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UPDATE 1-UK's FTSE 100 slightly lower in fitting farewell to dim 2018

Published 01/01/2019, 12:32 am
Updated 01/01/2019, 12:40 am
© Reuters.  UPDATE 1-UK's FTSE 100 slightly lower in fitting farewell to dim 2018

* FTSE 100 edges 0.1 pct lower

* FTSE 250 up 0.2 pct

* Worst year for UK indexes since 2008

* Many 2018 headwinds remain in play for 2019 - analyst

(Adds historical milestones, analyst comments, updates share moves)

By Muvija M and Shashwat Awasthi

Dec 31 (Reuters) - The UK blue-chip index ended its worst year since the 2008 financial crisis in the red, as a strong pound pulled down exporter shares, offsetting U.S. President Donald Trump's positive comments on the U.S.-China trade dispute.

The FTSE 100 .FTSE lost 0.1 percent, while the FTSE 250 .FTMC added 0.2 percent on the final trading day of 2018, after a rally on Friday when they both closed more than 2 percent higher.

British American Tobacco BATS.L , GlaxoSmithKline GSK.L , HSBC HSBA.L , Unilever ULVR.L , Reckitt Benckiser RB.L all dipped 0.4 to 2.7 percent.

The indexes suffered their worst year since the 2008 financial crisis, falling 12.5 percent and 15.6 percent, respectively. The U.S.-China trade war, Brexit uncertainties and a U.S. government shutdown all weighed on stocks.

Trump tweeted that he had a "long and very good call" with Chinese President Xi Jinping and a possible trade deal between was progressing. oil and gas company Cabot Energy CABC.L plummeted 59 percent to hit a record low after warning that it might not be able to operate as a going concern if it does not raise money from shareholders in January.

DEATH CROSSES AND BEAR MARKET

A roller-coaster year saw the FTSE 100 reach new highs early on but form the "death cross" pattern twice, when its 50-day moving average fell below its 200-DMA, which some market watchers see as a bearish near-term signal.

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The spotlight is likely to fall on the mid-cap index, which flirted with bear market territory last week, as a mid-January parliamentary vote on Prime Minister Theresa May's controversial Brexit deal draws near.

Outperforming the blue chips, online grocer Ocado OCDO.L rose 2.9 percent, making it a clear winner not just for the day but also for the year.

The stock nearly doubled in value in 2018, partly boosted by major overseas technology partnerships, including U.S. group Kroger (NYSE:KR), in what its chief executive officer referred to as a "transformative year". Hikma Pharmaceuticals HIK.L followed with a 51.3 percent gain as it took advantage of short supplies for injectable opioid painkillers in the United States.

GlaxoSmithKline GSK.L and AstraZeneca AZN.L were also among the big gainers, rising 12.8 percent and 14.7 percent respectively.

Among losers, tobacco firm BAT dropped 50.2 percent in a year that was marred by proposals for a major crackdown on menthol cigarette sales in the U.S.

Oil stocks also dropped as crude prices plunged amid concern over a supply glut, dragging BP BP.L and Shell RDSa.L in to the red.

Sports car maker Aston Martin AML.L , peer-to-peer lender Funding Circle FCH.L and Old Mutual's OML.L unit Quilter QLT.L all shed value after debuting this year.

Investors punished retail shares, where several household names were clobbered by stiff competition from Amazon (NASDAQ:AMZN), Brexit jitters, lower consumer spending and rising labour costs. A retail selloff led by ASOS's ASOS.L profit alert did not help.

Superdry SDRY.L was the worst mid-cap loser with a 75.7 percent drop this year, hit by warm weather prompting profit warnings.

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Just last week, music retailer HMV announced it was calling in administrators, joining Toys R Us, House of Fraser and Mothercare MTC.L .

But market volatility was a boon to mid-cap online trading platform Plus500 PLUSP.L , which was by far the biggest gainer on the FTSE 250 this year with a 63 percent leap.

"The advantage we have starting the new year is that if investors are prepared to start afresh, lower entry points and multi-year lows on many things could attract interest", said Michael van Dulken, an analyst at Accendo Markets.

"That said, many of the headwinds like the trade war, and tighter monetary policy, China slowing, etc., remain very much in play."

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