16th Jan 2017 12:11
LONDON (Alliance News) - Stocks in London were mostly lower on Monday midday, with the FTSE 100 index of large caps weighed by banking stocks, despite a lower pound and a strong performance by miners.
The FTSE 100 was down 0.1%, or 6.06 points, at 7,331.75 at midday. On Friday, the index closed higher for a 14th consecutive session, while it closed at a record high for a 12th consecutive time. Just after the open on Monday, the index hit a fresh record intraday high of 7,354.14.
The pound appeared to suffer market jitters ahead of a speech by UK Prime Minister Theresa May on Tuesday at Lancaster House in London. May is expected to set out the UK government's position in the negotiations with the European Union on Brexit, ahead of the triggering of article 50 by the end of March.
Sterling was quoted at USD1.2062 at midday compared to USD1.2185 at the London equities close on Friday. The UK currency earlier on Monday hit a low of USD1.1987, its lowest level since the 'flash crash' seen in October, when it fell to USD1.1806.
But ahead of the prime minister's speech on Tuesday, Bank of England Governor Mark Carney talks at the London School of Economics at 1830 GMT, in a conference called 'Policy Issues affecting the Bank of England'.
"[The title of Carney's talk] will inevitably mean that he is likely to be asked about the impact of 'Brexit' negotiations on the BoE but he may be reluctant to comment ahead of PM May's speech tomorrow," said Lloyds Bank analyst Robin Wilkin.
The main support for the FTSE 100 to post only marginal losses was the weak pound, but a good performance from its heavy-weight mining sector was also limiting the losses.
A soft dollar was giving support to commodities prices and in turn to mining stocks in London, with the FTSE 350 Mining sector index up 1.1%, the best performing sector index.
The market is awaiting further details on president-elect Donald Trump's policies, which are expected to support US consumer inflation. Trump is scheduled to take office on Friday. The New York stock market is closed on Monday for Martin Luther King's Birthday.
However, banking stocks were among the biggest decliners in the FTSE 100, with Royal Bank of Scotland Group down 2.3%.
RBS was down after Goldman Sachs cut the lender to Neutral from Buy. Peers Barclays and Lloyds Banking were also suffering, down 1.9% and 1.6%, respectively.
Meanwhile, the FTSE 250 index, filled with mid-cap stocks more sensitive to the UK economy, was down 0.3% at 18,312.80, though the AIM All Share index of mostly small-cap stocks was up 0.1% at 874.78.
The BATS UK 100 index was flat at 12,386.78, the BATS 250 down 0.3% at 16,685.12, and the BATS Small Companies flat at 11,034.39.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were both down 0.7%.
The eurozone trade surplus advanced in November as growth in exports outpaced the increase in imports, data from Eurostat showed. The trade surplus rose to a seasonally adjusted EUR22.7 billion in November from EUR19.9 billion in October. Exports climbed 3.3% and imports rose 1.8% in November from October.
On a unadjusted basis, the trade surplus totalled EUR25.9 billion compared to EUR22.9 billion in the prior year. Exports logged an annual growth of 6% and imports posted a 5% increase.
Property website Rightmove said UK house prices increased marginally in January. Property prices increased 0.4% in January from prior month to hit GBP300,245 on average. On a yearly basis, house prices advanced 3.2% in January.
Those planning to buy their first home in 2017 have more choice of properties and less competition from other buyers than their counterparts a year ago, Miles Shipside, Rightmove director said. Rightmove said its website traffic has increased by 5% since Boxing Day.
Elsewhere in London, FTSE 100-listed Burberry Group was up 1.3%. The luxury fashion retailer confirmed incoming Chief Executive Marco Gobbetti will join the group later this month before taking over as CEO in July. Burberry hired Gobbetti as its new CEO back in July 2016 from French fashion house Celine, where he had been chairman and CEO.
Gobbetti is replacing Christopher Bailey, who will relinquish his role as CEO but stay with Burberry as president and chief creative officer, the latter of which he had held in combination with the CEO role previously. Gobbetti will join Burberry on January 27, initially as executive chairman for Asia Pacific and Middle East. He will hold that role until July 5, when he will become CEO. Burberry will release a third quarter trading update on Wednesday.
FTSE 250-listed Ashmore Group was up 4.3%, the biggest mid-cap gainer, after saying that despite net outflows and negative investment performance in the final quarter of 2016, it is expecting a recovery in 2017.
The emerging markets-focused asset manager attributed a USD1.70 billion negative investment performance in the quarter ended December 31, 2016, to steepening of debt yield curves and the strengthening of the US dollar.
However, Ashmore was positive in its outlook, suggesting emerging market asset prices improved in December and have continued to strengthen since, laying the base for a recovery in flows and investment performance in 2017.
Meanwhile, fellow FTSE 250 firm Ibstock was down 3.2% despite the clay brick maker saying it will meet its earnings expectations for 2016 after growth in revenue in the UK and the US.
The company said group revenue for the year to the end of December rose 5.0% year-on-year, with 2.0% growth in the UK and 18% in the US, the latter benefiting from translating dollar sales into a weak pound. In constant currencies, US revenue rose 4.0%.
The stock has recovered all the losses seen after the Brexit referendum held in June, but has remained somewhat flat for the last month and a half.
By Daniel Ruiz; [email protected]
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