24th Oct 2019 16:59
(Alliance News) - Stocks in London ended mixed on Thursday with the FTSE 100 back above the 7,300 mark amid weakness in the pound which was under pressure due to Brexit and UK election uncertainty.
The internationally exposed FTSE 100 index closed up 67.51 points, or 0.9%, at 7,328.25. The FTSE 250 ended down 28.79 points, or 0.1%, at 20,152.15, and the AIM All-Share closed up 6.78 points, or 0.8%, at 892.80.
The Cboe UK 100 ended up 0.9% at 12,423.70, the Cboe UK 250 closed 0.3% lower at 18,068.96, and the Cboe Small Companies ended up 0.7% at 11,217.17.
The CAC 40 in Paris and the DAX 30 in Frankfurt both ended up 0.6%.
"As ever the FTSE rubbed its hands in glee at the site of sterling's struggles. Combine that bit of schadenfreude with a health showing from its commodity and housing sectors, and a sharp 5.3% increase from AstraZeneca - the pharma firm reported its fifth straight quarter of revenue growth this Thursday, beating estimates in the process - and the UK index shot up by 0.9%. That leaves the FTSE above 7,320 for the first time since the October-opening bloodbath," said Spreadex analyst Connor Campbell.
On the London Stock Exchange, AstraZeneca ended as the best blue chip performer, up 5.6% after the Anglo-Swedish drugmaker posted a dip in third-quarter profit as a result of research & development expenses, but upgraded annual sales guidance.
For the three months ended September, pretax profit was USD409 million, down 14%. This reduction was the result of a 32% rise in selling, general & administrative costs, on top of a 5.5% jump in research & development expense. Total revenue rose 20%, reaching USD6.41 billion thanks both to a 16% rise in product sales and to a more than trebling of collaboration revenue.
Astra has upgraded product sales guidance for 2019 and is now expecting a low to mid-teens percentage rise, having previously expected a low double-digit percentage increase. Astra also reiterated guidance for core earnings per share of between USD3.50 and USD3.70 for 2019 as a whole.
RELX closed up 4.0% after the publishing and analytics firm reaffirmed 2019 guidance after a solid first nine months of the year. RELX delivered 4% underlying revenue growth for the first nine months of 2019, with all four business areas delivering an improvement year-on-year.
AVEVA Group closed up 5.0% after the engineering and industrial software firm said strong sales execution has led to solid revenue growth.
Cambridge-headquartered firm achieved low double-digit revenue growth on a proforma constant-currency basis in the financial first half ended September. On a reported basis, revenue benefited from foreign exchange movements, the company said.
At the other end of the large cap index, Royal Bank of Scotland Group closed down 3.3% after the state-backed lender reported a third-quarter loss on a large payment protection insurance provision.
In the three months to September 30, RBS recorded an operating pretax loss of GBP8 million compared to a GBP961 million profit a year before.
The loss was attributed to a GBP900 million PPI provision. In September, the lender warned of a "spike" in PPI claims in the days leading up to the Financial Conduct Authority's deadline of August 29.
As a result of the PPI spike, RBS's loss attributable to shareholders totalled GBP315 million, compared to a GBP448 million profit in the third quarter last year and a GBP1.33 billion profit in the second quarter of this year.
The pound was quoted at USD1.2828 at the London equities close, down from USD1.2887 at the close Wednesday, as European leaders continue to consider whether to grant a further extension to Brexit.
"The pound is reversing lower today, as rumours of the potential Brexit extension proposed by the EU have started to come to emerge. Talk of a three-month extension appears to be raising fears for markets, with that timeframe pointing towards a potential election. While the polls point towards a wide lead by the Conservatives, there is a strong possibility that any such government would require the involvement of the Brexit Party," commented IG Group's Josh Mahony.
UK Prime Minister Boris Johnson has warned he will push for a snap general election if he is forced to accept a lengthy delay to the UK's departure, potentially into the new year.
However there are signs of divisions among ministers and senior No 10 advisers over whether to press for a December poll.
Dominic Cummings, Johnson's chief adviser, is reportedly leading calls to abandon attempts to get the PM's Brexit deal through Parliament and go for an election.
Any decision is likely to wait until Friday when EU leaders are expected to decide whether, and for how long, there should be another Brexit delay.
The euro stood at USD1.1100 at the European equities close, broadly flat from USD1.1114 a day before, after the European Central Bank left its key borrowing rates unchanged.
The ECB announced that it had left its benchmark refinancing rate on hold at an historic low of 0% and its deposit rate, which sets the rate for banks parking funds at the ECB, at minus 0.5%.
The Frankfurt-based ECB hopes that a lower deposit rate will encourage banks to lend and consequently boost economic growth, saying it would hold borrowing costs at their present levels on an open-ended basis amid weak inflation.
The central bank also confirmed it would launch its new EUR20 billion a month bond-buying programme from November 1.
"The ECB meeting was largely a non-event for markets and the euro, with the ECB fully reiterating its decision from September. If anything, the ECB's view of increased downside risks to the euro area growth and inflation outlook since then (as evident in the deteriorating eurozone and German economic data) confirms the appropriateness of the September policy decision. Importantly, despite the rise of dissenting voices since the September meeting, this wasn't reflected in the statement," ING's Carsten Brzeski said.
At his final press conference at president of the ECB, Mario Draghi opened by emphasising the "downside risks" that continue to threaten the eurozone and are tied to "uncertainties related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets."
Data and sentiment surveys nevertheless point to "moderate but positive growth in the second half" of 2019, Draghi noted.
While Draghi is widely credited with saving the euro, critics inside and outside the ECB launched a rarely seen barrage of criticism after he opted last month for a relaunch of quantitative easing bond-buying and lower rates.
Looking to calm fears that the divisions could divide the ECB, Draghi said "one of the dissenters called for unity and full implementation of the policy package" while another said "bygones are bygones".
Brzeski added: "For the time being, Draghi will be the president who brought the ECB to new professional levels, in terms of communication, institutional set-up and toolkit of monetary policy instruments. And the ECB president who saved the eurozone from falling apart."
Draghi will be replaced by Christine Lagarde who will become the first woman to head the Frankfurt-based bank on November 1.
Against the yen, the dollar was trading at JPY108.54, flat compared to JPY108.57 late Wednesday.
Stocks in New York were mixed at the London equities close as earnings season continues in earnest.
The DJIA was down 0.2%, the S&P 500 index flat and the Nasdaq Composite up 0.4%.
On the corporate front, Twitter's stock fell sharply after a quarterly update showed weaker-than-expected growth for the messaging platform.
Profit for the third quarter was USD37 million, a sharp drop from last year, when Twitter was helped by a large tax benefit. Revenue rose 9% from a year earlier to USD824 million, well below analyst forecasts, hurt by what the company called "revenue product issues."
Shares in the San Francisco, California-headquartered social media platform were down 19% in New York.
3M Co was down 4.0% after the Post-it note maker reported a decline in quarterly sales, but earnings have risen in what it called a "strong" performance.
The conglomerate, which has products in industries such as automotive, mining, electronics, and safety, reported a 2.0% fall in sales for the third-quarter of 2019 to USD8.0 billion.
Sales on an organic basis, without foreign currency movements, fell by 1.3%.
Ahead in the US earnings calendar on Thursday, e-commerce giant Amazon.com will report earnings after the closing bell on Wall Street.
Brent oil was quoted at USD61.65 a barrel at the London equities close, up from USD60.08 at the close Wednesday.
Gold was quoted at USD1,501.50 an ounce at the London equities close, up from USD1,493.54 late Wednesday.
"Precious metals prices have risen partly because of expectations than central banks globally will continue to keep monetary policy extraordinary loose, while base metals have found support amid optimism over a US-China trade deal," said Forex.com analyst Fawad Razaqzada.
The economic events calendar on Friday has producer prices from France at 0745 BST.
The UK corporate on Friday has third-quarter results from lender Barclays, advertising firm WPP and insurer Hastings Group. There are also interim results from Africa-focused telecommunications firm Airtel Africa.
By Arvind Bhunjun; [email protected]
London market Close is available to subscribers as an email newsletter. Contact [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
AstrazenecaRelxAVV.LRBS.L