11th Oct 2019 08:36
(Alliance News) - The overseas earnings-heavy FTSE 100 index opened the day in the red on Friday amid a stronger pound, though housebuilders have benefited from optimism over a possible Brexit deal.
The FTSE 100 index was down 12.79 points, or 0.2%, at 7,173.57 in early trade.
The FTSE 250 was up 110.23 points, however, or 0.6%, at 19,345.95, and the AIM All-Share was 0.3% higher at 858.7.
The Cboe UK 100 index was down 0.7% at 12,127.22. The Cboe UK 250 was up 0.6% at 17,246.02 and the Cboe UK Small Companies was 0.1% higher at 10,806.26.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were up 0.4% and 1.0% respectively in early trade.
UK Brexit Secretary Stephen Barclay is holding key talks with the EU's chief negotiator Michel Barnier on Friday as the chance of a breakthrough on securing a withdrawal deal appeared to rise.
The Brussels meeting comes in the wake of discussions between Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar after which both leaders declared they could "see a pathway" to a possible agreement.
Barclay's talks look likely to give the clearest indication of whether there has been a significant thawing of relations between London and the EU after a week of abrupt exchanges.
Such a move could lead to the start of so-called intensive "tunnel" negotiations in the coming days ahead of the crunch EU heads of government summit on October 17 and 18.
The pound was quoted at USD1.2460 early Friday, up from USD1.2306 at the close Thursday. Potential Brexit progress strengthened sterling on Thursday, with the pound having closed at USD1.2222 on Wednesday.
On the London Stock Exchange, the perceived lower risk of a non-deal Brexit has provided a boost to housebuilders. Persimmon was 4.7% higher, Taylor Wimpey up 3.7%, Barratt Developments up 4.0%, and Berkeley Group 3.5% higher, the large-cap index's best performers.
Midcap peers Crest Nicholson, Bellway, and Galliford Try were 3.8%, 3.5%, and 3.7% higher respectively.
WPP fell 4.3%, after advertising peer Publicis Groupe late on Thursday guided for a fall in organic revenue growth in 2019 due to "very cautious" spending approaches by some clients.
FTSE 250-listed Jupiter Fund Management dipped 0.1% after it reported negative net flows in the third quarter of 2019 of GBP1.32 billion, with assets under management falling 1.7% over the quarter to GBP45.91 billion.
Jupiter said much of the outflow came from its European Growth fund.
Man Group, a fund manager that focuses on private markets, fell 2.4% as it likewise reported net outflows during the third quarter, of USD1.1 billion, and funds under management decreased 1% to USD112.7 billion.
Man Group has recently completed a USD100 million share buyback announced in 2018, and said Friday it plans to repurchase another USD100 million.
Chief Executive Luke Ellis said: "In the third quarter, we saw a continuation of the trends experienced in the first half of the year with strong absolute performance and inflows into our quant alternative strategies, and outflows from our long only equity strategies."
Dart Group jumped 12%. The owner of budget airline Jet2 reported "encouraging" late season bookings in its Leisure Travel unit and said demand for flights and package holidays "has continued to strengthen".
The demise of Thomas Cook has led to increased demand, Dart said, and it now believes it will top market expectations for pretax profit before foreign exchange for the year to March 2020.
Away from the LSE, US and Chinese delegations will continue trade talks on Friday at the White House, US President Donald Trump said, claiming the first day in the latest round of trade negotiations went "really well".
Chinese Vice Premier Liu He took part in the first day of talks along with Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. The US president earlier indicated he would meet Liu.
"Going to see them tomorrow right here," Trump told reporters outside the White House on Thursday. "It's going very well."
Trump was speaking as the delegations were winding down their first day of talks, which lasted for several hours.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closing 0.6% higher.
The Japanese Nikkei 225 index closed up 1.2% on Friday. In China, the Shanghai Composite finished up 0.9%, while the Hang Seng index in Hong Kong is 2.3% higher in late trade.
"Positive risk sentiment prevailed in Asia, as a result of optimistic noises surrounding yesterday's Brexit talks and US-China trade negotiations. However, neither is a done deal, with markets appearing to have lowered their expectations in favour of partial agreements," said analysts at Lloyds.
"PM Johnson and his Irish counterpart Varadkar issued a joint statement noting discussions were 'detailed and constructive' and, importantly, identified a 'pathway' to a possible deal by the end of the month. However, a lot of work still needs to be done. Trump, meanwhile, said the first day of trade talks with China went 'very well'."
In economic news early Friday, Germany's consumer price inflation came in at 1.2% in September, Destatis revealed, in line with economist expectations.
The 1.2% year-on-year rise in prices compares to a 1.4% rise in August. On a month-on-month basis, the consumer price index was flat, again matching economist forecasts, according to FXStreet.
September's harmonised CPI reading was up 0.9% on a yearly basis but down 0.1% from August.
Energy prices fell 1.1% year-on-year in September, Destatis said, while food prices climbed 1.3%, slowing from a 2.7% increase in August. This was mainly driven by a rise in the price of meat and fish.
On a monthly basis, "considerable" price rises came in the form of clothing and footwear, mainly due to a changeover to the autumn/winter collections. Due to the end of summer, the price of package holidays and air tickets declined.
Later on Friday, the University of Michigan's survey of US consumers will be released at 1500 BST. This, David Madden at CMC Markets UK said, will be closely watched amid the trade war with China.
By George Collard; [email protected]
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