LONDON MARKET CLOSE: Persisting US-China Trade Hopes Push FTSE Higher

Tue, 05th Nov 2019 16:49

(Alliance News) - The FTSE 100's winning streak continued on Tuesday as the blue-chip index locked in a third consecutive session of gains, driven by ongoing hopes of an improvement in the US-China trade situation.

The FTSE 100 index closed up 18.39 points, or 0.3%, at 7,388.08. The FTSE 250 ended up 45.27 points, or 0.2%, at 20,294.99, and the AIM All-Share closed 1.58 points higher, or 0.2%, at 890.90.

The Cboe UK 100 ended up 0.4% at 12,529.56, the Cboe UK 250 closed up 0.3% at 18,199.76, and the Cboe Small Companies ended up 0.1% at 11,255.08.

In European equities on Tuesday, the CAC 40 in Paris ended up 0.4%, while the DAX 30 in Frankfurt ended 0.1% higher.

"Xi Jinping, China's premier, called for international trade tensions to be diffused through talks. Traders took those comments as a sign the Chinese lawmaker is keen to progress down the route of trade negotiations, so equity dealers continued to buy into the markets," said David Madden at CMC Markets.

Stocks in New York were mixed at the London equities close, with the Dow Jones up 0.1%, the S&P 500 index down 0.1%, and the Nasdaq Composite 0.1% higher.

In New York, shares in Uber were down 7.3% after the ride-hailing and food delivery platform reported a widened quarterly loss.

San Francisco-based Uber reported a loss of USD1.2 billion, widened from a loss of USD986 million a year ago.

Uber revenue was up 30% to USD3.8 billion in the quarter on growth in its shared rides service as well as its Eats restaurant meal delivery service and the Freight platform, that matches shippers with truckers.

The number of people using Uber's platform monthly grew 26% to 103 million, while the number of trips taken by riders rose 31% to nearly 1.8 billion, according to the earnings report.

In London, Associated British Foods ended at the top of the blue-chip pack, up 5.6% after reporting a rise in adjusted profit and issuing better-than-feared margin guidance for low-cost fashion chain Primark.

For the year ended September 14, pretax profit fell 8.6% to GBP1.17 billion from GBP1.28 billion the year prior. This was despite revenue rising 1.6% to GBP15.82 billion from GBP15.57 billion the year before.

Adjusted pretax profit came in at GBP1.41 billion, up 2% year-on-year.

Primark sales were up 4.2% at actual exchange rates and 4.1% ahead at constant currency, driven by an increase in selling space, which was partially offset by a 2.0% like-for-like decline in sales. The low-cost fashion chain's operating margin increased to 11.7% from 11.3%, leading adjusted operating profit to grow 8% to GBP913 million.

Looking ahead, AB Foods said: "The sterling exchange rate is currently very volatile but, at current exchange rates, we now expect margin in the second half to be in line with the same period this year and margin for the full year to be only a small reduction on that achieved this year."

Meanwhile, miners were also among the gainers on hopes of improved relations between the US and industrial heavyweight China, with Antofagasta closing up 3.4%, Glencore up 2.8% and BHP Group up 2.4%.

In the FTSE 250, James Fisher slipped 5.6% after the engineering services provider revealed it was the victim of a cyber attack.

The company said attackers tried to gain unauthorised access to its computer systems, but stopped short of providing specific details regarding the cyber attack. James Fisher has appointed external specialists, including a forensic cyber security expert, to investigate the incident.

"As a precautionary measure James Fisher & Sons took all affected systems offline. This has restricted access to communication and financial systems. Following containment of the incident, we are working with our cyber security experts on a safe recovery of systems, applications and data from our disaster recovery back-up," James Fisher said.

Weir ended 3.3% higher after reporting a rise in third quarter sales.

Orders from continuing operations in the quarter ended September 30 rose by 4% from last year, though Weir added they were flat on a like-for-like basis. In the Oil & Gas division, orders were 32% lower year-on-year, with the FTSE 250 firm attributing this to a tough market conditions in North America.

In commodities, Brent oil was quoted at USD62.72 a barrel at the London equities close Tuesday versus USD62.70 late Monday.

Gold was quoted at USD1,483.02 an ounce at the London equities close Tuesday, down from USD1,505.64 at the close on Monday as the week's risk-on mood continued.

In data on Tuesday, figures from the Institute of Supply Management showed the US non-manufacturing sector strengthened in October.

The Non-Manufacturing Index registered 54.7 in October, above September's reading of 52.6. A reading above 50 signals expansion, while one below indicates contraction. October's reading was above consensus, according to FXStreet, of 53.4.

The ISM added that the NMI reading of 54.7, based on the past relationship between the index and the overall economy, corresponds to a 2.1% increase in real gross domestic product on an annual basis.

The dollar rose on the ISM report, noted Madden at CMC Markets, pushing down sterling amid an "underwhelming" services PMI from the UK.

The seasonally adjusted IHS Markit/CIPS UK Services purchasing managers' index ticked up to 50.0 in October, from September's reading of 49.5. Any reading below 50 indicates contraction, while one above expansion, so October's reading suggests no change at all.

The latest figure was among the lowest registered in the past ten-and-a-half years, IHS Markit commented.

"The [UK services] report was underwhelming, but it could have been worse. Opinion polls focusing on the December general election are likely to play a big role in the pound's performance in the months to come," said Madden.

The pound was quoted at USD1.2868 at the London equities close Tuesday, lower compared to USD1.2908 at the close on Monday.

The euro stood at USD1.1067 at the European equities close Tuesday, down from USD1.1142 at the same time on Monday.

Against the yen, the dollar was trading at JPY109.14, higher compared to JPY108.60 late Monday.

In the economic calendar on Wednesday, there is a Japanese services PMI at 0030 GMT, German factory orders at 0700 GMT and then a raft of European services PMI readings - including Germany at 0855 GMT and the eurozone at 0900 GMT. At 1000 GMT are eurozone retail sales.

In the UK corporate calendar on Wednesday, there are interim results from high street stalwart Marks & Spencer, a trading statement from defence firm Ultra Electronics and third quarter results from chemicals firm Croda and shopping centre owner Intu Properties.

By Lucy Heming; lucyheming@alliancenews.com

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