14th Jan 2019 16:54
LONDON (Alliance News) - London stocks started the week on a downbeat note, with miners among the worst performers in the FTSE 100 on Monday after worrying trade data from China.Also hindering the blue-chip index was a stronger pound as UK Prime Minister Theresa May cautioned Brexit may not happen at all if MPs reject her withdrawal deal. The FTSE 100 index closed down 63.16 points, or 0.9%, at 6,855.02. The FTSE 250 ended down 124.73 points, or 0.7%, at 18,417.58, and the AIM All-Share closed down 0.7% at 904.13.The Cboe UK 100 ended down 0.9% at 11,628.84, the Cboe UK 250 closed down 0.7% at 16,460.71, and the Cboe Small Companies ended down 0.2% at 11,165.99."Equity markets are trading in the red this afternoon, continuing the broadly negative theme as markets struggle to find new positives to keep the latest rally in equities going into a fourth week," said IG chief market analyst Chris Beauchamp.Weighing on the overseas earnings-heavy FTSE 100 at the start of the week was a strong pound, as Theresa May warned the country faces the prospect of no Brexit at all if her withdrawal agreement fails to pass Tuesday's parliamentary vote. The pound was quoted at USD1.2890 at the London equities close Monday, higher compared to USD1.2835 at the close on Friday.Beauchamp commented: "This rally in sterling will either be a gift for sellers later in the week, or the start of something bigger if a no deal Brexit recedes further into the distance. The market has begun to sense the sands are shifting in support of the deal. "After the twists and turns of the past year, nothing would surprise markets, but with a Hilary Benn amendment to rule out a no-deal apparently provoking an outbreak of unity among hard-Brexit Tory MPs, it looks like the Brexit tale has a few twists left in it."Theresa May on Monday issued a last-ditch plea for MPs to back her Brexit deal, after Brussels chiefs issued a letter offering assurances they do not want the controversial "backstop" to be permanent.Speaking in a factory in Leave-voting Stoke-on-Trent, the prime minister said the letter from European Council president Donald Tusk and European Commission president Jean-Claude Juncker made clear the backstop was "not a threat or a trap".With less than 36 hours to go until the long-awaited vote, May said that, based on last week's votes in Parliament, she now believes MPs blocking Brexit is a more likely outcome than leaving without a deal.And she also said she was committed to working with MPs from across the House to ensure workers' rights and environmental standards were protected after Brexit.May warned MPs would be behaving with the "height of recklessness" if they reject her Withdrawal Agreement in Tuesday's vote.In European equities on Monday, the CAC 40 in Paris ended down 0.5%, while the DAX 30 in Frankfurt ended down 0.4%.The euro stood at USD1.1477 at the European equities close Monday, against USD1.1470 at the same time on Friday.Stocks in New York were lower at the London equities close, with the DJIA down 0.5%, the S&P 500 index also 0.5% lower, and the Nasdaq Composite down 0.7%. US President Donald Trump on Monday slammed Democrats for not negotiating to end the partial government shutdown and said he's in no hurry to declare a national emergency.The partial shutdown entered its 24th day with the two sides still far apart on the issue of border security. Trump has stuck to his demand for USD5.7 billion in funding to build a border wall on the US-Mexico border that he says is needed to control crime, illegal immigration and human trafficking.In US company news, Citigroup was the first to kick off the banking reporting season with a return to profit in the fourth quarter.Adjusted earnings per share beat analysts' estimates, while revenue missed their expectations. The company noted a volatile fourth quarter impacted some of its market-sensitive businesses, particularly Fixed Income. Citigroup's fourth-quarter net income was USD4.31 billion or USD1.64 per share, compared to a net loss of USD18.89 billion or USD7.38 per share in the year-ago period.Excluding items, adjusted earnings were USD1.61 per share, compared to USD1.28 per share last year. On average, 23 analysts polled by Thomson Reuters expected earnings of USD1.55 per share. Analysts' estimates typically exclude special items.Revenue for the quarter declined 2% to USD17.12 billion from USD17.50 billion in the prior year. Analysts expected revenue of USD17.59 billion.Shares in the bank were up 3.0% in New York. Earnings will come from the likes of JPMorgan, Wells Fargo, and Goldman Sachs in the coming days. "US banking giants are expected to turn in decent results not only based on the growth in the previous quarters but also the latest retail sales numbers and historically low unemployment levels in the US," commented Fiona Cincotta, senior market analyst at City Index."The Fed's recent U-turn on rates for this year will also work in favour of further retail spending. However, like Citigroup, the other banks may have registered some trading losses during the volatile pre-Christmas trading weeks," she added.In London, miners declined after downbeat trade data from China overnight. Exports dropped 4.4% year-on-year in December, figures from the General Administration of Customs showed on Monday. That was in contrast to the 3% gain economists had predicted. Imports decreased 7.6% from a year ago, defying expectations for a 5% rise.For 2018 as whole, exports grew 9.9% imports rose 15.8%, resulting in a trade surplus of USD351.8 billion, which was over 30% lower than a year ago.Antofagasta closed down 2.7%, Anglo American down 2.0%, and Glencore down 1.9%.Paddy Power Betfair closed down 3.9% after Barclays cut the stock to Equal Weight from Overweight. Also knocked by a broker rating downgrade was Next, finishing down 2.0% after Credit Suisse cut the stock to Underperform from Neutral.Dragging on the FTSE 250 was Premier Oil, down 11% as it said it has not made a firm decision to bid for oil major Chevron's assets, which are currently being marketed.On Sunday, The Times reported Premier was considering a fundraise to buy a package of North Sea oil and gas fields worth around USD1.5 billion from Chevron. According to The Times, Premier is intending to fund the acquisition through a rights issue or share placing, and could also consider selling all or part of its Latin American business.JD Sports Fashion finished as the star mid-cap performer, up 7.4%, after lifting its annual profit outlook.The sports fashion retailer said total sales were up 15% across all the company's global shop brands in the 48 weeks to January 5, excluding acquisitions the Finish Line in the US and Sport Zone in Iberia.Like-for-like sales in the same period were up by "more than 5%", JD said, driven by a positive performance around Black Friday and Christmas.This led the company to raise its guidance for the current financial year, which ends on February 2. JD Sports now sees annual pretax profit at the upper end of market expectations, which ranges between GBP325 million and GBP352 million. Last year, JD Sports' profit was GBP294.5 million.Brent oil was quoted at USD60.11 a barrel at the London equities close Monday, soft compared to USD60.65 late Friday. Gold was quoted at USD1,290.33 an ounce at the close Monday against USD1,289.55 Friday.In the economic calendar on Tuesday, France's consumer price index is at 0745 GMT followed by the eurozone trade balance at 1000 GMT. Ireland's consumer price inflation is at 1100 GMT, while US product prices are at 1330 GMT. In the corporate calendar on Tuesday are trading updates from recruitment firm Hays, subprime lender Provident Financial, online clothing retailer Boohoo, and emerging markets-focused investment manager Ashmore Group. There are half-year results from miniature wargaming manufacturer Games Workshop.
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