London close: Stocks finish weaker amid trade concerns
London stocks closed in negative territory on Thursday, with ex-dividends weighing heavily as hopes of further US stimulus faded and a trade dispute between the US and Europe dented sentiment, although the latest jobless figures out of the US did surprise.
The FTSE 100 ended the session down 1.5% at 6,185.62, and the FTSE 250 was off 0.91% at 17,924.59.
Sterling was stronger in afternoon trading, last rising 0.37% on the dollar to $1.3082, and advancing 0.07% against the euro to €1.1068.
“UK listed stocks are underperforming today, as traders look ahead to a double whammy of resurgent Brexit fears and an October end to the furlough scheme,” said IG senior market analyst Joshua Mahony.
“With stocks coming off a strong run, today provides a breather despite an impressive jobless claims report out of the US.”
Mahony said that, with initial jobless claims dropping below one million for the first time since March, there was a feeling things were moving into a more normalised state of affairs despite the absence of a fresh stimulus bill.
“With both sides seemingly at a stalemate over the next stimulus package, it does provide a potential future boost for bulls to look ahead to.”
The number of Americans applying for unemployment benefits fell below one million last week for the first time since mid-March as a Congress-approved weekly wage supplement expired.
Initial jobless claims came to a seasonally-adjusted 963,000 for the week to August 8, compared to 1.191m in the prior week, the US Department of Labor said.
The figure was lower than analyst estimates of 1.1m.
Earlier, the downbeat mood was exacerbated after the US government said it would maintain 15% tariffs on Airbus aircraft and 25% tariffs on other European goods earlier.
Trade relations between the US and China were also in focus, with officials from both countries set to meet on Saturday for a review of their deal.
Meanwhile, hopes of an agreement between US Democrats and Republicans over further stimulus were dashed after President Donald Trump said it was "not going to happen".
In equity markets, ex-dividend stocks were a drag, with Phoenix Group down 3.52%, Legal & General off 2.55%, Ashtead losing 1.61%, Pearson 1.01% weaker, and Shell 3.65% lower.
Among the other ex-dividend stocks were BP, AstraZeneca, GlaxoSmithKline and Diageo, which lost 3.5%, 1.8%, 2.59% and 0.51% respectively, while Aviva, Smurfit Kappa, Direct Line and Centamin were 3.52%, 2.88%, 8.08% and 1.35% weaker.
Bus operator National Express fell 16.19% as it said it swung to a half-year loss after the coronavirus lockdown led to an 80% slump in passenger traffic.
FTSE 250 engineering company Renishaw slid 7.79% as it posted a drop in full-year profit as revenue fell amid "very challenging economic conditions".
Travel company TUI was in the red by 6.15% after it plunged to a €1.1bn third-quarter loss as its business shut down under coronavirus lockdowns and bookings fell through the floor.
On the upside, Just Eat Takeaway got a 1.19% boost after JPMorgan Cazenove said the stock remains its ‘top pick’ in the space.
Watches of Switzerland rallied 23.85% after it said first-quarter trading was ahead of expectations as the luxury watch retailer reported a 6.2% increase in annual profit.
Elsewhere, Just Group was trading up 8.06% after well-received results.
FTSE 100 - Risers
Flutter Entertainment (FLTR) 12,325.00p 2.79%
Persimmon (PSN) 2,514.00p 1.95%
GVC Holdings (GVC) 800.00p 1.86%
Spirax-Sarco Engineering (SPX) 10,950.00p 1.77%
Ocado Group (OCDO) 2,340.00p 1.74%
Fresnillo (FRES) 1,258.50p 1.53%
Just Eat Takeaway.Com N.V. (CDI) (JET) 9,096.00p 1.38%
Bunzl (BNZL) 2,445.00p 1.16%
InterContinental Hotels Group (IHG) 4,226.00p 1.08%
Scottish Mortgage Inv Trust (SMT) 906.50p 0.67%
FTSE 100 - Fallers
ITV (ITV) 62.72p -5.00%
International Consolidated Airlines Group SA (CDI) (IAG) 204.40p -4.17%
Phoenix Group Holdings (PHNX) 692.80p -3.96%
NATWEST GROUP PLC ORD 100P (NWG) 114.75p -3.85%
HSBC Holdings (HSBA) 343.75p -3.74%
Royal Dutch Shell 'A' (RDSA) 1,203.20p -3.73%
Royal Dutch Shell 'B' (RDSB) 1,160.40p -3.65%
Legal & General Group (LGEN) 228.50p -3.55%
Aviva (AV.) 293.00p -3.52%
Standard Chartered (STAN) 423.40p -3.44%
FTSE 250 - Risers
Watches of Switzerland Group (WOSG) 327.50p 23.85%
Just Group (JUST) 55.00p 8.06%
Domino's Pizza Group (DOM) 357.60p 4.81%
Capital & Counties Properties (CAPC) 133.60p 4.38%
Petrofac Ltd. (PFC) 188.00p 4.36%
Plus500 Ltd (DI) (PLUS) 1,468.00p 3.72%
William Hill (WMH) 136.95p 2.58%
Royal Mail (RMG) 216.90p 2.21%
Essentra (ESNT) 314.00p 2.08%
John Laing Group (JLG) 296.00p 2.07%
FTSE 250 - Fallers
National Express Group (NEX) 150.50p -16.19%
FirstGroup (FGP) 41.36p -8.86%
Helios Towers (HTWS) 162.20p -8.77%
Direct Line Insurance Group (DLG) 311.60p -8.08%
Renishaw (RSW) 4,878.00p -7.79%
Coats Group (COA) 57.90p -6.61%
TUI AG Reg Shs (DI) (TUI) 344.70p -6.15%
4Imprint Group (FOUR) 2,270.00p -5.81%
Softcat (SCT) 1,341.00p -5.43%
Hammerson (HMSO) 51.22p -5.25%