London close: US-China trade concerns and pound strength weigh on stocks

(Sharecast News) - London stocks finished a tad lower on Thursday amid ongoing worries about Sino-US trade relations, while sterling moved higher after the European Union's chief trade negotiator, Michel Barnier, told the BBC he was open to alternative solutions for the Irish border.
The FTSE 100 was off lows but still in the red, down 0.56% at 7,493.09, with the downbeat tone attributed in part to a Wall Street Journal article suggesting that US-China trade talks have stalled due to Huawei.

But in later remarks to broadcaster CNBC, US Treasury Secretary, Steve Mnuchin, questioned the accuracy of that report, saying that the Chinese telecommunications giant was not a sticking point in the trade negotiations, adding that "there are just a lot of complicated issues".

Mnuchin also reportedly said that if a call between US and Chinese trade officials scheduled for later on Thursday went well then he expected face-to-face talks to take place.

IG analyst Josh Mahony said: "Gains for the pound have come at the expense of UK stocks today, with the FTSE 100 hitting a July-low in early trade today."

in a BBC documentary, Barnier said that he could be open to an alternative plan for the Irish border.

However, a spokeswoman for the European Commission quickly replied that there is "no news on the Brexit front", adding that the Withdrawal agreement will not be reopened for negotiations.

Overnight results from Netflix also weighed on sentiment, as the company's quarterly subscriber growth disappointed.

On home turf, there was some good news in the form of solid retail sales figures, which also helped to boosted the pound. Sterling rose 0.39% against the US dollar to 1.24806 and 0.4% versus the euro to 1.1121.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures are a timely reminder that consumers aren't being haunted by the possibility of a no-deal Brexit, but are happy to spend the proceeds from rising growth in the real wages.

"Looking ahead, retail sales should retain their recent momentum. Wage growth hit an 11-year high in May, business surveys suggest the dip in employee numbers in the three months to May was just a blip and mortgage rates are set to fall modestly, thereby freeing up disposable income for homeowners when they refinance their loans."

In equity markets, equipment rental firm Ashtead was in the red after US peer United Rentals cut the top of its guidance range on Wednesday, while software company Sage was down after German software maker SAP's second-quarter profits missed expectations.

InterContinental Hotels and Whitbread were hit by downgrades to 'underperform' at RBC Capital Markets, although by the end of the trading day the latter had managed to pare its losses.

Greggs meanwhile was lower after a downgrade 'reduce' by Peel Hunt.

Amigo Holdings was the worst performer on the FTSE 250 as its stock went ex-dividend.

Outside the FTSE 350, Asos shares tumbled after the online fashion retailer warned that annual pre-tax profit was now expected to come in at between £30m and £35m, down from £102m last year, pointing to issues at its new warehouses in Europe and the US.

On the upside, EI Group saw its shares surge after it agreed to be bought by Slug & Lettuce owner Stonegate for £1.3bn. The rest of the pub sector fizzed higher, with Mitchells & Butlers, Martston's and Greene King all up.

Vodafone rallied after the European Commission approved its €18bn bid for Liberty Global's cable networks in Germany and central Europe.

EasyJet flew higher as the budget airline hailed a "robust" third quarter, with revenue up 11%, while Hochschild Mining shone as it said it was "firmly on track" to meet full-year production.

Market Movers

FTSE 100 (UKX) 7,493.09 -0.56%
FTSE 250 (MCX) 19,535.13 -0.40%
techMARK (TASX) 3,656.06 -0.66%

FTSE 100 - Risers

British American Tobacco (BATS) 3,104.50p 6.14%
Imperial Brands (IMB) 2,146.00p 2.19%
Centrica (CNA) 89.74p 1.82%
Severn Trent (SVT) 2,033.00p 1.60%
ITV (ITV) 109.50p 1.48%
Persimmon (PSN) 1,978.00p 1.41%
Associated British Foods (ABF) 2,345.00p 1.08%
SSE (SSE) 1,165.50p 0.95%
Taylor Wimpey (TW.) 164.90p 0.83%
RSA Insurance Group (RSA) 575.60p 0.81%

FTSE 100 - Fallers

Fresnillo (FRES) 818.40p -9.12%
Johnson Matthey (JMAT) 3,046.00p -4.93%
Ashtead Group (AHT) 2,189.00p -3.40%
BP (BP.) 515.70p -2.33%
Sage Group (SGE) 799.00p -2.30%
Intertek Group (ITRK) 5,498.00p -2.17%
TUI AG Reg Shs (DI) (TUI) 764.80p -2.15%
Rio Tinto (RIO) 4,779.50p -1.97%
Ferguson (FERG) 5,816.00p -1.93%
BHP Group (BHP) 1,997.20p -1.81%

FTSE 250 - Risers

EI Group (EIG) 285.00p 38.48%
Plus500 Ltd (DI) (PLUS) 670.20p 4.60%
Wetherspoon (J.D.) (JDW) 1,527.00p 4.23%
National Express Group (NEX) 421.40p 3.39%
Intu Properties (INTU) 81.02p 3.37%
Syncona Limited NPV (SYNC) 241.00p 3.21%
Restaurant Group (RTN) 146.70p 2.88%
Acacia Mining (ACA) 186.60p 2.81%
Provident Financial (PFG) 406.50p 2.70%
NewRiver REIT (NRR) 167.00p 2.20%

FTSE 250 - Fallers

Moneysupermarket.com Group (MONY) 369.00p -8.19%
Amigo Holdings (AMGO) 171.00p -4.89%
Aggreko (AGK) 783.80p -3.99%
Wood Group (John) (WG.) 500.60p -3.58%
IMI (IMI) 984.40p -3.11%
Senior (SNR) 202.40p -2.97%
Morgan Advanced Materials (MGAM) 249.00p -2.66%
Weir Group (WEIR) 1,428.50p -2.66%
Dixons Carphone (DC.) 119.10p -2.66%
Spectris (SXS) 2,672.00p -2.59%