London close: Stocks hit US-China trade concerns ahead of Fed meeting
London-listed stocks were left nursing moderate losses amid mixed reports out of the US-China trade talks in Shanghai and ahead of interest rate decisions by the Federal Reserve later in the session and the Bank of England the next day.
According to China's Ministry of Commerce, the two sides "had a candid, highly effective, constructive and deep exchange on major trade and economic issues of mutual interest" and talks were set to continue in September.
In parallel however, Reuters cited Chinese Foreign Ministry spokeswoman, Hua Chunying, as saying that it was Washington that was continuing to 'flip flop'.
Earlier, after the talks had wrapped up following a shorter than expected half day of meetings, the South China Morning Post had reported that not much had been on the table from either side and that the talks had ended ahead of schedule with a willingness to continue discussions but no sign of a breakthrough.
By the end of trading, the FTSE 100 was down by 0.78% to 7,586.78, while the pound was regaining 0.75% of its value versus the euro to trade at 1.0977.
Ahead of the US central bank's rate decision, IG's Chris Beauchamp said: "The key, once the initial news is out, will be what the FOMC says about its course of action from here on in.
"With trade war negotiations having, with almost perfect timing, apparently broken down over night, the committee will be on watch for more weakness."
Back on home turf, during a visit to farmers in Wales on Tuesday, Boris Johnson said that Britain might stay in the customs union and single market for a further two years and reportedly described the chance of a no-deal Brexit as "vanishingly small".
In economic news, consultancy GfK's UK consumer confidence index for July improved by two points from the month before to -11.0 (consensus: -13.0).
On the other hand, SMMT reported that only £90m of new investment was committed to automotive plants in Britain in the first half of 2019 as carmakers funnelled at least £330m towards Brexit preparations.
Next surprises pleasantly, Aston Martin hits the skids
Fashion retailer Next gave shareholders something to smile about, reporting 4.0% growth in sales despite its difficult comparators with the summer of 2018 and with Next brand growth of 3.8% and 2.2% in May and June, respectively, versus the declines seen at other retailers, leading the company to nudge its full-year guidance for profits before tax up by 1.0% to £725.0m.
Nonetheless, given the sharp share price reaction to the news, analysts at ShoreCap said the stock's valuation had caught up with events, leading them to reiterate their recommendation to 'hold'.
Rentokil Initial was also in play on Wednesday, with investors pushing the company's shares to a fresh record high after the pest control business reported an increase in both revenues and profits during for the first half of its trading year, prompting the group to reiterate its full-year guidance.
Heading the other way, investors were cashing in their shares of precious metals miner Fresnillo following its poor update the day before.
Taylor Wimpey was another standout faller, with Michael Hewson at CMC Markets UK explaining to clients that: "Current trading continues to look positive with forward sales at 87%, and a solid order book, however the slide in the share price appears to be as a result of investors focussing on the rise in build cost inflation which is expected to rise to 5% in 2019, from 3.5% in 2018, which could well shrink margins and profits further."
To take note of, stock in Barclays and RBS also headed lower ahead of updates from the two lenders scheduled for Thursday and Friday, respectively.
Lloyds posted stronger than expected net income and lower costs at the half year stage, despite which statutory profits came in weaker than expected on the back of a much worse than feared £550.0m in PPI charges which would weigh on capital generation.
And management cautioned that "continued economic uncertainty could impact outlook".
Shares of Intu Properties plummeted as the property investment trust reported falls in its interim net rental income and underlying earnings, while the company also outlined a 5 year programme to pay down debt levels by disposing some of their underperforming assets, slashing its dividend, and transforming the remaining assets.
Aston Martin Lagonda's share price plumbed fresh depths after its interim results were worse than flagged in a profit warning last week, with net debt also having jumped to 4.7 times operating earnings, from 2.3 times at the 2018 year end.
Meanwhile, computer services provider Computacenter led the risers after reporting solid momentum during the first half of its trading year, resulting in the group's pre-tax profits coming in marginally ahead of the previous year.
Meanwhile, investors reacted positively as Centamin posted a sharp drop in first half profits, but raised its dividend payout and sounded a confident note on its outlook for the back half of 2019, standing by its guidance for full-year output and costs.
Serco followed suit as it reported interim underlying profit and revenue growth following strong performances in the Americas and the Asia Pacific region.
Travis Perkins was on the up as it reported "good strategic progress" in its interim results which it said was underpinned by "strong" trading performance, with continuing group revenue rising 6.9% to £2.77bn.
Finally, British pub operator Mitchells & Butlers climbed after reporting 2.8% sales growth despite strong comparatives stemming from last year's World Cup and extended period of sunny weather, while Man Group edged higher after it reported a 5% improvement in funds under management in its interim results.
Market Movers
FTSE 100 (UKX) 7,586.78 -0.78%
FTSE 250 (MCX) 19,666.52 -0.55%
techMARK (TASX) 3,870.55 -0.51%
FTSE 100 - Risers
Next (NXT) 6,064.00p 7.98%
Rentokil Initial (RTO) 435.00p 5.53%
Centrica (CNA) 76.08p 3.40%
International Consolidated Airlines Group SA (CDI) (IAG) 424.40p 2.31%
London Stock Exchange Group (LSE) 6,628.00p 1.88%
Antofagasta (ANTO) 939.20p 1.87%
Just Eat (JE.) 761.40p 1.52%
BAE Systems (BA.) 549.40p 1.11%
CRH (CRH) 2,733.00p 1.03%
Auto Trader Group (AUTO) 543.40p 0.67%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 161.80p -8.35%
Fresnillo (FRES) 601.00p -8.05%
St James's Place (STJ) 984.00p -5.66%
Land Securities Group (LAND) 796.20p -3.54%
British Land Company (BLND) 509.60p -3.39%
Rolls-Royce Holdings (RR.) 863.20p -3.28%
Lloyds Banking Group (LLOY) 53.33p -3.18%
TUI AG Reg Shs (DI) (TUI) 817.60p -2.76%
Pearson (PSON) 871.20p -2.72%
Whitbread (WTB) 4,523.00p -2.65%
FTSE 250 - Risers
Computacenter (CCC) 1,525.00p 12.13%
Centamin (DI) (CEY) 129.90p 6.52%
Sports Direct International (SPD) 226.80p 5.78%
Serco Group (SRP) 147.40p 5.44%
Premier Oil (PMO) 84.04p 5.13%
Travis Perkins (TPK) 1,366.00p 3.21%
Man Group (EMG) 171.20p 2.61%
Tullow Oil (TLW) 193.75p 2.57%
IP Group (IPO) 68.60p 2.39%
Elementis (ELM) 151.10p 2.37%
FTSE 250 - Fallers
Intu Properties (INTU) 47.85p -31.90%
Aston Martin Lagonda Global Holdings (AML) 498.00p -12.32%
Hammerson (HMSO) 214.50p -10.71%
Capital & Counties Properties (CAPC) 198.10p -5.71%
Bakkavor Group (BAKK) 105.60p -4.86%
CYBG (CYBG) 172.05p -4.36%
NewRiver REIT (NRR) 163.80p -4.21%
Plus500 Ltd (DI) (PLUS) 599.40p -4.19%
Games Workshop Group (GAW) 4,536.00p -3.78%
Woodford Patient Capital Trust (WPCT) 47.90p -3.76%