London close: Stocks finish red as trade, eurozone concerns linger
London stocks remained in the red at the close on Monday, amid ongoing concerns over Sino-US trade relations and signs that the eurozone economy was stalling, although holiday firm TUI bucked the trend after rival Thomas Cook collapsed.
The FTSE 100 ended the day down 0.26% at 7,326.08, while sterling was 0.41% weaker against the dollar at $1.2427 and down 0.19% on the euro at €1.1302.
Traders were informed earlier in the afternoon that the Supreme Court would be releasing its decision on whether Prime Minister Boris Johnson acted legally in proroguing Parliament on Tuesday morning.
“If the court finds against Boris Johnson it would be yet another blow, but ultimately it’s hard to see now exactly the effect of recalling MPs for another couple of weeks,” said Neil Wilson, chief market analyst at Markets.com.
“The talking shop has had over three years and failed to agree anything.”
Investors were also mulling the latest trade developments between the US and China, with the US Trade Representative's office saying on Friday that discussions between deputy negotiators from both sides in Washington had been "productive".
However, market participants were left disappointed after Chinese agriculture officials cancelled a planned visit to farms in Montana and Nebraska, and departed the United States earlier than anticipated.
“Investors remain unconvinced that a trade deal is about to see the light of day soon, and that’s likely to put a cap on any further gains in risk assets,” said Hussein Sayed, chief market strategist at FXTM.
“The longer it takes to strike a deal, the more economic damage will be felt.
“This would likely lead to more rotation into value stocks rather than momentum or growth ones.”
Also weighing on sentiment was the release of weak eurozone data showing that the economy was close to stalling in September, as demand for both goods and services fell at the fastest rate in more than six years.
The IHS/Markit flash eurozone composite purchasing managers' index - which measures the services and manufacturing sector - fell to 50.4 this month from 51.9 in August.
That was the weakest expansion in output across the sectors since June 2013, and came in well below expectations for a reading of 52.0.
In equity markets, high street retailer Marks and Spencer was 3.24% weaker as it said chief financial officer Humphrey Singer had decided to leave the company.
No departure date had been set, and Singer would work with chief executive Steve Rowe to ensure an orderly transition, the company said in a statement.
Sports Direct International reversed earlier losses to finish up 0.57%, after it offered to buy football pitch operator Goals Soccer Centres, in which it already holds a near 19% stake, for £4m.
Also on the upside was tour operator TUI, which added 7.12% after rival Thomas Cook finally went bust.
Thomas Cook’s failure came after last-minute talks to save the industry giant failed, leaving thousands of holidaymakers stranded around the world and putting 22,000 jobs at risk.
EasyJet and Ryanair were also trading up, by 4.63% and 0.85% respectively, while Jet2 owner Dart Group rallied 6.19%.
“The failure to scrape together the requisite £200m owed to creditors means that the Civil Aviation Authority will foot the bill, estimated to be around £100m to get stranded holidaymakers home,” said David Cheetham, chief market analyst at XTB.
“A failure for the government to plug this shortfall may seem illogical in the short-term but a rescue package would likely have amounted to little more than delaying the inevitable and simply throwing good money after bad, with the prospect of Thomas Cook having been able to turn this around given the massive debt pile and struggling core business operations extremely faint to say the least.”
AstraZeneca ticked up 0.04% after the pharmaceuticals giant received European Union marketing authorisation for its Qtrilmet diabetes treatment.
FTSE 100 - Risers
TUI AG Reg Shs (DI) (TUI) 901.40p 7.23%
Fresnillo (FRES) 742.40p 3.48%
Unilever (ULVR) 4,862.50p 1.41%
Compass Group (CPG) 2,030.00p 1.30%
Relx plc (REL) 1,879.50p 1.18%
National Grid (NG.) 860.10p 1.01%
Royal Dutch Shell 'B' (RDSB) 2,357.50p 0.99%
GlaxoSmithKline (GSK) 1,686.60p 0.90%
3i Group (III) 1,119.50p 0.86%
Diageo (DGE) 3,247.50p 0.79%
FTSE 100 - Fallers
NMC Health (NMC) 2,702.00p -7.15%
Smiths Group (SMIN) 1,560.50p -4.73%
Micro Focus International (MCRO) 1,119.80p -4.36%
Marks & Spencer Group (MKS) 188.95p -3.52%
Glencore (GLEN) 249.05p -2.92%
RSA Insurance Group (RSA) 524.40p -2.71%
Antofagasta (ANTO) 884.80p -2.49%
Smurfit Kappa Group (SKG) 2,400.00p -2.36%
Johnson Matthey (JMAT) 3,027.00p -2.35%
Centrica (CNA) 71.68p -2.29%
FTSE 250 - Risers
Intu Properties (INTU) 41.74p 7.97%
JPMorgan Indian Investment Trust (JII) 748.00p 4.47%
Centamin (DI) (CEY) 130.90p 4.22%
Hochschild Mining (HOC) 219.40p 4.18%
Metro Bank (MTRO) 298.00p 3.76%
Ted Baker (TED) 970.50p 3.35%
Future (FUTR) 1,320.00p 3.29%
Dunelm Group (DNLM) 868.00p 2.66%
McCarthy & Stone (MCS) 147.20p 2.65%
Bakkavor Group (BAKK) 115.00p 2.50%
FTSE 250 - Fallers
Ferrexpo (FXPO) 174.95p -6.34%
Aston Martin Lagonda Global Holdings (AML) 578.80p -6.25%
PureTech Health (PRTC) 250.00p -6.02%
TI Fluid Systems (TIFS) 197.20p -4.96%
Woodford Patient Capital Trust (WPCT) 44.50p -4.71%
Polypipe Group (PLP) 396.60p -4.16%
4Imprint Group (FOUR) 3,000.00p -4.15%
Wood Group (John) (WG.) 413.90p -4.06%
Drax Group (DRX) 280.40p -3.91%
Kaz Minerals (KAZ) 433.50p -3.75%