2nd Dec 2019 16:48
(Alliance News) - A broadly upbeat session in London turned sour as the day progressed after US President Donald Trump turned his trade ire towards Argentina and Brazil.
The FTSE 100 index closed down 60.59 points, or 0.8%, at 7,285.94 on Monday. The FTSE 250 ended down 112.39 points, or 0.5%, at 20,700.21, and the AIM All-Share closed down 10.92 points, or 1.2%, at 911.56.
The Cboe UK 100 ended down 1.1% at 12,347.86, the Cboe UK 250 closed down 0.9% at 18,568.77, but the Cboe Small Companies ended up 0.1% at 11,452.97.
In European equities on Monday, the CAC 40 in Paris ended down 2.0%, while the DAX 30 in Frankfurt shed 2.1%.
"With the markets having done their best to maintain a positive outlook on the US-China situation, despite Hong Kong becoming a political pawn between the two sides, Trump went and added another couple of enemies to his trade war portfolio," commented Connor Campbell at Spreadex.
US President Donald Trump on Twitter said the US will impose tariffs on steel and aluminium imports from Brazil and Argentina due to the two "presiding over a massive devaluation of their currencies".
Last year, Trump announced global tariffs of 25% on steel and 10% on aluminium, but in March agreed to lift them for Argentina and Brazil, as well as a number of other countries initially included.
The euro stood at USD1.1086 at the European equities close Monday, up from USD1.1017 at the same time on Friday.
Data in the morning showed the eurozone's purchasing managers' index reading came in at 46.9 in November, an improvement from 45.9 in October, but still lagging below the 50.0 marker which separates expansion from contraction. It was the slowest rate of decline in three months, IHS noted, and beat consensus forecasts.
Spreadex's Campbell continued: "The real big losses, however, were saved for the eurozone. With the region's total manufacturing PMI marginally better than initial estimates, and issues for the pound (political) and dollar (manufacturing), the euro rose 0.4% and 0.5% against sterling and the greenback respectively. That left the region's indices in a bad way."
In the UK, however, the manufacturing sector continued to slump. November's PMI fell to 48.9 from 49.6 in October, the reading now remaining below the neutral 50 mark for seven successive months.
The pound was quoted at USD1.2933 at the London equities close Monday, flat compared to USD1.2929 at the close on Friday.
In the US, the Institute for Supply Management showed showed manufacturing conditions deteriorated further in November. The ISM's purchasing managers' index slipped to 48.1 in November, down from 48.3 in October.
This marked the fourth consecutive month of contraction, ISM said.
This was in contrast to an earlier IHS Markit survey, which signalled a solid strengthening in output. The Markit PMI came in at 52.6 for November, up from 51.3 in October, marking the strongest improvement in the health of the sector since April, IHS Markit noted.
"Of all the manufacturing numbers to come out and miss expectations, the latest ISM manufacturing number wouldn't necessarily, have been top of the list, but today's November numbers missed the mark on all counts," said Michael Hewson at CMC Markets.
As a result, he added, the US dollar has slipped back "across the board".
Against the yen, the dollar was trading at JPY109.03, down compared to JPY109.47 late Friday.
Stocks in New York were in the red at the London equities close, with the Dow Jones down 0.8%, the S&P 500 index down 0.9%, and the Nasdaq Composite 1.4% lower.
In London, Ocado led the FTSE 100 losers, ending down 7.0% on a bond offering.
The bonds, which are due 2025, will help fund the online supermarket's commitments to its Ocado Solutions business, which provides services, technology, and automation to other online grocers.
Ocado said it views the bond issue as allowing it to diversify its sources of funding and "capitalise on attractive issuance conditions", meaning low interest rates and a strong Ocado share price.
The grocer also on Monday provided an update on its Ocado Retail business, saying it expects retail revenue growth of between 10% and 11%, with Ocado Zoom orders to slightly exceed retail revenue growth.
Gold miner Fresnillo closed down 1.4% after narrowing annual guidance.
The miner expects to produce 885,000 ounces of gold and 55 million ounces of silver in 2019. In October, Fresnillo had 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.
However, it had said at the time it expected 2019 production to be towards the lower end of each range.
Fresnillo said the decrease in gold production guidance was driven by the planned Noche Buena mine closure and lower production from Herradura. Fresnillo expects 2019 capital expenditure to be around USD585 million.
Meanwhile, gold was quoted at USD1,463.74 an ounce at the London equities close Monday, flat against USD1,463.01 at the close on Friday.
"Gold has enjoyed a nice rebound as the day has progressed, although even now it's struggling to break back into positive territory for the session. It's found some support around USD1,440-1,450 over the last few weeks but even this continues to look vulnerable," said Craig Erlam at Oanda.
In other commodities, Brent oil was quoted at USD61.44 a barrel at the London equities close Monday, firm compared to USD61.18 late Friday.
Back in London, Ted Baker shares shed 8.2% after the upmarket clothing retailer said it has overstated past stock by up to GBP25 million.
Based on preliminary analysis, the board thinks the overstatement - which will have no cash impact and will relate to prior years - will hit the value of inventory by GBP20 million to GBP25 million.
Bloomsbury Publishing closed up 3.7% after partnering with China Youth Publishing Group, a state-owned publisher.
The UK publishing company said the partnership enables it to further accelerate the Bigger Bloomsbury strategy, which aims to expand the company's China profile and presence within the country. Bloomsbury said the joint venture will be based in Beijing and will publish its own titles originating from China.
In the UK corporate calendar on Tuesday, there are first-quarter results from plumbing firm Ferguson as well as a trading statement from cinema operator Cineworld.
In the economic calendar on Tuesday, there is British Retail Consortium like-for-like retail sales at 0001 GMT, as well as Irish consumer confidence at 0001 GMT, while a UK construction PMI is due at 0930 GMT and eurozone producer prices at 1000 GMT.
By Lucy Heming; [email protected]
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