29th Nov 2019 16:59
(Alliance News) - Stocks in London ended lower on Friday amid doubts a preliminary trade deal between the US and China will come to fruition by the end of the year.
On Thursday, an irate China issued an fiery response to US President Donald Trump's decision to sign legislation supporting Hong Kong protests.
Investors saw the development as a fresh risk to the drawn-out trade talks between the two superpowers, even as negotiators attempt to work toward a deal.
In Hong Kong on Friday, police ended their two-week siege of a university campus that became a battleground with pro-democracy protesters as activists vowed to hold fresh rallies and strikes in the coming days.
Renewed calls to hit the streets came after Beijing and city leader Carrie Lam refused further political concessions despite a landslide victory for pro-democracy parties in local elections last weekend.
The FTSE 100 index closed down 69.90 points, or 0.9% at 7,346.53, ending the week up 0.3%.
The FTSE 250 ended down 210.95 points, or 1.0% at 20,812.60, ending the week up 1.6%, and the AIM All-Share closed down 1.33 points, or 0.1% at 922.48, ending the week up 1.7%.
The Cboe UK 100 index finished down 0.7% at 12,479.89. The Cboe UK 250 closed down 0.9% at 18,733.28 and the Cboe UK Small Companies ended up 0.1% at 11,444.46.
"FTSE 100 is underperforming today as there is a broad sell-off in financial, mining, energy and consumer stocks. The US-China trade story continues to dominate the headlines as the latest twist in the story is the Hong Kong bill - where the US government essentially backs the citizens of Hong Kong. Beijing does not want to see the Trump administration stick their nose in domestic matters, so dealers are worried it might derail the trade talks. Apprehension about what will be China's next move is stopping traders from buying into the market," said CMC Markets analyst David Madden.
In Paris the CAC 40 closed down 0.1% and the DAX 30 in Frankfurt ended down 0.1%.
On the London Stock Exchange, Ocado Group ended the best blue chip performer, up 9.7% after the online grocer set its sights on the land of the rising sun.
The Hatfield, Hertfordshire-heaquartered firm signed an agreement with Aeon to develop the Japanese grocer's online business using the Ocado Smart Platform.
Aeon has about 100 million customers and operates over 21,000 stores across various businesses, with operations in 14 countries. Aeon will be launching its new online business with the help of Ocado's platform.
The agreement calls for the development of a national fulfilment network to serve the whole of the Japanese market, with expected sales capacity of around JPY600 billion by 2030, growing to approximately JPY1 trillion by 2035, the company said. Initial fulfilment centres will serve the Kanto region of Japan, which includes Tokyo, with the first planned centre to go live in 2023. By 2025, Aeon expects to have a sales capacity in this region in excess of JPY200 billion.
At the other end of the large cap index, St James's Place ended down 2.7%. Goldman Sachs downgraded the wealth manager to Sell from Neutral.
The pound was quoted at USD1.2929 at the London equities close, up from USD1.2904 at close Thursday, as the UK general election draws ever closer.
UK Prime Minister Boris Johnson has told Brexit supporters they must vote Conservative to prevent a "hung, broken Parliament" that cannot deliver their desires, as he attempted to shift the election focus back on to the EU.
The PM vowed on Friday that he would get the UK out of the bloc by January 31, "no ifs, no buts", by bringing his deal back before Parliament before Christmas.
The Conservative leader's comments alongside key Vote Leave allies in a Westminster press conference came after a poll suggested Brexit-backers hold the key to winning the December 12 election.
Meanwhile, the PM committed to "ensuring that the public sector buys British", and to introducing a new state aid regime that would make it easier for the government to intervene in struggling industries.
JPMorgan said that the outcome of a Conservative Party majority in the UK general election on December 12 was the investment bank's base case. This may result in fiscal easing to support economic growth over the medium term and a rise in the pound, but also a renewed risk of a no deal Brexit, the bank added.
"Generally we expect domestic consumer and business sentiment to respond positively to any near-term reduction in uncertainty that might arise from a clear Conservative majority. The sectors most likely to do best in such a scenario are also the ones that could be most at risk in a Labour victory scenario," analysts Alexander Mees and Samuel Bland said.
The euro stood at USD1.1017 at the European equities close, up from USD1.1002 late Thursday, after a series of economic data releases from the continent.
Eurozone consumer inflation accelerated more than expected in November, according to preliminary data from Eurostat.
Consumer price index was estimated to be 1.0% higher in November from a year before, accelerating from the 0.7% annual rise reported in October. The inflation figure also was higher than the 0.9% forecast by economists.
"November's jump in eurozone inflation is unlikely to be the beginning of a sustained upward trend in price pressures. With employment growth slowing and slack in the labour market increasing, wage growth seems likely to level off or slow this year," said analysts at Capital Economics.
In a separate release, the eurozone unemployment rate eased as expected to 7.5% in October from 7.6% the month prior, data from Eurostat showed.
Against the yen, the dollar was trading at JPY109.47, flat from JPY109.50 late Thursday.
Stocks in New York were lower at the London equities close amid lighter trading volumes after being closed on Thursday for the Thanksgiving holiday. Markets will close at 1300 EST on Friday.
The DJIA was down 0.3%, the S&P 500 index down 0.2% and the Nasdaq Composite down 0.1%.
Brent oil was quoted at USD61.18 a barrel at the London equities close, down sharply from USD62.72 at the close Thursday.
Oil prices were lower after Russia's oil minister Alexander Valentinovich Novak said Russia would prefer a wait and see approach before committing to any further extensions in production cuts by OPEC.
The comments could cause concern among investors ahead of the OPEC+ meeting next Friday.
"The quiet dominating equities has not been replicated in oil, which has been the victim of low volumes and news that Russia is seeking to extend a delay to further output cuts. It has been a choppy rally in crude over the past two months, and this week has seen both Brent and WTI unable to make much headway. As a result the price has been ripe for a correction, although it must be said that similar drops over the past month have proven to be excellent buying opportunities," said IG Group's Chris Beauchamp.
Meanwhile, Saudi oil giant Aramco said that applications from private investors for its planned stock market offering had been oversubscribed.
The IPO could exceed the world's biggest to date, trumping the USD25 billion float of Chinese retail giant Alibaba in 2014.
Earlier this month, Saudi Aramco said it would sell 1.5% of the company in an initial public offering worth USD24 billion to 25.6 billion.
"Retail subscriptions, which concluded last night, reached 47,411,624,960 Saudi riyals (USD12.6 billion, EUR11.5 billion), with almost five million subscribers for nearly 1.5 billion shares," the statement said.
Gold was quoted at USD1,463.01 an ounce at the London equities close, up from USD1,455.02 late Thursday.
The economic events calendar on Monday has manufacturing PMI data from Germany at 0855 GMT, the eurozone at 0900 GMT, the UK at 0930 GMT and US at 1445 GMT.
The UK corporate calendar on Monday has interim results from social housing-focused property investor Civitas Social Housing.
By Arvind Bhunjun; [email protected]
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