London close: Stocks retreat amid US-China trade worries
By Alexander Bueso
Date: Friday 29 Nov 2019
(Sharecast News) - Equity markets in London finished the week mired in red amid worries about the current state of Sino-US trade relations and the toll they were taking on the global economy, but Ocado surged as it announced its first deal in Asia.
The FTSE 100 was down 0.94% at 7,346.53, while the pound was 0.2% higher against the US dollar at 1.29372 and up by 0.09% versus the euro to 1.1739.
Stocks in London took their cue from weakness in Asia, after data showed that Japanese industrial production dropped 4.2% last month, while industrial production in South Korea declined 1.7%. Concerns about trade relations between the US and China also continued to weigh on sentiment as China threatened "firm countermeasures" in response to US legislation backing anti-government protesters in Hong Kong.
Spreadex analyst Connor Campbell said the move by the US "will irrevocably damage the relationship between the US and China just as it seemed that the 'phase one' trade talks were pointing in the right direction".
On home shores, the latest GfK survey revealed that consumer confidence in the UK remained subdued in November amid uncertainty over Brexit and ahead of the general election. GfK's long-running consumer confidence index was unchanged from October at -14, in line with expectations and at a six-year low.
Joe Staton, client strategy director at GfK, said: "In the face of Brexit and election uncertainty, consumers are clearly in a 'wait-and-see' mode. The score for the general economy over the coming year has ticked up three points and this is possibly an indication that some consumers believe the imminent general election might clear the Brexit deadlock, even though this sub-measure is still in deeply negative territory at -34.
"The general election is potentially an opportunity to move us out of the doldrums - but for this to happen there must be a clear result. A hung parliament could be very damaging for consumer confidence and would surely deepen the obvious malaise that we see month after month. We have not seen a positive headline score since January 2016 - that's nearly four years ago. Uncertainty is nobody's friend. So, while many issues are under the spotlight in this election, political parties will need to satisfy voters that they will be effective for the wider economy and that, as a consequence, people will be better off next year and beyond."
There wasn't much happening on the corporate front, but Ocado rallied sharply after the online grocer signed a technology partnership with Japanese supermarket chain Aeon to establish an online business.
Neil Wilson, chief market analyst at Markets.com, said: "This is a big deal - Aeon is in the top 10 global retailers bracket and is among Asia's largest retailers. This deal gives access to one of the world's largest markets and with probably the best brand Ocado could have picked for entry into the Japanese market.
"Aeon's footprint is especially large as it has a presence across multiple retail channels, from groceries and convenience to general merchandise. Another smart move by Steiner and co."
Virgin Money also rose, for a second day running, after its annual results on Thursday. Deutsche Bank said in a note that while the results were a miss, guidance was better than expected.
Elsewhere, St James's Place was knocked lower by a downgrade to 'sell' at Goldman Sachs, while Royal Mail was weaker after a downgrade to 'market perform' at Bernstein. It was also in focus after the Court of Appeal rejected a union appeal against an injunction preventing its staff from striking ahead of Christmas.
Tullow Oil gushed lower after Peel Hunt downgraded the stock to 'add'.
Market Movers
FTSE 100 (UKX) 7,346.53 -0.94%
FTSE 250 (MCX) 20,812.60 -1.00%
techMARK (TASX) 4,090.05 -0.56%
FTSE 100 - Risers
Ocado Group (OCDO) 1,325.00p 9.69%
Fresnillo (FRES) 577.60p 1.16%
Compass Group (CPG) 1,904.00p 1.14%
Aviva (AV.) 403.80p 0.45%
Polymetal International (POLY) 1,165.00p 0.43%
Just Eat (JE.) 764.60p 0.34%
Evraz (EVR) 370.40p 0.33%
Unilever (ULVR) 4,582.50p 0.24%
Burberry Group (BRBY) 2,104.00p 0.24%
Standard Chartered (STAN) 697.40p 0.20%
FTSE 100 - Fallers
Tesco (TSCO) 229.40p -3.37%
Sainsbury (J) (SBRY) 214.30p -2.99%
Kingfisher (KGF) 209.90p -2.69%
Berkeley Group Holdings (The) (BKG) 4,586.00p -2.67%
Royal Bank of Scotland Group (RBS) 226.20p -2.54%
Lloyds Banking Group (LLOY) 61.15p -2.46%
NMC Health (NMC) 2,509.00p -2.37%
Hargreaves Lansdown (HL.) 1,855.00p -2.37%
Next (NXT) 6,758.00p -2.34%
St James's Place (STJ) 1,093.50p -2.28%
FTSE 250 - Risers
Finablr (FIN) 208.00p 7.16%
Virgin Money UK (VMUK) 178.80p 5.18%
Sirius Minerals (SXX) 3.69p 4.00%
Ascential (ASCL) 328.00p 2.82%
Restaurant Group (RTN) 148.00p 2.71%
Cineworld Group (CINE) 207.80p 1.91%
Coats Group (COA) 72.15p 1.91%
PayPoint (PAY) 1,016.00p 1.91%
Micro Focus International (MCRO) 1,132.80p 1.65%
Playtech (PTEC) 384.10p 1.53%
FTSE 250 - Fallers
Victrex plc (VCT) 2,304.00p -5.96%
Wood Group (John) (WG.) 351.30p -5.51%
Travis Perkins (TPK) 1,539.50p -4.65%
Barr (A.G.) (BAG) 588.00p -4.39%
Royal Mail (RMG) 208.50p -4.23%
TI Fluid Systems (TIFS) 226.50p -4.03%
Ferrexpo (FXPO) 143.40p -3.89%
Aston Martin Lagonda Global Holdings (AML) 550.40p -3.74%
Tullow Oil (TLW) 130.95p -3.61%
Hunting (HTG) 390.40p -3.60%
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