|CATEGORY: MARKET REPORT - CLOSE
Wed 15 Jan 2020
LONDON (SHARECAST) - (Sharecast News) - London stocks finished on a mixed note as investors mulled the latest UK inflation figures and looked ahead to the signing of the 'phase one' trade deal between the US and China later in the day.
The FTSE 100 was up 0.27% at 7,642.80, showing little movement as concerns about the trade deal crept in after US Treasury Secretary Steven Mnuchin confirmed late on Tuesday that tariffs on $360bn-worth of Chinese goods - roughly two-thirds of the country's exports to the States - would remain in place until there is a 'phase 2' deal.
His comments followed a Bloomberg report which suggested that the existing tariffs on Chinese goods coming into the US were likely to remain until after the US presidential election. Citing people familiar with the matter, Bloomberg said any move to reduce the tariffs will hinge on Beijing's compliance with the terms of the phase one deal.
The report said that the two sides have an understanding that no sooner than 10 months after the signing of the agreement at the White House on Wednesday, the US will review progress and potentially consider additional cuts on tariffs affecting $360bn of imports from China.
"It comes as no surprise to see US markets outperform their European counterparts today, as the market casts its eyes on a trade deal which seems to focus more on boosting the US economic picture than helping nurse the global growth picture back to health," said IG analyst Josh Mahony.
On home shores, a rate cut at the end of January was looking increasingly likely after the Office for National Statistics reported that consumer price inflation slowed to 1.3% in December from 1.5% in the month before, marking its lowest reading since November 2016 and coming in below consensus expectations of no change. It was weighed down mainly by weakness in accommodation services and clothing.
Core inflation, which strips out all volatile components, was 1.4%, well below the expected no change on November's print of 1.7%.
"The lowest inflation in three years justifies a BoE rate cut. A central bank would need a good reason to not ease policy with inflation 70bp below target and likely to remain there by mid-year. The PMI may yet give that reason, but the bar is high (a bounce to 53 at least)," said economists at Bank of America.
"Headline was only 10bp below the BoE's November forecast but the BoE would likely have raised that call since given the upside news last month and petrol prices. This print is one for the doves."
In equity markets, Persimmon was in the green even as the housebuilder reported a fall in full-year revenue as it spent more cash fixing poor quality homes after an independent review last month slammed the standards of the company's work.
Provident Financial rallied as the doorstep lender said profits for 2019 were set to meet market expectations following a solid performance from Vanquis Bank in the fourth quarter. Investors also cheered news that it had agreed a bilateral securitisation facility with NatWest Markets to fund Moneybarn business flows. The new facility provides up to £100m of initial funding and is expected to grow to £275m over the next 18 months.
Tullow Oil slid, erasing a short-lived bounce in the wake of its latest trading update, while Hochschild Mining was higher as it maintained its 2020 production forecasts.
Shares of Capita advanced after Goldman Sachs reiterated its 'buy' rating on the outsourcer, hiked the price target and added it to the Conviction List.
On the downside, Royal Bank of Scotland slumped after a downgrade to 'underweight' at Barclays, while Rathbone Brothers fell after an initiation at 'underperform' by Jefferies.
Luxury car maker Aston Martin edged up, reversing early losses after Jefferies said in a note that it was likely to need at least £400.0m of fresh equity, "which in itself may not ensure sustained profitability".
Diploma retreated despite saying it traded in line in the first quarter and backing its expectations for the full year.
FTSE 100 (UKX) 7,642.80 0.27%
FTSE 250 (MCX) 21,713.11 -0.20%
techMARK (TASX) 4,268.29 0.71%
FTSE 100 - Risers
Ocado Group (OCDO) 1,338.50p 2.72%
Pearson (PSON) 618.40p 2.21%
Informa (INF) 856.80p 2.05%
National Grid (NG.) 956.60p 1.93%
SSE (SSE) 1,486.50p 1.92%
AstraZeneca (AZN) 7,836.00p 1.89%
Burberry Group (BRBY) 2,313.00p 1.85%
Imperial Brands (IMB) 2,025.00p 1.82%
Centrica (CNA) 91.36p 1.81%
GlaxoSmithKline (GSK) 1,835.20p 1.71%
FTSE 100 - Fallers
Prudential (PRU) 1,400.50p -3.68%
NMC Health (NMC) 1,345.50p -2.85%
Royal Bank of Scotland Group (RBS) 224.90p -2.51%
Sainsbury (J) (SBRY) 215.00p -2.49%
Smith (DS) (SMDS) 358.70p -2.42%
Croda International (CRDA) 5,030.00p -2.24%
Legal & General Group (LGEN) 296.50p -2.15%
Kingfisher (KGF) 214.00p -2.06%
TUI AG Reg Shs (DI) (TUI) 899.40p -2.03%
Standard Chartered (STAN) 703.20p -1.87%
FTSE 250 - Risers
Provident Financial (PFG) 451.30p 6.97%
Spirent Communications (SPT) 248.00p 6.21%
Barr (A.G.) (BAG) 565.00p 3.67%
Sanne Group (SNN) 632.00p 3.44%
Avast (AVST) 523.00p 2.84%
Centamin (DI) (CEY) 121.55p 2.70%
Hochschild Mining (HOC) 168.50p 2.68%
PureTech Health (PRTC) 279.00p 2.57%
Fresnillo (FRES) 623.60p 2.40%
Pennon Group (PNN) 1,090.00p 2.21%
FTSE 250 - Fallers
Tullow Oil (TLW) 49.88p -15.71%
Just Group (JUST) 70.60p -9.14%
Galliford Try (GFRD) 151.86p -4.04%
IP Group (IPO) 65.20p -3.69%
Hunting (HTG) 368.00p -3.46%
Senior (SNR) 173.00p -3.35%
Synthomer (SYNT) 323.00p -3.18%
Moneysupermarket.com Group (MONY) 322.50p -3.15%
Games Workshop Group (GAW) 6,755.00p -2.95%
Vistry Group (VTY) 1,303.00p -2.91%