US-China trade talks affect commodity stocks

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A monitor displays Exxon Mobil Corp. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Feb. 9, 2018. Photographer: Michael Nagle/Bloomberg

The FTSE 100 edged higher on Monday as investors grew sanguine on the progress of US-China trade relations.

London’s blue-chip index closed up 5.14 points, or 0.07%, at 7,183.74, while Germany’s DAX rose 0.53% and France’s CAC grew 0.34%.

David Madden, market analyst at CMC Markets, said: “The US was scheduled to increase its existing tariffs on Chinese imports next month, but that has been delayed, and that announcement has lifted investor sentiment.”

The FTSE 100-listed commodity stocks such as BP, Royal Dutch Shell and BHP Billiton fell as the price of oil slumped after Donald Trump complained that prices were too high.

Mr Madden said: “The US president claimed the global economy can’t withstand another hike in the oil market. The energy recently hit a three-month high, so dealers used the opportunity to take some money off the table”.

Brent crude, the international benchmark, traded down 3.16% at 64.86 US dollars (£49.65).

Meanwhile, the pound was flat against both the greenback at 1.306 and the euro at 1.151 at the London market close.

In corporate news, an investment company confirmed it is in the early stages of tabling a £20 million bid for Laura Ashley, despite the current owner’s insistence that it has no plans to sell the brand.

Flacks Group, a Manchester-based private investor, issued a statement on Monday afternoon stating that it is in “very preliminary stages of evaluating a possible transaction”, valuing the retailer at 2.75p per share.

Shares in Laura Ashley dropped 1.2% to 3.2p following the update, as the proposed value of the sale appeared to fall short of investor expectations.

Laura Ashley shares closed up 0.23p to 3.47p.

Primark owner Associated British Foods (ABF) reiterated profit expectations for the full year, despite an anticipated dip in sugar revenue.

The group expects growth across all its businesses except sugar during the first half of the year.

ABF shares fell 40p to 2,273p.

Doorstep lender Provident rebuffed a £1.3 billion takeover approach from rival Non-Standard Finance, describing it as “highly opportunistic” and “irresponsible”.

Last week sub-prime lender NSF tabled an all-share takeover bid for troubled Provident at 511p per share.

Provident shares rose 20.6p to 610p.

Daily Mirror publisher Reach swung to a full-year loss after being stung by hefty pension and impairment charges.

The company posted a statutory pre-tax loss of £119.9 million in 2018, which compares with a profit of £81.9 million the previous year.

Reach shares rose 2.95p to 60.5p.

Hiscox beat forecasts to triple profits last year despite a string of natural disasters, as the insurance giant insisted it is ready for Brexit.

Profit before tax was 137.4 million US dollars (£105 million), coming in around 7% higher than company-compiled consensus.

Hiscox shares grew 47p to 1,641p.

The biggest risers on the FTSE 100 were Prudential up 48p to 1,583p, GVC Holdings up 19p to 647p, DS Smith up 8.1p to 341.5p, and Kingfisher up 5.4p to 239p.

The biggest fallers on the FTSE 100 were Pearson down 48.8p to 854.2p, Persimmon down 116p to 2,352p, Bunzl down 93p to 2,446p, and Royal Mail down 9p to 277.7p.

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