LONDON (Alliance News) - Stocks in London ended sharply lower on Friday, with the FTSE 100 falling to a near two-year low, as the global bloodbath in equity markets showed no signs of letting up. The FTSE 100 index closed down 0.9%, or 64.54 points at 6,939.56. ending the week 1.6% lower. The large cap index touched an intraday low of 6,851.59 in late afternoon trade - its lowest level since December 2016. The FTSE 250 ended down 1.0%, or 178.63 points, at 18,352.90, ending the week 2.4% lower and the AIM All-Share closed down 1.1%, or 10.30 points, at 962.86, ending the week 3.7% lower.The Cboe UK 100 ended down 1.3% at 11,710.62, the Cboe UK 250 closed down 1.2% at 16,565.59, and the Cboe Small Companies ended down 0.8% at 11,423.69."Sentiment has been hit by a number of factors, not least ongoing trade tensions, Brexit stalemate and the stand-off between Italy and the EU regarding the former's budget. For the stock markets, rising interest rates and stretched valuations were additional factors weighing on sentiment," said Forex.com analyst Fawad Razaqzada."Safe havens have been in vogue amid this flight to safety, and the role of the dollar as a haven is doing little to help boost US stocks. Interestingly, we have seen the internationally focused FTSE 100 significantly underperform it's domestic FTSE 250 counterpart, despite the decline in the pound," said IG market analyst Joshua Mahony.On the London Stock Exchange, gold miner
Randgold Resources ended among a handful of companies in the green, up 3.5% tracking spot gold prices higher. Moreover, after the market close on Thursday, the miner said it got operations at the Ivory Coast's Tongon mine back to normal following lengthy industrial action.As a result, Tongon is set to reach its revised 230,000 ounces of gold production guidance for 2018.The precious metal was up quoted at USD1,241.00 an ounce at the London equities close against USD1,230.44 late Thursday."Gold is higher today as the metal is benefiting from the risk-off attitude of traders .The severe sell-off in global stocks has shaken investor sentiment, and some dealers are seeking out assets that are deemed to be lower risk," said David Madden, market analyst at CMC Markets.At the other end of the large cap index,
WPP closed down 4.0% after Kepler Cheuvreux downgraded the advertising and marketing company to Hold from Buy.
Royal Bank of Scotland closed down 4.1% after the state-backed lender said it is "very aware" its high liquidity is pushing down its interest margins as it sets aside extra provisions to prepare for the outcome of the Brexit negotiations.The bank also took a GBP240 million impairment charge, including GBP100 million to reflect the "more uncertain economic outlook" in the UK ahead of Brexit.RBS, which is 62% owned by the taxpayer, posted third quarter results which revealed positive headline figures, but a drop in its net interest margin.The bank's pretax profit in the three months ended September increased around 10% to GBP961 million from GBP871 million the year before. But its net interest margin suffered a fall in the third quarter to 1.93% versus 2.01% in the quarter before."Profit is higher in the third quarter, but its margins are under pressure thanks to a highly competitive mortgage market," noted AJ Bell's Russ Mould.
Rolls-Royce Holdings ended down 2.0% after the jet engines maker said it will fall short of its previously guided number of Trent 7000 engines delivered.Rolls-Royce had previously aimed to deliver around 550 large Trent 7000 engines in 2018, but it is now to deliver around 500. The Trent 7000 engine is used in the Airbus A330neo passenger aircraft.However, despite this, the company has reiterated its guidance for 2018 profit and free cash flow, as given in August at its interim results.This was for underlying profit between GBP350 million and GBP550 million, and underlying free cash flow of GBP300 million to GBP500 million. In 2017, underlying pretax profit was GBP1.07 billion, up 25%.
International Consolidated Airlines Group closed down 0.3% despite the British Airways parent reporting positive third quarter earnings.For the three months to September 30, the company posted pretax profit of EUR1.38 billion, up from a restated EUR1.23 billion pretax profit in the comparative quarter a year ago. On an adjusted basis, pretax profit was marginally down to EUR1.42 billion.Elsewhere,
AIB Group closed down 3.8% after the Irish lender said it recorded a "strong" third quarter performance and is on track to meet its full year expectations, as Chief Executive Officer Bernard Byrne announced he will be stepping down in 2019.Allied Irish Banks said its net interest income was "stable" in the nine months to September 30. The bank's net interest margin stood at 2.51% at September 30, versus 2.53% at June 30.The Irish bank attributed the income stability to stable asset yields and lower funding costs. The slight drop in margin was blamed on excess liquidity. The bank said "actions" are being taken to reduce the effects of excess liquidity.The pound was quoted at USD1.2827 at the London equities close, compared to USD1.2823 at the close Thursday, ahead of the UK Budget on Monday.UK Chancellor of the Exchequer Philip Hammond is unlikely to embark on a spending frenzy despite UK Prime Minister Theresa May's claim that austerity is now over.Instead, the chancellor is expected to find a way to fund promised spending on the NHS and top-up the revenue shortfall caused by the decision to limit the maximum stake on fixed-odds betting terminals to GBP2.00.This could include a higher remote gaming tax, cutting pension tax relief, or a housing stamp duty for overseas buyers.In Paris the CAC 40 ended down 1.3%, while the DAX 30 in Frankfurt ended down 0.9%. The euro was firm at USD1.1392 at the European equities close, against USD1.1370 late Thursday. Stocks in New York were sharply at the London equities close amid heavy falls from some of the country's of big name companies. Amazon shares were down 8.9% in New York after the online retail giant reported third quarter earnings that beat estimates but weaker than expected revenues and provided disappointing fourth quarter guidance.Alphabet was down 4.8% after the Google parent reported better than expected third quarter earnings but revenue that came in below expectations.Fellow tech stocks, Apple and Facebook were down 2.7% and 4.1% respectively. The DJIA was down 1.2%, the S&P 500 index down 1.6% and the Nasdaq Composite down 2.0%.In US economic news, a report from the Commerce Department showed stronger than expected economic growth in the third quarter, although the data may have added to recent concerns about the outlook for interest rates.The Commerce Department said real gross domestic product advanced by 3.5% in the third quarter after surging up by 4.2% in the second quarter. Economists had expected GDP growth to slow to 3.3%.The slowdown in the pace of growth in the third quarter came after the jump in the second quarter represented the fastest growth since a 4.9% spike in the third quarter of 2014."The US economy has had a stellar year so far, showing its strongest quarter on quarter growth since 2014. We can expect President Trump to wax lyrical about these results in the run up to the congressional midterm elections, adding evidence to his promise on expanding the economy," said Nancy Curtin, chief investment officer at Close Brothers Asset Management."However, growth has already moderated and will continue to do so in 2019 as the tax cut boost dissipates and inflation tightens its grip as a result of Trump's tit for tat [trade war] with China," Curtin added. On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth slowed to 1.6% in the third quarter from 2.1% in the second quarter. The measure is the Federal Reserve's preferred gauge of inflation. Brent oil was higher quoted at USD77.37 a barrel at the London equities close from USD76.46 at the close Thursday.Although, over the past week, the North Sea benchmark has fallen 4.0% after Saudi Arabia's OPEC governor said the market could be heading into oversupply in the fourth quarter, amid rising inventories and slowing demand.In addition, a slump in global equity markets on concerns over earnings growth, trade tensions and political uncertainty in Europe has also clouded the outlook for fuel demand.On Sunday, British Summer Time will end at 0200 BST in the UK and will revert to Greenwich Mean Time.The economic events calendar on Monday has Italy producer prices at 0900 GMT, UK mortgage approvals figures at 0930 GMT and US consumer spending data is at 1230 GMT. The UK corporate calendar on Monday has third quarter results from global lender HSBC Holdings.
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