London close: Stocks finish mixed as investors mull Brexit, ECB

The FTSE 100 ended the session up 0.54% at 6,599.76, while the FTSE 250 was 0.64% weaker at 19,756.10.

Sterling was 0.72% weaker against the dollar at $1.3302, and lost 1.11% on the euro to €1.0970.

“Markets are on the rise after a somewhat tumultuous day that saw Brexit disappointment and ECB changes dominate the European session,” said IG senior market analyst Joshua Mahony.

“Fortunately, while the UK and EU are looking as far from a deal as ever, the US could be getting their act together in a bid to push a fresh stimulus package across the line.

“The ability to achieve a bipartisan stimulus package was boosted yesterday after congress passed a short-term funding solution to avoid a government shutdown.”

However, Mahony noted that on Thursday there was “growing confidence” in a wider-ranging stimulus package after Steve Mnuchin stated they were making much progress towards a possible deal.

“With Congress needing to pass a deal by the 18 December deadline, the coming week is going to be important in helping to drive risk-assets higher given the nerves seen across US indices yesterday.

“From a UK perspective, the growing threat of a no-deal Brexit does highlight potential bumps ahead for stocks.

“Thus investors will hope for a breakthrough in US stimulus talks as a potential distraction from what could be a particularly rocky road ahead for the UK economy.”

Market participants were also mulling the publication by the EU of contingency plans in case Brexit trade talks with the UK collapse.

On the macroeconomic front, the latest figures from the Office for National Statistics showed a sharp slowdown in growth in October amid the reintroduction of certain Covid-19 restrictions.

GDP rose 0.4% on the month, in line with consensus expectations and marking the six consecutive month of growth, but down from the 2.2% and 1.1% month-on-month increases seen in August and September.

October GDP is now 23.4% higher than its low in April - when it slumped by a record 19.5% - but remains 7.9% below the levels seen in February 2020, before the full impact of the pandemic.

“The economy continued to grow in October, but at a snail’s pace,” said economists at Capital Economics.

“And with the Covid-19 restrictions likely to remain in place for some time, the economy is in for a difficult few months yet.”

Scope for a decent “vaccine bounce” in 2021 should allow the economy to regain its pre-pandemic level in early 2022, they noted.

“And we now think that by the middle of the decade the economy won’t be much smaller than if the crisis had never happened.”

In equity markets, packaging company DS Smith rose 3.79% after it reported a slide in half-year profits but resumed dividend payments, and sounded an upbeat note on the outlook and demand from online shopping.

Mike Ashley’s Frasers Group surged 12.94% after it raised full-year profit guidance as it reported higher profits at the half-year, driven by strong sales online and at stores as they reopened after the Covid-19 lockdown.

Online supermarket Ocado fell 6.08% despite lifting its full-year earnings forecast as it reported a jump in fourth-quarter revenue amid continued strong demand.

Neil Wilson, chief market analyst at Markets.com, pointed out that retail revenues rose 35% in the fourth quarter, down from 52% in the preceding quarter.

“Whilst still very strong, investors are perhaps just booking some profits now on the news," he said.

Travel operator TUI was 3.78% weaker after swinging to a full-year loss of €3bn as revenues tumbled as the pandemic and related restrictions continued to take their toll.

Market Movers

FTSE 100 (UKX) 6,599.76 0.54%
FTSE 250 (MCX) 19,756.10 -0.64%
techMARK (TASX) 4,098.19 0.21%

FTSE 100 - Risers

BP (BP.) 284.75p 4.46%
Smith (DS) (SMDS) 372.10p 3.79%
Royal Dutch Shell 'B' (RDSB) 1,385.20p 3.78%
Royal Dutch Shell 'A' (RDSA) 1,434.80p 3.69%
Evraz (EVR) 452.50p 3.26%
Hikma Pharmaceuticals (HIK) 2,559.00p 3.23%
BHP Group (BHP) 1,977.60p 3.17%
Rio Tinto (RIO) 5,525.00p 2.91%
Morrison (Wm) Supermarkets (MRW) 182.90p 2.57%
B&M European Value Retail S.A. (DI) (BME) 489.50p 2.17%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,165.00p -6.92%
Persimmon (PSN) 2,514.00p -6.37%
Barratt Developments (BDEV) 599.80p -5.10%
Lloyds Banking Group (LLOY) 35.67p -4.24%
Taylor Wimpey (TW.) 153.30p -4.22%
NATWEST GROUP PLC ORD 100P (NWG) 161.10p -3.99%
Kingfisher (KGF) 263.20p -3.91%
Next (NXT) 6,650.00p -3.12%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,858.00p -2.97%
DCC (DCC) 5,460.00p -2.95%

FTSE 250 - Risers

Frasers Group (FRAS) 495.80p 12.94%
JTC (JTC) 582.00p 8.99%
Inchcape (INCH) 667.00p 5.71%
Sabre Insurance Group (SBRE) 256.50p 4.27%
Victrex plc (VCT) 2,166.00p 3.54%
Liontrust Asset Management (LIO) 1,370.00p 3.40%
Softcat (SCT) 1,199.00p 3.36%
Oxford Biomedica (OXB) 887.00p 3.27%
Electrocomponents (ECM) 841.50p 3.19%
Just Group (JUST) 58.80p 2.98%

FTSE 250 - Fallers

Network International Holdings (NETW) 285.60p -7.15%
Crest Nicholson Holdings (CRST) 290.60p -6.32%
Investec (INVP) 187.00p -5.86%
Bellway (BWY) 2,778.00p -5.57%
BMO Commercial Property Trust Limited (BCPT) 79.50p -4.79%
Countryside Properties (CSP) 410.60p -4.73%
Workspace Group (WKP) 737.00p -4.53%
Carnival (CCL) 1,450.00p -4.44%
Marks & Spencer Group (MKS) 136.75p -4.37%
AO World (AO.) 361.00p -4.24%