LONDON MARKET MIDDAY: Trump Rally Cools Ahead Of Risk-Off Weekend

LONDON (Alliance News) - Stocks in London were lower on Friday at midday, as the dust settles from the unexpected election on Tuesday of Republican Donald Trump as US president, amid little fresh stimulus on the economic and corporate fronts.

"Equity markets are voting risk-off into the weekend, perhaps worried about what a two-day break could deliver in terms of news about Trump's team and his plans once in office," said Accendo Markets analyst Mike van Dulken. "A correction from post-election highs is, however, no surprise."

The FTSE 100 was down 0.9%, or 64.77 points, at 6,763.21. The blue-chip index was lower for a second consecutive session. On Thursday, the index had attempted to continue its Trump-inspired rally, but it turned around half way through the session, finishing down 1.2%. On Friday, the index made another brief attempt to rise at the open, but then turned around and fell steadily through the morning.

The FTSE 250 of mid-caps was trading 0.8% lower at 17,526.54 on Friday midday, having ended in the green on Thursday. The AIM All-Share was down 0.1% at 800.98.

The BATS UK 100 was down 1.1% at 11,420.05, while the BATS 250 was 0.9% lower at 15,889.80. The BATS Small Companies was up 0.3% at 10,784.92.

"The market...is still struggling to work out what is going to happen in the coming months and years. The initial bounce was driven by a realisation that Trump's infrastructure stimulus would indeed come to pass, but since then investors have been scrambling to work out all the other implications, and this will take far longer," said IG analyst Chris Beauchamp.

"In this climate of uncertainty, markets such as the FTSE 100 look expensive for now, especially with a rising pound," noted the analyst.

Sterling was higher for a third consecutive day against the dollar, quoted at USD1.2625 at midday compared to USD1.2521 at the London equities close on Thursday.

The euro was standing at USD1.0875, hardly changed from USD1.0869 at the close on Thursday. The CAC 40 index in Paris was down 0.9%, while the DAX 30 in Frankfurt was flat.

Data from Destatis showed that German inflation climbed to a two-year high in October. The consumer price index climbed 0.8% year-on-year in October, faster than the 0.7% rise seen in September. On a monthly basis, consumer prices gained 0.2% after rising 0.1% in September. Both annual and monthly inflation figures matched preliminary estimates published on October 28.

Still ahead in the economic calendar, US Federal Reserve board member Stanley Fischer will speak at 1400 GMT, the Michigan consumer sentiment index is at 1500 GMT, and the Baker Hughes oil rig count is at 1800 GMT.

In New York, stocks were called slightly lower, with the Dow Industrials seen down 0.4%, the S&P 500 index down 0.6% and the Nasdaq 100 pointed down 1.1%.

It is Veterans Day in the US, Remembrance Day in Canada, and Armistice Day in the UK and France, but all stock markets remain open.

Back in London, the Pharmaceutical & Biotech index was among the worst performing sector indices, down 2.3%, with Hikma Pharmaceuticals down 3.5%, Shire down 2.6%, GlaxoSmithKline down 2.1% and AstraZeneca down 1.6%.

Pharma stocks were among the biggest gainers on Wednesday from Trump's victory, on hopes for a lighter regulatory regime in the US and the repeal of 'Obamacare', the Affordable Care Act. Trump said this will be among his top priorities once in office.

AstraZeneca, the eighth biggest stock in the FTSE 100, was adding to its 5.6% decline on Thursday, after reporting a 3% decline in revenue in the first nine months of 2016, hit by generic competition in the US against its core anti-cholesterol statin Crestor in the third quarter.

Gold miners Fresnillo and Randgold Resources were down 5.7% and 4.5%, respectively, tracking the the precious metal's price. Gold was quoted at USD1,256.42 an ounce at midday, compared to USD1,263.70 on Thursday.

Meanwhile, housebuilders were higher as the UK Department for Communities & Local Government said councils in England will be offered up to GBP18.0 million in new funding to speed up the construction of up to 8,000 homes on large developments.

Taylor Wimpey was up 2.1%, Barratt Developments, up 2.0% and Persimmon, up 1.2%. FTSE 250-listed estate agent Countrywide also was benefiting, up 3.5%.

The 'capacity fund' is designed to tackle planning issues that can hold up projects. "We want to turbo-charge house building on large sites to get the homes built in the places people want to live, so that this country works for everyone, not just the privileged few," Housing Minister Gavin Barwell said.

However, FTSE 250 building products SIG was down 20%, after it issued a profit warning and said Chief Executive Stuart Mitchell has stepped down with immediate effect.

The group said that, following a slowdown in trading after the UK's vote to leave the European Union, markets in the UK have continued to soften and competition has increased. In particularly, SIG has taken a hit from delays of projects in the commercial sector, plus subdued demand for technical insulation in the petrochemical and manufacturing sectors.

Cranswick was up 3.3% in the FTSE 250, after the pork and poultry producer was upgraded to Buy from Hold by Liberum.

By Daniel Ruiz; danielruiz@alliancenews.com

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