Resurgent pound and Vodafone merger hit Footsie
LONDON
THE FTSE 100 ended in negative territory yesterday, dented by a resurgent pound and dragged down by the likes of Vodafone and Smurfit Kappa.
London’s top flight closed the day down 47.18 points, or 0.62%, at 7,516.03.
Leading the fallers was Vodafone, with the telecommunications giant subject to a sell-off after Merrill Lynch downgraded its stock to neutral from buy.
It came after Vodafone agreed a mammoth 15 billion Australian dollar (£8.4 billion) deal to merge its Australian operations with TPG Telecom.
Shares ended down 5.42p at 167.52p.
Smurfit Kappa was also among the biggest fallers after disclosing a day earlier that Venezuela’s socialist government has seized control of its operations in the country. Shares closed down 68p at 3,168p.
ON the FTSE 250, recruitment firm Hays came under pressure as its UK arm continues to be held back by Brexit uncertainty.
The group reported a 17% rise in pre-tax profits to £238.5 million in the 12 months to June 30, boosted by a strong performance in its international unit.
But in the UK and Ireland, net fees rose by just 2%, a dismal performance compared with its other territories. The stock closed down 8.8p at 194p.
The FTSE 100 was also knocked by the pound’s mini renaissance.
Sterling held on to gains made on Wednesday following comments from Michel Barnier suggesting that the European Union is ready to offer the UK a bespoke Brexit deal.
The bloc’s chief negotiator said the EU is “prepared to offer a partnership with Britain such as has never been with any other third country”, which resulted in the pound spiking.
The pound was hovering around 1.30 US dollars for most of the day before dipping 0.2% to end the session at 1.299p.
Versus the single currency, the pound was up 0.3% at 1.115 euros.
David Madden, market analyst at CMC, said: “The dust has settled after Michel Barnier’s comments yesterday that he would be prepared to give the UK a deal that no other country has been offered.
“It was reported that President Macron will encourage the EU to broker an agreement with the UK.
“While the prospects of a ‘no-deal Brexit’ remain low, the pound’s prospects are likely to be positive.”
In Europe, France’s CAC was down 0.42% and Germany’s DAX closed down 0.54%.
Brent Crude was trading up 0.26% at 77.4 US dollars per barrel.
The biggest risers on the FTSE 100 were Ocado up 18p at 1,080.5p, United Utilities up 9.4p at 738.8p, GVC up 10p at 1,110p and Whitbread up 31p at 4,020p.
The biggest fallers on the FTSE 100 were Vodafone down 5.42p at 167.52p, Fresnillo down 28.4p at 906.2p, Royal Mail down 13.1p at 451.2p and Smurfit Kappa down 68p at 3,168p.
NEW YORK
US stocks ended their four-day winning streak yesterday as risk reduction ahead of the long holiday weekend accelerated on growing trade anxieties.
The broad-based sell-off steepened in mid-afternoon following a Bloomberg report that US President Donald Trump wants to impose proposed tariffs on an additional $200 billion of Chinese imports as early as next week, sooner than many expected.
The CBOE Volatility Index, a gauge of investor expectations for near-term volatility, rose to a near two-week high in a low-volume, pre-holiday session, closing at 13.53.
“When you have low volume, it’s harder for the market to absorb strong buying or selling pressure,” said Shawn Cruz, at TD Ameritrade in Jersey City. “We still have (trade) headlines coming out on a daily basis.”
The Bloomberg report coincided with continuing efforts by Canada and the United States to revamp the Nafta agreement.
Apple Inc shares closed at a record high, rising 0.9 per cent following news that it would unveil its latest iphone soon.
Amazon.com stock rose 0.2%, closing above $2,000 for the first time and edging the company closer to becoming the second US company after Apple to reach $1 trillion in market value.
The Dow Jones fell 137.65 points to 25,986.92, the S&P 500 lost 12.91 points to 2,901.13 and the Nasdaq Composite dropped 21.32 points to 8,088.36.