London close: Stocks stage small bounce, US-China trade still in focus
Stocks finished modestly higher amid news that the Chancellor might back a second referendum in order to unblock the paralysis that had led to a halving in the UK's car production last month, overcoming continued strident rhetoric from some Chinese officials.
In remarks to BBC Radio 4's Today Programme, Philip Hammond, said that "if we get to the point when we have to admit that parliament can't resolve this issue then clearly it will have to be remitted back to the people."
Earlier, the Society of Motor Manufacturers and Traders had reported that in April the UK's output of cars shrank by 44.5% versus a year ago as companies carried through on previously scheduled factory shutdowns in anticipation of the original Brexit date.
By the end of trading, the top flight index had gained 32.86 points or 0.46% to trade at 7,218.16, even as Brent crude oil futures for prompt month delivery gave back 3.2% to $67.31 a barrel after the latest weekly inventory figures in the States revealed that domestic US oil output hit another record at 12.3m barrels a day.
London's second-tier index fared even better, adding 0.87% to 19,111.51, even as the pound dipped by 0.17% against the euro to 1.1325.
Versus the US dollar, sterling hit an intraday low at 1.2580, its weakest level since January, before trimming its losses to stand 0.1% lower at 1.26144.
To take note of, financial markets were waiting on a speech from the US central bank's vice-chairman, Richard Clarida, scheduled for 1800 BST, with investors keen for any hints regarding the outlook for monetary policy in the world's largest economy.
The Bank of England was also in the spotlight, with deputy governor Dave Ramsden reiterating in a speech at the Inverness Chamber of Commerce the widely-held view on the Monetary Policy Committee that a 'no deal' Brexit could cut either way in terms of the path for Bank Rate.
Dampening sentiment, in remarks made overnight, China's vice foreign minister, Zhang Hanhui, reportedly said that Beijing was against the use of "big sticks" like sanctions, tariffs or protectionism, labelling recent US actions as "naked economic terrorism".
Analysts appeared to be somewhat divided on the likelihood that US and Chinese trade negotiators would return to the negotiating table, with some market commentary highlighting the view that the current frictions were but the prelude to a rivalry that was set to heat-up and extend for decades.
On a more positive note, in remarks to Bloomberg TV, Morgan Stanley chief, James Gorman, said that a "collapse" in the stock market was unlikely, adding that trade talks between Beijing and Washington were likely to resume as there was simply too much to lose on the table.
Other market pundits also came out with their thoughts overnight, but with more cautious assessments.
One of those was Bridgewater Associates founder, Ray Dalio, who said on LinkedIn: "It is widely believed that time is on China’s side so that it is in the U.S. interest to have any fight that’s going to occur happen earlier and in China’s interest to have it later. This is leading to the Trump administration’s pushing the limits.
"Worth keeping in mind is how Chinese and Americans fight wars differently (the Chinese more strategically by gaining relative strength and the Americans more by exchanging blows until one side gives up)."
No major economic reports were published in the UK.
Off to the races: FirstGroup at two-year high after announcing intention to sell Greyhound unit
Hurricane Energy jumped as analysts at Berenberg started coverage of the oil explorer at 'buy' with a 100.0p target, ahead of the expected announcement of first oil at Lancaster, which they predicted would come in the next few days.
First Group delivered a better than expected full-year performance, on the back of strength in its North American operations outside of its Greyhound coach unit and announced the results of a wide-ranging strategy review, including the proposed sale of the iconic coach franchise in the States and the separation of its First Bus operations in the UK. The news sent First Group shares to their best level in approximately two years.
De La Rue was the standout faller in the small cap space after posting a 78% drop in profits on the heels of exceptional charges linked to American sanctions on Venezuela and after its boss announced his intention to step down.
Speciality chemicals company Johnson Matthey posted a 53% rise in pre-tax profits as tighter regulation in Europe and China helped its clean air division. Profits came it at £523m on revenues of £10.7bn, up 5% as the company said it expected current year growth in operating performance at constant rates to be within medium term guidance of mid to high single digit growth.
Pennon finished near its worst levels of the session on Thursday, despite announcing its decision to bump up its final dividend by 6.0% in the wake of a 6.1% rise in its full-year underlying revenues, which drove a 7.2% jump in the water utility's EBITDA.
Satellite communications giant Inmarsat announced on Thursday that Airbus Defence & Space had been selected as its satellite manufacturing partner, as part of the development of its ‘Global Xpress’ (GX) network. The FTSE 250 company said the partnership would provide a “step-change” in GX's capabilities, capacity and agility for the benefit of existing and future Inmarsat customers, partners and investors.
TR Property Investment Trust reported a 5.8% improvement in its net asset value per share in its full-year results on Thursday, to 418.54p. The FTSE 250 firm said shareholders’ funds were also ahead 5.8% at £1.33bn in the year ended 31 March, with shares in issue at year-end totalling 317.4 million, in line with the prior year. Its net debt ratio stood at 10%, narrowing from 14.6% year-on-year.
Several well-known corporates began trading without the rights to their latest dividend on Thursday, including National Grid, Bank of Georgia, Whitbread, Spire Healthcare and Marks&Spencer.
Market Movers
FTSE 100 (UKX) 7,218.16 0.46%
FTSE 250 (MCX) 19,111.51 0.87%
techMARK (TASX) 3,500.14 0.71%
FTSE 100 - Risers
Rightmove (RMV) 583.80p 3.33%
Standard Life Aberdeen (SLA) 272.50p 2.95%
Halma (HLMA) 1,835.50p 2.92%
Ocado Group (OCDO) 1,199.00p 2.70%
Evraz (EVR) 593.80p 2.38%
CRH (CRH) 2,517.00p 2.28%
Relx plc (REL) 1,852.50p 2.24%
Compass Group (CPG) 1,807.50p 2.15%
Standard Chartered (STAN) 693.60p 2.12%
London Stock Exchange Group (LSE) 5,252.00p 2.06%
FTSE 100 - Fallers
Marks & Spencer Group (MKS) 221.20p -4.70%
National Grid (NG.) 778.00p -4.63%
Johnson Matthey (JMAT) 3,064.20p -4.33%
United Utilities Group (UU.) 784.00p -1.63%
NMC Health (NMC) 2,411.00p -1.31%
Hikma Pharmaceuticals (HIK) 1,634.50p -0.94%
Kingfisher (KGF) 213.20p -0.79%
BT Group (BT.A) 194.76p -0.73%
Melrose Industries (MRO) 167.80p -0.59%
Severn Trent (SVT) 1,953.50p -0.53%
FTSE 250 - Risers
Kier Group (KIE) 292.80p 12.53%
Aveva Group (AVV) 3,616.00p 6.73%
Amigo Holdings (AMGO) 248.50p 5.30%
Intu Properties (INTU) 92.18p 4.04%
Vivo Energy (VVO) 117.20p 3.72%
FirstGroup (FGP) 114.40p 3.62%
Euromoney Institutional Investor (ERM) 1,358.00p 3.32%
TI Fluid Systems (TIFS) 188.60p 3.29%
Bodycote (BOY) 780.00p 3.24%
Tullow Oil (TLW) 207.70p 3.23%
FTSE 250 - Fallers
Just Group (JUST) 50.50p -6.48%
Metro Bank (MTRO) 729.00p -5.81%
Stobart Group Ltd. (STOB) 119.40p -4.02%
Saga (SAGA) 42.18p -3.52%
Bank of Georgia Group (BGEO) 1,680.00p -3.34%
Entertainment One Limited (ETO) 421.80p -2.81%
Acacia Mining (ACA) 153.10p -2.79%
Drax Group (DRX) 298.60p -2.61%
Card Factory (CARD) 190.20p -2.36%
Hammerson (HMSO) 266.90p -2.31%