• FTSE 100 closes down 31 points
  • US stocks lower
  • HSS defies the trend after a strong third quarter

5pm : FTSE closes down again

FTSE 100 index closed in the red on Thursday as Wall Street stocks also tumbled as trade worries and global uncertainty continued to weigh.

The UK’s index of leading shares closed down around 31 points at 7,231 with defensive stocks making up the gainers  

FTSE 250 also lost ground, plunging over 123 points at 20,352. 

“The trade saga has weighed on stocks a little. There is no clear view of what is going on in the trade discussions, so dealers are erring on the side of caution, and taking cash off the table,” noted David Madden, analyst at CMC Markets.

Connor Campbell, financial analyst at Spreadex, added: “Things do not seem to be going well between the US and China, so much so that the ‘phase one’ trade deal may be pushed to 2020, if it materialises at all.”

On Wall Street,  the Dow Jones Industrial Average shed over 86 points at 27,736; the S&P 500 lost around seven at 3,100. The Nasdaq index  lost around 29 points to stand at 8,497.

15.40pm : FTSE hovering

The FTSE 100 seems to have been hovering just above the 7,200 level all afternoon, deep in the red.

Meanwhile, across the pond, the two main benchmarks have opened on the back-foot, with the Dow Jones 78 points (0.3%) lower at 27,743 and the S&P 500 off 13 points (0.4%) at 3,095.

In the UK, the FTSE 100 remains in a rut, down 56 points (0.8%) at 7,206, despite sterling giving back the morning’s gains against the US dollar.

With 45 minutes of trading to go, cyber-security group Defenx PLC (LON:DFX) was the top riser, with a 46% gain at 1.5p. Earlier this month, the company announced its intention to delist from AIM so it is hard to fathom why it should be on the up today.

The reason behind Blue Prism Group plc’s (LON:PRSM) 31% advance to 1,160p is easier to fathom; the robotic process automation specialist said in a trading update it had seen a significant acceleration in sales in the second half of its financial year, which ran to the end of October.

Klunker of the day was Keras Resources PLC (LON:KRS), which recently hived off Calidus Resources. The shares slumped 22% to 0.245p as the company told investors that as the demerger resulted in only part of the investment in Keras being returned to shareholders, only part of the cost of that investment can be deducted for capital gains computation purposes.

2.25pm: Sleepwalk continues

With US benchmarks poised to open little changed, the FTSE 100 traded sideways over the lunchtime session.

Spread betting quotes suggest that the Dow Jones industrial average will open little changed and the S&P 500 up a point at 3,109.5.

Back in the UK, the FTSE 100 was down 55 points (0.8%) at 7,208.

Reports that China has invited American negotiators to Beijing for more trade talks failed to cut much ice in London, where mining stocks remained dull as investors began to show signs of trade talk fatigue.

Outside of the FTSE 350, tool hire firm HSS Hire Group PLC (LON:HSS) surged 9.5% to 38p after it delivered a significant improvement in profitability including a second successive quarter of return on capital above its 20% target range.

Outsourcing group MITIE Group PLC (LON:MTO) shed 6.0% at 134p after it sounded a note of caution in the outlook statement of its interim results.

“There is no doubt that we continue to operate in a challenging industry of rising labour costs and margin pressures. In addition, there is short-term economic and political uncertainty across our markets,” the company warned.

12.45pm: Ex-div stocks weigh down the Footsie

The FTSE 100 was keeping its head above 7,200 as ex-dividend stocks and lack of progress in the US-Sino trade talks weighed on the index.

London’s index of leading shares was down 55 points (0.8%) at 7,207.

Fags maker British American Tobacco PLC (LON:BATS) was a bright spot, advancing 4.0% to 2,974p after the US Food and Drug Administration’s autumn unified agenda, which sets the regulatory priorities for the year ahead, was published overnight without any mention of tighter nicotine standards.

BATS’ sector peer, Imperial Brands PLC (LON:IMB) was 2.6% lower at 1,716p following the announcement but that can be attributed to the stock going ex-dividend today.

Among the mid-caps, Direct Line Insurance Group PLC (LON:DLG) defied the trend, rising 6.4% on the day of its capital markets day at its contact centre in Doncaster.

The insurer cheered the market with a trading update, released after the close last night, which indicated a return to growth for its car insurance arm. The group also announced plans to slash costs and reduce capital expenditure.

11.15am: Blue-chips pare losses

After a good run this morning sterling has come off the top against the greenback, thus enticing some buyers back into the UK equity market.

Nevertheless, the FTSE 100 remains 32 points (0.4%) in the hole at 7,231 but it is, at least, about 34 points above its intra-day low.

One pound sterling currently buys US$1.2947, almost a quarter of a cent more than it did last night.

The FTSE 250, generally considered to be less of a hostage to the movement of the UK currency, is actually showing a bigger fall than its blue-chip counterpart, with the index down 118 points (0.6%) at 20,358.

Much of the blame for the mid-cap index’s underperformance can be laid at the door of Royal Mail PLC (LON:RMG), which was down by around one-sixth after it said there was a “a significant increase in the risk of industrial action taking place” over the Christmas period.

“Royal Mail has again delivered a mixed bag of numbers, as the increasing pressure of a letters market in terminal decline continues to bite,” said Richard Hunter, the head of markets at interactive investor.

“The group admits that its transformation plan is behind schedule. Yet the reduction in the letters and cards market, largely offset by the explosion of parcel deliveries arising from online shopping, is hardly a new phenomenon. The fact that the addressed letters part of the business is expected to decline at a higher rate of between 7% and 9% this year is proof it were needed that Royal Mail’s business mix needs to change rapidly,” Hunter suggested.

Also getting it in the neck after a trading update was Rotork PLC (LON:ROR), the flow control and instrumentation specialist.

The shares were off 4.1% at 321.6p after it noted that a “slightly greater than usual proportion of recent orders are not for delivery until next year”, as a result of which sales growth this year is expected to be a bit lower than previously expected.

10.00am: Rumour of a delay to US-Sino trade deal hits miners

Stock market bulls were on the run this morning as patience over the US-China trade talks wears thin.

The FTSE 100 was down 52 points (0.7%) at 7,210.

Speaking about the US-Sino trade talks, Connor Campbell of Spreadex noted, “A Reuters report suggested any phase one agreement may be pushed into 2020 – not least because Beijing and Washington remain split on a number of key topics, including the rolling back of tariffs and the treatment of Hong Kong. That latter issue was further put under the spotlight as the House of Representatives passed legislation designed to protect the rights of protestors in the region.”

“At the same time on Wednesday night you had Vice Premier Liu He claim in a dinner speech he was ‘cautiously optimistic’ about a deal, countering the rumours of Chinese pessimism that appeared on Monday but even then that statement was muddied by reports that Liu told an attendee he was ‘confused’ by the US demands.

“Attempting to put out some fires, China’s commerce ministry spokesman Gao Feng said on Thursday the country would strive for a deal; however, this talk fell on deaf ears, investors losing patience with the lack of action,” Campbell added.

Unsurprisingly, given the mood music emerging from China, steel-maker Evraz PLC (LON:EVR) and the mining giants were out of favour but all posted losses that were not as severe as those suffered by Johnson Matthey PLC (LON:JMAT), which was down 6.7% at 3,000p.

The speciality chemicals group reported better-than-expected first-half profits but rejigged full-year guidance and saw net debt much higher than expected.

Interims from Severn Trent PLC (LON:SVT) sent the water company’s shares down the drain.

The share price ebbed 60p to 2,277p after it reported a 9.7% fall in underlying basic earnings per share in the six months to the end of September.

8.45am: Trade talks fatigue hits the Footsie

World equity markets have become a barometer for trade negotiations – and they appear to wax and wane on any comments (good, bad or indifferent) from the US president.

The FTSE100, taking the US and Asia for its cue, opened firmly in negative territory after Donald Trump threatened to escalate hostilities with China unless the latter sat down and agreed a bi-lateral international commerce agreement.

Hong Kong, down 1.6%, was the worst hit of the major international exchanges with violence in the territory continuing to erode confidence.

Liquidity (the number of shares being traded) appears to be an issue.

Opinion was split over the cause. Some believe it the Alibaba IPO, set to raise £10bn via Hong Kong, could be acting as a depressant. The theory goes traders are holding back funds to invest.

Others suspect the explanation is more obvious (and potentially more worrying); overseas investors are pulling cash out of the market with clashes between protestors and police showing no signs of abating.

Closer to home, British American Tobacco (LON:BATS) was up 5% and topping the Footsie leader board after it was revealed the US investment management giant, The Capital Group of Companies, had increased its stake in the company to above 11%.

This comes in the wake of a poor run for the cigarette firms amid worries over the potentially harmful effects of vaping.

British Gas owner Centrica (LON:CNA) wasn’t far behind. It shares were buoyed 4.4% by a reassuring trading statement that confirmed it is on track to hit full-year earnings forecasts.

6.20am: FTSE 100 set to start on the back foot 

The FTSE 100 is set to start Thursday in negative territory as Trump’s Chinese tit-for-tat continued to erode global investor sentiments.

CFD and spreadbetting firm IG Markets sees the blue chip benchmark down about 27 points, making a price of 7,235 to 7,238.

It comes as global indices have been lit in red amid the seemingly endless trade dispute between Trump’s America and China.

“President Trump said he would impose ‘even higher’ tariffs on imports from China if a deal isn’t brokered. The announcement reopened up old trade worries, which triggered traders to cut their equity positions,” said David Madden, analyst at CMC Markets.

“The US-China trade spat has been rumbling on for over one year, and traders are used to the back and forth. Recently we have seen some European equity markets at multi-year highs, and a number of US indices hit record highs, so Trump’s remarks acted as an excuse to unwind some positions.”

US stocks finished Wednesday’s session on the back foot. On Wall Street, the Dow Jones dropped 112 points or 0.4% to close at 27,821.

The S&P 500 similarly gave up 0.38%, ending the day at 3,108, while the Nasdaq moved 0.51% lower to 8,526.

In Asia, Japan’s Nikkei slipped 96 points or 0.42% to trade at 23,057 while Hong Kong’s Hang Seng dropped lower, losing 437 points or 1.62% to 26,448. The Shanghai Composite index was down 0.46% at 2,897.

Around the markets

  • Pound: US$1.2928, up 0.03%
  • Gold: US$1,470 per ounce, down 0.17%
  • Brent crude: US$62.18 per barrel, up 2.04%
  • Bitcoin: US$8,097, down 0.13%

Significant announcements expected

Interims: Royal Mail Group PLC (LON:RMG), Severn Trent PLC (LON:SVT), Charles Stanley Group PLC (LON:CAY), CMC Markets Plc (LON:CMCX), Countryside Properties PLC (LON:CSP), First Property Group PLC (LON:FPO), Helical PLC (LON:HLCL), iEnergizer Ltd (LON:IBPO), JLEN Environmental Assets Group Ltd (LON:JLEN), Manolete Partners PLC (LON:MANO), MITIE Group PLC (LON:MTO), NewRiver REIT plc (LON:NRR), Syncona (SYNC)

Finals: Euromoney Institutional Investor PLC (LON:ERM), Residential Secure Income PLC (LON:RESI)

Trading statements: William Hill PLC (LON:WMH), Centrica PLC (LON:CNA), Close Brothers Group PLC (LON:CBG), Hill & Smith Holdings PLC (LON:HILS), TT Electronics plc (LON:TTG)

AGMs: Avation (LON:AVAP)

FTSE 100 ex-divs: Carnival PLC (LON:CCL), DCC PLC (LON:DCC), Imperial Brands PLC (LON:IMB), Scottish Mortgage Investment Trust PLC (LON:SMT)

Economic announcements: UK public sector borrowing, US existing homes sales data, US jobless