London close: Stocks off intra-session lows, but analysts wary

Tue 29 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks pared early losses on Tuesday but nevertheless ended lower as North Korea's missile launch over Japan sparked jitters across financial markets, prompting a flight to safety.
The FTSE 100 was down 0.87% to 7,337.43, while the pound was flat versus the dollar at 1.2934. The dollar was down 0.2% against the yen at 109.04, while the dollar index fell to 91.788 at one point during the session, marking its lowest level since January 2015. Meanwhile, the euro broke above the psychological 1.20 level against the greenback, although by the end of trading it was well off an intraday high of 1.2071.

Gold prices hit an 11-month high as investors looked for somewhere safe to park their cash, while the VIX Volatility index rose around 25% to 14.16.

In oil markets, West Texas Intermediate was down 1.35% at $45.97 a barrel and Brent crude was off 0.12% at $51.83 as Tropical Storm Harvey left a large swathe of US refining capacity shut down, hitting demand for oil.

IG analyst Joshua Mahony said: "There seems to be a widespread consensus between financial markets today, with the losses evident across equity markets indicative of a wider shift out of risk in response to the latest North Korean missile.

"The decision to send a rocket over Japan raises tensions once more, with the unpredictable Pyongyang leadership meaning that tensions can flare up at any moment. Put simply, this standoff has the potential to start a nuclear war if not handled correctly, and given Trump's no-nonsense approach, that risk is very real."

Precious metals miners bucked the trend, with Randgold Resources, Fresnillo, Hochschild and Acacia all higher thanks to the rally in gold prices.

Elsewhere, distribution and outsourcing group Bunzl moved lower despite reporting a jump in interim pre-tax profit of 17%.

Shares in Mitie had reversed course by the end of the session to trade higher after the City watchdog began to probe the timing and preparation of a profit warning last September. Mitie revealed on Monday that the Financial Conduct Authority had on Friday told the facilities management outsourcing group that an investigation "in connection with the timeliness" of the profit warning that was announced by the company on 19 September 2016.

Stock in AstraZeneca on the other hand slipped even after the company announced the US Food and Drug Administration had approved Faslodex (fulvestrant) 500mg as monotherapy for expanded use in women with hormone-receptor positive human epidermal growth factor receptor 2 negative advanced breast cancer, who have gone through menopause and have not received previous endocrine therapy.

Grainger was lower after agreeing to acquire a 375-home build-to-rent development in Salford, North West England for roughly 80m, while Restaurant Group and Tullow Oil were hit by broker downgrades.

Oilfield services company Hunting gushed lower after announcing the appointment of John Glick as non-executive chairman of the board with effect from 1 September, when Richard Hunting will step down after 26 years as chairman.

Polymetal rallied after its first-half earnings per share came in better than expected.

Investors were also digesting the latest survey from Nationwide, which showed that house price growth in the UK slowed to 2.1% in August from 2.9% in July, while month-on-month, prices fell 0.1% compared with a 0.2% increase the month before and expectations of a 0.1% gain.

Market Movers

FTSE 100 (UKX) 7,337.43 -0.87%
FTSE 250 (MCX) 19,527.89 -0.73%
techMARK (TASX) 3,362.39 -0.85%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,915.00p 4.56%
Fresnillo (FRES) 1,621.00p 2.59%
Anglo American (AAL) 1,353.50p 1.05%
Associated British Foods (ABF) 3,216.00p 1.01%
Coca-Cola HBC AG (CDI) (CCH) 2,625.00p 0.96%
BHP Billiton (BLT) 1,448.00p 0.77%
Ashtead Group (AHT) 1,595.00p 0.57%
Marks & Spencer Group (MKS) 314.50p 0.51%
Rentokil Initial (RTO) 295.60p 0.41%
Intertek Group (ITRK) 4,966.00p 0.36%

FTSE 100 - Fallers

ITV (ITV) 153.00p -4.91%
Morrison (Wm) Supermarkets (MRW) 242.00p -3.70%
Smurfit Kappa Group (SKG) 2,280.00p -2.94%
CRH (CRH) 2,647.00p -2.68%
Smiths Group (SMIN) 1,529.00p -2.30%
Sainsbury (J) (SBRY) 230.70p -2.29%
Standard Life Aberdeen (SLA) 431.70p -2.24%
Bunzl (BNZL) 2,283.00p -2.10%
Paddy Power Betfair (PPB) 6,665.00p -2.06%
Barclays (BARC) 190.35p -2.03%

FTSE 250 - Risers

Hochschild Mining (HOC) 286.80p 7.30%
Acacia Mining (ACA) 214.40p 6.95%
Evraz (EVR) 303.50p 4.15%
Millennium & Copthorne Hotels (MLC) 465.10p 3.10%
Euromoney Institutional Investor (ERM) 1,106.00p 2.88%
Vedanta Resources (VED) 842.00p 2.43%
ZPG Plc (ZPG) 348.20p 1.96%
Workspace Group (WKP) 867.50p 1.87%
Aggreko (AGK) 862.00p 1.83%
Kaz Minerals (KAZ) 830.50p 1.78%

FTSE 250 - Fallers

Carillion (CLLN) 47.21p -5.05%
Hunting (HTG) 382.60p -4.85%
Cairn Energy (CNE) 172.10p -4.34%
Softcat (SCT) 395.00p -3.78%
Vectura Group (VEC) 107.00p -3.60%
Weir Group (WEIR) 1,748.00p -3.59%
Playtech (PTEC) 942.50p -3.53%
Lancashire Holdings Limited (LRE) 670.00p -3.53%
IMI (IMI) 1,123.00p -3.27%
AA (AA.) 161.60p -3.11%
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