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(Alliance News) - Despite trading green in the morning, the FTSE 100 slipped deeper into the red as Tuesday afternoon played out, dented by a stronger pound and fiery words from US President Donald Trump towards China.
The FTSE 100 index closed down 34.65 points, or 0.5%, at 7,291.43. The FTSE 250 ended down 124.72 points, or 0.6%, at 19,919.07, and the AIM All-Share closed down 3.94 points, or 0.5%, at 881.10.
The Cboe UK 100 ended down 0.5% at 12,373.18, the Cboe UK 250 closed down 0.6% at 17,822.40, and the Cboe Small Companies ended down 0.3% at 10,901.59.
The news of the day was a devastating blow to Boris Johnson dealt by the UK Supreme Court.
The eleven justices agreed unanimously that the five-week prorogation in the run-up to Brexit was "void and of no effect". Commons Speaker Jon Bercow announced that he was putting in place arrangements for MPs to sit at 1130 BST on Wednesday.
The ruling is a bitter humiliation for the prime minister, who was in New York for the United Nations General Assembly when the verdict was announced.
The pound was quoted at USD1.2469 at the London equities close Tuesday, up compared to USD1.2440 at the close on Monday.
"Today's news essentially rules out the chance for any change at the next EU summit, forcing Boris to either request an extension or find a way of getting a general election. The PM's opponents think they have him on the run, and they might well do, but cornering Boris Johnson could yet backfire spectacularly," said Chris Beauchamp, chief market analyst at IG.
"A stronger pound weakened the FTSE 100, which slunk away from challenging the 7,350 area yet again," he noted.
Beauchamp continued: "Elsewhere indices were in better form, shrugging off the tough start to the week seen on Monday, although bullish momentum appears to be sagging, as markets continue to struggle for a reason to extend their September rally."
In European equities on Tuesday, the CAC 40 in Paris ended flat, while the DAX 30 in Frankfurt slipped 0.3%. On Monday, the indices closed down 1.1% and 1.0% respectively.
Stocks in New York were mixed at the London equities close, with the Dow Jones up 0.1%, the S&P 500 index also up 0.1%, and the Nasdaq Composite down 0.3%.
Talking at the United Nations in New York, US President Donald Trump put China on notice, declaring that the time of trade "abuses" by Beijing was "over" and calling on the country to protect Hong Kong's "democratic ways of life."
"For years, these (trade) abuses were tolerated, ignored, or even encouraged," he told the UN General Assembly, arguing that "globalism" had caused world leaders to ignore their own national interests.
"But as far as America is concerned, those days are over," he said.
The euro stood at USD1.1001 at the European equities close Tuesday, flat against USD1.1000 at the same time on Monday.
Miners in London ended lower amid the ongoing tensions between the US and industrial powerhouse China. BHP Group shed 2.8%, Rio Tinto 2.2% and Glencore 2.0%.
Finishing atop the FTSE 100, meanwhile, was TUI, up 6.8%.
The Anglo-German tour operator reiterated its annual guidance for the financial year ending on Monday, the update coming just a day after the collapse of smaller rival Thomas Cook.
Thomas Cook went into insolvency in the early hours of Monday, after talks with lenders and shareholders on Sunday failed to come up with crucial funding.
FTSE 100-listed TUI is preparing measures to support its customers booked on Thomas Cook flights, it said on Tuesday, offering replacement flights. TUI is currently assessing the financial impact this will have.
Turning to trade, TUI acknowledged there has been continued weaker demand for the winter, with around one-third of its holiday programme sold, the same as a year before. However, trading in the Markets & Airlines division has been stronger since mid-August, in terms of both bookings and selling prices, meaning summer 2019 bookings are flat year-on-year.
London-listed airlines continued to edge higher on Tuesday on hopes that the removal of Thomas Cook from the airspace should create a tailwind for existing operators. easyJet closed up 1.6%, Wizz Air up 1.9% and Ryanair up 1.7%.
In the FTSE 250, Card Factory shares closed up 4.0% after the retailer managed to eke out like-for-like sales growth in its first half.
Card Factory's like-for-like sales were up 1.5% on the year before for the six months to July 31, having declined 0.2% a year ago. Store like-for-like growth rose 1.2%, despite lower High Street footfall, with online sales surging 25%.
This helped the gift card retailer's revenue for the period climb 5.5% to GBP195.6 million, though pretax profit did decline 14% to GBP24.3 million. Underlying pretax profit slipped 7.9% to GBP22.0 million.
AG Barr ended up 3.8% despite the soft drinks maker reporting a fall in interim profit.
For the six months ended July 27, the Irn-Bru maker reported pretax profit of GBP13.9 million, down 23% from GBP18.2 million a year before. This was on revenue that dropped by 10% to GBP122.5 million from GBP136.9 million.
AG Barr's performance was hampered by one-off benefits in the same period the prior year, including a benefit from soft drink volumes in 2018 because of favourable weather, including a hot summer in the UK.
"It's not every day you see a share price bounce on confirmation that full year profits will be around 20% lower than the previous year. But in AG Barr's case, investors will be relieved to see things haven't got any worse – and the shifting sentiment towards prices seems to have gone down a treat with the market," said Sophie Lund-Yates, analyst at Hargreaves Lansdown.
Metro Bank shares slumped 36% after postponing a debt issue due to "current market conditions".
The challenger bank said a "broad number" of investors showed interest in a maiden MREL issuance, which it needs to complete to meet EU rules. MREL stands for minimum requirement for own funds and eligible liabilities and relates to EU solvency legislation.
On Monday, the Financial Times had reported Metro Bank had been forced to withdraw a GBP200 million to GBP250 million bond offering, after only receiving orders for GBP175 million.
Shares in the challenger bank are a sharp 94% lower compared to this time a year ago.
In commodities, Brent oil was quoted at USD63.68 a barrel at the London equities close Tuesday, down from USD64.42 late Monday.
Gold was quoted at USD1,525.82 an ounce at the London equities close Tuesday against USD1,523.83 at the close on Monday.
In the UK corporate calendar on Wednesday, there are interim results from online fashion retailer boohoo, while defence firm Babcock International, transport operator Stagecoach and hazard detection firm Halma all release trading statements.
In Wednesday's economic calendar, minutes from the Bank of Japan's last monetary policy meeting are released at 0050 BST, while the Confederation of British Industry's Distributive Trades survey is out at 1100 BST.
By Lucy Heming; lucyheming@alliancenews.com
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