London close: Stocks finish higher as US-China tensions escalate

London stocks finished in the green on Thursday, despite escalating tensions between the US and China, as investors sifted through a veritable tsunami of corporate news.

The FTSE 100 ended the session up 0.07% at 6,211.44, and the FTSE 250 was 0.14% firmer at 17,489.45.

Sterling was mixed against its major trading pairs, last rising 0.19% on the dollar to $1.2758, but falling 0.18% on the euro to €1.0986.

“The session has been subdued in the last few hours as concerns about the US-China relationship and the mixed labour data from the US has chipped away at the previously positive sentiment,” said CMC Markets analyst David Madden.

“The strained relationship between the US and China has been an issue lately and now the situation is a little worse. It was reported the Chinese government ordered the closure of the US consulate in Chengdu, as a way of hitting back at the US’s decision to close the Chinese consulate in Houston.

“On its own, it isn’t a major issue, but there has been an absence of positive news today.”

Back in Britain, the latest survey from the Confederation of British Industry showed output volumes in the manufacturing sector fell sharply again in the three months to July amid the Covid-19 pandemic, but manufacturers were more optimistic about the outlook.

The total order book balance rose to -46 in July from -58 in June, below consensus expectations of -38.

The survey of 356 manufacturing firms saw total new orders fall at their fastest pace since October 1980, with domestic orders and export orders declining at record paces.

That marked the third month in a row that new orders declined at a record pace.

Output dropped in 14 out of 17 sub-sectors, with the headline fall led by the motor vehicles & transport, food, drink & tobacco, and mechanical engineering sub-sectors.

On the bright side, and for the first time since February, manufacturers said they now expect output in the next quarter to begin to recover.

“Manufacturers continue to face extreme hardship due to the Covid-19 crisis,” said CBI chief economist Rain Newton-Smith.

“There are tentative signs of gradual recovery on the horizon, with firms expecting output and orders to begin to pick up in the next three months.

“But demand still remains deeply depressed.”

In equity markets, Unilever closed up 7.88% after it reported a lower-than-expected fall in second-quarter sales as strong growth in North America helped to offset the impact of coronavirus lockdowns.

Software company Sage gained 6.59% after saying that recurring revenues grew in the nine months to the end of June, while Polymetal added 6.12% as it posted a 30% increase in second-quarter revenue on the back of higher gold prices and sales volumes.

Petropavlovsk surged 17.57% as the Russian gold miner said total gold production remains on track to meet its full-year target of between 620,000 and 720,000 ounces, including third-party concentrate processing, after a 42% rise in second quarter output.

Insurer Beazley advanced 5.89% despite saying it swung to a loss in the first half due to coronavirus-related claims.

In the six months to the end of June, it swung to a pre-tax loss of $13.8m from a profit of $166.4m in the first half of last year, pointing to high volumes of claims arising from Covid-19 impacted lines".

Broker Shore Capital said it was a "resilient" set of earnings, with losses lower than estimates.

On the downside, SSE lost 6.3% and Pennon slid 3.74%, as their stock went ex-dividend.

Relx - formerly Reed Elsevier - was in the red by 3.66% after it reported a 10% fall in interim revenue as the pandemic weighed on its exhibitions business.

Countryside Properties was 7.91% weaker after the housebuilder and urban regeneration company raised around £250m through a discounted placing and subscription to bolster its balance sheet amid the pandemic and fund further growth in the partnerships division.

IG Group was 10.79% lower even as it posted a 36% jump in full-year net trading revenue and a 52% increase in pre-tax profit.

Traders noted that the shares had a good run into the numbers and highlighted the fact that medium-term targets were merely reiterated despite the big rise in annual profit.

Market Movers

FTSE 100 (UKX) 6,211.44 0.07%
FTSE 250 (MCX) 17,489.45 0.14%
techMARK (TASX) 3,844.71 0.67%

FTSE 100 - Risers

Unilever (ULVR) 4,671.00p 7.88%
Sage Group (SGE) 753.60p 6.59%
Polymetal International (POLY) 1,811.50p 6.12%
Melrose Industries (MRO) 108.90p 5.42%
WPP (WPP) 626.00p 2.93%
Glencore (GLEN) 183.56p 2.65%
Diageo (DGE) 2,853.00p 2.63%
Smith & Nephew (SN.) 1,674.00p 2.45%
Ocado Group (OCDO) 2,195.00p 2.35%
Intermediate Capital Group (ICP) 1,449.00p 2.03%

FTSE 100 - Fallers

SSE (SSE) 1,337.50p -6.30%
Informa (INF) 406.30p -5.27%
Pennon Group (PNN) 1,054.00p -3.74%
Relx plc (REL) 1,700.00p -3.66%
Rolls-Royce Holdings (RR.) 271.60p -3.52%
NATWEST GROUP PLC ORD 100P (NWG) 116.90p -3.31%
International Consolidated Airlines Group SA (CDI) (IAG) 208.60p -2.89%
GVC Holdings (GVC) 746.00p -2.86%
Smith (DS) (SMDS) 275.70p -2.85%
St James's Place (STJ) 963.20p -2.73%

FTSE 250 - Risers

Petropavlovsk (POG) 36.80p 17.57%
G4S (GFS) 146.75p 7.43%
Syncona Limited NPV (SYNC) 254.50p 6.04%
Beazley (BEZ) 456.00p 5.89%
BMO Commercial Property Trust Limited (BCPT) 58.00p 5.45%
Spirent Communications (SPT) 269.00p 4.67%
Micro Focus International (MCRO) 311.60p 4.56%
Renishaw (RSW) 4,952.00p 4.25%
Clarkson (CKN) 2,135.00p 4.15%
Future (FUTR) 1,306.00p 3.15%

FTSE 250 - Fallers

IG Group Holdings (IGG) 743.00p -10.79%
Countryside Properties (CSP) 330.80p -7.91%
Network International Holdings (NETW) 461.40p -6.03%
Hammerson (HMSO) 70.80p -5.80%
PureTech Health (PRTC) 270.00p -4.42%
National Express Group (NEX) 159.60p -3.80%
QinetiQ Group (QQ.) 306.00p -3.65%
Centrica (CNA) 40.37p -3.58%
Cairn Energy (CNE) 127.30p -3.41%
Dixons Carphone (DC.) 78.10p -3.28%