17th Aug 2020 12:15
(Alliance News) - Stock prices in London reversed early losses to more higher at midday on Monday, shrugging off a lack of progress by the US and China on trade relations.
High-level talks between the US and China set to take place over the weekend on their "phase one" trade agreement were called off, with no new date agreed upon for talks to resume.
In London, the blue-chip FTSE 100 index was up 12.06 points, or 0.1%, at 6,102.10. The mid-cap FTSE 250 index was up 3.04 points at 17,738.66. The AIM All-Share index was up 0.4% at 954.51.
The Cboe UK 100 index was up 0.2% at 607.69. The Cboe 250 was down 0.1% at 15,162.68, and the Cboe Small Companies was down 0.2% at 9,593.65.
In mainland Europe, the CAC 40 index in Paris was flat, while the DAX 30 in Frankfurt was 0.1% higher.
Analysts at ActivTrades said: "European share markets started the week on a mixed note as the 'wait and see' trading stance continues ahead of a busy week. Stimulus measures and the US-Sino relationship remain the biggest market drivers at the moment and investors were slightly disappointed to see trade talks between Washington and Beijing, initially planned for this week, have been postponed.
"Wednesday is likely to be the most volatile day of the week as traders patiently wait for the Federal Reserve's minutes of its last meeting in order to predict the next move from the central bank. Further downside risks in the near-term may increase if these minutes prove disappointing, as many investors have already anticipated further stimulus measures."
In the FTSE 100, Mexican gold and silver miner Fresnillo was the best performer, up 1.8% and Russian miner Polymetal International was up 1.2%, both tracking spot gold prices higher.
Gold was quoted at USD1,950.87 an ounce Monday midday, up from USD1,945.10 an ounce Friday evening in London.
In addition, sentiment towards gold miners was lifted after it emerged Warren Buffet - who has been a long-standing sceptic of the precious metal - changed tact by making an investment into one of the world's largest gold miners.
The Oracle of Omaha's Berkshire Hathaway acquired 21 million shares in Canada's Barrick Gold, in a deal worth USD563 million, according to a quarterly US SEC filing released on Friday. Barrick shares were up 8.7% in pre-market trade in New York.
"Gold remains bubbly on the 'Buffet Bandwagon bounce' after running into sticky bids in Asia; investors continue to look at gold as key a diversifier against future dollar weakness even more so with positions much cleaner," AxiCorp's Stephen Innes said.
Persimmon was up 1.5% after Davy raised the FTSE 100 housebuilder to Neutral from Underperform.
The UK housing market enjoyed its busiest month in over 10 years, listings site Rightmove said in its monthly tracker, bucking the trend of the summer period being a slow one for the sector.
In August, the average asking price fell 0.2% monthly to GBP319,497, though this still represented a 4.6% annual climb. Rightmove noted the number of sales agreed during the month surged to the highest level since its index began over 10 years ago.
At the other end of the large-cap index, British Airways parent International Consolidated Airlines was the worst performer, down 2.7%, having closed down 4.8% on Friday.
The UK government's decision to impose a 14-day self-isolation quarantine on travellers from France due to rising numbers of coronavirus cases in the country came into effect over the weekend.
The quarantine conditions also apply to travellers returning to or visiting the UK from the Netherlands, Monaco, Malta, Turks & Caicos and Aruba.
In addition, over the weekend Germany declared nearly all of Spain, including the tourist island of Mallorca, a coronavirus risk region following a spike in cases. Spain has seen a surge in new infections since it lifted its three-month lockdown measures in June.
The move dealt a blow to hopes for a swift recovery in tourism after months of lockdown to stop the spread of the virus all but wiped out this year's high season for tourism in Europe.
Anglo-German travel operator Tui was down 5.0%.
"Amid the latest quarantine requirements for returning tourists, implemented by the UK and Germany, travel stocks are on the back foot once again... The current stop-start nature of the industry is here to stay as governments attempt to strike the near-impossible balance of reopening economies and containing the virus. Without the 'silver bullet' of a Covid-19 vaccine, the tourism sector will inevitably endure prolonged suffering. An eventual sector casualty is almost certain," said Marc Kimsey, an equity trader at Frederick & Oliver.
In the FTSE 250, Cranswick was the best performer, up 5.5% after the pork and poultry products supplier said it expects annual results ahead of its expectations.
For the 13 weeks to June 27, Cranswick said revenue was 25% ahead of the first quarter the year before, while like-for-like revenue was 19% higher.
Cranswick said as a result of the current shift towards greater in-home consumption, retail demand has been "exceptionally robust". This - combined with increased poultry sales from its new Eye facility, which continues to perform strongly, and the benefit from new contract wins - has comfortably offset lower foodservice revenue, the company said.
The positive performance has so far continued in the second quarter of the financial year, Cranswick said. It added that outlook for the current financial year, ending March 27, 2021, is expected to be ahead of expectations.
The pound was quoted at USD1.3101 midday on Monday, flat from USD1.3104 at Friday's equities close in London.
The euro was priced at USD1.1852, up from USD1.1832. Against the yen, the dollar was quoted at JPY106.56 in London, firm from JPY106.48.
In commodities, Brent oil was trading at USD45.18 a barrel Monday midday, up from USD44.70 a barrel Friday evening in London.
New York was pointed to a higher open as developments surrounding the US presidential election start to heat up.
The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.6%, based on futures trading.
As Democrats on Monday open an unprecedented virtual convention, the party's disparate factions are projecting a united front behind Joe Biden, brought together by their common determination to oust President Donald Trump in November's election.
"It is absolutely imperative that Donald Trump be defeated," Bernie Sanders, a former Biden rival and a keynote speaker on the event's opening night, said Sunday on ABC's "This Week".
Biden enters the convention with significant but tightening poll leads over Trump and amid signs that his history-making pick of Senator Kamala Harris as his running mate - the first woman with a multi-ethnic background on a major party's presidential ticket - is widely popular among Democrats.
By Arvind Bhunjun; [email protected]
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