LONDON (Alliance News) - London stocks continued to slide at midday on Monday as concerns over the latest round of US tariffs on China weighed on markets."Unfortunately for market bulls, the US-China trade conundrum has shown little signs of going away, for even with trade talks being planned, we have seen precious few signs that either side will be willing to back down," said IG market analyst Joshua Mahony.
Sirius Minerals was the best performer in the FTSE 250 at midday, though
Sophos continued to drag after a broker rating downgrade from Deutsche Bank.The FTSE 100 was down 0.2%, or 15.84 points, at 7,288.20 at midday. The FTSE 250 was down 0.2%, or 40.50 points, at 20,335.37 while the AIM All-Share was 0.1% lower at 1,097.99.The Cboe UK 100 was down 0.3% at 12,349.01, while the Cboe UK 250 was 0.2% lower at 18,490.35 and the Cboe UK Small Companies flat at 12,184.58.Preempting US President Donald's Trump announcement of a further USD200 billion in duties on Chinese imports, which is expected sometime this week, Beijing on Monday promised it will take "necessary counter-measures"."The escalation of trade disputes does not meet the interests of either party," Chinese Foreign Ministry spokesman Geng Shuang said, adding that the Chinese government had proposed solving the trade tensions through negotiations.The US and China have already imposed tariffs on USD50 billion worth of goods each. If Trump goes ahead with the new round of duties, around half of all of China's imports to the US will end up being affected.Stocks in mainland Europe were also lower at midday on trade worries, with the CAC 40 in Paris and DAX 30 in Frankfurt down 0.3% and 0.5% respectively on Monday.In eurozone data, inflation slowed as first estimated in August. Harmonized inflation came in at 2% versus 2.1% in July, which had marked the highest since December 2012. Core inflation that excludes energy, food, alcohol and tobacco, slowed marginally to 1% in August, also as initially estimated, from 1.1% a month ago.Despite lower trade in Europe, stocks in the US are called for a broadly higher open on Monday. The Dow Jones is called up 0.1%, the Nasdaq Composite up 0.2% and the S&P 500 flat.With Brexit remaining in focus this week ahead of the EU General Affairs Council meeting and the informal Salzburg summit of EU leaders, the International Monetary Fund warned on Monday a 'no-deal' scenario could hit the UK economy and see the pound tumble.In the latest of its regular assessments of the state of Britain's finances, the IMF said that all likely Brexit scenarios would "entail costs for the UK economy", but that a disorderly departure could lead to "a significantly worse outcome".In its report, launched by IMF Managing Director Christine Lagarde alongside UK Chancellor Philip Hammond at the Treasury in London, the IMF urged UK authorities to prepare policies to "safeguard macroeconomic and financial stability" in the case of a chaotic Brexit.The Treasury and Bank of England should be prepared for the possibility of "sharp declines in sterling and other asset prices" and the bank should be ready to act to ensure the financial system has adequate liquidity, the report said.Even if an orderly Brexit is achieved, with a trade deal covering goods and some services, UK growth can be expected to remain "moderate" over the next few years, said the IMF. Its forecast of around 1.5% growth in GDP for 2018 and 2019 under this scenario was virtually unchanged from its predictions in July.On the London Stock Exchange at midday,
Sirius Minerals gained 3.6% as it rose to the top of the FTSE 250 on Monday after inking a supply deal in South America. The company, which is developing the Woodsmith mine in north Yorkshire, England, said units York Potash and OFD Supply have signed take-or-pay supply agreement with Cibrafertil Companhia Brasileira de Fertilizantes, or Cibra Group. The deal is for the supply and resale of up to 2.5 million tonnes per annum of POLY4, a fertilizer ingredient, into Brazil and some other South American countries.Sirius Minerals also has agreed to acquire a 30% equity interest in each of the Cibra Group companies for a total of 95 million ordinary shares of Sirius, representing about a 2% stake.
Tullow Oil was up 1.6% after Canaccord raised the oil exploration and production company to Buy from Hold.
Dairy Crest gained 1.6% after the FTSE 250 constituent said it expects first-half revenue to be ahead of last year driven by "strong performances" in its two largest brands - Cathedral City and Clover.For the six months ending September 30, the dairy products company said it expects cheese brand Cathedral City to deliver "good growth against strong volumes a year ago". Spread brand Clover is also expected to deliver volume and revenue growth.Dairy Crest said it expects first-half profit to be "slightly ahead of the same period last year", as it confirmed its full-year outlook.At the bottom of the mid-cap index was
Sophos Group, slumping 5.4% after Deutsche Bank cut the security software firm to Hold from Buy."Competition in Endpoint appears to be worsening, and we see increasing evidence of enterprise level next gen players attacking the midmarket," the German bank said.Hays was also lower after a broker rating downgrading, shedding 4.3% as HSBC cut the recruitment firm to Hold from Buy.Elsewhere on the Main Market,
Petra Diamonds advanced 4.7% despite turning to a loss for its recently-ended financial year.The company also said that Chief Executive Officer Johan Dippennar will step down in line with the company's succession plan and upon appointment of a replacement. Dippennar has been chief executive since 2005.Petra's pretax loss for the year to June 30 totaled USD85.0 million, compared with a USD43.0 million profit the year before. This was due to a near doubling in finance expenses to USD94.3 million from USD47.8 million, as well as a USD66.0 million impairment.The impairment charge came following a year-long review of the Koffiefontein mine in South Africa, which revealed execution risk related to it expansion targets, and the high sensitivity on the strengthening of the rand on the US dollar operating costs.On London's junior AIM market,
boohoo rose 1.9% after poaching Primark's chief operating officer to be its new chief executive.Amid a board shake-up, John Lytte will join the online retailer on March 15, 2019, after eight years at fast-fashion bricks-and-mortar clothing retailer Primark, a division of Associated British Foods.Mahmud Kamani, currently boohoo's joint CEO, will become executive chairman, focusing on the long-term strategic objectives of the group. The other joint CEO, Carol Kane, will will assume the title of co-founder and executive director on March 15.
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