2nd Apr 2019 12:06
LONDON (Alliance News) - The buoyant start to the month for European equities markets continued on Tuesday, with the FTSE 100 outperforming other indices as the pound weakened on the latest Brexit drama and signs of continued difficulties for the UK construction industry. The FTSE 100 index was up 48.68 points, or 0.7%, at 7,366.06 Tuesday midday. The FTSE 250 was up 17.24 points, or 0.1%, at 19,256.00, while the AIM All-Share index was up 0.2% at 919.50.The Cboe UK 100 index was up 0.6% at 12,498.52. The Cboe UK 250 was up 0.1% at 17,247.22, while the Cboe UK Small Companies was flat at 11,176.24.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.2% at midday."The resurgence in risk appetite looks to have legs, supported by stronger (or at least less bad) economic data, and any short-term weakness should probably be resolved in favour of the bulls in due course," said IG chief market analyst Chris Beauchamp.Also helping the FTSE 100, an index made up of a large number of overseas earners, was a weaker pound on Tuesday. "The pound has fallen over the past twelve hours, as MPs have been shown to be as divided as the country the represent; Labour MPs will vote for anything as long as it's not the government strategy, while Tories will say no to anything else, and yes only grudgingly to the PM's deal," said Beauchamp."This is not a recipe for progress and leaves the PM with almost nothing with which to take to Brussels as crunch talks loom," he added.Sterling was quoted at USD1.3049 Tuesday midday, down from USD1.3118 late Monday.Following the rejection of all four alternative Brexit proposals put on the table Monday evening, UK Prime Minister Theresa May is holding a marathon cabinet session to try to break the Brexit deadlock.This comes as EU chief negotiator Michel Barnier said a no-deal exit by the UK was becoming more likely by the day.A call for a customs union with the EU was rejected by MPs on Monday by just three votes, while a demand for a second referendum was defeated by 12 and a Norway-style deal put forward by Nick Boles by 21.Barnier said the UK now has two options, quit the EU without a deal, or seek an extension to Article 50.Speaking in Brussels, Barnier said: "If the UK Parliament does not vote in favour of the Withdrawal Agreement in the coming days only two options would remain. Leaving without an agreement or requesting a longer extension of the Article 50 period."Offering no respite for the pound on Tuesday were figures from IHS Markit, which showed UK construction output remained in contraction territory in March.The IHS Markit/CIPS UK Construction Total Activity Index read 49.7 points in March, up slightly from 49.5 in February. However, the reading remained below 50, the number which separates expansion from shrinkage in a sector. "Fears that the recent weakness of the UK construction sector may not be just a blip, but a sustained soft patch, were further fuelled by the latest data," said IHS Markit economist Joe Hayes.Another fall in commercial work and civil engineering activity more than offset a modest upturn in residential building, IHS Markit commented. "Amid subdued inflows of new work, a first back-to-back decline in output since August 2016 was recorded," said Hayes. "Brexit-related uncertainty continued to generate indecisiveness, ultimately hitting order book volumes."London-listed housebuilders were lower following the soft construction data, with Persimmon down 1.8%, Taylor Wimpey down 0.8%, and Barratt Developments off 0.6%.Another slight drag on London's FTSE 100 index was Rolls-Royce Holdings, down 1.9%.Singapore Airlines confirmed Tuesday it had grounded two of its Boeing 787-10 due to issues with their Rolls-Royce Trent 1000 TEN engines, the Straits Times reported.The flag carrier grounded two of its nine Boeing 787-10 which were fitted with the Trent 1000 TEN. The Trent 1000 TEN is an improved version of the FTSE 100-listed engine maker's Trent 1000 engine which has had issues with premature blade cracking. The Singaporean newspaper said sources at the airline confirmed that preliminary checks had shown the same cracked blade issue on the TEN as its older sibling. Among the risers in London on Tuesday was fund supermarket Hargreaves Lansdown, up 1.9% after Citigroup raised its rating on the stock to Neutral from Sell. Emerging markets-focused asset manager Ashmore Group was up 4.7% after Bank of American raised the firm to Buy from Neutral. Wizz Air gained 3.9% after the central and eastern Europe-focused airline said it said it expects annual profit to come in towards the top of guidance.For the month of March, Wizz Air reported a 9.9% rise in passenger numbers to 2.7 million, while the increase was even greater, up 17% to 34.6 million, on a rolling 12 months basis.Wizz Air said it expects its annual net profit for the year ended March to come in towards the upper half of its guidance range of between EUR270 million and EUR300 million. A year ago, Wizz Air's net profit amounted to EUR275 million.This was after fourth quarter trading in line with expectations and "robust" demand across the company's key geographical territories, Wizz Air explained. Meanwhile, larger peer Ryanair was down 1.9% despite reporting traffic grew in March with its load factor stable. The Irish budget airline said March passenger numbers rose 9.0% to 10.9 million, with a 96% load factor. Elsewhere on the London Main Market, struggling womenswear retailer Bonmarche dived 23% to 13.88 pence after receiving a cut-price takeover bid from Edinburgh Woollen Mill tycoon Philip Day.The offer, which is wholly unconditional, is priced at 11.445 pence per share, a 34% discount to Bonmarche's GBP8.7 million market value as at Monday's close. Bonmarche shares had closed at 18p on Monday.Spectre, a Dubai-registered company 100% owned by Day, was required to make the bid after acquiring 26.2 million Bonmarche shares and building a majority 52% stake in the retailer. It said the 11.445p price equalled the highest price it paid for Bonmarche shares over the past 12 months. Bonmarche said it is considering the offer and asked its shareholders to take no action in the meantime.In the US, Wall Street is set for a subdued start with the Dow Jones and S&P 500 both called flat, and the Nasdaq pointed down 0.1%. In the US economic calendar are durable goods orders at 1330 BST with the Redbook index at 1355 BST.
Related Shares:
Wizz AirRYA.LHargreaves LansdownBarratt DevelopmentsAshmorePersimmonTaylor WimpeyRolls-RoyceBON.L