FTSE 100 fails to gain traction; IAG hit as travel bridges collapse and JP Morgan downgrades

The FTSE 100 defied early predictions of a positive start to the trading week as it nudged into the negative territory and below the 6,000-mark.

While Asia’s main markets were buoyed by stronger than expected manufacturing data from China, here in the UK prices reacted to the latest blow to international travel.

British Airways owner IAG (LON:IAG), down 5%, was hardest hit as it looked increasingly likely that Portugal would be added to Britain’s now-extensive quarantine list.

JP Morgan Cazenove ladled on the agony for the airline, which is also in a stand-off with the unions, by downgrading the stock to ‘neutral’ from ‘overweight’.

Rolls Royce (LON:RR.), whose fortunes are linked to the airline industry, was down 3.8%.

On the up was silver miner Fresnillo (LON:FRES), ahead 3.2% as its shares tracked the gold’s ascent back towards US$2,000 an ounce.  

Sticking with the diggers, Glencore (LON:GLEN), up 2.5%, and copper giant Antofagasta (LON:ANTO), 1.5% higher, were boosted by China’s latest economic update.

6.48 am: Positive start predicted 

The FTSE 100 is expected to start September on the front foot after the long Bank Holiday weekend, despite the pound rising to a near one-year high.  

London’s blue chip share index has been tipped to rise 29 points on Tuesday by spread-betters in the City, having ended last week at 5,963.57, down 36 points on the day.

The previous day was a working one in the US and most of Europe, with most equity benchmarks losing ground. 

On Wall Street, the Dow Jones and S&P 500 finishing in the red, down 0.8% and 0.2% respectively, but the Nasdaq Composite setting another record intraday high and adding 0.7% by the closing bell.

Tuesday is all about manufacturing data around the world, with China setting things off on a positive note, with the Caixin survey giving a reading of 53.1, which was up from 52.6 a month earlier, above the expected 52.6 and is the fastest rate of expansion since 2011. 

Equity markets in Asia mostly in the green but muted, with the Nikkei and Shanghai Composite just above flat, and the Hang Seng up 0.25%.

“The sunshine cast by China’s PMI data across other asset classes has also fallen on oil,” said Jeffrey Halley, market analyst at Oanda.

“The apparently healthy recovery in China, and a steady improvement across the rest of the Asia-Pacific has lifted consumption hopes which have flowed into higher prices today.”

The dollar continues to soften after the ‘lower for longer’ speech from US central bank chief Jerome Powell last week, Halley added.

“With no sign of the US Dollar’s momentum waning in the short-term, Europe should see further appreciation versus the greenback, with pro-cyclical currencies outperforming.”

Around the markets

Sterling was up 0.3% against the dollar at 1.3411

Gold has risen 0.9% to US$1,996.6

Oil is up, with Brent crude advancing 1.2% to US$45.80

6.45 am: Early Markets: Asia / Australia

Stocks in Asia Pacific were mixed today after a private survey showed Chinese manufacturing activity in August expanding at its fastest pace in nearly 10 years.

Mainland Chinese stocks recovered from an earlier drop to rise by the afternoon, with the Shanghai composite up 0.08%.

In Japan, the Nikkei 225 was slightly higher while South Korea’s Kospi added 1.05%.

Australia’s S&P/ASX 200 hit a one-month low and is back below the key 6,000 point mark at 5,953 by evening, down 1.77%.

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Proactive Australia news:

Netlinkz Ltd (ASX:NET) recorded strong revenue growth during a “transformational” 2020 financial year, with total revenue from customers of $5.25 million, up 846% on the prior year’s $555,000.

Auteco Minerals Ltd (ASX:AUT) has increased the JORC 2012-compliant inferred resource at its Pickle Crow Gold Project in Canada by 20% to 1 million ounces at 11.3 g/t gold.

Vango Mining Limited’s (ASX:VAN) initial high-grade gold results from drilling of the PHB Corridor have confirmed extensions of all three major lode structures at the Marymia Gold Project in WA.

VIP Gloves Ltd (ASX:VIP) is demonstrating the benefits of increasing personal protection equipment (PPE) use with revenues during FY20 up by 17.1% to more than $13.696 million and profit for the year, after-tax, up 102.4% to $116,056.

Technology Metals Australia Limited (ASX:TMT) has been granted Mining Leases M51/883 (Northern Block) and M51/884 (Southern Tenement) within its Gabanintha Vanadium Project in WA.

Eclipse Metals Ltd (ASX:EPM) has scheduled a detailed ground magnetometer to be completed ahead of stage two drilling at the Amamoor Manganese Project in southeast Queensland.

Kin Mining NL (ASX:KIN) has received shallow and wide high-grade gold results from Helens East prospect with this new discovery enhancing the potential of the Cardinia Gold Project (CGP) near Leonora in Western Australia.

engage:BDR Ltd (ASX:EN1) grew revenue by 31.5% to $8.1 million for the first half of 2020 from $6.1 million in 2019, with the company achieving 95% of milestones on or before schedule despite COVID-19.

eSense-Lab Ltd (ASX:ESE) has received approval from Israel’s Ministry of Health for a joint research project at the Central Virology lab in Chaim Sheba Medical Centre for testing its proprietary TRP-ENVTM compound for efficacy against the OC43 human coronavirus strain.

YPB Group Ltd’s (ASX:YPB) financial performance improved strongly in the first half of 2020 with net operating loss reduced by $1.9 million or 52% compared to the corresponding period in 2019.

Story by ProactiveInvestors