9th May 2019 08:34
LONDON (Alliance News) - London stocks continued the week's tumble on Thursday with fears over US-China relations continuing to weigh as the latest round of trade talks get underway in Washington. Hindering the FTSE 100 on Thursday were ex-dividend stocks such as Centrica and Hiscox, while BT shares were unmoved despite the telecommunications firm missing profit expectations.The FTSE 100 was down 40.71 points, or 0.6%, at 7,230.29 early Thursday. London's blue-chip index is, so far, down 2.1% for the week. The FTSE 250 index was down 124.51 points, or 0.6%, at 19,407.40, while the AIM All-Share was down 0.2% at 960.39.The Cboe UK 100 index was down 0.6% at 12,260.64. The Cboe UK 250 was down 0.5% at 17,465.44. The Cboe UK Small Companies was down 0.2% at 11,718.73.In mainland Europe, the CAC 40 in Paris was down 1.2% while the DAX 30 in Frankfurt was down 0.7%. In Asia on Thursday, the Japanese Nikkei 225 index ended 0.9% lower. In China, the Shanghai Composite finished down 1.5%, while the Hang Seng index in Hong Kong is 2.2% lower. The lower open in Europe and weak performance in Asia overnight comes as investors monitor the latest round of trade talks between the US and China, said Michael van Dulken at Accendo Markets. "As was the tone of this week, Asian markets were all firmly in the red overnight throughout trade talk uncertainties. The US session didn't manage to hold on to the little gains it made in the wake of Donald Trump accusing China of backtracking on assurances made during negotiations," he said. US President Donald Trump accused Beijing of breaking "the deal" on Wednesday, on the eve of talks with Chinese officials aimed at resolving their months-long trade dispute."They broke the deal. So they are flying in, the vice premier tomorrow is flying in. Good man. But they broke the deal. They can't do that. So they will be paying," he told supporters at a rally in Florida.Chinese Vice Premier Liu He is to visit Washington for two days of negotiations starting Thursday.The heightened tariffs on Friday would affect goods such as telecom equipment, computer circuit boards and furniture. Besides, Trump has threatened to impose 25% duties on an additional USD325 billion worth of Chinese imports, which means virtually all of the US imports from China would be affected by tariffs."It thus looks very likely that the trade war is entering round 2," Commerzbank commented on the recent developments. "This does not bode well for the trade talks which are supposed to be held in the next two days.""It looks very much like a trade deal is almost off the table. A "no deal" could mean two things: either a complete collapse or simply a deadlock of the negotiations. However, the new tariffs would make any future talks more difficult and thus the prospect of a successful deal would certainly remain doubtful," said Commerzbank.The economic events calendar on Thursday has Irish inflation data at 1100 BST and US producer prices at 1330 BST.In the FTSE 100, British Gas owner Centrica was down 7.30% and insurer Hiscox down 2.0% as the stocks went ex-dividend, meaning new buyers no longer qualify for the latest payout. Melrose Industries was down 1.7%. The industrial turnaround specialist said current trading has been in line with expectations, with good progress being made on achieving its margin targets for acquired engineer GKN."We have recently laid out our targets for GKN which are better than those we indicated only one year ago at the time of the acquisition, and which come on the back of a stronger performance than expected in the first year of ownership," said Chair Justin Dowley.In addition, Executive Vice Chair David Roper - who has served in the role since 2012, prior to this holding the chief executive position at Melrose for nine years - has decided to retire from the group on May 31, 2020. Meanwhile, Barratt Developments shares edged up 0.8% after the housebuilder said its full-year outlook is "modestly above" previous expectations.Net private reservations per active outlet per average week was 0.79 from the start of 2019 up until May 5, down slightly from 0.80 a year ago. Total forward sales amounted to GBP3.37 billion at May 5, up 2.4% on GBP2.39 billion a year before.'Trading since the beginning of the year has been strong, the outlook for the year is modestly ahead of our previous expectations, and we are encouraged by our continued progress in driving operating efficiencies through the business," said Chief Executive David Thomas.Barratt said it expects to grow volumes towards the lower end of its medium-term target range in 2019, however. Shares in BT were largely unchanged, up 0.1%. The telecommunications firm held its dividend steady after it reported annual profit widened modestly as one-off costs subsided.However, underlying profit came in towards the lower end of analyst expectations as revenue declined.For the year ended March, reported pretax profit widened 1.9% to GBP2.67 billion from GBP2.62 billion the year prior. This was despite revenue slipping 1.2% to GBP23.43 billion from GBP23.72 billion the year prior.Profit was primarily helped by a fall in one-off charges during the year to GBP564 million from GBP828 million the year prior. This was in particular due to the non-recurrence of warranty claims charges related to BT's acquisition of mobile operator EE, partially offset by a rise in restructuring costs.On an adjusted basis - excluding exceptional items - BT's pretax profit narrowed 6.1% to GBP3.23 billion from GBP3.44 billion the year prior. According to company-compiled consensus figures for financial 2019, adjusted pretax profit was expected by analysts to decline to GBP3.31 billion. Elsewhere on the London Main Market, Superdry shares slipped 3.9% after the retailer said trading has continued to be weak, and thus its annual profit is likely to be below market expectations.For the fourth quarter, or 13 weeks to April 27, group revenue was down 4.5%. For the full-year, group revenue was flat.Interim Chief Executive Officer Julian Dunkerton - the Superdry co-founder who rejoined the board at the beginning of April after being narrowly voted in by the retailer's shareholders - said he is "more confident than ever" Superdry's performance can be restored."My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the Ecommerce proposition, which are two important steps towards addressing Superdry's recent weak performance," Dunkerton said.He added: "The impact of the changes we are making will take time to come through in the numbers but I'm confident we are heading in the right direction."
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CentricaBarratt DevelopmentsMelroseBTHiscoxSDRY.L