FTSE 100 set to make a subdued start to week with second wave worries, trade war concerns weighing – Proactive Investors UK

There were lots of encouraging trends in the manufacturing PMI but the headline reading was revised down from the flash estimate, which seemed to hit market sentiment

The seasonally adjusted IHS Markit/CIPS Manufacturing Purchasing Managers Index (PMI) rose to a 16-month high of 53.3 in July, up from 50.1 in June.

The reading was a downward revision of the flash estimate of 53.6.

The headline PMI calculated as a weighted average of five sub-indices has posted above the neutral 50.0 mark that marks the crossover pointed between improvement and deterioration in each of the past two months.

New orders expanded for the first time since February, mainlyreflecting a strengthening of domestic demand, IHS/Markit said.

Manufacturing production was raised for the second successive month and to the greatest extent since November 2017.

Confidence rose to its highest since March 2018, with 62% of companies expecting production to be higher one year from now. Only 12% of firms forecast a contraction.

Manufacturing employment fell for the sixth month running in July, albeit to the least marked extent since March.

The recovery strengthened as a loosening of lockdown restrictions allowed manufacturers to restart or raise production. July also saw signs of furloughed employees returning to work and customers resuming spending. Business optimism also rose to its highest for over two years as companies grew more hopeful that the future has brightened, said IHS/Markit director, Rob Dobson.

"Despite the solid start to the recovery, the road left to travel remains long and precarious. An extended period of growth is still needed to fully recoup the ground lost in recent months. This is also the case for the labour market, where job losses are continuing despite businesses reopening. There is a significant risk of further redundancies and of furloughed workers not returning unless demand and confidence stage more substantial and long-lasting rebounds in the months ahead, Dobson warned.

Duncan Brock, the group director at the Chartered Institute of Procurement & Supply (CIPS), said the makers were on the march again in July, although the employment situation remained bleak.

Driven largely by demand from the domestic market, clients looked towards building more localised supplier bases as opportunities for trade were unblocked with the end of the UKs lockdown; however, overseas customers failed to deliver any positive news. Export orders fell for the ninth month in a row, exposing the ongoing fragility of the broken global marketplace due to the pandemic, Brock said.

The FTSE 100 was virtually unchanged when the PMI was released; it is now down 17 points (0.3%) at 5,881.

Haunted by trade worries and coronavirus (COVID-19) second wave fears, the FTSE 100 was given a further shove lower by the performance of shares of index heavyweight (), which fell almost 5% after the release of its latest results.

The index of UK blue-chip shares fell a worse-than-predicted 37 points to 5,860.89.

The Asia-focused bank saw its first-half profits slump 65% as COVID-19 wrought havoc on its usually robust finances. The performance was far worse than analysts feared as the group said it would be setting aside up to US$13bn to cover bad debts.

has done little to lift investors spirits as it brings the curtain down on what has been a costly half-year reporting season for banks in general, said Richard Hunter, an analyst at Interactive Investor.

Battered Rolls Royce () continued to take a pasting as it headed the Footsies list of losers. A recent debt rating downgrade and the poor outlook for international travel continued to dog the stock market fortunes of the jet engine maker.

Jitters set in among the investors of ITV () ahead of results later this week that are expected to bear the scars of the current economic turmoil.

The days star was IP Group (), the intellectual property group, which owns a near 16% stake in Oxford Nanopore, the maker of the new generation of COVID-19 tests being rolled out by the government. IPs shares soared almost 13%.

Applied Graphene Materials () said it has signedan exclusive agreement with Ohio-based Maroon Group to distribute its graphene coatings in theUS and Canada. The agreement also gives it a direct route into the coatings and polymers sectors in North America, Applied Graphene added. Maroon Group has distributed speciality chemicals and ingredients across both countries since it was formed in 1977.

Seeing Machines Ltd () saw its revenue, profit and cash all come in ahead of target for the year to end-June, 2020, and it is looking forward to the launch oftwo new vehicles featuring its technology in the coming months. Annual revenue is expected to be A$39.7mln, versus guidance of A$36.6mln and up around 24% on the previous year despite the challenges of the coronavirus pandemic on its core markets, while total income is expected to be A$42.6mln, up 30% on the previous period, the provider of driver monitoring systems said in a trading statement.

() () (OTCQB:NQMIY) said it has appointed international legal firm Hill Dickinson in London to prepare the necessary prospectus and documentation to have its shares traded on a tier-1 stock exchange. "Now that the company's annual accounts have been published, showing solid year on year revenue growth, the board of the company has determined that the company has reached a size and stage of development that it is appropriate to consider what other platforms and exchanges exist to position the company to take maximum advantage of the company's maturing operating status, said executive chairman David Lenigas in a statement.

() has said it is cautiously optimistic of hitting full-year targets after a first half that saw revenues rise 43% year-on-year. The cyber-security company acknowledged there is a lot of uncertainty over the outlook for the rest of the year, particularly with the probableending of employee furlough schemes, but said full-year results should be in line with market expectations if it can get a few major product bids over the line in the next few months and continue to convert its healthy prospects pipeline into sales. For the first six months of 2020, the company expects to report revenues of 674,000, up 18% on the first half of 2019.

() said the Oil and Gas Authority has given the green light to its acquisition of a 12.5% additional stake in the onshore licences that host the Wressle operation in Lincolnshire. It takes UJOs holding to 40%, providing 200 barrels of additional daily output if Wressle comes on stream at an initial rate of 500 barrels a day. Break-even at US$17.62 a barrel, Wresslewill be a significant money-spinner with oil trading at around US$40 a barrel.

() has welcomed the commencement of site works at the Wressle onshore oil field in Lincolnshire, which will usher in first production on schedule in the second half of the year. Operator () is currently overseeing the construction, which includes the installation of items such as a high-density polyethelene impermeable membrane, a French drain system and a surface water interceptor. Europa holds a 30% interest in the licences that host the operation, alongside Egdon (30%) and Union Jack Oil & Gas (40%).

() has revealed that it is investing US$15mln in Energy Link Infrastructure (Malta) Ltd, the company which owns the Alternative Crude Oil Evacuation System project. The ACOES is being constructed to provide a dedicated oil export route from the OML 18 asset, comprising a new pipeline from OML 18 and a floating storage and offloading vessel. Once commissioned, the system is expected to reduce the downtime and allocated pipeline losses currently associated with the Nembe Creek Trunk Line to below 10%.

() has submitted the Transmission Integration Study for the integrated 300MW coal-fired power project and coal mine that it plans to build in Tete, Mozambique to Electricidad de Moambique The study evaluated many transmission connection options for the project, taking into account current and planned changes to the network since the completion of the last study with EDM. "It's a fantastic step forward that we have submitted the final draft of the Transmission Integration Study to EDM for review, said Ncondezi chief executive Hanno Pengilly in a statement.

Bushveld Minerals Limited(), the integrated primary vanadium producer and energy storage provider, has revealed that its 84%-owned Enerox Holdings Ltd has acquired a further 65.1% of the share capital of Enerox GmbH. The investment is in line with the company's strategy of establishing a vanadium redux flow battery investment platform to lead investments in VRFB original equipment manufacturers with attractive upside potential. The Enerox battery product is one of the most widely deployed over the past 10 years, offering a unique value proposition in the industry.

(LON:TILS, ) said it plans to raise a gross US$57.25mln from US investors to fund work on three separate drug programmes. Just over 11mln new American depositary shares are being issued at US$5.20 each as part of the fundraiser, organised by ThinkEquity. The proceeds will be used advance the clinical development of Foralumab, its promising fully-human anti-CD3 monoclonal antibody.

() said it has raised 550,000 via a share placing. In a statement, the technology investor said part of the proceeds will be deployed to maintain its 13% stake in Dynasty eSports, which, separately, is about to embark on a 1.5mln (US$2mln) funding round. Cash will also be set aside additional working capital. The new shares, issued at 0.15p, come with a warrant attached, exercisable at 0.25p.

(), the London Stock Exchange AIM listed investor in natural resource opportunities, has noted that Southern Gold Ltd (), in which Metal Tiger owns an approximate 17.1% equity interest, has published an update about its Gubong and Kochang joint venture projects with Bluebird Merchant Ventures PLC (). Southern Gold said itis seeking to realise value from its 50% equity interests in the Gubong and Kochang projects in the Republic of Korea by offering them to joint venture partner().

Group PLC (), a provider of foreign exchange services, saw a significant increase in underlying earnings in its first year as a listed company. Profit before tax in the year to the end of March 2020, shot up to 10.2mln from 2.1mln the previous year on revenue that rose to 29.0mln from 21.9mln the year before as foreign exchange passing through the system topped 12bn up 32.3% year-on-year. Argentex revealed 380 new corporate clients traded during the period, lifting the number of active corporate clients to 1,212, up 12% on the previous year.

(LSE: ZOE), the London-listed vertically integrated CBD and natural resources company, has provided a further update on the sale of DTU and its Kansas nitrogen assets to Path Investments PLC as previously announced on May 27, 2020, and July 8, 2020. The group said the transaction has not yet completed due to matters beyond the company's and Path's control, but its board remains hopeful that matters will be concluded shortly. The company and Path have agreed to an extension to allow the transaction to complete., it added, and the delay has no material impact on the financial performance of the company.

PLC () (NASDAQ:VRNA), a clinical-stage biopharmaceutical company focused on respiratory diseases, has announced that David Zaccardelli, its chief executive officer and president, and Mark Hahn, its chief financial officer, will present a company overview at the following virtual investor conferences in August: BTIG Virtual Biotechnology Conference on Monday, August 10, 2020, at 2.30pm ET; Wedbush PacGrow Healthcare Virtual Conference on Wednesday, August 12, 2020, at 11.30am ET; and the 40th Annual Growth Conference on Thursday, August 13, 2020, at 4.30pm ET. A live webcast of each event will be available on the Events and Presentations link on the Investors page of the companys website - http://www.veronapharma.com - and an audio replay will be available there for 30 days.

OKYO Pharma LTD (), the life sciences and biotechnology company, focused on the discovery and development of novel molecules to treat inflammatory dry eye diseases and chronic pain, announced that its CEO, Kunwar Shailubhai shared insight into the companys development pipeline and upcoming milestones during an investor webinar, hosted by RedChip Companies, on Sunday, August 2, 2020. The investor webinar can be viewed at https://youtu.be/l8onUtOvSqQ.

The FTSE 100 looks set to open the new trading week in negative territory as coronavirus second wave fears and simmering Sino-American trade tensions continueto weigh on sentiment.

The index of UK blue-chip shares is expected to open its weekly account 13 points in deficit at 5,887.76.

Traders are unwilling to be swayed by the economic performance of China after the Caixin purchasing managers index revealed the manufacturing sector to be firmly in growth mode. The reading of 52.8 was well ahead of the 51.3 consensus number and above 50, which denotes expansion.

While encouraging, the worlds second-largest economy appears to be staging a v-shaped recovery, traders appeared fixated on Americas seeming inability to control the coronavirus (COVID-19)outbreak and flare-ups in previously only marginally affected areas, such as Victoria in Australia.

Washington, meanwhile, seems intent on reining in the influence of Chinese software firms.

Mike Pompeo, the US Secretary of State, claimed the US government will clamp down on an array of Chinese state-controlled software companies, explained David Madden of CMC Markets. It is believed the move is motivated by concerns about national security.

Whether this will aid or hinder Microsofts potential acquisition of TikTok from ByteDance remains to be seen.

Closer to home, another busy week is in store on the corporate news front with updates expected from ITV (), () and BP ().

Weekend reports suggested the UK oil majors dividend may be headed for the chop with the company set to post a second-quarter loss of around 5.2bn.

Stocks in the Asia Pacific region are trading mixed today as US-China tensions continueto worry investors.

In Japan, the Nikkei 225 surged 2.16% higher and in China, the Shanghai Composite was up 1.08%.

But the Hang Seng index in Hong Kong dropped 0.95% and Australias S&P/ASX 200 dipped 0.1% after the second-most populous state of Victoria declared a state of disaster on Sunday and imposed a nightly curfew for the capital Melbourne.

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Ltd () is targeting around $225 million per month in existing business-to-business payments volume from its customer network for conversion to its new Spenda platform.

() (FRA:E4N) has closed its non-renounceable pro-rata entitlement offer heavily oversubscribed, with the $3.56 million raised demonstrating strong support from the companys shareholders and endorsing the company's oro-mucosal drug delivery strategy.

s () () placement of 175 million shares at A$0.05 per share has been strongly oversubscribed by new and existing investors, raising A$8.75 million.

engage:BDR Ltd () is trading higher after recording a 36% increase in year-to-date revenue as of July 31, 2020.

() is advancing its Republic of Korea patent application for 12CQ quantum computing chip technology IP with the bid now undergoing substantive examination procedures.

() has been as much as 28% higher after completing stage two production of high purity alumina (HPA) from its pilot plant facility in Welshpool, Western Australia.

() has embarked on a capital raising exercise and intends to raise up to approximately $1,255,625 in a non-renounceable pro-rata entitlement offer and up to $300,000 in an options offer.

() has completed pump testing of a water production bore within a shallow (6-16 metre depth) aquifer at the Butcherbird Manganese Project in WA, confirming sufficient process water supply for planned production.

() continued to make progress against its IPO goals, finishing its June 2020 quarter with record appointment volumes and the expansion of its Real World Evidence technology platform beyond cannabinoids.

() is focused on expanding the resource base and life-of-mine at its Cape Ray Gold Project in Newfoundland, Canada as the June quarter comes to a close.

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FTSE 100 set to make a subdued start to week with second wave worries, trade war concerns weighing - Proactive Investors UK