5th Dec 2019 08:32
(Alliance News) - It was a lukewarm open in London on Thursday, with the FTSE 100 fidgeting in and out of the red as markets continue to track the stops and starts of the US-China trade dance.
The FTSE 100 index was off just 3.06 points at 7,185.44 in early trade. The FTSE 250 was down 21.18 points, or 0.1%, at 20,644.30, and the AIM All-Share was up 0.1% at 907.94.
The Cboe UK 100 was up 0.1% at 12,185.99, the Cboe UK 250 was down 0.1% at 18,566.32, and the Cboe Small Companies flat at 11,385.95.
In European equities on Tuesday, the CAC 40 in Paris was up 0.2%, while the DAX 30 in Frankfurt was 0.1% higher.
In Asia on Thursday, the Japanese Nikkei 225 index ended up 0.7%. In China, the Shanghai Composite ended up 0.7%, while the Hang Seng index in Hong Kong is up 0.6% in late trade.
"The main factor driving markets is news on the US-China trade talks, which has caused rising volatility in markets over the past days due to conflicting signals from the US side," said Danske Bank.
US President Donald Trump earlier in the week said he had "no deadline" for a trade deal with China, though an article from Bloomberg subsequently said the two were moving closer to a phase one agreement.
"We continue to believe that a phase one deal will be struck in December, as Trump badly needs China to buy US agricultural goods soon. The US election is moving closer and US farmers, who deliver critical votes in three important swing states, have been the main victims on the US side of the trade war," said Danske Bank.
Among currencies, sterling was quoted at USD1.3141 early Thursday, up from on USD1.3118 at the London equities close on Wednesday.
"Just over a week before the election the Tories have been able to defend their comfortable lead over the Labour party in the polls. As a result the market seems increasingly optimistic that the election debacle under Theresa May in 2017 can be reversed," commented Thu Lan Nguyen at Commerzbank.
"The rising optimism on the part of the market participants is reflected very clearly in the sterling exchange rates that were able to rise again significantly yesterday," she said. "We see even further appreciation potential for the British currency as a Tory victory is still unlikely to be 100% priced in, in view of residual scepticism about the reliability of the poll results."
The euro was quoted at USD1.1085 early Thursday, broadly unchanged from USD1.1087 late Wednesday. Against the yen, the dollar was quoted at JPY108.90 versus JPY108.80.
In early trade on Thursday, London-listed packaging firm DS Smith was down 4.9% despite reporting a robust rise in profit, helped by acquisitions.
Revenue for the six months to October 31 rose 4% to GBP3.19 billion, while pretax profit was up 31% to GBP213 million. The company lifted its interim dividend by 4% in response to 5.4 pence per share.
The revenue rise was principally due to acquisitions, DS Smith said, which was partially offset by lower volumes and sales prices within the paper and recycling businesses.
"Assuming current macro-economic conditions prevail, we anticipate an acceleration of volume growth in the second half of the year which, together with the resilience of our business model, supports our expectation of further growth in the year," said Chief Executive Miles Roberts.
TUI was down 2.5% after Commerzbank cut the holiday operator to Hold from Buy.
Home furnishings retailer Dunelm surged 12% as it lifted its annual profit outlook as it reported strong margins, a successful transition of customers to its new digital platform, and well contained costs.
Dunelm said it now has a modern, flexible, cloud-native platform that will be used to accelerate the development of its customer proposition.
"Customers have responded well to the new website, and we are delighted that during this critical transition period we did not see any adverse impact to our performance, maintaining our strong sales growth both online and in stores," said Dunelm.
In addition, gross margins have been stronger than expected as a result of sourcing gains and better sell through, the retailer said, while operational costs well "well controlled".
As a result, Dunelm expects annual pretax profit to be higher than previous expectations, though this comes with the assumption that there is no significant change in consumer demand following the UK general election next week.
IG Group Holdings, down 3.0%, said half-year net trading revenue is expected to be broadly flat.
Net trading revenue for the first half of its financial year is expected around GBP250 million, compared to GBP251 million a year ago. The comparative period benefited from two months of trading prior to European regulatory intervention measures came into effect, however.
Revenue in core markets is expected to be around GBP210 million, down 6% on last year. The core business served, on average, 78,500 over-the-counter leveraged clients per quarter in its core markets in the first half, 4% higher than that seen in the second half of the 2019 financial year.
Boohoo Group founders Mahmud Kamani and Carol Kane have sold a combined total of 50 million shares in the fast fashion retailer via an accelerated share bookbuild, placing managers Zeus Capital and Jefferies International said.
This represents a 4.3% stake in the company. The shares were sold at 285p each, with the stock closing at 297.10p on Wednesday.
boohoo shares were down 3.2% in early trade.
boohoo on Tuesday reported a record performance over the Black Friday weekend, and said trading since its half-year end in August had remained strong.
Following the sale, Kane continues to hold a 2.7% stake and Kamani 13.1%.
In commodities, gold was quoted at USD1,474.85 early Thursday, firm from USD1,473.24 at the London equities close on Wednesday.
Brent was quoted at USD63.02, lower than USD63.26 at the London equities close on Wednesday ahead of Thursday's OPEC meeting.
Faced with slowing global economic growth and abundant reserves putting pressure on oil prices, the OPEC group and its partners could seek to deepen output cuts when they meet in Vienna on Thursday and Friday.
The cuts of 1.2 million barrels per day from October 2018 levels were originally fixed in December last year and were already extended at OPEC's last meeting in July. Some observers expected the cuts to remain in place possibly until the end of 2020.
Iraqi oil minister Thamer Ghadban on his arrival Tuesday in Vienna suggested some members would push for output to be slashed by an additional 400,000 barrels per day. However, he added that any cut was "very much subject to the member countries". In comments reported by Bloomberg on Wednesday, Ghadban was in favour of extending the current deal to the end of next year.
Elsewhere, the economic events calendar on Thursday has eurozone third-quarter GDP figures at 1000 GMT.
By Lucy Heming; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Smith (DS)IGDunelmTUI.LBoohoo