London open: Stocks edge up as Micro Focus, AstraZeneca rally
London stocks edged higher in early trade on Thursday, helped along by some well-received results from the likes of Micro Focus and AstraZeneca.
At 0840 GMT, the FTSE 100 was up 0.3% to 7,209.64, while the pound was down 0.1% against the dollar at 1.2833 and 0.2% weaker versus the euro at 1.1391.
Brexit-related headlines were likely to be eyed as MPs were set to debate and take a vote on the next steps in the process later in the day, with a series of amendments due to be considered.
CMC Markets analyst Michael Hewson said: “Prime Minister Theresa May will be putting forward a new parliamentary motion today that allows her to continue to negotiate with the EU to seek changes to the Irish backstop, as per the previous vote on the 29th January.
“MPs might seek to create mischief by attempting to amend the motion with an attempt to force another meaningful vote on the deal, try and force a vote on a second referendum, or to revoke article 50.”
On the data front, investors were digesting the latest survey from the Royal Institution of Chartered Surveyors, which showed the UK housing market got off to a weak start in 2019, with enquiries, sales and new instructions all down, as Brexit uncertainty continued to take its toll.
The RICS UK Residential Market Survey found that the number of new properties being listed in January had deteriorated to a net balance of -25%, the lowest since July 2016.
New buyer enquiries had also fallen on a seasonally-adjusted basis, the sixth successive monthly decline. Agreed sales declined as well.
The average time taken to sell a property continued to lengthen, meanwhile, reaching 19.4 weeks – the longest since 2017 when RICS started measuring the data point.
Contributors to the survey blamed Brexit for the weaker market conditions: “In the near term, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit continue to cause hesitancy, alongside affordability constraints in parts of the country.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Given that Brexit remains unresolved, activity and prices likely will continue to come under downward pressure in the near-term. But with both mortgage rates and unemployment low and banks willing to lend on a secured basis, the conditions are in place for a recovery when a no-deal Brexit has been averted.”
In corporate news, Micro Focus was feeling the Valentine’s Day love, surging to the top of the FTSE 100 as the software company’s full-year revenue beat analysts’ expectations.
AstraZeneca was also in the green as it reported a strong fourth quarter, beating analyst expectations for revenues and earnings, with the drugs colossus guiding to another strong year ahead.
Moneysupermarket was the top gainer on the FTSE 250 as the price comparison website posted a 14% jump in full-year operating profit and an 8% revenue rise as it announced that chairman Bruce Carnegie-Brown is stepping down.
On the downside, Coca-Cola HBC fell sharply. Although the company’s full-year results were slightly ahead in terms of the top line, higher finance charges meant that earnings per share were a miss.
Convatec tumbled as the medical device maker posted a 6% drop in adjusted earnings before interest and tax for 2018, while Restaurant Group also lost ground as it announced the departure of chief executive officer Andy McCue.
Emerging markets asset manager Ashmore was under the cosh as it said first-half assets under management and revenue rose, but profit dropped.
BP, Hargreaves Lansdown, Shell, PZ Cussons and Rank were among the companies whose stock went ex-dividend.
In broker notes, Dunelm was downgraded to ‘reduce’ by HSBC, while RSA was cut to ‘neutral’ at JPMorgan. Royal Mail was upgraded to ‘equalweight’ by Morgan Stanley.