(Alliance News) - Shares in London ended in the red Friday but commodities prices continued to surge as tension between the US and Iran showed no signs of cooling.The FTSE 100 index closed down 16.94 points, or 0.2%, at 7,407.50. Despite ending Friday in the red, the blue chip index gained 0.5% this week.The FTSE 250 ended down 59.53 points, or 0.3%, at 19,324.60, ending the week up 1.1%, and the AIM All-Share closed down 0.32 of a point at 933.07, finishing the week, 0.7% lower.The Cboe UK 100 ended down 0.7% at 12,524.17, the Cboe UK 250 closed down 0.4% at 17,285.13, and the Cboe Small Companies ended down 0.8% at 11,525.39.In European equities on Thursday, the CAC 40 in Paris ended up 0.2%, while the DAX 30 in Frankfurt lost 0.3%."Stock markets in Europe are in the red towards the close as dealers trim their longs positions in the wake of the bullish move yesterday. Between the dovish update from Mario Draghi, the head of the European Central Bank, and the remarks from Fed chief, Jerome Powell, the bulls have had a good run this week. It comes as no surprise that equities are a little lower as we approach the weekend," said CMC Market's David Madden."Lacking the central bank drama of the rest of the week, the markets weren't up to much this Friday," added SpreadEx's Connor Campbell. Stocks in New York were in the green at the London equities close, with the DJIA up 0.4%, the S&P 500 index up 0.2%, and the Nasdaq Composite also 0.1%.US President Donald Trump said he called off strikes against Iranian targets because he was told 150 people would die in the attacks, which would not be a "proportionate" response for the downing of an unmanned drone. In a series of tweets on Friday, the President said the US was ready "to retaliate last night on 3 different" locations but then called off the strikes 10 minutes before the plan went into action.The US withdraw last year from an international deal designed to prevent Iran from obtaining nuclear weapons and has been reimposing sanctions on Tehran in a "maximum pressure" campaign to shape Iranian foreign policy, with the two countries now in an escalatory cycle.XTB's David Cheetham said: "Reports overnight that Trump was ready to issue a retaliatory strike on Iran after an unmanned US drone was shot down caused gold prices to surge, with the precious metal moving above the USD1400 per ounce handle to trade at levels not seen since 2013. "It's been a big week of gains for bullion, with the clear dovish shift from the Fed sending both US bond yields and the buck lower and contributing to the 4% rise seen in the price of gold since Monday. A slowing global economy, imminent US rate cuts and rising geopolitical tensions provide a near perfect storm for gold bugs and while this trio of factors remain in place the rally seen in recent weeks will remain well supported," Cheetham added.Gold was quoted at USD1,395.10 an ounce at the London equities close Friday against USD1,385.72 at the close on Thursday.Buoyed by the gold price rise, FTSE 100-listed Fresnillo ended up 1.7%.Among mid-cap gold miners, Hochschild Mining and Centamin closed up 1.9% and 1.6%, smaller peer Petropavlovsk ended 2.7% higher. AIM-listed Solgold ended the session 25% higher.In other commodities, Brent oil had another good session, quoted at USD65.20 a barrel at the London equities close Thursday, higher compared to USD64.28 late Thursday. Brent is up 6.3% this week, with West Texas Intermediate prices increasing 10% over the week.Madden said: "Iran downed a US drone during the week, and President Trump called that move a 'very big mistake'. Mr Trump essentially warned Iran and said had a member of US military personnel been involved in the incident, it would be a different story in terms of the US's response. The standoff between the two nations is likely to keep the underlying oil market elevated, and that should assist oil stocks."The higher oil price caused stocks such as BP and Royal Dutch Shell to gain, with BP ending up 1.3%, Shell 'A' shares up 0.5% and 'B' shares also up 0.4%. Shell 'A' and 'B' was seen 1.1% higher at midday and both of the oil giant's share classes have gained 3.0% this week. At the other end of the FTSE 100, cruise operator Carnival continued its share slide on Friday - losing 1.8% - following an 11% fall on Thursday amid weak interim results.For the six months ended May, Carnival reported net income narrowed 17% on the year prior to USD787 million from despite revenue increasing 11% to USD9.51 billion.Consequently, Carnival guided for a lower full-year earnings outcome. The firm now expects adjusted earnings per share of between USD4.25 and USD4.35 from the USD4.35 to USD4.55 range provided previously. The year prior, Carnival reported EPS of USD4.44.In the midcap index, Dixons Carphone lost 6.2%, compounding Thursday's 6.1% losses, after HSBC cut the retailer to Hold from Buy.On Thursday, Dixons warned that an increasingly changing UK mobile market will further hurt results in the new 2020 financial year. For the year ended April 27, the phone and electrical goods retailer sank to a GBP259 million pretax loss from a GBP289 million profit the year prior. This was after revenue fell 1.0% to GBP10.43 billion from GBP10.53 billion the year before.The company expects its UK mobile division to be significantly loss making in 2020 financial year, with sales and profit growth in the Electricals division across all operating regions.In London's junior market, semiconductor maker IQE fell 25% after it warned annual revenue will be lower than market estimates due to order delays resulting from US ban on Chinese smartphones and consumer electronics manufacturer Huawei Technologies, also hurting margins.In 2019, IQE now expects to deliver revenue between GBP140 million and GBP160 million. This is lower than the consensus estimate of GBP175 million.IQE emphasised it expects to remain profitable in 2019 but with adjusted operating profit margin significantly below the previous guidance of over 10%. The firm is taking steps to reduce costs and avoid non-critical capital expenditure.IQE remains cautiously optimistic about growth opportunities for 2020 and expects to regain momentum due to 5G roll-out and connected devices to regain momentum.AIM-listed FairFX gained 9.5% after the payment services provider secured UK Financial Conduct Authority approval, through unit Spectrum Payment Services Ltd, to provide credit facilities acting as a broker. FairFX said the approval allows the group to offer a range of loan products to both its business and retail customers. As FairFX will be acting as a broker, the loans will be provided by third-party lenders. There will be no credit risk to FairFX, and the loans will not appear on its balance sheet.FairFX expects to launch a digitised revolving credit product in partnership with iwoca - a specialist lender to small and medium sized businesses - in the coming months. In other corporate news, online train ticket retailer Trainline announced it will price its initial public offer at 350 pence per share which gives the company a prospective market capitalisation of GBP1.68 billion.The corporate calendar next week has half year results from Porvair and full year results from Civitas Social Housing on Monday, while on Tuesday Carpetright is scheduled to release full year results. Wednesday sees trading statements from Tullow Oil and John Wood Group as BCA Marketplace is slated to issue its full year results.On Thursday, Staffline and Greene King will release full year results. A quiet Friday has full year results from Alcentra European Floating Rate Income Fund and interim results from Schroder UK Mid Cap Fund.The pound was quoted at USD1.2694 at the London equities close Friday, flat compared to USD1.2693 at the close on Thursday.Meanwhile, the euro stood at USD1.1320 at the European equities close Thursday, against USD1.1273 at the same time on Thursday.European Council President Donal Tusk said Brexit will become more "exciting" than before with a change of British Prime Minister. Tusk said the remaining 27 member states of the EU were looking forward to welcoming the next UK premier, but he reiterated his warning that the Withdrawal Agreement could not be renegotiated.In a press conference at the end of a two-day European Council summit in Brussels, Tusk told reporters: "We are waiting for the new British prime minister and we have to be very precise and also patient.""It's waiting for the decisions or maybe new proposals, but our position remains as I informed just five minutes ago."Maybe the process of Brexit will be even more exciting than before because of some personnel decisions in London, but nothing has changed when it comes to our position."European Commission president Jean-Claude Juncker added: "We repeated unanimously that there will be no renegotiation of the Withdrawal Agreement."The frontrunner in the race to replace Theresa May, Boris Johnson, has claimed it is "perfectly realistic" to renegotiate the Withdrawal Agreement to allow Britain to leave the EU in October - a deadline he thinks is "eminently feasible".The quiet economic calendar on Monday has Japan's leading economic index at 0600 BST, German business sentiment index at 0900 BST. The UK's inflation report hearings will be released and the minutes from the Bank of Japan's recent monetary policy meeting are scheduled for release at 0050 BST late Monday. London Close is available to subscribers as an email newsletter. Contact info@alliancenews.com
3 Feb 2017 12:09
