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(Alliance News) - London stocks started Wednesday's session lower as recent optimism over a tempering of US President Donald Trump's aggressive trade stance towards the China and Europe waned.
The FTSE 100 was 31.93 points lower, or 0.4%, at 7,333.51 early Wednesday. The FTSE 250 was down 119.52 points, or 0.6%, at 20,307.65, and the AIM All-Share was flat at 889.81.
The Cboe UK 100 index was down 0.6% at 12,427.53. The Cboe UK 250 was down 0.6% at 18,247.20, and the Cboe UK Small Companies was flat at 11,290.72.
In European equities, the CAC 40 index in Paris was down 0.1% and the DAX 30 in Frankfurt 0.2% lower in early trade.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.9%. In China, the Shanghai Composite ended down 0.3%, while the Hang Seng index in Hong Kong closed 2.0% lower.
"The risk-on lights are a bit dimmer today as the hopes for a near-term tariff roll-back fade," said Stephen Innes, market strategist at AxiTrader.
"Prospects for phase one tariff rollback deal dimmed after the president failed to dangle any tangible trade talk details in his NY speech and disappointing the street...In fact, the presidents 'failure to dangle' is impacting every cross-asset class. President Trump didn't exactly come across as a willing deal maker overnight and if he intended to leave the market in a state of tariff rollback limbo, job well done!" said Innes.
Trump on Tuesday took credit for an American economic renaissance but was greeted by another salvo from US industries that blame his trade wars for jeopardizing employment, wounding business and burdening consumers with higher costs.
But Trump doubled down, threatening to jack up tariffs even further should Washington and Beijing fail to finalize the partial trade deal he announced last month. "If we don't make a deal, we're going to substantially raise those tariffs," Trump said Tuesday.
He also hit out at the EU, calling the bloc's barriers "very, very difficult".
"The barriers they have up are terrible. Terrible. In many ways, worse than China," he said.
His comments come ahead of an EU auto tariff decision due on Thursday, with AFP reporting that the administration, despite Trump's tough words in New York, plans to issue a deferral on the matter. The delay could last up to another six months, two industry sources told AFP, with the announcement expected Wednesday or later.
The Trump administration has been threatening since last year to impose tariffs of perhaps 25% on auto imports to defend the US automaking sector, a symbol of American manufacturing. Trump already postponed the auto tariff decision – the threat of which has caused uncertainty in the European car industry, especially in Germany – for 180 days in May.
Despite broad-based losses in London, Coca-Cola HBC rose to the top of the FTSE 100, up 2.5%, after reporting a solid quarter.
Forex-neutral revenue grew 3.4%, or 2.3% excluding the soft-drink bottler's recent Bambi acquisition. Volumes were up 1.1% in the quarter, though down 0.1% excluding Bambi.
Coca-Cola HBC bought Serbian biscuits and snacks manufacturer Bambi at the beginning of 2019.
Volumes in established markets grew 1.2%, while developing markets saw a 4.0% decline. Emerging markets volumes increased 3.0%, or 0.8% when excluding Bambi.
For the full-year, Coca-Cola HBC expects to deliver forex-neutral revenue growth of 4.0% to 4.5%, including a 70 basis points contribution from Bambi. Currency movements in the quarter were better than expected, with the company now expecting a EUR15 million hit for the full-year, an improvement of EUR5 million compared to prior guidance.
"As we look to the full year, we are pleased to have seen an acceleration in Q4, giving us confidence that 2019 will be a year of solid top-line growth and good margin expansion," said Chief Executive Zoran Bogdanovic.
Technology firm Smiths Group, up 1.3%, said its annual expectations remain unchanged following its first quarter performance.
Revenue for the three months to October 31 was up 11% on an underlying basis, reflecting good growth in John Crane, a strong performance from Smiths Detection, organic growth in Flex-Tek, and an "expected performance" at Smiths Interconnect, amid a slowdown in the semiconductor market.
At the bottom of the FTSE 100 was ITV, down 1.9% after Kepler Cheuvreux cut the broadcaster to Hold from Buy.
On Tuesday, ITV reported a 1% rise in total advertising revenue in the third quarter, at the top end of guidance. The stock closed up 1.7% on Tuesday.
Pub operator JD Wetherspoon, shares down 1.5% in early trade, said like-for-like sales were up 5.3% in the 13 weeks to October 27, or its first quarter, with total sales up 5.6%.
The company has opened one pub since the start of the financial year, and closed four. It intends to open between 10 to 15 pubs in the current financial year. Chair Tim Martin said Wetherspoon continues to anticipate trading in line with previous expectations for the financial year.
Cineworld, down 4.8%, was started at Underweight by Morgan Stanley.
The economic events calendar on Wednesday has inflation readings from the UK and the US at 0930 GMT and 1330 GMT respectively. At 1000 GMT is industrial production from the eurozone.
FXStreet consensus forecasts UK consumer price inflation to ease to 1.6% in October from 1.7% the month before. Sterling was quoted at USD1.2854 early Wednesday, firm versus USD1.2841 at the London equities close on Tuesday.
Already released, final data for German's consumer price inflation rate in October was in line with prior estimates.
Annually, Germany's consumer price index rose 1.1%, and on a monthly basis by 0.1%. These readings were both in line with the provisional figures released at the end of last month.
In September, the annual inflation rate was 1.2%.
Energy product prices fell by 2.1% year-on-year in October, steeper than the 1.1% fall recorded in September. Excluding energy prices, October's inflation rate would have been 1.4%.
By Lucy Heming; lucyheming@alliancenews.com
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