Digital Look WebFG News | 11 Aug, 2017 17:40 - Updated: 17:52 | | |
Stocks ended near their session lows on Friday with traders still on edge and very wary heading into the weekend break due to the tense geopolitical situation in the Northern Pacific.
Despite that, the FTSE 100 closed Friday's session lower by 1.08% or 79.98 points to 7,309.96 and the more domestically focused FTSE 250 was down 154.63 points to 19,544.79. For the week, the top flight index was down by 2.69% or 201.75 points.
That was despite a possible indication that China might not back-up its errant neighbour if it carried out a missile strike that could threaten US territory.
According to the English-language Global Times, which was founded by the Communist Party's People's Daily, China should "make clear that if North Korea launches missiles that threaten US soil first and the US retaliates, China will stay neutral."
Nonetheless, and as IG's Joshua Mahony pointed out: "Today we have seen China step into the fray, promising to stay neutral if North Korea attacks first but to intervene if the US or South Korea attacks first. This essentially gives North Korea free reign to further develop their nuclear programme."
On the other hand, COMEX-traded gold futures were little changed, edging higher by 0.22% to $1,293.00/oz. while Wall Street was retracing a smidgen of Thursday's losses alongside - with the latter also benefitting from a weaker than expected reading on consumer price inflation in July.
Yet equity markets on the Continent all closed lower.
The downwards pressure on the US stock market increased overnight after US president Donald Trump told journalists he stood by his warning made to the North Korean regime the day before. Indeed, Trump added that his warning may not have been "tough enough" and declined to take the option of a pre-emptive strike off the table.
On that note, the Global Times also pointed out that: "if the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern on the peninsula, China will prevent them from doing so."
The headline rate of US CPI printed at up by 1.7% year-on-year, a tenth of a percentage point less than economists had forecast.
This was followed by speeches from the presidents of the Federal Reserve banks of Dallas and Minneapolis.
Dallas Fed chief Robert Kaplan made comments regarding the US rate hike stating, "I was a strong advocate of the two rate hikes this year," adding "I want to see more evidence on hitting inflation target."
On a similar note, the Minneapolis Fed's Neel Kashkari said, "There may be more slack than we think in the labour market," adding "we're not exactly sure why inflation has been low."
Back in the UK, in an interview with the Evening Standard the Monetary Policy Committee's Michael Saunders said Brexit would likely crimp the UK economy over the longer-term.
According to Saunders, Britain's gross domestic product may grow five percentage points less over the next 15 years.
Exane hangs up on Dixons
Shares in Dixons Carphone sank after Exane BNP Paribas downgraded the stock from 'outperform' to 'underperform' on concerns about changes in the mobile phone market, including fewer customers upgrading to new phones and the unbundling of handset and network contracts.
Financial services group Old Mutual posted a sharp 37% rise in adjusted pre-tax profits to £969m, helped in part by £108m of proceeds from the sale of its OMAM unit although it did incur in a goodwill impairment charge of £71m linked to UAP-Old Mutual in East Africa. On an IFRS basis profits before tax surged from £534m in the year-ago period to £940m, for earnings per share of 10.6p, with the latter up by 33%. Despite that, its net asset value per share decreased from 228.6p to 220.1p. In line with its stated policy on payouts, the interim dividend was increased by 32% to 3.53p.
Domino's Pizza Group announced the creation of a partnership with its largest franchisee in London on Friday. The FTSE 250 company said that, as part of the transaction, it agreed to pay £24m for a 75% stake in a newly-formed company, whose assets will consist of all the franchisee's operations being 25 existing Domino's stores in London.
The Restaurant Group announced the appointment of Kirk Davis as Chief Financial Officer on Friday before the market open. Davis arrives having spent the previous three years in the same position for fellow FTSE 250-listed firm Greene King.
Pub operator and brewing company Greene King announced on Friday that Richard Smothers would be joining the firm in December 2017, and joining the board as chief financial officer in February 2018. The FTSE 250 firm said Smothers was joining from retailer Mothercare, where he was chief financial officer since March 2015.
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 2,232.00p 1.74%
Persimmon (PSN) 2,501.00p 1.58%
DCC (DCC) 6,885.00p 1.03%
Barratt Developments (BDEV) 595.50p 1.02%
Reckitt Benckiser Group (RB.) 7,352.00p 0.56%
Whitbread (WTB) 3,829.00p 0.39%
Babcock International Group (BAB) 841.00p 0.36%
Mondi (MNDI) 1,995.00p 0.35%
Compass Group (CPG) 1,619.00p 0.31%
Morrison (Wm) Supermarkets (MRW) 247.00p 0.24%
FTSE 100 - Fallers
Standard Life (SL.) 410.80p -3.75%
Rio Tinto (RIO) 3,370.00p -3.15%
Old Mutual (OML) 195.30p -3.08%
Anglo American (AAL) 1,238.50p -3.05%
BHP Billiton (BLT) 1,336.00p -2.87%
Glencore (GLEN) 322.00p -2.85%
Standard Chartered (STAN) 753.60p -2.77%
Barclays (BARC) 199.35p -2.66%
Convatec Group (CTEC) 285.90p -2.46%
Prudential (PRU) 1,782.50p -2.38%
FTSE 250 - Risers
AA (AA.) 187.70p 3.08%
PayPoint (PAY) 901.00p 2.74%
Rathbone Brothers (RAT) 2,723.00p 2.60%
Hastings Group Holdings (HSTG) 323.30p 2.31%
Clarkson (CKN) 2,643.00p 2.24%
Supergroup (SGP) 1,555.00p 2.10%
Acacia Mining (ACA) 191.20p 1.97%
Carillion (CLLN) 56.85p 1.97%
Euromoney Institutional Investor (ERM) 1,132.00p 1.80%
IP Group (IPO) 138.90p 1.68%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 663.00p -7.92%
Dixons Carphone (DC.) 246.70p -7.15%
Vedanta Resources (VED) 694.00p -6.59%
Tullow Oil (TLW) 163.50p -6.25%
Amec Foster Wheeler (AMFW) 437.00p -5.31%
Wood Group (John) (WG.) 602.00p -4.90%
TBC Bank Group (TBCG) 1,568.00p -4.29%
Coats Group (COA) 72.00p -4.26%
Ferrexpo (FXPO) 254.60p -4.00%
Cairn Energy (CNE) 167.50p -3.90%
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.