London close: Shares finish on a mixed note despite dip in the pound

London equity markets put in a mixed performance on Wednesday, helped along by a stellar performance from Paddy Power Betfair and strength in the tobacco sector, but with Brexit and Sino-US trade worries limiting the upside.

The FTSE 100 was up 0.17% at 7,196.00, while the pound was down 0.21% against the US dollar at 1.31491 and by 0.30% versus the euro to 1.1619, after talks between the EU’s chief Brexit negotiator Michel Barnier and UK attorney general Geoffrey Cox and Brexit minister Stephen Barclay on Tuesday ended with no signs of a breakthrough.

Investors were also mulling a warning from the OECD, which said a no-deal Brexit would plunge the UK economy into a recession, while annual growth would fall below 1% this year for the first time since the financial crisis even if a deal is agreed.

On the US-China trade front meanwhile, some of the most recent comments from Chinese officials have been a tad more ambiguous.

Speaking on the sidelines of the 13th National Peoples's Congress, overnight, a former Chinese finance minister, Lou Jiwei, said that any concessions from Beijing were unlikely to be big while reportedly labeling US demands "unreasonable and nitpicky".

"The chances of a deal with China this month look a bit weaker now, while more trade conflict with Europe seems increasingly likely," was IG Chris Beauchamp's take on things.

"The assumption now is that trade wars will intensify, and that growth will suffer as a result, providing a less congenial outlook for equities."

In equity markets, Paddy Power Betfair surged as it announced plans to change its name to Flutter Entertainment and reported underlying EBITDA of £451m that was at the top end of prior guidance.

British American Tobacco and Imperial Brands racked up strong gains as investors cheered news that US FDA Commissioner Scott Gotlieb - who was spearheading a ban on menthol cigarettes - has resigned.

Packaging group DS Smith gained ground as it said trading since 1 November has continued to be strong and in line with its expectations, as it announced the sale of its plastics division to Olympus Partners for an enterprise value of $585m (around £450m).

Ultra Electronics was the biggest riser on the FTSE 250 as the defence company hiked its dividend after full-year revenue beat expectations but profits fell.

On the downside, Legal & General was in the red even as it lifted its total dividend 7% to 16.42p after reporting 10% growth in operating profit to £1.9bn for 2018.

David Cheetham, chief market analyst at XTB, said: "A worse-than-expected solvency ratio and a below forecast level of cash generation are not to be taken lightly, but the long term prospects seem to remain favourable for the firm going forward, with the selling seen likely just a case of investors taking some profits off the table after an impressive run higher of late."

Burberry retreated after a downgrade to ‘sell’ from ‘neutral’ at Goldman Sachs, which highlighted a demanding valuation. Intertek was knocked lower by a downgrade to ‘underweight’ at Barclays and John Laing by a downgrade to ‘hold’ at HSBC.

Just Eat was weaker even as it said it swung to a pre-tax profit in the year to the end of December 2018, with analysts noting concerns about the company’s strategy going forward.

Market Movers

FTSE 100 (UKX) 7,196.00 0.17%
FTSE 250 (MCX) 19,359.31 -0.43%
techMARK (TASX) 3,499.23 0.04%

FTSE 100 - Risers

British American Tobacco (BATS) 3,050.00p 5.15%
Smith (DS) (SMDS) 362.10p 3.72%
Wood Group (John) (WG.) 568.20p 3.46%
Evraz (EVR) 610.00p 3.08%
GVC Holdings (GVC) 717.00p 2.87%
NMC Health (NMC) 3,000.00p 2.11%
TUI AG Reg Shs (DI) (TUI) 810.60p 1.83%
Antofagasta (ANTO) 966.40p 1.47%
easyJet (EZJ) 1,244.00p 1.43%
Imperial Brands (IMB) 2,612.50p 1.40%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,874.50p -4.04%
Legal & General Group (LGEN) 275.60p -3.70%
Paddy Power Betfair (PPB) 6,065.00p -2.65%
Intertek Group (ITRK) 4,900.00p -1.92%
Fresnillo (FRES) 802.80p -1.69%
Hargreaves Lansdown (HL.) 1,753.50p -1.63%
British Land Company (BLND) 599.60p -1.54%
Persimmon (PSN) 2,433.00p -1.54%
Rolls-Royce Holdings (RR.) 900.40p -1.38%
CRH (CRH) 2,400.00p -1.32%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 1,441.00p 12.23%
Indivior (INDV) 111.95p 3.27%
IWG (IWG) 239.00p 3.20%
Centamin (DI) (CEY) 93.60p 3.17%
Aston Martin Lagonda Global Holdings (AML) 1,103.20p 3.10%
Genus (GNS) 2,310.00p 2.94%
Kaz Minerals (KAZ) 664.80p 2.66%
Premier Oil (PMO) 74.45p 2.20%
Domino's Pizza Group (DOM) 242.10p 1.98%
Barr (A.G.) (BAG) 795.00p 1.92%

FTSE 250 - Fallers

Contour Global (GLO) 175.00p -4.48%
Ascential (ASCL) 340.60p -3.95%
Amigo Holdings (AMGO) 218.00p -3.88%
Bakkavor Group (BAKK) 137.80p -3.50%
Spirent Communications (SPT) 151.20p -3.45%
Capita (CPI) 120.80p -3.01%
Games Workshop Group (GAW) 3,015.00p -2.90%
Dechra Pharmaceuticals (DPH) 2,452.00p -2.85%
Syncona Limited NPV (SYNC) 276.50p -2.81%
Pershing Square Holdings Ltd NPV (PSH) 1,248.00p -2.80%