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LONDON MARKET CLOSE: FTSE 100 Up As Brexit Deadline Drama Sinks Pound

Thu, 21st Mar 2019 17:20

LONDON (Alliance News) - Stocks in London ended mixed on Thursday, with the FTSE 100 gaining following weakness in the pound, as Brexit uncertainty spooked investors ahead of the deadline next week. The FTSE 100 index closed up 64.30 points, or 0.9%, at 7,355.31. The FTSE 250 ended 41.40 points lower, or 0.2%, at 19,347.58, and the AIM All-Share closed up 1.51 points, or 0.2%, at 922.77.The Cboe UK 100 ended up 0.8% at 12,489.70, the Cboe UK 250 closed down 0.5% at 17,304.11, and the Cboe Small Companies ended down 0.1% at 11,244.33."As expected, there were no fireworks from the BoE, who continue to sit on their hands offering little in the way of future guidance whilst Brexit remains unresolved. The weaker pound supported the usual suspects in the FTSE 100; the multinationals that earn abroad, which profit from the more beneficial exchange rate," City Index analyst Fiona Cincotta said. The pound was quoted at USD1.3048 at the London equities close, sharply lower than USD1.3205 at the close Wednesday, amid rising Brexit uncertainty as the deadline for the UK's departure from the bloc draws nigh. UK Prime Minister Theresa May has asked European Union leaders to delay Brexit from March 29 until the end of June and said she was preparing for a third vote in the UK Parliament on the exit deal she vigorously negotiated with Brussels.May issued a call for Parliament to deliver on the decision of the British people and take the UK out of the EU.As she arrived in Brussels for an EU summit at which she hopes to be granted a three-month extension to the UK's Brexit deadline, May said she "sincerely hopes" the UK will be able to leave with a deal.However, on Thursday French President Emmanuel Macron warned that if UK lawmakers reject the EU divorce deal for the third time, it will lead directly to a no-deal Brexit."We have to be clear: We can discuss and agree on an extension if it is a technical extension in case of a yes-vote," Macron said. "In case of no vote, or a 'no', directly it will guide everybody to a no deal, for sure".With just eight days before the UK is due to leave the EU, May will make the case for an extension to June 30 to the other 27 EU leaders at the opening of the two-day EU summit, before leaving them to discuss their response in her absence.On the London Stock Exchange, Fresnillo ended up 4.0%. The gold miner was tracking spot gold prices higher, quoted at USD1,305.78 an ounce, up from USD1,301.00 at the London equities close Wednesday. The precious metal hit an intraday high of USD1,320.18 in morning trade. Gold was up as the dollar weakened in the wake of the US Federal Reserve's decision to leave its benchmark interest rate unchanged on Wednesday. The Fed held the target range for the Federal Funds Rate at 2.25% to 2.50%. The central bank surprised investors by taking the possibility of interest rate hikes in 2019 off the table. Mid-cap gold miners Acacia Mining, Centamin and Hochschild Mining ended up 3.8%, 2.4% and 4.0% respectively. Next managed to close up 2.6%, recovering from earlier losses after the clothing and homewares retailer reported a well-flagged profit decrease, despite revenue edging up. For the year ended January 26, the fashion and homewares seller posted a pretax profit of GBP722.9 million, down 0.4% from GBP726.1 million the year before, but in line with the company's expectations of GBP723 million.Revenue rose to GBP4.17 billion from GBP4.09 billion a year ago. Full-price sales were up 3.1%, broadly in line with Next's guidance of a 3.2% increase. Next declared a 4.4% increase to its total dividend, up to 165.0 pence from 158.0p a year ago. At the other end of the large cap index, Royal Bank of Scotland closed as the worst performer, down 6.1% and Phoenix Group, ended down 3.2%. The stocks went ex-dividend meaning new buyers no longer qualify for the latest dividend payout. Persimmon closed down 2.4% after the housebuilder launched a house buyer's retention initiative, as part of its customer care improvement plan.Among the UK's major housebuilders, Persimmon is facing growing pressure from buyers and the government to increase the quality of new homes.Persimmon will write into its standard contract that 1.5% of the total value of a home, which is also equal to around 6% of the build fabric costs, will be retained by the buyer's solicitor until any faults identified up to the point of key release are resolved.Based on Persimmon's current selling prices, the average amount withheld will be GBP3,600 per home. The company said it expects the policy to be implemented by the end of June.In the FTSE 250, Renishaw ended as the worst performer, down 11% after the engineer lowered its revenue guidance and said it expects to report a fall in annual profit amid a slowdown in encoder product demand in Asia. Renishaw now expects to report revenue for the year to the end of June in a range of GBP595 million to GBP620 million, down from GBP635 million to GBP665 million anticipated previously. For financial 2018, Renishaw reported revenue of GBP611.5 million. "Today's warning will raise fears over the prospects of the wider engineering sector given Renishaw is probably better positioned than most of its peer group, with a level of expertise which sets up barriers to any potential competitive threats," said AJ Bell's Russ Mould. Meanwhile in the UK, the Bank of England voted unanimously to keep interest rates on hold on Thursday, as expected, though did nudge up its forecast for first-quarter gross domestic product growth.The nine-strong Monetary Policy Committee voted unanimously to maintain Bank Rate at 0.75%.Minutes from the meeting showed the MPC noted recent economic data have been mixed, but the projections laid out in its February Inflation Report "appear on track".Turning to Brexit, the MPC said that uncertainty has continued to weigh on confidence and business investment, though most indicators of consumer spending are consistent with "modest" growth. Elsewhere, UK retail sales showed continued strength in February, the Office for National Statistics revealed, though monthly food store sales fell at the fastest rate since 2016. UK retail sales grew 4.0% year-on-year in February, slower than the 4.1% recorded for January - which itself was revised down from 4.2% - but beating expectations for a 3.3% gain, as cited by FXStreet. Non-store retailing provided the largest contribution to growth in the amount spent and quantity bought in February on an annual basis, the ONS said. On a monthly basis, UK retail sales were up 0.4%. The monthly fall in food stores, of 1.2%, was the largest decline since December 2016, and reversed a rise of 0.9% in January. Alcohol stores saw the biggest monthly decline in the quantity bought in February, falling 5.3%.In addition, UK public sector borrowing in February was the lowest in two years, the Office for National Statistics said, while year-to-date borrowing hit a 17-year low. Public sector net borrowing excluding public sector banks in February was GBP200 million, the lowest February borrowing since 2017 and GBP1.0 billion less than in 2018.In Paris the CAC 40 ended down 0.1%, while the DAX 30 in Frankfurt ended down 0.5%. The euro stood at USD1.1346 at the European equities close, marginally lower than USD1.1354 late Wednesday.Stocks in New York were higher at the London equities close, recovering after earlier losses following dovish tones from the US Federal Reserve on Wednesday. The Dow Jones Industrial Average was up 0.7%, the S&P 500 index up 0.8% and the Nasdaq Composite up 1.0%."US markets have come storming back this afternoon after a mixed day for Wall Street yesterday. While banks are suffering on concerns that a more dovish interest rate outlook will hurt performance, the usual suspects in the tech sector are racing higher, providing an indication of resurgent risk appetite. Low inflation, ongoing stimulus and a recognition of the risks facing the US economy have proved to be an ideal environment for equities," said IG Group's Chris Beauchamp. Shares in blue jeans originator Levi Strauss surged on the company's highly-publicised return to life as a publicly traded company. On the New York Stock Exchange, Levi's was trading at USD22.53, up 32% from its IPO price of USD17.00 on Thursday. Still to come in the US earnings calendar, sportswear giant Nike will report third-quarter earnings after the closing bell in New York. Brent oil was quoted at USD67.88 a barrel at the London equities close, down from USD68.30 at the close Wednesday. However, the North Sea benchmark hit a fresh four-month high of USD68.68 in early trade. The economic events calendar on Friday has services and manufacturing PMI readings from France, Germany, the eurozone and the US at 0815 GMT, 0830 GMT, 0900 GMT and 1345 GMT. The UK corporate calendar on Friday has half-year results from engineering conglomerate Smiths Group. There are also annual results from property and construction company Henry Boot and hedge fund administrator Sanne Group.

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