London close: Stocks finish higher on renewed trade optimism
By Josh White
Date: Wednesday 04 Dec 2019
(Sharecast News) - London stocks remained in the green by the close on Wednesday, amid fresh optimism over a trade deal between the US and China, although a stronger pound meant gains were less than impressive in comparison to markets on the continent.
The FTSE 100 finished the day up 0.42% at 7,188.50, and the FTSE 250 was 0.8% firmer at 20,665.48.
It was a less impressive performance for the City's benchmark index compared to its European peers, which were all up at least 1%, as the pound hit seven-month highs amid market expectations that the Tories would come out victorious in the general election next week.
The pound was last 0.74% higher on the dollar at $1.3091, and ahead 0.73% on the euro at €1.1814.
Sentiment was boosted by a report suggesting that the United States and China were moving closer to agreeing a first phase trade deal, even as tensions over Hong Kong and Xinjiang escalated.
Bloomberg cited people familiar with the trade discussions, claiming that the two were edging closer to an agreement on the amount of tariffs that would be rolled back in a phase one deal.
The sources told Bloomberg that US president Donald Trump's comments at a NATO meeting in London on Tuesday, where he downplayed the urgency of a deal, should not be taken to mean talks were stalling.
One source said the US legislation passed last week in support of Hong Kong pro-democracy protesters and the more recent legislation, which requires the US president to condemn abuses against Muslims in China, were unlikely to affect the talks.
It was understood that US negotiators expected a phase one deal to be completed before US tariffs on goods from China are due to rise on 15 December.
Investors were also mulling Chinese and UK services data for much of the session, with Caixin's unofficial services purchasing managers' index in China ticking up to 53.5 from 51.1 in October, beating expectations for a reading of 51.2 and marking the fastest expansion since April.
A reading above 50.0 signals expansion, while a reading below indicates contraction.
The outfit's composite manufacturing and services PMI rose to 53.2 last month from 52.0 in October - the best reading in 21 months.
On home shores, the latest survey from IHS Markit/CIPS showed the services sector shrank in November, and at the fastest pace since March, as concerns about Brexit and the upcoming general election took their toll.
The purchasing managers' index ticked down to 49.3 from 50.0 in October, which was ahead of a flash reading of 48.6, but below the 50.0 level that separates contraction from expansion.
IHS Markit said the index was consistent with UK GDP declining at a quarterly rate of around 0.1%.
"The sector was hemmed in with no room for improvement in November by the fastest fall in the pipeline of new work since July 2016, and the biggest drop in export orders since this index began in September 2014," said Duncan Brock, group director at the Chartered Institute of Procurement & Supply.
"As Brexit nerves continued to affect domestic client decision-making, a veil of silence also descended over European clients in particular who were reluctant to commit until there is more clarity in the UK's future direction."
In equity markets, steelmaker Evraz rose 3.42%, and miners Antofagasta , Glencore and Anglo American gained 2.53%, 1.15% and 1.15% respectively, on trade deal hopes.
Rio Tinto was in the red, however, falling 0.12% after it said it had curtailed operations at its Richard Bay Minerals unit in South Africa, after one employee was shot and another seriously injured in local violence.
Morrisons was 1.41% weaker after the supermarket chain appointed current chief finance and commercial officer Trevor Strain to the role of chief operating officer and trading director Michael Gleeson to the role of chief financial officer.
Segro and Moneysupermarket were hit by downgrades to 'underperform' at RBC Capital Markets, falling 0.65% and 2.5% respectively, while Aviva was 0.53% lower after a downgrade to 'equal weight' at Barclays.
Market Movers
FTSE 100 (UKX) 7,188.50 0.42%
FTSE 250 (MCX) 20,665.48 0.80%
techMARK (TASX) 4,000.68 0.06%
FTSE 100 - Risers
Meggitt (MGGT) 640.20p 3.46%
Evraz (EVR) 357.20p 3.42%
Smith (DS) (SMDS) 378.90p 2.88%
Hargreaves Lansdown (HL.) 1,808.50p 2.87%
Ocado Group (OCDO) 1,228.00p 2.85%
JD Sports Fashion (JD.) 778.00p 2.72%
Antofagasta (ANTO) 866.60p 2.53%
Ferguson (FERG) 6,636.00p 2.50%
International Consolidated Airlines Group SA (CDI) (IAG) 552.20p 2.49%
Next (NXT) 6,726.00p 2.41%
FTSE 100 - Fallers
Fresnillo (FRES) 545.40p -6.39%
Morrison (Wm) Supermarkets (MRW) 192.80p -1.41%
Sage Group (SGE) 722.20p -1.34%
Smith & Nephew (SN.) 1,661.00p -1.25%
Diageo (DGE) 3,079.50p -1.22%
Coca-Cola HBC AG (CDI) (CCH) 2,495.00p -1.15%
Halma (HLMA) 2,091.00p -1.09%
Flutter Entertainment (FLTR) 8,666.00p -0.96%
Pearson (PSON) 628.00p -0.79%
Hiscox Limited (DI) (HSX) 1,339.00p -0.74%
FTSE 250 - Risers
Future (FUTR) 1,370.00p 8.04%
Cineworld Group (CINE) 208.20p 5.89%
Premier Oil (PMO) 89.98p 5.83%
Investec (INVP) 439.00p 5.15%
Kainos Group (KNOS) 626.00p 4.71%
Sirius Minerals (SXX) 3.59p 4.55%
Countryside Properties (CSP) 415.20p 4.53%
Provident Financial (PFG) 424.80p 4.09%
OneSavings Bank (OSB) 390.20p 3.94%
Tullow Oil (TLW) 137.85p 3.65%
FTSE 250 - Fallers
Moneysupermarket.com Group (MONY) 323.30p -2.91%
Euromoney Institutional Investor (ERM) 1,216.00p -2.88%
Unite Group (UTG) 1,194.00p -2.21%
Oxford Instruments (OXIG) 1,540.00p -2.04%
Serco Group (SRP) 146.80p -1.81%
FirstGroup (FGP) 116.20p -1.78%
William Hill (WMH) 169.00p -1.72%
Sanne Group (SNN) 630.00p -1.56%
Brewin Dolphin Holdings (BRW) 331.40p -1.54%
Hochschild Mining (HOC) 164.40p -1.50%
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