London close: Mixed US data, pound's resilience drag on shares
Stocks finished on a mixed note, with the Footsie hampered by a batch of mixed economic data out in the States as well as from across the Channel, in the euro area, even as the pound put on another show of resilience alongside.
Nevertheless, there was some positive news to be had in the form of figures revealing a record fiscal surplus for the Treasury in January, as well as on the global trade front.
Running over the day's highlights with clients, IG's Chris Beauchamp said: "US economic data is providing markets with a reason to drop back this afternoon, as durable goods orders grow by less than expected, housing data continues to look weak and the Philly Fed index drops into negative territory for the first time since mid-2016.
"Suddenly, the Fed's decision to ease back on the hawkish talk seems much more sensible. In addition, the lack of US-China trade talk news and the ECB’s fears over a US-EU spat on tariffs have also put a dampener on the mood."
By the end of trading, the FTSE 100 was standing 0.85% or 61.23 points lower ato 7,167.39, although the second-tier index was better behaved, adding 0.18% or 34.85 points to trade at 19,236.88.
In the US meanwhile, the latest readings on durable goods orders and on the Philly Fed's closely-followed regional manufacturing index stoked some concern among analysts - albeit not all - regarding the outlook for private investment.
Echoing those worries, following the release of those two reports, Mickey Levy at Berenberg Capital Markets said:"The manufacturing sectors face many challenges: slower global growth, especially in China; weaker global trade volumes; strong U.S. dollar; trade tensions; and low oil prices.
"Combined, their impacts appear to be intensifying. The sizeable rebound in the stock market thus far this year and an end to the U.S.-China trade tensions may lift confidence eventually, and deregulation initiatives from the Trump Administration and the reform components of the Tax Cuts and Jobs Act provide support to business investment, but the short-run challenges are very concerning and hard to dismiss."
Also weighing on the top-flight index, trading in the pound had a slightly positive skew throughout most of the session after the Chancellor talked up the prospects for a deal and the leader of the House of Commons, Andrea Leadsom, said the government was still planning to go ahead with a vote in Parliament on either a new Brexit deal or on what the way ahead should be.
Earlier, the Chancellor had told the BBC that there wee positive signs coming out of Brussels with the European Union now promising "guarantees" that the Irish backstop would not be permanent.
Back in the UK, the Office for National Statistics reported a record public sector surplus for January of £14.9bn (consensus: £10.0bn).
According to Samuel Tombs, Pantheon Macroeconomics's chief UK economist, the data suggested that it was unlikely the economy had lost as much momentum as many surveys seemed to imply.
Significantly, he said the data appeared to leave the path clear for the Chancellor to set fiscal policy such that it would deliver another "modest" boost in 2020, although "with the economic outlook highly uncertain at present, next month’s Spring Statement probably will be a holding operation."
Still on tap for later in the day in the States, senior US and Chinese officials were due to meet again on Thursday and Friday, but this time in Washington D.C., following the prior week's contacts between the two sides.
Linked to the above, overnight Bloomberg had reported that Washington and Beijing were working on various memorandums of understanding, covering areas ranging from agriculture or technology transfers and intellectual property to non-tariff barriers.
Barclays beats analysts estimates
Barclays beat analysts' profit estimates despite the hit to the lender's operations from Brexit-related uncertainty and volatility in markets. For the fourth quarter of 2018, the lender posted a 1% increase in profits before tax to reach £574m (consensus: £566m) on the back of a 2% rise in adjusted total income to £5.1bn.
Energy supplier Centrica on Thursday said the government-imposed price cap would hit 2019 results as it lost customers but reported a rise in operating profits. The company also announced it would sell its North American franchisee home services business Clockwork for £230m as recovery in the region was slower than expected, adding that it was targeting £500m in non-core divestments.
Anglo American on Thursday reported a 4% rise in underlying EBITDA to $9.2bn driven by strong prices, particularly platinum group metals, thermal and metallurgical coal and nickel, as well as productivity improvements and cost control. The company said hit took a $600m hit from the suspension of operations at it giant Minas Rio iron ore mine in Brazil. Production is due to resume by the end of the year.
Defence contractor BAE Systems said full year operating profit rose 14.3% per cent to £1.6bn as it warned that Germany's move to halt arms exports to Saudi Arabia could hit its ability to supply the controversial country in the aftermath of the murder of Saudi journalist Jamal Kashoggi. BAE said it was working closely with the UK government to "minimise the risk of any such occurrence and the impact it would have on financial performance, the supply chain and relationships".
Standard Chartered said it was setting aside $900m (£688m) to cover fines resulting from regulatory investigations in the US and UK. According to the lender, the provision related to the potential resolution of US investigations into alleged violations of sanctions, and for probes relating to foreign exchange trading in Britain.
Kaz Minerals on Thursday reported a rise in annual profit after a revenue increase was driven by increased copper production from the FTSE 250 listed company's portfolio of low-cost open-pit mines. For the year ended 31 December the Kazakhstan-focused miner saw profit before tax increase to £0.64bn, a rise of 10.7% since the year before, after revenue jumped by 30.0% to £2.16bn on the back of a 13.9% increase in copper production to 295 kt, coming in at the upper end of its guidance range of 270-300 kt..
Market Movers
FTSE 100 7,167.39 -0.85%
FTSE 250 19,236.88 +0.18%
FTSE 100 - Risers
Relx plc (REL) 1,765.50p +4.78%
British Land Company (BLND) 580.80p +1.22%
Land Securities Group (LAND) 879.40p +1.17%
Morrison (Wm) Supermarkets (MRW) 229.85p +1.14%
Experian (EXPN) 2,038.00p +1.04%
Schroders (SDR) 2,691.00p +1.01%
St James's Place (STJ) 956.40p +0.93%
Informa (INF) 721.40p +0.90%
InterContinental Hotels Group (IHG) 4,585.00p +0.88%
National Grid (NG.) 855.00p +0.86%
FTSE 100 - Fallers
Centrica (CNA) 121.15p -11.70%
BAE Systems (BA.) 464.80p -7.85%
Imperial Brands (IMB) 2,601.00p -4.15%
Smith (DS) (SMDS) 336.90p -3.61%
Fresnillo (FRES) 990.40p -3.61%
Glencore (GLEN) 300.50p -3.21%
HSBC Holdings (HSBA) 623.10p -3.16%
Ocado Group (OCDO) 903.60p -3.11%
TUI AG Reg Shs (DI) (TUI) 822.60p -2.44%
GlaxoSmithKline (GSK) 1,538.00p -2.29%
FTSE 250 - Risers
TBC Bank Group (TBCG) 1,412.00p +9.46%
Playtech (PTEC) 398.40p +8.23%
Plus500 Ltd (DI) (PLUS) 823.50p +7.37%
Stobart Group Ltd. (STOB) 154.40p +6.78%
Dairy Crest Group (DCG) 555.00p +5.92%
Serco Group (SRP) 121.70p +5.83%
CYBG (CYBG) 197.30p +4.89%
CLS Holdings (CLI) 245.00p +4.26%
Bakkavor Group (BAKK) 170.00p +3.66%
EI Group (EIG) 205.50p +3.16%
FTSE 250 - Fallers
Indivior (INDV) 99.34p -5.70%
Tullow Oil (TLW) 220.00p -4.97%
Just Eat (JE.) 699.00p -4.79%
Superdry (SDRY) 521.50p -4.66%
Hays (HAS) 151.80p -4.17%
BCA Marketplace (BCA) 207.50p -3.71%
Drax Group (DRX) 367.20p -3.57%
Woodford Patient Capital Trust (WPCT) 83.00p -3.15%
Vivo Energy (VVO) 133.12p -2.79%
Elementis (ELM) 192.90p -2.53%