- FTSE 100 closes higher
- JP Morgan American trust ditches two holdings for ESG concerns
- US stocks up but muted
5pm: FTSE closes ahead
FTSE 100 closed higher on Tuesday with little to spark much interest on the economic or news front and as traders await the Jackson Hole event.
Britain’s index of leading shares closed up around 16 points, or 0.24%, to stand at 7,125
The more UK plc focused FTSE 250, though, added 145 points, or 0.61% at 23,886.
“The week got off to a strong start on Monday but momentum is already waning,” Craig Erlam, senior market analyst at Oanda had said earlier.
“Investors were keen to buy dips at the start of the week and capitalise on last weeks sell-off, as China successfully contained the virus outbreak and the FDA gave full approval to the Pfizer (NYSE:PFE)-BioNTech vaccine.
“Chinese growth fears had weighed on risk appetite in recent weeks but it seems the draconian approach is paying off once more.”
On Wall Street, the Dow Jones added over 46 points, the S&P 500 added around seven points and the tech-laden Nasdaq was up 51 points at 14,994.
Technology firms have been bolstered by the huge wave of stimulus that has flowed from the US central bank, so the Nasdaq has the most to benefit if the Fed opts to delay their tapering timeline, noted online trading group IG.
3.35pm: JP Morgan American trust ditches two holdings for sustainability concerns
The FTSE 100 pared its losses before close, dropping 14 points to 7,094.
JP Morgan American trust, the investment bank’s arm worth GBP1.5bn, has ditched two holdings citing ESG concerns.
The fund manager said it has recently incorporated new data points for ESG criteria, including “reviewing the United Nations Global Compact (UNGC) severe violators list”.
2.45pm: Wall Street opens higher
The FTSE 100 stayed put in the afternoon, down 23 points to 7,086, while fellow US indices opened higher.
The Nasdaq rose 0.3%, followed by the Dow Jones Industrial Average with a 0.25% rise and the S&P 500 up 0.19%.
Investors responded positively to corporate news and signs of economic recovery against COVID-19, waiting for Jerome Powell’s appearance at the annual Jackson Hole event.
“Until recently, this looked the perfect platform to lay the groundwork for a September taper announcement but some concerning economic releases and a surge in delta cases in the US may see the Fed adopt a more cautious stance for now,” said Craig Erlam at OANDA.
“Any suggestion from Powell that a taper may not happen this year could give these markets another boost, with it having until recently looked almost guaranteed. The more cautious approach is likely to be adopted by many central banks in the coming months.”
1.40pm: Scottish Mortgage Investment Trust gets US tech stocks boost
The Footsie held its losses in the early afternoon and was down 26 points to 7,082.
Among the big caps, tech-focused fund Scottish Mortgage Investment Trust PLC (LSE:SMT) was up 1% to 1,367.8p after getting a boost from the likes of Tesla Inc (NASDAQ:TSLA), Amazon.com Inc and Moderna.
The firm, managed by Baillie Gifford, it’s nearly back to the all-time highs seen in February after a rollercoaster few months.
Shares in its investees were lifted overnight after the US Food and Drug Administration approved the Pfizer (NYSE:PFE) jab as its first COVID-19 vaccine, which had been used so far under the emergency use authorisation.
The news was welcomed by Wall Street, with Tesla rising nearly 4% and Amazon up 2%.
The move has also thrown the focus back on biotech plays such as Moderna, which is one of the top two holdings of Scottish Mortgage, the investment trust that probably more than any other has successfully ridden the tech wave in stock markets in the 21st century.
Scottish Mortgage had a wobble late last month as the government in China cracked down on the country’s big tech companies; four of SMT’s top 10 largest positions are Chinese companies, and until recently Tencent Holdings was its largest holding.
12.35pm: Wall Street to open in the green
The Footsie slipped further in the red at lunchtime, dropping 20 points to 7,088.
Meanwhile, US stocks were on course for opening gains on Tuesday, extending Monday’s advances as investors await more US housing market data and the Federal Reserve’s Jackson Hole symposium at the end of the week.
Futures for the Dow Jones Industrial Average were 0.1% higher, while those for the broader S&P 500 index added 0.2%, having closed at its second-highest level ever on Monday, and tech-laden Nasdaq-100 futures rose 0.3%.
Comments from Fed officials at the central bank’s Jackson Hole Symposium being held virtually later in the week may offer insights into the pace at which the central bank may, as expected, taper bond purchases. Fed chairman Jerome Powell speaks virtually at the event on Friday.
Data on US new home sales, due at 10am ET on Tuesday, are expected to show an increase in July after an unexpected drop in the previous month.
Investors are also awaiting earnings from companies including Best Buy ahead of the opening bell, with Intuit and Nordstrom set to release earnings after the market close.
11.45am: Airbnb (NASDAQ:ABNB) to host 20,000 Afghan refugees for free
The FTSE 100 trimmed its losses in late morning, shedding only 8 points to 7,100.
Airbnb (NASDAQ:ABNB).org is a non-profit organisation dedicated to facilitating temporary stays for people in moments of crisis, such as victims of natural disasters or healthcare workers during the COVID-19 pandemic.
If you’re willing to host a refugee family, reach out and I’ll connect you with the right people here to make it happen!
— Brian Chesky (@bchesky) August 24, 2021
“The displacement and resettlement of Afghan refugees in the US and elsewhere is one of the biggest humanitarian crises of our time. We feel a responsibility to step up,” Chesky tweeted.
“I hope this inspires other business leaders to do the same. There’s no time to waste.”
10.45am: Property sales tumble in July after stamp duty holiday deadline
The FTSE 100 turned red in mid-morning, down 15 points to 7,093.
Property sales fell to 82,110 in July, down 61.5% from a record 213,120 in June, according to the latest data from the HMRC.
It’s 1.8% higher compared to 2020 figures, but lower than the usual pre-pandemic July.
It was due to the stamp duty holiday deadline, which experts say it demonstrates “the powerful psychological impact the tax break had”.
“The stamp duty holiday didn’t create demand from nowhere. There was already a crowd of people ready to buy because of changes in how we wanted to live, and pent-up demand from the closure of the market during the first lockdown. The tax break just opened a window of eight months, through which this crowd of people tried to squeeze. Eventually this was extended and tapered, but it kept the pressure up,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
“All eyes will be on what happens next to the market, as this psychological boost is removed. Sales have fallen, and price rises are showing signs of slowing. There’s the chance that as the panicked rush subsides, prices will weaken. However, underlying demand from people who want to change their lifestyle, boosted by extraordinarily low mortgage interest rates, isn’t going anywhere in a hurry. It means there’s every chance of a soft landing as we head into the autumn.”
8.35am: Sainsbury loses a little of its sex appeal
The FTSE 100 made a quiet start to proceedings with traders perhaps taking a rearward glance at Asia where the momentum appears to have fizzled out.
At 8.30 am, the blue-chip index was up just eight points at 7,116.79 with traded volumes expected to remain light ahead of the long Bank Holiday weekend.
The list of early risers was topped by Flutter Entertainment (LON:FLTTR) as the post-results recovery for the gaming group continued with a 1.9% advance in the early exchanges.
Though the IPO of Flutter’s FanDuel operation has been delayed, investors may be looking at the progress enjoyed by and the valuation of its US arm’s nearest competitor, Draftkings Inc, which has advanced more than 48% in the last 12 months.
Scottish Mortgage Investment Trust (LON:SMT), one of the UK’s biggest investors in Silicon Valley, was up 1.7% after the tech-led Nadaq finished in record territory once more.
In the debit column was Sainsbury (LON:SBRY), which gave back around 1.5% of Monday’s 15% gain. Whether bid interest is more reported than real will emerge in the next weeks and months. That said, the story provided business hacks something to write about on what has traditionally been one of the quietest days of the year (barring Christmas and New Year).
Among the smaller companies, Open Orphan (LON:ORPH) made a fine start to proceedings with a 14% advance after it landed a chunky asthma challenge study contract.
6.50 am: FTSE 100 set to consolidate its position
FTSE 100 is set to consolidate yesterday’s gains inspired by the private equity bid talk surrounding Sainsbury’s, which had its best day in years with a 15% jump.
An hour before opening time, financial spread betters were indicating the blue-chip index would open around twelve points higher from Monday’s close of 7,109, though the mood remains uncertain on worries over the spread of the delta variant, especially in Asia.
“It’s clear that economies across the region are suffering more from COVID-19 than they previously did. The biggest factor is that Asia is poorly vaccinated,” Rob Carnell, Asia-Pacific head of research at ING in Singapore told Reuters.
Asia’s stock markets were heading for a better day towards the close overnight, but concerns over China’s tightening trip on its tech were highlighted again as Didi, the country’s equivalent of ride-hailing firm Uber, scrapped plans to launch in the UK and Europe due to concerns over how data it collects might be used.
Staff cuts are now expected among its European operation, the reports today said.
The holiday season, as much as there is due to Covid-19, is also in full swing and is being reflected in the lack of company updates.
John Wood Group PLC, the oil services and consultancy group is the largest company reporting today and how orders are recovering is likely to be the main point of interest.
6.50am: Early Markets – Asia / Australia
The Shanghai Composite in China jumped 1.30% and Hong Kong’s Hang Seng index surged 1.83%
In Japan, the Nikkei 225 rose 1.03% while South Korea’s Kospi gained 1.05%.
Shares in Australia joined in, with the S&P/ASX 200 trading 0.14% higher.