London close: Investors left nursing hefty losses after bruising August
London stocks finished higher on Friday amid optimism that trade relations between the US and China are improving.
The FTSE 100 ended up by 0.32% higher at 7,231.38, while the pound was 0.14% lower against the US dollar at 1.2164 but 0.58% firmer versus the euro at 1.1082 as the UK and the EU stepped up Brexit talks, with plans to meet twice a week in September.
For the week as a whole, the top flight index put in a gain of roughly 1.6% but was down by 5.0% for the month, mirroring Sterling's losses albeit with a one-month lag. The second-tier index fared far better, seeing the month off with a loss of 1.4%.
Nonetheless, at month's end, sentiment was being propped up by easing trade tensions between the US and China.
CMC Markets analyst Michael Hewson said: "The decision by China to hold back on any retaliation in response to last week’s US decision to increase tariffs, appears to, for now, have prompted a cautious rebound in equity markets.
"The more measured tone in deciding to focus on next month’s meeting to discuss removing the extra duties has seen some optimism start to creep back in."
But some strategists remained cautious, with those at Bank of America-Merrill Lynch telling clients at the end of the week that any sell-off in precious metals over the next few weeks and months "should be viewed as entry point to hedge against the bond bubble risk."
On home shores, the latest GfK consumer confidence index released overnight showed a drop to -14 in August from -11 in July amid worries about Brexit. This marked a six-year low but was above analysts’ expectations for a reading of -12.
Joe Staton, client strategy director at GfK, said: "Until Brexit leaves the front pages - whenever that will be - consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation.
"That’s an important distinction because a significant development in August is the sudden drop in views on personal finances ‘over the next 12 months’ after the encouraging jump in this measure last month."
Elsewhere, the latest survey from Nationwide showed that house prices were still subdued in August. On the year, they rose 0.6% following a 0.3% increase in July. On the month, meanwhile, prices were flat.
Nationwide’s chief economist, Robert Gardner, pointed out that annual house price growth remained below 1% for the ninth month in a row.
"While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.
"Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable."
Investors were also digesting figures showing that lending to UK consumers and businesses slowed further in July, but mortgage lending held up.
Precious metals miners bought on the dip
In equity markets, software company Micro Focus was the standout gainer on the top-flight index, having tumbled on Thursday on the back of a profit warning.
Shares in guarantor lender Amigo Holdings bounced after sustaining heavy losses a day earlier, when it warned that loan book growth for the year would be flat.
Builders merchant Grafton racked up healthy gains after it said half year pre-tax profits rose 5% to £88.2m as the company said it was exiting the Belgian market and had struck a deal with an unnamed buyer. Revenue rose 2% to £1.4bn despite Brexit uncertainty in the UK as Ireland and the Netherlands both recorded strong results.
Iron pellet producer Ferrexpo reversed earlier losses to trade higher even as it said some of the money it gave to a charity "could have been misappropriated”. The company had commissioned an independent probe into the donations to the Blooming Land charity which was set up to manage Ferrexpo's corporate social responsibility programme. It said it had terminated its relationship with the organisation.
Hochschild, Centamin and Polymetal came under considerable selling pressure tarcking a dip in gold prices, but by session's end Centamin had nearly erased its losses and Polymetal was again in the green.
Oanda analyst Craig Erlam said: "Gold has pulled back from its highs once again as risk appetite picked up on Thursday. Once again, the rally is showing some signs of weakness, having failed to top its previous high and displaying softer momentum.
"This may change, it's hard to find anyone that's not bullish gold longer term but correction red flags are popping up here and there."
Outside the FTSE 350, value retailer Shoe Zone was the latest casualty in the demise of the high street, with its shares tanking as it warned that full-year results will be below its expectations amid difficult trading conditions, and announced the departure of chief executive Nick Davis.
Market Movers
FTSE 100 (UKX) 7,207.18 0.32%
FTSE 250 (MCX) 19,393.63 0.52%
techMARK (TASX) 3,812.75 0.21%
FTSE 100 - Risers
NMC Health (NMC) 2,502.00p 7.47%
Micro Focus International (MCRO) 1,108.80p 5.46%
Rio Tinto (RIO) 4,149.50p 2.63%
Smith (DS) (SMDS) 340.00p 2.50%
BHP Group (BHP) 1,773.00p 2.49%
SSE (SSE) 1,151.00p 2.36%
Glencore (GLEN) 236.95p 2.31%
Rolls-Royce Holdings (RR.) 771.20p 2.25%
Ashtead Group (AHT) 2,271.00p 2.16%
Marks & Spencer Group (MKS) 192.25p 2.12%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 196.10p -1.95%
Direct Line Insurance Group (DLG) 283.10p -1.19%
Hargreaves Lansdown (HL.) 1,878.00p -1.03%
Royal Dutch Shell 'B' (RDSB) 2,265.00p -1.03%
Scottish Mortgage Inv Trust (SMT) 520.00p -0.95%
Royal Dutch Shell 'A' (RDSA) 2,275.50p -0.91%
International Consolidated Airlines Group SA (CDI) (IAG) 421.70p -0.87%
ITV (ITV) 115.95p -0.73%
Barclays (BARC) 136.60p -0.68%
Morrison (Wm) Supermarkets (MRW) 182.60p -0.68%
FTSE 250 - Risers
Amigo Holdings (AMGO) 79.60p 12.59%
Grafton Group Units (GFTU) 752.50p 10.26%
Intu Properties (INTU) 40.75p 7.86%
Wood Group (John) (WG.) 376.90p 4.64%
Petrofac Ltd. (PFC) 418.20p 4.08%
Provident Financial (PFG) 403.30p 3.44%
Kainos Group (KNOS) 498.00p 3.11%
PureTech Health (PRTC) 274.00p 2.95%
Greggs (GRG) 2,114.00p 2.92%
Softcat (SCT) 1,040.00p 2.77%
FTSE 250 - Fallers
Rank Group (RNK) 161.20p -4.95%
Hochschild Mining (HOC) 219.20p -3.44%
Metro Bank (MTRO) 268.80p -3.31%
Cineworld Group (CINE) 218.40p -2.54%
TBC Bank Group (TBCG) 1,232.00p -1.91%
Daejan Holdings (DJAN) 5,210.00p -1.88%
Stagecoach Group (SGC) 123.30p -1.75%
TalkTalk Telecom Group (TALK) 101.90p -1.64%
Rathbone Brothers (RAT) 2,230.00p -1.55%
Telecom Plus (TEP) 1,160.00p -1.53%