LONDON MARKET CLOSE: Caution Prevails As Market Mulls Over US Jobs

(Alliance News) - London stocks started the new week on a cautious note after Friday's US jobs report, with traders now anticipating milder easing action from the Federal Reserve. Ocado Group ended at the bottom of the FTSE 100 on Monday, joined by Schroders and CRH, while Imperial Brands surged to the top of the blue-chip index on a revamped dividend policy. The FTSE 100 index closed down 3.87 points, or 0.1%, at 7,549.27. The FTSE 250 ended down 73.80 points, or 0.4%, at 19,581.47, and the AIM All-Share closed down 5.70 points, or 0.6%, at 911.08.The Cboe UK 100 ended flat at 12,809.22, the Cboe UK 250 closed down 0.4% at 17,491.97, and the Cboe Small Companies ended down 0.8% at 11,282.60.Trade was lacklustre at the start of the week as markets continue to digest Friday's US jobs report."A modest rate cut is now the base case, with a 'wait and see' approach in place. As a result, some of the gains in equities will continue to be unwound, especially as investors await Jerome Powell's testimony to Congress this week," said Chris Beauchamp, chief market analyst at IG. The monthly report showed the US economy added 224,000 jobs in June, beating analyst expectations for 160,000 jobs. This followed a disappointing reading the month before, which had added to speculation of a US interest rate cut from the Federal Reserve in the coming months."A sense of caution ahead of earnings season should also mean that indices will struggle for direction, and a third reason for a pause is provided by summer seasonality - July to August represents the quietest period, and gains are usually hard to come by at this time of year," he added.Stocks in New York were lower at the London equities close, with the Dow Jones down 0.4%, the S&P 500 index slipping 0.5%, and the Nasdaq Composite sliding 0.7%.In European equities on Monday, the CAC 40 in Paris ended down 0.1%, while the DAX 30 in Frankfurt shed 0.2%."Markets are tough things to please," Beauchamp continued. "Deutsche Bank unveils drastic action to turn the bank around and the shares wilt, but Imperial Brands alters its cherished dividend policy and gets rewarded." In Frankfurt, Deutsche Bank reverse some early gains to end 5.5% lower after unveiling drastic restructuring plans over the weekend.The lender on Sunday revealed plans to cut around 18,000 jobs as part of radical restructuring plans. The bank's loss-making corporate and investment banking division will also be overhauled under the plans, and the departure of its division head, Garth Ritchie, was already announced on Friday.Deutsche Bank said that it would stop the investment division's stock-trading business and pull out of its global equities sales and trading business in a bid to improve profitability.Barclays, Europe's remaining major investment bank, was largely unmoved by the news, ending down 0.2%.Meanwhile, Imperial Brands ended at the top of London's FTSE 100, up 2.2%, after revising its dividend policy.The owner of Rizla rolling papers and Blu vapes said the new policy will recognise the importance of growing dividends while providing greater flexibility in capital allocation.Imperial Brands reaffirmed plans for a 10% lift to its final dividend for the financial year ending September 30 and said dividends thereafter will be progressive, growing annually from the current level while considering underlying business performance.As part of this revised policy, the cigarette maker announced a share buyback programme to return up to GBP200 million to shareholders before the end of 2019.Weighing at the other end of London's blue-chip index was online grocer Ocado, down 4.5%, ahead of its interim results release on Tuesday. Schroders slipped 2.6% after both Barclays and JPMorgan downgraded the investment firm, the former cutting the stock to Equal Weight from Overweight and the latter down to Hold from Buy.Building materials firm CRH was also dented by a Barclays downgrade, dipping 1.8% after the bank cut the Irish firm to Equal Weight from Overweight. Acacia Mining in the FTSE 250 gained 4.5% on an improved second quarter production performance. For the three months ended June, gold production jumped 19% to 158,774 ounces from 133,778 ounces the year prior. This was primarily due to a 39% surge in production from its North Mara operations to 119,113 ounces, partially offset by production falls at Buzwagi and Bulyanhulu also in Tanzania.Second-quarter production was 51% higher than the 104,899 ounces produced in the first quarter of 2019. Gains for Acacia came despite the price of gold slipping to USD1,397.26 an ounce at the London equities close Monday against USD1,398.78 at the close on Friday.In other commodities, Brent oil was quoted at USD64.78 a barrel at the London equities close Monday, up from USD64.07 late Friday.As tensions between Britain and Iran mount, an oil tanker operated by BP is being kept inside the Persian Gulf for fear it could be seized, Bloomberg reported. The British Heritage, which is able to move around one million barrels of oil, was sailing towards Iraq's Basrah terminal before making an "abrupt" u-turn over the weekend, said Bloomberg. The secretary of Iran's Expediency Council, a key advisory and arbitration body, last week warned that if Britain failed to release a seized Syria-bound oil tanker, Iran would be forced to take tit-for-tat action against a British vessel.Also in Iran, the Foreign Ministry said it will, in 60 days, implement its third deliberate violation of the nuclear deal if remaining parties do not find ways to counter US sanctions against Tehran. The third phase would involve reversing the reconfiguration of a heavy-water reactor so it is once again capable of producing plutonium.President Donald Trump last year pulled the US out of the accord and began imposing a "maximum pressure" campaign of strict sanctions on Tehran, over the objections of his European allies. The remaining powers in the agreement, including Britain, France and Germany, have sought to keep the deal aliveBack in London, betting firm GVC Holdings fell 7.1% after refuting allegations in The Sunday Times that there were issues with the sale of its Turkish-facing business back in 2017.The Sunday Times reported that GVC Chief Executive Kenny Alexander had agreed in 2017 to sell the company's Turkish business to a firm which provided IT services to GVC in order to push through the acquisition of Ladbrokes Coral Group.GVC said the Turkish disposal had involved "an arms-length competitive process" and had been "overseen by Houlihan Lokey investment bank". GVC further said the disposal details have already been "fully disclosed".Vivo Energy slid 3.6% after noting a media report about an ongoing investigation in the Moroccan fuel retailing industry.Vivo Energy said "industry participants" in the country are engaging with the Moroccan Competition Council as part the investigation into the "competitive dynamics" of the Moroccan fuel retailing industry."We take compliance with the laws and regulations of the jurisdictions in which we operate seriously and are co-operating fully with the Conseil de la Concurrence," the petrol station operator added.In the UK corporate calendar on Tuesday, there are interim results from Newbury-based software firm Micro Focus International while housebuilder Bovis Homes releases a trading statement.The economic calendar has British Retail Consortium like-for-like retail sales at 0001 BST, while US Federal Reserve Chair Jerome Powell speaks in Boston at 1345 BST.The pound was quoted at USD1.2508 at the London equities close Monday, slightly higher compared to USD1.2496 at the close on Friday. Meanwhile, the euro stood at USD1.1215 at the European equities close Monday, firm against USD1.1208 at the same time on Friday.London Close is available to subscribers as an email newsletter. Contact info@alliancenews.com