London midday: FTSE maintains losses; Asia-focused shares retreat
By Michele Maatouk
Date: Wednesday 13 Nov 2019
(Sharecast News) - London stocks were still in the red by midday on Wednesday after an eagerly-awaited speech by US President Trump left investors disappointed, while escalating unrest in Hong Kong also weighed on the mood.
The FTSE 100 was 0.5% lower at 7,326.74.
In his speech at the economic club of New York on Tuesday, Trump said a trade deal with China could happen "soon" but provided no new details on negotiations between the two countries and threatened to raise tariffs on China "very substantially" if it does not make a deal with the US.
Russ Mould, investment director at AJ Bell, said: "Donald Trump's speech on Tuesday failed to give investors the information they wanted on trade policy and so we've got another down day for UK and European equities.
"Investors had hoped they would get some clarity on the potential rollback of tariffs. Disappointment on this front, together with heightened tensions in Hong Kong, has served to damped investor appetite for equities."
In currency markets, sterling was flat against the dollar and the euro at 1.2850 and 1.1670, respectively, showing little reaction to the latest UK inflation data.
The UK's headline inflation rate fell to its lowest level in nearly three years in October, according to figures released by the Office for National Statistics earlier.
The consumer price index rose 1.5% year-on-year, down from 1.7% in September and marking the lowest headline inflation since November 2016. Economists expected the rate to slip to 1.6%.
An ONS spokesperson said: "A fall in utility prices due to a lowering of the energy price cap helped ease inflation in October. However, this was partially offset by rising clothing prices."
Gas and electricity prices declined 8.7% and 2.2% month-on-month, respectively, following a cut to Ofgem's price cap. Further downward contributions came from furniture, household equipment and maintenance.
Core inflation, which strips out volatile food and energy items, was unchanged at 1.7%, in line with consensus expectations.
Ruth Gregory, senior UK economist at Capital Economics, said: "October's consumer price inflation figures were in line with the Bank of England's expectations so they are unlikely to move the dial on the outlook for interest rates.
"Overall, the figures do little to change our view that inflation will spend more time below 2% than above it in 2020 and that if Brexit is delayed further, interest rates will be cut, in May 2020."
In equity markets, stocks with exposure to Asia were under pressure amid unrest in Hong Kong, with HSBC, Prudential and Burberry all weaker.
British Land was on the back foot as it reported a drop in first-half profit and the value of its portfolio amid challenging retail markets.
Taylor Wimpey reversed earlier gains to trade lower after the housebuilder said it was on track to deliver full-year results in line with expectations, albeit with slightly higher volumes and slightly lower operating margins than guided at the half year.
Tullow Oil tumbled after the cutting its 2019 oil production guidance and saying that free cash flow for the year would be lower than expected due to issues at its Ghana field.
Cineworld shares fell after an initiation at 'underweight' by Morgan Stanley.
On the upside, Coca-Cola HBC, which bottles Coca-Cola products, fizzed higher as it hailed a "solid" third quarter despite adverse weather conditions.
Engineer Smiths Group rallied after posting an 11% jump in first-quarter revenue and backing its expectations for the full year.
B&M European Value Retail was the standout gainer on the FTSE 250, having slumped a day earlier after announcing a strategic review of its German business and reporting a fall in first-half profit.
Market Movers
FTSE 100 (UKX) 7,326.74 -0.53%
FTSE 250 (MCX) 20,247.32 -0.88%
techMARK (TASX) 4,007.08 0.04%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 2,527.00p 7.12%
Smiths Group (SMIN) 1,676.50p 3.62%
Fresnillo (FRES) 645.40p 3.10%
Polymetal International (POLY) 1,190.00p 2.63%
NMC Health (NMC) 2,314.00p 2.07%
SSE (SSE) 1,313.50p 1.82%
AstraZeneca (AZN) 7,392.00p 1.61%
Diageo (DGE) 3,105.50p 1.49%
Spirax-Sarco Engineering (SPX) 8,335.00p 1.46%
Aveva Group (AVV) 4,466.00p 1.32%
FTSE 100 - Fallers
British Land Company (BLND) 550.80p -4.24%
ITV (ITV) 134.00p -3.11%
St James's Place (STJ) 1,034.50p -3.09%
Prudential (PRU) 1,308.50p -2.97%
HSBC Holdings (HSBA) 574.40p -2.43%
Taylor Wimpey (TW.) 166.15p -2.24%
Glencore (GLEN) 239.95p -2.20%
Legal & General Group (LGEN) 269.60p -2.11%
Mondi (MNDI) 1,637.50p -2.03%
Land Securities Group (LAND) 877.60p -1.99%
FTSE 250 - Risers
B&M European Value Retail S.A. (DI) (BME) 376.00p 5.38%
TBC Bank Group (TBCG) 1,402.00p 3.09%
Games Workshop Group (GAW) 5,515.00p 2.80%
G4S (GFS) 207.20p 2.37%
Wetherspoon (J.D.) (JDW) 1,559.00p 2.23%
Softcat (SCT) 1,132.00p 1.98%
Workspace Group (WKP) 1,107.00p 1.75%
Hochschild Mining (HOC) 187.10p 1.63%
Go-Ahead Group (GOG) 2,096.00p 1.55%
Dechra Pharmaceuticals (DPH) 2,708.00p 1.35%
FTSE 250 - Fallers
Tullow Oil (TLW) 153.90p -25.25%
Ferrexpo (FXPO) 127.35p -6.05%
Card Factory (CARD) 153.80p -4.53%
Cineworld Group (CINE) 209.70p -4.03%
Direct Line Insurance Group (DLG) 270.10p -3.64%
Network International Holdings (NETW) 515.00p -3.56%
Hunting (HTG) 421.20p -3.53%
Galliford Try (GFRD) 674.00p -3.30%
Airtel Africa (AAF) 68.20p -3.26%
Micro Focus International (MCRO) 1,073.00p -3.23%
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