London close: Stocks finish mixed as property firms slide
By Josh White
Date: Wednesday 06 Nov 2019
(Sharecast News) - London equity markets finished in a mixed state on Wednesday, as investors paused for thought following recent gains, while property stocks remained under the cosh after a downbeat update from Intu Properties.
At the close, the benchmark FTSE 100 was up 0.12% at 7,396.65 after a session of choppy trading, while the FTSE 250 fell 0.39% to 20,216.59.
The pound was weaker too, last falling 0.11% against the dollar to trade at $1.2870, and retreating 0.13% from the euro to €1.1618.
"You can almost feel the enthusiasm drain away from the equity market," said Chris Beauchamp, chief market analyst at IG, earlier.
"It is probably just some overtiredness, or disappointment at the lack of fresh trade war headlines, but stocks seem unable to keep moving higher.
"After the gains of the past month, this is hardly surprising, and, as suspected, the Vix is also beginning to move higher."
Beauchamp said the foundations of "some mid-November volatility" were being laid, even if that would only provide a buying opportunity further down the line.
"After last week's action-packed few days, this week is a damp squib by comparison, leaving stock markets at risk of some near-term downside."
Things were somewhat downbeat across the channel, however, the International Monetary Fund cut its eurozone growth forecasts on Wednesday as it warned that weakness in the manufacturing sector could spread to services.
The IMF said it now expected the euro area to grow by 1.2% this year, down from an estimate of 1.3% in April.
For 2020 and 2021, it expected growth of 1.4%, down from a previous forecast of 1.5% for both years.
In Germany specifically, the IMF downgraded its growth expectations for the country to 0.5% for this year from 0.8% in April.
"Economic activity in Europe has slowed on the back of weakness in trade and manufacturing. For most of the region, the slowdown remains externally driven," it said.
"However, some signs of softer domestic demand have started to appear, especially in investment.
"Services and domestic consumption have been buoyant so far, but their resilience is tightly linked to labour market conditions, which, despite some easing, remain robust."
On the corporate front, BT ended the session down 4.67%, after it competitor - Liberty Global-owned Virgin Media - said it had agreed a five-year deal to switch its more than 3 million mobile customers to the Vodafone network.
That switch would take place once Virgin's current agreement with BT comes to an end, with the news sending Vodafone's shares 0.28% higher.
British Land was down 1.85%, Land Securities lost 0.96%, and Hammerson slid 2.48% after shopping centre owner Intu Properties said rental income for the year was set to drop, and that it was considering a cash call amid tough trading conditions in the retail sector.
Shares in Intu plunged 17.17% by the end of play in the City.
Marks & Spencer slipped into the red towards the end of afternoon trading, closing down 0.19% after it posted a 2% decline in interim revenue due to weaker home and clothing sales, and a 17% drop in profits before tax and adjusted items.
Food like-for-like sales grew 0.9% driven by volume, while clothing & home like-for-like sales fell 5.5%, reflecting "first half shape of buy and supply chain issues", M&S said.
Group revenue fell to £4.8bn from £4.9bn, while pre-tax and adjusted items profit was £176.5m, down from £213m a year earlier.
"For some considerable time, the company has been split between a food business which has continued to deliver and a general merchandising arm whose performance has been plodding and dowdy," said Richard Hunter, head of markets at Interactive Investor.
"This update shows some determination to put things right, from the design of lines through to the supply chain, but the company is playing catch-up with a fiercely competitive and evolving sector.
"The 5.5% like-for-like sales decline in sales is a stark reminder of the challenges ahead."
Hunter noted that M&S had reported that October was a positive month, but he warned that "one swallow does not a summer make", adding that a trend would need to be established as the norm before investors could be won over.
Market Movers
FTSE 100 (UKX) 7,396.65 0.12%
FTSE 250 (MCX) 20,216.59 -0.39%
techMARK (TASX) 3,960.61 0.08%
FTSE 100 - Risers
Imperial Brands (IMB) 1,791.00p 2.39%
Centrica (CNA) 72.56p 2.20%
Associated British Foods (ABF) 2,422.00p 2.02%
Unilever (ULVR) 4,688.50p 1.80%
BAE Systems (BA.) 583.00p 1.75%
British American Tobacco (BATS) 2,839.50p 1.74%
Bunzl (BNZL) 2,056.00p 1.43%
Auto Trader Group (AUTO) 548.80p 1.22%
Ferguson (FERG) 6,716.00p 1.21%
Hikma Pharmaceuticals (HIK) 2,025.00p 1.10%
FTSE 100 - Fallers
BT Group (BT.A) 193.14p -4.67%
JD Sports Fashion (JD.) 741.80p -2.34%
British Land Company (BLND) 589.80p -2.32%
Hiscox Limited (DI) (HSX) 1,389.00p -2.25%
Ocado Group (OCDO) 1,330.50p -2.17%
Standard Life Aberdeen (SLA) 307.60p -1.47%
Hargreaves Lansdown (HL.) 1,770.50p -1.31%
Taylor Wimpey (TW.) 167.90p -1.26%
ITV (ITV) 133.75p -1.22%
Land Securities Group (LAND) 905.55p -1.21%
FTSE 250 - Risers
Ultra Electronics Holdings (ULE) 2,040.00p 3.87%
RHI Magnesita N.V. (DI) (RHIM) 3,740.00p 3.60%
Softcat (SCT) 1,077.00p 2.87%
UDG Healthcare Public Limited Company (UDG) 791.50p 2.39%
Dechra Pharmaceuticals (DPH) 2,634.00p 2.33%
Bakkavor Group (BAKK) 124.80p 2.30%
Inchcape (INCH) 640.00p 2.07%
Trainline (TRN) 426.00p 2.04%
Coats Group (COA) 72.80p 2.03%
Micro Focus International (MCRO) 1,055.60p 1.99%
FTSE 250 - Fallers
Kainos Group (KNOS) 496.00p -5.70%
Premier Oil (PMO) 84.50p -4.86%
Wood Group (John) (WG.) 357.30p -4.67%
Beazley (BEZ) 555.50p -4.64%
Tullow Oil (TLW) 207.70p -4.46%
TalkTalk Telecom Group (TALK) 107.50p -3.59%
4Imprint Group (FOUR) 2,950.00p -3.28%
Hammerson (HMSO) 281.90p -3.03%
Dixons Carphone (DC.) 120.25p -3.02%
Weir Group (WEIR) 1,436.50p -2.94%
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