LONDON MARKET CLOSE: Stocks End Down As Brexit Standoff Hits Sentiment

(Alliance News) - Stocks in London ended lower on Friday with uncertainty over Brexit continuing as European leaders postponed their decision on how long to allow a further Brexit delay.

The FTSE 100 index closed down 3.78 points, or 0.1% at 7,324.47, ending the week up 2.4%.

The FTSE 250 ended down 48.64 points, or 0.2% at 20,103.51, ending the week down 0.7%, and the AIM All-Share closed down 2.24 points, or 0.3% at 890.56, ending the week up 1.1%.

The Cboe UK 100 ended down 0.1% at 12,410.59, the Cboe UK 250 closed down 0.2% at 18,032.80, and the Cboe Small Companies ended up 0.2% at 11,237.87.

In Paris the CAC 40 ended up 0.7%, while the DAX 30 in Frankfurt ended up 0.2%.

"The UK and EU are now engaged in a delicate game of pass-the-parcel, as both sides wait for the other to decide on their next move," said IG Group's Chris Beauchamp.

"The sole joy of Brexit is perhaps seeing each new ridiculous episode in the saga, but this makes for grim reading for investors," Beauchamp added. "It looks unlikely that the opposition will fall into Boris Johnson's trap, and instead they could well continue to advocate for an election without actually agreeing to one. While this might hurt their poll ratings, their judgment that the PM will suffer more is hard to argue with."

The pound was quoted at USD1.2831 at the London equities close, flat against USD1.2828 at the close Thursday, as the Brexit saga rumbled on.

UK Prime Minister Boris Johnson on Friday told opposition leader Jeremy Corbyn to "man up" and accept a snap election as EU members delayed a decision on how long to postpone next week's Brexit deadline.

Johnson wants to call an election for December 12 which he hopes will give him a majority to pass the divorce deal he struck with EU leaders last week.

Senior European diplomats who attended a meeting on Friday in Brussels confirmed the 27 non-British members of the bloc had agreed in principle that some kind of delay was in order.

"The EU27 have agreed to the principle of an extension and work will now continue in the coming days," European Commission spokeswoman Mina Andreeva said following a two-hour meeting of ambassadors from the 27 remaining member states.

They also agreed that their capitals could decide on its length by written procedure, rather than by holding a leaders' crisis summit in Brussels next week.

But, with France pushing for a shorter delay to keep the pressure on Westminster, and Germany and Ireland backing a three-month pause until January 31, the decision is not finalised.

On the London Stock Exchange, WPP ended the best blue chip performer, up 6.1% after the advertising agency maintained its annual guidance for 2019 following an improved performance in the third quarter.

The advertising and public relations firm said third quarter reported revenue from continuing operations - excluding market research firm Kantar - was up 5.2% at GBP3.29 billion.

In mid-July, WPP agreed to sell 60% of Kantar to investment firm Bain Capital Private Equity, which valued all of Kantar at USD4.0 billion. The company also said that it intends to reorganise to separate the Kantar business from the wider WPP group, with completion expected in early 2020.

Looking ahead, WPP said its financial guidance remains unchanged, both including and excluding Kantar. WPP expects to deliver like-for-like revenue less pass-through costs down between 1.5% and 2.0% year-on-year.

Barclays closed up 2.4% despite the lender posting a sharp drop in quarterly profit, as it took a mammoth payment protection insurance charge. However, this hit was partially offset by a strong performance from its sometimes maligned investment bank.

In the three months to September 30, the lender recorded pretax profit of GBP246 million, 83% lower than the GBP1.46 billion posted a year earlier. Excluding litigation and conduct charges, third-quarter pretax profit rose 18% to GBP1.81 billion.

The sharp quarterly drop was attributed to a GBP1.4 billion payment protection insurance provision.

More positively, Barclays Corporate & Investment Bank, which sits within Barclays International, recorded a profit of GBP882 million in the third quarter, 77% higher year on year and broadly flat compared to the previous quarter. The corporate loan book recorded 2.7% growth to GBP95.8 billion.

In the FTSE 250, Airtel Africa ended the best performer, up 8.0% after the telecommunications and mobile money services firm reported a strong interim growth.

In the six months to September 30, the telecommunications and mobile money services firm recorded a pretax profit of USD316 million, almost triple the USD122 million reported a year before. Airtel's interim revenue rose 8.6% year on year to USD1.64 billion from USD1.51 billion.

The company saw growth across all of its services, with Voice, Data and Mobile Money revenue rising by 3.2%, 38% and 47%, respectively.

Airtel declared an interim dividend of 3.0 US cents per share.

At the other end of the midcap index, Synthomer ended the worst performer, down 9.4% after the speciality chemicals company issued a profit warning due to a challenging backdrop for the chemicals industry, depressed European industrial activity and increased political and economic uncertainties.

The chemicals company said if current weakness continues through fourth quarter then 2019 underlying pretax profit will be 10% below the GBP135.1 million recorded in 2018 and 10% off the current GBP135.3 million consensus estimate.

Synthomer also expects slower trading environment to continue through the remainder of 2019 and into 2020, particularly in Europe.

The euro stood at USD1.1081 at the European equities close, down from USD1.1100 late Thursday.

Against the yen, the dollar was trading at JPY108.56, flat from JPY108.54 late Thursday.

Stocks in New York were higher at the London equities close on a busy day on the corporate front from the likes of Microsoft and Visa, as well as a disappointing set of earnings from Amazon.

The DJIA was up 0.5%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.4%.

Payments giant Visa late Thursday in New York reported a strong fourth quarter, helping deliver significant annual profit and revenue growth.

For the quarter ended September, Visa's earnings per share rose 9% to USD1.34, helping the annual figure climb 20% to USD5.32.

Visa was up 1.3% on Wall Street.

Conversely, Amazon shares were off 1.7% after the e-commerce giant late Thursday posted decreased quarterly earnings due to the cost of building up its one-day delivery program on its Amazon Prime subscription service.

Amazon also projected lower-than-expected sales in the current quarter, which includes the critical holiday shopping season.

Brent oil was quoted at USD61.69 a barrel at the London equities close, flat from USD61.65 at the close Thursday.

Gold was quoted at USD1,508.50 an ounce at the London equities close, up from USD1,501.50 late Thursday.

The UK corporate calendar on Monday has third-quarter results from lender HSBC Holdings and a trading statement from photo booth operator Photo-Me International.

The economic events calendar on Monday has US trade data at 1230 GMT.

In the early hours of Sunday, the UK will revert to Greenwich Mean Time by going back one hour, marking the official end of British summertime.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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