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London close: FTSE indices join global sell-off amid growth concerns

By Alexander Bueso

Date: Friday 22 Mar 2019

London close: FTSE indices join global sell-off amid growth concerns

(Sharecast News) - London stocks were pummeled on Friday, even as the pound regained some composure after European leaders gave the UK a few more weeks to organise its withdrawal from the bloc, while weak German manufacturing data sparked global growth concerns, with the selling in shares extending across the Pond to Wall Street.
The FTSE 100 was down 2.01% at 7,207.59, with sterling rallying 1.42% against the euro to 1.1687 after the UK narrowly avoided an imminent no deal Brexit overnight and helped by an exceedingly weak reading on German manufacturing that served to sink the euro.

Against the US dollar, meanwhile, the pound was 0.63% higher to 1.3189 with yields on 10-year Gilts down by five basis points at 1.01% - having earlier hit a 52-week low at 1.0% - as global growth concerns reared their ugly head again both in the Eurozone and in the US

Things didn't go any better for the FTSE 250, which dropped 1.80% to 18,998.46.

"It has been a whipsaw week for equities, which is an indication of how conflicted investors are at present. Equities have been so strong of late that it makes little sense to abandon the asset entirely, but a sense that things have run too far, too fast is hard to shake off," said IG's Chris Beauchamp.

For US stocks at least, strategists at Bank of America-Merrill Lynch were also quite confident, predicting that the S&P 500 would rise past the 3,000 point mark in the first half 2019.

IHS Markit's manufacturing purchasing managers' index for Germany fell to 44.7 in March - a 79-month low - from 47.6 in February, missing expectations for a reading of 48.0 on the back of uncertainty around Brexit and US-China trade relations, a slowdown in the auto industry and generally softer global demand.

Overnight, EU leaders agreed to grant Britain an extension to the Brexit deadline to 22 May if Theresa May is able to get her deal through the House of Commons on a third attempt next week. However, if the deal is rejected again, a shorter extension to 12 April will apply, which would in theory allow Parliament to explore alternative options.

Council President Donald Tusk said "all options remain on the table...the UK government will still have a chance of a deal, no deal, a long extension or revoking Article 50" until 12 April.

"The 12th of April is a key date in terms of the UK deciding whether to hold European Parliament elections. If it has not decided to do so by then, the option of a long extension will automatically become impossible," he told a news conference.

Despite sterling's recovery, Neil Wilson, chief market analyst at Markets.com, pointed out that there is a "very real risk" that the Council's decision simply kicks the no-deal can down the road.

"Minds are being focused and the deadlines cannot be extended forever. On the other hand, this could presage an abrupt change in course for the UK's approach to Brexit," he said. "A lot depends on whether (assuming May fails to get her deal through on the third attempt), would she take Britain out without a deal, and/or would Parliament step in to prevent this.

"Of course, will the Speaker even allow a third vote? Assuming he does there is very little sense that Theresa May will get her deal through at the third attempt."

In equity markets, Unilever and Reckitt Benckiser, which have a strong international presence, lost ground as the pound popped higher.

Plastic packaging supplier RPC Group was in the red as Berry Global said it was not going to lift its £3.3bn bid for the company, while Thomas Cook lurched lower as the tour operator announced the closure of 21 travel agent outlets as part of an increased focus online.

Royal Mail retreated as it announced the appointment of current deputy chairman and British Airways veteran Keith Williams as its new chairman.

B&Q and Screwfix owner Kingfisher overcame early selling in the wake of a downgrade to 'neutral' from 'outperform' at Credit Suisse.

On the upside, clothing retailer Next continued to bounce back after its full-year results on Thursday, while Ted Baker was up after its full-year numbers sparked losses a day earlier.

Smiths Group advanced as it reported a decline in first-half profits that was still 2% ahead of consensus, and said it aims to demerge its medical devices arm by the middle of next year.

Education publisher Pearson was boosted by an upgrade to 'overweight' at JPMorgan and shares in temporary power supplier Aggreko racked up strong gains on the back of an upgrade to 'buy' at Stifel.

Sanne, a provider of alternative asset and corporate services, saw its shares rise as it posted an 11.8% jump in full-year underlying pre-tax profit thanks to strong performances from its core businesses, particularly in EMEA and the US.

Outside the FTSE 350, Debenhams shares were down but off lows, having collapsed earlier after announcing a plan to restructure its debt that could pretty much wipe out shareholders. The announcement was met with an offer from Sports Direct to buy Debenhams' Danish business, Magasin du Nord, for £100m in cash in return for installing Mike Ashley as chief executive of the department store group.

Market Movers

FTSE 100 (UKX) 7,207.59 -2.01%
FTSE 250 (MCX) 18,998.46 -1.80%
techMARK (TASX) 3,518.33 -1.56%

FTSE 100 - Risers

Pearson (PSON) 849.20p 1.68%
Kingfisher (KGF) 230.30p 1.63%
Next (NXT) 5,380.00p 1.20%
Auto Trader Group (AUTO) 512.20p 0.43%
Halma (HLMA) 1,675.00p 0.30%
Barratt Developments (BDEV) 586.20p 0.24%
Fresnillo (FRES) 833.60p 0.17%
Sainsbury (J) (SBRY) 236.80p 0.08%
Tesco (TSCO) 233.20p 0.00%
National Grid (NG.) 886.30p -0.01%

FTSE 100 - Fallers

NMC Health (NMC) 2,416.00p -6.36%
Standard Chartered (STAN) 578.60p -4.58%
Smurfit Kappa Group (SKG) 2,186.00p -4.37%
Smith (DS) (SMDS) 342.30p -4.17%
Antofagasta (ANTO) 937.40p -4.07%
Ashtead Group (AHT) 1,860.00p -3.95%
Just Eat (JE.) 728.40p -3.91%
Johnson Matthey (JMAT) 3,100.00p -3.88%
Mondi (MNDI) 1,711.50p -3.60%
Melrose Industries (MRO) 181.35p -3.54%

FTSE 250 - Risers

Sanne Group (SNN) 522.00p 3.57%
Just Group (JUST) 71.15p 3.57%
Aggreko (AGK) 802.40p 3.51%
Ted Baker (TED) 1,654.00p 3.31%
Renishaw (RSW) 3,782.00p 1.39%
Telecom Plus (TEP) 1,482.00p 0.95%
Indivior (INDV) 107.95p 0.79%
Greencore Group (GNC) 197.40p 0.74%
Dunelm Group (DNLM) 876.50p 0.63%
Intu Properties (INTU) 105.10p 0.53%

FTSE 250 - Fallers

Premier Oil (PMO) 88.05p -6.73%
Morgan Advanced Materials (MGAM) 253.40p -6.36%
Stobart Group Ltd. (STOB) 161.80p -5.49%
Hunting (HTG) 590.00p -5.45%
IP Group (IPO) 91.00p -5.41%
Weir Group (WEIR) 1,574.00p -5.32%
Cairn Energy (CNE) 163.60p -4.99%
Fidelity China Special Situations (FCSS) 224.50p -4.87%
OneSavings Bank (OSB) 371.00p -4.63%
Spirent Communications (SPT) 140.40p -4.62%

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