- FTSE 100 index drops 189 points
- Sterling pulverised after introduction of Tier 4 restrictions
- Shell lower after unveiling massive impairment charges
10.45am: Oil giants add further woe to the Footsie
As the nation wonders how continental Europe will cope with being cut off from Britain, the FTSE 100’s losses have extended substantially.
The index of leading shares was down 189 points (2.9%) at 6,341 despite sterling’s impressive limbo dance on foreign exchange markets; the pound is now more than three cents weaker against the dollar.
“There are concerns at home and aboard in relation to the fast-spreading strain of Covid-19. A few European countries have banned flight from Britain, and France has gone a step further by banning human handled freight. The French ban will last for 48 hours, but the ripple out effect on supply chains is likely to be huge,” reported David Madden at CMC Markets.
Sainsbury's says there could be shortages on some fruit and vegetables following France travel ban#COVID19 news live – latest UK updates: French transport secretary says plans underway to get traffic at border flowing again after food shortage warnings https://t.co/t1JDcEDSTG
— Stephen 3.5% #FBPE #FBPEGlobal????????#FBCoalition2024 (@TheStephenRalph) December 21, 2020
Royal Dutch Shell PLC (LON:RDSB) slumped 7.3% to 1,243p after it revealed it will incur an impairment charge of US$3.5bn-US$4.5bn in its fourth quarter results after difficult weather conditions in the Gulf of Mexico and northern Europe affected production.
BP PLC (LON:BP.) was down 7.0% at 252.45p in sympathy.
9.30am: Chickens come home to roost in time for Christmas
To the sound of chickens coming home to roost, UK shares have opened the week lower.
The latest handbrake turn by the government in its handling of the coronavirus pandemic has opened a trap-door beneath sterling on the foreign exchange markets; the pound was down two-and-three-quarters of a cent against the dollar at US$1.3256, which has at least provided some reason for traders to consider export-focused FTSE 100 companies … assuming those exports can get out of the country, of course.
Against the euro, the pound is down by almost one-and-three-quarters of a cent at €1.0863.
The FTSE 100 was down 86 points (1.3%) at 6,444 while the mid-cap FTSE 250, generally reckoned to be populated by stocks for whom a weak pound is a bane rather than a boon, is off 375 points (1.9%) at 19,741.
“The new coronavirus strain is weighing heavily on sentiment as the UK’s isolation from Europe becomes increasingly physical as well as conceptual,” said Richard Hunter of interactive investor.
“With some cases also being reported outside of the UK and with several countries suffering fresh spikes in cases and resorting to further lockdowns, the stark reminder is that until the vaccine rollout reaches a sufficient level, little can be done to defeat the virus.
“Against this backdrop, investors are far less likely to commit fresh capital to the market, especially in the last few trading days of the year,” Hunter added.
It’s not all gloom and doom in the stock market, however; miners are in demand, particularly Fresnillo PLC (LON:FRES), Polymetal International PLC (LON:POLY) and Anglo American PLC (LON:AAL), which are sporting gains ranging from 1.4% to 4.7%.
Food delivery firms are also, predictably, back on the menu for many investors with Ocado Group PLC (LON:OCDO) up 4.1% at 2,300p and Just Eat Takeaway.com NV (LON:JET) 3.2% heavier at 8,226p.
If the rise of the food delivery stocks was predictable so was the punishment meted out to aerospace-related stocks. British Airways owner International Consolidated Airlines (LON:IAG) was the hardest hit, down 9.1% at 142.1p, but aeroplane engine maker and maintainer Rolls-Royce Holdings PLC (LON:RR.) and Melrose Industries PLC (LON:MRO), which owns aerospace engineer GKN, were also under heavy fire; the former was down 7.8% at 105.05p and the latter was 4.9% weaker at 160.9p.
Owners of non-essential stores are also getting it in the neck after the creation of new Tier 4 restrictions over the weekend, with Primark owner Associated British Foods PLC (LON:ABF) 4.8% easier at 2,142p, while Mike Ashley’s Frasers Group PLC (LON:FRAS) was 7.4% weaker at 439.8p after it rescinded full-year guidance.
Frasers Group pulls guidance as new lockdowns hit retail hard https://t.co/VMULyZIwfT pic.twitter.com/mtNmwsd1mY
— FashionNetwork Worldwide (@FNW_WW) December 21, 2020
8.35am: Little festive cheer for Footsie
The FTSE 100 moved sharply lower in early trade on Monday amid worries over the latest lockdown restrictions prompted by the new coronavirus (COVID-19) super-strain.
The index of UK top stocks fell 81 points to 6,448.41 in early exchanges.
London and swathes of the south-east of England have been plunged into tier-4 restrictions to combat the spread of the new COVID-19 variant, while travel to much of mainland Europe has been curtailed.
Cross-channel trade has been temporarily halted, while movement in and out of ports serving Ireland has been severely affected.
“With some cases also being reported outside of the UK and with several countries suffering fresh spikes in cases and resorting to further lockdowns, the stark reminder is that until the vaccine rollout reaches a sufficient level, little can be done to defeat the virus,” said Richard Hunter, head of markets at Interactive Investor.
“Against this backdrop, investors are far less likely to commit fresh capital to the market, especially in the last few trading days of the year. For the UK, the introduction of a new tier-4 pandemic level accompanies an ongoing stalemate in Brexit negotiations, with talks set to extend yet again."
The Footsie’s biggest casualty was British Airways owner IAG (LON:IAG), which fell 17.5% in response to curtailment of travel in and out of the UK.
Rolls Royce (LON:RR.), which supplies and services the jet engines to many of the world’s airlines, was off 14% in a bloodbath early session, while Premier Inn hotels chain owner Whitbread (LON:WTB) fell 6.7%.
On the FTSE 250, ailing cinema chain Cineworld (LON:CINE) took a biff to the solar plexus, dropping 22.5%.
The economic impact of the wholesale closure of non-essential retail outlets (on top of the closure of many pubs and bars) is currently incalculable.
Frasers Group (LON:FRAS), the owner of Sports Direct, was the first to rescind earnings and sales guidance amid the unfolding chaos – and it is unlikely to be the last from the sector to suspend forecasts. The shares were off 5.4%.
The gold stocks – including Centamin (LON:CEY) and Polymetal (LON:POLY) – were provided a lift by the rising price of the precious metal, a haven investment in times of turmoil.
Proactive news headlines:
Primary Health Properties PLC (LON:PHP) has acquired a medical centre in Liverpool and has also agreed to fund a new centre in Ireland. The investor in primary healthcare facilities said it has acquired a standing let investment in West Derby, Liverpool for £4.6mln and contracted with a developer to fund the development and acquisition of a purpose-built primary care centre in Enniscorthy, Co Wexford, Ireland. The West Derby Medical Centre is a modern purpose-built medical centre constructed in 2016 that is leased to a substantial general practitioner (GP) practice, with a patient list of more than 13,000, and a pharmacy. The development funding for the construction of the Enniscorthy Primary Care Centre is €12.6mln.
Bahamas Petroleum PLC (LON:BPC) said it has commenced drilling of the Perseverance 1 well, with spudding having taken place on December 20, 2020. The AIM-listed firm said the well is expected to take 45-60 days to complete and is targeting P50 prospective oil resources of 0.77bn barrels with an upside of 1.44bn barrels. In a statement, BPC chief executive Simon Potter said the spudding of the well was a “momentous milestone” and that the company is now “within a couple of months of understanding the scale of potential resource uplift that might be accessed within the licences: a potential uplift that is the traditional domain of the 'oil majors'”.
Rosslyn Data Technologies PLC (LON:RDT) shares moved higher on Monday after the big data technology group announced the release of its new CustomsCloud software solution. The AIM-listed firm said the cloud-based self-service solution is designed to enable importers to overcome the additional customs procedures resulting from the UK's departure from the European Union. CustomsCloud enables Rosslyn clients to register with HMRC and to file all import declarations, either individually or in bulk, calculate the VAT and duty owed on any imports and to report this information direct to UK tax authorities for future payments.
Guild Esports PLC (LON:GILD) said it has signed Henrik Mclean, a top-ranked professional esports player, to its Fortnite team. The company said Mclean will join Nikolaj Andreas Frøslev, who was recruited to the team on November 19, 2020. The two players have a combined social media following of around 335,000 across several channels including YouTube, Instagram, Twitter and Twitch. Mclean has signed a one-year contract with Guild with an option to renew for an additional year. He will compete alongside Frøslev under the Guild banner in Fortnite tournaments either jointly or separately depending on fixtures and match opportunities.
BlueRock Diamonds PLC (LON:BRD) has recovered two gem-quality exceptional stones from its Kareevlei mine in the Kimberley region of South Africa. The diamonds measure 14.8 carats and 8.7 carats respectively. "I am very pleased to announce the recovery of two high-value gem-quality diamonds from the Kareevlei diamond mine,” said BlueRock executive chairman Mike Houston in a statement. He also highlighted the sale of a 12.8-carat diamond, the recovery of which was announced on December 4, 2020, for US$76,000, or US$6,000 per carat.
Shanta Gold Ltd (LON:SHG), the East Africa-focused gold producer, developer and explorer, said it has settled all outstanding gold forward sale commitments, leaving the company unhedged. As of early 2020, the company had sold forward 40,000 ounces to January 2021 at an average price of US$1,244 per ounce. The forward sales were a condition of its senior lending facility.
Angling Direct PLC (LON:ANG) said positive sales momentum has continued since updating the market at the start of December, although it has had to close 12 of its stores to shoppers other than click-and-collect customers following the UK government's weekend announcement on Tier 4 restrictions. The company's other 26 stores and its web-store remain fully operational for both the UK and European sales, with the group's distribution centre geared up to fulfil increased demand through this channel.
Symphony Environmental Technologies PLC (LON:SYM) has said it is commencing legal action against the Commission, Parliament, and Council of the European Union (EU) concerning the bloc’s decision to adopt Article 5 of the Single-Use Plastics Directive (SUPD). The AIM-listed plastics specialist said it has been advised by three barristers, all experts in EU law, that Article 5 of the SUPD is “confusing and illegal” and that it is claiming “substantial damages”. Symphony said the directive required EU member states to ban oxo-degradable plastic products that do not properly biodegrade and are not recyclable with ordinary plastics, however, it has not made the distinction between oxo-degradable and oxo-biodegradable plastic.
Mkango Resources Ltd. (LON:MKA) (CVE:MKA) has announced the appointment of Bacchus Capital Advisers Limited as a strategic and financial adviser, encompassing mergers and acquisitions, takeover defence, strategic and other financial advice. A London-based independent investment and merchant banking boutique, Bacchus Capital has been involved in building some of the world's most successful mining companies from the earliest stages and have played a key role in many of the metals and mining industry's most significant transactions in recent decades.
Red Rock Resources PLC (LON:RR.) has entered into two deed agreements concerning Australian company VEC Resources Ltd, which is in administration. The purpose of the deeds, taken together, is the commencement of arbitration proceedings in Paris, the continuation of an existing injunction in the British Virgin Islands, and the creation of an ability for Red Rock to engage counter-parties in discussions regarding a mediated outcome, with the support of creditors. VEC acquired a 60% stake in the Adidi-Kanga Gold Project in the Democratic Republic of Congo in 2017. But since December 31, 2018, the VEC stock has, except for two brief periods, been suspended from trading on the ASX as a result of issues connected with the acquisition.
Amur Minerals Corporation (LON:AMC) has said Paul McKay, the chief financial officer of the Russia-focused firm, is to leave the company on December 31, 2020. Accordingly, Amur said it has appointed Heytesbury Corporate LLP, an independent financial consulting and corporate management firm which acts in a similar capacity for many AIM-quoted companies within the mining sector, to provide company secretarial and accounting services. McKay has been working with Heytesbury during a handover period.
Block Energy PLC (LON:BLOE), the development and production company focused on Georgia, announced that David (Dato) Sandroshvili has been appointed as its independent non-executive director with immediate effect. The group noted that Sandroshvili has spent most of his career in oil and gas corporate finance advisory, but for the last six years has held senior positions in oil companies. He is currently the CFO at New Age (African Global Energy) Limited. Before this appointment, he was Director of Strategy, Commercial and Portfolio at Ophir Energy Plc. Sandroshvili started his corporate finance career at Schroder Salomon Smith Barney (part of Citigroup) in London, before moving to UBS Investment Bank, where he managed the Russia/CIS oil and gas advisory business. Subsequently, he was Managing Director of the Oil and Gas Advisory at Evercore Partners. Philip Dimmock, Block Energy’s chairman commented: "We look forward to benefitting from his wealth of experience in finance, strategy development and M&A transactions. Furthermore, his understanding of the establishment and culture of Georgia will bring extra competitive advantage to the Board."
Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company said Friday it has received notices to exercise warrants over 4,797,200 new ordinary shares of 0.1p each at an exercise price of 1.0p per ordinary share in the company. Subscription monies of £47,972 have been received by Power Metal in respect of these exercises.
Pure Gold Mining Inc. (CVE:PGM) (LON:PUR) said it has granted 1,955,000 Incentive Stock Options to directors and certain employees, 975,000 Deferred Share Units (DSUs) to directors and 1,134,930 Restricted Share Units (RSUs) to certain employees under its Incentive Stock Option, DSU and RSU Plans. The Incentive Stock Options have an exercise price of $2.84 and have a range of vesting periods over three years and expire after five years. The RSU’s are payable in common shares of the company on exercise, have a range of vesting periods over three years and must be redeemed by December 31, 2023, or they expire. The DSU’s vest immediately upon grant and are payable in common shares of the company, upon the holder ceasing to be a director of the company.
6.50am: Rough start predicted
The FTSE 100 looks set to open firmly lower amid concerns over a prolonged winter lockdown aimed at protecting the population against a new super-strain of the coronavirus (COVID-19).
The problems look to have been compounded by a ban on travel to at least 10 countries in mainland Europe and a halt to cross-Channel freight transport.
Sentiment on Asia’s main markets, meanwhile, was hit by a surge in COVID-19 cases across the region with only Shanghai bucking the trend.
Softening the blow a little was the agreement by US lawmakers to enact a fresh stimulus package worth around US$900mln.
“Unfortunately, that positive news (although the actual numbers involved leave me somewhat underwhelmed), is being overshadowed by COVID-19 headlines,” said Jeffrey Halley, market analyst at OANDA.
“The return of the virus to Sydney in Australia casts a pall over local markets and the currency today. But it is the emergence of a more contagious version of Covid in the United Kingdom that has spooked markets.”
The corporate news flow here in the UK will be at a premium in the run-up to Christmas.
In the US Tesla Inc (NASDAQ:TSLA) will make its debut on the S&P 500 index this week - to the delight of its massed retail following no doubt. One wonders how long it will take the short sellers to reload.
Elsewhere, a long-awaited Brexit deal may be delivered – but don’t hold your breath.
Apparently, the two sides pushed through another marathon negotiating session fuelled by mince pies and mulled wine (do we really believe this guff). However, fishing rights remained the main stumbling block to a trade accord.
On the markets:
- Pound US$1.3350 (-1.28%)
- Bitcoin US$23,812.82 (-1.14%)
- Gold US$1,909.70 (+1.10%)
- Brent crude US$50.85 (-2.70%)
6.45am: Early Markets - Asia/Australia
Stocks in Asia-Pacific were mixed on Monday as the coronavirus (COVID-19) situation in Japan and South Korea remains severe.
Chinese stocks were higher, with the Shanghai composite up 0.65% while Hong Kong’s Hang Seng index declined 0.21%.
Hong Kong-listed shares of China’s largest chipmaker SMIC (HKG:0981) fell 3.8% after the firm was recently added to the US Commerce Department’s entity list.
Japan’s Nikkei 225 slipped 0.18% and Australia’s ASX200 dipped 0.08% while South Korea’s Kospi was 0.23% higher.
Proactive Australia news:
Caspin Resources Ltd (ASX:CPN) has revealed new soil geochemistry results and a reassessment of existing data supporting several new targets within the Yarawindah Brook Project in Western Australia.
Cobalt Blue Holdings Ltd (ASX:COB) (OTCMKTS:CBBHF) (FRA:COH) is on track to start production from its Broken Hill pilot plant in Far West New South Wales from late February following plant commissioning.
Aspire Mining Ltd (ASX:AKM)(FRA:WKU) is the only ASX-listed company to have coking coal assets in Mongolia and could be well-placed to benefit from recent speculation that China is shifting away from Australian coal.
DomaCom Ltd (ASX:DCL) shares are trading about 7% higher intra-day after providing an update on the implementation agreement for a DomaCom sub-fund to acquire AustAgri Group Ltd (AAGL).
YPB Group Ltd (ASX:YPB) has made substantial technological enhancements to its proprietary CONNECT product authentication and customer engagement SaaS platform which was first launched several years ago around QR code functionality.
Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG1) has declared a JORC 2012 resource of 62,300 ounces of gold for the Lancefield Gold Tailings Project in the Goldfields region of Western Australia.
Great Boulder Resources Ltd (ASX:GBR) has received new high-grade assays from reverse circulation (RC) drilling at Mulga Bill prospect within the Side Well Gold Project near Meekatharra in Western Australia’s Mid-West.
Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has secured regulatory approval from the Ministry of Agriculture and Animal Feed in Uruguay (Ministerio de Ganadaria, Agricultura y Pesca) through its commercial partner Adler Laboratories, Uruguay for its anibidiol® line of animal health products.
White Rock Minerals Ltd (ASX:WRM) (OTCMKTS:WRMCF) has discovered a new large, robust gold anomaly measuring five square kilometres along strike to the west of its expanding Last Chance Gold Target in the Tintina Gold Province in Alaska.
Aeris Resources Ltd (ASX:AIS) has received high-grade copper results from the initial two drill holes completed at the Constellation deposit, at the company’s 100%-owned Tritton tenement package in central New South Wales.
Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (FRA:4W0) has closed its Canadian non-brokered private placement, issuing 4.73 million ordinary shares at an issue price of C$0.265 per share (around A$0.28 per share) for gross proceeds of C$1,253,450.
https://news.google.com/__i/rss/rd/articles/CBMipgFodHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL25ld3MvOTM3MDI3L2Z0c2UtMTAwLW1vdmVzLXNoYXJwbHktbG93ZXItYW1pZC13b3JyaWVzLW92ZXItY292aWQtc3VwZXItc3RyYWluLWlhZy1hbmQtY2luZXdvcmxkLWhhcmRlc3QtaGl0LTkzNzAyNy5odG1s0gE-aHR0cHM6Ly93d3cucHJvYWN0aXZlaW52ZXN0b3JzLmNvLnVrL2NvbXBhbmllcy9hbXAvbmV3cy85MzcwMjc?oc=5
2020-12-21 08:35:00Z
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