London close: Stocks finish higher despite investor jitters

(Sharecast News) - London stocks reversed course to trade higher following reports that the next round of US-China trade negotiations scheduled for September was likely proceed as planned, but market sentiment continued to be frail.
Helping to buoy confidence, late in the session, the South China Morning Post cited former Chinese vice-minister of Commerce, Wei Jianguo, as saying that trade talks planned for September in Washington DC were likely to go ahead - although prospects for a deal were "dim".

Yet investors around the world remained on edge, seeking out the relative safety of government bonds once again despite the negative yields on offer, in part after central banks in India, Thailand and New Zealand delivered all lowered their benchmark interest rates by more than expected overnight.

"US markets are eroding European gains this afternoon, with sharp declines throughout global bond yields stoking fears over an impending period of economic decline," said IG's Josh Mahony.

The FTSE 100 finished 0.38% higher at 7,198.70, while the pound was down 0.1% against the US dollar at 1.21584 and 0.41% lower versus the euro at 1.0820.

Russ Mould, investment director at AJ Bell, said: "A stabilisation in China's yuan currency has helped to stop the rot for global markets and the FTSE 100 manages to claw back a bit of ground to trade above the 7,200 mark on Wednesday."

"At the moment trade talks between the US and China are still scheduled for September and these, along with a meeting of the US Federal Reserve, are likely to be an increasing focus for the market as we move through August."

However, some market commentators were sceptical about the move higher.

Oanda analyst Craig Erlam said: "It's too early to even try and associate this with any form of optimism given the events of the last week, while the size of the rebound compared to the days before gives it more an appearance of a dead cat bounce than anything else."

"There's been a lot to digest and I wonder whether investors are simply taking a step back and doing just that."

On home shores, data out earlier from Halifax showed house prices fell by 0.2% on the month in July, undershooting expectations of a 0.2% increase but ahead of the previous month's 0.4% drop. On the year, prices were up 4.1%, missing expectations for a 4.4% jump.

Halifax managing director Russell Galley said: "We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon. However, new buyer enquiries are up, and favourable mortgage affordability - driven by low interest rates and strong wage growth - should continue to underpin prices for the time being."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Looking ahead, Brexit uncertainty likely will continue to depress the market, but the support from falling mortgage rates and solid wage growth should remain in place."

In equity markets, precious metals miner Fresnillo shone amid strong gold prices. Erlam said the environment continues to look very favourable for the yellow metal, which is still pushing for a breach of $1,500.

"It's so far found some resistance around $1,490 but doesn't appear to be lacking any support. The dollar has rebounded a little which may provide a headwind but three central banks cutting rates does it no harm."

Flutter Entertainment, formerly Paddy Power Betfair, was a high riser as it posted an 18% jump in interim revenue, although profit was hit by taxes and duties.

Phoenix Group advanced as it reported "strong" cash generation for the first half and said it expects to be towards the upper end of its 2019 cash generation target range of £600m to £700m.

Ultra Electronics also racked up healthy gains as the defence and aerospace contractor posted a 6.7% jump in first-half pre-tax profit, thanks in part to strong US defence spend.

Hill & Smith rallied as the infrastructure products supplier said a strong performance in the UK and US helped to drive a rise in interim profits.

On the downside, Spirax-Sarco Engineering was under the cosh as it said organic sales growth at its main steam specialties business is expected to halve in the second half of the year.

Standard Life Aberdeen lost ground as the asset manager posted a drop in first-half pre-tax profit to £280m from £311m in the first half of 2018.

Glencore lost ground as it said it was shuttering its Mutanda cobalt mine in response to a plunge in prices and higher costs as the miner reported a sharp fall in adjusted core earnings. The company said adjusted earnings before interest, tax, depreciation and amortisation fell 32% to $5.6bn, reflecting a "challenging economic backdrop for our commodity mix".

Market Movers

FTSE 100 (UKX) 7,198.70 0.38%
FTSE 250 (MCX) 18,941.00 0.50%
techMARK (TASX) 3,810.45 1.16%

FTSE 100 - Risers

Just Eat (JE.) 789.80p 6.82%
Flutter Entertainment (FLTR) 6,600.00p 5.97%
Fresnillo (FRES) 683.31p 5.58%
BAE Systems (BA.) 553.40p 3.25%
ITV (ITV) 109.65p 3.05%
London Stock Exchange Group (LSE) 6,790.00p 2.91%
Phoenix Group Holdings (PHNX) 674.50p 2.74%
Intertek Group (ITRK) 5,522.00p 2.68%
International Consolidated Airlines Group SA (CDI) (IAG) 456.80p 2.38%
Relx plc (REL) 1,924.00p 2.37%

FTSE 100 - Fallers

NMC Health (NMC) 2,000.00p -11.43%
Standard Life Aberdeen (SLA) 260.60p -7.52%
Spirax-Sarco Engineering (SPX) 8,060.00p -6.39%
Rolls-Royce Holdings (RR.) 730.00p -3.82%
Legal & General Group (LGEN) 237.70p -3.10%
Hargreaves Lansdown (HL.) 1,832.00p -2.34%
Centrica (CNA) 68.38p -1.36%
BHP Group (BHP) 1,760.00p -1.06%
Anglo American (AAL) 1,791.80p -0.92%
Glencore (GLEN) 226.25p -0.89%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 2,068.00p 11.42%
Hill & Smith Holdings (HILS) 1,140.00p 7.82%
IWG (IWG) 392.70p 6.14%
Sports Direct International (SPD) 230.80p 4.81%
Hochschild Mining (HOC) 223.00p 3.91%
William Hill (WMH) 144.55p 3.81%
Clarkson (CKN) 2,520.00p 3.49%
Ted Baker (TED) 930.00p 3.33%
Rank Group (RNK) 157.00p 3.29%
Sanne Group (SNN) 536.00p 3.28%

FTSE 250 - Fallers

Sirius Minerals (SXX) 9.25p -11.11%
Funding Circle Holdings (FCH) 99.00p -7.48%
Woodford Patient Capital Trust (WPCT) 40.45p -4.86%
Premier Oil (PMO) 68.86p -4.01%
Edinburgh Inv Trust (EDIN) 541.00p -3.91%
Future (FUTR) 1,024.00p -3.40%
Domino's Pizza Group (DOM) 229.70p -3.37%
Ferrexpo (FXPO) 223.40p -3.21%
Senior (SNR) 193.90p -3.05%
Provident Financial (PFG) 371.20p -2.52%