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London close: Stocks finish off their lows as bargain-hunters step in

By Alexander Bueso

Date: Monday 13 Aug 2018

London close: Stocks finish off their lows as bargain-hunters step in

(Sharecast News) - London stocks finished off their lows of the session on Monday, with travel shares under pressure amid worries about the crisis in Turkey, but Esure rocketing higher on the back of an offer from Bain Capital, which in turn buoyed the entire non-life insurance space.
The FTSE 100 finished down 0.32% or 24.56 points at 7,642.45, while the pound was down 0.13% against the dollar at 1.27532 and up 0.04% higher versus the euro at 1.1193.

Measures announced by Turkey's central bank on Sunday, including a pledge to provide "all the liquidity the banks need" to ensure stability, failed to assuage the worries of investors - many of whom believed the country's central bank needed to hike interes rates urgently.

So while some analysts appeared to be relatively confident that the turmoil in Turkish assets would not infect financial assets in other geographies, the slide in the country's currency continued.

As of 1704 BST, the Greenback was 8.70% higher against the lira at 6.9921, up by 2.05% versus the South African rand at 14.3961 and by another 1.59% against the Indian rupee o 69.9286.

Against Sterling, the lira was at 8.92.

Commenting on Monday's market backdrop, Chris Beauchamp at IG said: "The Turkish crisis rumbles on, but it appears to have provided an excuse for the bargain hunters to warm up their buying programmes, judging by the steady recovery seen in equities since this morning.

"Losses in European and UK markets have been steadily trimmed, although key indices still remain in the red. It's hard to tell if this Turkey crisis has been made worse thanks to the August lull, but with earnings season now winding down the big-ticket newsflow is certainly drying up."

Helping to offset the news out of Turkey, money supply statistics published in China revealed a quicker pace of loan growth in July, likely evidence that the People's Bank of China had shifted its stance in July, leaning on lenders to increase their loans, according to Freya Beamish at Panthon Macroeconomics.

Back in the UK, the retail sector was in focus as the latest monthly survey from the British Retail Consortium and Springboard fund revealed UK shoppers continued to desert shopping centres and retail parks last month, though high streets enjoyed a third positive month in a row.

Total UK footfall fell 0.8% in July, the monthly survey from the British Retail Consortium and Springboard found, which was only slightly improved from the prior month's 0.9% decline and compared with a decrease of in July 2017 of 1.1%.

In corporate news, emerging markets-focused asset manager Ashmore declined as Turkey woes spread. Russ Mould, investment director at AJ Bell, said: "Fund management group Ashmore is widely seen as the London-listed bellwether for emerging markets and its shares are unsurprisingly being sold off in the wake of the crisis in Turkey.

"The read-across to Ashmore is fairly straightforward. By selling down its shares, investors are betting that Ashmore could report a big outflow of assets under management when it next updates on trading."

Meanwhile, travel stocks with exposure to Turkey were also lower, with Tui, Thomas Cook and EasyJet all in the red. Wider emerging market jitters knocked Bank of Georgia lower and with South Africa's rand sent further south there were repercussions for the shares of Mediclinic and Old Mutual.

"A weaker currency should be a great for tourists heading to Turkey, but there are fears that economic collapse in Turkey would be far more damaging and more than offset any temporary boon from the weaker lira," said Markets.com analyst Neil Wilson.

Wealth manager Brewin Dolphin slipped as it announced the appointment of Siobhan Boylan - the current chief financial officer of Legal & General Investment - to the board as finance director.

Esure, which is due to report its first-half earnings on Tuesday, rose 30% after the insurer confirming that it has received an unsolicited takeover offer from private equity firm Bain Capital at 280p per share in cash. Non-life peers Hastings, Direct Line and Admiral also advanced.

Shipping services company Clarkson rallied as it posted a drop in interim profits due a tough first quarter and a weaker dollar, but said conditions picked up in the second quarter.

Shire was little changed after partner Shionogi applied to expand the use in Japan of co-developed drug Intuniv to treat adults for attention deficit hyperactivity disorder.

Outside the FTSE 350, Chemring tumbled 12% after warning that a fatal explosion at its Countermeasures facility near Salisbury will reduce underlying operating profit for the year by between £10m and £20m.

Online trading platform Plus500 slid after it reported a surge in first-half earnings as geopolitical events led to higher-than-expected market volatility, but cautioned that the performance was unlikely to be repeated in the second half.

On the broker note front, Meggitt was cut to 'equalweight' at Barclays, but BAE was upgraded to 'overweight' at Morgan Stanley and Clarkson was lifted to 'buy' at Liberum.

Paddy Power was downgraded to 'sell' at Citi and Ryanair was cut to 'reduce' at AlphaValue.

Market Movers

FTSE 100 (UKX) 7,642.45 -0.32%
FTSE 250 (MCX) 20,575.11 -0.45%
techMARK (TASX) 3,562.17 -0.41%

FTSE 100 - Risers

Evraz (EVR) 520.60p 2.08%
Admiral Group (ADM) 2,019.00p 1.61%
Direct Line Insurance Group (DLG) 327.30p 1.49%
Hargreaves Lansdown (HL.) 2,121.00p 1.43%
Burberry Group (BRBY) 2,250.00p 1.40%
BT Group (BT.A) 227.15p 0.98%
Rightmove (RMV) 4,935.00p 0.78%
Anglo American (AAL) 1,680.40p 0.77%
Imperial Brands (IMB) 2,966.00p 0.71%
Rentokil Initial (RTO) 335.60p 0.69%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,526.50p -2.49%
Paddy Power Betfair (PPB) 7,120.00p -1.86%
GVC Holdings (GVC) 1,105.00p -1.78%
Next (NXT) 5,566.00p -1.76%
Barclays (BARC) 184.50p -1.67%
Standard Life Aberdeen (SLA) 321.70p -1.59%
ITV (ITV) 166.25p -1.54%
Smith (DS) (SMDS) 505.60p -1.52%
British Land Company (BLND) 634.00p -1.43%
Marks & Spencer Group (MKS) 298.30p -1.42%

FTSE 250 - Risers

esure Group (ESUR) 267.20p 30.98%
Clarkson (CKN) 2,755.00p 6.58%
Hastings Group Holdings (HSTG) 261.00p 4.40%
Kaz Minerals (KAZ) 628.20p 2.48%
AA (AA.) 117.90p 2.43%
Equiniti Group (EQN) 215.00p 2.14%
Petrofac Ltd. (PFC) 633.40p 2.00%
Capita (CPI) 139.45p 1.97%
Auto Trader Group (AUTO) 438.40p 1.84%
Senior (SNR) 312.00p 1.76%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 1,593.00p -6.85%
Intu Properties (INTU) 160.30p -5.68%
Ashmore Group (ASHM) 337.60p -5.43%
Just Group (JUST) 96.00p -4.57%
Hill & Smith Holdings (HILS) 1,034.00p -4.52%
Mediclinic International (MDC) 471.60p -3.66%
Dixons Carphone (DC.) 170.05p -3.35%
Renewi (RWI) 65.90p -3.23%
SSP Group (SSPG) 682.10p -3.03%
Thomas Cook Group (TCG) 85.30p -2.90%

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