• FTSE 100 index drops 11 points
  • Gold holds near record highs
  • IAG confirms massive rights issue
  • Wall Street gets off to mixed start

3pm: Mixed start for US stocks

Wall Street stocks have made a mixed start, though tech stocks are rattling higher after knockout earnings numbers from some of the big names.

The Dow Jones had dropped in the negative territory in early trading, falling 0.2% to 26,268, while the tech-fuelled Nasdaq Composite shot up 1% to above 10,700 and the S&P 500 was somewhere in between with a 0.2% rise.

Apple (NASDAQ:AAPL) has climbed 6% to add several more billion dollars to its valuations, while Amazon (NASDAQ:AMZN) was up 4% and Facebook (NASDAQ:FB) surged 7% after their earnings reports overnight.

A small torrent of US economic data added to the uncertain vibe, with some of it better than expected and some worse.

Personal income fell and spending slowed in June, according to the Bureau of Economic Analysis, and that month was before the past months resurgence in coronavirus cases.

Household income fell 1.1% in June compared to the prior month, worse than the 0.8% economists expected, while consumer spending rose 5.6%, which was down from the 8.5% improvement in May, although slightly better than forecast.

This comes a day after initial jobless claims rose for the second consecutive week and US gross domestic product in the second quarter was shown to have collapsed 32.9% year-on-year — the worst fall on record — though this roughly equates to a true second-quarter decline of nearer 9% on a quarterly basis.

Back in London, the FTSE 100 has extended its decline, dropping 28 points or 0.5% to 5,961.86.

A softer dollar, leading to the pound being up 0.5% at 1.3161 is not helping many UK blue chips.

12.45pm: PM says reopening must slow

The FTSE is meandering lower but not by much, despite a warning from Prime Minister Boris Johnson that the UK needs to slow the reopening of the economy.

Now is the time to “squeeze that brake pedal in order to keep that virus under control”, he said, reversing the previous decision to allow the reopening of leisure businesses including casinos and bowling alleys.

This would seem to put the kibosh on hopes for a V-shaped recovery for the UK and put a definite dent in the shares of Hollywood Bowl (LON:BOWL).

These previously planned opening-up measures, including allowing certain beauty treatments to resume, will be postponed until at least August 15, Downing Street said.

The FTSE has fallen 11 points to 5,978.73.

Looking across the pond, traders at IG were calling the Dow Jones around 64 points higher ahead of the open.

This follows knockout numbers from Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) overnight.

“With this unprecedented pandemic causing a near-term consumer/enterprise spending abyss, the FAANG names have been viewed as relative safety blankets in this scary Category 5 storm”, said broker Wedbush.

Analysts at the US broker said they believed the tech stocks “could still go another 20%-30% higher” (Read more here).

11.59am: Blue chips into the red

Londons blue chip benchmark has dropped into negative territory for the day, led lower by a mix of companies.

The Footsie has lost eight points or 0.1% to 5,981.71, with British Airways owner IAG (LON:IAG) and host of other consumer-focused corporations among the big losers.

This includes media groups ITV (LON:ITV) and WPP (LON:WPP), bookies GVC (LON:GVC) and Flutter (LON:FLTR), hotels group Whitbread (LON:WTB), along with BT (LON:BT.A), Imperial Brands (LON:IMB) and Diageo (LON:DGE), offering internet, fags and booze, perhaps the modern trio of home comforts.

The dollar has also resumed its move lower after gains the previous day, with market analyst David Madden at CMC Markets saying this comes as dealers are “back in risk-on mode”.

Having yesterday appeared to act as a safe haven asset, the new move lower again “underlines the sour sentiment surrounding the currency”, said Madden.

This has benefitted the pound, which creates headwinds for the many overseas earners on the FTSE 100.

10.50am: Footsie flattens off

The FTSE 100 has given up almost all of its early gains now, dropping below the 6,000 mark with just 4 points added for the day at 5,994.

If the session finished around that level it would mean the month has seen a 2.8% loss and down more than 7% since early June and 22% since Januarys highest point.

“July has been a second bad month in a row for investors in UK stocks with the FTSE 100 index now trading at lows last seen in late-May,” noted Russ Mould, investment director at AJ Bell.

“The market has most certainly lost momentum and is slowly drifting down as many companies continue to struggle from the pandemic.”

Tobacco, banks and media have been the three worst performing sectors on the LSE in July, with gains for NatWest (LON:NWG) and British American Tobacco (LON:BAT) slight gains on the back of results today making hardly a difference.

Following the hefty provisions for bad debts announced by several of its peers earlier in the week, amid worsening expectations for the economy, NatWest guided full-year impairment charges of £3.5-4.5bn.

“Interestingly, it said customer deposits increased by £39.1bn in the first-half period to £408.3bn,” observed Mould.

“This is probably as a result of lower spending and people taking steps to have back-up cash in case of emergencies or a change in their circumstances.

While NatWests shares advanced, Mould said "this must be seen in the context of a big sell-off earlier this week following gloomy updates from other listed banks”.

Over at BAT, the shares is only just in positive territory this morning after its first-half earnings per share number came in 3% below expectations but full year guidance was held.

10.25am: European economic growth crashes

European and UK shares are remaining in positive territory but coming off their highs after Eurozone gross domestic product fell by 12.1% in the second quarter of the year compared to the first

The shrinking in the eurozone economy was the largest since the bloc was founded, but only slightly worse than the 12% forecast by economists.

"Some records are never to be beaten," said Bert Colijn, ING senior economist. "Think of Alan Shearers Premier League goals, Wilt Chamberlains 100 point basketball game, Eddy Merckxs victories in cycling. The second quarter eurozone GDP figure should probably go on that list as well; it would be great if it were never to be beaten.

"The -12.1% quarter-on-quarter growth rate is the worst ever recorded and a pretty difficult one to interpret. It is a shocking drop, but completely understandable as the economy was shut for a considerable period during the quarter.

"It, therefore, doesnt tell us all that much about the general state of the economy, which is usually why one would look at GDP figures in the first place.

"Still, the deeper the lockdown, the higher the chance of more significant lasting damage to the economy and therefore the extent of the decline is still relevant."

10am: House prices crash looks unlikely

The FTSE 100 has faltered slightly but remains in positive territory, up 15 points or 0.3% to 6,005, with support coming from a traditional end-of-month buying by funds and housebuilding companies after some positive news on house prices.

House prices rose by 1.7% in July compared to the month before, according to building society Nationwide, which more than reversed a 1.6% fall in June.

On an annual basis, prices are now up 1.5%, gaining ground from the negative figure of 0.1% seen the previous month.

"Along with the pickup in lending in June, this reinforces our view that a house price crash is now unlikely," said Hansen Lu at Capital Economics.

"Although, with the mortgage holiday and furlough schemes due to end soon, further modest price falls may still be on the horizon."

Among the builders, blue chip Persimmon (LON:PSN) was a strong gainer, up more than 1%, while rivals including Barratt (LON:BDEV) and Taylor Wimpey (LON:TW.) were enjoying smaller gains.

The positive tone in markets was helped by "end of the month recovery mode", said market analyst Connor Campbell at Spreadex, more noticeably over in the continent.

"As ever during this pandemic, the reasons behind Fridays gains feel quite arbitrary, almost counterintuitive. After all, investors have woken up to a 13.8% second quarter collapse in France, wiping out 18 years worth of growth, a worse than forecast 18.5% contraction in Spain, and a 12.4% fall in Italy."

Euro area reports 12.1 percent #GDP drop in Q2 – a sharper fall than in the US (9.5pc) but not as negative as the @OBR_UK projection of a UK contraction of around 20pc. May be that the #OBR is being too pessimistic – it will depend on how far economic activity rebounds in June.

— Andrew Sentance (@asentance) July 31, 2020

The UK is also shrugging off a new lockdown announced overnight by the government to cover swathes of Greater Manchester, East and West Yorkshire.

"And yet, in part thanks to some blockbuster earnings from the likes of Apple and Amazon, and solid updates from Facebook and Alphabet, the tone of trading was positive," Campbell said.

8.55am: Friday starts positively

Traders cast aside their coronavirus worries as the FTSE 100 opened in positive territory.

The index of UK blue-chip shares rose 35 points to 6,025.69.

Still, underlying concerns about the fragile state of the world economy reheated the gold price, which was bubbling around US$1,975 an ounce.

Remember, the yellow metal acts as a haven investment in times of turmoil, so the fact it is nearing record territory underlines the markets skittish mood.

What does Roman Abramovich know about the gold price?

On the eve of his teams appearance in the FA Cup final, Russian billionaire Roman Abramovich has, according to Bloomberg, decided to offload his shares in Highland Gold Mining (LON:HGM).

The proceeds may help fund Chelsea manager Frank Lampards future forays into the transfer market.

Elsewhere, the big, but expected, news was provided by British Airways owner IAG (LON:IAG), which fell 5.8% after the announcement of its long-mooted £2.5bn rights issue. The carrier also warned that international travel was unlikely to recover until 2023.

After delivering a seemingly gloomy message as it significantly increased bad debt provisions, NatWest (LON:NWG) found itself in the list of risers with a 2.2% gain. Much of that was a recovery from Thursdays sector-wide sell-off prompted by the rather grim update from Lloyds (LON:LLOY).

Proactive news headlines:

Tiziana Life Sciences PLC (LON:TILS, NASDAQ:TLSA) has submitted a patent application covering the potential use of nasally-administered and orally taken Foralumab for the treatment of COVID-19 either alone or in combination with other antiviral drugs. The methods of delivering the fully human anti-CD3 monoclonal antibody (mAb) could potentially modulate or stimulate the immune system to suppress cytokine storms and therefore reduce respiratory failure in coronavirus patients, the company said. Its researchers believe its combination with other anti-viral drugs could improve efficacy.

Thor Mining PLC (LON:THR) (ASX:THR) has revealed that there is visible gold from sample panning of the second phase of gold, nickel, and chromium geochemical sampling at the 100% owned Pilbara Goldfield tenements (E46/1262 and E46/1190) in Western Australia. Among the highlights, 17 of the 32 stream sediment samples had visible gold in panning, while two of the 2019 sample sites (19PST22 and 19PST32) had visible gold in multiple follow-up stream sediment samples, and samples 20PST04 and 20PST24 returned 13 and 11 grains respectively from panning. Mick Billing, Thor Minings executive chairman commented: "This appears to be a highly successful follow up, to the previous, very successful, sampling program."

ReNeuron Group PLC (LON:RENE) has announced that the US Patent and Trademark office (USPTO) has completed its examination of the company's patent application (14/379,239), entitled: "Phenotype profile of human retinal progenitor cells" and has issued a notification of allowance for the issuance of a patent. In a statement, the UK-based global leader in the development of cell-based therapeutics said the allowed patent protects the composition of the company's hRPC cell-based therapeutic candidate for retinal diseases, cultured under specific conditions to enhance function and identifiable by the presence and absence of specific cell surface markers. This notification of allowance in the US adds further intellectual property protection to the hRPC technology, which already has patent protection in a number of other major territories including Europe, Japan and Australia, it added.

SkinBioTherapeutics PLC (LON:SBTX) has updated investors on the progress of its cosmetic skincare programme and a psoriasis food supplement trial. The AIM-listed firm said Sederma, its partner in the cosmetics programme and a division of Croda International PLC (LON:CRDA), has successfully replicated the lysate manufacturing process and achieved the same performance from the companys SkinBiotix technology and is now working to validate a scale-up of the manufacturing process at different volume levels. Meanwhile, the firm said in light of current restrictions on non-coronavirus related human studies, it has established a protocol for its self-managed psoriasis food supplement trial and was proceeding with the study.

Impax Environmental Markets PLC (LON:IEX) revealed on Thursday that it is to pay a first interim dividend for the 2020 financial year of 1.3p per ordinary share, and said it is the intention of its board to declare a final, or second interim, dividend towards the end of the first quarter of 2021. In a statement released after the London market close, IEX said that in order to be equitable to all shareholders, and following a similar consideration of paying last year's (single) dividend as an interim rather than a later final, the board has decided that henceforth it will declare an interim dividend at the half-year stage, with a second dividend payable after the year-end.

Oncimmune Holdings PLC (LON:ONC) has announced that The European Respiratory Journal – a leading lung disease-focused scientific publication and flagship journal of the European Respiratory Society – has published the peer-reviewed results from the Early detection of Cancer of the Lung Scotland (ECLS) trial. The trial was delivered by the Universities of Dundee and St Andrews with NHS Tayside, and co-funded by Oncimmune, the Scottish Chief Scientist Office and the Scottish Government. The leading global immunodiagnostics group said the paper titled 'Earlier diagnosis of lung cancer in a randomised trial of an autoantibody blood test followed by imaging' – which is now available online and will be replicated in print before Q3 2020 – evaluates the effectiveness of Oncimmune's EarlyCDT Lung test in reducing the incidence of patients presenting with late-stage lung cancer at diagnosis.

Collagen Solutions PLC (LON:COS) has reported that its year-to-date sales plus its confirmed order book are now over £4mln following the signing of two supply agreements in its first quarter. In an update on current trading accompanying results for the year ended March 31, 2020, the biomaterials and regenerative medicines firm also reported revenue of £900,000 for its first quarter, helped by a reduction in the impact of coronavirus experienced in the fourth quarter of the prior year, as well as a cash balance at the end of the period of £1.6mln. For the prior year, Collagen reported revenues of £4.46mln, down 1% year-on-year, alongside a pre-tax loss of £2.06mln compared to £1.79mln in the prior year.

MBH Corporation Plc (FRA:M8H) has expanded its construction arm with its fourth acquisition of 2020. GS Contracts (Joinery) Limited, a specialist in high-end hospitality and retail fit-out work, has joined the group for a consideration of £1.7mln in convertible notes and bonds. The payment includes the acquisition of a commercial property worth roughly £0.8mln as GS Contracts brings their own in-house production facilities.

NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQMLF) (OTCQB:NQMIY) said it is “optimistic” for its prospects moving forward after reporting rising production from its Hellyer mine in the first part of 2020. In an outlook statement accompanying its results for the year ended December 31, 2019, the company reported that in the first quarter of 2020 it produced 8,127 tonnes of lead concentrate, up from 4,712 a year ago, while zinc concentrate rose to 4,609 tonnes from 3,015.

European Metals Holdings Limited (LON:EMH) (ASX:EMH) has highlighted “continued progress” at its Cinovec lithium and tin project in Czechia. In an update for the three months ended June 30, 2020, the AIM-listed firm said during the period a €29.1mln investment in Cinovec by conglomerate CEZ Group was completed and project work will commence immediately, while a preliminary mining permit for the project has also been granted relating to the eastern part of the deposit for eight years. The company is also in discussions with the Prague Stock Exchange regarding a proposed listing, adding that it has also arranged an interim funding facility to assist in financing new initiatives for ongoing operations.

Conroy Gold and Natural Resources PLC (LON:CGNR), the gold exploration and development company focused on Ireland and Finland, said it has received a notice to exercise warrants to subscribe for 1,358,333 ordinary shares at a price of 16p per ordinary share for which funds of £217,333 have been received by the company. The warrants were issued as part of the placing and subscription for new ordinary shares announced on February 18, 2020. The group added that proceeds from the exercise of the warrants will be used for general working capital purposes.

San Leon Energy PLC (LON:SLE), the independent oil and gas production, development and exploration company focused on Nigeria, has announced the appointment of Allenby Capital Limited as the company's nominated adviser and joint broker with iRead More – Source