London close: FTSE 100 led higher by UK-focused stocks

14 March 2019

(Sharecast News) - London's FTSE 100 edged higher on Thursday, aided by a weaker pound as investors were bewildering by Brexit business in Westminster.
The UK equity benchmark could not hold onto its midday gains but added just over 26 points or 0.4% to finish at 7,185.43. Sterling fell 0.5% against the dollar to 1.3272, having surged to a nine-month high on Wednesday after MPs voted to reject a no-deal Brexit on an amended government motion by 321 votes to 278. Against the euro, the pound was 0.25% weaker at 1.1745.

"The FTSE 100 remains stuck in a state of indecision, with the phase of uninspiring consolidation continuing to dominate amid ongoing mixed messages in the Brexit debacle," said Joshua Mahony, senior market analyst at <em>IG</em>. "The pound has been the true gauge of market sentiment, and if today's GBPUSD trade is anything to go by, markets are as confused as the rest of us."

Ahead of an early-evening vote on whether the UK should seek a temporary extension to Article 50, Theresa May signalled that there will be a third vote on her twice-defeated Brexit deal.

May had initially said that any extension, which the European Union has yet to agree, would only be short. But on Wednesday night she warned MPs that a longer extension would be needed if her deal was not backed, and that could require the UK to take part in elections for the European Parliament in May.

"I do not think that would be the right outcome. But the House needs to face up to the consequences of the decisions it has taken," she said.

EU Council president Donald Tusk said in a tweet earlier that he was open to the possibility of a "long extension" to Article 50 "if the UK finds it necessary to rethink its Brexit strategy and build consensus around it".

David Cheetham, chief market analyst at <em>XTB,</em> said: "On the face of it the parliamentary vote last night takes no deal off the table, and later on the house of commons will likely vote in favour of an extension of Article 50. The problem that remains for the UK is that while parliament have signalled what they don't want, with votes against both May's deal and no-deal, they still haven't indicated a clear majority for what they do want - apart from more time to decide."

MPs will also vote on four amendments, including on whether to allow time for a second referendum, whether to allow May a third meaningful vote on her Brexit deal and whether to begin a series indicative votes to allow parliament to work out alternative Brexit arrangements.

Away from Brexit, Sino-US relations were in focus again following a report that a meeting between US President Donald Trump and Chinese President Xi Jinping to sign an agreement to end their trade war will not take place this month and is likely to be delayed until April at the earliest.

Despite claims of progress in talks by both sides, a hoped-for summit at Trump's Mar-a-Lago resort will now take place at the end of April if it happens at all. One source told <em>Bloomberg</em> that China is pressing for a formal state visit rather than a lower-key appearance just to sign a trade deal, while another said Xi Jinping's staff have given up planning for a potential flight to the US following a trip to Europe later this month.

On the UK data front, the latest housing market survey from the Royal Institution of Chartered Surveyors took a back seat. It showed the net balance of surveyors reporting that house prices have risen over the last three months fell to -28 in February from -22 the month before, versus expectations of -24.

Chinese data was also in focus. Growth in the country's industrial output slowed to a 17-year low in the first two months of the year. Industrial production growth slowed to 5.3% year-on-year from 6.2% in December, missing expectations of 5.6%.

However, fixed asset investment growth picked up to 6.1% year-on-year in February from 5.9% in December, in line with consensus. Retail sales data was also in line with growth of 8.2% in February from 9% in December.

In London equity markets, travel operator <strong>Tui</strong> gained was the standout gainer on the top-flight index after an upgrade to 'overweight' at <em>Morgan Stanley</em>. On the FTSE 250, <strong>Ultra Electronics</strong> was boosted by an upgrade to 'buy' at <em>Berenberg</em> and <strong>Quilter</strong> rose thanks to an upgrade to 'overweight' at <em>JPMorgan.</em>

<strong>Cineworld</strong> shares put in a blockbuster performance after the company reported a 125% surge in full-year pre-tax profit and a 259% increase in revenue following the acquisition of US-based cinema chain Regal Entertainment last year.

<strong>OneSavings Bank</strong> was on the front foot after it and <strong>Charter Court</strong> reached agreement on the terms of a recommended all-share merger, under the same terms as suggested at the start of the week. The deal will be effected by means of a scheme of arrangement with each Charter Court shareholder receiving 0.8253 new OSB shares. Both lenders announced final results, with Charter Court declaring a 12.7p dividend and OneSavings a payout of 14.6p.

Domestically focused sectors such as retailers and housebuilders were at the forefront on Thursday, even though a delay to the Article 50 departure date seems likely to prolong the short-term agony for the UK.

General retailers were notably on the front foot, with <strong>Next,</strong> <strong>M&amp;S</strong>, <strong>Dixons Carphone</strong>, <strong>Dunelm,</strong> <strong>JD Sports</strong>, <strong>Sports Direct </strong>and <strong>WH Smith</strong> all up more than 2%. There was also a green belt of housebuilders, led by<strong> Bovis</strong>, <strong>Persimmon</strong> and <strong>Crest Nicholson</strong>.

<strong>Sports Direct</strong> nudged up as it offered <strong>Debenhams</strong> a new alternative to the &#0194;&#163;150m loan that the troubled department store group is seeking. Sports Direct said it would offer Debenhams a &#0194;&#163;150m unsecured 12-month term loan, in return for a further 5% of its shares or interest of 3% on the loan. Debenhams shares also advanced.

On the downside, <strong>Anglo American</strong>, <strong>CRH,</strong> <strong>Land Securities</strong>, <strong>GVC Holdings</strong>, <strong>Jupiter Fund Management</strong> and <strong>Galliford Try</strong> were all weaker as their stock went ex-dividend.

Elsewhere, retirement products specialist <strong>Just Group</strong> tanked after announcing plans to scrap its dividend for 2018 and raise &#0194;&#163;300m in a placing.

Real estate advisor <strong>Savills</strong> saw its shares drop as it posted a small rise in underlying pre-tax profit for 2018 as revenue rose, but sounded a cautious note on the outlook.

Outsourcer <strong>Capita</strong> could not hold onto mid-session gains and ended lower even though it reported a smaller fall in profit than analysts had expected.

<strong>Market Movers</strong>

FTSE 100 (UKX) 7,189.12 0.42%
FTSE 250 (MCX) 19,283.06 0.54%
techMARK (TASX) 3,513.68 0.37%

<strong>FTSE 100 - Risers</strong>

easyJet (EZJ) 1,227.00p 4.34%
Auto Trader Group (AUTO) 497.00p 4.02%
TUI AG Reg Shs (DI) (TUI) 799.00p 3.77%
ITV (ITV) 135.85p 3.39%
Ocado Group (OCDO) 1,106.46p 3.02%
Prudential (PRU) 1,583.50p 2.33%
Kingfisher (KGF) 239.20p 2.31%
Next (NXT) 5,222.00p 2.27%
Lloyds Banking Group (LLOY) 63.95p 2.21%
Royal Bank of Scotland Group (RBS) 266.40p 1.99%

<strong>FTSE 100 - Fallers</strong>

Anglo American (AAL) 1,941.52p -3.72%
Hikma Pharmaceuticals (HIK) 1,547.00p -2.37%
GVC Holdings (GVC) 531.50p -1.94%
Smurfit Kappa Group (SKG) 2,142.00p -1.74%
BHP Group (BHP) 1,730.40p -1.45%
CRH (CRH) 2,336.00p -1.39%
Fresnillo (FRES) 802.40p -1.38%
Centrica (CNA) 120.75p -1.23%
Antofagasta (ANTO) 923.00p -1.18%
DCC (DCC) 6,350.00p -1.01%

<strong>FTSE 250 - Risers</strong>

Marshalls (MSLH) 580.00p 6.32%
Stobart Group Ltd. (STOB) 171.00p 6.21%
Royal Mail (RMG) 261.92p 6.08%
Energean Oil &amp; Gas (ENOG) 779.90p 5.41%
Grafton Group Units (GFTU) 850.00p 5.20%
HGCapital Trust (HGT) 2,070.00p 4.81%
SIG (SHI) 147.20p 4.25%
Dixons Carphone (DC.) 138.10p 3.87%
Cineworld Group (CINE) 300.00p 3.81%
Ultra Electronics Holdings (ULE) 1,591.00p 3.78%

<strong>FTSE 250 - Fallers</strong>

Just Group (JUST) 85.30p -12.51%
Sophos Group (SOPH) 314.20p -5.30%
Jupiter Fund Management (JUP) 348.60p -4.55%
Savills (SVS) 889.00p -3.74%
Senior (SNR) 213.80p -2.99%
Syncona Limited NPV (SYNC) 246.50p -2.95%
Sirius Minerals (SXX) 19.32p -2.47%
Genus (GNS) 2,394.00p -2.44%
888 Holdings (888) 161.90p -2.41%
Acacia Mining (ACA) 203.00p -2.31%