5th Apr 2019 17:12
LONDON (Alliance News) - Stocks in London ended the week in the green with miners pushing the FTSE 100 higher, offset by homebuilders falling on UK house prices slipping in March. The FTSE 100 index closed up 44.93 points, or 0.6%, at 7,446.87. For the week the blue chip index is up 3.1%.The FTSE 250 ended up 30.97 points, or 0.2%, at 19,538.30, and the AIM All-Share closed up 2.26 points, or 0.3%, at 922.50.The Cboe UK 100 ended up 0.7% at 12,657.04, the Cboe UK 250 closed marginally up at 17,470.84, and the Cboe Small Companies ended broadly flat at 11,246.64."Stock markets are in positive territory heading into the close. The reasonably positive US non-farm payrolls report, combined with continued optimism surrounding the US-China trade talks has helped stock markets. The US jobs report won't upset the apple cart in terms of Federal Reserve monetary policy, and given the lack of negative news out of Europe today, sentiment was given a boost," said CMC Markets analyst David Madden.The pound was quoted at USD1.3020 at the London equities close, down from USD1.3075 at the close Thursday.Cityindex Senior Market Analyst Fiona Cincotta said: "The pound headed southwards versus the stronger dollar, as investors digested Brexit developments. Theresa May requesting an extension to Article 50 to June30 hasn't gone down well with pound traders and isn't likely to go down well with Brussels either.""Whilst May is looking for another short extension, ultimately the decision is the EU's. With EU President Donald Tusk favouring an extension of a year and France playing hardball, May's request is likely to be rebuffed. This will leave Theresa May with little choice but to hold European elections next month, a move many Brexiteers could find too much to swallow."On the London Stock Exchange, the FTSE 100 was boosted by miners, riding high on hopes for a possible US-China trade deal, with Anglo American closing up 2.2%, Antofagasta up 1.2%, Rio Tinto 1.7% higher, Evraz 1.9% higher and Glencore 1.1% higher.At the other end of the large cap index, housebuilders ended lower after data from Halifax showed monthly house prices fell in March.Berkeley Group closed down 1.7%, Barratt Developments was down 1.6% and Persimmon ended the session down 0.9%.House prices in the three months to March were 2.6% higher compared to the same period a year ago. On a monthly basis, however, house prices fell 1.6% in March. The average house price in the UK is now GBP233,181, Halifax said."These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London, meaning that we continue to expect subdued price growth for the time being," said Halifax Managing Director Russell Galley.Persimmon commissioned an independent review into the company Friday, on how it deals with customers and issues.Among the UK's major housebuilders, Persimmon, in particular, has been under increasing pressure from buyers and the government to increase the quality of new homes.The company has been criticised for paying out huge bonuses to senior executives and enjoying a substantial rise in profit on the back of the UK government's Help to Buy scheme - while doing little to improve the quality of the homes it constructs. In the FTSE 250, ContourGlobal ended among the best performers, up 6.9% after the power plant operator declared a dividend above company guidance as it reported a surge in annual revenue.For 2018, revenue grew by 23% to USD1.25 billion from USD1.02 billion in 2017. However, pretax profit fell 32% to USD27.8 million from USD40.6 million the year before - due to higher depreciation and amortisation costs as well as finance expenses. Adjusted earnings before interest, taxes, depreciation and amortisation, however, increased by 19% to USD610 million from USD513 million in 2017, due to growth on acquisitions of CSP Spain and CHP Mexico, and gains from the sale of minority solar assets in Italy and Slovakia.ContourGlobal declared a final dividend of 9.4 cents per share, leading to a total payout of 13.4 cents, or USD90 million in total, which is above the group's initial guidance of USD80 million.At the other end of the midcaps, small business lender Funding Circle Holdings ended the worst performer, down 8.2% after its sister investment trust Funding Circle SME Income declared its intention to wind down.Shares in Funding Circle SME closed up 0.9%.In response to the announcement, Funding Circle Holdings said that Funding Circle SME had become a "declining part of its overall funding mix", as the peer-to-peer lender started to expand its range of funding sources and become more international in nature."A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform," said Samir Desai, chief executive officer of Funding Circle Holdings.For 2019, Funding Circle SME was estimated to fund only 3.5% of Funding Circle Holdings' origination volume. In 2018, Funding Circle Holdings loans under management increased 49% to GBP3.15 billion, with originations increasing 32% to GBP2.29 billion.Stagecoach Group closed down 5.8% after Jefferies downgraded the transport operator to Underperform from Hold."We express caution surrounding; the sustainability of regional top line growth, cost inflation headwinds and over capacity and positioning in the London bus cycle," Jefferies analyst Becky Lane said. Stocks in New York were higher at the London equities close as the presidents of China and the US signalled progress on a new trade deal which would help end the trade war between the two major economic powers.The DJIA was up 0.1%, the S&P 500 index was 0.4% higher and the Nasdaq Composite up 0.5%.Chinese Vice Premier Liu He, who is in Washington as Beijing's lead negotiator to resolve the nine month-long trade war, conveyed Chinese President Xi Jinping's message to his US counterpart Donald Trump at the White House.The Chinese president said that new substantial progress has been made on the text of the China-US economic and trade agreement in the past month.Chinese state-run Xinhua news agency quoted Xi as telling Trump that under the current situation, a healthy and stable development of China-US relations concerns the interests of both Chinese and American people as well as the interests of people of other countries.Earlier, Trump had said a trade deal was close, and something very "monumental" could be announced in next four weeks.There was also positive news on the unemployment front for the US, as the unemployment rate was unchanged at 3.8% in March, the US Bureau of Labour Statistics said, matching economists' expectations.In addition, the number of jobs created was 196,000 in March, following an increase in jobs of 33,000 in February, a figure revised up from an initially reported increase of 20,000.However, average hourly earnings on an annual basis came in at 3.2%, down from 3.4% in February, missing analyst expectations of 3.4%. Wage gains increased by 0.1% month-on-month, lower than February's figure of 0.4%. "The US nonfarm payroll numbers, along with the spate of economic data released earlier in the week, appear to confirm that while US growth is undoubtedly slowing, it is far from collapsing," commented Rupert Thompson, head of research at Kingswood. Late Friday, Trump told a press conference he believes the US Federal Reserve should cut interest rates and return to a policy of quantitative easing. The central bank last year raised rates four times but its more recent guidance has indicated it would likely put a pause on further hikes in the short term.The unconventional policy of quantitative easing was introduced in the wake of the global financial crisis as a means to insert money into the financial system and lower the cost of borrowing by buying government securities or other securities from the market.In Paris the CAC 40 ended up 0.2%, while the DAX 30 in Frankfurt ended up 0.2%. The euro stood at USD1.1217 at the European equities close, broadly flat compared to USD1.1215 late Thursday. Brent oil was quoted at USD69.90 a barrel at the London equities close, up from USD69.52 at the close Thursday.Gold was quoted at USD1,291.30 an ounce at the London equities close, higher than USD1,288.10 late Thursday.The economic events calendar next week has German trade balance and US factory orders on Monday, with US Redbook index on Tuesday. A busy Wednesday sees UK trade balance and GDP, with US mortgage applications CPI, and US Federal Open Market Committee minutes. The ECB interest rate decision is also Wednesday.The European Council will be meeting Wednesday to decide whether to grant the UK an extension to agree on a Withdrawal Agreement ahead of the deadline next Friday. On Thursday, there is Chinese CPI and PPI, German harmonized CPI and US PPI and continuing jobless claims. Friday has Chinese trade balance and Eurozone industrial production.The UK corporate calendar next week has full year results from Tesco and interim results from ASOS on Wednesday. In the US, Wells Fargo and JPMorgan Chase will be reporting first quarter earnings.