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(Alliance News) - Stock prices were well in the red in London early on Wednesday, with trade worries hitting sentiment, amid fading hopes for US-China trade talks and a negative trading update from UK retailer Kingfisher.
The FTSE 100 index of London large-cap stocks was 45.26 points lower, or 0.6%, at 7,278.54.
The mid-cap FTSE 250 was 116.53 points down, or 0.6%, at 20,411.95, and the AIM All-Share was 0.4% lower at 893.34.
The Cboe UK 100 index was 0.6% lower at 12,332.96. The Cboe UK 250 was 0.4% lower at 18,398.57, but the Cboe UK Small Companies was up 0.2% at 11,291.42.
In European equities, the CAC 40 index in Paris was down 0.6% and the DAX 30 in Frankfurt also 0.6% lower.
US President Donald Trump on Tuesday warned failure to get a trade deal with China will prompt more tariffs. "If we don't make a deal with China, I'll just raise the tariffs even higher," he told reporters at the White House.
Trump's latest tough comment came as markets are watching intensely for signs of progress in the two economic superpowers' attempt to reach a so-called "phase one" partial deal to take the heat out of a growing trade war.
Wall Street ended mixed on Tuesday, with the Dow Jones Industrial Average closing 0.4% lower, the S&P 500 down 0.1%, but the Nasdaq Composite up 0.2%.
The Japanese Nikkei 225 index closed 0.6% lower on Wednesday. In China, the Shanghai Composite ended down 0.8%, while the Hang Seng index in Hong Kong also finished down 0.8%.
On the London Stock Exchange, DIY retailer Kingfisher slumped 6.8% after it said trading in the three months to October was "disappointing", with sales falling 3.7% to GBP2.96 billion. Like-for-like revenue slipped 3.7%.
Kingfisher said this "reflects continuing disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in our main markets".
Kingfisher expects the UK market to remain subdued, and in France the firm continues to believe its Castorama stores will underperform the wider market.
Sage Group fell 2.2%. The accounting software firm reported "strong growth in high-quality" recurring revenue, with the figure up 11% organically to GBP1.56 billion. Total organic revenue rose 5.6% to GBP1.82 billion, with the reported figure up 4.9% to GBP1.94 billion.
However, Sage's pretax profit slipped 9.3% to GBP361 million, and the underlying figure declined by 11% to GBP425 million.
The company's annual dividend was raised 2.5% to 16.91 pence per share, and it has decided to return an extra GBP250 million to shareholders following the sale of Sage Pay, announced on Monday.
Sage said profit was hit by increased investment as well as a rise in variable staff pay following "strong business performance".
Sage's outlook is "optimistic", and it sees recurring revenue growth in its new financial year of 8% to 9%.
Aviva has simplified into five divisions, the insurer said, and it is targeting GBP300 million of net savings by 2022. Shares were down 3.4% in early trading in London.
Operating profit for 2019 is "broadly in line" with expectations, and it will be investing GBP1.3 billion over the next three years.
"Consistent with the operating trends reported in our 2019 interim results, we have seen continued progress in Canada and stronger sales in bulk purchase annuities, offset by weaker results in Aviva Investors and UK personal lines insurance," said Aviva.
In the FTSE 250, Mitchells & Butlers jumped 5.8%. The pub chain reported like-for-like sales growth in the year to September 28, with total revenue rising 4.2% to GBP2.24 billion.
Pretax profit increased on an adjusted basis by 11%, with the reported figure rising by 36% to GBP177 million.
Mitchells & Butlers, which has not paid a dividend, said it was a year of "strong trading with market outperformance and profit growth".
SSP Group, which operates food and drink outlets in travel locations, reported 1.9% annual like-for-like sales growth, with both air and rail delivering growth. Revenue was up 9.0% to GBP2.79 billion. Shares fell 3.1% in early trading.
SSP's reported pretax profit climbed 7.8% to GBP197.2 million, and the underlying figure was 10% higher at GBP203.2 million.
The firm is paying a final dividend of 6.0p per share, taking the year's total to 11.8p, 16% higher than the year before. SSP has also announced a GBP100 million share buyback.
It said it was a "strong" annual performance, and trading in its new financial year is so far meeting expectations.
On the UK political front, Boris Johnson and Jeremy Corbyn were almost inseparable in the eyes of viewers after a series of heated exchanges during the first televised debate of the General Election.
Johnson edged a snap YouGov poll 51-49, although Labour figures were pleased with the showing of their leader in the prime-time ITV slot.
The pair clashed over their rival plans for Brexit, with Corbyn describing the Prime Minister's pledge to "get Brexit done" by the end of January as "nonsense", while Mr Johnson suggested his rival was "not fit to lead our country".
YouGov's poll, which surveyed 1,646 viewers, also found Johnson appeared more prime ministerial, although Corbyn was considered more trustworthy.
The pound was quoted at USD1.2905 early Wednesday, down from USD1.2929 at the close Tuesday.
On mainland Europe, German producer prices fell unexpectedly in October on the month prior, with the annual change also coming in lower than forecast.
The producer prices index from Destatis on Wednesday showed producer prices fell 0.2% in October on the month prior.
According to FX Street compiled consensus figures, economists expected the print to remain stable on the month prior after a 0.1% month-on-month rise in September.
On a yearly basis, German producer prices in October were 0.6% lower. This was weaker than the 0.1% decline reported in September and the 0.4% fall forecast by consensus data.
By George Collard; georgecollard@alliancenews.com
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