Monday 17 June 2019

London’s top-flight stocks under pressure amid trade fears

The US has issued a fresh threat of tariffs on Chinese goods.

Markets have been rocked by trade war fears in recent months (Niall Carson/PA)
Markets have been rocked by trade war fears in recent months (Niall Carson/PA)

By Helen Cahill, Press Association City Reporter

London’s top-flight stocks were under pressure on Wednesday amid yet more fears over a US-China trade war.

The FTSE 100 closed 1.24% or 95.85 points lower at 7,652.91, while the Cac 40 in France was down by 0.23% and the Dax in Germany was knocked 0.53%, after the Trump administration announced fresh plans for tariffs on Chinese goods.

Sterling was muted during the session following data showing in July, Britain’s manufacturing sector grew at its weakest rate in 16 months.

In the afternoon, the pound was up 0.2% against the euro at 1.124. Sterling was flat against the dollar at 1.312.

Oil prices dived, with Brent crude down by as much as 2.24% to 72.512 US dollars a barrell, on the back of news of a spike in US oil inventories.

In markets, Direct Line said its boss Paul Geddes is to leave the insurance giant next summer after 10 years at the helm.

My Geddes said he had been “privileged” to lead the firm, with a tenure that saw him oversee Direct Line’s split from Royal Bank of Scotland and its stock market flotation. Shares closed 5.4p lower at 338.5p.

Lloyds Banking Group has thanked a cost-cutting drive for its 23% rise in half-year profits, despite taking a restructuring charge and a £550 million hit from the payment protection insurance (PPI) scandal.

The high street lender said underlying profit rose 7% to £4.2 billion over the six months to June 30, while statutory pre-tax profits surged 23% to £3.1 billion. The results lifted shares 1.03p to 63.41p.

Surging demand for summer clothing helped retail chain Next grow sales by 2.8% as Britons sweltered in the recent heatwave, but the firm’s shares slumped 7% or 424p, making it the biggest faller on the FTSE 100.

The group said online sales in its second quarter to July 28 rose by 12.5%, which offset an ongoing decline in its high street stores, where sales dropped by 5.9%.

BAE Systems posted a fall in profits as it kick-started talks with the Australian government over its £20 billion contract to build warships.

For the six months ended June 30, operating profit dropped 11% to £792 million, down from £885 million for the same period in 2017, knocking shares by 19.2p to 634p.

Capita’s shares dived by 8.6% or 13.95p to 148.05p after the company posted plunging profits and axed a handout to investors.

The UK’s biggest outsourcer said on Wednesday that underlying profit before tax fell by 59% to £80.5 million for the half-year, compared with £195 million the previous year.

Dignity’s shares jumped by more than 3% or 39p to 1,051p as the funeral provider announced a £50 million turnaround plan and better than expected earnings on the back of a rise in deaths.

The company reported a 3% rise in revenue to £174.7 million over the 26 weeks to June 29, and while underlying operating profit fell 5% to £56.4 million – which was higher than forecasts for £52.5 million.

The biggest risers on the FTSE 100 were Smurfit Kappa Group up 86p to 3,216p, Lloyds Banking Group up 1.03p to 63.41p, Shire up 53p to 4,404p and Schroders up 29p to 3,142p.

The biggest fallers on the FTSE 100 were Next down 424p to 5,512p, Glencore down 12.65p to 321.85p, Rentokil down 12.7 to 326.6p and Rio Tinto down 142.5p to 4,054p.

Press Association

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