London close: Stocks slide again amid trade worries and hindered by pound strength
By Alexander Bueso
Date: Thursday 15 Aug 2019
(Sharecast News) - London stocks finished firmly in the red again on Thursday amid ongoing Sino-US trade frictions and as sterling was boosted by better-than-expected retail sales data.
Stocks were lower from the get-go after China's State Council Tariff Committee said that Beijing "has no choice but to take necessary measures to retaliate" to the latest round of trade tariffs from Washington.
In later remarks, Chinese foreign affairs ministry spokeswoman, Hua Chunying, said Beijing hoped that the US would meet China half way in implementing the consensus reached between the two countries' leaders at the last G20 summit.
US President Donald Trump responded saying a deal had to be on American terms, cutting short a bounce on Wall Street on the back of stronger readings for retail sales and two closely-followed manufacturing sector surveys.
Against that backdrop, the FTSE 100 finished down 1.13% at 7,067.01, while the pound was up 0.44% against the US dollar at 1.21152 and 0.83% firmer versus the euro at 1.0916, after figures from the Office for National Statistics showed that retail sales unexpectedly ticked higher in July.
Retail sales edged up 0.2% last month, down from a 0.9% increase in June but ahead of expectations for a 0.2% decline.
On the year, retail sales rose 3.3%, down from 3.8% growth in June but beating expectations for a 2.6% jump.
Non-store sales, such as online sales, rose 6.9% in July and were up 12.7% on the year. Meanwhile, department store sales were up 1.6%, having fallen in the previous six months.
ONS head of retail sales Rhian Murphy said: "Retail sales saw only modest growth in the latest three months.
"Although still declining across the quarter, there was an increase in sales for department stores in July for the first time this year. Strong online sales growth on the month was driven by promotions."
David Cheetham, chief market analyst at XTB, said: "The UK consumer continues to show impressive resilience to the slowing economy and political uncertainty with retail sales figures for July topping estimates. This is the sixth time this year that monthly figures have been better than expected, with strong growth of 6.9% seen in non-store retailing."
In the background, the US Treasury yield curve had shifted lower but was no longer inverted - albeit only very marginally so.
On a related note, analysts at Capital Economics told clients that although research conducted by the Federal Reserve showed that the interest rate curve was significantly distorted "it does not necessarily mean, however, that a recession is so unlikely."
In equity markets, Kaz Minerals tumbled as it said continued copper sales growth partially offset lower commodity prices in the first half of 2019 as revenues and core earnings both fell.
Ex-dividends weighed, with RBS, Anglo American, Ashtead, Aviva, Evraz, Ferrexpo, HSBC, Ibstock, Legal & General, Mondi, Pearson, Phoenix Group, Provident Financial, Royal Dutch Shell, Segro and TI Fluids all in the frame.
On the upside, GVC Holdings was a high riser as it lifted its guidance for the full year and reported an increase in first-half revenues
Shares of online trading platform Plus500 surged after the company's chief executive officer and other directors picked up some stock.
Broker Liberum said: "That directors should buy stock has been a key piece of investor feedback and is therefore notably responsive, especially taken with the recent buyback and new distribution policy. This also tells you that the company is not sitting on inside information."
FTSE 250 transport operator FirstGroup was on the rise as it appointed the former chief executive of Arriva, David Martin, as it new chairman with immediate effect.
In broker note action, RBS was cut to 'hold' at HSBC, while Glencore and Hunting were downgraded to 'underweight' 'neutral', respectively, at JPMorgan. Capital & Regional was cut to 'hold' at Berenberg.
Market Movers
FTSE 100 (UKX) 7,067.01 -1.13%
FTSE 250 (MCX) 18,640.65 -0.48%
techMARK (TASX) 3,770.76 -0.81%
FTSE 100 - Risers
United Utilities Group (UU.) 789.20p 1.94%
British American Tobacco (BATS) 3,049.50p 1.36%
National Grid (NG.) 851.00p 0.97%
Micro Focus International (MCRO) 1,568.60p 0.68%
Severn Trent (SVT) 1,991.00p 0.66%
NMC Health (NMC) 1,810.00p 0.47%
RSA Insurance Group (RSA) 518.00p 0.43%
Relx plc (REL) 1,917.50p 0.26%
Diageo (DGE) 3,415.50p 0.25%
Rolls-Royce Holdings (RR.) 753.60p 0.21%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 177.65p -10.48%
Just Eat (JE.) 763.00p -5.96%
Phoenix Group Holdings (PHNX) 641.00p -5.55%
Evraz (EVR) 498.90p -5.40%
Anglo American (AAL) 1,696.20p -5.19%
Standard Life Aberdeen (SLA) 238.10p -4.68%
Sainsbury (J) (SBRY) 177.10p -4.50%
Smith (DS) (SMDS) 307.90p -4.02%
TUI AG Reg Shs (DI) (TUI) 744.80p -3.90%
Glencore (GLEN) 222.15p -3.62%
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 724.00p 9.60%
FirstGroup (FGP) 121.90p 6.37%
IP Group (IPO) 62.60p 3.99%
Safestore Holdings (SAFE) 610.00p 3.92%
Sirius Minerals (SXX) 9.16p 3.50%
Avast (AVST) 368.20p 3.43%
Sports Direct International (SPD) 220.80p 3.18%
Amigo Holdings (AMGO) 149.40p 3.18%
Syncona Limited NPV (SYNC) 230.00p 3.14%
Ascential (ASCL) 367.60p 3.08%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 419.10p -15.28%
Bakkavor Group (BAKK) 91.50p -6.70%
Metro Bank (MTRO) 269.60p -6.52%
NewRiver REIT (NRR) 148.00p -6.09%
Ferrexpo (FXPO) 216.70p -5.86%
Renishaw (RSW) 3,466.00p -5.82%
Aston Martin Lagonda Global Holdings (AML) 445.10p -4.91%
Ibstock (IBST) 208.60p -4.66%
Playtech (PTEC) 376.50p -4.49%
Riverstone Energy Limited (RSE) 682.00p -4.35%
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