London close: FTSE closes higher as investors watch Brexit talks
Market Close Report
15:18, 11th September 2020

(Sharecast News) - London's top-flight index managed a positive end to its session on Friday, as investors digested the latest UK GDP figures, with all eyes on the resumption of Brexit talks.
The FTSE 100 ended the day up 0.48% at 6,032.09, while the FTSE 250 slipped 0.1% to 17,555.87.

Sterling was in negative territory against its major trading pairs, last falling 0.18% on the dollar to $1.2782, and sliding 0.38% against the euro to €1.0798.

"In the past week, traders in this part of the world took their cues from the US, in particular the tech sector, and seeing as that has calmed down, things have cooled-off here too," said CMC Markets analyst David Madden.

"Broadly speaking it has been a positive week for European indices, but then again the FTSE was starting from a low base, and the DAX 30 hasn't retested the highs of last week."

Madden said traders were still "monitoring" the health crisis.

"Uncertainty in relation to the UK-EU trade relationship has increased and US lawmakers have yet to reach an agreement on the relief package," he added.

Talks between the UK and the EU were set to resume, despite the UK's rejection the EU's ultimatum to ditch plans to override the withdrawal agreement.

Meanwhile, figures released earlier by the Office for National Statistics showed the economy continued to recover in July but remains below pre-pandemic levels.

The economy grew 6.6% in July following 8.7% growth in June and a 2.4% increase in May, coming in just below expectations for a 6.7% increase.

That compared to a record 20% contraction in April in the aftermath of the imposition of full lockdown.

GDP had recovered 18.6% from the April low, but was still 11.7% below its pre-Covid peak.

Thomas Pugh, UK economist at Capital Economics, said the monthly rise in GDP, although a little slower than July, "still suggests that the record-breaking negative growth rate of GDP in Q2 will be followed by a record-breaking positive growth rate in Q3".

"However, July was probably the last of the big step ups in activity and a full recovery probably won't be achieved until early 2022, which is why we think the Bank of England will yet expand quantitative easing by a further £250bn in total."

In equity markets, London Stock Exchange was ahead 1.57% as it took a step closer to taking over data provider Refinitiv, after Euronext confirmed it was in talks with Italian state lender Cassa Depositi e Prestiti about submitting an offer to LSE to buy Borsa Italiana.

LSE announced in July that it had begun discussions to sell part of or all of its Borsa Italiana unit to satisfy European regulators over its acquisition of Refinitiv.

Rio Tinto added 4.35% after it announced that chief executive Jean-Sébastien Jacques had resigned after the company's board yielded to shareholder pressure over the destruction of sacred 46,000-year-old rock shelters in Western Australia.

Swiss iron ore company Ferrexpo racked up gains of 6.99% after it announced a further special dividend following strong cash generation and amid solid demand.

Royal Mail was boosted 5.99% by an upgrade at JPMorgan, while Essentra and Travis Perkins were lifted 3.25% and 3% respectively, by upgrades at Jefferies.

On the downside, travel-related stocks were under the cosh again, with British Airways parent IAG down 3.09%, Premier Inn owner

Market Movers

FTSE 100 (UKX) 6,032.09 0.48%
FTSE 250 (MCX) 17,555.87 -0.10%
techMARK (TASX) 3,828.04 0.14%

FTSE 100 - Risers

Aviva (AV.) 303.20p 5.02%
Anglo American (AAL) 1,945.60p 4.46%
Rio Tinto (RIO) 4,992.00p 4.35%
Glencore (GLEN) 182.00p 4.13%
Burberry Group (BRBY) 1,554.00p 3.71%
Antofagasta (ANTO) 1,111.00p 2.81%
BHP Group (BHP) 1,743.60p 2.14%
Flutter Entertainment (FLTR) 11,750.00p 2.09%
Smurfit Kappa Group (SKG) 2,894.00p 1.97%
Mondi (MNDI) 1,516.00p 1.81%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 787.20p -3.81%
International Consolidated Airlines Group SA (CDI) (IAG) 194.20p -3.09%
Morrison (Wm) Supermarkets (MRW) 180.30p -3.06%
Taylor Wimpey (TW.) 111.15p -2.59%
M&G (MNG) 152.75p -2.52%
Whitbread (WTB) 2,313.00p -2.36%
Barclays (BARC) 102.62p -2.30%
Pearson (PSON) 524.20p -2.16%
Lloyds Banking Group (LLOY) 25.88p -2.04%
Ocado Group (OCDO) 2,273.00p -1.73%

FTSE 250 - Risers

Vivo Energy (VVO) 75.30p 7.26%
Ferrexpo (FXPO) 188.20p 6.99%
Royal Mail (RMG) 233.70p 5.99%
Watches of Switzerland Group (WOSG) 318.50p 5.41%
Cineworld Group (CINE) 52.00p 4.94%
Dunelm Group (DNLM) 1,405.00p 4.77%
Hammerson (HMSO) 23.06p 4.74%
Games Workshop Group (GAW) 10,150.00p 4.10%
Howden Joinery Group (HWDN) 567.00p 3.92%
Petrofac Ltd. (PFC) 141.55p 3.62%

FTSE 250 - Fallers

Ascential (ASCL) 289.40p -6.77%
Capital & Counties Properties (CAPC) 123.30p -5.73%
Babcock International Group (BAB) 235.80p -5.72%
Ashmore Group (ASHM) 377.60p -3.58%
Equiniti Group (EQN) 109.00p -3.54%
Paragon Banking Group (PAG) 344.20p -3.48%
Marks & Spencer Group (MKS) 101.85p -3.41%
Network International Holdings (NETW) 394.00p -3.34%
Great Portland Estates (GPOR) 567.40p -3.31%
Vistry Group (VTY) 585.00p -3.31%

Whitbread off 2.36% and TUI 2.58% weaker, after Portugal was put back on England's quarantine list.

Ashmore was also in the red by 3.58%, after it proposed an unchanged final dividend of 12.10p a share as the emerging markets fund manager reported a 1% increase in pre-tax profit to £221.5m for the year to the end of June.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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