19th Oct 2018 12:05
LONDON (Alliance News) - Stocks in London were mixed at middy on Friday with the FTSE 100 higher as the pound remained around the USD1.30 mark, while weak Chinese data and concerns over Italy's budget sapped investors' appetite for risk. The FTSE 100 index was up 0.1%, or 8.96 points at 7,035.95. The FTSE 250 was down 0.8%, or 147.04 points, at 18,814.31, and the AIM All-Share was down 0.8%, or 8.16 points, at 1,002.19.The Cboe UK 100 was up 0.1% at 11,946.33, the Cboe UK 250 was down 1.1% at 17,025.53, and the Cboe UK Small Companies was down 0.5% at 11,673.77.Italy's flagship FTSE MiB index was down 1.6%. Elsewhere on the continent, the CAC 40 in Paris was down 1.1%, while the DAX 30 in Frankfurt was down 0.7%. "European markets are showing little appetite to follow up on the gains seen throughout the beginning of the week, with the release of disappointing Chinese growth figures helping to dent what little confidence there is in markets," said IG market analyst Joshua Mahony.Worries over Italy re-emerged after the European Commission said Italy's 2019 budget draft is in serious breach of European Union budget rules.In a letter to the Italian government, Commissioners Valdis Dombrovskis and Pierre Moscovici wrote that the government's budget plans represent "an obvious significant deviation" from recommendations adopted by the Council for 2019."With Italy's government debt standing at around 130% of GDP, our preliminary assessment also indicates that Italy's plans would not ensure compliance with the debt reduction benchmark agreed by all Member States," the letter stated.The euro was down at USD1.1426 at midday, against USD1.1510 at the European equities close Thursday. "In Europe the simmering issue over the Italian budget has the potential to disrupt money market trading and markets are beginning to price in the possibility the ECB will postpone its planned September 2019 rate hike for later next year. Things will come to a crux next week when the EU reviews Italy's draft budget and gives its official yea or nay," said City Index analyst Fiona Cincotta.In addition, sentiment was also tempered as Chinese growth figures missed expectations, suggesting that there was downward pressure on the world's second-largest economy due to the ongoing trade spat with the US. China's GDP climbed an annual 6.5% in the third quarter of 2018- shy of estimates for 6.6% and down from 6.7% in the previous three months.In UK corporate news, London Stock Exchange Group was among the best blue chip performers, up 1.2% after the stock exchange operator reported a "strong" third quarter showing continued momentum.For the three months ended September, LSEG reported a 7.4% increase in total income to GBP522 million from GBP486 million in the same period a year ago.The company's net revenue, which excludes income from the company's central counterparty business, increased 4.7% to GBP464 million from GBP443 million. LSEG's third-quarter gross profit increased 8.1% year-on-year to GBP465 million from GBP430 million.At the other end of the large cap index, InterContinental Hotels Group was down 4.6% after the eponymous hotel operator reported modest revenue growth amid a lacklustre performance in the US.For the three months to September 30, the hotels operator added that its net system size grew 5.1%, or 4.6% excluding the acquisition of Regent Hotels & Resorts.IHG's 1.0% rise in revenue per available room in the third quarter resulted from a 1.7% in room rates, offset by a 0.7% dip in occupancy.Year-to-date, RevPar - a key metric for the hotel industry - increased 2.7%.The company, which owns the Holiday Inn and Crowne Plaza Hotels brands, said RevPAR in the Americas was flat, impacted by strong prior-year demand from the 2017 hurricanes, the company explained. Room rates were up 1.4%, but this was completely offset by a 1.4% drop in occupancy."Revenue per available room is a little lower than hoped for, largely as a result of weak occupancy numbers in the US. With IHG rapidly expanding its rate of room growth, including some sizeable acquisitions and new brand launches, lower revenues are far from welcome," said Hargreaves Lansdown analyst Nicholas Hyett.In the FTSE 250, intu Properties was up 11% at 197.26p after the shopping mall operator confirmed it received a takeover proposal - at a sharp discount to its net asset value - from a consortium comprising Peel Group, Olayan Group, and Brookfield Property Group.London-and Johannesburg-listed intu said it received a proposal from the consortium on Thursday last week of 205 pence per share in cash. A independent committee formed by intu - which does not include deputy chairman John Whittaker, as he is executive chairman at Peel Group - met to review the offer.Following "further engagement", intu on Wednesday received a revised proposal from the consortium of 215p per share in cash, it said.The terms of both the initial and revised proposals provide that the mooted consideration will be reduced by any dividends declared or paid by intu prior to completion of the deal. This includes intu's interim dividend of 4.6p per share, due to be paid in November.Accordingly, the consideration under the revised proposal would be 210.4p per share. That price values intu at GBP2.85 billion. The stock closed at 177.70p on Thursday.The pound was marginally lower quoted at USD1.3037 at midday, compared to USD1.3078 at the London equities close on Thursday.In domestic political news, UK Foreign Secretary Jeremy Hunt urged warring Conservative prty members to get behind Theresa May's Brexit strategy after the prime minister faced a fierce backlash against the idea of extending the UK's transition period.Meanwhile, the EU's chief negotiator Michel Barnier warned that the UK's withdrawal agreement could still fail over the issue of the Irish border, leading to an "extremely serious" no-deal Brexit.Speaking to France-Inter radio, Barnier said the deal was "90%" done and he was hoping to complete it "in a few weeks or a few months, as soon as possible".However, when asked if he was convinced an agreement would be reached, Barnier retorted: "I have no deep conviction on this subject, because in the UK the political situation is very complex and I don't know what decisions Theresa May will take."The UK secured a 21-month transition period following the formal date of Brexit in March 2019, to give authorities and companies time to prepare for new arrangements. But EU chiefs indicated this could be extended at the European Council summit earlier this week in Brussels.On the economic front, the UK budget deficit reached its lowest September level in 11 years, data from the Office for National Statistics showed. Public sector net borrowing excluding public sector banks was GBP4.10 billion, which was GBP0.80 billion less than in September 2017. This was the lowest September deficit since 2007. Further, data showed that borrowing in the current financial year-to-date was GBP19.90 billion, that was GBP10.70 billion less than in the same period in 2017. This was the lowest year-to-date for 16 years. At the end of September, public sector net debt excluding public sector banks increased by GBP3.40 billion to GBP1,789.5 billion, or 84.3% of gross domestic product, in September. UK Chancellor of the Exchequer Philip Hammond will deliver the Autumn Budget on October 29.Ahead, Bank of England Governor Mark Carney will speak at the Economic Club of New York at 1710 BST. Stocks in New York were set for a higher open after US stocks fell sharply overnight amid worries surrounding higher interest rates and US-Saudi Arabia relationsThe DJIA was called to open up up 0.1%, the S&P 500 index up 0.2% and the Nasdaq Composite up 0.1%.US President Donald Trump said on Thursday he presumes journalist Jamal Khashoggi had likely been killed and that the US response to Saudi Arabia will likely be "very severe".Related Shares:
InterContinental HotelsLSE.LINTU.L