FTSE 100 ends higher on Friday but still lower on week; Dow Jones bounds ahead

0
17
  • FTSE 100 closes up 26 points
  • US blue chips bound higher again
  • ITV makes £12mln from Love Island sponsorships

The FTSE 100 index closed out Friday with further solid gains but still remained around 20 points below where it started a topsy-turvy week as the focus remained on interest rates as the world emerges slowly from coronavirus lockdowns.

At the close, the UK blue-chip index was 26.10 points, or 0.4% higher at 7,136.07, just below the day’s peak of 7,139.08 and well above the session low of 7,109.79.

On Wall Street around London’s close, the Dow Jones Industrials Average was 234 points, or 0.7% higher at 34,431, while the broader S&P 500 index gained 0.3% but the tech-laden Nasdaq Composite – which has outperformed this week – was only up 0.01%.

Chris Beauchamp, chief market analyst at IG, a global leader in online trading commented: “It continues to be the Dow’s turn to lead markets higher in the US, after a period in which the grandaddy of them all lagged behind the S&P 500 and Nasdaq. Healthcare and tech stocks, as well as consumer spending firms, have led the way higher on the index, while bank stocks have also maintained their strong run for the week so far, leading to hopes that the sector can put in a further good performance ahead of July’s earnings season, now just over two weeks away.”

He added: “European markets are more mixed, but the FTSE 100 sits in positive territory once more as it steadily recoups last week’s losses;  what has been remarkable is how indices globally have shrugged off the Fed’s apparent change of outlook (which has been careful walked back to an extent this week), and have resumed the march higher, presumably following the dangling carrot of economic growth as the world returns to normal.”

Beauchamp continued: “One asset that has matched equities in its move higher has been oil, which has touched fresh three-year highs this week. Next week’s OPEC/Non-OPEC meeting is a potential fly in the ointment however, at least in the short-term, and represents, along with non-farm payrolls, a potential spark for volatility as the summer months see increasingly thin trading.”

3.45pm: ITV eyes highest monthly revenues yet thanks to Love Island

The FTSE 100 held its gains before close, jumping 22 points 7,132.

ITV PLC (LON:ITV) is set to make its biggest monthly revenues yet in June after making £12mln from Love Island.

The reality show, which is airing on Monday, has signed up nine official partners including Tinder, Boots, Spotify and JD Sports, The Guardian reported.

Hair straighteners maker Cloud Nine and drinks producer WKD are also part of the roster.

Love Island didn’t air last year due to COVID-19, so ITV reckons there will be huge pent-up demand for one of the most followed shows ever.

The average audience was 5.9mln in 2019, so a single 30-second TV ad is priced £100,000.

“Our revenues for June are going to be the biggest in our history, and I suspect July will be the same,” Kelly Williams, the managing director of commercial at ITV, was reported as saying.

“Not just the biggest in our history, but the biggest by quite some margin. Some of it is our Euro 2020 coverage, yes, but advertisers have definitely learned through the pandemic the value of TV.”

The broadcaster rose 1% to 127.85p before close.

2.42pm: Wall Street opens in the green as inflation comes in as expected

Wall Street got off to a positive start on Friday after the latest US inflation reading was in line with the market’s expectations.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.49% at 34,365 while the S&P 500 climbed 0.21% to 4,275 and the Nasdaq rose 0.18% to 14,395.

Sentiment appears to have improved following the inflation data, which saw the US PCE inflation rise to 3.9% in May from 3.6% in April.

Despite an increase, investors appear to have been relieved that inflation did not increase even more.

Back in London, the FTSE 100 was manging to hold onto most of its gains and was up 21 points at 7,130 at around 2.40pm.

1.40pm: JD Sports leads big-cap risers after record Nike results

The FTSE 100 took a decisive direction for the first time on Friday, surging 25 points to 7,135 in the early afternoon.

JD Sports Fashion PLC (LON:JD.) was the lead riser in the index, jumping 3% to 944.2p, after sportwear giant Nike posted record results.

Quarterly sales slam-dunked the US$12bn mark for the first time in the Beaverton, Oregon company’s 50-year history, up 96% on the pandemic hit period a year ago to US$12.3bn and 21% higher than two years ago.

The ‘athleisure’ retailer, however, is still set for a controversial AGM next week amid criticism for the £4.3mln worth bonuses awarded to executive chairman Peter Cowgill.

It doesn’t sit right with many advisory groups as the company has received government support during the pandemic.

12.50pm: Malta to let travellers from UK skip quarantine if fully vaccinated

The FTSE 100 was treading water at lunchtime, adding 12 points to 7,122.

UK travellers will be able to skip a 14-day quarantine when entering Malta only if they have been fully vaccinated.

The Maltese government adopted the new measures over concerns of high levels of Delta variant in the UK, local media reported.

The news comes hours after the UK added the EU country on its green list of quarantine-free arrivals, alongside the Balearic Islands and Madeira.

Iceland and France have also imposed mandatory self-isolation on UK arrivals who haven’t received a full course of an approved COVID-19 jab, while the Netherlands, Belgium, Ireland, the US, Croatia, Poland, Italy and Germany require quarantine for all people coming from Britain.

British Airways owner IAG (LON:IAG) and travel operator TUI (LON:TUI) both dipped 1% to 190.19p and 405.6p respectively.

11.50am: Wall Street to open higher after Biden infrastructure deal

The FTSE 100 added a handful of points and rose by 7 points to 7,117 at noon.

US stocks are pointing to a positive finish to the week after Biden’s US$600bn infrastructure deal was agreed, paving the way for investment in roads, bridges and broadband.

“The deal was less ambitious than what Biden had hoped for and that could explain treasury yields and the US Dollar have remained downbeat this week despite the Fed’s more hawkish stance,” said Sophie Griffiths, analyst at OANDA.

“All eyes will now be on PCE data which will almost certainly support the Fed’s hawkish shift.”

The core PCE deflator is expected at 3.4% year-on-year, up from 3.1% the month before, though the month-on-month is expected to slow to 0.6% from 0.7% the previous month, according to Markets.com.

The month-on-month is the most significant one as it will show whether inflation is as transitory as the Fed has been saying.

The Dow Jones Industrial Average is expected to jump 103 point to 34,184, the S&P 500 to add 4 points to 4,260 and the Nasdaq 21 points to 14,375 at open.

10.55am: Amazon, Google under investigation in UK over fake reviews concerns

The FTSE 100 trimmed its gains in the late morning and was up only 3 points to 7,113.

The Competition and Markets Authority (CMA) has started a full-scale probe into how Amazon Inc (NASDAQ:AMZN) and Google (NASDAQ:GOOG) combat fake reviews.

The watchdog is concerned over whether the two tech giants have been doing enough to detect fake and misleading reviews or suspicious patterns of behaviour and, if discovered, are removing offenders and imposing sanctions.

The CMA said it is also concerned that Amazon’s systems do not stop sellers lifting reviews from other sources.

Andrea Coscelli, the CMA’s Chief Executive, said: “Our worry is that millions of online shoppers could be misled by reading fake reviews and then spending their money based on those recommendations.

“We are investigating concerns that Amazon and Google have not been doing enough to prevent or remove fake reviews to protect customers and honest businesses.”

9.40am: NHS to roll out blood test that detects cancer

The FTSE 100 held its gains in mid-morning and was up 8 points to 7,118.

A Californian company called Grail has developed a blood test that can detect over 50 types of cancer.

The NHS will start a pilot scheme using the assay on 140,000 people aged over 50 this year.

If successful, it could be rolled out to millions of people by 2025, The Times reported.

Grail’s kit detected 65.6% of cancers with solid tumours with no screening options, such as oesophageal, liver and pancreatic cancers, according to a paper published in the journal Annals of Oncology.

It found 33.7% of cancers that can be screened, such as breast, bowel, cervical and prostate cancers, and 55.1% of blood tumours.

“This study provides further evidence that blood tests like this could help the NHS meet its ambitious target of finding three quarters of cancers at an early stage,” said Peter Johnson, the national clinical director for cancer.

8.40am: FTSE 100 opens in the green

The FTSE 100 opened in the green, adding 7 points to 7,117 early in the morning, while sterling was flat at US$1.3908.

The index was buoyed by another set of record highs in the US after US President Biden approved a US$1.2 trillion infrastructure deal that will provide a boost to roads, bridges, broadband, passenger and freight services.

“Quite apart from the further injection into revitalising the economy, the amount is less than the US$3 trillion which had been sought by the President, thus having lower tax implications than had been thought to pay for it,” said Richard Hunter, head of markets at interactive investor.

“News of the infrastructure plan also spilled over to the oil price in anticipation of further energy demand. With constrained supply and increasing demand to come from the US driving season and incrementally higher travel over the following months, the price has added 46% so far this year.”

BP PLC (LON:BP.) and Royal Dutch Shell Plc (LON:RDSB), in fact, were modestly higher on Friday morning, both rising 1% to 328.82p and 1,448.2p respectively.

Travel stocks remained disappointed after the UK announced only a handful of destinations will be added to the green list, so travellers from those areas won’t be required to quarantine.

British Airways owner International Consolidated Airlines Group SA (LON:IAG) added 1% to 193.77p, while in the FTSE 250 easyJet PLC (LON:EZJ) also advanced 1% to 981p and TUI AG (LON:TUI) was flat at 409.83p.

6.30am: FTSE 100 to open modestly higher 

A little bit – with the emphasis on the “little” – of US stardust is set to rub off on London equities this morning.

Spread betting quotes suggest the FTSE 100 will open 13 points higher at 7,123 after a sparkling performance by US indices last night.

“Wall Street shrugged off a headline disappointment in the U Durable Goods data overnight, as US President Joe Biden secured a preliminary deal on his infrastructure package. A bipartisan group of Senators presented an acceptable, but much slimmed-down infrastructure agreement to the President that will still total around $1.2 trillion over the next eight years,” said Jeffrey Halley at OANDA.

“However, challenges remain with the additional $1.8 trillion of social spending plans and proposed tax increases on the wealthy and corporations still stuck in a deep freeze. Mr Biden and Ms Pelosi expect those bills to progress along with the infrastructure as part of a greater overall package.

“But Wall Street is never one to let the facts and reality get in the way of a good story; stock markets rose, notably the growth heavy Dow Jones,” Halley noted.

The Dow shot up 323 points to 34,197 while the broader-based S&P 500 jumped 25 points to 4,266, with infrastructure-related stocks unsurprisingly going especially well.

In Asia this morning, the mood has also been upbeat with Japan’s Nikkei 225 202 points firmer at 29,077 and Hong Kong’s Hang Seng 328 points heavier at 29,210.

In London today, travel stocks such as British Airways owner International Consolidated Airlines (LON:IAG) are likely to be in focus after the UK government added Malta, Madeira and the Balearic islands to the “green list”.

Around the markets

  • Sterling: US$1.3923, unchanged
  • 10-year gilt: 0.745%, down 3.81 basis points
  • Gold: US$1,776,20 an ounce, down 50 cents
  • Brent crude: US$75.58 a barrel, up 2 cents
  • Bitcoin: US$34,639, down US$217

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were higher on Friday after the S&P 500 rose to a record closing high overnight in the US.

The gains in the US came after President Joe Biden announced the White House had reached an infrastructure deal after meeting with a bipartisan group of senators.

The Shanghai Composite in China rose 1.06% and Hong Kong’s Hang Seng index surged 1.21%

In Japan, the Nikkei 225 gained 0.68% while South Korea’s Kospi rose 0.50%.

Shares in Australia lifted, with the S&P/ASX 200 trading 0.50% higher.

READ OUR ASX REPORT HERE

LEAVE A REPLY

Please enter your comment!
Please enter your name here