Source: Sharecast
In a wholly unexpected development, and citing four people familiar with the matter, overnight Bloomberg had reported that Trump did in fact want to reach an agreement with China's Xi Jinping at the G-20 leaders' meeting in Buenos Aires, at the end of the month, and that he had asked "key cabinet secretaries" to start drafting potential terms.
The events took place on Thursday, following a telephone exchange between the two leaders, Bloomberg reported.
London's top-flight index initially jumped on the report, but what appeared to be a rally in risk sentiment was cut short towards 1345 GMT by a CNBC report according to which a deal remained far off.
And after the close of markets, White House Economic adviser, Larry Kudlow, reportedly said Trump had not instructed potential trade terms to be drawn-up.
Against that backdrop, the FTSE 100 index finished 0.29% or 20.54 points lower at 7,094.12 -its lows of the session. The pound was also lower, having earlier added to the previous day's gains, falling by 0.32% to 1.29637 against the US dollar and by 0.11% versus the euro to 1.1390.
Overnight, US stocks enjoyed their third straight winning session after President Trump himself said that trade discussions with China were "moving along nicely".
Also buoying sentiment was a bumper US non-farm payrolls report for the month of October.
According to the US Department of Labor, non-farm payrolls accelerated last month to reach a pace of 250,000, handily beating economists' forecasts for a gain of 200,000.
More important, in parallel average hourly gains accelerated to a clip of 3.1% year-on-year following an advance of 2.8% seen during the month before and surpassing the 3.0% mark for the first time since 2009.
To take note of as well, the labour force participation rate increased by two tenths of a percentage point to 62.9%, a development which was likely please policymakers.
On that point, which was possibly of quite some significance, Mickey Levy at Berenberg Capital Markets said: "This encouraging rise in labor force participation for the prime working-age cohort since 2016 has been a key factor that has led us to upgrade our estimates of longer-run potential growth."
The resulting buying pressure on Wall Street was so strong that investors initially looked past disappointing iPhone sales and a poor Christmas outlook from US tech heavyweight Apple that had sent its shares sharply lower.
As an aside, on Friday, Tesla chief, Elon Musk pointed out what he believed was the main problem with Apple, saying in a podcast that "they still make great products, but there's less of that. Like, I don't think people are necessarily running to the store for the iPhone 11."
Musk was also critical of rival Ford, whom he said may not survive the next recession. Unlike all other major US carmarkers, Ford did not require government handouts to remain afloat.
Also overnight, Asian markets lapped up the positive news of an easing trade war, market analyst Japser Lawler at LCG pointed out.
"The trade war has been partly to blame for the recent equities rout, so any signs that the two powers are making progress will encourage investors to put risk back on the table and pick up stocks at bargain levels," he said.
"This remains a fragile situation, but it appears to have turned a corner, providing a floor to the recent equity selloff. Whilst talks are on a positive note we don’t expect to see a repeat of those extreme bouts of selling that we saw across October."
In UK corporate news, IAG gave up early gains after the British Airways owner upped its profit target for the coming five years. The Anglo-Iberian airline group held an investor event on Friday, where chief executive Willie Walsh set out plans to generate EBTIDAR averaging €7.2bn per year, up from the previous target of €6.5bn for 2018-2022.
Burberry shares were lifted as the luxury sector rallied around the world on the back of the US-China tensions thawing. Likewise, Asia-focused banks Standard Chartered and HSBC were given a fillip, while exporters such as Melrose were also higher.
Sage shares were lifted as investors cheered the promotion of finance chief Steve Hare to chief executive after serving two months as the software group’s interim leader.
"As we looked externally for the experience, vision and deep knowledge required to accelerate operational execution it very quickly became clear through Steve's early decisions and his clear prioritisation that he is the right person to lead Sage," said chairman Donald Brydon.
Barclays finished a tad higher after it confirmed that Rothschild boss Nigel Higgins had been recruited to replace John McFarlane as chairman. Higgins will take over at Barclays’ next annual meeting on 2 May.
Paddy Power Betfair was trotting higher as it reported lower third quarter profits but tightened up its full year earnings guidance. Reported third quarter EBITDA fell 16% to £101m, due to the inclusion of FanDuel fantasy sports losses.
Oil majors BP and Shell slid as Brent crude remained softer on Friday at $72.56 a barrel, with West Texas Intermediate at $62.91.
"Oil prices have also continued to slide after the US gave eight countries waivers on Iranian sanctions, sending the oil price back below the 200 day MA to a daily close below it for the first time since August 2017," observed Michael Hewson at CMC Markets UK.
"Given that we’ve seen five successive weeks of inventory builds we could well see further falls towards the August 2018 lows at $70 a barrel, welcome news for the consumer and also welcome news for the US consumer which has seen WTI prices fall to their lowest levels since April, thus putting downward pressure on US gasoline prices."
On the downside, defensive stocks were generally in the red as optimism about the US-China trade situation led investors to move to a more risk-on approach.
Market Movers
FTSE 100 (UKX) 7,094.12 -0.29%
FTSE 250 (MCX) 19,325.73 0.80%
techMARK (TASX) 3,327.05 0.02%
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 2,580.00p 4.05%
Standard Chartered (STAN) 579.00p 3.95%
Informa (INF) 725.00p 3.34%
Prudential (PRU) 1,615.50p 3.10%
Royal Mail (RMG) 367.70p 2.71%
Sage Group (SGE) 564.60p 2.65%
Burberry Group (BRBY) 1,865.00p 2.64%
Just Eat (JE.) 662.60p 2.57%
WPP (WPP) 913.80p 2.33%
Intertek Group (ITRK) 4,772.00p 2.29%
FTSE 100 - Fallers
Imperial Brands (IMB) 2,618.00p -2.66%
Glencore (GLEN) 320.00p -2.53%
British American Tobacco (BATS) 3,342.50p -2.19%
GlaxoSmithKline (GSK) 1,480.00p -2.13%
DCC (DCC) 6,605.00p -1.93%
Shire Plc (SHP) 4,534.00p -1.66%
AstraZeneca (AZN) 5,732.00p -1.63%
BP (BP.) 533.30p -1.51%
Diageo (DGE) 2,634.00p -1.50%
NMC Health (NMC) 3,430.00p -1.10%
FTSE 250 - Risers
Thomas Cook Group (TCG) 54.50p 9.00%
RHI Magnesita N.V. (DI) (RHIM) 4,050.00p 7.14%
IP Group (IPO) 120.00p 6.38%
Sophos Group (SOPH) 489.00p 6.17%
Superdry (SDRY) 891.00p 5.44%
Indivior (INDV) 202.30p 5.31%
Hastings Group Holdings (HSTG) 198.90p 5.29%
Assura (AGR) 56.30p 4.84%
TalkTalk Telecom Group (TALK) 132.80p 4.73%
Kaz Minerals (KAZ) 561.20p 4.35%
FTSE 250 - Fallers
Senior (SNR) 259.00p -7.04%
Millennium & Copthorne Hotels (MLC) 465.00p -3.93%
Just Group (JUST) 95.40p -3.59%
CLS Holdings (CLI) 211.00p -2.99%
Pantheon International (PIN) 2,080.00p -2.82%
Capita (CPI) 127.05p -1.59%
Rathbone Brothers (RAT) 2,382.00p -1.32%
Unite Group (UTG) 847.00p -1.28%
Hays (HAS) 161.80p -1.28%
Hikma Pharmaceuticals (HIK) 1,872.00p -1.27%