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London close: Falling sterling fails to helps stocks as details emerge of Russia bomb attack

By Andrew Schonberg

Date: Monday 03 Apr 2017

London close: Falling sterling fails to helps stocks as details emerge of Russia bomb attack

(ShareCast News) - Stocks in London closed lower on Monday as sterling sank convincingly against both the US dollar and euro on market concerns of a possible diplomatic spat between the UK and Spain over Gibraltar in a post-Brexit world.
This was as more details emerged after a deadly bomb attack on the metro system at St Petersburg, Russia, which was so far known to have killed about 10 people. All causes, including terrorism, were being probed, said President Vladimir Putin.

The FTSE 100 ended the session down 0.55% to 7,282.69, while the FTSE 250 drifted 0.09% lower to 18,954.24.

The Dow Jones, S&P 500 and Nasdaq Composite were all lower, after the Institute for Supply Management's manufacturing sector gauge slipped to 57.2 in March, from 57.4 in February. Economists had projected a reading of 57.0.

In Europe, Germany's Dax, France's Cac 40 and the Euro Stoxx 50 all softened even after IHS Markit confirmd its Eurozone manufacturing sector purchasing-managers' index (PMI) for March was at 56.2, from 55.4 in February and in-line with economists' forecasts.

Returning to London, the UK's PMI retreated to 54.2 in March, after a revised 54.5 in February. Analysts had been looking for a reading of 54.6.

Jasper Lawler, senior market analyst at London Capital Group, said early gains gains slipped away by the afternoon following the disappointing manufacturing data and reports of deadly explosions on the St Petersburg subway.

"The pound and UK stocks fell in unison on Monday after the EU figuratively scrunched up Theresa May's Article 50 letter and lobbed it into the bin over her demand for tandem trade and exit talks," said Lawler.

"Anecdotally, traders appear to be waiting for Federal Open Market Committee (FOMC) minutes (on Wednesday) and the US unemployment report to test the conviction of Fed members signalling 3-4 hikes this year," he said.

Chris Beauchamp, chief market analyst at IG, summarised the start to April's trade, and also the second quarter of 2017, was dismal. Among the financial stocks it was insurers and banks falling, while commercial property, supermarkets and miners also lost ground.

The disposal of the UK government's stake in Lloyds Banking Group continued today, with the taxpayer stake falling 1% to less than 2%, and bringing with it the prospect that the taxpayer may well see a modest return on the initial £20.3bn bailout of the bank in 2008.

"After a (FTSE) rally that seemingly went on and on, a feeling of exhaustion is creeping in, and top of the selling in the US has been the energy and financial sectors, some of the chief beneficiaries over the last few months," said Beauchamp.

"The rally is not yet at an end, but it once again looks under serious threat," he added.

Michael Hewson, chief market analyst at CMC Markets UK, said one of the best performers in London was Micro Focus International, which disclosed the earnings of HPE Software, the business it looked set to acquire from Hewlett Packard.

Consumer products maker Reckitt Benckiser said it was considering options for its food business. "We have ... decided to initiate a strategic review of Food where we will explore all options for this great business," said Reckitt Benckiser.

Hewson commented: "Has the recent Kraft bid for consumer goods giant Unilever caused a spill over effect through the rest of the sector?

"How else to explain the decision by Reckitt Benckiser to consider its options with respect to its food business, where it is reported that management are looking at spinning off the business to help fund its acquisition of baby food producer Mead Johnson."

Babcock International was chosen as the preferred bidder to become the Marine Systems Support Partner for the Royal Navy's new Queen Elizabeth Class Aircraft Carriers and Type 45 Destroyers. The MoD programme is potentially worth £360m spread across seven years.

Industrial equipment rental company Ashtead has bought New York-based Pride Equipment Corporation for £279m via its US subsidiary, Sunbelt Rentals.

BP announced it was selling its UK Forties pipeline to Ineos for $250m.

Market Movers

FTSE 100 (UKX) 7,282.69 -0.55%
FTSE 250 (MCX) 18,954.24 -0.09%
techMARK (TASX) 3,418.16 -0.96%

FTSE 100 - Risers

Provident Financial (PFG) 3,044.00p 1.57%
Mondi (MNDI) 1,955.00p 1.45%
Micro Focus International (MCRO) 2,305.00p 1.19%
Randgold Resources Ltd. (RRS) 7,035.00p 1.01%
Burberry Group (BRBY) 1,740.00p 0.75%
London Stock Exchange Group (LSE) 3,191.00p 0.63%
Croda International (CRDA) 3,584.00p 0.56%
Scottish Mortgage Inv Trust (SMT) 368.30p 0.52%
Admiral Group (ADM) 1,997.00p 0.40%
Babcock International Group (BAB) 885.50p 0.40%

FTSE 100 - Fallers

Next (NXT) 4,166.00p -3.56%
ITV (ITV) 213.30p -2.56%
Prudential (PRU) 1,653.00p -1.96%
Standard Chartered (STAN) 748.30p -1.93%
Hikma Pharmaceuticals (HIK) 1,944.00p -1.87%
3i Group (III) 736.50p -1.73%
Barclays (BARC) 221.45p -1.62%
Wolseley (WOS) 4,945.00p -1.49%
Paddy Power Betfair (PPB) 8,475.00p -1.45%
Land Securities Group (LAND) 1,044.00p -1.42%

FTSE 250 - Risers

Atkins (WS) (ATK) 1,950.00p 26.62%
Metro Bank (MTRO) 3,384.00p 4.00%
Evraz (EVR) 224.20p 3.65%
TalkTalk Telecom Group (TALK) 195.40p 3.11%
Spirax-Sarco Engineering (SPX) 4,893.00p 2.60%
PayPoint (PAY) 1,048.00p 2.24%
Millennium & Copthorne Hotels (MLC) 441.10p 2.11%
Aldermore Group (ALD) 227.30p 1.97%
RPC Group (RPC) 796.50p 1.92%
Genus (GNS) 1,753.00p 1.57%

FTSE 250 - Fallers

Allied Minds (ALM) 270.40p -11.26%
Drax Group (DRX) 315.40p -3.44%
Dixons Carphone (DC.) 308.20p -2.96%
IP Group (IPO) 151.70p -2.87%
Tullow Oil (TLW) 228.00p -2.56%
Petra Diamonds Ltd.(DI) (PDL) 130.20p -2.33%
CLS Holdings (CLI) 1,718.00p -2.26%
TP ICAP (TCAP) 454.40p -2.17%
JRP Group (JRP) 129.30p -1.90%
GVC Holdings (GVC) 720.00p -1.84%


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