FTSE 100 heads lower despite support from mining shares as Barclays PLC drops

• FTSE 100 down 22 points
• Barclays results disappoint
• Mining shares continue to climb

9.45am: Banks drag down leading index

Miners are dominating the day’s risers but cannot seem to rescue a flagging FTSE 100.

Rising commodity prices and positive updates this week from some of the major companies have combined to support the sector, but not the wider market. An economic recovery as the global vaccination programme rolls out will increase demand for commodities, and investors are jumping in to make the most of the subsequent rally in metal prices.

So Rio Tinto PLC (LON.RIO) has risen 225p or 3.61% to 6460p, Glencore PLC (LON.GLEN) is up 8.55p or 2.97% to 296.75p while BHP PLC (LON.BHP) is 52p or 2.32% better at 2296.5p.

However Smith & Nephew PLC and Barclays PLC (LON.BARC) continue to drag down the market following their figures. Barclays is now down 4.36p or 2.83% to 150p, while Lloyds Banking Group (LON.LLOY) is 0.92p or 2.35% lower at 38.01p and NatWest Group PLC (LON.NWG) has fallen 2.3p or 1.29% to 175.85p.

So the FTSE 100 is currently down 22.4 points or 0.33% at 6688.5.

“Having started on Monday wide awake and making some bumper gains it feels like the FTSE 100 has hit the snooze button for the rest of the week,” said AJ Bell investment director Russ Mould.

“The latest day of destiny for investor sentiment feels like it is coming on Monday when Boris Johnson is set to reveal the pace at which coronavirus restrictions will be eased in England.

“Other asset classes continue to surge, with the extreme cold in the US disrupting oil production and driving up prices of the black stuff beyond pre-Covid levels, while bitcoin continues to surge having taken out the $50,000 level.”

8.32: FTSE slips in early trading

Leading shares are marginally in the red in early trading after drifting higher initially.

The FTSE 100 has dipped 0.11% or 7.22 points to 6703.68 with Imperial Brands PLC (LON.IMB) among the leading fallers, down 3.75% or 56.5p at 1448.5p as it feels the effect of the strong pound.

Barclays PLC (LON.BARC) is down 1% or 1.54p at 152.82p following its results which showed a better than expected 30% drop in full year profits. But it has cautioned about the outlook given the continuing effects of the pandemic.

Susannah Streeter, senior investment and markets analyst, at Hargreaves Lansdown said:‘’Pre-tax profit of £3.1 billion is no mean feat for Barclays given the pummelling the banking sector has had from the economic damage wreaked by the coronavirus.

“But looking ahead Barclays will need to be nimble on its feet to withstand the blows from the ongoing economic fall out of the Covid crisis. Although it foresees a meaningful improvement in returns in 2021, it has warned that further rates cuts or negative rates could adversely affect the group’s prospects.

“But it’s also warning about too rapid a rate rise in the future, which could hurt the fragile recovery, hit business confidence and lead to more loans turning bad.”

Healthcare group Smith & Nephew PLC (LON.SN) has fallen 98p or 6.25% to 1469.5p after a 12% drop in full year revenues and a decline in operating profits from $815m to $295m.

Later investors will be looking to the latest indicator from the US economy, with weekly jobless claims expected to show a decline to the perhaps the lowest level since December.

Oil prices remain firm after the severe storms in Texas, with US stocks expected to fall when figures are released later. David Madden at CMC Markets UK said: “The EIA report is predicted to show that US oil stockpiles will fall by 2.42 million barrels, while US gasoline inventories are tipped to increase by 1.39 million barrels. The data is likely to be skewed by the adverse weather in the southern part of the country.

“Oil eked out a new 13 month high yesterday on account of the big freeze in Texas, production was impacted. It was reported yesterday that Saudi Arabia is keen to increase output when the global economy recoveries, but if the report is accurate, we are unlikely to see any changes to production in the near term.”            

Energy update:
Oil – WTI (undated) 6169 +0.9%
Oil – Brent (undated) 6435 +0.88%
Natural Gas 3081 +0.49%
Heating Oil 18481 +1.17%
Gasoline 18950 +1.26%
London Gas Oil 531 +1.3%#Oil #Brent #WTI #OOTT

— IGSquawk (@IGSquawk) February 18, 2021

6.45am: Positive start predicted

The FTSE 100 is seen starting Thursday in positive territory as global stock benchmarks remain somewhat in limbo.

In London, CFD and spreadbetting firm IG Markets makes the blue-chip benchmark 21 points higher, at 6,721 to 6,724 with just over an hour to go until the open.

It comes as crude oil prices rise further due to a cold snap in the United States and as demand continues to eek higher, altogether boosting energy stocks.

Elsewhere though the market factors have been more predictable.

David Madden, market analyst at CMC Markets UK, said: “The minutes from last month’s Fed meeting were published last night and it showed the central bank is keen to have an accommodative policy to help assist the economy.

“It wasn’t exactly new information but the message was that monetary policy is unlikely to change anytime soon as the economy still has a long way to go before the Fed reaches its targets.”

Wall Street benchmarks saw mixed trading. The Dow Jones traded higher, rising 90 points or 0.29% to 31,613, whilst the S&P 500 was more or less flat ending the day at 3,931.

The Nasdaq, meanwhile, swung to an 82 point or 0.58% decline with a close of 13,965.

In Asia, this morning, Japan’s Nikkei traded down 0.19% at 30,236 as Hong Kong’s Hang Seng pulled back 1.13% to 30,732. The Shanghai Composite meanwhile moved up, rising 0.56%,

Around the markets

The pound: US$1.3850, down 0.05%

Gold: US$1,783, up 0.39%

Silver: US$27.26, down 0.37%

Brent crude: US$65.14 per barrel, up 2.8%

WTI crude: US61.72, up 2.78%

Bitcoin: US$52,105, up 3.57%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Thursday as Australia’s unemployment rate decreased to 6.4% in January, compared against December’s 6.6%.

The Hang Seng index in Hong Kong dipped 1.16% while the Shanghai Composite in China rose 0.55%.

In Japan, the Nikkei 225 slipped 0.19% and South Korea’s Kospi was 1.5% lower.

Shares in Australia rose marginally, with the S&P/ASX 200 closing 0.01% higher.

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Proactive Australia news:

Montem Resources Ltd (ASX:MR1) has raised A$5.2 million in a share placement to sophisticated or professional investors at A$0.17 per share to advance its coking coal projects in Canada.

Paradigm Biopharmaceuticals Ltd (ASX:PAR) has received ethics approval for its phase 2 clinical trial to evaluate the treatment effects of Pentosan Polysulfate Sodium (PPS) against placebo on synovial fluid biomarkers in participants with knee osteoarthritis (OA) pain.

Infinity Lithium Corporation Ltd (ASX:INF) (FRA:3PM) has raised A$15 million through a strongly supported placement and will issue more than 79.47 million shares at A$0.19 per share to advance the San José Lithium Project in Spain and its integrated supply strategy in Europe.

Bellevue Gold Ltd’s (ASX:BGL) (OTCMKTS:BELGF) stage one feasibility study has found that its Bellevue Gold Project in Western Australia is expected to be ranked amongst Australia’s top-25 gold mines based upon annual production.

Fe Limited (ASX:FEL) (FRA:B4T) has received firm commitments for its $5.5 million placement via the issue of around 123.4 million shares at $0.045 per share to sophisticated and professional investors (before costs of raising).

AVZ Minerals Ltd (ASX:AVZ) (OTCMKTS:AZZVF) (FRA:3A2) has received further strong results from mineral resource drilling at Manono Lithium and Tin Project in the Democratic Republic of Congo with 172 metres at 1.63% lithium and 1,134ppm tin returned from the pit floor ‘wedge’ at Roche Dure.

Strategic Elements Ltd (ASX:SOR) has started developing a ‘Sensor Fusion’ stack for integration into a new generation of autonomous robotic security vehicles that will make them more intuitive and more responsive to their environment.

Marvel Gold Ltd‘s (ASX:MVL) (OTCMKTS:GRXMF) (FRA:GR2) results from the first eight holes of a resource expansion drill program at the Tabakorole Gold Project in southern Mali has confirmed an extension to the southeast.

Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) and its 90%-owned subsidiary Envirostream Australia Pty Ltd’s field testing of fertiliser blends containing manganese micronutrients derived from spent alkaline batteries recycled by Envirostream have demonstrated successful uptake of these micronutrients in a field setting.

Story by ProactiveInvestors