Markets lower on Brexit, Italy & US-China woes

Markets traded lower on Tuesday on investor concerns over Britain’s departure form the European Union, Italy’s budget issues and US-China trade tensions.

The FTSE 100 closed 19.15 points, or 0.3%, lower at 7,016.85.

France’s Cac was down 0.2%, while Germany’s Dax fell 0.4%.

David Madden, market analyst at CMC Markets, said: “Stock markets are in the red following yesterday’s bullish move. Fears regarding US-China trade, Italy’s budget and Brexit all play into the mix.

“President Trump warned that the levy on Chinese imports might be increased, and further tariffs could be announced. This dampened investors’ hopes about a deal being struck at the G20 summit.”

Meanwhile, the pound came under pressure as opposition to Prime Minster Theresa May’s EU Withdrawal Agreement continued.

The pound was down over 0.5% versus the US dollar at 1.273 and the British currency shed 0.2% against the euro to finish the session at 1.128.

Mr Madden said: “The DUP, who are propping up the Conservatives at Westminster, have made it clear they won’t support it. Former defence secretary Michael Fallon said it was ‘doomed’.

“The chances of a ‘no-deal’ Brexit have increased as there is speculation that the deal will be voted down, and that is weighing on the pound.”

Oil prices were largely unchanged as investors continued to fret about oversupply and the trade tariffs between the US and China.

“Saudi Arabian production reached a record high, and tensions are rising between the US and China in relation to trade, and dealers are cautious that demand might drop too.” Mr Madden said.

A barrel of Brent crude was up 0.4% at 60.63 US dollars (£47.60).

In corporate news, Thomas Cook closed 10.98p, or 23%, lower to 37.56p after it issued its third profit warning of the year.

The company said it would take a £30 million hit to profits in an unscheduled announcement due to extra costs and the effect of the heatwave on holiday bookings.

Topps Tiles shares fell 1p to 65p after the company said it is stockpiling key products ahead of Brexit as it prepares for possible supply disruption.

The retailer said it would increase stock levels of “key selling lines” ahead of March 2019, echoing the likes of Premier Foods and Pets at Home – which have also said they will store products in case of disruption.

Shares in Greggs rose 136p to 1,373p after the bakery chain upped its full-year profit outlook thanks to a rise in sales following strong autumn trading.

The group, which has more than 1,900 shops across the UK, saw like-for-like sales growth strengthen to 4.5% in the eight weeks to November 24.

Pets at Home shares were down 1.3p to 113.3p after the company revealed action to stockpile pet food and products worth millions of pounds ahead of Brexit as it announced 30 vet practices are set for possible closure.

New chief executive Peter Pritchard, who took on the top job in May, told the Press Association the group has already imported goods worth a “couple of million pounds” as part of no-deal Brexit contingency plans.

The biggest risers on the FTSE 100 were Coca-Cola up 104p to 2,373p, Ocado up 26.20p to 816p, Kingfisher up 5.7p to 253.8p, and Intertek up 106p to 4,752p.

The biggest fallers on the FTSE 100 were Johnson Matthey down 127p to 2,950p, GVC Holdings down 30.20p to 778.5p, Antofagasta down 27.20p to 778.6p, and Evraz down 15.50p to 460.6p.