28th Aug 2018 12:00
LONDON (Alliance News) - Stock prices in London were firm at midday on Tuesday following the long holiday weekend in the UK, with the FTSE 100 driven higher by commodity stocks as the US reached a trade deal with Mexico. The FTSE 100 index was up 0.3% or 24.72 points at 7,602.21. The FTSE 250 was up 0.7% or 143.64 points at 20,835.05, and the AIM All-Share was up 0.4% or 4.35 points at 1,096.57.The Cboe UK 100 was up 0.3% at 12,890.76, the Cboe UK 250 was up 0.7% at 18,917.21, and the Cboe UK Small Companies was up 0.1% at 12,354.58."The FTSE 100 is playing catch-up with the rest of Europe following the UK bank holiday yesterday. The positive sentiment in the US on the back of the trade deal with Mexico has boosted sentiment in Europe. Trade concerns have been hanging over global markets for months, and the US-Mexico deal proves that there is light at the end of the tunnel," said David Madden, market analyst at CMC Markets.The US and Mexico have reached a preliminary agreement on trade, US President Donald Trump said Monday, indicating he could conclude a final deal without Canada. Trump said he was looking to "terminate" the North American Free Trade Agreement, a 24-year-old North America free trade pact between the three nations that he has long derided and now said has "bad connotations." He dubbed his new breakthrough the "US-Mexico Trade Agreement," saying "it's a really good deal for both countries". Mexican President Enrique Pena Nieto was on speakerphone as Trump made the announcement in the Oval Office and said he hoped Canada will eventually be incorporated into the deal.Canada's Foreign Affairs Minister Chrystia Freeland is due to arrive in the US for trade talks on Tuesday, broadcaster CBC reported."Progress on trade talks is welcome for all concerned, since it shows that 'the Donald' can be persuaded if the right approach is used. Trade negotiators around the globe will be studying the US/Mexico talks for tips on how to get on the president's good side. Further dollar weakness is continuing to bolster the euro and sterling, providing another headwind for European stocks to deal with," said IG chief market analyst Chris Beauchamp.On the London Stock Exchange, commodity stocks were among the blue-chip risers riding the wave of optimism over a potentially improved global trade outlook.Anglo American was up 3.1%, BHP Billiton up 2.5%, Glencore up 2.2% and Rio Tinto up 1.3%. In addition, Russian steelmaker Evraz was up 4.5%. Separately, NMC Health rose 4.0% after the United Arab Emirates-focused healthcare provider denied news reports it is looking to acquire assets in India. NMC said it "reaffirms its current focus" on the Gulf Cooperation Council markets for capital deployment. The Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. NMC Health said its fertility and oral & maxillofacial businesses "remain the only exceptions" and still "maintain a wider geographic focus". "Big strategic moves can generate headlines and market excitement but often it is best for a company's management to stick to the knitting, focusing on what they are good at rather than operating outside of their realm of expertise," noted AJ Bell's Russ Mould. Sterling was higher against the dollar, quoted at USD1.2900 at midday Tuesday, against USD1.2852 at the London equities close on Friday. The greenback was lower as the US-Mexico trade deal to replace NAFTA triggered a sell-off in safe-haven assets.Moreover, dollar traders reacted negatively to dovish comments from US Federal Reserve Chair Jerome Powell at his maiden address at the Jackson Hole Economic Policy Symposium on Friday. "For the 'big' dollar, long dollar positions are beginning to ask questions. A number of recent factors are beginning to weigh on its performance. US Fed chair Powell's 'dovish' comments at Jackson Hole - he saw no reason to speed up interest rate increases - coupled with the lack of stronger US data momentum and flattening yield curve are somewhat negative for the buck," said Oanda market analyst Dean Popplewell.In UK domestic political news, Prime Minister Theresa May dismissed fears of a no-deal Brexit apocalypse as she played down the Chancellor Philip Hammond's warnings of major economic consequences.May repeated claims that no agreement with the EU "would not be a walk in the park" but "wouldn't be the end of the world", initially made by the World Trade Organisation's Roberto Azevedo.She added the government is putting in place measures to ensure it can "make a success of no deal" and remains confident it can do similar with a "good deal", which she maintained it was possible to agree.May also said Hammond was highlighting "work in progress" figures released in January when he published a letter just hours after the government started revealing its 'no-deal' Brexit preparations.May has arrived in Cape Town on the first leg of a three-country African trade mission starting in South Africa.In Paris the CAC 40 was up 0.3%, while the DAX 30 in Frankfurt was up 0.2%. The euro was up against the greenback quoted at USD1.1703 at midday, from USD1.1624 at the European equities close Friday.Stocks in New York were set to open marginally higher following a strong finish on Monday, with the S&P 500 and Nasdaq closing at record highs. The DJIA, the S&P 500 index and the Nasdaq Composite were all called up 0.2% on Tuesday.
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Anglo AmericanRio TintoBHP Billiton PLCNMC.LGlencore