15th Oct 2018 17:09
LONDON (Alliance News) - Stocks in London ended mixed on Monday with the FTSE 100 staging a late recovery to close above the 7,000 mark amid a softer pound which was lower due to Brexit uncertainty. The FTSE 100 index closed down 0.5%, or 33.31 points at 7,029.22. The large cap index recovered from earlier losses - having hit an intraday low of 6,961.28 in early trade. The FTSE 250 ended down 0.9%, or 170.00 points, at 18,803.45, and the AIM All-Share closed down 0.5%, or 5.35 points, at 986.50.The Cboe UK 100 closed up 0.5% at 11,929.22, the Cboe UK 250 closed 0.8% lower at 17,066.54, and the Cboe UK Small Companies closed 0.1% lower at 11,666.72."The FTSE 100's rise that just about pushed the index back above 7000 - came at the expense of sterling," said Spreadex analyst Connor Campbell.In Paris the CAC 40 ended flat while the DAX 30 in Frankfurt ended up 0.8%. On the London Stock Exchange, gold miners ended among the best blue chip performers, with Randgold Resources, up 5.2% and Fresnillo, up 4.1% tracking spot gold prices higher.The precious metal was quoted at USD1,226.70 from USD1,218.81 at the London equities close Friday."The rise in the gold price has helped push Randgold Resources and Fresnillo to the top of the FTSE 100 as a weaker outlook for stocks prompts some haven buying in the wake of last week's heavy stock market falls," noted CMC Markets chief market analyst Michael Hewson.At the other end of the large cap index, BAE Systems ended as the worst performer, down 3.8% amid tensions between the US and Saudi Arabia."BAE's Saudi contracts are the company's bread and butter, its recent sale of 48 Typhoon jets worth over GBP10 billion has secured a deal that will generate thousands of jobs over the next ten years," City Index analyst Fiona Cincotta said. Schroders closed down 1.8% despite reporting a marginal rise in assets under management, with figures showing a steady performance across both asset and wealth management units.The investment manager recorded total assets under management of GBP439.10 billion as at September 30, up from GBP435.70 billion at the start of the year.The company's core Asset Management unit had GBP392.30 billion in funds under management versus GBP389.80 billion. The Wealth Management unit's assets stood at GBP46.80 billion at September 30 versus GBP45.90 billion at January 1.In the FTSE 250, ConvaTec ended as the worst performer down 34%, with around GBP1.51 billion wiped off its total market value, after the wound dressings maker slashed its growth forecast for the year and announced the departure of its chief executive.In a third quarter trading statement, the medical products and technologies firm warned on both its expected organic revenue growth and its adjusted earnings before interest and taxation margin for 2018.ConvaTec said the revised guidance was largely to due its Infusion Devices franchise, with a change in the inventory policy of the unit's biggest customer expected to hit fourth quarter revenue by around USD18 million to USD23 million.In addition, the group said Chief Executive Paul Moraviec has stepped down from his role, effective immediately. Non-Executive Director Rick Anderson is to assume the position of interim CEO until a permanent successor is found.Superdry closed down 22% after the high street fashion retailer said recent hot weather in the UK, combined with weak consumer confidence, will dent annual profit for financial year 2019 by around GBP10 million.For the first six months to October, the group expects to record low to mid-single digit statutory revenue growth. Online sales are expected to rise by mid-single digit, while store revenue is predicted to fall by low-single digit.The clothing retailer also said it will record GBP8 million in additional foreign exchange costs, split evenly over the financial year, as historic foreign exchange hedging mechanisms have not provided the expected degree of protection.Greencore Group closed down 8.9% after the convenience foods maker said it disposed of its troubled US business to an affiliate of Hearthside Food Solutions for USD1.08 billion in cash - less than two years after making a major statement of intent in the US with the acquisition of Peacock Foods. The company said it intends to use proceeds from the sale to pay its shareholders a special dividend of 72 pence per share, representing GBP509 million in cash. The remaining proceeds of GBP293 million will be used to reduce leverage and support the company's balance sheet, it said. Going forward, Greencore is to sharpen its focus on its core UK operations which boasts a client list which includes the likes of Marks & Spencer, Waitrose and J Sainsbury.Berenberg said Greencore's management sees three key benefits for the UK business as a result of the US disposal; increased focus, increased firepower and increased financial flexibility.The pound was flat against the dollar quoted at USD1.3159 at the London equities close, compared to USD1.3156 at the close Friday.In domestic political news, a negotiated deal between the UK and European Union is still "achievable," Prime Minister Theresa May said on Monday, even as the prospects for a breakthrough at an EU summit this week faded."The shape of a deal across the vast majority of the withdrawal agreement, the terms of our exit, are now clear," May told lawmakers in the lower house of parliament, the House of Commons."We have made real progress in recent weeks on both the withdrawal agreement and the political declaration on our future relationship," she said, adding that negotiations were now in the "final stages".The final sticking point - a deal aimed at keeping borders open on the island of Ireland - was taking time to resolve, she said.Talks on a "backstop option" insisted on by the EU were being prolonged, she said, by a request for a fallback in case this did not completely work out - "a backstop to the backstop," as May described it.The two sides have been working on a deal to prevent the UK from crashing out of the EU in March without transitional arrangements in place."After the September statement, markets decided to approach the statement with caution, but thankfully this time around there was no repetition of 'no deal is better than a bad deal' and the generally upbeat gloss put on what was, by all accounts, a fairly stormy encounter in Brussels, helped the pound to recover. But there is still a lot of work to be done," said IG chief market analyst Chris Beauchamp.Over the weekend, a hastily-arranged meeting between EU chief negotiator Michel Barnier and Brexit Secretary Dominic Raab broke up without a breakthrough.The euro was firm against the greenback at USD1.1590 at the European equities close, against USD1.1557 late Friday. Stocks in New York were lower at the London equities close amid global trade and higher US interest rate worries, along with growing tension between the US and Saudi Arabia over the disappearance of a prominent Saudi journalist.The DJIA was down 0.2%, the S&P 500 index down 0.4% and the Nasdaq Composite down 0.8%.In US corporate news, Bank of America reported its third-quarter earnings per share was up 43% year-on-year to USD0.66. On average, 24 analysts polled by Thomson Reuters expected the company to report profit per share of USD0.62 for the quarter. Analysts' estimates typically exclude special items.Third quarter revenue, net of interest expense, increased 4% to USD22.78 billion. Net interest income increased 6%, to USD11.9 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth; net interest yield of 2.42%, up 6 basis points. Non-interest income increased 2%, to USD10.90 billion.The lender said overall credit quality remained strong across both the consumer and commercial portfolios during the quarter.Bank of America shares were down 2.6% in New York. In US economic news, the dollar was lower against major counterparts after US retail sales growth for September was weaker then expected. Data from the Commerce Department showed that retail sales inched up by 0.1% in September, matching the uptick seen in August. Economists had expected retail sales to climb by 0.5%.Excluding a rebound in auto sales, retail sales edged down by 0.1% in September after rising by a downwardly revised 0.2% in August.Ex-auto sales had been expected to rise by 0.3%, matching the increase originally reported for the previous month.Brent oil was flat quoted at USD80.12 a barrel at the London equities close from USD80.06 at the close Friday.Saudi Arabia said it would retaliate to any possible US sanctions over the disappearance of a journalist, which led to a spurt in Brent crude prices, Bloomberg reported as the world's largest oil exporter struck a conciliatory tone in India.According to the report, Khalid al-Falih, the energy minister of the kingdom, said it will continue to be responsible and help keep oil markets stable. He also assured of increased oil production in a month. The North Sea benchmark hit intraday high of USD81.89 a barrel in early trade amid tensions between the US and Saudi Arabia over the disappearance of Jamal Khashoggi.Khashoggi, a columnist for The Washington Post who had been living in the US, has been missing since he entered a Saudi consulate in Istanbul on October 2.Turkish authorities suspect that Khashoggi was abducted and murdered by the Saudis, which was denied by Riyadh.The economic events calendar on Tuesday has China inflation readings at 0230 BST, UK unemployment figures at 0930 BST, with Italy inflation and eurozone trade figures following at 1000 BST.The UK corporate calendar has full year results from housebuilder Bellway and half year results from footwear retailer Footasylum. There are also trading statements from tobacco giant British American Tobacco and theme park operator Merlin Entertainments.Related Shares:
SchrodersConvaTecRandgold ResourcesBAE SystemsFresnilloGreencoreSDRY.L