FTSE 100 shrugs off latest episode in US-China muscle-flexing contest

FTSE 100 index gains 35 points Investors sweet on Tate & Lyle after a trading update Unilever hitches its skirts and races higher as it confirms plans to spin off tea business 9.50am: Sweet start for equities US-China tensions are bubbling away in the background but investors are choosing to accentuate the positive. “The US appeared to rachet up its tit-for-tat proxy cold war with China overnight, unexpectedly ordering the closure of China's Houston Consulate,” reported OANDA’s Jeffrey Halley. “Overall, the announcement is not a game-changer in the medium to longer-term. Financial markets have for some time, been building up herd immunity to constant quarrels of the two school-yard bullies,” he suggested. The FTSE 100 was up 35 points (0.6%) at 6,242, with lumbering consumer goods giant Unilever PLC (LON:ULVR) showing an unaccustomed turn of foot to lead the index higher with an 8.2% share price hike to 4,687p. “Unilever has identified some of the factors which have limited its prospects of late and is taking some large strides towards rectifying the situation,” said Richard Hunter, the head of markets at interactive investor. “More recently, sales growth has been tepid at Unilever and fell marginally during this period. The need to re-energise sales is not only something which the company has recognised, but is something where Unilever has a historically strong record. The move to a single structure should give the group more flexibility, while the constant evaluation of core products has resulted in a spin-off of the Tea business, as had been expected and which is likely to complete by the end of 2021,” he added. Unilever without a tea business is a bit like Tate & Lyle PLC (LON:TATE) without a sugar business – unthinkable until it happens. Talking of Tate, the sugar-free food ingredients mid-cap was up 2.5% at 668.6p after its trading update. “The fact revenue was actually up in its Food & Beverage Solutions division for the three months to June is a remarkable feat and reflects a desire for comfort food in the form of biscuits, snacks and drinks while people have been stuck indoors – no wonder many people are emerging from the restrictions with lockdown tummies,” said AJ Bell’s no doubt svelte as a whippet investment director, Russ Mould. Today we published a trading update on our first quarter (April to June 2020). Read the full statement here: https://t.co/IKwyOPrOKA pic.twitter.com/Izmx7c7xM5 — Tate & Lyle PLC (@tateandlyleplc) July 23, 2020 8.30am: Upbeat start to the session The FTSE 100 index bobbed higher in early trade on Thursday as worries of recent days that have seen a flight to safety were put on the backburner. The index of UK blue-chip stocks opened 15 points to the good at 6,222.36. That said, concerns over America’s seemingly inept response to the coronavirus outbreak, China-US trade relations and a ‘no-deal’ Brexit continued to bubble under the surface. Gold, the haven asset in times of crisis, continued its march towards a new record as the price of an ounce of the yellow metal nudged above US$1,875 and close to the all-time high of US$1,920.30 (seen in September 2011). Silver, meanwhile, has also been a beneficiary from the rush into physical assets as it hit a seven-year high, driving Mexican miner Fresnillo (LON:FRES) a further 4.7% higher. The movements of gold and silver betray underlying anxiety over the state of the world economy and the general 'toppiness' of international markets. The latest research on the individual shares to avoid reveals Hammerson (LON:HMSO), the shopping centre group, down 1.5%, is the most shorted by professional investors. Metro Bank (LON:MTRO), Royal Mail (LON:RMG) and Premier Oil (LON:PMO) are also firmly in the cross-hairs of the bears. On the rise early on, with a 7.1% gain, was Unilever (LON:ULVR), which said it will spin off its tea business, except for the Indian and Indonesian operations. The consumer brands giant also weighed in with a smaller than expected decline in sales, which pleased the City. So rare are company pay-outs in these austere times that it’s cause for a double-take when a company goes ex-dividend (trades without entitlement to the divi). For SSE (LON:SSE), this was the cause of a 6.6% drop in the share price. Proactive news headlines: Symphony Environmental Technologies PLC (LON:SYM) said its antimicrobial technology has been tested as effective against bovine coronavirus (COVID-19). Its d2p product has been designed to be embedded in the plastic so it will not wear off. A masterbatch was assessed by the lab group Eurofins, which detected a virus reduction of 99.84% in 24 hours. Symphony said bovine coronavirus “is a close beta coronavirus surrogate for COVID-19”. In a statement, Symphony chief executive Michael Laurier said: "This is a very exciting and positive development for our global sales team to bring to the market as quickly as possible and we look forward to receiving Eurofins final report in due course. IronRidge Resources Limited (LON:IRR) has reported additional high-grade drilling results at the Zaranou gold project in Côte d'Ivoire and the sighting of visible gold observed amid deeper reverse circulation (RC) drilling. The visible gold was seen in cuttings from deep RC drilling at the Ehuasso target, in drill hole ZARC0013 which is part of the second phase drilling programme. It comes from an area that’s a further 60 metres below previously reported high-grade gold, measured in the prior ZARC009 hole. The high-grade results, meanwhile, were received from primary samples taken in prior air-core drilling, a 15,000-metre programme that took place on the Ehuasso target. Learning Technologies Group PLC (LON:LTG) said its performance for the first half of the year has been “robust” and retention rates in its business have held up well despite the disruption caused by the coronavirus pandemic. In a trading update for the six months to June 30, 2020, the digital learning group said it expects to report revenues of at least £64mln, 2% higher year-on-year, with a small decline in its underlying business offset by a contribution from the recently acquired Open LMS business in the second quarter. Learning Technologies also predicted underlying adjusted earnings (EBIT) for the period of £19.9mln, up from £19.5mln the year before. Greatland Gold PLC (LON:GGP) has released what it described as outstanding new results from drilling at the Havieron deposit in the Paterson region of Western Australia. Extension drilling in the north-west portion of the property has confirmed and unearthed a new zone of higher-grade breccia mineralisation, the group said. Newcrest Mining, Greatland’s partner and project operator, revealed the latest finding and also stated that separate infill drilling had also yielded excellent results, confirming mineral continuity within the project area. Drill results to date support the investigation of both high-grade selective and bulk mining methods, according to Newcrest. Personal Group PLC (LON:PGH), the employee services provider, said it had a positive first half of 2020 with underlying earnings (EBITDA) ahead of 2019. The company said much of the first half of the year was spent preparing for and dealing with the coronavirus (COVID-19) pandemic, which happily did not have as big an impact on its business as feared. While half-year revenues were little changed year-on-year at about £30mln, EBITDA of around £5mln was ahead of the company’s expectations at the start of the pandemic. OptiBiotix Health PLC (LON:OPTI) said it has extended its manufacturing, supply and profit-sharing agreement with Agropur MSI to include WellBiome, developed to promote gut health. Agropur already has the rights to weight management range SlimBiome in the US, Canada and Mexico. Dr Fred Narbel, managing director of OptiBiotix’s prebiotics division, said the enhanced deal recognised its partner’s success in building sales of SlimBiome. First deliveries in the territory occurred in the second quarter. KR1 PLC (LON:KR1) said it has sold 35,128 tokens in the Nexus Mutual project at an average price of US$14.03 each, netting the company US$492,991. The digital asset investment firm said it had acquired the tokens at an average price of US$2.24 each during a seed round for the project, which aims to recreate a mutual insurance company built upon the Ethereum decentralised (DeFi) finance system and smart contracts. KR1 said Nexus has seen “surging demand” over the last few months, with the insurer having written over US$16.39mln worth of cover since launch, adding that it was also expanding its capacities by growing its capital pool to US$7.64mln and signing up more than 1,000 members. Westminster Group PLC (LON:WSG), the airport security services company, noted that Sierra Leone’s Freetown Airport Lungi has been reopened for commercial flights. "Since the airport was closed in March to all but essential traffic, we have continued to maintain security of the airport, kept all of our staff employed and safe, utilising the time to enhance their training ready for when the airport reopens,” Musayeroh Barrie, Westminster Group’s country director said in a statement released late on Wednesday. Alien Metals Ltd (LON:UFO) a minerals exploration and development company, has announced the appointment of Mark Culbert as a non-executive director of the company with immediate effect. It noted that Culbert is an experienced litigation lawyer and is the managing director of iLaw Solicitors Limited, a City Legal 500 law firm, which he co-founded in 2006.  His speciality areas are intellectual property, technology and media disputes and he is the chairman of the IT Disputes Group of the Society for Computers & Law, an Associate Member of the Chartered Institute of Trade Mark Attorneys and an Associate Member of the Australian Risk Policy Institute. The group also advised that Chris Gordon has resigned as a director of the company at the same time. W Resources PLC (LON:WRES) said the coronavirus (COVID-19) lockdown and contractor equipment problems provided challenges for its operations in the second quarter of 2020. In its June quarterly production report, the group said run-of-mine feed into the plant reduced by 7% compared to the first three months of 2020, to total 253,256 tonnes, nonetheless, total contained tungsten and tin production increased by 0.5% to 47.6 tonnes with volumes helped by improved tin recovery. It noted that tin production actually increased by 65% in the three months, with a total of 20 dry tonnes produced. Tungsten volumes meanwhile reduced 17% to 2,756 tonnes with the temporary mine closure during the lockdown and a weaker than expected plant performance. NQ Minerals PLC (AQSE NQMI) (OTCQB:NQMLF) has announced that the Tasmanian Government has now formally transferred the Mining Lease ML 1767 P/M, that covers the Beaconsfield Gold Mine, to NQ’s 100% subsidiary Pieman Resources Pty Ltd. David Lenigas, NQ’s Chairman, commented: “I’m pleased to announce that the Beaconsfield Mining Lease have now been formally transferred by the Tasmanian Government to NQ Minerals, and work has already commenced on site with respect to the gold treatment plant refurbishment and the deployment of geologists to site to commence a detailed sampling programme of surface stocks potentially available for start-up plant feed.” Gore Street Energy Storage Fund PLC (LON:GSF), London's first energy storage fund has said its annual general meeting (AGM) will be held on Wednesday, August 19, 2020, at 09.00am. The company noted that it is holding the AGM virtually in light of the coronavirus pandemic and it will be held by electronic means with the minimum necessary quorum of two shareholders to conduct the business of the meeting. The format of the meeting will be purely functional and will comprise of the formal business. Shareholders are asked to participate by submitting a proxy vote in advance of the meeting and appointing the chair of the meeting as their proxy through the Shareholders' portal at www.signalshares.com. 88 Energy Limited (LON:88E) (ASX:88E) has said it’s latest corporate presentation is now available on the 88 Energy website at www.88energy.com and via the following link: http://www.rns-pdf.londonstockexchange.com/rns/8797T_1-2020-7-23.pdf Red Rock Resources PLC (LON:RRR), the natural resource development company with interests in gold, manganese and minerals, has invited interested shareholders to a scheduled Zoom meeting at 5.30pm on Thursday, July 23, 2020: https://us04web.zoom.us/j/76620430710?pwd=dlRlNFl4UHVINnlpOUFjT2VZcXQxQT09; Meeting ID: 766 2043 0710; Passcode: 9QwfRU. 6.50am: Footsie seen edging ahead The FTSE 100 is set to start Thursday a sliver higher as traders find themselves caught between the latest escalation of tensions between the Trump administration and China, and hopes that a coronavirus (COVID-19) vaccine could be around the corner. In London, CFD firm IG Market sees the UK benchmark up just 3 points making the price 6,208 to 6,211 with just over an hour to go until the open following a 55 point drop on Wednesday. Domestically, attentions are begrudgingly still on Brexit as Boris Johnson’s self-imposed July deal deadline looms with no agreements appearing particularly likely – though, like everywhere else, the vaccine story is taking focus. The US government yesterday stoked hopes as it ordered 100mln vaccine doses from Pfizer and partner BioNTech as a Phase 2/3 clinical trial is set to kick off in the coming days. Gentle optimism is evidently becoming the market’s default position amidst macro volatility. “It is becoming ever clearer that while concerns are rising over the global economic backdrop, as we head into the second half of the year, markets appear to be hedging their bets more and more when it comes to asset allocation,” said Michael Hewson, an analyst at CMC Markets. “Equity investors, while remaining cautious about the outlook, still appear to be happy buying dips, as stock markets continue to trade in a manner that is two steps forward and one back, slowly ratcheting higher, with sharp drops in between. “On the other hand, traditional safe havens are also doing well with gold and silver prices surging while bond yields also slipped back with the UK 10-year gilt posting a record low of 0.12%, while US 10-year treasury yields closed at a three-month low,” Hewson added. Wall Street largely overlooked the escalating tensions with China – triggered after the US ordered the closure of China’s consulate in Houston, Texas, and the Chinese reportedly retaliated in kind, closing a US consulate in the city of Chengdu. US stocks advanced, albeit with a little less vigour than recent sessions. The Dow Jones Industrials Average climbed 165 points or 0.62% to finish Wednesday’s session at 27,005, whilst the S&P 500 added 0.57% to close at 3,276. The Nasdaq Composite’s tech-led rally was comparatively muted as it edged up 0.24% to meander near its recent record highs, ending the day at 10,706 with results coming from Microsoft and Tesl after the close. In Asia, it is a public holiday in Japan and equity trading is closed. Hong Kong’s Hang Seng moved up 82 points or 0.33% to 25,140 while the Shanghai Composite dipped 34 points or 1.03% to 3,298. Around the markets: The pound: US$1.2741, up 0.05% Gold: US$1,869 per ounce, down 0.02% Silver: US$22.67 per ounce, down 1.38% Brent crude: US$44.41 per barrel, up 0.2% WTI crude: US$42.06 per barrel, up 0.33% Bitcoin: US$9,493, down 0.26% 6.45am: Early Markets - Asia/Australia Asia Pacific markets were mixed today with the Shanghai Composite down 1.19% and South Korea’s Kospi falling 0.85% after the country reported a decline in second-quarter GDP, largely due to a steep fall in exports. Hong Kong’s Hang Seng index added 0.37% and India’s Nifty 50 increased by 0.18%. In Australia, the S&P/ASX 200 rose 0.25% despite the projection of a budget deficit of $184.5 billion in 2020-21, the biggest since World War II. READ OUR ASX REPORT FOR MORE INFORMATION Proactive Australia news: Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) (FRA:PL4) has passed a key milestone with the production of battery-quality lithium hydroxide from its namesake project in North Carolina, USA. Kingwest Resources Ltd (ASX:KWR) is higher after an updated resource estimate for Lady Shenton deposit and a maiden estimate for the Stirling deposit increased overall resources at its Menzies Gold Project (MGP) by 37% to 320,000 ounces. St George Mining Ltd’s (ASX:SGQ) is encouraged by promising signs returned from ongoing diamond drilling at the Investigators prospect of its flagship Mt Alexander Nickel-Copper Sulphide Project in Western Australia. Pharmaxis Ltd (ASX:PXS) (OTCMKTS:PXSLY) (FRA:UUD) has submitted an Investigational New Drug (IND) application to the US Food and Drug Administration (FDA) for a planned phase 1/2 study of PXS-5505 for the treatment of myelofibrosis Element 25 Ltd (ASX:E25) has closed its share purchase plan (SPP) announced on July 6 heavily oversubscribed after receiving applications worth more than $3.2 million, more than double the original target. Bardoc Gold Ltd (ASX:BDC) has intersected further broad zones of gold mineralisation during reverse circulation (RC) drilling at the Mayday North deposit and returned promising results from early exploration drilling outside the main deposit. Lake Resources NL (ASX:LKE) (CMKTS:LLKKF) will support the global push for cleaner energy using its leading sustainable and scalable direct lithium extraction process as more countries, including those in Europe, unveil 'cleaner and greener' strategies incorporating electric vehicles. Cardinal Resources Ltd (ASX:CDV) (TSE:CDV) (OTCMKTS:CRDNF) has received a revised and improved takeover offer proposal from Shandong Gold Mining (Hong Kong) Co Limited of A$0.70 per share, up from A$0.60.