London close: Stocks finish lower on trade worries and gains for pound

By Alexander Bueso

Date: Wednesday 17 Jul 2019

London close: Stocks finish lower on trade worries and gains for pound

(Sharecast News) - London stocks were lower on Wednesday amid renewed concerns about Sino-US trade relations.
Also weighing on stocks, Brexit minister, Stephen Barclay, said that there had been a lot misleading reports out regarding his most recent meeting with the European Union\'s chief trade negotiator, Michel Barnier, with his remarks helping Sterling recoup some of the previous session\'s losses, which in turn weighed on shares.

The FTSE 100 was down 0.55% at 7,535.6 by the close, while the pound was 0.35% higher versus the US dollar at 1.24490 and up by 0.14% against the euro to 1.1084.

In remarks to a parliamentary committee, Barclay said that what he had told Barnier was that he did not believe that an unchanged proposal from the EU would pass muster in the House of Commons.

Be that as it may, according to Morgan Stanley\'s Hans Redecker, if the UK\'s next Prime Minister pursued a tougher negotiating stance vis-a-vis Brussels, then cable could fall to the $1.10-$1.20 range, or $1.0-$1.10 in case of a so-called \'hard Brexit\', Bloomberg reported.

Sterling had only ever traded below the $1.10 mark once, in 1985, after Washington devalued the Greenback.

And amid reports of various possible plans to suspend Parliament ahead of the 31 October Brexit deadline, the House of Lords was set to vote, later on Wednesday, on potential measures to potentially head-off that risk.

Earlier, Chancellor Philip Hammond had reportedly labelled the suggestion by Jacob Rees-Mogg and fellow Brexiteers that Britain would in fact be better off with no deal as \"terrifying\".

Overseas, relations between the US and China were in focus again after US President Trump said on Monday that the two countries have a \"long way to go\" to work out a trade deal and warned that he could slap tariffs on $325bn of Chinese goods if he wants.

As an aside, the International Monetary Fund\'s research director, Gita Golpinath, highlighted on Wednesday the still excessive current account surpluses being run by Germany and the Netherlands, even as China\'s had come down rapidly.

On the flip-side, Golpinath said the excessive current account deficits were concentrated in the UK, the US and some emerging market economies such as Argentina and Indonesia.

In corporate news, Johnson Matthey was in the red as it reaffirmed its full-year guidance but said that its clean air unit will see annual profits drop on the year.

Fresnillo was also weaker as the precious metals miner cut its production targets for 2019, blaming lower-than-expected grades of ore grades and delays in construction work at the Herradura gold mine in Mexico.

On the upside, Burberry was the standout gainer for the second day in a row following a well-received first-quarter update on Monday.

Builder Galliford Try rallied after saying that it expects annual pre-tax profit to be in line with the current range of analysts\' expectations amid \"good\" housing demand, while GVC Holdings pushed higher as the Ladbrokes Coral owner posted double-digital online growth for the first half.

TalkTalk was in the green after it reported a 1.3% rise in first-quarter revenue thanks to strong demand for fibre products, and backed its full-year guidance.

In broker note action, Hochschild Mining and Polymetal were started at \'sell\' and \'hold\', respectively, by Berenberg. Burberry was cut to \'underperform\' at Jefferies, Experian was downgraded to \'reduce\' at HSBC and Micro Focus was bumped down to \'sell\' at Goldman Sachs.

Market Movers

FTSE 100 (UKX) 7,535.46 -0.55%
FTSE 250 (MCX) 19,614.20 -0.21%
techMARK (TASX) 3,680.22 -0.15%

FTSE 100 - Risers

Burberry Group (BRBY) 2,345.00p 2.99%
Imperial Brands (IMB) 2,096.50p 2.22%
Aveva Group (AVV) 4,024.00p 1.51%
Persimmon (PSN) 1,950.50p 1.14%
Coca-Cola HBC AG (CDI) (CCH) 2,730.00p 1.07%
Barratt Developments (BDEV) 632.00p 1.02%
Experian (EXPN) 2,414.00p 1.00%
Micro Focus International (MCRO) 1,700.20p 0.91%
SEGRO (SGRO) 755.40p 0.77%
Reckitt Benckiser Group (RB.) 6,688.00p 0.74%

FTSE 100 - Fallers

Johnson Matthey (JMAT) 3,204.00p -5.40%
RSA Insurance Group (RSA) 571.00p -4.36%
ITV (ITV) 107.80p -3.14%
BP (BP.) 528.00p -2.87%
Fresnillo (FRES) 892.00p -2.84%
St James\'s Place (STJ) 1,119.50p -1.97%
WPP (WPP) 942.20p -1.85%
CRH (CRH) 2,669.00p -1.80%
Just Eat (JE.) 622.20p -1.67%
Vodafone Group (VOD) 126.08p -1.56%

FTSE 250 - Risers

CLS Holdings (CLI) 224.00p 3.51%
Galliford Try (GFRD) 630.50p 3.19%
Future (FUTR) 996.00p 3.12%
Contour Global (GLO) 181.40p 3.07%
TalkTalk Telecom Group (TALK) 108.80p 2.93%
Sophos Group (SOPH) 449.90p 2.88%
Rank Group (RNK) 157.20p 2.75%
Mitchells & Butlers (MAB) 298.00p 2.58%
Fisher (James) & Sons (FSJ) 1,974.00p 2.56%
Capita (CPI) 114.50p 2.23%

FTSE 250 - Fallers

Cairn Energy (CNE) 160.70p -5.64%
Metro Bank (MTRO) 473.00p -5.32%
Cineworld Group (CINE) 250.80p -4.24%
Oxford Instruments (OXIG) 1,324.00p -4.06%
Weir Group (WEIR) 1,467.50p -3.39%
Premier Oil (PMO) 78.30p -3.29%
Aston Martin Lagonda Global Holdings (AML) 978.00p -3.07%
Victrex plc (VCT) 1,986.00p -2.84%
Tullow Oil (TLW) 202.70p -2.83%
TBC Bank Group (TBCG) 1,540.00p -2.65%


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