(Alliance News) - Stocks were in the red early on Friday in London, as concerns over China's economic growth overshadow any optimism provided by the fitful progress towards a Brexit deal between the UK and the EU.
The FTSE 100 stock index 20.99 points lower, or 0.3%, at 7,161.33.
The FTSE 250 was down 31.48 points, or 0.2%, at 20,189.63, but the AIM All-Share was 0.1% in the green at 883.76.
The Cboe UK 100 index was down 0.7% at 12,125.64. The Cboe UK 250 was 0.1% lower at 18,162.26 at 18,048.90 and the Cboe UK Small Companies also was 0.1% down, at 11,095.97.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were 0.5% and 0.2% lower respectively in early trading.
On the London market, InterContinental Hotels Group fell 2.7% as it reported a 4.7% yearly rise in net system size to 865,000 rooms for the third quarter of 2019, despite what it said was a strong comparable.
However, revenue per available room, a key hotel industry metric, fell 0.8%, and was flat for the first nine months of the year. Greater China RevPar fell 6.1% in the quarter amid unrest in Hong Kong, while in the Americas it dipped 0.6%. However, in Europe, the Middle East, Asia & Africa, RevPar rose 0.2%.
"Despite the weaker RevPAR environment, and the challenges some of our markets are currently experiencing, we remain confident in our financial outcome for the rest of the year," said IHG Chief Executive Keith Barr.
Steelmaker Evraz lost 2.3%, as it said the effect on earnings before interest, tax, depreciation and amortisation from an efficiency programme will be USD350 million in 2019, and it wants around USD300 million per year from it going forward.
The firm is also mulling three "major" investment projects in 2020 to 2023, without naming them, which will lead to capital expenditure of around USD1 billion a year in that timeframe. In 2019, capex is seen at USD850 million.
London Stock Exchange Group, which recently fended off a takeover bid from Hong Kong Exchanges & Clearing, was up 1.9% as it registered a 12% rise in third-quarter income to GBP587 million. On a nine-month basis, the figure was 9% higher at GBP1.73 billion.
The business is performing well, it said, with third-quarter trading "strong". Information Services grew revenue by 9%, helped by strong performance in subscription revenue from FTSE Russell, while Capital Markets revenue climbed 14% in a weak environment.
LSEG said the proposed acquisition of Refinitiv is continuing to progress, and remains on track to complete in the second half of 2020.
Chief Financial Officer David Warren will be departing by the end of 2020. He will stay until the Refinitiv deal has been completed and will not leave until a replacement is found, LSEG said. The company also appointed a chief integration officer to support the merger, hiring David Shalders, who will leave the TP ICAP board as a result.
Royal Bank of Scotland climbed 1.9%, as JPMorgan raised its rating on the lender to Overweight from Neutral.
In the FTSE 250 index, shopping centre owner intu Properties fell 5.2% as HSBC lowered it to a Reduce rating from Hold. Gold miner Centamin was down 2.2% as Goldman Sachs cut it to Neutral from Buy, while drinks firm Britvic dipped 1.8% after JPMorgan lowered it to Neutral from Overweight.
Cybersecurity firm Avast jumped 3.7%. It reported a 5.0% rise in adjusted revenue for the third quarter to USD220.3 million. Excluding discontinued operations, this rose 7.3% to USD218.3 million.
Adjusted Ebita rose 8.7% to USD121.9 million, and is 6.6% higher in the first nine months.
Avast has reiterated 2019 guidance, and Chief Executive Ondrej Vlcek said the firm had a good quarter, meeting expectations.
On AIM, Elegant Hotels surged 55% to 108.27 pence. It has agreed a GBP100.8 million takeover by Marriott International. Marriott has offered 110p per Elegant share, a 57% premium to Elegant's closing price on Thursday in London.
China's economy expanded at its slowest rate in nearly three decades in the third quarter, hit by cooling domestic demand and a protracted US trade war, data showed Friday, with an official warning of "mounting downward pressure".
Gross domestic product expanded 6.0% in July to September, down from 6.2% in the second quarter, according to the National Bureau of Statistics.
The reading, in line with an AFP survey of 13 analysts, is the worst quarterly figure since 1992 but within the government's target range of 6.0% to 6.5% for the whole year. The economy grew 6.6% in 2018.
"There emerges a risk fourth-quarter GDP growth could dip below the psychological level of 6.0%. However, if this happens, this is not a complete surprise to the market, but will further confirm the downward trend of the economy," said Hao Zhou at Commerzbank Research.
The Japanese Nikkei 225 index closed up 0.2% on Friday. In China, the Shanghai Composite ended down 1.3%, while the Hang Seng index in Hong Kong is 0.7% lower in late trade.
The US imposed tariffs on a record USD7.5 billion worth of EU goods on Friday, despite threats of retaliation, with Airbus, French wine and Scottish whiskies among the high-profile targets.
The tariffs, which took effect just after midnight in Washington, came after talks between European officials and US trade representatives failed to win a last-minute reprieve.
The WTO-endorsed onslaught from US President Donald Trump also comes as Washington is mired in the trade war with China and could risk destabilising the global economy further.
On the Brexit front, Boris Johnson will face a race against time to sell his last-minute deal to MPs before a crunch vote as he returns from Brussels in a "very confident" mood.
The prime minister said there is a "very good case" for MPs to vote in his favour in what is expected to be a dramatic and historic House of Commons showdown on Saturday.
But with significant opposition lining up to thwart it, he faces an uphill battle to get the deal through in the extraordinary sitting of Parliament, the first on a weekend since April 1982.
The pound was quoted at USD1.2876 early Friday, firm against USD1.2831 at the close Thursday.
"Despite the optimism surrounding yesterday's Brexit deal there still remain a number of key obstacles to its passage through the UK parliament, namely the current arithmetic, which saw Theresa May's deal get voted down three times, and she at least had a majority," said Michael Hewson at CMC Markets UK.
"Her successor Boris Johnson doesn't have that luxury, which means he is likely to struggle even more, given the Democratic Unionists have said they will vote against the deal. This is because it doesn't satisfy all of their requirements around consent, particularly around the lack of a veto, but this was never likely to fly in any case."
"The maximum number of votes Theresa May got for her deal was 287, and she needed 320 to get the deal passed, as will Boris Johnson on Saturday. That's the size of the task facing the PM," Hewson continued.
In the US on Thursday, Wall Street ended in the green, with the Dow Jones Industrial Average closing up 0.1%, the S&P 500 0.3% higher, and the Nasdaq Composite 0.4% higher.
The economic calendar has eurozone current account numbers at 0900 BST.
By George Collard; georgecollard@alliancenews.com
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