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31 Jul 2019 | 12:04

Markets retreat after Trump Twitter outburst

Renewed criticism of China by US President Donald Trump weighed on global equities as investors reduced hopes about a positive resolution to trade talks.

Following a drop in US stocks last night, markets in parts of Asian and Europe struggled on Wednesday. Hong Kong's Hang Seng index fell 1.3% to 27,777 and Amsterdam's AEX index dipped 0.2% to 573.2.

At 11.15am the FTSE 100 traded 0.6% lower at 7,604, with the financial sector weighing heavily on the index thanks to poor results from Lloyds and St James's Place.

The US Federal Reserve will provide its latest interest rate decision later today.

LARGE CAP NEWS

Lloyds Banking lost 4.5% to 52.6p after it delivered a modest beat on second-quarter profits expectations, but said it expected its capital build for the year to come it at the lower end of expectations as it set aside more funds to meet accelerated payment protection insurance claims.

Other stocks in the banking sector fell as investors speculated they too could suffer high PPI claims. Royal Bank of Scotland dropped 3.6% to 212.3p and Barclays retreated 2.1% to 154.36p.

Shopping centre landlord Intu dropped 23.4% to 53.78p after it reported wider losses in the first half of the year, blaming a 'challenging' period in which several retailers entered insolvency arrangements.

Retailer Next jumped 8.3% to £60.82 after increasing its full-price sales and profit guidance for the second half following better-than-expected sales performance in the second quarter.

Sports car maker Aston Martin Lagonda slumped 12.7% to 495.8p after it posted a £79m loss in the first half of the year compared with a £21m profit a year ago.

The shares have lost more than 50% of their value in the last week as concerns grow that it may need to raise capital to continue investing in new models.

Medical equipment manufacturer Smith & Nephew was broadly flat to £18.65 after it said it had raised its full-year revenue guidance amid 'positive momentum' across the business globally in the first half of 2019.

Just Eat added 2.2% to 767p despite reporting a sharp decline in half-yearly profits amid higher costs as the food delivery company ramped up investments to improve its delivery service.

Defence company BAE Systems climbed 2.4% to 555.6p after it reported a jump in half-yearly profits as ongoing operational improvements helped bolster performance.

Restaurant and pub operator Mitchells & Butlers added 2.5% to 305p after it saw strong food sales in its third quarter even as drink sales suffered slightly from comparisons with 2018, which was boosted by the World Cup.

British housebuilding company Taylor Wimpey fell 5.9% to 166.19p as it saw a drop in its half-year pre-tax and operating profit due to higher build costs and geographic mix. However, it expected full-year results to be 'in line' with expectations.

Vodafone fell 0.2% to 151p after it said it had completed the sale of 100% of Vodafone New Zealand for a cash consideration equivalent to an enterprise value of NZ$3.4bn (€2.1bn), with sale proceeds going towards reducing its net debt.

Hedge fund group Man Group added 3.5% to 172.75p after it said its assets under management increased 5% in the first half of 2019 amid strong absolute performance from its quant alternative strategies, however outflows were higher year on year.

Private equity and infrastructure investor 3i Group edged 1.45% lower to £11.85 even as it reported a rise in fiscal first-quarter net assets, led by good growth in its private equity portfolio.

Evraz grew 0.3% to 666.8p after it said second-quarter steel output was flat quarter-on-quarter, but sales rose 7.7% on higher demand.

Wealth management group St. James's Place fell 5.9% to 981.60p after it said 'challenging external factors' weighed on new inflows in the first six months of 2019.

Insurer Direct Line shed 1.85% to 317.9p after it reported a fall in pre-tax profits as lower average premiums in motor and lower partnership volumes weighed on overall premiums.

Pest control company Rentokil added 4.7% to 431.5p after the company saw increases in revenue and operating profit in the first half of 2019 and left its full-year guidance unchanged as it confirmed the sale of its stake in CWS-boco.

Glencore lost 1.4% to 269.15p after it reported a fall in copper output in the first half of the year, led by weaker-than-expected performance in its African copper business and the miner also flagged a $350m hit on its cobalt business following a drop in prices. SMALL CAP NEWS

Industrial and property services group Hargreaves Services said full year underlying operating profit grew by 6.4% to £10m and that net debt had nearly halved to £17.9m (2018: £30.8m). Investors liked the news, bidding up the shares 15.6% to 260p.

The market was also excited by cyber security group Shearwater whose shares soared by 27% to 2.5p. It reported a maiden profit on an underlying EBITDA basis and said it had won a material number of new customer wins in recent months.

Story provided by StockMarketWire.com
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