Traders wait and see following political turmoil

LONDON

THE FTSE 100 struggled for direction yesterday as traders adopted a “wait-and-see” approach amid further Brexit fallout and as Sino-us relations continue to come under the microscope.

London’s top flight closed down 2.69 points, or 0.04%, at 6,877.5 as investors suffered a bout of Brexit fatigue following the high drama of earlier in the week.

Traders were also cautious over reports China and the US are making more progress on trade talks following acrimony between the two global superpowers.

Theresa May survived a noconfidence vote on Wednesday, earning her further scorn from extreme Brexiters in her party who wish to remove the Prime Minster and install one of their own in Downing Street.

But her survival acted as a mini boon for the pound, which has retreated from multi-month lows and was trading broadly flat at the London market close.

Sterling was up marginally versus the US dollar at 1.263 and rose 0.2% against the euro to hit 1.113.

Fiona Cincotta, senior market analyst at City Index said: “Whilst the pound extended its recovery from a 20-month low on Tuesday, gains will remain limited. Theresa May has survived a coup, but her Brexit plan is still hugely unpalatable for many Conservative MPS.”

In stocks, most of the action took place in the retail sector, with Mike Ashley’s loose tongue triggering a sell-off in both Sports Direct and Debenhams.

The tracksuit tycoon warned that November trading had been “unbelievably bad” as profits at the retailer took a hit from the acquisition of department store House of Fraser.

He also claimed Debenhams, where Mr Ashley’s Sports Direct is the largest shareholder, is on the brink of collapse as he urged the struggling retailer to accept his offer of a £40 million loan to avoid a Christmas disaster.

His comments sent shares in Sports Direct down 40.9p, or 14.8%, at 235.4p and Debenhams stock ended the day 0.28p down, or 4.89%, at 5.45p.

In more dark news for the high street, womenswear chain Bonmarche saw its shares crash after warning it could slip to a £4 million annual loss amid “unprecedented” tough trading conditions.

The group’s chief executive Helen Connolly said conditions on the high street are worse than those seen during the recession sparked by the financial crisis.

Shares tumbled 36p, or 44.72%, to 44.5p at the close.

In Europe, France’s CAC was down 0.26% and Germany’s DAX shed 0.04%.

A barrel of Brent crude was trading nearly 1% higher at 60 US dollars.

The biggest risers on the FTSE 100 were Standard Life Aberdeen up 10.95p at 244p, Tui up 51p at 1,190p, Shire up 117.5p at 4,657.5p and Fresnillo up 19.6p at 841p.

The biggest fallers on the FTSE 100 were Mondi down 66.5p at 1,632.5p, Marks & Spencer down 10.5p at 266p, Barratt Developments down 15.4p at 452.7p and Next down 146p at 4,424p.

NEW YORK

THE S&P 500 finished little changed after a volatile session yesterday, as investors continued to be spooked by uncertainty on domestic and international issues, driving up bids for defensive shares while financials and consumer discretionary stocks were dragging.

The Dow eked out a gain. The S&P oscillated between positive and negative territory after failing to sustain an opening rally spurred by hopes for progress in Us-china trade negotiations. A Chinese Commerce Ministry spokesman had said Washington and Beijing were in close contact over trade.

“It’s a market that’s been very nervous. Investors get excited in the morning and then their fears come back,” said Omar Aguilar, chief investment officer at Charles Schwab Investment Management in San Francisco.

Aguilar cited worries on issues ranging from the US Federal Reserve’s interest rate hikes, the Us-china trade talks to uncertainty about Brexit, Italy and EU monetary policy.

“We need a catalyst to get us a more consistent trend. It could be good economic data or more clarity on the Fed’s intentions for next year or more certainty in Us-china trade,” he said.

The Dow Jones rose 70.11 points to 24,597.38, the S&P 500 lost 0.53 point to 2,650.54 and the Nasdaq Composite fell 27.98 points to 7,070.33.

General Electric Co rose 7.3 per cent after JP Morgan upgraded the industrial conglomerate’s shares.