Next Share News (NXT)

(Alliance News) - Stocks in London ended lower on Wednesday as disappointing earnings and breakdown in US-China talks hit investor sentiment, while the US markets gear up for the Federal Reserve interest rate decision.Investors are betting the Fed will announce a long-anticipated interest rate cut at 1900 BST, and will be watching closely for signals that more stimulus is on the way. Analysts believe the cut in the benchmark lending rate has been largely priced in, although any Fed hints on the possibility of additional actions could move markets."Later today, we expect the Fed to cut its policy rate by 25 basis points. The accompanying statement is likely to retain the pledge that officials will 'act as appropriate to sustain the expansion', but Chair Jerome Powell will probably emphasise in his press conference that further rate cuts will depend on the incoming data. We continue to expect a sharper slowdown in economic growth over the second half of 2019 to prompt two further 25 basis points cuts," said analysts at Capital Economics. The Trump administration has been putting pressure on the Fed to lower interest rates in a bid to lower the dollar and potentially make US exports more appealing to overseas buyers, amid the ongoing trade spat with China. US and Chinese negotiators concluded trade talks in Shanghai, reaching no deal but agreeing to convene again in September in Washington."The two sides conducted frank, highly efficient and constructive in-depth exchanges on major issues of common interest in the economic and trade field," according to the official Xinhua news agency.The White House said Beijing "confirmed their commitment" to buy US farm goods - something President Donald Trump complained about Tuesday on Twitter.However, trade experts reckon it now appears unlikely a trade deal will be finalised before the US presidential elections next year.The FTSE 100 index closed down 47.19 points, or 0.6%, at 7,599.58. The FTSE 250 ended down 76.80 points, or 0.4%, at 19,698.02, and the AIM All-Share closed down 0.69 points, or 0.1%, at 931.67.The Cboe UK 100 ended down 0.8% at 12,882.77, the Cboe UK 250 closed down 0.5% at 17,539.81, and the Cboe Small Companies ended flat at 11,031.67.In European equities, the CAC 40 in Paris ended up 0.3% while the DAX 30 in Frankfurt up 0.4%.Stocks in New York were subdued at the London equities close ahead of the Fed's rate decision, with the DJIA and the S&P 500 index flat and the Nasdaq Composite up 0.2%.In company news, Apple, a Dow component and important contributor to the Nasdaq, was up 4.6% after the tech giant reported better-than-expected quarterly earnings after the market close Tuesday.On the London Stock Exchange, Next ended the best blue chip performer, up 8.0% after the clothing and homewares retailer raised its annual guidance following a better-than-expected trading performance in the second quarter of its current financial year. Next reported full price sales growth in the 26 weeks to last Saturday of 4.3%. Total sales, including markdown sales, were up 3.8%. Sales from retail outlets fell by 3.9% during the period, but this was more than offset by 12% sales growth in Online. For the 13 weeks to last Saturday, full price sales have beaten expectations, rising by 4.0% on the prior year. At the end of May, Next had guided for a 0.5% decline in full price sales in the second quarter. Looking ahead, the company said it has entered the end-of-season sale period on July, with surplus stock down 1% on last year and clearance rates 2.0% below expectations. As such, Next adjusted its guidance to assume a similar reduction in sale clearance rates in the second half. Following the strong first-half showing, Next increased its annual full price sales guidance to 3.0% from 1.7%. Rentokil Initial closed up 5.5% after the pest control company reported its best interim organic growth performance in over five years. Rentokil posted 4.2% organic revenue growth in the first half of 2019, the best in over half a decade, despite wet weather in North America during the second quarter. Overall revenue growth was 10% at actual currency, and 8.5% constant currency, reaching GBP1.30 billion. Rentokil has posted a pretax profit of GBP113.8 million, 3.7% higher at actual rates on the year before. The adjusted figure rose 14% actual rates to GBP141.6 million. At the other end of the large cap index, Taylor Wimpey ended the worst performer, down 8.4% after the housebuilder said profit in the first half of 2019 dipped slightly despite revenue growth due to higher sales costs. For the six months to the end of June, the FTSE 100-listed housebuilder reported a pretax profit of GBP299.8 million, down 0.4% from GBP301.0 million. Operating profit for the period was down 9.4% at GBP311.9 million from GBP344.3 million, due to higher build costs and Taylor Wimpey's geographic mix.Fresnillo closed down 8.1% after RBC Capital downgraded Fresnillo to Sector Perform from Top Pick, expecting the Mexican gold miner's operational challenges to hinder recovery at the company's flagship projects.On Tuesday, Fresnillo slashed its interim dividend after lower production and gold prices led to a decline in revenue and a far steeper fall in profit. The stock closed down 17% on Tuesday.Lloyds Banking Group closed down 3.2% after the lender reported a dip in interim profit and income but was pleased with improving margins and efficiency. In the six months to June 30, Lloyds's pretax profit slipped 7.1% to GBP2.90 billion from GBP3.12 billion the year before. The bank's net interest income declined 3.0% to GBP6.15 billion from GBP6.34 billion, while total net income slipped 1.7% to GBP8.82 billion. Lloyds's operating costs in the first half improved to GBP3.91 billion from GBP4.02 billion. Restructuring costs were halved to GBP182 million. The bank has upped its payment protection insurance provisions, however, to GBP650 million from GBP550 million last year.In the FTSE 250, Intu Properties closed down 26% after the shopping mall operator axed its interim dividend, as it looked to strengthen its balance sheet amid intense pressure on its assets and income performance. For the six months ended June, net asset value per share fell 19% to 252 pence from 312 pence the year prior. Meanwhile, net rental income fell 8.0% to GBP205.2 million from GBP223.1 million the year before. NAV per share was particularly hurt by the property revaluation deficit growing to GBP872.1 million from GBP650.4 million the year prior. The larger units in the portfolio were noticeably hit following a "higher level" of administrations and company voluntary arrangements. Intu axed its interim dividend for 2019, having paid out 4.6 pence per share the year prior. This is in line with its decision to not pay a final dividend for 2018 in order to reduce debt levels. Net debt fell to GBP4.71 billion as at June 30 from GBP4.87 billion a year prior.The pound was quoted at USD1.2222 at the London equities close, up from USD1.2150 at the close Tuesday.On Thursday, the Bank of England follows the Fed in making its own interest rate decision, in what has come to be known as 'Super Thursday'.The BoE will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes, at midday on Thursday.The bank's Quarterly Inflation Report is due alongside the rate decision, creating the 'Super Thursday' moniker. There will be a press conference with BoE Governor Mark Carney held at 1230 BST.This will be the last Inflation Report before the UK is scheduled to leave the EU, on October 31. With this deadline fast approaching and signs over a Brexit deal lacking, the central bank is likely to hold interest rates but slash economic growth forecasts on Thursday as fears of a cliff-edge Brexit mount.Earlier this week, sterling was sent tumbling to two-year lows over fears new Prime Minister Boris Johnson's hardline stance on European Union negotiations will lead to the UK crashing out of the bloc without a deal.Berenberg's Kallum Pickering said: "Since Boris Johnson became UK prime minister, support for the Conservative Party has risen from 25% to around 30% while support for The Brexit Party has dropped from 19% to around 14%. However, while Johnson's upping of the Brexit ante may be winning him support at home, he is not inspiring confidence in the financial markets." "The 1.9% depreciation of sterling versus the euro, and 2.4% drop versus the US dollar, since 22 July - the day before Johnson became PM - reflects the markets' increased worries about a hard Brexit on 31 October. The drop partly reflects the market's belief that a hard Brexit would be an act of economic vandalism that could tip the UK into a recession and lower the UK's long-run growth potential."The euro stood at USD1.1135 at the European equities close, marginally lower than USD1.1146 late Tuesday, following a slew of economic news from the continent.The annual rate of inflation across the eurozone fell to 1.1% in July, according to a first estimate released by the EU statistics agency Eurostat.This takes year-on-year inflation down 0.2 percentage points from June, even further from the European Central Bank's target of just below 2% for the 19-member currency bloc.Also on Tuesday, Eurostat said that the gross domestic product of both the eurozone and the 28 EU member states rose much slower in the second quarter of 2019 as compared to the first months of the year.Seasonally adjusted GDP rose by 0.2%, according to a preliminary estimate.In the first quarter of this year, the bloc's and currency union's economic output rose by 0.4% and 0.5% respectively.Compared with the second quarter of 2018, GDP rose by 1.1% in the eurozone and 1.3% across the whole EU between April and June.At the end of 2018, the ECB phased out an emergency stimulus plan it introduced in 2015 to fire up economic growth and boost inflation in the wake of Europe's financial crisis.In recent months, however, sluggish growth and below-target inflation have become renewed concerns.Last week, ECB President Mario Draghi indicated he would introduce fresh stimulus to head off the threat posed to the eurozone economy by ultra-low inflation and a slowing global economy.Brent oil was quoted at USD65.26 a barrel at the London equities close, up from USD64.03 late Tuesday, after the Energy Information Administration reported a solid decline in inventories. The EIA said crude oil inventories shed 8.5 million barrels in the week to July 26, compared with a 10.8-million-barrel inventory draw a week previously.Gold was quoted at USD1,427.80 an ounce at the London equities close, flat against USD1,427.63 late Tuesday. The economic events calendar on Thursday has manufacturing PMI readings from China overnight, Italy at 0845 BST, France at 0850 BST, Germany at 0855 BST, eurozone at 0900 BST and UK at 0930 BST. The UK corporate on Thursday has interim results from oil major Royal Dutch Shell, tobacco giant British American Tobacco, paper and packaging firm Mondi, miner Rio Tinto, insurer RSA Insurance Group, fund manager Schroders, stock exchange operator London Stock Exchange Group and from banks Barclays and Standard Chartered. London Close is available to subscribers as an email newsletter. Contact info@alliancenews.com