LONDON MARKET CLOSE: Weak Pound, Tobacco Stocks Send FTSE 100 Higher

LONDON (Alliance News) - Stocks in London ended broadly higher on Wednesday as gains from tobacco stocks and a weaker pound extended the FTSE 100's winning streak to four straight sessions. The FTSE 100 index closed up 12.57 points, or 0.2%, at 7,196.00. The FTSE 250 ended down 83.83 points, or 0.4%, at 19,359.31, and the AIM All-Share closed up just 0.78 points at 916.56.The Cboe UK 100 ended up 0.2% at 12,217.24, the Cboe UK 250 closed down 0.3% at 17,329.41 and the Cboe Small Companies ended flat at 11,163.40."The FTSE 100 managed to keep in positive territory thanks in part to strength in tobacco firms and the weaker pound. The pound traded across the session hitting a nadir of USD1.3124. Gloomy Brexit headlines continued to eat away at trader optimism," said City Index analyst Fiona Cincotta.On the London Stock Exchange, cigarette maker British American Tobacco ended as the best blue chip performer, up 5.2%, while shares in peer Imperial Brands closed up 1.5%. The tobacco stocks gained following the resignation of US Food & Drug Administration Commissioner Scott Gottlieb.Gottlieb has led a crusade against youth vaping, hitting shares in tobacco companies across the globe in the process. The plan, detailed by Gottlieb late last year, would sharply restrict the sale of flavoured e-cigarettes to curb a surge in underage vaping, which he argued could result in a whole new generation addicted to nicotine."With one enemy less, BAT charged up the FTSE gaining 4% across the session. Gottlieb's surprise departure is clearly seen as a positive for the tobacco firms, although it does open some uncertainty going forward," said Cincotta.DS Smith ended in second spot, up 3.7%, after the recycled packaging firm agreed to sell its plastics unit for USD585 million, about GBP450 million, to private equity firm Olympus Partners.DS Smith said the sale will see the firm receive net cash of GBP400 million after taxation and expenses. The proceeds will be used to reduce its debt. Additionally, DS Smith added trading since the start of November had "continued to be strong" and in line with its expectations. At the other end of the large cap index, Burberry ended the worst performer, down 4.0%, after Goldman Sachs downgraded its rating on the fashion house to Sell from Neutral.The US bank expects Burberry's investment to increase as the company seeks to sustain its brand momentum and keep up with European peers, such as Gucci's parent Kering and Louis Vuitton's owner LVMH. Legal & General closed down 3.5% after the insurer reported a rise in profit and missed market consensus.In 2018, Legal & General's pretax profit increased 1.9% to GBP2.13 billion from GBP2.09 billion the year before. Legal & General said pretax profit was hurt by losses in its investment portfolio of GBP207 million for the year, from a profit of GBP35 million a year earlier. The company's solvency II operational surplus generation increased 14% to GBP1.4 billion. Legal & General has an estimated solvency II surplus of GBP6.9 billion over its solvency capital requirement, leading to a coverage ratio of 188% at the end of 2018 from 189% the year before. Consensus forecast Legal & General ending 2018 with a solvency II coverage ratio of 194%. "A lower than hoped for Solvency ratio, and a miss on cash generation, hit Legal & General's share price immediately after results were announced," Hargreaves Lansdown's Nick Hyett said. Paddy Power Betfair closed down 2.9%, after the bookmaker said annual earnings were both below its own guidance and consensus due to increased investments in its US sports betting business. Paddy Power delivered GBP451 million of underlying earnings before interest, taxes, depreciation, and amortization in 2018, 4.7% lower than GBP473.2 million the prior year, primarily as a result of investment in the US sports betting. In its own guidance, the company had said it would deliver Ebitda of between GBP465 million and GBP480 million, while the market's consensus forecast stood at GBP497 million. Meanwhile, pretax profit, including exceptional items, decreased 11% to GBP218.7 million and without pre-exceptional items pretax profit fell by 8.1% to GBP356.9 million.In addition, Paddy Power intends to seek shareholder approval in May to change its name to Flutter Entertainment, saying the new name will better reflect the increasing diversity of its brands.In the FTSE 250, Ultra Electronics closed up 12%. The defence and energy firm hiked its 2018 dividend following a "good" second half. Ultra proposed a 37.0 pence per share final dividend, up from 35.0p the year prior. For the full year, the dividend rose to 51.6p from 49.6p the year before. In 2018, Ultra's pretax profit narrowed to GBP42.6 million from GBP60.6 million the year prior. The pound was quoted at USD1.3142 at the London equities close, flat against USD1.3137 at the close Tuesday.In domestic political news, the latest talks aimed at breaking the Brexit deadlock over the Northern Ireland backstop have failed to achieve a breakthrough, the European Commission has said.The commission said there was still "no solution" to the impasse after the meeting on Tuesday in Brussels between Michel Barnier, the EU's chief negotiator and UK Attorney General Geoffrey Cox and Brexit Secretary Stephen Barclay.The meeting took place as UK Prime Minister Theresa May prepared for next week's crunch "meaningful vote" in the Commons on her Brexit Withdrawal Agreement.The prime minister has said she wants legally binding changes to the backstop - intended to prevent the return of a hard border on the island of Ireland - to ensure the UK is not tied to EU rules indefinitely, in order to convince MPs to back her deal.However, Barnier told the weekly meeting of the College of Commissioners in Brussels that the negotiations were proving "difficult" and a way forward had not been found.In Paris the CAC 40 ended down 0.2%, while the DAX 30 in Frankfurt ended down 0.3%. The euro stood at USD1.1318 at the European equities close, marginally higher against USD1.1299 late Tuesday, ahead of the European Central Bank's interest rate decision on Thursday.The ECB Governing Council meets on Thursday in Frankfurt, announcing its latest policy decision at 1245 GMT. This will be followed by a press conference with ECB President Mario Draghi at 1330 GMT.The central bank faces the tough challenge of maintaining confidence in its forecasting ability without stirring up panic by sounding overly pessimistic on the eurozone's outlook. In addition, the ECB will also announce macroeconomic forecasts on Thursday. It is "very likely" the ECB will reduce its prediction for 2019 GDP growth, which was seen at 1.7% in December, said analysts at ING.Conversely, Bank of America Merrill Lynch said it would be surprised if the ECB was "aggressive" in cutting its forecasts.BofAML expects the ECB to lower its GDP forecast for 2019 to around 1.2% to 1.3%, still much lower than the 1.7% forecast in December. Then, 2020 could be seen around 1.5% to 1.6%, only slightly below the 1.7% estimated in December, while the 2021 forecast would be unchanged at 1.5%. Stocks in New York were lower at the London equities close after a US think tank said analysis of new satellite images of activity at a North Korean long-range rocket site suggests Pyongyang may be rapidly rebuilding the test facility that it pledged to dismantle.The DJIA was down 0.2%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.4%.The Center for Strategic and International Studies said the images were taken two days after the second summit between President Donald Trump and North Korean leader Kim Jong Un ended without an agreement late last month.The two leaders cut short their discussions after Kim's request for a full withdrawal of sanctions in return for the communist country's willingness to abandon nuclear weapons was rejected.Meanwhile, in spite of Trump's tough trade stance, the US trade deficit increased in December to nearly USD60 billion, US government data showed.The deficit increased by USD9.5 billion to USD59.8 billion, the highest since October 2008 and an increase of nearly 19% over November's deficit of USD50.3 billion.The Bureau of Economic Analysis, which reported the data, said imports in goods and services totalled USD264.9 billion, up 2.1%. That compared with exports of USD205.1 billion, down 1.9%."This is unlikely to be taken by Trump as a sign that his approach is not working. Instead he could well up the ante once more in a bid to distract attention from the realities of the situation. The chances of a deal with China this month look a bit weaker now, while more trade conflict with Europe seems increasingly likely. The assumption now is that trade wars will intensify, and that growth will suffer as a result, providing a less congenial outlook for equities," IG Group's Chris Beauchamp said. Brent oil was quoted at USD66.06 a barrel at the London equities close, up from USD65.62 at the close Tuesday. The North Sea benchmark has risen 21% so far in 2019. "The sharp recovery since the start of the year suggests investors have revised their views on the supply and demand forces impacting crude oil prices. Fears over a global economic slowdown have eased and this has helped to boost crude's demand outlook, which looked bleak at the end of last year. This is because incoming data in the US has bucked the trend of disappointing macro numbers from Eurozone and China, while optimism over a US-China trade resolution has further brightened sentiment towards risk-sensitive assets across the board," Forex.com analyst Fawad Razaqzada said.Gold was quoted at USD1,285.88 an ounce at the London equities close, a touch higher than USD1,283.80 late Tuesday."We view the current sell-off in gold as a correction within the current uptrend. While we maintain a bullish outlook above USD1,276, we also have to conclude that a deterioration in global stocks, as well as increased geopolitical and/or macroeconomic risks are needed to give gold enough momentum to mount a challenge at the strong band of resistance between USD1,360 and USD1,380," said Saxo Bank's Ole Hansen. The economic events calendar on Thursday has UK Halifax house prices data at 0830 GMT, eurozone GDP readings at 1000 GMT and the US EIA natural gas storage change report at 1530 GMT. The UK corporate calendar on Thursday has annual results from insurers Aviva and Admiral, fund manager Schroders, industrial turnaround specialist Melrose Industries and from vegan sausage rolls maker Greggs.