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London open: Stocks nudge lower ahead of jobs data; Ashtead bucks trend
London stocks edged lower in early trade on Tuesday as the pound gained ground against the dollar, with investors eyeing the latest round of UK jobs data.
At 0830 BST, the FTSE 100 was down 0.1% to 7,274.31, while the pound was up 0.4% against the dollar at 1.3071 and down 0.1% versus the euro at 1.1230, still underpinned by comments from the EU’s top Brexit negotiator, Michel Barnier, who said on Monday that a deal was possible in six to eight weeks.
Despite the weaker start, the mood was given a boost after the US government confirmed it is in the process of arranging a second meeting between President Trump and North Korea’s Kim Jong Un.
CMC Markets analyst David Madden said: “The announcement is seen as a step in the right direction for political stability in the region. Political and business relations are on the mend elsewhere as Russia and China are looking to launch projects worth $100bn via scores of joint ventures, and this has lifted investment sentiment too.”
Still, investors are likely to remain cautious amid ongoing trade tensions between the US and China.
Madden said: “The trade spat between the US and China rumbles on, and President Trump has the fire power to step it up to a full blown trade war. Mr Trump has up to $467bn worth of tariffs on Chinese imports at his disposal, but he hasn’t budged so far. Beijing has made it clear they will retaliate should Washington DC slap additional tariffs on Chinese imports. The situation is unlikely to fade away, so dealers are likely to remain on edge.
“The US still has unfinished business with Canada and the EU when it comes to trade, and that is playing into the mix too.”
On the UK data front, the Office for National Statistics is due to publish a labour market report at 0930 BST, including the unemployment rate, average earnings and the claimant count.
In corporate news, Elementis slumped as it cut the up-front price of its acquisition of industrial talc group Mondo Minerals by $100m after the deal was poorly received by investors, while Cairn Energy was in the red as it reported first-half pre-tax losses of £383m.
Anglo American slipped after saying the value of rough diamond sales at its De Beers unit fell in the seventh cycle of 2018 to $505m from $533m in the sixth.
Going the other way, equipment rental firm Ashtead was the top gainer after saying it would increase and extend its share buyback plans after a strong first quarter of its financial year.
JD Sports Fashion ticked higher as it posted a rise in interim pre-tax profit and revenue despite a “challenging” backdrop.
Sanne Group advanced even as it reported a drop in half-year profits, as it lifted its interim dividend and said it remains confident of meeting full-year expectations.
Hilton Food was in the green as it posted a jump in interim profit and revenue, boosted by the first full inclusion of the Seachill business, recovery of the business in Central Europe and further strategic progress in Australia.
In broker note action, BP was initiated at ‘buy’ and Royal Dutch Shell was started at ‘hold’ by Berenberg, while JD Wetherspoon was lifted to ‘buy’ by the same outfit.
Cineworld was upped to ‘buy’ from ‘hold’ by HSBC and Premier Oil was upgraded to ‘buy’ from ‘hold’ at Investec.
