London close: Stocks edge higher as investors monitor election polls

Tue 26 Nov 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks were modestly higher on Tuesday as sterling lost ground, with signs of progress in Sino-US trade relations failing to provide much of a boost.
The FTSE 100 was up just 0.1% at 7,403.14, while the pound was down by 0.37% against the US dollar to 1.2855 and by 0.37% versus the euro at 1.1669, as polls pointed to a tightening gap between the Conservative and Labour parties ahead of next month's general election. A Kantar survey out earlier showed that the Tories have an 11-point lead over Labour, down from an 18-point lead a week ago.

Joshua Mahony, senior market analyst at IG, said: "Conservative gains had been a key driver of sterling upside, yet that appears to be flagging as we reach the business end of the election process. With the Conservatives having depleted much of the Brexit party vote, it seems as if their ascent could be stifled from here on."

Normally, a weaker pound would help to lift the Footsie, as around 70% of the FTSE 100's constituents derive most of their earnings from overseas.

The second-tier index on the other hand did manage to put on 0.78% to 20,864.92, rising to a 17-month high in the process.

More broadly, trade relations remained in focus after China's Commerce Ministry said earlier that Liu He, China's top negotiator on trade, had spoken to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin over the phone and both sides had "reached consensus" on how to resolve a number of issues.

Spreadex analyst Connor Campbell said the post-discussion statement was "a tad too vague" to prompt a significant reaction in markets, "at least, not after Monday's gains".

On home shores, the latest figures from UK Finance revealed that mortgage approvals fell to a seven-month low in October as political uncertainty dented the housing market.

Gross mortgage lending across the residential market eased 0.9% year-on-year in October to 25.5bn. House mortgage approvals by the main high street banks fell to 41,219 in October, from 42,216 in September. Analysts had expected approvals to be largely unchanged month-on-month.

On a year-on-year basis, mortgage approvals for home purchases by the main high street banks were 3.0% higher, while remortgage approvals jumped 12.7%. Approvals for other secured borrowing dipped 2.1%, however.

Samuel Tombs, UK chief economist at Pantheon Macroeconomics, said: "The return of mortgage approvals to their 12-month average in October likely partly reflected would-be buyers deferring purchases until the political outlook becomes clearer.

"Approvals should pick up again, if the Conservatives win a majority and pass the Withdrawal Agreement Bill by 31 January, as now looks likely. After all, the recent sharp decline in mortgage rates has been home-ownership much more attractive."

On the corporate front, CRH was on the rise after the building materials group said it expected full-year core earnings to be more than €4.15bn (3.55bn) after a strong Americas and European performance in the first nine months of 2019 and despite a downturn in the UK due to Brexit.

Industrial thread maker Coats Group rallied after saying it was buying the business and assets of US-based Pharr High Performance Yarns for $37m (28.7m). Pharr makes high-performance engineered yarns for the industrial thermal protection, defence and fire service industries.

Pets at Home gained as it reported an increase in interim profit and said it was on track to deliver annual pre-tax profit towards the top end of current market views.

Hiscox was boosted by an upgrade to 'buy' at HSBC, while Tate & Lyle was in the green after an upgrade to 'buy' at Goldman Sachs.

On the downside, catering company Compass fell sharply after it reported a rise in annual underlying operating profit but warned of a "more challenging trading environment" in Europe.

Irish food group Greencore was weaker despite posting a jump in full-year adjusted pre-tax profit and saying it expects another year of profitable growth in FY20.

Outside the FTSE 350, banknote printer De La Rue tanked after saying it swung to a loss in the first half, scrapping its dividend and warning of "significant doubt" over its ability to continue as a going concern.

Market Movers

FTSE 100 (UKX) 7,403.14 0.09%
FTSE 250 (MCX) 20,864.92 0.78%
techMARK (TASX) 4,109.33 0.52%

FTSE 100 - Risers

Fresnillo (FRES) 576.20p 6.78%
Hiscox Limited (DI) (HSX) 1,320.00p 4.02%
Johnson Matthey (JMAT) 3,015.00p 3.04%
CRH (CRH) 2,991.00p 2.85%
Kingfisher (KGF) 211.00p 2.78%
Croda International (CRDA) 4,996.00p 2.63%
St James's Place (STJ) 1,077.00p 2.57%
Melrose Industries (MRO) 237.90p 2.45%
Standard Life Aberdeen (SLA) 322.00p 2.38%
Bunzl (BNZL) 2,116.00p 2.37%

FTSE 100 - Fallers

Compass Group (CPG) 1,923.00p -7.51%
JD Sports Fashion (JD.) 787.60p -2.40%
Rightmove (RMV) 619.20p -1.56%
BP (BP.) 493.10p -1.44%
Royal Dutch Shell 'B' (RDSB) 2,235.00p -1.43%
BT Group (BT.A) 189.78p -1.41%
Next (NXT) 6,802.00p -1.22%
Evraz (EVR) 366.60p -1.21%
SSE (SSE) 1,320.00p -1.20%
Royal Dutch Shell 'A' (RDSA) 2,256.50p -0.83%

FTSE 250 - Risers

Pets at Home Group (PETS) 249.00p 16.14%
Aston Martin Lagonda Global Holdings (AML) 530.20p 7.11%
Restaurant Group (RTN) 142.40p 6.99%
Future (FUTR) 1,528.00p 6.22%
Sirius Minerals (SXX) 3.39p 5.74%
Riverstone Energy Limited (RSE) 432.50p 5.01%
Oxford Instruments (OXIG) 1,626.00p 4.90%
FirstGroup (FGP) 121.90p 4.81%
Kainos Group (KNOS) 606.00p 4.48%
Tate & Lyle (TATE) 740.60p 4.46%

FTSE 250 - Fallers

Shaftesbury (SHB) 908.00p -4.52%
Greencore Group (GNC) 239.90p -3.38%
Hunting (HTG) 401.00p -2.62%
Equiniti Group (EQN) 191.50p -2.40%
Euromoney Institutional Investor (ERM) 1,230.00p -2.07%
Tritax Big Box Reit (BBOX) 150.70p -1.76%
Synthomer (SYNT) 302.40p -1.63%
Babcock International Group (BAB) 584.80p -1.58%
Contour Global (GLO) 208.00p -1.43%
Avast (AVST) 444.40p -1.42%
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