4th Apr 2019 17:06
LONDON (Alliance News) - Stocks in London ended lower on Thursday, with ex-dividend stocks weighing on the FTSE 100 as markets await details of a US-China trade developments.The FTSE 100 index closed down 16.34 points, or 0.2%, at 7,401.94, retreating from fresh four-month highs reached on Wednesday. The FTSE 250 ended down 56.11 points, or 0.3%, at 19,507.33, and the AIM All-Share closed down 1.11 points, or 0.1%, at 920.08.The Cboe UK 100 ended down 0.1% at 12,565.90, the Cboe UK 250 closed down 0.2% at 17,468.92, and the Cboe Small Companies ended up 0.5% at 11,247.18."US-China trade talks resumed in Washington today, as market excitement builds as we start to see light at the end of the tunnel. However, details emerging from those close to the deal have revealed a crucial time-limited aspect that could be imposed to coincide with Trump's presidential term," said IG Group's Josh Mahony. "With the deal expected to frontload all the Chinese purchases of US goods into the period up until 2025, Trump has shown himself to be looking after his legacy over the long-term economic picture of the US. Nevertheless, for US firms this means that there should be a substantial bounty for US firms who will likely benefit from a sharp spike in Chinese demand over the coming years," Mahony added. On the London Stock Exchange, ex-dividend stocks were weighing on the large cap index.Direct Line Insurance Group, Lloyds Banking Group and DS Smith closed down 5.4%, 3.5% and 2.4%, respectively, after going ex-dividend - meaning new buyers are no longer eligible for the latest payout.Micro Focus International closed down 6.0% after Citigroup downgraded the enterprise software company to Sell from Neutral. Citi's Amit Harchandani said that over the mid-term, there are downside risks to the company's revenue forecasts and earnings growth compared to market expectations.In the FTSE 250, Entertainment One closed up 3.5% after the film and TV content producer anticipated an annual performance in line with expectations and guided for earnings increase.In the Family & Brands division - the division which houses the popular cartoon Peppa Pig - Entertainment One said it expects to report revenue and adjusted earnings before interest, taxes, depreciation and amortisation for the year ended March up by more than 25% on last year's revenue of GBP138.6 million and adjusted Ebitda of GBP82.3 million.Languishing at the other end of the midcaps was Saga, which closed down 36% after the over-50s insurance and travel company slashed its dividend as it warned on falling earnings in new financial year and swinging to a substantial loss. The stock hit an all-time low of 64.01 pence in early trade and closed at 68.13p, down 68% from its 2014 initial public offering price of 185p. For the year ended January 31, Saga posted a GBP134.6 million pretax loss compared with pretax profit of GBP180.9 million a year ago, after a goodwill impairment of GBP310 million. The swing to a loss at the pretax level was mainly due to an asset impairment amounting to GBP315.9 million, which the company did not incur last year. The impairment relates to Saga re-assessing the carrying value of goodwill in its Insurance operations. Saga cut its total dividend by 56% to 4.0p per share from 9.0p paid to shareholders last year. This was after proposing a final payout of 1.0p down from 6.0p a year ago. In a bid to change its fortunes, Saga said it is launching a "fundamental" strategy revamp which will see it change its approach in the insurance business to address "increasing challenges" in its markets."While the cruise line might be Saga's shop window, it's the car insurer that drives profits, and that needs to be a scale business. Cross-selling is all well and good, but a large proportion of the customers Saga needs to make insurance work will never go on a Saga holiday. In a market where insurance has become highly commoditised, Saga will need to work hard if it's to create a reason for older drivers to knock directly on its door," said Hargreaves Lansdown analyst Nick Hyett. Stagecoach closed down 7.9% after Liberum downgraded the transport operator to Hold from Buy. The broker believes risks to its rail division mean Stagecoach could become a "pure" bus operator by this time next year. In Paris the CAC 40 ended down 0.1%, while the DAX 30 in Frankfurt ended up 0.3%. Frankfurt-listed Commerzbank closed up 2.9% after the Financial Times reported Italy's UniCredit is preparing a multi-billion euro takeover offer for the bank should merger talks with fellow German lender Deutsche Bank collapse.Milan-listed Unicredit closed down 0.7%.The Italian bank's renewed interest in Commerzbank comes amid signs that plans to merge the German bank with Deutsche Bank are facing several major hurdles, people briefed on the discussions told the newspaper.The pound was quoted at USD1.3075 at the London equities close, down from USD1.3155 at the close Wednesday.On Wednesday, UK lawmakers approved legislation that forces Prime Minister Theresa May to seek an extension to Brexit beyond Friday next week.The effective defeat for the government, after the Bill narrowly passed through the Commons by just one vote late on Wednesday, paves the way for the Opposition to push forward with further debate on the legislation in the hope of it becoming law.The Bill would ensure there is a legal requirement on the prime minister to seek an extension to Article 50 to prevent a no-deal Brexit.The government and Labour will continue in-depth talks in a bid to break the Brexit deadlock."If, as we expect, the talks fail to find a compromise, then the government is likely to bring forward its own series of indicative votes. May's latest move and the threat of a softer Brexit could increase support for her deal - something she is clearly hoping for. However, as things stand, it is difficult to see enough MPs switching their votes to support her. This will likely mean that May will have to ask the EU for a long extension to Article 50, which we expect to be granted with conditions," said analysts at UBS. The euro stood at USD1.1215 at the European equities close, marginally lower USD1.1227 late Wednesday, following the release of minutes from the European Central Bank's March meeting The minutes showed that policymakers agreed that the weakening in economic data indicated a sizeable moderation in the pace of the economic expansion that would extend into the current year.Policymakers cautioned about the continued slowdown in global growth and trade momentum as well as the potential impact of trade protectionism on the global outlook and the ongoing risk of an escalation of trade conflicts, the minutes of the central bank's March 6-7 meeting showed.Compounding the single currency's woes was weak German factory orders for February, which plunged to their lowest since January 2017.Preliminary figures from the Federal Statistical Office showed that Germany's manufacturing orders decreased sharply in February, defying expectations for a modest increase.Factory orders dropped 4.2% month-on-month, while economists had forecast a 0.3% increase."The euro stopped falling after the initial move lower, suggesting that the negative sentiment towards the Eurozone may already be priced in and that the single currency may have carved out a near term bottom against the dollar," said Forex.com analyst Fawad Razaqzada. "Market participants are not rushing to increase their dollar holdings given that the US monthly jobs report is just a day away and some of the leading employers indicators released this week have disappointed expectations. If the jobs data were to miss forecasts for the second consecutive month, then we could see a more pronounced sell-off in the dollar on Friday," Razaqzada added. Stocks in New York were mixed at the London equities close as investors await news on the US-China trade front, as well as the release of the monthly jobs report on Friday.The DJIA was up 0.4%, the S&P 500 index was flat and the Nasdaq Composite down 0.3%.Equity markets have recently benefited from optimistic reports regarding progress in US-China trade talks, although traders may be waiting for more concrete developments.Traders are likely to keep an eye on any news out of a meeting between President Donald Trump and Chinese Vice Premier Liu He which are expected to start at 2130 BST.Brent oil was quoted at USD69.52 a barrel at the London equities close, up from USD69.10 at the close Wednesday.Gold was quoted at USD1,288.10 an ounce at the London equities close, lower than USD1,290.10 late Wednesday.The economic events calendar on Friday has Germany industrial production figures at 0700 BST and UK Halifax house prices at 0830 BST. In the afternoon there is the US jobs report for March at 1330 BST. The corporate calendar on Friday has annual results from power generation firm ContourGlobal, first quarter production results from iron pellet producer Ferrexpo and a trading statement from car dealer Motorpoint Group. Financial markets in Hong Kong and China are closed on Friday for the Tomb Sweeping Day holiday.
Related Shares:
LloydsSagaEntertainment OneSmith (DS)Direct LineSGC.LMCRO.L