London close: Dip in pound ahead of TV debate buoys stocks
London stocks extended their gains on Tuesday, helped along by a weaker pound and some well-received corporate releases, as investors mulled mixed news on the trade front.
The FTSE 100 was up 0.22% at 7,323.80, while the pound was down 0.2% against the US dollar and the euro at 1.2921 and 1.1671, respectively, ahead of a televised debate in which Prime Minister Boris Johnson went head-to-head with Labour leader Jeremy Corbyn.
Commenting on Tuesday's price action in financial markets, Josh Mahony at IG said: "The FTSE 100 has outperformed its peers, as a wider bullish sentiment has been enhanced by declines in the pound. On a day largely devoid of major UK news, markets will be following tonight’s election debate as a potential driver of sentiment for the pound.
"Given the double-digit lead for Boris Johnson’s Conservative party, there is a feeling that tonight’s debate is more likely to hinder that lead than enhance it. Johnson’s advisors largely kept him out of the spotlight during the leadership race back in July, and thus there is a worry for some that he could come unstuck when faced by a Labour grilling tonight."
Otherwise, market participants welcomed the Trump administration’s decision to issue a new three-month extension allowing US companies to keep doing business with China’s Huawei. Nevertheless, there wasn’t much to cheer in terms of trade progress after China said on Monday that it was pessimistic about the prospects a deal with the US.
On home shores, the latest survey from the Confederation of British Industry showed that output in the manufacturing sector improved more than expected in November but remained weak.
The CBI’s total orders balance came in at -26 this month from -37 in October, beating expectations for a reading of -31 but still well below the long-run average of -13.
Anna Leach, CBI deputy chief economist, said: "While the thick fog of uncertainty from a no deal Brexit has lifted somewhat, the manufacturing sector remains under pressure from weak global trade and a subdued domestic economy.
"Order books remain below average, and output volumes continue to fall. When taking into account the deteriorating outlook for manufacturing globally, it’s clear that the outlook for the sector remains precarious.
"The General Election is an opportunity for all parties to explain how they will shore up our economy. Ratifying a Brexit deal and moving on to build a vibrant future relationship with our biggest trading partner, based on frictionless trade, will be vital - both for UK manufacturers, and business as a whole."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said there was "no sign of a turnaround yet".
"The CBI’s industrial trends survey remains consistent with a deepening downturn in manufacturing output, despite the partial recovery of the total orders balance in November," he said.
In equity markets, safety, health and environmental technology group Halma rallied as it reported record first-half results thanks to revenue growth in all of its major regions and business sectors.
Intertek was boosted by an upgrade to ‘buy’ at Jefferies, while Meggitt was on the rise as it secured a six-year $130m requirements contract with the Defense Logistics Agency in Philadelphia for the supply of fuel bladders.
PureTech Health surged after shares of US biopharmaceutical company Karuna Therapeutics - in which it owns a 30% stake - rocketed in the previous session as a phase 2 trial of its schizophrenia treatment met its primary endpoint.
Home repairs and improvements business Homeserve traded up as it posted a rise in interim revenue and announced the acquisition of a controlling stake in US-based home experts business eLocal for around $140m.
Intermediate Capital gained after it said first-half assets under management rose 11% to €41.1bn as its diversification strategy continues to bear fruit.
On the downside, Equiniti tumbled as it warned that 2019 underlying earnings would be towards the lower end of market expectations due to weaker higher margin UK corporate activity.
Big Yellow was in the red as it reported a slow start to the third quarter, while Polypipe lost ground as it said underlying operating profit for the year would be "just below" its previous expectations.
FTSE 100 - Risers
Halma (HLMA) 2,061.00p 8.56%
Intertek Group (ITRK) 5,522.00p 4.07%
NMC Health (NMC) 2,594.00p 3.59%
Smiths Group (SMIN) 1,658.50p 2.85%
Spirax-Sarco Engineering (SPX) 8,535.00p 2.40%
Hargreaves Lansdown (HL.) 1,818.00p 2.36%
Hiscox Limited (DI) (HSX) 1,261.00p 2.11%
Experian (EXPN) 2,477.00p 2.06%
Antofagasta (ANTO) 895.80p 1.82%
Croda International (CRDA) 4,800.00p 1.69%
FTSE 100 - Fallers
Ferguson (FERG) 6,740.00p -2.12%
SSE (SSE) 1,316.00p -1.53%
Next (NXT) 6,624.00p -1.52%
Persimmon (PSN) 2,474.00p -1.51%
Associated British Foods (ABF) 2,428.00p -1.50%
Centrica (CNA) 73.52p -1.37%
JD Sports Fashion (JD.) 760.00p -1.30%
BT Group (BT.A) 190.16p -1.24%
Berkeley Group Holdings (The) (BKG) 4,530.00p -1.13%
Smurfit Kappa Group (SKG) 2,698.00p -1.10%
FTSE 250 - Risers
PureTech Health (PRTC) 291.00p 16.87%
Spectris (SXS) 2,728.00p 5.00%
Homeserve (HSV) 1,255.00p 4.76%
Telecom Plus (TEP) 1,336.00p 4.37%
Cineworld Group (CINE) 199.25p 4.32%
Sanne Group (SNN) 568.00p 4.03%
Cobham (COB) 160.65p 3.78%
Ferrexpo (FXPO) 142.25p 3.57%
Domino's Pizza Group (DOM) 305.80p 3.45%
Hill & Smith Holdings (HILS) 1,385.00p 3.13%
FTSE 250 - Fallers
Equiniti Group (EQN) 198.40p -12.75%
Aston Martin Lagonda Global Holdings (AML) 440.60p -6.69%
Future (FUTR) 1,444.00p -5.50%
TBC Bank Group (TBCG) 1,226.00p -5.26%
Card Factory (CARD) 156.30p -3.93%
Drax Group (DRX) 285.60p -3.58%
Big Yellow Group (BYG) 1,152.00p -3.36%
Riverstone Energy Limited (RSE) 426.00p -3.18%
Network International Holdings (NETW) 516.00p -3.01%
Ibstock (IBST) 252.00p -2.55%