UK Markets Narrative Tues 25 Sep 18 EOD

Price action amongst the major UK indices was once again dominated by oil’s continuing break-out with Brent adding another 1.3% to bring the price of oil to $82, a price not seen since Nov 2014 when oil was retreating from the $115 highs of summer 2014. Speculation of a return to  $100 oil may further spur the rally and technically, a price in the mdi 90’s seems easily achievable. This opens trading opportunities in oilers and oil and gas service companies. While the oil services sector has shone over the past few months (up 12% in the past month and 29% ytd), the O&G producers have lagged the oil price which may suggest further upside: the sector is up 6.5% ytd but has gained 3.5% in the past 5 days which illustrates the rapid rerating that is occurring amongst oilers. Assuming oil continues north then these trades look like having some way to run which in turn may lift the UKX. |For today O&G producers closed up 2.5% while Oil Services was up almost 2%.

The UKX was further lifted by NXT   pleasing investors with its second quarter TU: rallying almost 10% intraday. There was no halo effect for the rest of this embattled sector with the MCIX Gen Retailers all losing ground; CARD reported today and dropped over 5%.

Other sectors in the green today included Mining +1.9%, Pharm +1.3%, Software +1.2%

Utilities continued to underperform losing 1% today while Gen Industrials and REITs also dropped around 1%.

The MCIX closed down 0.2% weighed on by Financial Services (IGG, PLUS) Banks and Retailers. AIM was flat on the day while the TechMARK rallied led by Software and Electronics & Electricals.

GBP firmed against USD up over 0.3% at pixel

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UK Markets Narrative Fri 05 Oct 18 EOD

The week ended with further weakness across all of UK indices with almost all indices down 1% or more. GBP strengthened against USD which provided some headwinds for the UKX and NMX. Brent yielding over 1% on the day did inflict some damage on the O&G sector but equally some profit taking is also to be expected given recent runs. That might also be applicable to Mining which suffered the most today losing over 3% although AAL and AAL lost 4% and 5% respectively with BLT and RIO close behind them: there are suggestion that weakness in China may also be a root cause. Almost all sectors were down on the day with only Utilities and REITs showing green: a sign of some defensive positioning given the recent weakness across most UK markets

The day ended with NMX -1.1%, UKX -1.2%, MCIX -0.75%, AIM -1.31 and TechMARK -1.2%

US NFP jobs number did nothing to soothe neither domestic US nor UK and European markets woes: the assumption being higher rates sooner may now be more likely.

We end the first week of October deeply in the red on all UK indices and on all timescales:

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UK Markets Narrative Thurs 04 Oct 18 EOD

Another ugly day in red for the UK and broader global markets: these are increasing in frequency as the main indices languish below their 200 and 50 DMAs. Today even the irrepressible US markets are joining the global swoon with the NASDAQ leading the rout, down 1.7% at pixel. Given the US markets are largely propped up by mega techs, this may signal a broader reversal and a more significant sell-off. However, to date the BTFD strategy has been in operation in the US so we await confirmation of any further weakness.

The UKX dropped over 1.2% today though not owing to the usual suspects of the miners or the oilers, OCDO tanked over 8% today with SMDS, BRBY, SKG, ITRK and REL all dropping between 5-6%: ITRK and SMDS are both ex-div and BRBY rattled by news of China’s change in customs checks on luxury imports.

In AIM, BOOM was more bust today opening down almost 50% on poor results.  FDP, EVE, JAY and EVRH were also among double digit losers today.

Worst performing sectors included Personal Goods, Tobacco, Utilities, Household Goods, Media and T&L all down over 2%.

The four sectors in green included the Banks, Insurance and Mining.

MCIX down 1%, AIM down 1.5%, TechMARK 1.1%

GBP has rallied above the $1.30 level while Brent pulled-back 0.5% but remains around the $85 mark. Increasing supply constraints may see this maintained with much speculation of a $90-100 target in the coming months. This will boost oilers and O&G services while negatively impacting the airlines and transports.Base metals were mixed while gold and silver are showing some signs of catching a bid.

 

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UK Markets Narrative Wed 03 Oct 18 EOD

A muted day in green for all the UK indices as Italian fears lifted and GBP steadied with oil continuing north closing above $85.  This resulted in the UKX and NMX closing 0.5% up lifted in the main by Banks, Pharm Media and Gen Retail all up 1% or more on the day.

TSCO started the day on a downer as profits disappointed investors, closing down almost 9% on the day and dragging the F&D Retail sector into the red with it.  OCDO, SBRY and MRW did seem unperturbed closing the day up 1-2% to the good suggesting this is a TSCO problem and not a sector one

The MCIX Was up a more muted 0.2% while AIM rallied 0.3%. The TechMARK performed the best up 0.6% with BATM and CCC up almost 5% on the day.

IN the commodities complex, gold  dipped back below $1200 while the base metals were all flat to positive on the day

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UK Markets Narrative Tues 02 Oct 18 EOD

A general sour note pervaded the UK markets today with every index in the red. Support Services, Life Insurance, banks and Media did most of the damage to the NMX and UKX both down by 0.3%.  The poorer than expected Construction PMI may well have spooked the market along with increasing worries over Brexit and the Italian budget.

The MCIX dropped 0.8% while AIM was down by almost 1.5% with ASOS, BUR and LTG inflicting much of the damage down -5%, -8% and -8% respectively.

The TechMARK bled the least today down only 0.23% as Pharms remain bullish with the sector up 0.45%. Other islands of green included Mining up 1.4% and O&G +0.13%.

Brent remains just shy of $85 while GBP dropped below $1.30 today which should bolster the FTSE if wider macro concerns abate.

For now all major UK indices are bearish on all timescale except AIM and the TechMARK although both of these are short and mid term bearish.

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UK Markets Narrative Mon 01 Oct 18 EOD

The new month started pretty muted for the UK with the main indices sitting out of the overall global rally today despite better than expected Manufacturing PMI at 09:30: Asia finished up overnight while the DAX rallied over 0.7% with the US cock-hoop following the Canadian resolution to the “new”  NAFTA. This may auger well for the China trade discussions as time to mid-terms in the US runs out.

UKX closed flat on the day, muted by a boost to GBP /USD but offset by a further uptick in oil with Brent now above $83.  The oilers and O&G services responded to the rallying oil price with improving price action with BP just shy of £6 for the first time since pre-Deepwater Horizon days of 2010.

Mining pulled back again down 0.3% as the sector consolidated following the recent manic up-thrust in price. Banks remain bearish and sold-off while Pharm was flat and T&L positive

Support Services rallied over 1% with RTO, DCC and SRP all firmly in the green by 3-5%.

MCIX was boosted up 0.5% presumably aided by Hammond’s business friendly speech at the Conservative Party Conference. AIM was up 0.4% while the TechMARK managed 0.2%

Elsewhere in the commodities complex, base metals were mainly negative with copper down 0.6% while gold and silver continue to tumble following the price action from last week’s FOMC announcement.

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UK Markets Narrative Fri 28 Sep 18 EOD

September ends with a whimper as all but AIM closed the final day of trading in the red. Both NMX and UKX were down almost 0.5% while the MCIX closed down -0.4% along with the TechMARK. AIM rallied 0.3%

Outperforming sectors included Utilities, A&D, O&G services , Mining, T&L all up on the day

Banks were down 2% accounting for most of the main index losses along with Non-life insurance was down over 3% while Mobile comms was down 2%

Oil rallied on the day while GBP sold off against USD

 

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UK Markets Narrative Thurs 27 Sep 18 EOD

Today was a green day for the resource heavy UKX and NMX but a day in red for the MCIX and AIM.  After last night’s Fed rate hike and more hawkish commentary on future monetary policy, USD rallied and pushed GBP back to around the $1.31 level. This boosted the UKX.

The Tech MARK closed up 0.45% helped by the Pharms.

Banks Pharm, O&G, Media, Utilities and Tobacco all had a good day in green while Mining pulled back another 0.8% with FS dragged lower by IGG (-13%) and TCAP (-7%). With PLUS and CMCX joining IGG in bear territory, questions must be in investors’ minds on the full effects of legislation changes on this sector.

Oil continued to hold around the $82 level which augers well for the oilers and oil services sectors.

Gold slipped below the $1200 on stronger USD while the base metals were mixed with iron ore down almost 2% and copper mildly in the red.

 

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UK Markets Narrative Wed 26 Sep 18 EOD

All major indices were flat on the day with many traders awaiting the outcome of the FOMC this evening and the potential implications for liquidity. Oil held firm on the day despite early weakness while cable was also flat on the day.

There were some major price moves with INDV bombing just before the close on a TU - down 16.5% on the day: AA also lost almost 14% today blaming poor weather for higher costs owing to the number of call-outs.

Miners gave back some recent gains where profit taking took the sector down 1.7% on the day: similarly, O&G Producers slipped by 0.7%

 

Outperforming sectors of note included Tobacco, Food Producers, F&D Retail , T&L all +0.6%: Banks , Pharm and non Life Insurance all +0.5%

 

Oil closed flat as did cable with base metals treading water. Gold and silver sold-off which may be presaging further dollar strength following the FOMC rate decision at 19:00

 

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UK Markets Narrative Tues 25 Sep 18 EOD

Price action amongst the major UK indices was once again dominated by oil’s continuing break-out with Brent adding another 1.3% to bring the price of oil to $82, a price not seen since Nov 2014 when oil was retreating from the $115 highs of summer 2014. Speculation of a return to  $100 oil may further spur the rally and technically, a price in the mdi 90’s seems easily achievable. This opens trading opportunities in oilers and oil and gas service companies. While the oil services sector has shone over the past few months (up 12% in the past month and 29% ytd), the O&G producers have lagged the oil price which may suggest further upside: the sector is up 6.5% ytd but has gained 3.5% in the past 5 days which illustrates the rapid rerating that is occurring amongst oilers. Assuming oil continues north then these trades look like having some way to run which in turn may lift the UKX. |For today O&G producers closed up 2.5% while Oil Services was up almost 2%.

The UKX was further lifted by NXT   pleasing investors with its second quarter TU: rallying almost 10% intraday. There was no halo effect for the rest of this embattled sector with the MCIX Gen Retailers all losing ground; CARD reported today and dropped over 5%.

Other sectors in the green today included Mining +1.9%, Pharm +1.3%, Software +1.2%

Utilities continued to underperform losing 1% today while Gen Industrials and REITs also dropped around 1%.

The MCIX closed down 0.2% weighed on by Financial Services (IGG, PLUS) Banks and Retailers. AIM was flat on the day while the TechMARK rallied led by Software and Electronics & Electricals.

GBP firmed against USD up over 0.3% at pixel

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UK Markets Narrative Fri 21 Sep 18 EOD

Today’s trading started with a bang for the UKX and NMX as the US all-time-highs yesterday sent ripples around the world. However, PM May’s defiant rebuttal of the Salzburg slap-down this afternoon sent GBP plummeting over 1.5%. The weaker pound bolstered the already ebullient mega cap index with the UKX closing the day up 1.8% led by Mining (+3.6%), O&G (+2%), Pharm (+2%) and even a bounce-back in Tobacco up 2.7%. The NMX closed up 1.4%.

This cheer was not shared across all indices and sectors as the MCIX ended the day flat with the likes of JD down almost 5%, GNS -4.5%, with £1bn plus mid -caps IPO, WKP, GFRD and SRP all down over 3%.

AIM closed up over 0.5% while the TechMARK closed up 0.7% with CCC rallying over 5% and MCRO up 2.7%.

Brent touched $80 intraday before retreating and was flat on the day at pixel. Gold reversed sharply on the day from a touch over 1211 to a low of 1191 in less than 30 minutes. Silver did similar but recovered lost ground in a similar time. Copper was up over 4% on the day while all the base metals with the exception of iron ore rallied strongly. This combined with a weak pound and a strong recovery form oversold accounts for the storm back in Mining

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