London close: Spooked investors see Halloween session finish red

London stocks remained in the red at the close on Thursday, dragged lower by a stronger pound, with fresh uncertainty over a potential Sino-US trade deal and disappointing results from the likes of Shell and Lloyds spooking investors.

The Halloween horror for the FTSE 100 saw it close down 1.12% at 7,248.38, while the FTSE 250 finished 0.47% weaker at 20,021.50.

In currencies, sterling was last 0.28% stronger against the dollar at $1.2938 and up 0.31% on the euro at €1.1606, with the firmer pound undoubtedly denting the top-flight index as around 70% of its constituents derive most of their earnings from overseas.

Stocks had started the morning slightly lower, but losses intensified before lunch as sterling gained ground, and following a report that Chinese officials had raised fresh doubts about reaching a comprehensive trade deal with the US.

Bloomberg cited people familiar with the matter as saying that Chinese officials had warned in private conversations with visitors to Beijing and other interlocutors in recent weeks that they would not budge on particularly thorny issues.

They remain concerned over the impulsive nature of US President Donald Trump, as well as the risk he could back out of even the limited deal both sides say they want to sign in the coming weeks, the report said.

David Cheetham, chief market analyst at XTB, said the market’s sensitivity to such news was exemplified on Wednesday, when a smaller but similar move occurred following reports that the Asia-Pacific Economic Cooperation (APEC) summit in Chile - where the US and China were expected to sign the first phase of a trade deal - was cancelled amid ongoing political protests in the South American country.

“Traders and headline-scanning algos rushed to sell stocks on it before the realisation that the cancellation was solely due to civil unrest in the country at present and not because of a breakdown in US-Sino negotiations saw the moves reversed,” he said.

“Phase one is still set to be signed next month, in Macau, but the latest remarks suggest it could be presumptuous to believe that this will lead to phases two, three and possibly more in short order.

“It is worth noting that market sentiment had gotten very upbeat on trade in recent months despite only a little tangible progress and those who were extrapolating the recent events into a long-term deal may now start to question that hypothesis.”

Dismal growth figures out of Hong Kong did little to help the mood, as it was confirmed that the economy had plunged into a recession in the third quarter, following months of pro-democracy protests.

Back on British shores, uninspiring third-quarter numbers from Royal Dutch Shell and Lloyds were a drag.

Shell closed down 4.12% after it reported a 15% decline in third-quarter earnings, due in part to lower energy prices.

Lloyds Banking Group was also in the red, falling 1.39% after it said third-quarter profits slumped as it took a £1.8bn hit from payment protection insurance claims.

That was at the top end of the £1.6bn to £1.8bn guidance it gave in September.

FTSE 250 housebuilder Crest Nicholson tumbled 5.13% after it warned on full-year profits, highlighting a "volatile" sales environment in some of its regional businesses in the second half, driven mainly by Brexit-related uncertainty and the economic outlook in the UK.

Miners fell on the trade news, with Glencore, Antofagasta and Anglo American all down, while Go-Ahead, Dunelm and Morgan Advanced Materials all lost ground as their stock went ex-dividend.

On the upside, precious metals miner Fresnillo was sparkling from the upper reaches of the FTSE 100, rising 2.63% as gold prices rallied to trade near the week's highs.

Polymetal was also up, finishing the session ahead 1.61%.

BT Group rose 1.44% as investors welcomed the fact that it maintained its interim dividend of 4.62p a share even as revenues fell and profits were flat in the first half.

Shares of British Airways and Iberia parent International Airlines Group were 2.19% higher, after the company's third-quarter operating profit came in as expected at €1.4bn, having taken a hit from pilot strikes.

Market Movers

FTSE 100 (UKX) 7,248.38 -1.12%
FTSE 250 (MCX) 20,021.50 -0.47%
techMARK (TASX) 3,934.18 -0.21%

FTSE 100 - Risers

Fresnillo (FRES) 710.00p 2.63%
Flutter Entertainment (FLTR) 7,978.00p 2.42%
International Consolidated Airlines Group SA (CDI) (IAG) 531.20p 2.19%
Polymetal International (POLY) 1,265.00p 1.61%
BT Group (BT.A) 204.70p 1.36%
Whitbread (WTB) 4,061.00p 1.25%
United Utilities Group (UU.) 870.20p 1.07%
Bunzl (BNZL) 2,008.00p 0.88%
Kingfisher (KGF) 207.20p 0.88%
ITV (ITV) 133.75p 0.87%

FTSE 100 - Fallers

Royal Dutch Shell 'B' (RDSB) 2,218.00p -4.50%
Royal Dutch Shell 'A' (RDSA) 2,233.00p -4.12%
Smith & Nephew (SN.) 1,652.50p -3.64%
Imperial Brands (IMB) 1,692.40p -3.32%
Evraz (EVR) 367.20p -3.06%
BP (BP.) 489.30p -2.26%
London Stock Exchange Group (LSE) 6,954.00p -2.08%
Glencore (GLEN) 232.65p -2.00%
Antofagasta (ANTO) 867.20p -1.66%
Standard Chartered (STAN) 701.00p -1.66%

FTSE 250 - Risers

Future (FUTR) 1,514.00p 11.32%
Ferrexpo (FXPO) 126.40p 2.76%
GVC Holdings (GVC) 890.00p 1.76%
Diploma (DPLM) 1,603.00p 1.71%
RHI Magnesita N.V. (DI) (RHIM) 3,478.00p 1.70%
Genus (GNS) 2,894.00p 1.62%
Cairn Energy (CNE) 177.80p 1.54%
SSP Group (SSPG) 637.00p 1.43%
Wood Group (John) (WG.) 338.30p 1.38%
Babcock International Group (BAB) 554.00p 1.35%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 399.30p -7.03%
Dunelm Group (DNLM) 789.50p -6.46%
Crest Nicholson Holdings (CRST) 388.00p -5.13%
Sanne Group (SNN) 528.00p -3.83%
Coats Group (COA) 71.30p -3.52%
Go-Ahead Group (GOG) 2,052.00p -3.49%
Sirius Minerals (SXX) 2.87p -3.49%
Plus500 Ltd (DI) (PLUS) 800.00p -3.40%
Convatec Group (CTEC) 197.15p -2.79%
Essentra (ESNT) 381.40p -2.70%