London close: City remains subdued amid Trump, Johnson concerns

London stocks clawed back some of their earlier losses in afternoon trade on Wednesday, but remained in the red at the close, as political woes on both sides of the pond dented sentiment.

The FTSE 100 ended the session down 0.02% at 7,289.99, and the FTSE 250 lost 0.72% to 19,774.92.

In currencies, sterling was down 1.08% against the dollar at $1.2352 and 0.4% weaker versus the euro at €1.1292, as MPs returned to parliament.

Sentiment took a hit from news that US President Trump was facing impeachment proceedings stateside.

Overnight, Democratic House speaker Nancy Pelosi formally initiated proceedings against Trump, accusing him of betraying his oath of office and national security.

The move followed a call during which Trump allegedly pressured Ukrainian President Volodymyr Zelensky to investigate the family of former Vice President Joe Biden.

Trump had admitted to bringing up Biden on the call, but denied pressuring Zelensky.

Geopolitical concerns were also a factor on Wednesday, after Trump hit out at Iran and China in his speech at the United Nations a day earlier.

Joshua Mahony, senior market analyst at IG, said any optimism over the US-China relationship faded with each word uttered on the subject by Trump.

“Trump’s appearance at the UN sought to criticise the Chinese growth strategy, drawing the ire of Chinese diplomat Wang Yi who warned that US threats act as a roadblock to trade talk progress," he said.

“The US-China trade talks have taken markets around in circles over the years, and markets are growing increasingly sceptical over an eventual conclusion.”

From a US perspective, Mahony said markets were seeing the focus shift towards the impeachment process launched by Nancy Pelosi, drawing some of his attention away from China relations.

“This process is likely to come to nothing, yet this is yet another challenge to a President who has by and large been keen to target an elevated stock-market over the years.”

On home shores, meanwhile, Prime Minister Boris Johnson was facing calls to resign after the Supreme Court ruled on Tuesday that his decision to suspend parliament was unlawful.

Neil Wilson, chief market analyst at Markets.com, said that despite growing calls for Johnson’s resignation, "nothing has really changed".

"The only narrative that counts is that there’s elite out there frustrating Brexit at every turn. The court ruling only supports this story."

In equity markets, travel company TUI finished down 3.4%, following two days of strong gains on the back of Thomas Cook’s collapse and following the release of a pre-close trading update.

Aston Martin Lagonda was off 5.48% after the luxury car maker said it had successfully raised $150m from a bond issue, with an option for a further $100m, as analysts expressed caution on high borrowing costs.

The bonds come with interest of 12% and 15% respectively and chief financial officer Mark Wilson said the financing deal would provide flexibility in the face of "macroeconomic headwinds and uncertainty".

On the upside, supermarket group J Sainsbury was in the green by 1.64% as it said first-half pre-tax profits would fall by £50m due to the impact of unseasonal weather and higher marketing costs, but maintained its full-year outlook.

Second-quarter total retail sales rose 0.1% excluding fuel, with like-for-like sales down 0.2%, excluding fuel.

Grocery sales increased by 0.6%, general merchandise declined 2% and clothing increased by 3.3%.

Babcock rallied 6.36% as the aerospace and defence group said trading was in line in the first half and that it continued to win work across all sectors, as it backed its full-year guidance.

Imperial Leather maker PZ Cussons fell 2.84% as it said full-year results are expected to be in line with the previous year - assuming no further deterioration in its key markets - amid "challenging” conditions.

In a statement ahead of its annual meeting, the company said its key markets continue to be hit by consumer fragility, with the Nigerian economy remaining depressed, uncertainty in the UK and "highly competitive" markets in Australia.

In broker note action, BBA Aviation was downgraded to ‘hold’ at Berenberg, with its shares losing 0.88%, while Entertainment One was cut to ‘neutral’ at Citi, as its stock closed up 0.09%.

Market Movers

FTSE 100 (UKX) 7,289.99 -0.02%
FTSE 250 (MCX) 19,774.92 -0.72%
techMARK (TASX) 3,843.58 -0.63%

FTSE 100 - Risers

British American Tobacco (BATS) 2,924.50p 3.27%
Imperial Brands (IMB) 2,065.50p 2.25%
Antofagasta (ANTO) 881.20p 1.83%
Sainsbury (J) (SBRY) 216.50p 1.64%
Morrison (Wm) Supermarkets (MRW) 202.00p 1.53%
Croda International (CRDA) 4,800.00p 1.39%
Kingfisher (KGF) 202.20p 1.33%
BHP Group (BHP) 1,733.00p 1.30%
Standard Life Aberdeen (SLA) 277.10p 1.21%
Evraz (EVR) 465.50p 1.17%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 927.00p -3.40%
Ocado Group (OCDO) 1,297.50p -3.06%
Halma (HLMA) 1,914.00p -2.97%
Persimmon (PSN) 2,053.00p -2.75%
Aveva Group (AVV) 3,564.00p -2.62%
DCC (DCC) 6,900.00p -2.54%
Sage Group (SGE) 668.00p -2.37%
Spirax-Sarco Engineering (SPX) 7,635.00p -1.61%
InterContinental Hotels Group (IHG) 4,957.00p -1.61%
Scottish Mortgage Inv Trust (SMT) 497.60p -1.58%

FTSE 250 - Risers

Babcock International Group (BAB) 575.60p 6.36%
Card Factory (CARD) 178.20p 5.76%
4Imprint Group (FOUR) 2,990.00p 2.75%
Hammerson (HMSO) 279.70p 2.57%
Clarkson (CKN) 2,395.00p 2.35%
Shaftesbury (SHB) 896.50p 1.64%
Brewin Dolphin Holdings (BRW) 313.80p 1.55%
Bakkavor Group (BAKK) 115.00p 1.05%
Investec (INVP) 414.60p 0.97%
Great Portland Estates (GPOR) 727.00p 0.89%

FTSE 250 - Fallers

Airtel Africa (AAF) 49.30p -7.85%
Vivo Energy (VVO) 120.80p -6.14%
Pets at Home Group (PETS) 207.40p -5.81%
Syncona Limited NPV (SYNC) 222.00p -5.53%
Premier Oil (PMO) 79.12p -5.49%
PureTech Health (PRTC) 226.00p -4.98%
Future (FUTR) 1,238.00p -4.77%
Aston Martin Lagonda Global Holdings (AML) 550.80p -4.18%
Riverstone Energy Limited (RSE) 622.00p -4.17%
Sophos Group (SOPH) 393.50p -4.05%