3rd Oct 2018 16:52
LONDON (Alliance News) - Stocks in London ended in the green on Wednesday for the first time this week, the FTSE 100 boosted as gains for ITV and Schroders helped to overcome Tesco's tumble.The pound firmed after data showed the UK's service sector logged solid activity in September, and as UK Prime Minister Theresa May gave a closing speech at the Conservative party conference in which she emphasised the desire to seal a Brexit deal that "delivers for Britain"."Event risks remain high for the pound going forward with the next 7 days likely to reveal whether there is a realistic chance that a deal can be reached by the EU summit or whether this game of brinkmanship lurches ever closer to the cliff edge," commented XTB chief market analyst David CheethamThe FTSE 100 index closed up 0.5%, or 35.73 points at 7,510.28. The FTSE 250 ended up 0.2%, or 35.14 points, at 20,300.00, and the AIM All-Share closed up 0.3%, or 2.74 points, at 1,092.44.The Cboe UK 100 ended up 0.6% at 12,760.78, the Cboe UK 250 closed up 0.1% at 18,413.46, and the Cboe Small Companies ended up 0.2% at 12,136.07.The pound was slightly firm on Wednesday following the release of UK services data and a keynote speech from May, quoted at USD1.2999 at the London equities close Wednesday compared to USD1.2979 at the close on Tuesday.Data on Wednesday showed the UK's service sector activity eased in September but still managed to post decent growth.The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index dropped to 53.9 in September from 54.3 in August. The index was forecast to fall to 54.0, but still remained above the line of 50 which indicates expansion.New order growth eased marginally in September amid reports of resilient demand. However, a number of firms suggested that political uncertainty had weighed on business confidence and been a factor behind tighter budget setting among clients."The drop back in September's Markit/CIPS report on services was a little disappointing but a bit of a fall was expected after a large jump in August. The bigger picture is that growth in the services sector is holding up pretty well," said Thomas Pugh, UK economist at Capital Economics.Meanwhile, in Birmingham, Prime Minister May declared the age of austerity over with a message to voters that "there are better days ahead".Also admitting that the housing market is "broken", she announced she was lifting the cap on councils borrowing to fund new developments, with the aim of "building the homes this country needs".In a speech designed to rally her party behind her following a conference riven by differences over Brexit, May warned that squabbling over the details of EU withdrawal might mean "ending up with no Brexit at all".Standing firmly by the Chequers plan which was denounced by former foreign secretary Boris Johnson as a "constitutional outrage", May promised: "If we stick together and hold our nerve, I know we can get a deal that delivers for Britain."Less than an hour before taking the stage, May was hit by a call for her removal from former minister James Duddridge, who said she was "incapable" of providing the leadership Tories need.In European equities on Wednesday, the CAC 40 in Paris ended up 0.4%, while the DAX 30 was closed for the National Unity Day holiday.The euro stood at USD1.1526 at the European equities close Wednesday, down from USD1.1555 at the same time on Tuesday.Stocks in New York were higher at the London equities close, with the DJIA up 0.5% - hitting a record high of 26,951.81 in early trade - the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.3%. In US data, payroll processor ADP reported a larger-than-expected increase in private sector employment in September.ADP said US private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August.Economists had expected employment to increase by about 185,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month.The release from ADP is a precursor to the closely-watched US nonfarm payroll job data, out on Friday.In commodities on Wednesday, Brent oil continued to trade above the USD85 mark, quoted at USD85.10 a barrel at the London equities close Wednesday from USD85.03 late Tuesday.Oil continues to be buoyed by supply concerns ahead of US sanctions against Iran due to kick in next month.Russia's energy minister, Alexander Novak, said on Wednesday that more uncertainties could push oil prices higher and the long-term forecast for the oil prices could be only done in late 2018-early 2019.Meanwhile, gold was quoted at USD1,198.79 an ounce at the London equities close Wednesday against USD1,205.20 at the close on Tuesday.On the London Stock Exchange, ITV topped the FTSE 100 as it gained 3.8% after confirming it has no intention of making a bid for Dutch production company Endemol Shine Group.In mid-September, the Times reported the broadcaster had entered the bidding for Endemol, which has been put up on sale by private equity firm Apollo and Twenty First Century Fox.Asset manager Schroders closed up 2.3% after the Financial Times reported the firm is poised to beat American investment manager BlackRock in a battle to manage Lloyds Banking Group's GBP109 billion worth of assets.Lloyds is looking for a new manager for its Scottish Widows portfolio of assets after it announced in February it would terminate its contract with current manager Standard Life Aberdeen, citing "competition concerns".According to the FT, Schroders offering Lloyds a "sweetener" in the form of "some control" of its Cazenove Capital wealth arm could be the deciding factor.Tumbling to the bottom of the blue-chips was Tesco, closing down 8.8% after missing trading profit expectations due to a weak figures in Asia.For the six months to August 25, the grocer posted a rise in pretax profit of 2% year-on-year to GBP564 million from GBP553 million. Revenue, including VAT and fuel, came in 12% higher than the prior year at GBP31.73 billion versus GBP28.33 billion. However, while trading profit rose 24% year-on-year to GBP933 million, it was 6% short of analyst expectations, which had sat at around GBP992 million. This miss was driven by Asia, with profit for the division coming in at GBP100 million, below an estimate of GBP137 million from Shore Capital.Plumbing and heating products supplier Ferguson shed 1.9% after JPMorgan cut the stock to Neutral from Overweight. Shares in Computacenter rose 4.5% after UBS raised the IT infrastructure services provider to Neutral from Sell, commenting that the acquisition of FusionStorm - announced by Computacenter on Monday - opens up the US market for the FTSE 250 constituent "at a decent price".Elsewhere on the Main Market, Aston Martin Lagonda shares declined to 1,812.40 pence compared to their IPO price of 1,900p on the luxury car maker's stock market debt.Aston Martin had in mid-September given a 1,750p to 2,250p price range for its IPO, meaning its decided price is in the middle-to-lower part of the range. Conditional dealings in Aston Martin shares started on Wednesday, before unconditional dealings on Monday next week. "The entire UK car manufacturing industry is living under a big Brexit cloud at the moment, as the sector is so reliant on parts sourced from inside the EU. A hard Brexit has the potential to cripple the industry overnight, and Aston Martin would be no exception," commented Fiona Cincotta, senior market analyst at City Index.In the corporate calendar on Thursday there are half-year results from clothing retailer Ted Baker, annual results from retailer DFS Furniture, a trading statement from semiconductor distributor Electrocomponents and September traffic statistics from low-cost airline easyJet.Thursday's economic calendar has US initial and continuing jobless claims at 1330 BST and factory orders at 1500 BST.Related Shares:
TescoLloydsSchrodersFergusonComputacenterITV