London close: Losses in commodities keep a lid on Footsie

Softness in commodity markets kept a lid on equities in London, with some traders pointing out there was still margin for further downside moves in the likes of oil and gold, as investors monitored events in Greece.

In the afternoon the International Monetary Fund said Greece has paid back €2.05bn of debt. The Mediterranean country had also reportedly begun paying back €4.2bn owed to the European Central Bank, thanks to the €7.16bn bridge loan that was approved last week by the European Union.

The news seemed to soothe fears on Greece for the time being, but IG market analyst David Madden warned: “The focus is now on next month’s repayments to creditors. The Greek debt saga has been on repeat for five years, so traders have learned what to expect, and they suspect this current calm between the storms won’t last long.”

That followed a wave of selling in gold during Asian trading hours which saw trading volumes spike and futures prices drop almost 4%, with technical analysts telling Sharecast there was still room for further losses in the near-term.

Trading volumes on the Shanghai Gold Exchange spiked on Monday to reach approximately 900,000 lots on a key contract. In comparison, less than 27,000 lots changed hands on 17 July. The average volume thus far in July had been less than 30,000 lots, according to Bloomberg data.

The Footsie finished the day 13.61 points higher at 6,788.69 and the FTSE 250 up by another 25.51 points to 17,781.42.

Front-month Brent crude futures were lower by 0.901% to $56,59 per barrel on the ICE. In parallel, gold futures for August delivery on COMEX were losing 2.05% to $1,109 per ounce.

Further downside eyed in gold and oil markets

Technical analysts at Sharecast pointed out how Monday’s intra-day low in spot gold prices, at $1,072.93 per ounce, coincided with the 50% retracement of the move higher during the ‘super-cycle’ which began in August of 1999. If that support failed to hold a move towards $900 per ounce might be on the cards, they added.

In parallel, the latest positioning data from the US CFTC revealed the number of hedge funds with reported positions were now unusually short oil futures. The market had not been that ‘bearish’ on oil since March 2014, Bill HUbard, chief economist at Bankor, pointed out to Sharecast.

Nevertheless, so-called technical indicators were still pointing towards further downside in US crude futures, possibly to as low as $47 per barrel, Hubard went on to explain.

Sports Direct and Aveva lead gains

Sports Direct International topped the risers as Exane BNP Paribas lifted its target price to 860p from 800p. Exane said it continued to value Sports Direct at a premium of around 5% to the sector given the quality of the UK business, strong earnings growth profile and optionality of European expansion.

Shares in Pearson, which were earlier down more than 2%, spiked on the re-emergence of reports that the education group is exploring the sale of the Financial Times. Citing people familiar with the matter, Bloomberg said possible bidders for the salmon-colored newspaper were being sounded out.

Shares in Aveva were up by more than a quarter after engineering design firm Schneider Electric said it would acquire the firm in a reverse takeover deal, beating out rumoured rivals Emerson and General Electric.

Barclays was reportedly planning to cut more than 30,000 jobs in the next two years, just days after the bank ousted chief executive Antony Jenkins. The cuts – which are seen as the only way to address the bank’s underperformance and lift its share price – could take the bank’s global workforce to below 100,000 by the end of 2017.

Tullow Oil said gas exports from the Jubilee Field to the Ghana Gas plant at Atuabo had been suspended since 3 July due to technical issues and is expected to resume mid-August.

Aerospace and defence company Rolls-Royce announced two new deals worth more $2.23bn. The company has been selected by the national carrier of Saudi Arabia to provide long-term TotalCare engine service support, while International AirFinance Corporation has also signed it up to provide Trent 700 engines for 20 Airbus A330 Regional aircraft.

Standard Chartered announced a radical management shake-up designed to restore the fortunes of the bank. Under the new regime, chief executive Bill Winters will take more responsibility as all heads of business units will report to him not his deputy Mike Rees, the bank said in an announcement. The restructuring formed part of a previously announced goal of $1.8b in savings by the end of 2017.

British Land said it had a good start to the year, with strong occupational demand and lettings well ahead of estimated market rental value. In its first-quarter trading update, the company said its Leadenhall Building, also known as the Cheesegrater, is now 90% full, with 107,000 square feet of new lettings and 52,000 square feet under offer.

Market Movers

techMARK 3,215.74 +0.73%
FTSE 100 6,788.69 +0.20%
FTSE 250 17,781.42 +0.14%

FTSE 100 - Risers
Sports Direct International (SPD) 772.50p +3.41%
Sainsbury (J) (SBRY) 272.30p +2.14%
TUI AG Reg Shs (DI) (TUI) 1,122.00p +1.81%
easyJet (EZJ) 1,721.00p +1.35%
Kingfisher (KGF) 366.30p +1.22%
ARM Holdings (ARM) 1,030.00p +1.18%
Taylor Wimpey (TW.) 190.90p +1.17%
HSBC Holdings (HSBA) 586.70p +1.12%
Hargreaves Lansdown (HL.) 1,210.00p +1.09%
Sage Group (SGE) 536.00p +1.04%

FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 3,817.00p -4.67%
Fresnillo (FRES) 629.00p -4.41%
Meggitt (MGGT) 486.80p -1.99%
Inmarsat (ISAT) 933.00p -1.58%
Pearson (PSON) 1,255.00p -1.57%
Antofagasta (ANTO) 641.00p -1.54%
Admiral Group (ADM) 1,453.00p -1.22%
Anglo American (AAL) 867.30p -1.15%
Intertek Group (ITRK) 2,408.00p -1.11%
Glencore (GLEN) 240.55p -1.05%

FTSE 250 - Risers
Aveva Group (AVV) 2,256.00p +27.31%
Man Group (EMG) 158.10p +3.94%
NMC Health (NMC) 825.00p +3.00%
Bodycote (BOY) 677.50p +2.96%
Domino's Pizza Group (DOM) 803.50p +2.95%
Virgin Money Holdings (UK) (VM.) 399.20p +2.94%
Just Eat (JE.) 449.90p +2.74%
Fidessa Group (FDSA) 2,355.00p +2.57%
Bellway (BWY) 2,352.00p +2.35%
Ladbrokes (LAD) 130.30p +2.04%

FTSE 250 - Fallers
Acacia Mining (ACA) 239.00p -13.72%
Centamin (DI) (CEY) 53.60p -9.08%
Petrofac Ltd. (PFC) 853.00p -5.90%
AO World (AO.) 119.70p -5.75%
Tullow Oil (TLW) 267.10p -5.15%
Lonmin (LMI) 77.65p -4.37%
Premier Oil (PMO) 137.20p -3.92%
Indivior (INDV) 251.00p -3.50%
Wood Group (John) (WG.) 592.00p -2.95%
Redefine International (RDI) 53.50p -2.73%