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London midday: Stocks turn negative as Hong Kong protests escalate

By Michele Maatouk

Date: Monday 12 Aug 2019

London midday: Stocks turn negative as Hong Kong protests escalate

(Sharecast News) - London stocks had turned negative by midday on Monday as sentiment was dented by reports that Hong Kong airport has cancelled all flights after thousands of anti-government demonstrators descended on the building.
The FTSE 100 was 0.5% weaker at 7,220.54.

Neil Wilson, chief market analyst at Markets.com, said: "Events in Hong Kong threaten to overshadow equity markets on Monday.

"We're also heard reports that armed police are gathering in Shenzhen, the mainland China city that borders Hong Kong.

"We don't know what happens next - there is no sign that protestors are about to back down and the authorities are only hardening their stance. Hong Kong has kind of been under the radar of most traders (unless you're into the Hang Seng) but increasingly I feel like that this has the potential to spiral into a bigger market worry. Today's moves highlight the risks."

In currency markets, the pound was up 0.4% against the dollar at 1.2081 and 0.5% firmer versus the euro at 1.0790. Sterling fell as low at 1.2010 against the dollar in Asian trade.

"Without any real catalyst the 1.20 level is holding for now. But whilst 1.20 is being defended doggedly it's hard to see it holding out much longer. A breach below 1.20 and a new post-Brexit low could open up further downside," said Wilson.

More broadly, Sino-US trade relations remained in focus after US President Trump said on Friday that he 'won't do business with Huawei' and suggested that the planned trade meeting for September might not take place.

In equity markets, Rolls-Royce was under the cosh following reports that small fragments of a Norwegian Boeing 787 Dreamliner fell from the sky as the plane encountered technical trouble and had to make an emergency landing in Rome. The Boeing 787 Dreamline uses Rolls-Royce's Trent 1000 engine.

Shipping services company Clarkson was in the red even as it posted a rise interim revenue and underlying profit despite challenging markets.

Acacia Mining was a touch lower despite announcing that it can now resume gold exports from its North Mara mine in Tanzania after receiving government clearance. The ban was introduced in 2017 to keep processing activities in Tanzania.

UDG Healthcare was down after being cut to 'sector perform' by RBC Capital Markets, while Ultra Electronics was knocked lower by a downgrade to 'hold' at Berenberg.

Outside the FTSE 350, share of travel company Thomas Cook slumped after it said it is in talks with its creditors about a further 150m cash injection, on top of the 750m it is negotiating with Chinese shareholder Fosun. The company said existing shareholders are expected to be "significantly" diluted as part of the recapitalisation, which it expects to implement in early October.

On the upside, SSE gained as the energy company confirmed it is in talks over the possible sale of its energy services business to rival Ovo Group.

Tullow Oil shares rallied sharply after the oil and gas exploration group said it has made a "substantial and high value" oil discovery in Guyana. The shares got an added boost from an upgrade to 'buy' at Berenberg.

Hammerson was boosted by an upgrade to 'outperform' at RBC Capital Markets, while Merlin Entertainments nudged up after an upgrade to 'hold' at HSBC.

Market Movers

FTSE 100 (UKX) 7,220.54 -0.46%
FTSE 250 (MCX) 19,017.95 -0.39%
techMARK (TASX) 3,820.20 -0.50%

FTSE 100 - Risers

Reckitt Benckiser Group (RB.) 6,094.00p 1.04%
Diageo (DGE) 3,410.00p 0.74%
InterContinental Hotels Group (IHG) 5,377.00p 0.67%
Marks & Spencer Group (MKS) 188.55p 0.53%
Persimmon (PSN) 1,908.65p 0.51%
SSE (SSE) 1,100.00p 0.50%
Unilever (ULVR) 4,896.50p 0.45%
Rentokil Initial (RTO) 451.40p 0.36%
Standard Life Aberdeen (SLA) 250.90p 0.28%
Whitbread (WTB) 4,232.00p 0.26%

FTSE 100 - Fallers

NMC Health (NMC) 1,945.75p -3.82%
Rolls-Royce Holdings (RR.) 754.00p -3.26%
Burberry Group (BRBY) 2,156.00p -2.66%
Standard Chartered (STAN) 613.80p -2.01%
HSBC Holdings (HSBA) 609.60p -1.99%
TUI AG Reg Shs (DI) (TUI) 807.20p -1.92%
Anglo American (AAL) 1,808.13p -1.86%
Hargreaves Lansdown (HL.) 2,031.50p -1.67%
British Land Company (BLND) 476.60p -1.63%
Evraz (EVR) 554.80p -1.42%

FTSE 250 - Risers

Tullow Oil (TLW) 210.00p 17.25%
Funding Circle Holdings (FCH) 127.02p 2.93%
CLS Holdings (CLI) 236.00p 1.72%
Dixons Carphone (DC.) 112.70p 1.53%
Law Debenture Corp. (LWDB) 576.19p 1.44%
Metro Bank (MTRO) 302.46p 1.22%
Hammerson (HMSO) 219.30p 1.20%
Woodford Patient Capital Trust (WPCT) 44.73p 1.20%
Stagecoach Group (SGC) 129.70p 1.17%
Kainos Group (KNOS) 524.00p 1.16%

FTSE 250 - Fallers

Sirius Minerals (SXX) 8.25p -10.85%
RHI Magnesita N.V. (DI) (RHIM) 3,992.00p -4.08%
CYBG (CYBG) 149.55p -3.27%
Intu Properties (INTU) 35.63p -3.23%
Clarkson (CKN) 2,450.00p -2.97%
Sports Direct International (SPD) 230.40p -2.70%
Provident Financial (PFG) 376.60p -2.44%
Quilter (QLT) 132.55p -2.39%
GVC Holdings (GVC) 556.20p -2.32%
UDG Healthcare Public Limited Company (UDG) 771.50p -2.28%

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