20th Sep 2019 09:22
(Alliance News) - Stock prices in London were mixed on Friday morning, as a stronger pound weighed on the large-cap index, while other indexes gained on raised hopes for a Brexit deal between the UK and the EU.
The FTSE 100 was down 21.14 points, or 0.3%, at 7,335.28 early Friday. The FTSE 250 up 46.88 points, or 0.2%, at 20,136.34, while the AIM All-Share was up 0.2% at 887.19.
The Cboe UK 100 index was down 0.4% at 12,442.71. The Cboe UK 250 was up 0.3% at 18,054.52, and the Cboe UK Small Companies 0.1% lower at 10,998.76.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were flat and down 0.1%, respectively, in early trade on Friday.
The only economic data in the euro area Friday still to come are Irish wholesale prices at 1100 BST and the flash eurozone consumer confidence indicator for September at 1500 BST.
The pound was quoted at USD1.2570 early on Friday, almost a cent higher against USD1.2485 at the close Thursday.
The positive move comes after European Commission President Jean-Claude Juncker expressed optimism that a Brexit deal with the UK could be reached to avoid a no-deal Brexit at end-October.
Juncker met Boris Johnson in Luxembourg for Brexit discussions on Monday, before the UK prime minister headed for an ill-fated meeting with his Luxembourg counterpart Xavier Bettel.
The EU chief insisted his meeting with the prime minister was "rather positive", adding: "We can have a deal."
"It's better for Britain and for the EU to have an organised deal," he added.
"Overall, however, all this suggests nothing new regarding the EU position. Indeed, we put the diplomatic niceties down to a concerted effort on the EU side not to be blamed if and when the talks eventually collapse," commented Daiwa Capital Markets analyst Chris Scicluna.
"We continue to see a very low probability that a deal will be reached with the EU and passed by the House of Commons and European Parliament in time to allow the UK to leave in an orderly manner at end-October," added Scicluna.
On the LSE, Smiths Group was among the best performers among large-cap stocks, up 1.7% in morning trade. UK engineering firm reported double-digit profit growth in its most recently ended financial year, thanks to acquisitions and favourable foreign currency exchange rates.
The company delivered pretax profit of GBP376 million for the year to the end of July, up 13% from GBP333 million a year earlier, as revenue rose 7% to GBP2.50 billion from GBP2.33 billion.
Underlying revenue increased 3% during the year, with acquisitions and favourable foreign exchange translation each adding a further 2% to revenue growth.
"In this context of progress and confidence in the future, we announced plans to separate Smiths Medical to create two stronger, industry-leading companies," said Chief Executive Andy Smith. "The separation process is progressing well; we are on track for demerger by the end of the first half of 2020."
Luxury fashion retailer Burberry was up 1.2% after Credit Suisse raised its recommendation on the stock to Outperform from Neutral.
Royal Bank of Scotland Group also was among the top gainers, up 1.2% after promoting Alison Rose to the position of chief executive officer, as expected. She will replace Ross McEwan, who will step down on October 31.
Rose currently serves as deputy CEO of NatWest Holdings and CEO of Commercial & Private Banking.
"Ross leaves a strong platform for his successor; a bank that has refocussed on its core markets in the UK and Ireland and resolved all its major legacy issues, while returning to profitability and paying dividends," said Chair Howard Davies.
"I am delighted that we have appointed Alison as our new CEO," continued Davies. "Following a rigorous internal and external process, I am confident that we have appointed the best person for the job."
Rolls-Royce was in the red, trading 2.0% lower. It warned that the rate of recovery in Trent 1000 Aircraft On Ground is likely to be slower than it originally planned, due to the additional maintenance repair & overhaul load.
The aero-engine manufacturing company has faced a number of operating problems recently, including faster-than-expected deterioration of its Trent 1000 TEN jet engine blades.
Rolls-Royce, however, maintained its expectations that the 2019 negative impact of the Trent 1000 issues will be GBP450 million to GBP500 million.
Meanwhile, Antofagasta was hurt by a UBS rating cut. The Swiss bank lowered its recommendation on the Chilean miner to Sell from Neutral, sending its shares down 0.7%.
In the mid-cap FTSE 250, Investec was the worst performer, down 6.4%. The Anglo-South African financial services firm expects its adjusted operating profit for the six months to the end of September to be slightly behind the year-earlier period due to "challenging market conditions".
In addition, Investec said the costs incurred in relation to its proposed demerger are anticipated to hurt pretax earnings for the half-year by GBP42 million. At the beginning of August, Investec confirmed the demerger and listing of Investec Asset Management, which is expected to complete in the first quarter of 2020.
"In spite of challenging trading conditions, the group remains well positioned for the long term and continues to concentrate on the execution of its strategy of simplification, focus, and disciplined growth," Investec said in its statement Friday.
Investec said it has made further progress on simplifying and focusing the business on growth over the long-term. At August 31, third-party assets under management were up 6.7% on year to GBP178.4 billion, Investec highlighted.
Great Portland Estates and Derwent London were both down 1.2% as HSBC cut the property developers to Reduce from Hold.
In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average ending down 0.2%, the S&P 500 flat, and the Nasdaq Composite up 0.1%.
"After US stocks moved broadly sideways yesterday, a number of Asian-Pacific markets also trod water today," said Daiwa's analyst Scicluna.
In Asia on Friday, the Japanese Nikkei 225 index closed up 0.2%. In China, the Shanghai Composite closed up 0.2%, while the Hang Seng index in Hong Kong ended 0.2% lower.