29th Aug 2018 17:00
LONDON (Alliance News) - Stocks in London ended lower on Wednesday with the FTSE 100 dented by the strengthening pound, which appreciated after optimistic signs from the European Union over Brexit talks.The FTSE 100 index closed down 0.7%, or 54.01 points at 7,563.21. The FTSE 250 ended down 0.5%, or 112.36 points, at 20,736.88, and the AIM All-Share closed down 0.2%, or 2.36 points, at 1,099.27.The Cboe UK 100 closed down 0.8% at 12,822.18, the Cboe UK 250 ended down 0.6% at 18,811.29, and the Cboe UK Small Companies closed flat at 12,358.64."The FTSE 100 is enduring a broad based sell-off as mining, housing, retail and oil stocks are lower. The surge in sterling on the back of Barnier's comments about Brexit sent the internationally exposure index even lower. The EU negotiator is prepared to offer the UK a deal, that hasn't been offered to any other country, and traders are viewing this as a step in the right direction," said David Madden, market analyst at CMC Markets.The pound rallied after the European Union's Chief Brexit Negotiator Michel Barnier offered hope to the UK that a bespoke deal could be agreed ahead of the upcoming deadline, according to Reuters.Barnier said the bloc was prepared to offer the UK an "unprecedentedly close relationship" after it leaves the EU, but would not sanction anything that would weaken the EU's single market, the news agency reported."We are prepared to offer Britain a partnership such as there never has been with any other third country," Barnier told reporters in Berlin on Wednesday after a meeting with German Foreign Minister Heiko Maas.Sterling was quoted at USD1.2999 at the London equities close, compared to USD1.2891 at the close Tuesday, having spiked to an intraday high of USD1.3010 on the back of Barnier's comments. "While we are seeing some significant improvement in market sentiment after this announcement, there is feeling that we have seen this all before. Almost all the preceding 'breakthroughs' have been swiftly proven to be a false dawn, and thus while we are seeing the pound spike higher, there is certain to be some hesitancy until we see a more consistently positive tone from the EU," said IG market analyst Joshua Mahony.On the London Stock Exchange, heavyweight mining stocks ended among the worst performers on the large cap index amid a decline in copper prices.Antofagasta closed down 1.8%, Anglo American closed down 1.8%, Rio Tinto closed down 1.1% and BHP Billiton closed down 0.7%. Smurfit Kappa closed down 1.7% after the Venezuelan government took temporary control of the Irish corrugated packaging company's subsidiary business and detained two employees.The business of Smurfit Kappa Carton de Venezuela, or SKCV, will be under government control for the next 90 days following a number of allegations. These allegations were made after a two-day inspection of SKCV and are entirely refuted by Smurfit.Conversely, Micro Focus International ended as the best blue chip performer up 2.9% after the Newbury-based software firm announced a new share buyback programme. Micro Focus did not say how much the overall buyback would be worth, but it is to return USD200 million to shareholders in the first tranche, running from Wednesday until October 24 with Citigroup in charge. The company also said shareholders have approved its sale of its open-source software business SUSE to Marcel Bidco for USD2.54 billion. Bunzl closed up 2.8% having reported solid half year earnings on Tuesday. The distribution and outsourcing company on Tuesday said it acquired its first business in Norway after its profit grew in the first half of 2018, boosted by acquisitions and new customer wins. Although, the stock closed down 0.2% - having risen as high as 4.7% on Tuesday. United Utilities closed up 1.5% after Citigroup raised the utility stock to Buy from Neutral. Elsewhere, Aston Martin looks set for a spot in London's FTSE 100 index after the British luxury car maker announced plans to list on the London Stock Exchange. The 105-year-old auto maker was founded in 1913. Its iconic sports cars have appeared in 11 James Bond films. The company did not give any financial details of its IPO, nor what its ticker might be. Global joint coordinators are Deutsche Bank, Goldman Sachs, and JPMorgan Securities, while financial advisor is Lazard. A prospectus will be published on or around September 20. Aston Martin is aiming for a premium listing on the London Main Market, floating at least 25% of its shares. It said Germany's Daimler, which currently has a 4.9% stake, will remain a shareholder. The car maker was owned partially or fully by the US's Ford Motor Co from 1987 to 2007. AJ Bell Investment Director Russ Mould is looking at a GBP5 billion valuation for the firm, putting it at number 93 in the FTSE 100, ahead of the likes of postal operator Royal Mail. In Paris the CAC 40 ended up 0.3%, while the DAX 30 in Frankfurt ended up 0.3%. The euro was down against the dollar at USD1.1692 at the European equities close, against USD1.1718 late Tuesday. Stocks in New York were higher at the London equities close as investors keep an eye on renewed trade talks between the US, Canada, and Mexico.Canada rejoined the talks following President Donald Trump's announcement of a preliminary trade deal with Mexico on Monday.In remarks to reporters on Tuesday, Canadian Foreign Affairs Minister Chrystia Freeland said "difficult" concessions by Mexico have set the stage for productive conversations in the coming days.Freeland said she is due to engage into detailed discussions with US Trade Representative Robert Lighthizer later Wednesday.The DJIA was up 0.2%, the S&P 500 index up 0.4% and the Nasdaq Composite up 0.7%.On the US economic front, the Commerce Department recently released a report showing economic activity grew by more than initially estimated in the second quarter.The report said real gross domestic product climbed by 4.2% in the second quarter compared to the previously reported 4.1% increase. The pace of growth had been expected to be downwardly revised to 4.0%.With the unexpected upward revision, the GDP growth in the second quarter reflects a significant acceleration from the 2.2% advance in the first quarter.Shortly after the start of trading in the US, the National Association of Realtors released a report showing an unexpected pullback in pending home sales in the month of July.NAR said its pending home sales index dropped by 0.7% to 106.2 in July after jumping by 1.0% to an upwardly revised 107.0 in June.Economists had expected pending home sales to rise by 0.3% compared to the 0.9% increase originally reported for the previous month.With the unexpected monthly decrease, pending home sales in July were down by 2.3% compared to the same month a year ago, reflecting the seventh straight year-over-year decrease.Brent oil was firm quoted at USD76.53 a barrel at the London equities close from USD76.30 at the close Tuesday. Gold was down quoted at USD1,204.00 an ounce at the London equities close against USD1,208.10 late Tuesday.Having hit a month high of USD1,227.88 at the end of September, the gold price has steadily retreated and ThinkMarkets analyst Naeem Aslam attributed the slump to the robustness of the US economy. This has prompted the Federal Reserve to raise US interest rates twice this year and is widely expected to do so next month and again in December, much to the chagrin of Trump. "The rate hikes are pushing investors the dollar higher and for investors dollar is more favourite instrument. Of course in the recent geopolitical events, we have also seen where investors have favoured dollar as a safe haven rather than gold. This in turn affects the price of gold. Therefore, one of the ultimate reasons behind gold dropping and the greenback rising is due to the actions carried out by the Fed," Aslam said. The economic events calendar on Thursday has unemployment and inflation data from Germany at 0855 BST and 1300 BST respectively, UK mortgage approvals at 0930 BST, eurozone consumer confidence at 1000 BST and US personal consumption expenditure data at 1330 BST. The core PCE is the Fed's preferred inflation measure.The UK corporate calendar on Thursday has half year results from oilfield services firm Hunting and equipment rental firm HSS Hire Group. There is also full year results from recruiter Hays and a trading statement from books and stationary retailer WH Smith.Related Shares:
Anglo AmericanRio TintoBHP Billiton PLCMCRO.LSKG.LBunzlAntofagastaUnited UtilitiesAntofag.5%pr