London close: Stocks fall amid concerns around US-China trade talks

(Sharecast News) - London stocks fell into the red on Wednesday as concerns about trade relations between the US and China dented the mood, while results from the likes of Kingfisher and Sage also weighed.

The FTSE 100 was down 0.84% at 7,262.49 as sentiment took a knock after US President Donald Trump said at a cabinet meeting on Tuesday evening that he would raise tariffs on China "even higher" if a trade deal between the two is not agreed.

The US Senate's passing of a bill overnight aimed at protecting human rights in Hong Kong added to tensions. The Hong Kong Human Rights and Democracy Act will now go to the House of Representatives for approval. If signed into law, the bill will demand sanctions on Chinese and Hong Kong officials identified by the US as carrying out alleged human rights abuses.

China has condemned the bill and called on the White House to block it.

Foreign Ministry spokesman Geng Shuang said: "This bill neglects facts and the truth. It applies double standards and it is overt meddling in Hong Kong's affairs and China's internal affairs. This is a serious violation of the international law and fundamental norms regulating international relations. China condemns this and speaks out against this decisively."

He added that China "will be forced to take resolute countermeasure for protectings its national sovereignty".

David Cheetham, chief market analyst at XTB, said that while the passing of the Senate bill was "a victory for human rights, it will likely infuriate Beijing and once more stoke tensions between the world's two largest economies at a time when US-Sino trade developments are the main driving force for the markets".

"It feels like a phase one agreement on a trade deal has been already discounted several times over by investors and sentiment may be starting to sour," he added.

In equity markets, DIY group Kingfisher tumbled after it reported a "disappointing" 3.2% fall in third-quarter sales in softer markets as the company's chief executive said it was suffering from "organisational complexity" that ignored customers.

Total sales fell 3.2% to £2.95bn on a constant currency basis. On a like-for-like basis, the decrease was 3.7% reflecting continuing disruption from new range implementations, lower promotional activity and ongoing operational challenges in France.

Russ Mould, investment director at AJ Bell, said "the company seems to be running very hard to get nowhere in particular".

"Recently appointed chief executive Thierry Garnier has diagnosed what he sees as some of the problems. It is trying to do too much at once and there is too much complexity in the business with the result that the company hasn't been good enough at giving customers what they want.

Elsewhere, Aviva fell after saying it was simplifying its business into five operating divisions and selling its stake in its Hong Kong unit to joint-venture partner Hillhouse Capital, while software company Sage retreated as it posted a 9% decline in full-year pre-tax profit.

On the upside, All Bar One and Harvester owner Mitchells & Butlers rallied after it posted a 36.2% rise in full-year pre-tax profit as its transformation programme bears fruit.

Like-for-like sales growth meanwhile printed at up by 3.5% while operating margins improved by 10 basis points to 14.2%.

Canaccord Genuity said it expected the company's shares to extend their recent "strong" run, telling clients that the outfit's 'Ignite' self-help programme was proving a boon, while highlighting the latent value in asset intense pubcos in general and M&B in particular.

Bodycote shares were right behind on the FTSE 250 leaderboard on the back of what analysts at Jefferies labelled a "very robust" trading update for the four months ending on 31 October, with continued strength in civil aerospace, automobiles and general industrial.

Intermediate Capital Group on the other hand was on the back foot despite posting an 11.0% jump in assets under management for the six months to 30 September to reach €41.1bn, together with €4.6bn of new money raised in the period.

The fund manager's shares nevertheless remained within striking distance of their all-time highs.

Market Movers

FTSE 100 (UKX) 7,262.49 -0.84%
FTSE 250 (MCX) 20,475.25 -0.26%
techMARK (TASX) 3,998.76 -0.45%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 519.00p 1.67%
Associated British Foods (ABF) 2,458.00p 0.90%
Rightmove (RMV) 611.80p 0.89%
Evraz (EVR) 363.70p 0.89%
Auto Trader Group (AUTO) 539.00p 0.52%
Johnson Matthey (JMAT) 3,219.00p 0.50%
Glencore (GLEN) 242.00p 0.44%
Next (NXT) 6,666.00p 0.39%
ITV (ITV) 136.90p 0.29%
Croda International (CRDA) 4,814.00p 0.17%

FTSE 100 - Fallers

Kingfisher (KGF) 194.00p -7.09%
Pearson (PSON) 642.00p -3.78%
NMC Health (NMC) 2,503.00p -3.74%
Aviva (AV.) 403.50p -3.54%
Sage Group (SGE) 720.00p -2.96%
InterContinental Hotels Group (IHG) 4,671.50p -2.82%
DCC (DCC) 6,496.00p -2.40%
Hargreaves Lansdown (HL.) 1,776.50p -2.26%
St James's Place (STJ) 1,039.50p -2.17%
TUI AG Reg Shs (DI) (TUI) 1,040.50p -2.07%

FTSE 250 - Risers

Mitchells & Butlers (MAB) 468.50p 5.49%
Micro Focus International (MCRO) 1,091.80p 4.82%
Finablr (FIN) 182.00p 3.84%
Bodycote (BOY) 865.00p 3.65%
Sirius Minerals (SXX) 3.54p 3.57%
Airtel Africa (AAF) 71.25p 3.26%
FDM Group (Holdings) (FDM) 833.00p 2.20%
Aston Martin Lagonda Global Holdings (AML) 451.40p 2.01%
Avast (AVST) 444.20p 1.69%
Premier Oil (PMO) 87.44p 1.67%

FTSE 250 - Fallers

Ascential (ASCL) 329.20p -4.02%
Big Yellow Group (BYG) 1,106.00p -3.57%
Stagecoach Group (SGC) 131.50p -3.52%
SSP Group (SSPG) 631.00p -3.51%
IWG (IWG) 398.20p -3.14%
Moneysupermarket.com Group (MONY) 345.00p -2.98%
CLS Holdings (CLI) 260.50p -2.98%
Elementis (ELM) 172.00p -2.60%
Pets at Home Group (PETS) 202.00p -2.42%
Ashmore Group (ASHM) 473.40p -2.30%