LONDON MARKET OPEN: FTSE 100 Snaps Winning Streak But M&S Surges

Wed, 06th Nov 2019 08:39

(Alliance News) - The FTSE 100 pulled back on Wednesday following a strong start to the week, with blue-chip miners giving back some of their recent US-China trade hope inspired gains.

The FTSE 100 was 10.15 points lower, or 0.1%, at 7,377.93 early Wednesday. The FTSE 250 was down just 5.85 points at 20,289.14, and the AIM All-Share was down 0.2% at 889.48.

The Cboe UK 100 index was down 0.2% at 12,508.45. The Cboe UK 250 was flat at 18,207.85 and the Cboe UK Small Companies was 0.1% lower at 11,248.58.

In European equities, the CAC 40 index in Paris was flat and the DAX 30 in Frankfurt down 0.1% in early trade.

In early German data, manufacturing orders returned to growth in September on the previous month.

Manufacturing orders were 1.3% higher in September on August, after August's orders declined by 0.4% on July. This 0.4% fall for August has been revised from a provisional 0.6% dip.

However, there was a still a 5.4% year-on-year decline in manufacturing orders in September, though not as steep as August's 6.5% year-on-year fall.

Still in the economic calendar on Wednesday, there are 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.

"The October eurozone services PMI and the readings for France and Germany are 'final' readings and are not expected to be revised from the initial estimates. These showed the services index for the region as a whole up modestly from September. However, still only at a level consistent with sluggish growth," said Lloyds Banking.

In Asia on Wednesday, the Japanese Nikkei 225 index finished up 0.2%. In China, the Shanghai Composite ended down 0.4%, while the Hang Seng index in Hong Kong closed down 0.1%.

In UK political news, parliament has been dissolved to make way for December's general election.

As well as kicking off the Conservative campaign in the West Midlands on Wednesday, Prime Minister Boris Johnson is expected to visit Buckingham Palace for an audience with the Queen, and announce the start of the election drive in Downing Street.

Johnson is expected to put Britain's withdrawal from the EU, the NHS, and law and order at the centre of the Tories' campaign.

Jeremy Corbyn, meanwhile, will say on Wednesday that Labour will end the need for food banks if it takes power. He is using a speech in Telford, Shropshire, on Wednesday to insist the party will deliver "real change" and that he will be a different kind of prime minister if elected on December 12.

In London, miners were among the losers in the FTSE 100 after a strong start to the week on US-China trade deal hopes. Glencore was down 1.2% in early trade, while Rio Tinto slipped 1.0% and Antofagasta shares also declined 1.0%.

At the top of the FTSE 250 was Marks & Spencer, up 6.6% despite reporting a "difficult" first half for its Clothing & Home unit.

Revenue for the half-year to September 28 fell 2.1% to GBP4.86 billion, though pretax profit jumped 52% to GBP153.5 million. Profit before tax and adjusting items fell, however, by 17% to GBP176.5 million.

M&S booked just GBP23.0 million in adjusting items in the recent half year, compared to GBP111.7 million a year ago. This includes costs relating to strategic programmes in areas such as its UK store estate and IT restructure.

Like-for-like sales growth in the Food unit was 0.9% in the half-year, driven by volume. Clothing & Home like-for-like sales, meanwhile, fell 5.5%.

M&S said it saw an improved Clothing & Home performance in October following a "difficult" first half.

"Trading continues to be challenging for Marks and Spencer: revenues are in decline, earnings per share have fallen, and profit before tax is down. The positive, though, remains the food business, which delivered like-for-like sales growth," said Arlene Ewing, investment manager at Brewin Dolphin.

Ultra Electronics rose 1.6% as the defence firm said it continues to trade in line with expectations and it has seen "good" order book development since its interim results.

"The ongoing strategic evolution is progressing and there remains good long term opportunities and growth potential for Ultra. Our major markets are growing, and our strong technology base is positioning us well on existing and potential future programs," Ultra said.

Meanwhile, intu Properties slumped 13% after warning like-for-like net rental income will fall in 2019.

Intu said leasing activity slowed in the period to September 30, with customers more reluctant to dig into their coffers due to prevailing political and economic uncertainty.

Intu footfall was up 1.2% year-on-year in the third quarter, and the company's rental income was lifted by 4% after 34 rent reviews during the period.

However, intu said: "We anticipate that like-for-like net rental income for 2019 will be down by around 9%, with more than half the reduction coming from the impact of CVAs such as Arcadia and Monsoon."

Shopping centre property peer Hammerson was down 1.7% in a negative read-across.

By Lucy Heming; lucyheming@alliancenews.com