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London close: Footsie slips below the line in late trading

By Josh White

Date: Friday 10 May 2019

London close: Footsie slips below the line in late trading

(Sharecast News) - London stocks ended Friday in a mixed state, with the benchmark falling below the waterline during the afternoon, after data showed that UK economic growth picked up in the first quarter.
Investors also remained hopeful for a trade deal between the US and China even as the US lifted tariffs on Chinese goods.

China had vowed to retaliate after the US lifted tariffs on $200bn of Chinese goods to 25% from 10%, with Beijing saying it "deeply regrets" the move and would have to take "necessary counter-measures."

However, it seemed investors were erring on the side of optimism and hoping that a deal can still be struck, as talks between Chinese Vice Premier Liu He and US trade representatives were set to resume in Washington.

The FTSE 100 finished the day down 0.057% at 7,203.29, having dipped below the line late in the afternoon, while the FTSE 250 was up 0.42% at 19,366.80.

Sterling was last 0.71% stronger against the dollar at 1.3036, and just 0.01% firmer versus the euro at 1.1596.

CMC Markets market analyst David Madden noted that equity markets had largely been in positive territory, but were now looking to be edging lower as the "feel-good factor" in relation to the US-China trade situation started to wear-off.

"The bounce in Asian markets overnight influenced European dealers ,and now that it is dawning on investors that the US-China standoff is far from over, and things are likely to get worse before they get better."

On home shores, investors digested data from the Office for National Statistics showing that the UK economy grew 0.5% in the first quarter, as expected, and up from 0.2% growth in the final quarter of last year.

GDP was ahead 1.8% year-on-year in the first quarter, compared to 1.4% growth in the last three months of 2018, also in line with economists' expectations.

Figures from the ONS showed that solid growth in factory output drove a stronger-than-expected increase in production in the first quarter of the year.

Manufacturing output rose 2.2% in the three months to March sending total production 1.4% higher - the strongest rise over three months since February 2017.

Monthly total production rose for the third straight period, gaining 0.7% in March, ahead of the 0.6% rise in February and expectations for 0.1% growth.

Manufacturing was the biggest contributor, rising 0.9% with strong showings by pharmaceuticals, transport equipment and other manufacturing and repair.

On average, economists had expected a rise of just 0.2%.

Tej Parikh, senior economist at the Institute of Directors, said the relatively strong growth figures for Q1 "may just be a flash in the pan".

"Some businesses brought activity forward early this year in preparation for leaving the EU, so higher stocks and earlier orders have artificially bumped up the growth numbers," he said.

"In the second quarter, many firms will be keen to run down their Brexit caches, which will drag on economic growth.

"Keen consumers also played a key role in lifting sales in the first quarter, but barring temporary boosts due to weather, households will overall remain cautious in the months ahead."

In corporate news, British Airways and Iberia parent International Consolidated Airlines flew 1.9% higher even as it said that profit more than halved in the first quarter as it was buffeted by rising fuel costs and stiff competition.

"It's not every day you'll see a company's profits fall so sharply but the shares still rise," said George Salmon, equity analyst at Hargreaves Lansdown.

"But when your competitors have slipped into a loss, it's perhaps not a surprise.

"The main factor holding back profits is increased fuel prices, which have been compounded by a rise in the US dollar."

Salmon noted that the company was confident it could offset those macro headwinds with cost efficiencies elsewhere, such that profits would be level with last year.

"That would be an impressive achievement in the current climate."

Aviation support company BBA Aviation rose 2.57% after it said trading remained in line with expectations, with revenue for the first four months of 2019 up 23.1% year-on year.

Millennium & Copthorne was 0.91% higher despite posting a drop in first-quarter revenue and pre-tax profit as it took a hit from the refurbishment of some of its hotels.

On the downside, wealth manager Brewin Dolphin retreated 4.67% as it confirmed that it has agreed to buy the Irish wealth management business of Investec for around €44m and announced a placing to raise approximately £60m to "maintain a strong regulatory capital level".

Anti-virus software developer Avast lost 4.79% after shares of US peer Symantec slumped in after-hours trading overnight, as its quarterly earnings missed expectations and the company's revenue guidance fell short.

British Land was hit by downgrades at Barclays and Kempen, with its shares falling 2.4%, while Auto Trader was knocked 1.41% lower by a downgrade to 'neutral' at Citi.

Market Movers

FTSE 100 (UKX) 7,203.29 -0.06%
FTSE 250 (MCX) 19,366.80 0.42%
techMARK (TASX) 3,525.50 -0.26%

FTSE 100 - Risers

Ferguson (FERG) 5,514.00p 2.87%
Intertek Group (ITRK) 5,124.00p 1.99%
International Consolidated Airlines Group SA (CDI) (IAG) 498.60p 1.90%
Morrison (Wm) Supermarkets (MRW) 215.40p 1.75%
RSA Insurance Group (RSA) 554.20p 1.43%
National Grid (NG.) 835.50p 1.27%
Smith (DS) (SMDS) 339.60p 1.19%
Mondi (MNDI) 1,657.50p 1.19%
Burberry Group (BRBY) 1,921.50p 1.16%
Ashtead Group (AHT) 2,028.00p 1.15%

FTSE 100 - Fallers

Bunzl (BNZL) 2,125.00p -2.97%
Imperial Brands (IMB) 2,164.50p -2.83%
British Land Company (BLND) 570.00p -2.40%
AstraZeneca (AZN) 5,692.00p -2.30%
Centrica (CNA) 92.62p -1.70%
British American Tobacco (BATS) 2,839.00p -1.61%
Auto Trader Group (AUTO) 572.20p -1.41%
NMC Health (NMC) 2,638.00p -1.31%
Just Eat (JE.) 665.00p -1.22%
GlaxoSmithKline (GSK) 1,503.60p -1.07%

FTSE 250 - Risers

Sirius Minerals (SXX) 19.24p 9.01%
Just Group (JUST) 66.75p 4.71%
Ted Baker (TED) 1,564.00p 4.20%
Funding Circle Holdings (FCH) 245.50p 4.03%
Bakkavor Group (BAKK) 125.00p 3.99%
Rank Group (RNK) 156.60p 3.79%
Games Workshop Group (GAW) 4,150.00p 3.29%
Woodford Patient Capital Trust (WPCT) 80.00p 3.09%
FDM Group (Holdings) (FDM) 989.00p 3.02%
Premier Oil (PMO) 88.14p 2.87%

FTSE 250 - Fallers

Avast (AVST) 298.40p -4.79%
Brewin Dolphin Holdings (BRW) 305.00p -4.67%
Stobart Group Ltd. (STOB) 141.00p -4.08%
Telecom Plus (TEP) 1,436.00p -2.05%
Saga (SAGA) 53.75p -1.92%
Go-Ahead Group (GOG) 1,896.00p -1.50%
Rathbone Brothers (RAT) 2,335.00p -1.48%
F&C Commercial Property Trust Ltd. (FCPT) 120.20p -1.48%
Bank of Georgia Group (BGEO) 1,700.00p -1.45%
Travis Perkins (TPK) 1,380.50p -1.43%


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