20th Nov 2018 08:42
LONDON (Alliance News) - Stocks in London opened lower on Tuesday following sharp losses in the US and Asia overnight, with Compass the best blue-chip performer and easyJet falling to the foot of the FTSE 100. The FTSE 100 index of large-cap companies was down 0.2%, or 13.87 points, at 6,987.02. The mid-cap FTSE 250 down 0.5%, or 86.08 points, at 18,457.38. The AIM All-Share was down 0.6% at 941.66.The Cboe UK 100 index was down 0.1% at 11,834.90, while the Cboe UK 250 was down 0.4% at 16,583.82. The Cboe UK Small Companies index flat at 11,437.18.In the US on Monday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.6%, S&P 500 down 1.7% and the tech-heavy Nasdaq Composite down 3.0%. The Nasdaq fell to its lowest closing level in almost five months at 7,028.48. The sell-off on Wall Street came amid lingering concerns about the outlook for the global economy along with uncertainty about the potential for a trade deal between the US and China. At the Asia Pacific Economic Cooperation summit over the weekend, Vice President Mike Pence said the US would not back down until China changes its ways.The Japanese Nikkei 225 index closed down 1.1%. In China, the Shanghai Composite closed down 2.1%, while the Hang Seng index in Hong Kong closed down 1.9%."With the Dow Jones tumbling following a US-China trade war-inspired tech sell-off on Monday, and the Asian session following suit over night, the European indices had little option but to open in the red," said Spreadex analyst Connor Campbell.On the London Stock Exchange, Compass Group was the best blue-chip performer, up 3.2% after the contract caterer said it enjoyed a strong year with healthy revenue growth, driven by what it called an excellent performance in North America, an acceleration in Europe, and good progress in Rest of World. For the financial year ended September 30, revenue increased 1.7% to GBP22.96 billion from GBP22.57 billion last year and operating profit rose to GBP1.69 billion from GBP1.67 billion. On an underlying basis, revenue rose 5.5% to GBP23.24 billion from GBP21.84 billion last year and operating profit was up 7.1% to GBP1.74 billion from GBP1.63 billion. The company-supplied consensus also had expected underlying profit of GBP1.74 billion. The company's underlying operating margin remained flat at 7.4%. Compass reported that annual underlying organic revenue growth was 5.5%, accelerating from 4.0% last year. This beat the company-supplied consensus estimate of 5.3%. The company raised its annual dividend 13% to 37.7p from 33.5p last year.Halma was up 2.8% after the fire alarm and security technology company reported a rise in interim earnings and lifted its dividend.For the half year ended September 30, revenue rose 16% to GBP585.5 million from GBP506.3 million last year, and pretax profit was up 23% to GBP94.5 million from GBP76.8 million the year before. Halma raised its interim dividend 7% to 6.11p from 5.71p last year. The company added that it is on track to deliver more typical rates of constant currency organic growth in the second half.Reckitt Benckiser was up 1.0% after Exane BNP raised the household goods maker to Outperform from Neutral. At the other end of the large cap index, easyJet was down 2.3% after a 43% dividend hike and a surge in the budget airline's annual earnings went unnoticed by investors. For the year to September 30, easyJet's pretax profit came in at GBP445 million, up from GBP385 million a year prior.This was on the back of revenue increasing by 17% year-on-year to GBP5.90 billion from GBP5.05 billion. Total revenue per seat was up 6.4% to GBP61.94 from GBP58.23.During the year, the FTSE 100-listed airline carried a "record" number of passengers, up 10% year-on-year to 88.5 million from 80.2 million. easyJet is proposing a dividend of 58.6 pence per share, up from 40.9p a year ago.Interactive Investor's Richard Hunter said the only "fly in the ointment" seems to be an increase in the cost per seat.The carrier said that headline cost per seat excluding fuel was up 5.3% to GBP43.4, mainly due to expansion into Tegel airport in Berlin, higher levels of disruption, and crew cost inflation."The reported gap between revenue and cost per seat indicates a wafer thin margin which could be upset by any number of factors, including ones outside of the company's control, such as the oil price, industrial action and flight cancellations arising from adverse weather. This is quite apart from the airline trading rules which may fall out of Brexit," Hunter noted. The pound was firm quoted at USD1.2866 from USD1.2843 at the London equities close Monday.In domestic political news, Prime Minister Theresa May's DUP allies have delivered a warning shot across the bows after accusing the prime minister of breaking fundamental promises on Brexit.The party joined with Labour to cut the government's majority to just five in a Commons vote on the Budget.They also abstained on a series of other amendments to the Finance Bill on Monday night in a move intended to send a "political message" to Prime Minister.Their actions appeared to call into question the future of the "confidence and supply" arrangement by which the DUP props up May's minority Conservative Government.Meanwhile, negotiators from EU member states failed to reach an agreement over the 2019 eurozone budget by the deadline of midnight on Monday, ensuring further discussions will have to be scheduled in coming weeks.The budget covers everything from agricultural subsidies and support for poorer regions to research and education programmes. Most money flows back to member states.The European Commission is now required to submit a fresh proposal for talks later this month or early in December, according to a spokesperson for the Austrian government, which holds the rotating EU presidency through December.The economic events calendar on Tuesday has US housing starts at 1330 GMT. In addition, there are the UK Inflation Report Hearings from 1000 GMT, with Bank of England Governor, Mark Carney, as well as several MPC members, due to testify on inflation and the economic outlook before parliament's Treasury Select Committee.
Related Shares:
HalmaRB..LCompass GroupeasyJet