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London open: Stocks tick down as investors eye data
London stocks ticked lower in early trade on Wednesday as investors eyed a slew of key data releases amid ongoing trade war concerns.
At 0840 BST, the FTSE 100 was down 0.1% to 7,231.19, while the pound was 0.1% firmer against the dollar at 1.3159 and 0.2% higher versus the euro at 1.1456.
Trade relations between the US and China were on investors’ minds again after US Treasury Secretary Steven Mnuchin renewed a warning to China not to engage in competitive currency devaluation.
Neil Wilson, chief market analyst at Markets.com, said: “As previously argued there is a risk that a full-blown trade conflict leads naturally to a currency war as countries affected by tariffs devalue to remain competitive. Currency and trade are just two sides of the same coin. Without the firepower on trade, China’s chief weapon is its currency and it is no surprise if it were to utilise this.”
On the UK data front, industrial and manufacturing production figures are due at 0930 BST, along with the goods trade balance and gross domestic product for August. UK economic growth is expected to have eased to just 0.1% on the month from 0.3% in July. Meanwhile, manufacturing and industrial production are expected to have picked up marginally.
In corporate news, British American Tobacco fell after chief marketing officer Andrew Gray quit after a 32-year career, just two weeks after he was overlooked for the top job.
DS Smith, Smurfit Kappa and Mondi were all on the back foot on news that ND Paper, the Illinois-based subsidiary of Hong Kong’s Nine Dragons Paper plans to invest $300m over the next two years into its mills in Wisconsin and Maine.
Rank Group was under the cosh after the Gambling Commission said it must pay £500,000 for failing to follow rules that protect problem gamblers, while International PPL was in the red after announcing plans to raise around £75m in an equity placing.
On the upside, PageGroup rallied after saying it expects its full-year operating profit to be marginally ahead of consensus after notching its highest quarterly growth rate in seven years.
HSBC was a touch higher even after it emerged overnight that it has agreed to pay a $765m settlement in the US over its sale of mortgage-based securities in the run-up to the financial crisis.
SSE was steady after its merger with Npower was provisionally cleared by the UK’s Competition and Markets Authority.
In broker note action, Ocado was the top riser after being lifted to ‘equalweight’ at Barclays. Dixons Carphone was boosted to ‘buy’ by HSBC, Rio Tinto was raised to ‘buy’ at Goldman and Sage was upgraded to ‘hold’ at Deutsche Bank. Soco International was upgraded to ‘outperform’ at RBC Capital Markets.
Rightmove was bumped up to ‘buy’ at Liberum and Hunting was cut to ‘equalweight’ at Barclays.
