23rd Oct 2019 17:07
(Alliance News) - Stocks in London ended mixed on Wednesday as investors await European Union's decision on UK's request for a Brexit delay.
The internationally exposed FTSE 100 index closed up 48.25 points, or 0.7%, at 7,260.74. The FTSE 250 ended down 0.97 of a point at 20,180.94, and the AIM All-Share closed up 1.87 points, or 0.2%, at 886.02.
The Cboe UK 100 ended up 0.7% at 12,319.51, the Cboe UK 250 closed 0.2% lower at 18,123.57, and the Cboe Small Companies ended down 0.1% at 11,144.44.
In Paris the CAC 40 ended down 0.1%, while the DAX 30 in Frankfurt ended up 0.3%.
CMC Markets analyst David Madden said: "Equity markets are a mixed bag as there is chatter of an extension in relation to Brexit. UK politics remains in limbo as there is speculation the UK's exit from the EU will be pushed back to early 2020, and there is also chatter of a general election. The possibility of a no-deal Brexit seems to have been greatly reduced, which is music to dealers' ears.
"While there remains a lack of clarity in relation to Brexit, stock markets are likely to meander. Things haven't gone exactly according to plan for Prime Minister Johnson, but the fact that he managed to strike a deal with the EU, and get support for it, suggests that things are heading in the right direct."
The pound was quoted at USD1.2887 at the London equities close, down against USD1.2958 at the close Tuesday.
Sterling has experienced volatility since the start of the week reaching five-month highs above USD1.30 on increasing hopes that a 'no-deal' Brexit would be averted.
In the latest developments, the European Union is set to grant another Brexit extension after UK MPs on Tuesday rejected Prime Minister Boris Johnson's bid to force his divorce deal through parliament this week.
European Council President Donald Tusk has recommended that the EU's 27 other member states grant an extension, likely until the end of January.
"The pound held steady below USD1.29 as investors continue to digest Brexit developments from the previous session and as they await further news from the EU over the length of the Brexit extension. The pound is on pause as investors await the next chapter of this ongoing drama," City Index analyst Fiona Cincotta said.
"Boris Johnson could try to push his Brexit deal through at a slightly slower pace or we could be looking at a general election, should the opposition feel secure once the extension is in place. Which route is taken will depend to a degree on the length of the Brexit extension granted by the EU. A short extension simply doesn't allow for an election. It will also depend on Labour's belief in its ability to win an election," Cincotta added.
On the London Stock Exchange, Royal Bank of Scotland ended the worst blue chip performer, down 2.9% ahead of the state-backed lender's third-quarter results on Thursday.
Fresnillo closed down 1.7% after the Mexican gold miner warned annual production is likely to be at the lower end of its guided range. Fresnillo has guided for 880,000 ounces to 910,000 ounces of gold for 2019, and for between 55 million ounces and 58 million ounces of silver.
The miner expects 2019 production to be towards the lower end of each range. In 2018, Fresnillo produced 923,000 ounces of gold and 61.8 million ounces of silver. In July, Fresnillo cut 2019 production guidance from what it had provided at the start of the year, due in part to lower-than-expected ore grades and ore throughput at the Fresnillo mine in Mexico.
The euro stood at USD1.1114 at the European equities close, lower than USD1.1140 late Tuesday, as Mario Draghi prepares for his swansong at the helm of the European Central Bank.
The ECB will Governing Council meets on Wednesday in Frankfurt, announcing its latest policy decision at 1245 BST. This will be followed by a press conference with Draghi at 1330 BST, at his last meeting as president of the central bank.
Draghi's term expires at the end of October, after eight years in the role. Christine Lagarde, formerly head of the International Monetary Fund, is set to take over the ECB post at the start of November.
Should the ECB leave interest rates unchanged on Thursday - as expected - Draghi will have completed his whole eight year tenure in charge of the central bank without ever having raised interest rates. This would make him one of only a handful of major central bank chiefs not to lift rates in the modern era.
"Record low inflation expectations hurts Draghi's legacy the most. We think Draghi did a stellar job in turning the ECB into a modern central bank and in fighting crises, but his ECB also overestimated the ability to control inflation and expectations in an environment of structural headwinds," said analysts at Societe Generale.
Against the yen, the dollar was trading at JPY108.57, flat from JPY108.54 late Tuesday.
Stocks in New York were higher at the London equities close despite some mixed earnings that included some cautionary notes about the economy.
The DJIA was up 0.2%, the S&P 500 index up 0.1% and the Nasdaq Composite up 0.1%.
Caterpillar cut its 2019 earnings forecasts amid weak demand in its construction and mining equipment businesses.
For the full year, Caterpillar cut its earnings per share outlook to between USD10.90 and USD11.40 from the USD12.06 to USD13.06 prior. The world's biggest construction and mining equipment maker made the cuts to expectations amid a forecast than annual revenue will be "modestly lower" than in 2018.
Caterpillar shares were down 0.4% in New York.
Boeing was up 3.5% in New York despite ongoing problems with the 737 MAX aircraft leading to a steep decline in both quarterly earnings and revenue.
Earnings per share for the three months to September fell 50% to USD2.05, with net earnings down 51% to USD1.17 billion. Revenue declined 21% to USD19.98 billion.
For the nine months to September, Boeing's earnings per share slumped to USD0.66 from USD11.95, with net earnings likewise crashing to USD374 million from USD7.04 billion. Revenue declined 19% to USD58.65 billion.
The aerospace giant's top-selling 737 MAX has been grounded since mid-March following two crashes that killed 346 people.
Boeing has been in close contact with the Federal Aviation Authority to have the plane recertified in a process that has dragged out much longer than initially expected, and assumes the aircraft will get regulatory approval in the final quarter of 2019, it said Wednesday.
Brent oil was quoted at USD60.08 a barrel at the London equities close, flat against USD60.10 at the close Tuesday.
Gold was quoted at USD1,493.54 an ounce at the London equities close, up from USD1,484.14 late Tuesday.
The economic events calendar on Thursday has PMI readings from France, Germany and eurozone at 0815 BST, 0830 BST and 0900 BST respectively.
The UK corporate calendar on Thursday has third-quarter results from Anglo Swedish drugmaker AstraZeneca, information and analytics firm RELX and from state-backed lender Royal Bank of Scotland Group.
By Arvind Bhunjun; [email protected]
London market Close is available to subscribers as an email newsletter. Contact [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
RBS.LFresnillo