where it has an operating mine. The AIM-quoted gold miner, which also has assets at various stages of development in the Kyrgyz Republic, noted that, on November 9,  2020, a peace deal brokered by Russia was agreed between Azerbaijan and Armenia in relation to the Nagorno-Karabakh region.  Russia has deployed resources to keep the peace in the region with an initial period of five years and a potential extension for another five years, it added.

() has unveiled the results of a fundraising as well as details of a new debt facility that it said will allow it to focus on executing its strategy. The media and technology firm said it has raised £747,793 through a fully subscribed placing of around 6.2bn new shares at a price of 0.012p, a 20% discount to its closing mid-market price on Thursday. Iconic said the placing will allow it to progress towards a “more conventional basis of funding” with the proceeds to be used for general working capital purposes. The firm also said it has entered into a new more conventional debt facility with Shard Merchant Capital (SMC), which is to be secured for an aggregate amount of up to £1mln, with an initial drawdown of £500,000.

(), the commercial passenger aircraft leasing company, has announced that on November 12, 2020, the company repurchased US$1,315,000 Avation Capital S.A. 6.5% senior notes due 2021 issued under Avation’s global medium-term note programme. The notes were acquired through the market at a price equal to 65% of face value and will be cancelled. The group noted that there are US$342,642,000 Avation Capital S.A. 6.5% senior notes due 2021 outstanding following this transaction.

() said it received notification on 12 November 2020 that Andrew Law, its commercial director acquired 446,307 ordinary shares of 1p each in the company at a price of 12.35p each on November 12, 2020.  Following this acquisition, the group noted, Law has an interest in 724,326 Enteq ordinary shares, representing approximately 1.1% of the company’s issued ordinary share capital.

Amur Minerals Corporation ()  has announced that it’s annual general meeting (AGM) will be held at 10,00am GMT on Thursday, December 10, 2020, at the offices of Brunton Publications Limited, 1 London Road, Bishopdown, Salisbury SP1 3HP, UK. In light of the government’s directive limiting gatherings to no more than two persons, it has become necessary to restrict physical participation at the AGM. In order to assist with voting, and in the absence of a Q&A session during the AGM, the company said it will post a presentation and Q&A session on Wednesday, November 25, 2020. Shareholders are invited to submit questions in advance that will be incorporated into the Q&A. Questions are to be submitted to [email protected] (marked for the attention of the ‘Amur Minerals AGM’) by November 19, 2020. The presentation will be accessible to watch from 4.00pm GMT on Wednesday, November 25, 2020, using the following link: https://www.bigmarker.com/share-talk/Amur-Minerals-Corporation-Webinar-Q-A

6.50am: Markets taking fright again

The FTSE 100 index looks set to retreat at the start on Friday, extending Thursday’s decline following three previous sessions of strong gains as the early week optimism over a coronavirus (COVID-19) vaccine gives way to the late week reality of surging hospitalisations, and rising death rates.

Spread betting firm CMC Markets expects the blue-chip index to open around 59 points lower at 6,280, having shed 43.16 points on Thursday to close at 6,338.94.

Overnight in New York, the Dow Jones Industrials Average ended 317 points, or 1.1% lower at 29,080 while the broader S&P 500 index lost 1.0%, and the tech-laden Nasdaq Composite shed 0.7%.

Asian markets were also lower on Friday, with Japan’s Nikkei 225 index down 0.6% and  Hong Kong’s Hang Seng index off 0.5%.

Jeffrey Halley, senior market analyst, Asia Pacific, OANDA commented: ”The danger when financial markets price in two years of return to normal in the space of two hours, is that there are no stragglers in the herd left to continue the momentum. That appears to be the case after the BioNTech announcement earlier this week. It only took a day or so for some to move back to the comfort of big tech, and the lack of macroeconomic drivers since, has sapped momentum.

“A plethora of central bankers since has stated that the road ahead remains cloudy and that a vaccine won’t be an instant panacea for the world’s economic ills. Even positive noises from the US’ Dr Anthony Fauci about the Moderna vaccine, initial results of which are due soon, failed to reinvigorate the rally.

“That probably tells us that the street went all in, and then went what now, as they found themselves marooned in the portable frozen Antarctic wastes required to distribute the vaccine. Covid-19 continues to spin out of control across the US, Europe and other parts of the globe, with the ensuing movement restrictions sure to crimp Q4 growth. Any lingering hopes of a US fiscal boost receded further overnight, as US Initial Jobless Claims fell more than expected, although they remain above 700,000.”

Diary almost bare on Friday the 13th

It is perhaps not surprising that, after a busy week for corporate news, not many companies want to bring out any statements on Friday the 13th.

There looks to be just one exception, small-cap engineering firm () which has said it intends to announce its half-year results on the inauspicious day.

In a trading update in respect of the six month period ended September 30, 2020, published on October 6, Castings noted that it reported in August that demand from the commercial vehicle sector had increased to over 60% of pre-coronavirus (COVID-19) output levels.

Forward schedules at that time were suggesting a further increase to approximately 85%, and the group said in October that its monthly demand had hit that level.

Investors will be hoping that all of the positives have continued for the group, although in the light of another COVID-19 lockdown and the lack of progress on Brexit deals, news on current and future trading could be less optimistic, which may spook the market.

Around the Markets:

  • Pound down 0.1% at US$1.316
  • Gold up 0.2% to US$1,877.00
  • down 1.5% to US$42.94

6.45am: Early Markets – Asia/Australia

Stocks in the Asia-Pacific region were mostly lower on Friday as the number of new COVID-19 cases in the US topped 150,000 on Thursday, eight days after 100,000 cases were found in a day for the first time.

In China, the Shanghai composite declined 1.33% while Hong Kong’s Hang Seng index dipped 0.56%.

Japan’s Nikkei 225 shed 0.53% but South Korea’s Kospi skipped the overall trend by rising 0.64%.

Shares in Australia declined, with the S&P/ASX 200 index closing 0.20% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

Comet Resources Limited () has made significant progress on the development pathway at Santa Teresa High-Grade Gold Project in Baja California, Mexico, including the release of an initial JORC-compliant mineral resource estimate.

() (FRA:R1Y) is encouraged by Canadian midstream sector progress in advancing gas projects despite the impacts of the COVID-19 pandemic.

() has set a development pathway for gold operations at Mon Ami in Western Australia after completing an in-house preliminary economic evaluation of the potential for an open-pit development.

() has received consistent gold results in resource extension drilling at the 100%-owned component of Horn Island Gold Project in Torres Strait, Queensland, with potential to increase the current inferred resource.

‘s () joint-venture company for the Abra Base Metals Project, Abra Mining Pty Limited (AMPL), has received a further cash investment from Toho Zinc Co Ltd to continue developing the project.

’s () results from the second phase of aircore drilling at Blue Poles discovery within the Whiteheads project north of Kalgoorlie, has extended the total strike length to more than of 1-kilometre.

() (OTCMKTS:CAULF) (FRA:UFX) has not been sitting on its hands during Victoria’s strict COVID-19 lockdown with non-site activities progressed for the Blackwood Gold Project in the Victorian Goldfields.

(), formerly named Mali Lithium (ASX:MLL), has moved quickly to implement plans to transform the newly acquired Morila Gold Mine in Mali, Africa into a major near-term gold producing project.

’s () () net asset value (NAV) has outshined the benchmark Alternative Harvest ETF during the four months ended October 31 2020.