8th May 2019 08:34
LONDON (Alliance News) - London stocks got off to yet another downbeat start on Wednesday amid US-China trade worries, while ITV and Direct Line Insurance weighed on the FTSE 100.The FTSE 100 was down 13.87 points, or 0.2%, at 7,246.60 early Wednesday. The FTSE 250 index was down 23.36 points, or 0.1%, at 19,442.33, while the AIM All-Share was down 0.2% at 964.34.The Cboe UK 100 index was down 0.1% at 12,285.73. The Cboe UK 250 was down 0.1% at 17,482.07. The Cboe UK Small Companies was down 0.1% at 11,775.68.In mainland Europe, the CAC 40 in Paris was up 0.1% while the DAX 30 in Frankfurt was up 0.2%. "The threat of higher tariffs on China by the US is still the dominant force in the markets and investors are largely under the influence of the this," said Naeem Aslam at ThinkMarkets. US President Donald Trump on Sunday said he would increase tariffs on USD200 billion of Chinese goods from 10% to 25% at the end of this week.Despite this, Chinese Vice Premier Liu He will visit Washington for two days of negotiations starting Thursday.Liu's trip had initially been scheduled to start on Wednesday, but was put under question after Trump made his threat. Foreign Ministry spokesman Geng Shuang on Tuesday downplayed the move, saying China believes it is "normal" for two sides to have differences.Aslam continued: "Asian trading session has been feeble as a result of this and European markets are picking up the momentum where they left off yesterday...If no common ground is established between the US and China, these worries would crush the markets and this could easily intensify the sell-off."In Asia on Wednesday, the Japanese Nikkei 225 index ended down 1.5%. In China, the Shanghai Composite finished 1.1% lower, while the Hang Seng index in Hong Kong is down 1.1% in late trade.In a sign the trade spat between the world's two largest economies is taking its toll, data overnight showed China's exports dropped 2.7% in April from last year, performing worse than analysts had expected.China-US trade took a hit, dropping 16% in April. Chinese imports from the US dropped 30%, while exports fell 9.7%."Looking ahead, we expect export growth to remain somewhat tepid amid US tariffs and soft global growth, while imports should gradually improve as domestic demand stabilises," said Societe Generale. In London, ITV was among those stocks weighing on the FTSE 100 early Wednesday, down 2.2% as the broadcaster said its first-quarter performance was in line with forecasts, though total external revenue fell 4%. ITV Broadcast & Online revenue was down 7% at GBP489 million, and ITV Studios revenue was up 1% to GBP385 million."We remain confident that we will deliver good organic revenue growth in ITV Studios over the full year and have already secured over GBP120m more revenue for 2019 than at the same time last year," said Chief Executive Carolyn McCall.ITV added that, as previously guided, the first half of 2019 is expected to be dented by economic and political uncertainty and its subsequent hit to demand for advertising, as well as planned investments and the absence of the football World Cup this year.Direct Line Insurance dipped 1.7% as it reported a fall in gross written premiums for the first quarter. Gross written premiums fell 2.1% to GBP753.9 million with motor premiums among one of the largest drags on performance, down 4.2% to GBP386.9 million."The motor market remained highly competitive, with market premiums failing to keep pace with claims inflation. Our response, as usual, was to focus on achieving our target loss ratios and continuing to improve pricing effectiveness," commented Penny James, chief financial officer and chief executive-designate.Imperial Brands was 1.2% lower despite reporting a "pleasing underlying tobacco performance" in the first half of its financial year.Revenue for the six months to March 31 rose 2.3% to GBP14.39 billion, while pretax profit jumped to GBP1.02 billion from just GBP600 million a year ago.This was due to administrative expenses falling to GBP574 million from GBP919 million, and a non-repeating GBP160 million charge booked a year ago relating to the administration of UK distributor Palmer & Harvey.Tobacco volumes fell 6.9% in the half to 115.2 billion stick equivalents, while Next Generation Products - which includes offerings such as vapes and e-cigarettes - saw revenue more than triple to GBP148 million from just GBP42 million a year ago.Imperial boosted its interim dividend by 10% to 62.56 pence. JD Wetherspoon was down 3.7% despite reporting a rise in third quarter like-for-like sales.For the 13 weeks to April 28, like-for-like sales rose 7.6% and total sales were up 8.4%. In the year-to-date, comparable sales rose 6.8% and total sales were up 7.6%."We continue to anticipate a trading outcome for this financial year in line with our previous expectations," commented Chair Tim Martin.Builders' merchant Travis Perkins gained 3.8% as it reported a positive start to 2019, with like-for-like sales growth and a recovery at chain Wickes. Like-for-like sales in the first quarter of the year grew 7.3%, with total sales up 5.4%. There was a "good recovery" at Wickes, which saw like-for-like sales grow 11%.Travis Perkins said its expectations for 2019 as a whole remain unchanged given "current uncertain market conditions".
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Wetherspoon (J.D)Direct LineTravis PerkinsITVImperial Brands