FTSE CLOSE: Footsie ekes out a small gain after the European Central Bank keeps rates on hold
17.30: The FTSE 100 closed up 4.98 points at 7026.90 amid disappointment that the European Central Bank appears hesitant to launch more stimulus measures to help weak eurozone economies.
The Dow Jones was down 62.4 points at 18,140.2 after last night’s final, fraught presidential debate before the US election on November 8. Germany’s DAX was up 41.8 points at 10,687.5 and France’s CAC 40 was ahead 19.8 points at 4,540.1. Brent crude was at £51.46.
‘The ushering in of more quantitative easing from the ECB has been pushed back until December – or maybe later,’ said Jasper Lawler of CMC Markets.
Market watch: The Dow Jones fell the morning after the final, fraught presidential debate before the US election
‘There was no extension of QE presented for market on a silver platter from Mario Draghi.
Instead the ECB president bounced back multiple questions from journalists with the response that it is “had not been discussed.”
‘European stocks were flat to lower leading up to the ECB policy decision, dropped a bit during the press conference and were back to where they started within half an hour. The ECB had a bigger impact on currencies, for stock markets the slump in oil prices was arguably the bigger factor.’
On the US debate, Lawler said: ‘The Mexican peso, the market’s gauge for the likelihood of a Trump Presidency rose during the debate, but later came off the highs as polls put “The Donald” ahead.
‘Financial markets have Hillary Clinton down as a shoo-in. Betting markets have Clinton well-ahead in bet value but more bets have been placed on Trump.
‘This is interestingly reminiscent of the EU referendum when small betters (“the great unwashed”) correctly called the result and large betters (“experts”) didn’t.’
Bank stocks led the FTSE 100 higher as they took the lead from US counterparts after a buoyant third quarter earnings session on Wall Street.
Ahead of their third quarter updates next week, Royal Bank of Scotland and Barclays were the biggest blue chip risers, ahead 6.3p at 186.3p and 5.7p to 183.1p respectively.
Lloyds, which also reports next week, was 0.7p stronger at 55.6p.
British Airways owner International Airlines Group and easyJet also made strong gains thanks to a surprise profit target rise by German rival Lufthansa. This came as a dose of welcome good news from the industry after recent profit warnings from Ryanair and easyJet. IAG lifted 7.8p to 400.9p and easyJet was 8.5p higher at 934.5p.
But ITV was down 4 per cent or 6.6p to 173.2p after downbeat broker notes from Liberum and Jefferies, with the latter warning on the broadcaster’s net advertising revenue outlook in the fourth quarter.
On the FTSE 250, engineering firms Senior and Keller saw their shares hammered after both firms warned over profits.
Senior, which makes components for Airbus and Bombardier planes, saw shares plunge more than a fifth to their lowest level since the end of 2011 at one stage as it posted an 18 per cent drop in profits for the first nine months of its year and warned over the full-year result.
Its shares later clawed back to stand 13 per cent down, off 27.3p at 176.9p.
Keller suffered a 27 per cent plunge in shares after it said profits would be around 15 per cent below expectations. The stock tumbled 241p to 644.5p.
On currency markets, the embattled pound slipped almost a cent to £1.22 against the US dollar, while it held firm against the euro at EUR1.12.
The biggest FTSE 100 risers were Royal Bank of Scotland up 6.3p at 186.3p, Barclays ahead 5.7p at 183.1p, Standard Chartered 13.9p stronger at 699.2p and International Airlines Group 7.8p higher at 400.9p.
The biggest FTSE 100 fallers were ITV down 6.6p to 173.2p, Sky off 31p at 825p, WPP 65p lower at 1755p and Smiths Group 44p weaker at 1436p.
17.01: The FTSE 100 closed up 4.98 points at 7026.90. More to come.
15:30: The Footsie pushed higher in afternoon trading in a session that has been dominated by the European Central Bank and its lack of action.
With an hour to go, the FTSE 100 was up 9 points at 7,028, having spent most of the day in the red.
On Wall Street, the Dow Jones managed managed a mild 30 point climb at the bell.
In Europe stocks also pushed marginally higher after the European Central Bank left all its interest rates unchanged and kept its asset purchase scheme unaltered too.
Bank President Mario Draghi offered little insight into what the ECB would do next at his press conference, one of the shortest on record.
Connor Campbell, analyst at Spreadex. said: ‘Beyond Draghi’s market-teasing there was little else for investors to work with this afternoon.
‘In regards to the US open the Dow Jones managed a mild 30 point climb after the bell, a better than forecast Philly Fed manufacturing index reading (at 9.7 against the 5.2 forecast and the 12.8 last month) joined by a typically dull jobless claims figure and a healthy existing home sales number.
‘The FTSE and pound, meanwhile, largely followed the lead of the Eurozone; the former eked out a 20 point increase, while the latter stumbled against the dollar.’
1300: The Footsie had barely moved by lunch as company earnings updates took precedence for the second session in a row.
By early afternoon the FTSE 100 was off 10 points at 7012, although the index may receive a late boost from a positive US open.
The index, dominated by internationally exposed companies, has surged more than 20 per cent since a post-Brexit sell-off in June following a drop in sterling.
On the macro front there was little for investors to sink their teeth into.
UK retail sales came in flat for September – although there were hints that inflation has started to affect shoppers behaviour – while the European Central Bank left interest rates unchanged.
The ECB statement offered nothing new from the one it posted in September and analysts, investors, traders and journalists will have to wait for the press conference to hear President Mario Draghi’s thoughts.
Cautious: Tough day for media companies as worries over advertising revenues hurt stocks
On the markets there has been plenty of action.
Shares in advertiser WPP have fallen nearly 3 per cent after Publicis Groupe, down 6 per cent, said third-quarter sales grew by just 0.2 per cent on an organic basis following the loss of large media accounts in the United States in 2015.
Concern about advertising revenues hit broadcaster ITV as well, with its shares down 3 per cent after broker Liberum cut its target price for the stock.
In better news airline stocks found some solid ground after German airline Lufthansa, up more than 7 per cent, increased its profit target for the year and on expectations that the UK Government will approve a third runway for London’s Heathrow airport.
Shares in British Airways owner ICG, easyJet and Ryanair rose 2.2 to 3.3 per cent.
But the FTSE 250 has been under pressure.
Cyber security company NCC plummeted 35 per cent and headed for its biggest-ever daily decline after it faced some contract cancellations and difficulties with some renewals.
While engineering companies Keller slumped 25 per cent and Senior fell 20 per cent after both issued profit warnings.
Sterling has slipped against the dollar to £1.22 and similarly against the euro by 0.21 per cent to EUR1.1172.
08:30: The Footsie was marginally lower in early deals as political commentators pronounced another victory for Hilary Clinton overnight in the final Presidential debate against Donald Trump.
Investors were relieved rather than celebrating the outcome, and analysts said Trump now has a lot of work to do over the next 19 days if he is to reverse current poll numbers.
Shortly after the open the FTSE 100 index was down just 10 points at 7,011, having closed 21.8 points higher at 7,021.9 yesterday thanks to a late afternoon surge spurred by rising oil prices.
Focus: The European Central Bank will announce the outcome of its latest interest rate policy meeting at 12:45 – the bank is not expected to cut interest rates
Overnight stock markets across Asia traded higher. Japan’s Nikkei 225 index was up 1 per cent, while Hong Kong’s Hang Seng index increased 0.7 per cent.
The major event this session takes place in Europe as the ECB meets later today to decide on interest rates.
Analysts are not expecting much, but the euro will be driven by forward guidance from ECB head Draghi who will be faced with questions related to a recent unofficial report indicating tapering asset purchases.
Mike van Dulken, analyst at Accendo Markets, said: ‘Today’s focus will be the ECB policy update. No change expected to headline rates but markets are itching to know what Draghi’s plan is (or isn’t) in terms of its QE bond-buying stimulus programme; especially after this month’s ‘taper tantrum’.
‘Increase monthly purchases?
Purchase beyond March? Change the makeup of purchases? Lower the negative yield threshold?
Some, even all of the above?’
Ahead of the announcement the Cac 40 in France and the Dax in Germany were both flat.
Stocks in focus in London includes:
LSE – The exchange has reported 15 per cent revenue growth in the third quarter as it continues to focus on pushing through its proposed merger with Deutsche Boerse.
RIO TINTO – The global miner has cut its 2016 guidance for iron ore shipments by as much as 5 million tonnes after releasing lower third-quarter production data, citing shipping interruptions.
KELLER GROUP – The UK engineer has warned that it expects its underlying results this year to be around 15 per cent below current market expectations, predominantly due to problems at its Asia-Pacific business, which incurred further operating losses in the third quarter.
MAN GROUP – The world’s largest listed hedge fund has revealed the details of its share buyback scheme worth £100million.
GLENCORE – The commodities firm has announced the sale of its coal haulage business in Australia for £800m to US company Genesee & Wyoming.
SEGRO – The outsourcing company said its operating business has shown continued strength over the last quarter.
Economic news scheduled today includes:
European Central Bank interest rate decision at 12.45pm
European Central Bank monetary policy statement at 1.30pm