London close: UK stocks underperform despite dovish ECB and positive trade news

London stocks underperformed despite another round of monetary stimulus from the European Central Bank - albeit accompanied this time by a very explicit call for fiscal stimulus in the euro area - and apparent signs that trade tensions between the US and China were easing.

In an unusually blunt manner, during his press conference following Thursday's policy announcement, ECB chief Mario Draghi said it was "high time" that fiscal policy took over as policymakers' main tool.

"Mario Draghi has brought out the kitchen sink once again, with the Eurozone economy no better despite all his efforts. The question is whether the recovery will stick this time around. Meanwhile, the outlook for US-China relations appears to have improved as both sides pull back once more," said IG's Josh Mahony.

The FTSE 100 edged up 0.09% to 7,344.67, while the second-tier index gave back 0.10% to 19,962.57, with the pound 0.13% higher against the US dollar at 1.23467 but off by 0.34% versus the euro at 1.1157.

Claus Vistesen at Pantheon Macroeconomics chipped in saying Draghi was justified in calling for action from governments, adding that he was likely to succeed, which in turn pointed higher for growth and asset prices.

"Clearly, the governing council believes that it is being pushed to take increasingly extreme actions in an environment, where fiscal policymakers are sitting idle. That's fair enough [...]," Vistesen said.

On a related note, yields on benchmark 10-year Gilts ended the session up by four basis points to 0.67% after a roller-coaster session - induced by the ECB's policy announcement - that was mirrored both on the Continent and over in the States.

As expected, the ECB also announced a raft of new measures, including a cut to the deposit rate, even cheaper (and for longer) financing for euro area lenders, a tiered deposit rate and more debt purchases that would run until the central bank began raising rates.

Concerns about Sino-US trade relations receded overnight after Donald Trump agreed to delay a planned increase in tariffs on $250bn of Chinese imports by two weeks. The US President said on Twitter on Wednesday that the delay was "a gesture of goodwill" and due to the fact that the People's Republic of China will be celebrating its 70th anniversary on 1 October.

The move followed a decision by Beijing earlier in that session to ease tariffs on 16 categories of goods imported from the US.

On home shores, investors were digesting the latest survey from the Royal Institution of Chartered Surveyors, which showed the outlook for the UK housing market darkened in August.

The net balance of surveyors reporting that house prices have risen over the last three months increased to -4 in August from -9 in July, versus expectations for a reading of -10.

However, Brexit-related uncertainty dented the outlook, with the near-term sales expectations net balance falling to -23 from -4, while the near-term prices expectations net balance declined to -24 from -13.

In equity markets, miners were the top performers, with Anglo American, Rio Tinto and BHP all traded up as copper and iron ore prices were back at recent highs.

Morrisons was the standout gainer on the top-flight index as the supermarket retailer reported a fall in second-quarter like-for-like sales but a 5.3% rise in interim profit.

British American Tobacco rose after saying it was axing 2,300 management jobs as it looks to simplify its structure and reinvest the savings in developing new products such as vapour, tobacco heating and oral tobacco.

Going the other way, InterContinental Hotels and Whitbread traded lower after rating downgrades at JPMorgan, while Lloyds was hit by a downgrade to 'sell' at Goldman Sachs.

Market Movers

FTSE 100 (UKX) 7,344.67 0.09%
FTSE 250 (MCX) 19,962.57 -0.10%
techMARK (TASX) 3,835.09 0.02%

FTSE 100 - Risers

Morrison (Wm) Supermarkets (MRW) 203.10p 4.69%
Fresnillo (FRES) 749.40p 2.77%
Associated British Foods (ABF) 2,300.00p 2.72%
Anglo American (AAL) 1,932.80p 2.64%
Centrica (CNA) 74.78p 2.64%
CRH (CRH) 2,820.00p 1.95%
Aveva Group (AVV) 3,592.00p 1.81%
Experian (EXPN) 2,525.00p 1.77%
BHP Group (BHP) 1,803.80p 1.51%
Berkeley Group Holdings (The) (BKG) 4,085.00p 1.37%

FTSE 100 - Fallers

ITV (ITV) 120.05p -4.34%
NMC Health (NMC) 2,816.00p -3.50%
Bunzl (BNZL) 2,097.00p -3.01%
Whitbread (WTB) 4,429.00p -2.53%
InterContinental Hotels Group (IHG) 5,037.00p -2.52%
Marks & Spencer Group (MKS) 198.05p -2.44%
3i Group (III) 1,100.50p -2.26%
Ocado Group (OCDO) 1,338.50p -2.23%
Land Securities Group (LAND) 805.06p -2.06%
British Land Company (BLND) 542.80p -1.95%

FTSE 250 - Risers

Rank Group (RNK) 178.60p 5.80%
Sirius Minerals (SXX) 11.00p 3.77%
TI Fluid Systems (TIFS) 189.40p 3.72%
Vivo Energy (VVO) 130.60p 3.16%
4Imprint Group (FOUR) 2,950.00p 3.15%
Capita (CPI) 144.90p 2.99%
NewRiver REIT (NRR) 186.80p 2.75%
Dechra Pharmaceuticals (DPH) 2,870.00p 2.64%
Stagecoach Group (SGC) 132.00p 2.48%
Sabre Insurance Group (SBRE) 281.00p 2.37%

FTSE 250 - Fallers

Intu Properties (INTU) 43.27p -5.48%
Premier Oil (PMO) 84.08p -4.89%
Tullow Oil (TLW) 217.70p -4.68%
Hammerson (HMSO) 259.80p -4.52%
Energean Oil & Gas (ENOG) 951.00p -4.52%
Wood Group (John) (WG.) 411.40p -4.17%
IP Group (IPO) 62.40p -3.93%
Centamin (DI) (CEY) 130.00p -3.56%
Cairn Energy (CNE) 185.90p -3.28%
Metro Bank (MTRO) 280.00p -3.25%