London close: Markets finish green as sterling edges higher
London stocks managed to keep their heads above water for the close on Friday, bouncing back from heavy losses in the previous session, but underperforming their European peers somewhat as sterling ticked higher.
The FTSE 100 finished up 0.71% at 7,117.15, having opened late after a technical software issue at the London Stock Exchange affected trading in the top-flight index and its sister FTSE 250, which ended the day ahead 0.97% at 18,821.85.
In currency markets, the pound was up 0.5% against the dollar at $1.2155 and 0.66% firmer versus the euro at €1.0959, underpinned by a recent slew of upbeat economic data and growing opposition to a no-deal Brexit.
“Sterling has stabilised above 1.21. The Remain rebels are girding themselves for the assault,” quipped Neil Wilson, chief market analyst at Markets.com.
He pointed to signs that it may be trickier for Boris Johnson to force through a no deal Brexit.
Meanwhile, Oanda analyst Craig Erlam said that while investors appear "more relaxed" on Friday, recession fears were still "alive and well" and "it would be naive to expect it to continue".
“This week everyone has become obsessed with the inverted yield curve and whether it means we're headed for recession or if it's ‘different this time’.
“Of course, it's always different this time. Although there are good arguments why ‘this time’ that may actually be true.”
Erlam said the problem was that if enough people were convinced, it could become self-fulfilling, but he added that the reality was that it was “just a trend” that had been reliable over the last 50 years or so, rather than having any solid foundation.
“If Trump and Xi miraculously resolve the trade war tomorrow, are we still headed for recession?
“I would think not and the curve would adjust to reflect that.”
At the moment, Craig Erlam thought there was likely more reason to have faith in an indicator such as the inversion of two-year and 10-year bond yield curves, rather the US and China bringing an end to their “unnecessarily damaging” exercise.
“Trump is happy to continue to blame the Fed for any evidence of the trade war hurting the US while both sides seem happy to see this through and accept the consequences.”
In equity markets, Hiscox gained 1.39% after an upgrade to ‘overweight’ at Morgan Stanley.
ITV was also in the green by 3.19% after Spain’s La Liga said it signed an initial deal for its matches to be shown on the London-listed broadcaster’s free-to-air network in the UK.
Ultra Electronics stayed on the right side of the ledger, rising 0.56% after saying that it and joint venture partner Sparton DeLeon Springs had won a contract worth up to $1.04bn to manufacture sonobuoys for the US Navy.
Acacia Mining reversed earlier losses, finishing 0.56% higher after it said it had resumed gold exports from its North Mara mine after receiving export permits from the Tanzanian government.
The firm did warn that production at the plant was still halted over a ban on the use of its tailings facility.
On the downside, Ted Baker shares slipped 0.22% after it signed a five-year deal with Next to produce and sell Ted Baker childrenswear from spring 2020.
Next shares themselves were into the red by 0.32%.
In broker note action, BHP was downgraded to ‘underperform’ at Bank of America Merrill Lynch, while Ferrexpo was double-downgraded to ‘underperform’ and Glencore was cut to ‘neutral’.
FTSE 100 - Risers
ITV (ITV) 107.10p 3.38%
JD Sports Fashion (JD.) 599.40p 3.10%
Smurfit Kappa Group (SKG) 2,444.00p 3.04%
St James's Place (STJ) 940.00p 2.78%
Scottish Mortgage Inv Trust (SMT) 519.50p 2.57%
Royal Bank of Scotland Group (RBS) 182.15p 2.53%
Phoenix Group Holdings (PHNX) 656.60p 2.43%
Ashtead Group (AHT) 2,091.00p 2.40%
Sainsbury (J) (SBRY) 181.30p 2.37%
British Land Company (BLND) 479.40p 2.37%
FTSE 100 - Fallers
Fresnillo (FRES) 663.40p -1.16%
Prudential (PRU) 1,415.46p -1.02%
BHP Group (BHP) 1,755.20p -0.98%
United Utilities Group (UU.) 781.60p -0.96%
Antofagasta (ANTO) 791.20p -0.70%
British American Tobacco (BATS) 3,029.00p -0.67%
Evraz (EVR) 496.00p -0.58%
Rio Tinto (RIO) 4,005.00p -0.52%
BT Group (BT.A) 164.02p -0.22%
Next (NXT) 5,628.00p -0.21%
FTSE 250 - Risers
Bakkavor Group (BAKK) 103.20p 10.61%
CYBG (CYBG) 141.65p 6.74%
Marshalls (MSLH) 654.50p 6.16%
Contour Global (GLO) 172.80p 6.01%
Cineworld Group (CINE) 222.40p 4.91%
Sports Direct International (SPD) 230.60p 4.44%
Future (FUTR) 1,004.00p 4.26%
Aston Martin Lagonda Global Holdings (AML) 464.00p 4.25%
Provident Financial (PFG) 370.80p 4.16%
GVC Holdings (GVC) 566.60p 3.93%
FTSE 250 - Fallers
Intu Properties (INTU) 36.55p -5.92%
Riverstone Energy Limited (RSE) 642.00p -5.87%
Coats Group (COA) 71.25p -3.06%
Ferrexpo (FXPO) 211.10p -2.58%
Plus500 Ltd (DI) (PLUS) 705.60p -2.54%
Hochschild Mining (HOC) 210.20p -2.41%
Apax Global Alpha Limited (APAX) 153.00p -1.92%
Hilton Food Group (HFG) 936.00p -1.89%
Amigo Holdings (AMGO) 146.80p -1.74%
Tate & Lyle (TATE) 700.20p -1.38%