|CATEGORY: MARKET REPORT - CLOSE
Tue 12 Jun 2018
LONDON (SHARECAST) - (Sharecast News) - London stocks fell as traders bid the pound slightly higher ahead of the US central bank's policy decision the next day, even as they followed the latest developments in the Commons debate on the Withdrawal Bill.
To take note of, at one point in the afternoon, following the resignation of junior minister Philip Lee, it appeared that the government might lose its bid to block the amendment calling for parliament to have "a meaningful vote" on the final Brexit deal.
However, later reports appeared to indicate that the government might have succeeded in seeing off that challenge - for the moment at least.
Against that backdrop, the FTSE 100 was down 0.43% at 7,703.81, while the pound reversed earlier losses to trade up by 0.28% against the US dollar to 1.34141 and by 0.33% versus the euro to 1.1390.
That was despite the drag from the latest employment data showing that wage growth in Britain slowed unexpectedly in April, even as employment rose to a new record high over the latest three-month stretch.
Earlier, data showed that the number of people in work increased by 146,000 from the previous quarter taking the total to 32.39m. Unemployment fell by 38,000 to 1.42m - a rate of 4.2% that was in line with economists' expectations and remained the lowest since 1975.
Total earnings including bonuses rose 2.5% - down from 2.6% in the three months to March. Economists on average had expected the rate of wage growth to be unchanged. Excluding bonuses, average weekly earnings growth slipped to 2.8% from 2.9%.
The weaker than expected wage growth could add to doubts about the strength of the economy as the Bank of England weighs up whether to increase interest rates in August. The BoE's monetary policy committee has cited the prospect of higher pay growth as one of its main reasons for considering a rate rise.
The jobs and wages figures followed a series of weak economic numbers that cast doubt on the BoE's belief that the economy's sharp slowdown in the first quarter was caused by bad weather.
In other news, overnight Donald Trump and Kim Jong-un signed a document confirming that North Korea will begin dismantling its nuclear capabilities "very quickly".
Although Trump described the declaration as "very important" and "pretty comprehensive", analysts highlighted the lack of detail in terms of timing or checks on whether North Korea is making changes to its nuclear program.
Chris Beauchamp, chief market analyst at IG, said: "It looks a lot like 'buy the rumour, sell the fact' where the Trump-Kim summit is concerned. Having shrugged off the failed G7 meeting, markets are finding it hard to make progress this morning despite the bullishness that was very much in evidence yesterday. Perhaps the upcoming Fed and ECB meetings are keeping sentiment in check for the time being.
"The overall picture remains firmly bullish, and is probably an opportunity to add to risk in the near-term, markets having weathered the storm of trade wars successfully thus far."
In corporate news, housebuilders were a drag after Crest Nicholson reported a 2% drop in half-year pre-tax profit and warned that margins for the year would come in towards the lower end of its guidance range, squeezed by cost pressures.
Peer Bellway slipped despite saying it was on track for strong earnings growth this year and predicting record annual sales of more than 10,000 homes, while Bovis Homes, Redrow, Berkeley, Barratt, Persimmon and Taylor Wimpey were all weaker.
AstraZeneca was a touch lower after it said that it and partner Eli Lilly are discontinuing the global Phase III clinical trials of lanabecestat, which is an oral beta secretase cleaving enzyme inhibitor for the treatment of Alzheimer's disease.
Fashion brand Ted Baker was in the red even as it posted a 4.2% jump in group revenue for the 19 weeks to 9 June despite unseasonal weather across Europe and the East Coast of America and still-challenging external trading conditions across many of its global markets.
British American Tobacco fell after saying it was trading in line with expectations but that first half sales would be lower and that profit would be affected by significant currency fluctuations.
Acacia Mining lost its shine after announcing a fatal accident involving an operator for one of its contractors at North Mara gold mine, and Randgold Resources declined as it noted "unrest" in Mali, not far from its Gounkoto mine.
Rio Tinto fell after it appointed Jakob Stausholm, who recently stepped down as CFO of shipping group AP Moller-Maersk, as its new chief financial officer, while Domino's Pizza tumbled after it announced that chief financial officer Rachel Osborne left the group a day earlier.
Halma reversed earlier losses to trade higher as it posted a 9% increase in fiscal 2018 pre-tax profit and said revenue exceeded £1bn for the first time.
On the broker note front, Centrica was sitting pretty at the top of the FTSE 100 leader board, boosted by an upgrade to 'buy' at Jefferies, while IMI rallied on the back of an upgrade to 'overweight' at Morgan Stanley.
Rotork and Tate & Lyle both retreated after downgrades by Morgan Stanley and Kepler Cheuvreux, respectively.
FTSE 100 (UKX) 7,703.81 -0.43%
FTSE 250 (MCX) 21,241.64 -0.36%
techMARK (TASX) 3,550.62 0.03%
FTSE 100 - Risers
Mediclinic International (MDC) 565.40p 4.01%
Centrica (CNA) 150.00p 3.73%
Evraz (EVR) 551.80p 2.76%
Kingfisher (KGF) 312.80p 2.66%
Marks & Spencer Group (MKS) 304.30p 2.22%
Old Mutual (OML) 222.50p 1.97%
Royal Mail (RMG) 497.60p 1.86%
Hargreaves Lansdown (HL.) 2,015.00p 1.41%
Carnival (CCL) 4,635.00p 1.40%
Next (NXT) 6,202.00p 1.34%
FTSE 100 - Fallers
Anglo American (AAL) 1,812.60p -3.24%
Barratt Developments (BDEV) 561.00p -3.11%
Berkeley Group Holdings (The) (BKG) 4,188.00p -2.76%
Persimmon (PSN) 2,790.00p -2.45%
Antofagasta (ANTO) 1,067.00p -2.33%
Ashtead Group (AHT) 2,348.00p -2.17%
Mondi (MNDI) 2,081.00p -2.11%
Taylor Wimpey (TW.) 185.50p -2.08%
Smurfit Kappa Group (SKG) 2,920.00p -1.88%
Informa (INF) 814.20p -1.86%
FTSE 250 - Risers
Contour Global (GLO) 230.00p 3.60%
Grafton Group Units (GFTU) 799.00p 2.90%
TBC Bank Group (TBCG) 1,746.00p 2.69%
Ascential (ASCL) 436.20p 2.39%
Clarkson (CKN) 2,570.00p 2.19%
Spire Healthcare Group (SPI) 256.00p 2.16%
Charter Court Financial Services Group (CCFS) 326.95p 2.04%
Fidelity China Special Situations (FCSS) 268.00p 1.71%
Renishaw (RSW) 5,660.00p 1.71%
Pershing Square Holdings Ltd NPV (PSH) 1,094.00p 1.67%
FTSE 250 - Fallers
Domino's Pizza Group (DOM) 361.31p -6.20%
Alfa Financial Software Holdings (ALFA) 193.00p -5.85%
Weir Group (WEIR) 2,099.00p -4.37%
Redrow (RDW) 586.50p -4.17%
Ocado Group (OCDO) 1,065.00p -4.14%
Crest Nicholson Holdings (CRST) 428.00p -4.08%
Superdry (SDRY) 1,216.00p -4.01%
Bellway (BWY) 3,287.00p -3.58%
Inmarsat (ISAT) 515.20p -3.52%
Bovis Homes Group (BVS) 1,228.00p -3.42%