London close: Stocks dip as miners weigh and pound rallies
London stocks were not able to hold onto their modest early gains and closed in the red on Thursday as late pressure came from the pound on renewed optimism over a Brexit deal.
The FTSE 100 ended 0.37% lower at 7,320.75, as the pound recovered from earlier lows to climb 0.3% against the euro and dollar to 1.1390 and 1.3430 respectively.
With Thursday's trading relatively becalmed as markets position themselves ahead of the key US non-farm jobs report at the end of the week, the FTSE suffered at the hands of a strengthening pound and weak session for insurance firms and miners, noted analyst Joshua Mahony at IG.
"While many markets have been seen somewhat of a serene session, the same cannot be said for Bitcoin which seems to go from strength to strength amid the rise to $16,000. Incredibly this rally seems to know no bounds, with the news of a massive hack totaling over $64m batted off in favour of new record highs."
Brexit was at the forefront of many traders’ minds as the European Commission said the UK had a deadline of Sunday to agree a text on a potential deal or it will be told that negotiations cannot proceed to the next stage.
Analyst David Cheetham at forex broker XTB said volatility in the pound against the euro has been rising fairly strongly this week and currently sit at levels not seen since June as Brexit talks keep the market on tenterhooks.
"Reports this morning that UK PM Theresa May has prepared another Brexit proposal to submit to Ireland in a bid to settle the border dispute have boosted sterling, but until there is official confirmation of a deal the pound’s gains will be capped. An EU summit that kicks off this time next week has been earmarked as an event where the Brexit talks can progress to trade negotiations, but this would likely require a resolution on the Irish border by tomorrow at the latest."
Property investors were also digesting the latest research from Halifax, which showed house prices are continuing to surge higher, running contrary to most other surveys of the housing market.
The Halifax house price index increased by 0.5% month-to-month in November, slightly above the consensus forecast of 0.2% and following a 0.3% increase in October to mark the fifth rise in a row.
Growth in the past three months compared to the same period last year slowed to 3.9%, from the 4.5% announced a month ago, which was expected by the market.
Pantheon Macroeconomics said it remains inclined to place much more weight on the Nationwide and Rightmove measures.
“Looking ahead, we remain concerned that even relatively small increases in mortgage rates - in response to last month’s Bank Rate hike and the impending closure of the Term Funding Scheme - will reduce the size of mortgages that households take out, while falling consumer confidence will additionally subdue demand. As such, we still expect house prices merely to flatline over the next 12 months.”
In corporate news, Sky gained following reports that US cable network Comcast was interested in taking full control of the broadcaster, joining Disney in the pursuit of several assets from Rupert Murdoch's 21st Century Fox.
Ladbrokes Coral leapt 29% on news is it in advanced talks with GVC Holdings about a possible £3.9bn takeover of the bookmaker. GVC was also sharply higher.
Elsewhere in the sector William Hill also surged more than 8% after it settled a dispute with NYX, a Toronto-listed gaming software company in which the bookmaker owns a stake.
Coca-Cola HBC edged up after it appointed Zoran Bogdanovic as its new chief executive officer with immediate effect, succeeding Dimitris Lois who passed away in October.
Building materials group CRH was on the front foot after deciding not to bid for South African rival PPC.
On the downside, packaging and paper group DS Smith reversed earlier gains to trade a touch lower after saying sales increased strongly in the first half of the year but profits grew more slowly due to higher paper prices.
Legal & General reversed early gains after saying it expected a record year for profits and earnings with growth accelerating across its businesses.
Heavily-weighted miners lost ground as copper and iron prices declined, with Rio Tinto, Anglo American and Glencore all weaker.
Cobham was on the back foot after a downgrade to ‘reduce’ at Kepler Cheuvreux, while Babcock was down as its stock went ex-dividend.
FTSE 100 - Risers
Pearson (PSON) 737.00p 2.22%
BT Group (BT.A) 262.75p 2.16%
Mediclinic International (MDC) 590.50p 1.46%
Vodafone Group (VOD) 227.85p 1.36%
Hammerson (HMSO) 508.00p 1.30%
Fresnillo (FRES) 1,279.00p 1.27%
Worldpay Group (WPG) 418.80p 1.26%
Smurfit Kappa Group (SKG) 2,356.00p 1.12%
Convatec Group (CTEC) 209.70p 1.06%
Reckitt Benckiser Group (RB.) 6,615.00p 0.98%
FTSE 100 - Fallers
Babcock International Group (BAB) 654.50p -3.47%
Admiral Group (ADM) 1,847.00p -2.59%
Associated British Foods (ABF) 2,852.00p -2.33%
Direct Line Insurance Group (DLG) 357.10p -2.16%
Rio Tinto (RIO) 3,440.50p -1.66%
Standard Life Aberdeen (SLA) 413.10p -1.60%
Whitbread (WTB) 3,928.00p -1.55%
Centrica (CNA) 144.80p -1.50%
St James's Place (STJ) 1,152.00p -1.45%
Ferguson (FERG) 5,330.00p -1.39%
FTSE 250 - Risers
Ladbrokes Coral Group (LCL) 175.10p 29.03%
William Hill (WMH) 315.80p 8.10%
GVC Holdings (GVC) 954.50p 5.01%
Sophos Group (SOPH) 550.50p 4.76%
Aveva Group (AVV) 2,693.00p 3.86%
888 Holdings (888) 269.70p 3.73%
JD Sports Fashion (JD.) 329.00p 3.46%
TalkTalk Telecom Group (TALK) 148.50p 2.91%
Fisher (James) & Sons (FSJ) 1,571.00p 2.75%
Just Group (JUST) 162.40p 2.41%
FTSE 250 - Fallers
Aggreko (AGK) 787.50p -3.55%
Vedanta Resources (VED) 633.50p -3.21%
Greene King (GNK) 508.50p -3.05%
Investec (INVP) 483.00p -2.93%
Britvic (BVIC) 796.50p -2.87%
PayPoint (PAY) 890.00p -2.79%
Electra Private Equity (ELTA) 935.00p -2.71%
Smith (DS) (SMDS) 525.00p -2.60%
Halfords Group (HFD) 331.60p -2.59%
Cineworld Group (CINE) 519.50p -2.53%