LONDON MARKET MIDDAY: US-China Optimism Fails To Keep Stocks In Green

LONDON (Alliance News) - Despite optimism over US-China trade relations, London stock prices were mostly in the red at midday on Wednesday, underperforming markets in Germany and France, as the pound edged higher."Despite Philip Hammond predictably stating that the UK would be worse off in every form of Brexit, and the increasing likelihood that Theresa May wouldn't be able to get her deal through Parliament, the pound regained some poise on Wednesday," commented Spreadex analyst Connor Campbell. "Realistically, sterling's gains came from issues with the dollar...The greenback may be in retreat following Larry Kudlow's attempts to ease investors' trade war fears, the dollar now less immediately needed as a safe haven." Cambell continued: "This meant the FTSE's (brief) bright start was completely erased as lunchtime approached, the index slipping 0.2% to lurk just above 7000."The FTSE 100 was down 14.43 points, or 0.2%, at 7,002.42 at midday Wednesday. The FTSE 250 was down 18.04 points, or 0.1%, at 18,642.85 and the AIM All-Share flat at 925.38.The Cboe UK 100 was down 0.3% at 11,881.53, the Cboe UK 250 down 0.1% at 16,768.67, but the Cboe UK Small Companies up 0.1% at 11,422.21.The pound was quoted at USD1.2791 at midday, up from USD1.2747 late Tuesday.In mainland Europe, the CAC 40 stock index in Paris and the DAX 30 in Frankfurt were up 0.3% and 0.1%, respectively.Stocks with a particular exposure to China were among London's risers on Wednesday after White House economic advisor Larry Kudlow said the Trump administration has restarted talks with the Chinese government "at all levels" and that the upcoming Trump-Xi meeting offers an "opportunity to break through".IG market analyst Joshua Mahony commented: "Amongst gainers today, particularly notable moves have come from Antofagasta, Standard Chartered, and Burberry whose Asia-Pacific division represents the one growing part of the business of late."Miner Antofagasta was the best performer in the FTSE 100 at midday, up 3.4%, while luxury fashion retailer Burberry was up 2.6%. Emerging markets lender Standard Chartered was 0.9% higher.The banking sector remains at the forefront of investor focus on Wednesday ahead of the results of the Bank of England's annual stress test. The BoE will release results at 1630 GMT. Ahead of this, Barclays was up 0.2% at midday, CYBG up 0.1%, Lloyds Banking up 0.7%, Royal Bank of Scotland down 0.2% and HSBC Holdings down 0.5%.BoE Governor Mark Carney will give a press conference at 1645 GMT.Last week, the bank brought forward the publication of the stress test and its financial stability report from December 5 to provide lawmakers an analysis of how the Brexit deal will affect the bank's ability to deliver its statutory remits for monetary and financial stability, including in a 'no deal, no transition' scenario.This comes as Chancellor Philip Hammond admitted Wednesday that "in pure economic terms" the UK will be worse off under all possible Brexit outcomes. He was speaking as the government prepared to set out its analysis of the impact of leaving the EU.Downing Street said the papers will cover a "range of scenarios" as the UK Prime Minister Theresa May seeks to press her case that her agreement with Brussels represents the only way to protect jobs and investment while avoiding the chaos of a no-deal Brexit.She will then travel to Scotland for another day of campaigning as she appeals over the heads of MPs to ordinary voters to support her plan.The Treasury analysis is expected to conclude the UK will be far better off under the terms of May's controversial agreement with Brussels than if it faced a disorderly Brexit with a no-deal break.Elsewhere in the economic events calendar, US third-quarter GDP is at 1330 GMT along with core personal consumption expenditures at the same time. At 1700 GMT, Federal Reserve Chair Jerome Powell speaks in New York.US GDP is expected to grow 3.5% in the third quarter, slowing from 4.2% in the second quarter.Ahead of the data, stocks in New York are called for a higher open amid a more constructive tone for US-China relations. The Dow Jones and S&P 500 are both called up 0.3%, while the Nasdaq is pointed 0.4% higher.Back on the London Stock Exchange, low-cost airline easyJet was down 3.0% after Kepler Cheuvreux cut its rating on the stock to Hold from Buy.In the FTSE 250, On the Beach gained 3.1% after it boosted its dividend on double-digit annual revenue and profit growth.Revenue for the year to September 30 grew 25% to GBP104.1 million, as pretax profit rose 24% to GBP26.1 million. The beach holiday firm's dividend for the year was 18% higher at 3.3p.In current trading, the FTSE 250 constituent said the seasonally quieter first quarter of its new financial year has seen a "strong" early trading performance, supported by a slightly earlier release of summer capacity by major low-cost air carriers, lower year-on-year seat prices for winter departures, and efficiency in marketing spend."This current performance is in line with our expectations and the board believes the business is well positioned for the key trading period that commences in late December and continues into Q1 2019," On the Beach said. Fellow travel firm Thomas Cook was facing another negative session, down 5.6%, after Tuesday's profit warning which had sent the stock closing a sharp 23% lower.Among other FTSE 250 losers was Senior, down 6.2%. The engineer said it expects good progress to be made in 2018 as it invests in aircraft development programmes and new products. Senior said trading in the 10 months to the end of October has been in line with expectations. The Aerospace division continued to benefit from positive activity in the large commercial aircraft sector, Senior said, with production increasing on the new aircraft development programmes. In 2019, the company said it intends to invest actively in the new product introductions and development of the programmes won over the past year. Brewin Dolphin was down 4.3% despite reporting an increase in its total funds in "another successful year", as the financial firm upped its full-year dividend payout.For the year that ended September 30, the FTSE 250-listed investment manager's total funds increased 6.7% to GBP42.8 billion from GBP40.1 billion the year before. The increase was driven by the net flows of positive GBP1.5 billion and an investment performance gain of GBP1.2 billion.Brewin Dolphin's pretax profit increased 19% to GBP68.5 million from GBP57.6 million, on a core income increase of 9.9% to GBP319.7 million from GBP291.0 million. The company increased its full year dividend by 9.3% to 16.4p from 15.0p paid out the year before.Broker Peel Hunt commented: "Although reported numbers were in line with consensus expectations, future year forecasts will be impacted modestly by lower revenue margins and continuing investment in the business. Despite this, the stock trades on an attractive multiple and we will therefore retain our positive recommendation."