25th Jul 2019 16:57
LONDON (Alliance News) - Stock prices in London closed mixed on Thursday after the ECB signalled a potential interest rate cut amid persistently low inflation, despite holding rates for now. The FTSE 100 index closed 0.2% lower at 7,489.05. The mid-cap FTSE 250 index ended up 0.2% at 19,820.35, and the AIM All-Share index finished marginally higher at 926.05.The Cboe UK 100 closed down 0.1% at 12,711.59, the Cboe UK 250 up 0.2% at 17,732.04, but the Cboe UK Small Companies down 0.1% at 11,05.27.At the close Thursday, sterling was modestly firmer against the US dollar. The pound was quoted at USD1.2488 at the London close, from USD1.2492 late Wednesday.The European Central Bank kept interest rates on hold, though indicated a cut could be in store in the near future.The ECB central bank kept its interest rates on main refinancing operations, the marginal lending facility and the deposit facility all unchanged at 0.00%, 0.25% and minus 0.40% respectively. The rate-setter emphasised it expects interest rates to "remain at their present or lower levels at least through the first half of 2020." This contrasts to the previous belief that rates would remain at their present levels at least through to the first half of 2020.The ECB added that it was "determined to act" should medium-term inflation continue to fall short of its targeted "below, but close to 2%" rate. The ECB never pre-commits," Pantheon Macroeconomics Chief Eurozone Economist Claus Vistesen said. "But this is as close at it gets." "When the central bank convenes in September, it will be looking at poor second quarter gross domestic product data, and core inflation that almost surely will be virtually unchanged from its current trend of about 1% to 1.2%," Vistesen added. "In short; further easing is on the way." "But what kind? We are fairly certain that deposit rate cuts are coming, but today's initial statement points towards a combination of rate cuts and quantitative easing," Vistesen added.In mainland Europe, in Paris the CAC 40 equities index ended down 0.4% and the DAX 30 in Frankfurt ended down 1.0%.The euro was quoted at USD1.1158, compared to USD1.1141 late Wednesday.In the UK, new Prime Minister Boris Johnson entered his first full day as chief by chairing the first meeting of his freshly-constituted cabinet, guaranteeing the rights of EU citizens in the UK after Brexit and declaring the withdrawal deal negotiated by his predecessor Theresa May as "unacceptable."Under the deal sealed by May, EU citizens rights would have been protected. Yet, Johnson has been threatening leaving the EU without a deal which would not immediately guarantee such rights. Earlier on Thursday, Johnson emphasised he would "much prefer" to leave the EU - currently expected on October 31 - with a deal. Nonetheless, he branded the withdrawal deal of May as "unacceptable." The EU, however, have repeatedly confirmed that the withdrawal deal was no longer negotiable. Amongst the FTSE 100 in London, accounting software firm Sage ended at the bottom of the blue chips, down 9.3%, after reporting a disappointing third quarter trading update.For the three months ended June, organic revenue grew 5.3% to GBP476 million. Nonetheless, this was slower than the 5.9% growth to GBP1.42 billion reported across the first nine months of the financial year. This was helped by recurring revenue surging 11% to GBP405.0 million.What is more, Sage warned it expected full year organic operating margin to be at the "lower end" of the 23% to 25% previously given. The year prior, organic operating margins stood at 27.8%. Amongst the blue chip gainers, AstraZeneca ended 8.2% higher after it hiked its full year growth guidance for its core product sales. For the six months ended June, product sales jumped 12% to USD11.18 billion from USD10.02 billion the year prior. This contributed to the 9.5% revenue rise to USD11.31 billion from USD10.33 billion the year before. Looking to the full year, AstraZeneca now expects product sales growth in the "low double digit" percentage range. Previously, the drug maker had forecast growth in the "high single digits."Catering firm Compass closed in the green, up 2.5%, after a strong third quarter resulted in a boost to its full year forecasts. For the three months end June, organic revenue rose 6.3% with its Rest of World unit delivering an improved performance. Over the nine months, organic revenue was 6.5% higher.Consequently, Compass now expects full year organic revenue towards the top of its 4% to 6% range. Margins are expected to remain flat at around the 7.4% reported the year prior. In the mid-caps, aerospace and defence firm Cobham surged 35% after agreeing a GBP4 billion takeover from a subsidiary of US private equity firm Advent International Corp. Advent will pay 165 pence per share for Cobham in cash, equivalent to a 34% premium to closing share price on Wednesday. Kitchen supplier Howden Joinery closed 9.0% higher after reporting profit and revenue both grew strongly in the first few months of its financial year. For the 24 weeks ended June 15, pretax profit surged 14% to GBP78.1 million from GBP68.8 million the year prior. This was after revenue rose 5.4% to GBP652.6 million from GBP619.4 million the year before. At the other end of the mid caps, Metro Bank slumped 19% after interim profit fell sharply despite rising revenue and its chair and founder decided to leave.For the six months ended June, pretax profit plummeted 84% to GBP3.4 million from GBP20.8 million the year prior. This was despite revenue rising 14% to GBP216.7 million. Meanwhile, the challenger high street bank reported founder and Chair Vernon Hill will step back to become non-executive and president. The timetable for his departure from the chair was not clarified at this stage. Luxury car maker Aston Martin Lagonda extended its steep declines on Wednesday with a further 18% fall on Thursday.On Wednesday, shares in Aston Martin fell 26% after issuing a sales warning amid weak global demand for its vehicles just months after its headline-grabbing initial public offer in October. In 2019, Aston Martin now expects wholesale sales be between 6,300 and 6,500 vehicles. The company described this as "disappointing" after forecasting sales between 7,100 and 7,300On Wall Street, the Dow Jones was trading 0.3% lower, the S&P 500 down 0.2%, and the Nasdaq Composite was down 0.5%. Gold was quoted at USD1,418.12 an ounce at the London equities close, lower versus USD1,423.31 Wednesday.Brent oil was quoted at USD63.89 a barrel at the London equities close, lower than USD64.18 Wednesday.In the economic calendar on Friday, Japanese consumer price index figures are due at 0030 BST. In the US, second quarter gross domestic product data are due at 1330 BST alongside personal consumption expenditure figures. At 1800 BST, the Baker Hughes US oil rig count data are also released.In Europe, German import price index data are released at 0700 BST with French consumer confidence figures at 0745 BST. In UK corporate events on Friday, full year results are due from retailer Sports Direct International. Meanwhile, half year results are expected from lender AIB, online property website Rightmove, publisher Pearson and engineer IMI. In addition, first quarter results are expected from telecommunications firm Vodafone and baby and children equipment retailer Mothercare.