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London close: Footsie buoyed by miners, but second-tier index slumps

By Alexander Bueso

Date: Monday 05 Nov 2018

London close: Footsie buoyed by miners, but second-tier index slumps

(Sharecast News) - London's top flight index edged higher on Monday, as a mix of resources and defensive stocks erasing earlier losses, although a disappointing reading on the UK services sector weighed on the second-tier FTSE 250.
The FTSE 100 edged higher by 0.14% to 7,1030.84, while the pound was 0.43% firmer against the dollar at 1.30236 and 0.34% higher versus the euro to 1.1426 amid Brexit hopes and as both sides contended with their own issues.

The FTSE 250 on the other hand finished down by 1.36% to 19,063.71.

Helping to buoy sentiment towards miners was a 'bullish' call on the sector out of strategists at JP Morgan.

The dollar on the other hand was weaker ahead of Tuesday's mid-term elections - which could see things get complicated for the Trump administration if the Democrats win majority control of the House - and the latest rate announcement by the Federal Reserve on Thursday, while the euro was held back by worries about Italy's budget plans.

Meanwhile, The Sunday Times reported that Prime Minister Theresa May has agreed a customs deal with the European Union. According to the paper, May has secured concessions from the EU to keep the whole of the UK in a customs union after Brexit in a deal that would avoid the need for an Irish backstop.

The report was quickly dismissed as "speculation" by Downing Street, but this did little to dent sterling's gains.

To ramp up the pressure further, ITV's political editor said the government has decided that the default option of a no-deal Brexit will become the "probable outcome" unless there is a deal struck with the EU within a week.

Data out earlier revealed that activity in the UK's services sector slowed more than expected last month.

The IHS Markit-CIPS UK services purchasing managers' index fell to 52.2 in October from 53.9 the month before, short of the 53.3 that the market expected. Although still above the 50 mark that separates contraction from expansion, this was the weakest reading since snow-affected March and the second weakest since July 2016 as new orders softened for the third time in the past four months.

Following a disappointing manufacturing PMI survey but a better construction report last week, the combined PMI of 52.2 is well below its average reading of 53.9 in the third quarter and points to UK gross domestic product growth of just 0.2% if current levels are maintained, which would be less than half the 0.5% pace pencilled in for the third quarter. Third-quarter GDP is due to be published by the Office for National Statistics on Friday.

"Brexit uncertainty in particular continued to cloud the outlook, dampening current spending and investment, though other factors were also reported to have weakened demand, including global economic slowdown worries," said Chris Williamson, IHS Markit's chief business economist.

On the corporate front, Micro Focus rallied as it appointed Brian McArthur-Muscroft from Paysafe as a replacement finance chief after ITV, which was a touch weaker, lured Chris Kennedy from the software group.

Micro Focus also issued a short trading statement to the effect that full year revenue will be towards the upper end of its previously guided range and pledged to restart its share buyback programme.

The Footsie's heavyweight group of resources stocks, led by oil behemoths BP and Shell and miners including Rio Tinto, Glencore and Anglo American were lifted out of an early slump as the session progressed.

Plastic packaging supplier RPC Group gained as the deadline for private equity firms Apollo Global Management and Bain Capital to make an offer for the company was extended again.

On the downside, equipment rental firm Ashtead dropped after Barclays slashed its price target on the stock to 2,200p from 2,580p, while Babcock was hit by a downgrade to 'sector perform' at RBC Capital Markets.

Specialist insurer Hiscox slumped after saying that gross written premiums rose 14.3% to $3.04bn in the first nine months of the year, but that there had been more claims in the third quarter from US Hurricanes Florence and Michael and Typhoons Jebi and Trammi, which hit Japan.

Mediclinic was lower after it was cut to 'hold' at Investec and Babcock following a downgrade to 'sector perform' from RBC.

Market Movers

FTSE 100 (UKX) 7,103.84 0.14%
FTSE 250 (MCX) 19,063.71 -1.36%
techMARK (TASX) 3,310.14 -0.51%

FTSE 100 - Risers

Evraz (EVR) 570.40p 4.02%
AstraZeneca (AZN) 5,877.00p 2.53%
Wood Group (John) (WG.) 689.80p 2.07%
Micro Focus International (MCRO) 1,256.00p 1.99%
British American Tobacco (BATS) 3,407.50p 1.93%
Centrica (CNA) 148.00p 1.90%
Rio Tinto (RIO) 3,924.00p 1.84%
GlaxoSmithKline (GSK) 1,507.20p 1.84%
Diageo (DGE) 2,677.50p 1.65%
BP (BP.) 542.10p 1.65%

FTSE 100 - Fallers

GVC Holdings (GVC) 905.50p -6.00%
Ashtead Group (AHT) 1,881.00p -4.40%
Just Eat (JE.) 635.00p -4.17%
Melrose Industries (MRO) 172.30p -3.91%
Burberry Group (BRBY) 1,800.00p -3.49%
Coca-Cola HBC AG (CDI) (CCH) 2,288.00p -3.38%
Kingfisher (KGF) 254.50p -3.23%
Royal Mail (RMG) 356.10p -3.15%
Next (NXT) 5,256.00p -3.10%
Smurfit Kappa Group (SKG) 2,492.00p -3.04%

FTSE 250 - Risers

Capital & Counties Properties (CAPC) 268.50p 5.66%
Energean Oil & Gas (ENOG) 659.00p 2.97%
CLS Holdings (CLI) 217.00p 2.84%
Drax Group (DRX) 411.60p 2.54%
Daejan Holdings (DJAN) 5,970.00p 2.40%
Ferrexpo (FXPO) 231.50p 2.17%
Amigo Holdings (AMGO) 242.25p 2.08%
Wood Group (John) (WG.) 689.80p 2.07%
Auto Trader Group (AUTO) 426.40p 1.94%
RPC Group (RPC) 797.40p 1.92%

FTSE 250 - Fallers

RHI Magnesita N.V. (DI) (RHIM) 3,720.00p -8.15%
Babcock International Group (BAB) 581.00p -6.21%
Hiscox Limited (DI) (HSX) 1,552.00p -5.71%
Metro Bank (MTRO) 2,242.00p -5.56%
Weir Group (WEIR) 1,512.00p -5.47%
Playtech (PTEC) 474.00p -5.18%
Thomas Cook Group (TCG) 51.80p -4.95%
Rank Group (RNK) 153.60p -4.83%
Renishaw (RSW) 4,136.00p -4.66%
Intermediate Capital Group (ICP) 930.00p -4.52%


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