11th Jun 2018 17:15
LONDON (Alliance News) - Stocks in London ended higher on Monday casting aside an acrimonious G7 summit, as investor focus turns to US President Donald Trump as he prepares to hold a historic meeting with North Korean leader Kim Jong Un.The FTSE 100 index closed up 0.7%, or 56.36 points at 7,737.43. The FTSE 250 ended up 0.8%, or 158.23 points, at 21,318.77, and the AIM All-Share closed up 0.3%, or 3.33 points, at 1,099.91.The Cboe UK 100 ended up 0.9% at 13,142.13, the Cboe UK 250 closed up 0.9% at 19,483.71, and the Cboe UK Small Companies closed up 0.5% at 12,921.16."With relations between the US and its fellow G7 countries at a low, the US President has switched his focus to North Korea, giving the long-time foe an opportunity to withdraw its nuclear capabilities in exchange for a loosening of current sanctions. Despite a recent war of words between these two leaders, markets seem to be relatively insensitive towards this event, with a surprisingly calm start to the week despite the historical nature of both the G7 and North Korea meetings," said IG market analyst Joshua Mahony.The White House said Trump will meet with Kim at the Capella Hotel on Singapore's Sentosa Island at 9am local time on Tuesday.Trump is set to become the first incumbent US president to meet a sitting leader of North Korea, with hopes the summit could eventually lead to dismantling of a North Korean nuclear programme that threatens the US.Following the initial greeting, Trump and Kim will participate in a one-on-one meeting, with translators only, the White House said.US Secretary of State Mike Pompeo said "the complete, verifiable and irreversible denuclearization of the Korean peninsula is the only outcome that the US will accept" in its negotiations with North Korea."North Korea has previously confirmed to us its willingness to denuclearize, and we are eager to see if those words prove sincere," Pompeo added."Given the huge gulf between the two sides, we think a major breakthrough next week is unlikely. The most likely scenario is that the two leaders make general commitments towards denuclearisation and agree to future talks. Trump himself has tempered expectations for the upcoming summit, noting that it will likely take multiple meetings to negotiate a nuclear agreement," said Capital Economics. On the London Stock Exchange, Evraz ended as the best blue chip performer, up 8.0% after Fitch Ratings upgraded the Russian steelmaker to BB from BB- with a stable outlook. Fitch's upgrade reflected Evraz's reduction of net debt to USD4 billion, leading to a funds from operations gross leverage of 2.4 times at the end of 2017. Evraz is targeting absolute net debt in the range of USD3.00 billion to USD3.50 billion.NMC Health closed up 4.9% after the UAE-focused private healthcare operator signed an agreement to form a joint-venture healthcare platform with Hassana Investment Co, the investment arm of the Saudi Arabia's largest pension fund, General Organization for Social Insurance. The joint venture will be formed through contribution of existing assets by both NMC Health and GOSI's investee Tadawul-listed National Medical Care Co. NMC will retain a majority stake and operational control of the Saudi Arabian joint venture. The venture will serve as the main vehicle of future expansion for NMC in Saudi Arabia and will seek to acquire stakes in regional healthcare operators. The venture will also seek to manage private and government sector hospitals in the country.At the other end of the large cap index, Old Mutual closed down 1.9% as it announced the price range for its global offer of a stake in soon-to-float UK wealth manager Quilter.The Anglo-South African financial services company is offering up to a 9.6% stake, or 165 million shares, in Quilter at a price between 125 pence and 155p. The final price will be determined, and the number of shares sold, at around the same time as it lists.Quilter was formerly Old Mutual Wealth, and the spun-off wealth management business is set to list in both London and Johannesburg on June 25.Experian closed down 1.3% after Deutsche Bank cut the credit checking agency to Hold from Buy.Rolls-Royce Holdings ended 0.7% lower after the jet engine maker identified durability issues on a number of Trent 1000 jet engines, dubbed Package B engines.Rolls-Royce said it agreed with US aerospace company Boeing and the relevant regulatory authorities to conduct a one-off inspection of the group's Trent 1000 Package B fleet, which consists of 166 engines.The inspection requirements are expected to incur additional costs for 2018; however Rolls-Royce said it remains confident that its free cash flow guidance of around GBP450 million, plus or minus GBP100.0 million remains unchanged.In the FTSE 250, Inmarsat ended as the best performer, up 12% amid takeover hopes. On Friday, the satellite communications company confirmed it had received a preliminary merger proposal from US peer Echostar Corp, which was rejected by the company's board.The company was responding to movement in its share price and a takeover speculation on the Financial Times' Alphaville blog. Shares in Inmarsat closed up 13% on Friday. Analysts at RBC Capital said Inmarsat is a unique strategic asset which could attract many suitors, even if a deal with Echostar fails to take place. At the other end of the midcaps, Aggreko closed down 2.4% after Liberum started coverage on the temporary power supplier with a Sell rating, saying it faces too many structural problems. The pound was quoted at USD1.3382 at the London equities close, compared to USD1.3394 at the same time on Friday, following disappointing UK industrial and manufacturing production data. UK industrial production decreased unexpectedly at the start of the second quarter, figures from the Office for National Statistics showed.Industrial production fell 0.8% month-over-month in April, reversing a 0.1% rise in March. It was the first decline in four months. Economists had expected a stable 0.1% increase for the month.On a yearly basis, industrial production growth eased to 1.8% in April from 2.9% a month ago. The expected growth rate was 2.7%.Manufacturing production dropped 1.4% monthly in April, following a 0.1% contraction in March. In contrast, output was expected to recover by 0.3%. This was the largest fall since October 2012, when it slid by 1.8%.Annually, growth in manufacturing production slowed to 1.4% from 2.9% in March.Elsewhere, the UK's gross domestic product growth is forecast to have quickened marginally in the three months to May compared to the quarter to April, the National Instutute of Economic & Social Research said Monday.It expects GDP growth of 0.2% for the three months to May, with the figure coming in at 0.1% for the three months to April. NIESR is currently forecasting GDP growth for 1.4% for all of 2018 and then 1.7% in 2019. Amit Kara, the head of UK macroeconomic forecasting, said: "We estimate that output expanded by just 0.2% in the three months to May 2018, which is around half the potential growth rate of the economy. In Paris the CAC 40 ended up 0.4%, while the DAX 30 in Frankfurt ended up 0.6%. The euro was higher at USD1.1803 at the European equities close, against USD1.1761 late Friday. Stocks in New York were flat to higher at the London equities close. The DJIA was flat, the S&P 500 index up 0.2% and the Nasdaq Composite up 0.1%.Brent oil was firm quoted at USD76.49 a barrel at the London equities close from USD76.47 at close Friday."There is chatter Saudi Arabia and Russia will increase output, and the market might remain lacklustre until after the OPEC meeting later this month," said David Madden, market analyst at CMC Markets.Gold was up quoted at USD1,301.25 an ounce at the London equities close against USD1,297.90 late Friday.The economic events calendar Tuesday there are China new loans figures at 0300 BST, UK unemployment data at 0930 BST and US inflation readings at 1330 BST. The corporate calendar on Tuesday has full-year results from safety and environmental technology company Halma and half year results from housebuilder Crest Nicholson. There are also trading statements from housebuilder Bellway and from high street fashion retailer Ted Baker.