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LONDON MARKET CLOSE: FTSE Reverses Losses In Rocky First 2019 Session

Wed, 02nd Jan 2019 16:58

LONDON (Alliance News) - The FTSE 100 managed to end in the green on Wednesday after it staged a rebound from heavy losses suffered in the new year opening trade.Dragging on the blue-chip index were industrial commodity-exposed miners following troubling manufacturing data from China, while gold producers tracked the price of the safe haven asset higher amid Wednesday's volatile trade. Retailer Next, meanwhile, ended as the best performer in the FTSE 100 as investors await Thursday's Christmas trading update. The FTSE 100 index closed up 6.10 points, or 0.1%, at 6,734.23. This marked an impressive rebound from the intraday low of 6,599.48 hit in early dealings on Wednesday.The FTSE 250 ended up 84.65 points, or 0.5%, at 17,586.70, and the AIM All-Share closed up 1.70 points, or 0.2%, at 860.31.The Cboe UK 100 ended up 0.1% at 11,414.42, the Cboe UK 250 closed up 0.1% at 15,681.13, and the Cboe Small Companies ended up 0.8% at 10,895.02."Europe is creeping into positive territory after a very shaky start to the new year, while in the US a down morning for futures has been followed up by steady buying, perhaps indicating that this bounce off the lows of 2018 has a little further to run," said IG chief market analyst Chris Beauchamp.He added: "Weakness in sterling will [have helped] power the FTSE 100 higher this afternoon as dollar strength combines with concerns that some of the positive picture generated by this morning's manufacturing PMI was down to the stockpiling of goods in anticipation of a hard Brexit, hardly the kind of 'activity' most would consider a positive omen for UK PLC."The pound was quoted at USD1.2591 at the London equities close Wednesday, falling from USD1.2782 at the close on Monday.The IHS Markit/CIPS manufacturing Purchasing Managers' Index for the UK came in at 54.2 in December, up from 53.6 in November. A score above the no-change mark of 50 indicates expansion in the sector, while one below signals contraction. Consensus forecasts had seen the reading falling to 52.5 in December.The average PMI reading during the fourth quarter of 2018 was the weakest since the third quarter of 2016 - the first survey conducted after the UK's decision to leave the EU, noted Markit.The rise in the PMI in December was mainly driven by stronger inflows of new business and a "solid" increase in stocks of purchases. Movements in both mainly reflected Brexit preparations by manufacturers and their clients, Markit said, as output also increased, but at a slower pace than seen the month before. In European equities on Wednesday, the CAC 40 in Paris ended down 0.8%, while the DAX 30 in Frankfurt ended up 0.3%.In manufacturing data from Europe, IHS Markit's final December PMI reading for the eurozone fell to 51.4 from 51.8 in November. The score came in line with the flash estimate. In accordance with the latest trend, underlying the slowdown in overall growth was further softness in new orders, the survey showed.Separate data showed that German manufacturing activity expanded in December at the slowest pace since March 2016. The final manufacturing PMI slipped to 51.5 in December from 51.8 in November. The reading matched the flash estimate.The euro stood at USD1.1355 at the European equities close Wednesday, down from USD1.1446 at the close on Monday.Stocks in New York were mixed at the London equities close, with the DJIA down 0.1%, the S&P 500 index flat and the Nasdaq Composite up 0.2%.Shares in Nasdaq constituent Tesla slipped 7.8% despite the electric car maker reporting production in the fourth-quarter grew to 86,555 vehicles. The quarterly deliveries grew to 90,700 vehicles, which was 8% more than prior all time-high in the third-quarter. Starting today, the company is reducing the price of Model S, Model X and Model 3 vehicles in the US By USD2,000.Tesla said that in the fourth-quarter, it produced and delivered at the rate of nearly 1,000 vehicles per day, setting new company records for both production and deliveries.However, the numbers failed to live up to expectations, said Nicholas Hyett, equity analyst at Hargreaves Lansdown."Unfortunately for Tesla shareholders, the market has come to expect Herculean achievements, and sometimes that means the bar is just that little bit too high. Deliveries have fallen short of what some analysts had expected and the shares are suffering as a result," noted Hyett.In London, miners ended among the worst performers after data showed the Chinese manufacturing sector entered contraction territory in December. The Caixin manufacturing PMI fell to 49.7 points in December from 50.2 in November. Economists had expected it to weaken to 50.1 points, but the fall below the 50 point mark which separates contraction from expansion was worse than forecast.The print was the lowest since May 2017, when the index stood at 49.6 points. Wednesday's data comes after the official PMI, released on Monday, also slipped into contraction territory in December with a score of 49.4. Glencore ended as the biggest loser in the FTSE 100, down 3.0%, while Anglo American closed down 2.1% and Antofagasta also shedding 2.1%.It was a more positive session for gold miner Fresnillo, however, as the safe haven asset traded around its best level in six months amid Wednesday's volatile trade. Fresnillo closed up 3.3% while FTSE 250-listed peer Centamin closed up 5.4%, and Hochschild Mining up 5.3%. Gold was quoted at USD1,286.20 an ounce at the London equities close Wednesday against USD1,282.92 at the close on Monday. The precious metal hit a six-month high of USD1,288.61 earlier in Wednesday's session.Meanwhile, Brent oil was quoted at USD56.52 a barrel at the London equities close Wednesday from USD54.59 at the close on Monday.On the rise in oil, IG's Beauchamp commented: "Hopes of a slowdown in US output and the initial impact of the OPEC cuts might provide some near-term relief, but it is hard to see how the overall picture has changed much in the near-term."Oil majors tracked the price of Brent higher, with BP closing up 2.5% and Royal Dutch Shell 'A' shares up 1.9% and 'B' shares up 1.5%.Finishing at the top of the FTSE 100 was retailer Next, up 4.7% ahead of Thursday's Christmas trading update. In the economic calendar on Thursday is the UK's construction PMI, due at 0930 GMT. The reading is expected to come in at 52.9 for December, down from the 53.4 reported in November. In the US private payroll processor ADP releases employment change figures for November at 1315 GMT, a precursor to Friday's monthly jobs report.

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