• FTSE 100 index rises 6 points
  • Wall Street to see lukewarm open
  • The 11am Brexit announcement has been delayed

12.50pm: FTSE 100 closes Christmas Eve session in the green

The Footsie closed Christmas Eve session in the green as a Brexit deal is expected to be announced in a matter of hours.

London’s main index ended the short Christmas Eve session 6 points higher at 6,502, while sterling trimmed some gains and rose only 0.66% to US$1.3587.

British banks and housebuilders have been the biggest blue-chip risers on trade deal hopes, as Lloyds (LON:LLOY), Barclays (LON:BARC) and NatWest (LON:NWG) are more domestically focused than their peers.

“The fact that a no-deal scenario appears to have been dodged has boosted the sector because there were fears that their provisions for bad debts would surge in a no-deal environment,” noted David Madden, analyst at CMC Markets.

“In addition to that, lending margins could improve in 2021 as the Bank of England might reign in its chatter about the possibility of introducing negative interest rates – which was weighing on net interest income.”

Meanwhile, Barratt Developments (LON:BDEV), Berkeley Group (LON:BKG) and Persimmon (LON:PSN) have shown gains as traders were worried that a no-deal outcome might clobber house prices.

But the main winners today have been the pound and the FTSE 250.

“While the FTSE 100 treads water, moving around from small gains to small losses, the mid-cap index has raced ahead in today’s shortened session, as a whole host of UK-focused names stride higher,” said Chris Beauchamp at IG.

“We are on the cusp of a major sea-change for UK assets, if a deal is done (always wise not to assume these things before the signing is done and dusted) – Brexit will diminish in its overall presence on the front pages, even if it does not go away entirely, and thus investors can hopefully start to take a different view of the UK’s economic prospects.”

11.55am: Lukewarm open in sight for Wall Street

The Footsie dipped in the red before midday just as sterling trimmed some gains.

London’s main index shed 2 points to 6,492 while the pound was up 0.75% to US$1.3599.

Wall Street is expected to see a lukewarm open to the short Christmas Eve trading day, with the Dow Jones, the S&P 500 and the Nasdaq up a handful of points.

In Washington, the Democrats are pushing to approve the US$2,000 stimulus cheques proposed by Donald Trump.

It would plump the US$600 payments for individuals approved as part of an US$892bn emergency package on Monday.

House Democrats are expected to bring forward a new bill on Thursday, which is hoped to be passed by unanimous consent.

In company news, International Business Machines Corp (NYSE:IBM) has agreed to pay US$24.25mln to resolve two investigations by the US Federal Communications Commission over subsidies the company was awarded to connect schools and libraries to broadband internet networks.

11.00am: Why are we waiting (sung to the tune of O Come, All Ye Faithful)

The waiting for the expected Brexit announcement continues and the FTSE 100 continues to spin its wheels.

London’s index of leading shares was up 7 points (0.1%) at 6,502, which is hardly an ecstatic reaction to the apparent end of a saga that would weary a Norse bard.

The pound, at least, has responded in an enthusiastic fashion, gaining more than a cent at US$1.3611 and 0.85 of a cent at EUR1.1160.

Unfortunately, for those invested in FTSE 100 tracking funds, a strong pound tends to be like kryptonite for the big-caps index. The mid-cap FTYSE 250, on the other hand, tends to welcome a stronger exchange rate as it means cheaper imports for many of the index constituents – those that are domestically focused.

That does not explain why luxury car maker Aston Marton Lagonda Global Holdings PLC (LON:AML) is one of the top mid-cap risers with a 7.7% rise at 1,843p or for that matter why Watches of Switzerland Group PLC (LON:WOSG) is up 6.1% at 595p.

Elsewhere in the FTSE 250, investment trusts are in favour, with Henderson Smaller Companies Investment Trust PLC (LON:HSL) the top riser with an 8.1% rise to 1,090p while The Mercantile Investment Trusts PLC (LON:MRC) also gives a vote of confidence to a Brexit deal – albeit a “hard Brexit” one – with a 5.2% jump to 245p.

9.30am: You can cut the tension with a dishcloth

There’s been no announcement yet, in case you were wondering.

While the market awaits the expected announcement from the prime minister, the FTSE 100 has been treading water, up 5 points (0.1%) at 6,501.

Whether the market is suffering from Brexit fatigue or has just taken the (half) day off, no one seems very excited at the prospect of a deal (apparently) finally being settled, possibly because the deal will end up having something to annoy everyone.

One is reminded of the old idiom about a camel being a horse designed by a committee.

Having said that, banking stocks have responded well to the news as have housebuilders.

Mining company BHP Group PLC (LON:BHP) has broken with tradition and put out some positive news on Christmas Eve.

The company said Samarco, which it jointly owns with Brazilian mining giant Vale, has met the licensing requirements to restart operations at its Germano complex in Minas Gerais and its Ubu complex in Espirito Santo, Brazil, and has commenced iron ore pellet production.

The restart happened just over five years after Samarco’s Fundao tailings dam burst, killing 19 people.

BHP shares were down 0.2% at 1,962p in quiet trading.

8.40am: Could the Brexit Santa be real?

The FTSE 100 index opened the final session before Christmas in the green with the Square Mile, along with the rest of the UK, waiting for official confirmation of a last-gasp Brexit deal.

The index of UK blue-chip stocks had largely anticipated the breakthrough. It opened up just 25 points at 6,521.51 on the half-day pre-Christmas trading session.

According to reports, there is likely to be a phased five-year agreement over fishing rights, while there will be no role for the European Court of Human Rights in the British legal system.

The Daily Mail said the official text governing the future relationship between Britain and the European Union runs to 2,000 pages and described the breakthrough as ‘Brexmas Time’.

The pound reacted positively as it pushed up 0.6% to U$1.3576, which also kept the lid on the internationally-focused Footsie.

David Madden, an analyst at CMC Markets, summed up the mood: “The trade talks have been dragging on and on and people’s patience has been running low.”

On the market, banks reacted positively to the news of an imminent Brexit deal with Lloyds (LON:LLOY) leading the way with a 6.8% advance.

A no-deal departure from the world’s largest trading bloc would have caused untold chaos and cost for the British financial system.

It could also have heralded a period of sustained economic underperformance, which was why the housebuilders became a proxy for the status of Brexit talks.

On Thursday, they were well bid with Persimmon (LON:PSN) up 3.75% in the early exchanges.

Proactive news headlines:

[email protected] Capital PLC (LON:SYME), the fintech platform which provides inventory monetisation services to manufacturing and trading companies, said it has expanded its shareholder base. Five professional investors have acquired a combined 12.2% stake. Their interest followed the completion of transactions aimed at simplifying the company’s ownership structure.

IXICO PLC (LON:IXI), the AI data analytics company focused on neuroscience, has landed a four-and-a-half-year contract worth GBP3.4mln. It is with an existing client working on a trial of a drug for the rare neurodegenerative condition Spinocerebellar Ataxia type 3 (SCA3), also known as Machado-Joseph disease. Currently, there is no treatment to slow down or reverse the progressive course of this terminal condition.

BATM Advanced Communications Limited (LON:BVC) has said its test kit for coronavirus (COVID-19) is effective at diagnosing a new variant of the virus that is rapidly spreading in the UK and elsewhere. The networking and medical laboratory solutions firm said that it continually tests its kits against any mutations of the virus that are perceived to be clinically material to ensure they are accurately able to detect all known variants of COVID-19. BATM added that the kits also have 4+1 gene discovery capability compared with a market standard of one to three gene discovery, which enables it to provide more accurate results and reduce the risk of false positives and false negatives.

Falcon Oil & Gas Ltd (LON:FOG) has said nitrogen lift operations should start in the next few days at its Kyalla 117 N2-1H ST2 well in the Betaloo basin of the Northern Territory in Australia. The owners of the Betaloo licence decided earlier this month to execute operations without delay to re-enter Kyalla 117 with coiled tubing and apply nitrogen lift to lower the pressure in the wellbore and to assist with achieving and sustaining gas breakthrough. If successful, the operation will allow extended production testing to confirm at the well.

Galileo Resources PLC (LON:GLR), the exploration and development mining company, has said it is better placed after an “operationally difficult but extremely positive” year. In the group’s results statement covering the year to the end of March 2020, Galileo executive chairman Colin Bird reassured shareholders that none of the company’s assets were adversely affected by the coronavirus (COVID-19) outbreak, which picked up pace after the end of the reporting period. “Whilst director and senior management visits were very restricted, the company managed to progress all of its obligations and maintain its rights during the period and up to the time of writing this report,” Bird said.

Cobra Resources PLC (LON:COBR), the gold exploration and mining company focused on the Wudinna Gold Project in South Australia, has announced significant gold intercepts at the Baggy Green deposit. The company noted that the Baggy Green JORC resource is currently estimated at 94,000 ounces and occurs as two deposits. It said 13 holes were drilled to the north and south of, and in between, the existing JORC resource zones, with a further six exploration holes targeting new mineralisation.

Emmerson PLC (LON:EML) said it has appointed its chief executive Graham Clarke to its board as a director of the company with effect from December 22, 2020. The potash development firm noted that Clarke is “a highly experienced fertiliser industry executive with 26 years’ experience in underground potash mining”, with experience in managing all technical disciplines, due diligence processes and stakeholder engagement.

Strategic Minerals PLC (LON:SML) (OTCMKTS:SMCDY), a producing mineral company announced that it has been informed that Peter Wale, an executive director of the company, on Wednesday sold 3,875,000 Strategic Minerals ordinary shares of 0.1 pence each and purchased 3,875,000 ordinary shares through his personal Individual Savings Account (ISA). Following the dealings, the group noted that Wale’s beneficial interest in the company is 76,767,266 ordinary shares representing 4.02% of the issued ordinary share capital.

Mineral & Financial Investments Limited (LON:MAFL)), the AIM-quoted resources investment company, has confirmed it will hold its annual general meeting (AGM) at 11.00am on January 21, 2021, at Censeo House, 6 St Peter’s Street, St Albans, Herts. AL1 3LF. Given the current situation concerning coronavirus (COVID-19), this year’s AGM format will be a closed meeting and purely procedural in format. Also, all resolutions will be taken on a poll (with votes cast by proxy)., and there will be no presentations or Q&A and no refreshments will be provided. Shareholders should therefore not attend the AGM in person this year and are encouraged to appoint the chairman of the meeting as their proxy rather than a named person who will not be permitted to attend the meeting.

6.35am: Goodwill to all of Europe

Reports that Britain and the EU are “within touching distance” of a Brexit deal has done wonders for the pound but not much for equities, which are only seen modestly higher on Christmas Eve.

Spread betting quotes suggest the FTSE 100 index will add to yesterday’s gains but only to the tune of 35 points at 6,531, with trading set to end at 12.30pm.

As Christmas tunes go, it is not exactly Darlene Love’s majestic “Christmas (Baby Please Come Home)” – but then who can come home this Christmas?

The Prime Minister, Boris Johnson, is reportedly set to make an announcement this morning.

“Still, it leaves the UK isolated internationally due to Covid-19, thousands of trucks marooned on each side of the English Channel and follows more of England’s regions being moved into a hard tier-4 lockdown. With Christmas in England starting to resemble one reminiscent of the wartime blitz, it is perhaps not surprising that Sterling’s bullish reaction is underwhelming. Not helping is that the world is long enough Sterling to fill in the English Channel,” said Jeffrey Halley at OANDA. Grinchily.

Sterling was six-tenths of a cent higher at US$1.3557 against the dollar on Thursday having put on a bit of a spurt last night when news broke of a probable Brexit deal.

Not much else is expected to interfere with Brexit news today, particularly as it is a shortened trading day.

Overnight on Wall Street, the Nasdaq Composite lost ground while the Dow Jones Industrials Average and the S&P 500 made headway, in a reversal of the normal form.

The Nasdaq Composite ended 37 points higher at 12,771 while the Dow Jones was up 43 points at 6,496 and the S&P 500 climbed 3 points to 3,690.

Asian markets were mostly firmer this morning with the Nikkei 225 in Tokyo 113 points higher at 26,638 and the Hang Seng index 43 points to the good at 26,387.

Around the markets:

  • Sterling: US$1.3557, up 0.61 cents
  • 10-year gilt: 0.288%, up 10.35 basis points
  • Gold: US$1,879.10, up US$1.00
  • Brent crude: US$51.63 a barrel, up 42 cents
  • Bitcoin: US$23,016, down US$282

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