14th Oct 2020 17:06
(Alliance News) - London markets delivered a mixed close on Wednesday, reflecting a range of responses to news that Brexit talks have once again stalled before Thursday's deadline.
The FTSE 100 index finished 34.65 points, or 0.6%, lower closing at 5,935.06 points on Wednesday. The mid-cap FTSE 250 index finished 59.40 points, or 0.3%, higher at 17,950.41. The AIM All-Share index closed 0.8% lower at 981.34 points
The Cboe UK 100 index ended 0.5% lower at 590.10 points. The Cboe 250 ended 0.3% higher at 15,179.14, and the Cboe Small Companies closed 0.2% lower at 9,443.46.
The pound was quoted at USD1.3029 at the close on Wednesday, up from USD1.2978 at the London equities close Tuesday.
"While Brexit talks appear to have all but broken down before the October 15 deadline, the news has been greeted with a shrug by the pound, which remains near to the day's highs against the dollar and the euro. As expected, the October 15 deadline will melt away, to be replaced by one in November, with negotiations to restart next week. As with the eurozone crisis, there is usually another deadline, although the December 31 one isn't going away on the current outlook. Sterling's strength remains a problem for the FTSE 100, with the index slipping back below 6000 even as other markets begin to recover," said Chris Beauchamp, chief market analyst at IG.
The EU and UK seem set to press on with talks on a post-Brexit trade deal past a Thursday deadline set by London, according to a source close to negotiations and an EU document seen by dpa.
With a number of stubborn disputes unresolved and both sides still needing to ratify any agreement on their future relations, UK Prime Minister Boris Johnson had set Thursday as a deadline for nailing down a deal.
The EU has said that something must be agreed by the end of the month.
The bloc's 27 leaders are to meet at a Brussels summit on Thursday and Friday - once seen as a potential crunch moment where Johnson could walk away from talks and instead focus on preparations for a no-deal scenario. But according to a source familiar with the negotiations, talks seem likely to continue into the next two weeks.
A spokesman for Johnson said that the British prime minister would decide the "next steps" regarding a Brexit deal after the summit.
"I cannot prejudge what that decision will be," he added.
"Some progress has been made this week, primarily in technical areas of the negotiations, but there are still differences," he said, according to the British Press Association news agency, on Wednesday.
A draft joint statement to be signed off at the summit also states that leaders will "invite the Union's chief negotiator [Michel Barnier] to intensify negotiations" so that a deal can be wrapped up by the end of the year.
European Commission President Ursula von der Leyen and Johnson are to speak later Wednesday evening, according to her spokesperson. After this, the two sides will set out a shared timeline, the source said.
After leaving the EU at the end of January, Britain entered a transition period that allows it to keep trading with EU countries on similar terms.
When it expires at the end of the year - and in the absence of a deal - trade controls will quickly reappear, upsetting supply chains and business relations.
In company news, Just Eat Takeaway.com led the FTSE 100 - ending 6.4% higher - after it said order growth accelerated in the third quarter, leading to a widening gap to its competition in key countries, including the UK and Canada.
The coronavirus pandemic and the resultant movement restrictions has led to a sharp rise in online food orders, benefiting online takeaway platforms such as Just Eat Takeaway.com.
Just Eat Takeaway.com said 46% more orders were placed in the third quarter of 2020 than a year earlier, due to strong demand in online orders as a result of coronavirus social distancing measures in restaurants.
Total orders for the quarter stood at 151.4 million versus 103.6 million a year ago. Year-to-date order growth was 37% at 408.3 million.
Also performing well was FTSE 100-listed distribution and outsourcing company Bunzl, which ended 2.0% higher.
Bunzl said continued growth in the sales of Covid-19 related products, such as masks and sanitisers, offset a drop in sales of other products during the third quarter of 2020.
The company also said it expects revenue in the second half of 2020 to grow strongly at constant exchange rates and a slightly higher second half operating profit margin compared to the prior year, reflecting the year-to-date performance and recent acquisitions.
Bunzl recorded 4% growth in third-quarter reported revenue and 8.0% growth in underlying revenue at constant exchange rates, reflecting continued growth in the sale of Covid-19 related products.
Looking forward, Bunzl expects an uncertain outlook mainly due to current coronavirus pandemic trends and reintroduction of movement restrictions in some markets, limiting recovery. It also estimates a limited number of larger Covid-19 related orders.
ASOS ended 10% lower. Its annual profit multiplied and its revenue jumped almost 20%, the online retailer said, as it shrugged off "performance issues" from last year.
But despite the boom in earnings, the company kept a lid on expectations for the new year and beyond, owing to economic uncertainty, particularly affecting its target market of young adults.
ASOS said pretax profit in the year that ended August 31 multiplied to GBP142.1 million from GBP33.1 million.
About GBP50 million in a "non-strategic" costs were not repeated in the most recent financial year, ASOS noted, as an efficiency drive "exceeded our initial expectations".
The company added it has made a "solid start" to the new year but is tempering expectations for now given the uncertainty caused by Covid-19 and the "economic prospects and lifestyles of 20-somethings" being set for disruption.
In commodities, Brent oil was trading at USD43.18 a barrel at the close Wednesday, up from USD42.30 late Tuesday in London.
Safe haven asset gold changed hands at USD1909.80 an ounce, a notable rise from USD1,890.88.
In mainland Europe, the CAC 40 in Paris ended 0.1% lower while the DAX 30 in Frankfurt finished 0.1% higher.
The euro was priced at USD1.1760, from USD1.1741. Against the yen, the dollar was quoted at JPY105.07, down from JPY105.53.
Stocks in New York were in the red at the London equities close, with the Dow Jones Industrial Average and the S&P 500 index both down 0.5%, while the Nasdaq Composite was 0.7% lower.
Due Thursday are trading statements from two FTSE 100 companies, miner Rio Tinto and wealth manager Schroders, though the Rio Tinto statement is not due until 2230 BST. In the FTSE 250, housebuilder Countryside Properties, home furnishings retailer Dunelm Group, employment recruiter Hays, private healthcare services company Mediclinic International, wealth manager Rathbone Brothers, and Domino's Pizza Group all have trading statements due.
In the international economics calendar on Thursday, the Bank of England credit conditions survey and quarterly bank liabilities survey are due at 0930 BST. French CPI is due at 0745 BST, Italian industrial turnover & orders at 0900 BST, and Irish goods exports and imports at 1100 BST. In the afternoon, the US unemployment insurance weekly claims report and import & export price indexes are due at 1330 BST.
By Anna Farley; [email protected]
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