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LONDON MARKET CLOSE: Miners Up As FTSE 100 Dips Below 7,000 Mark

Fri, 12th Oct 2018 17:13

LONDON (Alliance News) - Stocks in London ended mixed on Friday following a bruising week for the large cap FTSE 100 index, though mining stocks were the main winners on stronger commodity prices and Chinese data.The FTSE 100 index closed down 0.2%, or 11.02 points, at 6,995.91, ending the week 4.4% lower. The FTSE 250 ended up 0.8%, or 155.70 points, at 18,973.45, and the AIM All-Share finished up 2.4% higher at 991.61. The Cboe UK 100 closed down 0.2% at 11,873.76, the Cboe UK 250 closed 0.6% higher at 17,196.59, and the Cboe UK Small Companies closed 0.3% higher at 11,679.02.In Paris the CAC 40 was down 0.2%, while the DAX 30 in Frankfurt was 0.1% lower."European equity markets got off to a strong start following a mixed session in Asia, but now the gains are evaporating as we approach the close," said CMC Markets UK's David Madden."Traders are keen to square up their books ahead of the weekend. The global equity rout originated in the US, and the moves continue to be US driven, and European dealers are keen to cash in their holdings as Wall Street still has several hours more trading left."Stocks in New York were in the green at the London equities close, with the DJIA up 0.8%, the S&P 500 index up 1.1%, and the Nasdaq Composite gaining 1.7%.Next week sees earnings season in the US begin, though some major US banks have already released third quarter results. JPMorgan Chase & Co third quarter profit of USD8.38 billion, or USD2.34 per share, from USD6.73 billion, or USD1.76 per share, in last year's third quarter. Analysts had expected the company to earn USD2.25 per share.The company's revenue for the quarter rose 5.2% to USD27.82 billion.Citigroup reported a 12% increase in profit for the third quarter from last year, as slightly lower revenue were more than offset by a lower tax rate as well as decline in cost of credit and expenses.Earnings per share beat analysts' expectations, while revenue missed their estimates. Citigroup's third-quarter net income rose to USD4.62 billion or USD1.73 per share from USD4.13 billion or USD1.42 per share in the year-ago period. Analysts expected the company to report earnings of USD1.69 per share. Total revenue for the quarter declined to USD18.39 billion from USD18.42 billion in the prior-year period. Analysts expected revenue of USD18.45 billion."The relentless drumbeat of third quarter earnings could well provide reasons to charge back into equities, but while almost every indicator is screaming 'buying opportunity', hesitancy is still making itself felt," said IG's Chris Beauchamp."The big question is whether stocks can find a way to live with higher yields, or whether we can expect further falls as the relative attractiveness of bonds continues to increase."In US data, with consumers offering less favorable assessments of their personal finances, the University of Michigan released a report on Friday unexpectedly showing a modest decrease in US consumer sentiment in the month of October.The preliminary report showed the consumer sentiment index dipped to 99.0 in October from the final September reading of 100.1. The drop surprised economists, who had expected the index to inch up to 100.4."Consumer sentiment slipped in early October, although it remained at quite favorable levels and just above the average reading during 2018," said Surveys of Consumers chief economist Richard Curtin.Curtin added, "It should be noted that the sharp selloff in equities overlapped interviewing by only one evening, having virtually no influence on the early October data."Reflecting a substantial rebound in fuel prices, the Labor Department released a report on Friday showing a much bigger than expected increase in US import prices in the month of September.The Labor Department said import prices climbed by 0.5% in September after falling by a revised 0.4% in August.Economists had expected import prices to rise by 0.2% compared to the 0.6% drop originally reported for the previous month.The bigger than expected increase in import prices came as prices for fuel imports surged up by 3.8% in September after tumbling by 2.2% in August. The rebound came as a spike in petroleum prices more than offset lower natural gas prices.On the London Stock Exchange, heavyweight mining stocks were among the blue chip risers after data showed China's exports logged double-digit growth in September to beat forecasts despite escalating trade tensions with the US."Copper prices jumped today after under wrought imports into China hit a two-and-half-year high, and imports of copper concentrate hit a record high," continued Madden."The Chinese authorities are clamping down on scrap, and that has prompted the import of other variations of the metal. Even though the official China trade data showed that total imports undershot expectations, and showed slower growth, the red metal still rose. China's exports, in US dollars, soared 15% in September compared to the same period last year, reaching USD226.7 billion. Meanwhile, imports jumped 14% year-on-year to USD195 billion.China's strong domestic demand continues to drive foreign trade, despite its souring relationship with the US. Companies are also believed to be rushing to fill orders before the situation further deteriorates.Antofagasta ended up 1.9%, Anglo American up 4.0%, Rio Tinto up 1.3%.Gold miners continued to do well following the price of the safe-haven precious metal higher. Gold was quoted at USD1,218.81, up from USD1,215.80 at the London equities close Thursday. The precious metal had been down at USD1,188.56 an ounce at the London close on Wednesday.Randgold Resources closed up 1.4%, Fresnillo up 4.5%, and midcap peer Centamin up 3.0%.Tobacco giants Imperial Brands and British American Tobacco led the fallers in the large cap index, closing 6.0% lower and 3.9% lower respectively. This follows a global tobacco control treaty which included a hard line decision that new "vaping" products should face the same restrictions as cigarettes.According to JapanToday, a meeting of state parties to the UN health agency's Framework Convention on Tobacco Control concluded last week with a number of anti-industry rulings, including increased efforts to curb industry influence and a call to crack down on new products.Elsewhere on the LSE, Patisserie Holdings said it hopes to raise a combined GBP25 million through a share placing as well as a loan from Executive Chairman Luke Johnson.The Patisserie Valerie owner has been struggling since it announced potentially fraudulent accounting irregularities on Wednesday.On Thursday, Finance Director Chris Marsh was arrested and released on bail, while on Friday the UK Serious Fraud Office said it is investigating an unnamed individual connected to the firm.Patisserie said Thursday it needed immediate cash to keep going - and has now said it needs "no less than" GBP20 million to continue trading in its current guise and avoid administration.As a result, it is planning to issue 30 million shares at 50 pence each to raise GBP15 million. Shares were last quoted at 429.50p each, with the stock suspended from trading currently following Wednesday's news.On top of this, Patisserie expects to agree imminently a new bridging loan with Executive Chairman Johnson worth GBP10 million to allow it to repay in full its immediate liabilities.The UK corporate calendar on Monday has a trading statement from asset manager Schroders, as well as a third quarter operations review from Rio Tinto at 2330 BST. The pound was against the dollar quoted at USD1.3156 at the London close, compared to USD1.3192 at the London equities close Thursday."The other big event of next week will be Brexit negotiations," continued IG's Beauchamp."Some of the optimism of earlier in the week seems to be ebbing way, as it becomes clear once again that the prime minister has still a lot of work to do to get a deal past her Cabinet, her DUP allies and Parliament," he continued. "Set against the ticking clock of negotiations, next week's data-heavy week for sterling may struggle to gain much attention."UK Prime Minister Theresa May would never agree a Brexit deal with the EU which "traps" the UK permanently in a customs union, Downing Street has said.The pledge came amid speculation over possible ministerial resignations if the prime minister gives too much ground ahead of a crunch Brussels summit next week.The UK will get a Brexit "deal dividend" if it is able to agree good terms with Brussels to leave the EU, UK Chancellor of the Exchequer Philip Hammond said.The chancellor made the claim as he told the BBC the last 10 days had seen "a measurable change in pace" in Brexit negotiations, although many challenges remain ahead of a prospective deal.Hammond, speaking to reporters at the International Monetary Fund's annual meeting in Bali, told the Financial Times: "If we are successful in negotiating that package, there will be an upside dividend in terms of the economy and, consequently, the fiscal numbers."The euro was quoted at USD1.1557 against the greenback from USD1.1554 late Thursday.In economic news from the continent, eurozone industrial production grew more-than-expected in August, data from Eurostat revealed. Industrial production climbed 1% on a monthly basis, reversing 0.7% drop each in June and July.Output was expected to rise moderately by 0.4%. The increase was driven by a 3.1% rise in non-durable consumer goods output and 1.3% increase in capital goods.On a yearly basis, industrial production growth advanced to 0.9% from 0.3% in July. Economists had forecast output to drop 0.3%.Brent oil was quoted at USD80.06 a barrel at the London equities close Friday from USD80.93 late Thursday.Next week, the international economic events calendar has US manufacturing data on Monday, UK unemployment and US industrial production on Tuesday, while on Wednesday there are UK producer, consumer, and house prices as well as the release of the US Federal Reserve Open Market Committee's latest minutes. On Thursday, there are UK retail sales as well as the start of the EU summit. On Friday, there is Chinese industrial output and GDP, as well as UK public sector finances.
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