Oliver Haill WebFG News | 05 Dec, 2017 18:12 - Updated: 18:12 | | |
London equity markets pared early gains to finish lower on Tuesday as services data disappointed, mining stocks lurched lower and the pound made a late rally after more encouraging reports on Brexit negotiations.
The FTSE 100 closed down 11.47 point or 0.16% at 7,327.50, while the pound reversed its earlier slump against the euro to put a 0.2% gain over the session to 1.1380, while falling 0.3% against the dollar at 1.3438.
Brexit negotiations were the main cause of the pound's fluctuations. The rally against the euro came after Brexit Secretary David Davis told parliament that “regulatory alignment” with the EU is what the government wants for the whole of the UK after Brexit.
He pointed out that alignment is not the same as harmonisation and that this "regulatory alignment" was intended to apply to the whole of the country, not just Northern Ireland.
The UK Markit/CIPS services purchasing managers' index for November fell to 53.8 from 55.6 a month earlier, which was worse than the fall to 55.0 that the market had forecast.
A PMI reading above 50 indicates growth in these widely followed surveys, though economists differ on how reliable this soft data is in predicting the official outcomes.
There was also some disagreement also over whether Tuesday's services PMI pointed to gross domestic product growth remaining at 0.4% in the fourth quarter or slowing to 0.3%.
Even after stronger readings from the manufacturing and construction surveys, the UK composite PMI for November fell to 54.9 when the previous month's six-month high of 55.8 had been expected to hold steady.
The resurgent pound was the main drag on UK listed stocks, said analyst Chris Beauchamp at IG. "Coming off the back of a period of high volatility due to the sensitivity surrounding US tax reform developments, today has seen things calm down significantly amid a lull in newsflow.
"Miners have been the clear underperformer today, as the deterioration in Glencore, Anglo American, Rio Tinto, and Antofagasta proved to be the undoing of an index which is heavily commodity weighted. Much of the deterioration in commodity stocks have come at the hands of a drastic devaluation of copper, with high grade copper falling into a two-month low."
Supermarkets were the standout gainers on the corporate front, with Tesco and Morrisons boosted by upgrades from Goldman Sachs, and Sainsbury tagging along for the ride after the bank upped its price target on the stock but kept the rating at 'sell'. Goldman said margin pressure in the UK grocery market is easing, adding that while competitive intensity is still high, multiple data points suggest 2018 will see greater industry margin expansion than 2017.
Housebuilders were also on the rise, with Persimmon and Taylor Wimpey lifted by upgrades to 'buy' at Canaccord Genuity, while Standard Chartered was higher on the back of an upgrade to 'overweight' at JPMorgan.
Plumbing and heating products distributor Ferguson, formerly Wolseley, was in the black after saying said it was on track to meet annual profit expectations after strong growth in the US offset tough trading in the UK during the first quarter.
Telecommunications giant Vodafone ticked higher after saying it has entered into a strategic alliance with SoftBank Corp, focussing on mobile services for enterprise customers.
IG Group rallied after saying it saw growth slow in the second quarter after a barnstorming first, though revenues were still higher and costs lower than the same period last year.
Budget carrier Wizz Air flew higher as it reported 22% growth in passenger numbers for November and the said the load factor ticked up to 88.3% from 86.8%, while British Airways and Iberia parent International Consolidated Airlines Group dipped after reporting a rise in traffic for November as it announced that its French airline OpenSkies will cease to operate at the end of next summer.
On the downside, Provident Financial was under the cosh after it said its Moneybarn motor finance arm is being investigated by the financial watchdog, the second of the embattled sub-prime lender's businesses to be probed.
Cineworld shares fell despite reaching an agreement to buy US rival Regal Entertainment Group for $3.6bn (£2.7bn), creating the world's second largest cinema operator.
Victrex reversed earlier gains after its full-year numbers, despite the dividend coming in ahead of expectations, while Wood Group also gave up its earlier gains after it won a multi-million dollar contract to support GlaxoSmithKline in Germany.
FTSE 100 - Risers
Standard Chartered (STAN) 749.20p 3.03%
Tesco (TSCO) 201.00p 3.00%
Sainsbury (J) (SBRY) 239.30p 2.75%
Whitbread (WTB) 3,710.00p 2.74%
Morrison (Wm) Supermarkets (MRW) 218.80p 2.24%
Hammerson (HMSO) 534.50p 2.10%
Sky (SKY) 976.00p 2.09%
Convatec Group (CTEC) 207.40p 1.57%
Persimmon (PSN) 2,602.00p 1.40%
Mediclinic International (MDC) 579.50p 1.31%
FTSE 100 - Fallers
Anglo American (AAL) 1,351.00p -2.45%
Glencore (GLEN) 334.00p -2.27%
St James's Place (STJ) 1,175.00p -2.08%
Rio Tinto (RIO) 3,468.50p -2.02%
Antofagasta (ANTO) 884.50p -1.67%
Babcock International Group (BAB) 676.50p -1.53%
ITV (ITV) 158.70p -1.43%
Barclays (BARC) 191.70p -1.31%
Prudential (PRU) 1,809.00p -1.17%
Mondi (MNDI) 1,699.00p -1.16%
FTSE 250 - Risers
Millennium & Copthorne Hotels (MLC) 584.00p 4.10%
TBC Bank Group (TBCG) 1,662.00p 3.88%
Capital & Counties Properties (CAPC) 268.00p 2.72%
Nostrum Oil & Gas (NOG) 340.00p 2.72%
LondonMetric Property (LMP) 179.90p 2.45%
Tullow Oil (TLW) 187.60p 2.35%
Rank Group (RNK) 246.40p 2.20%
Brewin Dolphin Holdings (BRW) 375.40p 1.73%
Spire Healthcare Group (SPI) 245.60p 1.70%
Booker Group (BOK) 222.90p 1.69%
FTSE 250 - Fallers
Provident Financial (PFG) 790.50p -10.17%
Sirius Minerals (SXX) 23.64p -4.44%
Inmarsat (ISAT) 475.30p -3.98%
Vedanta Resources (VED) 655.00p -3.69%
Acacia Mining (ACA) 165.30p -3.45%
Stagecoach Group (SGC) 177.20p -3.34%
Sophos Group (SOPH) 535.00p -3.33%
TalkTalk Telecom Group (TALK) 144.40p -3.28%
Kaz Minerals (KAZ) 713.50p -3.12%
Countryside Properties (CSP) 331.90p -3.09%
The top flight index recovered some ground on Friday, but mostly on account of weakness in Sterling after German Chancellor Angela Merkel reportedly echoed other European Union officials, saying "the most difficult phase is ahead of us".
The focus in the coming week will continue to be on the ebb and flow of data out of the US, including Republicans' progress on securing passage of their tax cuts.
Wall Street is heading higher again on Friday amid news that Republicans were tweaking their proposed tax cuts in order to secure prompt passage of the US tax bill.
The chief executive of French planemaker Airbus will step down from his position in 2019 as the company announced a major shake-up of its management team.
London’s FTSE 250 was up 0.1% to 20,023.23 in afternoon trade on Friday as the Christmas lull kicked in.
Industrial production in the States rose slightly less quickly than expected last month, despite higher output of business equipment and materials.
Diversified mineral production and development company Strategic Minerals announced on Friday that, after the successful completion of technical and financial due diligence on the Leigh Creek Copper Mine company, it has agreed to continue with the acquisition on renegotiated terms.
London’s FTSE 100 was up 0.3% to 7,469.23 in quiet afternoon trade on Friday.
International esports entertainment group Gfinity has been named as a preferred event partner to Microsoft for the forthcoming ‘Halo World Championship 2018’ for the next season, it announced on Friday.
Hutchison China MediTech, known as Chi-Med, has initiated the United States Phase I bridging clinical trial of fruquintinib, it announced on Friday.