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(Alliance News) - Stocks in London ended broadly lower on Monday, as a stronger pound and weaker dollar dragged the FTSE 100 into the red.
"After an impressive 11 consecutive winning sessions the FTSE was on the back-foot heading towards the close. With Wall Street starting in the red, a stronger pound and little for traders to grab onto in the sluggish seasonal trading period, profit taking was the order of the day," said Fiona Cincotta of CityIndex.
The FTSE 100 index closed down 0.8%, or 57.85 points at 7,587.05. The FTSE 250 ended 0.6% down, or 122.73 points, at 21,936.26, and the AIM All-Share closed up 0.4%, or 3.84 points, at 958.01.
The Cboe UK 100 ended down 0.6% at 12,864.51, the Cboe UK 250 closed down 0.5% at 19,851.79, but the Cboe Small Companies ended up 0.4% at 12,244.46.
The pound was quoted at USD1.3136 at the London equities close, up from USD1.3092 at the same time on Friday.
"The pound is faring better than the FTSE in the penultimate day of trading of the year. The pound is on the rise for the sixth straight session, extending gains by 0.4% at the start of the week versus both the euro and the dollar, as thin trading volume enhances action in the FX markets," Cincotta continued. "Pound traders are shrugging off the no deal Brexit concerns that caused sterling to pare post-election gains."
In Paris the CAC 40 ended 0.9% lower while the DAX 30 in Frankfurt down 0.7% in late trade.
In economic news, total capital issuance in the UK fell month-on-month in November, according to numbers released by the Bank of England.
Gross capital issuance by UK residents was down 8.7% to GBP36.7 billion from GBP40.2 billion in October. It also represents a 13% decrease from the GBP42.0 billion monthly average in the six months prior.
In the year-to-date, gross issuance came in at GBP429.6 billion, up 1.7% year-on-year from GBP422.6 billion. In the month of November, gross bond issuance was down by 24% to GBP27.2 billion from GBP20.6 billion in October.
The euro stood at USD1.1216 at the European equities close, up from USD1.1175 a day before.
Against the yen, the dollar was trading at JPY108.83, down from JPY109.41 late Friday.
"The US dollar is rapidly reaching crunch point against a host of global currencies, with the dollar index hitting its lowest level since mid-July. With US data already looking better, and the Fed’s course set for the time being, it is time that the optimism around the global economy was spread around a bit more, and the gains in currencies like the Aussie, the euro and sterling are a reflection of this," said Chris Beauchamp, chief market analyst at IG.
Stocks in New York were lower at the London equities close. The DJIA and the S&P 500 index were down 0.5% while the Nasdaq Composite was 0.7% lower.
In UK company news, NMC Health ended up 4.6%, the top performer in the FTSE 100 index, after rebounding from its 2.6% drop on Friday following a continued spar with short selling firm Muddy Waters.
On Friday, the UAE-focused private healthcare company said STH Consultant, the engineering consultant retained by NMC, provided written confirmation of the total built-up floor area of NMC Royal Women's Hospital in Abu Dhabi at 18,595 metres squared. It also made publicly available floor plans for the hospital approved by the Health Authority of Abu Dhabi.
The statement came in response to attacks on the hospital operator and short selling of shares by Muddy Waters over its accountancy practises.
Last week, Muddy Waters highlighted a USD107.4 million investment by NMC in the redevelopment of NMC Royal Women's Hospital, previously known as Brightpoint Royal Women's Hospital. "Red flags" in this investment, it said, included the cost being USD7,700 per square metre, exceeding Muddy Waters' expectation of USD3,500 to USD4,000.
Short selling is an investment or trading strategy that speculates on the decline in a stock.
Fresnillo was up 3.3%, as the price of gold rose on the back of the weakening dollar. In the FTSE 250, Centamin was up 5.1%.
"Gold's latest surge is strictly happening because the dollar is weakening, and expectations are growing the greenback will continue to fall further in 2020. Both Europe and Asia are starting to show further signs of economic life and the dollar could weaken further as we start to see strong flows come to emerging markets," Moya added.
Gold was quoted at USD1,515.03 an ounce at the London equities close against USD1,514.27 on Friday.
Elsewhere, radio frequency technology provider CyanConnode surged 67% as it has secured an order for 33,000 smart metering solutions units in Thailand, a new territory for the firm.
Under the agreement CyanConnode said it will supply its hardware, head end system and annual maintenance services. Hardware deliveries will start in 2020, with deliverables for the integrated system commencing immediately.
As part of the contract, CyanConnode said it will receive an upfront payment at the time of order of around USD400,000, which is about 25% of the contract value.
Brent oil was quoted at USD66.14 a barrel at the equities close from USD68.14 at the same time the prior day.
On Tuesday, financial markets in the UK, Ireland, France and the US will close early for New Year's Eve, while Germany and Japan will be closed entirely.
The economic calendar on Tuesday has China's CFLP purchasing managers indices at 0100 GMT, while the US has the consumer confidence index at 1500 GMT.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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