London close: Shares finish day little changed, despite trade concerns

London stocks finished the session little changed as trade concerns continued to weigh on investors' minds, with US President Trump set to slap tariffs on a further $200bn-worth of Chinese imports, possibly as soon as Monday evening.

The FTSE 100 was 0.03% or 1.94 points lower at 7,302.10, while the pound was up 0.1% against the euro at 1.1250 and 0.62% firmer versus the dollar at 1.31510, holding its ground as both the British Chambers of Commerce and the International Monetary Fund added their voice to those warning about the dangers of a no-deal Brexit.

According to reports, Beijing was considering declining the US administration's offer of negotiations later this month after Trump instructed aides to press ahead with tariffs of 10%.

Trump tweeted on Monday: "Tariffs have put the US in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be Tariffed!"

Rebecca O'Keeffe, head of investment at Interactive Investor, said: "President Trump’s style is to escalate the pressure to try and generate as much leverage as he can in any potential negotiation, but China may not play his game, with reports that they are considering pulling out of any trade talks, making it difficult to see a resolution to the tensions in the short term."

Meanwhile, the BCC downgraded its UK growth expectations, saying it now expects GDP growth for 2018 of just 1.1%, down from a previous forecast of 1.3% and growth of 1.4% for 2019, down from 1.3%. The downgrades were driven by a weaker outlook for trade and investments, with exports likely to face more subdued growth due to continued Brexit uncertainty and slower growth in key markets.

Adam Marshall, director general of the BCC, said: "The lack of precision on the nature of the UK’s future relationship with the EU is lowering expectations for both business investment and export growth.

"The drag effect on investment and trade would intensify in the event of a ‘messy’ and disorderly Brexit. Businesses need the Brexit negotiations to deliver clarity, precision and results at pace over the coming weeks."

Meanwhile, the IMF cautioned that a no-deal Brexit would lead to "substantial costs" for the UK economy. It said Britain’s economy would grow by about 1.5% in 2018 and 2019 if a broad Brexit agreement was reached, compared with 1.75% if it had stayed in.

There was some better news, however, with figures from Rightmove revealing that UK house prices bounced back in September and the latest consumer spending index from Visa showing a return to positive territory last month.

According to Rightmove, house prices rose 0.7% on the month following a 2.3% decline in August amid signs of a recovery in London and a pickup in sales of the capital's most expensive properties. On the year, prices were up 1.2% compared to a 1.1% increase the month before.

In Greater London, house prices were up 1.2% on the month, but down 0.5% on the year. Rightmove said there were signs of renewed buyer activity in the upper price sectors in London, with a 6% increase in the number of sales agreed for properties of £750,000 and over compared to the same month last year.

"Buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation," said Rightmove director Miles Shipside. "However in London, after asking prices rose by over 50% between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts of the capital. Now, there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves."

Meanwhile, the data from Visa revealed a 0.4% year-on-year increase in household spending last month compared to a 0.9% reduction in July.

Visa's chief commercial officer, Mark Antipof, said spending was buoyed by face-to-face purchases with back-to-school spending amongst parents likely contributing to a glimmer of hope for its high streets.

"The prolonged good weather has seen sustained performance for hotels, restaurants and bars and food and drink again topping the sector categories," he said.

In corporate news, ITV fell after reports emerged over the weekend that it has entered the bidding for the independent production house Endemol Shine, the £3bn maker of programmes including Big Brother, The Fall, MasterChef and Peaky Blinders.

Prudential was in the red after saying that M&G Prudential will take on around £3.5bn of subordinated debt when it demerges from Prudential as part of a debt rebalancing process, subject to approval from its new board.

On the upside, Dairy Crest rallied after it said strong sales from its largest cheese and butter brands will mean first half revenues will churn higher than last year.

Sirius Minerals racked up strong gains as it secured a supply deal to sell up to 2.5m tonnes per year of POLY4 - its flagship fertiliser product - to Brazilian fertiliser distribution company The Cibra Group.

On the broker note front, GVC Holdings lost ground after Barclays cut its price target on the stock.

Compass was started at 'outperform' by Bernstein, while Tullow Oil was upgraded to 'hold' at HSBC. Hays and Sophos were cut to 'hold' at HSBC and Deutsche Bank, respectively, while Caretech was initiated at 'buy' at Liberum.

Market Movers

FTSE 100 (UKX) 7,302.10 -0.03%
FTSE 250 (MCX) 20,374.39 -0.01%
techMARK (TASX) 3,472.15 -0.00%

FTSE 100 - Risers

SSE (SSE) 1,122.50p 3.55%
Evraz (EVR) 495.70p 2.48%
Carnival (CCL) 4,815.00p 2.36%
Smurfit Kappa Group (SKG) 3,124.00p 2.16%
WPP (WPP) 1,148.00p 2.09%
Royal Bank of Scotland Group (RBS) 250.00p 1.58%
Centrica (CNA) 145.45p 1.50%
Randgold Resources Ltd. (RRS) 4,720.00p 1.40%
Kingfisher (KGF) 266.00p 1.37%
BT Group (BT.A) 228.80p 1.24%

FTSE 100 - Fallers

GVC Holdings (GVC) 995.00p -3.49%
Scottish Mortgage Inv Trust (SMT) 532.00p -2.46%
Ashtead Group (AHT) 2,340.00p -2.26%
Burberry Group (BRBY) 2,109.00p -2.04%
Prudential (PRU) 1,681.00p -1.44%
InterContinental Hotels Group (IHG) 4,633.00p -1.34%
Experian (EXPN) 1,920.50p -1.26%
Relx plc (REL) 1,571.00p -1.26%
Coca-Cola HBC AG (CDI) (CCH) 2,566.00p -1.19%
ITV (ITV) 158.00p -1.13%

FTSE 250 - Risers

Sirius Minerals (SXX) 29.28p 6.32%
Rank Group (RNK) 181.80p 6.16%
Kier Group (KIE) 1,036.00p 5.39%
Metro Bank (MTRO) 2,906.00p 3.64%
TalkTalk Telecom Group (TALK) 132.05p 2.65%
Euromoney Institutional Investor (ERM) 1,342.00p 2.60%
Wetherspoon (J.D.) (JDW) 1,295.00p 2.53%
Assura (AGR) 56.70p 2.53%
On The Beach Group (OTB) 509.00p 2.52%
Tullow Oil (TLW) 234.70p 2.27%

FTSE 250 - Fallers

Sophos Group (SOPH) 492.60p -4.54%
Hikma Pharmaceuticals (HIK) 1,890.50p -3.67%
Investec (INVP) 506.00p -3.66%
Indivior (INDV) 260.40p -3.48%
Kaz Minerals (KAZ) 462.90p -2.77%
Superdry (SDRY) 1,146.00p -2.55%
Hays (HAS) 205.80p -2.28%
BTG (BTG) 546.00p -2.24%
Greggs (GRG) 1,061.00p -2.12%
Polar Capital Technology Trust (PCT) 1,322.00p -1.78%