14th Jun 2019 17:01
(Alliance News) - Stocks in London ended lower on Friday as investors fretted over heightened tensions between the US and Iran, as well as disappointing economic data from China. US President Donald Trump on Friday blamed Iran for an attack on two oil tankers in the Gulf of Oman, adding that the US doesn't "take it lightly."Trump's comments in an interview with Fox News reinforced an accusation made by US Secretary of State Mike Pompeo on Thursday following the incident near the Strait of Hormuz and the release of a US Navy video purportedly showing an Iranian vessel removing an unexploded mine from one of the tankers."Iran did do it and you know they did it because you saw the boat," he said, adding that the limpet mine that reportedly was removed had "Iran written all over it" and its removal showed that Iran didn't want evidence left behind.Earlier Friday, Iran accused the US of playing a dangerous blame game and said Pompeo's comments were "ridiculous, but also very worrying and dangerous," according to state news agency IRNA.Iranian Foreign Ministry spokesman Abbas Mousavi added that the focus should be on who stands to profit the most from a crisis, rather than spreading baseless insinuations.The exact circumstances and cause of the incident remain unclear.Brent oil was quoted at USD62.00 a barrel at the London equities close, up from USD61.80 late Thursday. However, the North Sea benchmark is on track for a weekly loss, down 2.1%. In addition, disappointing data from the world's second largest economy weighed on sentiment.China's industrial output growth slowed to a more than 17-year low of 5% in May amid an escalating trade war with the US, a government report showed.The FTSE 100 index closed down 22.79 points, or 0.3% at 7,345.78, ending the week up 0.2%.The FTSE 250 index closed down 54.03 points, or 0.3% at 19,118.34, ending the week down 0.6%, and the AIM All-Share closed down 1.76 points, or 0.2% at 937.21, ending the week down 0.1%.The Cboe UK 100 ended down 0.3% at 12,460.17, the Cboe UK 250 closed down 0.3% at 17,151.01, while the Cboe Small Companies ended up 0.3% at 11,670.12."Equity markets finished lower on the day as trade and political tensions weighed on stocks. Washington DC and Beijing are still locked in their trade spat, and President Trump has reiterated that he believes that China will make a trade deal. The situation with Iran has become tenser in light of the attack on two oil tankers, and Trump will hold his tough stance on Iran as he feels they were behind the attack," said CMC Markets analyst David Madden.In Paris the CAC 40 ended down 0.2%, while the DAX 30 in Frankfurt ended down 0.4%. On the London Stock Exchange, Mexican gold miner Fresnillo ended the best blue chip performer, up 3.2% tracking spot gold prices higher, as demand for safe haven assets increased. Midcap peers Centamin and Hochschild Mining closed up 5.1% and 2.6%, respectively.Gold was quoted at USD1,349.52 an ounce at the London close, up from USD1,336.70 late Thursday. The precious metal hit an intraday high of USD1,357.92 in early trade - its highest level since April 2018. Languishing at the bottom of the FTSE 250, Kier Group saw GBP117 million slashed off its total market value following a news report that the troubled construction firm was planning to sell its housebuilding unit for a lower-than-expected price.The Times newspaper reported Kier is preparing to sell its housebuilding business in a deal that could be worth up to GBP150 million.Liberum's Joe Brent said the amount quoted would be "disappointing" in relation to the value of the business as a whole and compared to the company's own assessment of the value of the business in 2018 of GBP291 million.Kier closed down 36% at 130.80p, giving it a total market value of GBP212 million, having stood at GBP329 million on Thursday. Kier will be demoted from the midcap index when the FTSE Russell index review changes come into effect later this month. On the UK political front, Conservative Party leadership race frontrunner Boris Johnson claimed it is "perfectly realistic" to renegotiate the Withdrawal Agreement to allow the UK to leave the EU in October.In his first broadcast interview of the contest, he agreed to take part in a BBC debate, but suggested he would miss one hosted by Channel 4, amid accusations that he was hiding from the media.The former foreign secretary told BBC Radio 4's World At One programme that he was committed to leaving the EU by October 31 and said the controversial Irish backstop problems could be solved by having checks away from the border."Sterling has dropped further today, as Boris Johnson remains firmly ahead of the pack in the Tory leadership contest. Matt Hancock's departure does not necessarily strengthen BoJo's lead, but a clear 'anyone but Boris' candidate has yet to emerge, leaving the former foreign secretary firmly ahead. Rory Stewart's social media campaign is winning plaudits, but it is yet to translate into MP votes, and even if he emerges victorious, it is doubtful whether he can command the loyalty of pro-Brexit voters," said IG Group's Chris Beauchamp. The pound was quoted at USD1.2604 at the London equities close, lower compared to USD1.2683 at the close Thursday, as the dollar strengthened following positive US retail sales data. In US economic news, the Commerce Department reported a substantial upward revision to retail sales data for April.The Commerce Department said retail sales climbed by 0.5% in May after rising by an upwardly revised 0.3% in April. Economists had expected retail sales to increase by 0.6% compared to the 0.2% drop originally reported for the previous month.Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, climbed by 0.5% in May. The April reading was upwardly revised from no change to a 0.4% gain.City Index analyst Fiona Cincotta said: "This is the second straight month that retail sales have increased. However, retail sales are notoriously volatile, we have seen some large swings in the data so far this year making it difficult for policy makers to gauge the mood of the US consumers. The better than forecast data, just ahead the Federal Reserve meeting next week, will have investors questioning whether the Fed will be prepared to cut interest rates whilst consumers are still spending well."The broad expectation is that the Fed will sit tight for this month. According to the CME FedWatch tool the market is only pricing in a 22.5% probability of a rate cut in June. However, this increases to 88.5% in July and 97.5% by September."Stocks in New York were lower at the London equities close, with the tech-heavy Nasdaq index coming under pressure after chipmaker Broadcom lowered its full-year revenue guidance.The DJIA was down 0.2%, the S&P 500 index down 0.3% and the Nasdaq Composite down 0.5%.Broadcom President and CEO Hock Tan said the chip maker sees a "broad-based slowdown in the demand environment" due to continued geopolitical uncertainties and the effects of export restrictions on Chinese tech giant Huawei.The comments from Tan have led to renewed concerns about the impact of the US-China trade dispute on the broader tech sector.Broadcom was down down 6.5% in New York. The euro stood at USD1.1222 at the European equities close, down from USD1.1275 late Thursday. In continental economic news, German wholesale price growth slowed in May, the Federal Statistical Office said.Separately, official statistics also showed consumer inflation in both France and Italy eased in May.In Germany, wholesale prices were up 1.6% in May on a year before, slower than 2.1% in April. In March, prices had risen 1.8%. On a monthly basis, wholesale selling prices were up 0.3%.Among components, food, beverage and tobacco prices were up 2.1% year-on-year in Germany while live animals rose 11% and flower & plants grew 2.1%.Meanwhile, in France, official data showed consumer prices rose by 0.1% on a monthly basis and 0.9% year-on-year. This compares to a monthly rise of 0.3% in April and annual growth of 1.3%.France's harmonised index of consumer prices gained 1.1% on an annual basis. On this basis, prices rose 0.1% on the previous month.The economic events calendar on Monday has UK Rightmove house price index readings at 0000 BST and Ireland first-quarter GDP data at 1100 BST. The UK corporate calendar on Monday has interim results from Scottish Investment Trust. London Close is available to subscribers as an email newsletter. Contact [email protected]
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