FTSE 100 up 9 points
US rate decision due at 7.15pm
William Hill lifted by HSBC upgrade
9.45am: IAG dips as BA suspends flights to China
Shares in the owner of British Airways, International Consolidated Airlines Group SA (LON:IAG), dipped slightly in mid-morning following news that BA has suspended its flights to China amid the ongoing coronavirus epidemic.
The airline is the first major carrier to suspend flights to the country in the wake of the outbreak, which so far has infected around 6,000 people and killed more than 130.
BA said it had made the move following advice from the UK Foreign Office that British citizens should avoid all but essential travel to China to reduce the chances of infection.
Shares in IAG were 0.1% lower 590.4p shortly after 9.30am.
Seeing better fortunes in early trading were the bookmakers, with William Hill PLC (LON:WMH) rising 1.5% to 178p after HSBC upgraded the FTSE 250 firm to ‘buy’ from ‘hold’ and hiked its target price to 230p from 185p.
Meanwhile, the FTSE 100 was just about in positive territory, up 9 points to 7,490 at around 9.45am.
8.30am: Modest early gains
The FTSE 100 started on the front foot on Wednesday as the markets took a sanguine view of the possible coronavirus pandemic.
The index of UK blue-chips opened 12 points higher at 7,492.30
But it was a fairly dull start to proceedings and traders are expected to keep their powder dry ahead of the US Federal Reserve’s monthly rate-setting confab.
“In terms of the Fed meeting today, the key thing we’re looking for today relate to balance sheet expansion – anything that suggests the free money taps could be turned off may expose riskier assets,” said Neil Wilson, senior analyst at Markets.com.
“Markets are accustomed to the Fed riding to the rescue and using monetary policy to create an easy path higher for stocks,” he added.
HBSC was also active in the trains sector. Its upgrade to ‘hold’ on FirstGroup (LON:FGP) was met with a collective ‘meh’. Its downgrade to ‘reduce’ of Stagecoach (LON:SCG), however, was greeted with a 2.6% markdown.
Delving into the small-caps, Polarean Imaging (LON:POLX) was an early riser after success with two phase III clinical trials. The stock rose 14%.
Proactive news headlines:
Tremor International Ltd (LON:TRMR) said it is confident in its outlook for 2020 following a “transformational” 2019 which saw its merger with RythmOne. In a trading update for the year ended 31 December, the video advertising firm said it is expecting to report adjusted earnings (EBITDA) of US$60mln, in line with expectations, with revenues of around US$325mln.
Polarean Imaging PLC (LON:POLX) said two phase III clinical trials have “validated the belief” that its technology allows doctors and surgeons to visualise aspects of lung function that have gone undetected using traditional magnetic resonances imaging (MRI) techniques. And it does so in a way that was both safe and allowed for quantitative analysis of the area of the lung being examined, it added. Polarean has developed a drug-device combination that uses hyperpolarised 129-Xenon gas and MRI.
Shanta Gold Limited (LON:SHG) has unveiled a new mineral resource estimate for the Singida project in central Tanzania, adding 194,000 additional ounces of gold. The new estimate gives Singida 919,000 ounces, grading 2.25 grams per tonne, which represents an improvement of around 725,000 ounces.
Ergomed PLC (LON:ERGO) said it expects its underlying earnings to exceed market forecasts and added that momentum seen in 2019 had continued into the current year. The company noted that its order book currently stands at GBP125mln as at December 31, up 15% year-on-year, which bodes well for 2020.
Minds + Machines Group Limited (LON:MMX) has said it will announce a maiden dividend with its results for 2019 following strong trading for the year. In a trading update, the provider of internet top-level domains (TLDs) said revenue for the year just gone was expected to be “significantly ahead” of 2018, adding that the quality of revenue had continued to improve in line with its strategy of decreasing reliance on one-off brokered sales.
APQ Global Limited (LON:APQ) has beefed up its corporate services and administration offering in the Channel Islands with the acquisition of Parish Group by the emerging markets fund manager for GBP2.7mln. Parish provides a full range of fiduciary and corporate services from offices in Guernsey and Alderney and has customers in over 30 jurisdictions, including Israel, South Africa, the United Arab Emirates and Qatar.
Anglo Pacific Group PLC (LON:APF) told investors that it has agreed a US$30mln increase in its revolving credit facility (RCF), and, has extended the facilities expiry by twelve months. As a result, the natural resources royalties firm said, it now has some US$90mln available in the RCF, and, it retains the possibility that the lending facility could increase up to US$120mln – if an accordion feature is implemented.
Bango PLC (LON:BGO), the mobile commerce company, said it will deliver a Strategy Day presentation in London for investors and analysts on Wednesday afternoon. The group said the presentations, at which no new material trading or financial information will be disclosed, will be made available on the company’s Bangoinvestor.com website.
Eckoh PLC (LON:ECK), the global provider of secure payment products and customer contact solutions, said it has received notification that, on 28 January 2020, Todd Funk, its senior executive vice president of US Operations, sold a total of 350,000 ordinary shares in the company at a price of 58p each.
Salt Lake Potash Limited (LON:SO4) (ASX:SO4) said that at General Meeting of the company, held on Wednesday, all the resolutions voted on were carried by way of a poll.
6.35am: Footsie called higher
The FTSE 100 is expected to open higher on Wednesday as markets continue to shrug off fears over the coronavirus impact ahead of a Federal Reserve meeting later today.
Spread-better IG expects the FTSE 100 to open around 19 points higher after ending Tuesday’s session up 69 points at 7,481.
Unlike the keenly anticipated meeting of the Bank of England on Thursday, the Fed’s meeting today is expected to be a much duller affair.
No change in Fed policy is anticipated “for the foreseeable future”, says Capital Economics, after three rate cuts last year.
AJ Bell‘s Russ Mould is similarly expectant that the Fed will hold its fire, citing a CME Fedwatch survey that currently puts the likelihood of ‘no change’ at 87%, although they are simultaneously estimating a 75% probability that the Fed will cut rates at least once this year.
All eyes will be on Powell’s press conference following the meeting to see if there is any new information.
“We expect to see very little changes to the broad economic assessment in the upcoming FOMC statement and expect chair Powell to continue to push a strong ‘on hold’ bias with regards to broad interest rate policy in his press conference,” said economists at RBC Capital Markets in a Fed preview.
The current stance is fairly certain to be unchanged, Deutsche Bank said, barring a “material reassessment to the outlook”.
Wall Street was driven higher overnight as fears over the viral outbreak in China began to ease, with the Dow Jones Industrials Average closing up 0.66% at 28,722 while the S&P 500 climbed 1% to 3,276 and the Nasdaq rose 1.4% to 9,269.
A standout performer after the US close was tech giant Apple Inc (NASDAQ:AAPL), which saw its shares move higher in after-market trading after it delivered record earnings for its first quarter.
In Asia, the Japanese Nikkei 225 was up 0.7%, while Hong Kong’s Hang Seng slumped 2.6% as traders returned from an extended Lunar New Year holiday amid concerns over the spread of the coronavirus in the city.
On currency markets, the pound was slightly sluggish against the dollar, down 0.02% at US$1.3024, as investors sat of their hands ahead of Thursday’s Bank of England meeting.
Significant announcements expected on Wednesday:
Economic announcements: Federal Reserve policy decision, UK house prices
Around the markets:
- Sterling: US$1.3024, down 0.02%
- Brent crude: US$59.47, up 1.1%
- Gold: US$1,566.59 an ounce, down 0.1%
- Bitcoin: US$9,371, up 4.2%
- Apple posted a record quarterly profit last night that beat forecasts and extended a rally in its shares, boosted by strong iPhone sales – Times
- The Trump administration on Tuesday called Boris Johnson’s decision to use Huawei’s equipment in parts of Britain’s fifth-generation mobile phone networks “disappointing” – Financial Times
- Administrator Link Fund Solutions confirmed on Tuesday that thousands of investors in Neil Woodford’s former flagship fund will lose more than half their money – Telegraph
- The departing boss of Sainsbury’s, Mike Coupe, has denied that his exit was prompted by the botched merger with Asda as he said it was ‘absolutely’ his choice to leave the supermarket – Daily Mail
- Index Ventures and Accel, Deliveroo‘s earliest backers, have accused the UK regulator of jeopardising investment in British start-ups by launching a probe of its deal with Amazon – FT
- Airbus has agreed to pay EUR3.6 billion in fines and penalties to Britain, France and America after settling claims against it of bribery and corruption – Times