Marks & Spencer Share News (MKS)

LONDON (Alliance News) - Stocks in London ended mixed on Wednesday with the FTSE 100 benefiting from weakness in the pound, as speculation mounted on the future of UK Prime Minister Theresa May. The FTSE 100 index closed up 5.27 points, or 0.1%, at 7,334.19. The FTSE 250 ended down 109.94 points, or 0.6%, at 19,326.42, and the AIM All-Share closed up 6.34 points, or 0.7%, at 965.78.The Cboe UK 100 ended up 0.2% at 12,451.60, the Cboe UK 250 closed down 0.5% at 17,368.37, and the Cboe Small Companies ended down 0.1% at 11,802.33.In European equities, the CAC 40 in Paris ended down 0.1%, while the DAX 30 in Frankfurt ended up 0.1%.The pound was quoted at USD1.2657 at the London equities close, down from USD1.2760 at the close Tuesday, as pressure mounts on the PM to abandon her attempt to get her Brexit deal ratified. Sterling hit an intraday low of USD1.2624 versus the greenback - its lowest level in four months. "The growing sense that May's premiership isn't long for this world - setting up a Tory leadership battle that could well put a hardline Brexiteer in power, especially if the party does as badly in the European elections as expected - was ruinous for sterling. This was a great help to the FTSE. The day's rebound had waned after the US open," said Spreadex analyst Connor Campbell. May pleaded with MPs to let her Brexit deal pass, as she faced intense pressure to quit after Tories rejected her latest proposals.The prime minister warned that whoever succeeded her would face the same Brexit pressures as she called on MPs to back the Withdrawal Agreement Bill.In a Commons statement, May appeared to acknowledge that the clock was ticking on her time in office, having already said she will set out a timetable for her departure.The PM said the Withdrawal Agreement Bill would be published on Friday and backing it would help get the UK out of the EU by the end of July.However, Conservative eurosceptics have reacted with fury to the Brexit plan's offer of a vote on whether to hold a second referendum.Markets.com analyst Neil Wilson said: "It seems the cabinet has now had enough and if they don't move now Theresa May will be safe for a while longer. The pressure on the PM is intense and it's hard to see how she can survive. We should caution though that she is the master of clinging on no matter what."For the market this opens up the prospect of more uncertainty, the potential of a Brexiter PM, a General Election and perhaps a second referendum. In other words it just makes things even more chaotic. However, we should caution that a sell the rumour, buy the fact trade may well be at work - as soon as things become clearer sterling is ripe for a bounce - the more it's sold the riper it becomes as the trade looks increasingly crowded."On the London Stock Exchange, paper and packaging stocks ended among the best blue chip performers after Mondi told its customers that the prices of recycled containerboard and kraft top liner will be raised by EUR60 a tonne in June to July. Smurfit Kappa closed up 5.5%, DS Smith up 3.8%, while Mondi ended up 2.7%. At the other end of the large cap index, Marks & Spencer ended the worst performer, down 8.4% after the food, clothing and homewares retailer reported a drop in revenue, cut its dividend and announced the terms of its rights issue. For the financial year to the end of March, revenue declined by 3.0% during the year to GBP10.38 billion from GBP10.70 billion reported a year earlier. The company highlighted sales in the final quarter of its financial year were hurt by store closures in the UK and the timing of Easter. However, pretax profit rose 27% to GBP84.6 million from GBP66.8 million a year earlier, thanks to the company's ongoing transformation programme. M&S cut its dividend by 26% to 13.9 pence from 18.7p paid the year before. M&S said it intends to raise GBP601.3 million through a rights issue, which will result in the issue of 325.0 million new shares at a price of 185 pence each. The rights issue price represents a discount of 32% to Tuesday's closing price of 271.2p per share. The fundraising was launched to finance the creation of a 50/50 joint venture with online grocer Ocado, announced in February."M&S's results showed evidence of further decline of the business and it is very difficult to formulate a bull case. The Ocado joint venture is expensive and capital intensive and there are questions about how lucrative it will be even in the longer term for M&S," said Mark Swain, enterprise fund manager at Smith & Williamson.SSE closed down 3.1% after the water company reported full-year results "well" short of expectations, with profit comfortably missing the market's expectations. The blue chip utility's adjusted pretax profit slipped 38% year-on-year for the 12 months to March to GBP725.7 million, against analyst consensus of GBP807 million. In the FTSE 250, IG Group ended the best performer, up 13% after the online trading company issued a strategy update the company hopes will drive growth in the medium term. IG, for the purposes of its updated strategy, has split itself into two divisions: Core Markets and Significant Opportunities. In particular, IG said it has identified a potential opportunity to participate in the leveraged securities market for retail clients in Hong Kong. The company will "pursue partnerships" to assess the opportunity. IG added that it expects its trading revenue to be down sharply in financial 2019 due to the "low levels of volatility and market activity". IG expects its net trading revenue to be down 17% in the twelve months to May 31 compared to the year before. The company reiterated it expects to maintain its dividend at 43.2 pence per share, until its earnings allow the company to resume progressive dividend payments.At the other end of the midcaps, Babcock International closed down 9.3% after the engineering services firm reported decline in profit and revenue and a weak outlook. For the year ended March, pretax profit narrowed 30% to GBP235.2 million from GBP337.7 million the year prior after revenue fell 4.1% to GBP4.47 billion from GBP4.66 billion the year before. Profit performance was also hurt by a rise in administration costs and GBP160.8 million in one-off charges related to impairments of the oil & gas unit, restructuring costs and pension charges. In financial 2020, Babcock expects underlying revenue to be around GBP4.9 billion with underlying operating profit between GBP515 million and GBP535 million. In financial 2018, the firm generated GBP588.4 million operating profit on revenue of GBP5.16 billion. Compounding its woes, JPMorgan cut the stock to Neutral from Overweight.On the economic front, UK consumer price inflation exceeded the central bank's target in April for the first time since December, driven by higher utility costs and air fares.Meanwhile, core inflation held steady for a second month in a row, further damping hopes of an interest rate hike this year.Consumer price inflation rose to 2.1% in April from 1.9% in March, figures from the Office for National Statistics revealed.The rate exceeded the 2% target, but this was slightly below the forecast of 2.2%."Higher inflation would usually bring pressure on the central bank to raise interest rates - but these are far from normal times. The MPC is rightly reluctant to tweak policy while Brexit hangs over the economy like the Sword of Damocles. Moreover, fuel and energy prices are notoriously volatile from month to month, and are usually led by factors outside the control of domestic monetary policy. I'd expect the headline rate to fall back as we move through 2019. Core inflation, which strips out these volatile components, remained unchanged at 1.8%. So today's data changes little - the absence of domestic inflationary pressure means policymakers have licence to leave rates on hold for now," said Hargreaves Lansdown's Ben Brettell.The euro stood at USD1.1156 at the European equities close, flat against USD1.1164 late Tuesday.Stocks in New York were lower at the London equities close as investors continue to fret over the trade dispute between the US and China.The DJIA, the S&P 500 index and the Nasdaq Composite were all down 0.3%.In the latest developments, a report from the South China Morning Post said China is re-examining the entire bilateral economic relationship between the US and China.The SCMP said Chinese government advisers are highlighting the risk of sourcing critical supplies from an increasingly hostile US following the Trump administration's recent move to blacklist Chinese tech giant Huawei.Adding to the trade concerns, Treasury Secretary Steven Mnuchin told CNBC's Ylan Mui the US has no plans to go to Beijing to resume trade negotiations.Investors are also looking ahead to the release of the minutes of the latest Federal Reserve meeting at 1900 BST.Brent oil was quoted at USD71.10 a barrel at the equities close, down from USD72.00 late Tuesday. Oil was lower after the Energy Information Administration reported that US stockpiles jumped by 4.74 million barrels, while the consensus estimate pointed to a drop of 1.2 million barrels.Gold was quoted at USD1,274.80 an ounce at the London equities close, flat against USD1,273.30 late Tuesday. The economic events calendar on Thursday has Germany GDP readings at 0700 BST and manufacturing and services PMI figures from France, Germany and the eurozone at 0815 BST, 0830 BST, and 0900 BST respectively. The UK corporate calendar on Thursday has annual results from water company United Utilities, home phone and broadband provider TalkTalk Telecom Group, mother and baby products retailer Mothercare, private hospital group Mediclinic International and defence outsourcer QinetiQ Group.