London open: Stocks drop amid geopolitical concerns, housebuilders weigh

Wed 06 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks fell in early trade on Wednesday, taking their cue from downbeat sessions in the US and Asia as worries about North Korea continued to play on investors' minds.
At 0830 BST, the FTSE 100 was down 0.5% to 7,339.61, while the pound was off 0.1% against the dollar at 1.3026 and 0.2% versus the euro at 1.0924.

After its hydrogen bomb test on Sunday, North Korea threatened to send "more gift packages" to the US if it continues to put pressure on the regime.

Spreadex analyst Connor Campbell said: "South Korea's president Moon Jae-in stated that the situation was becoming 'uncontrollable', while North Korea's UN ambassador Han Tae Song claimed the US can expect to receive more nuclear test 'gift packages'. Add onto this the threat of Hurricane Irma, currently in the Caribbean and heading towards Florida, and there was little reason for market-cheer.

"The FTSE was up there with the worst performers, falling half a percent largely thanks to the weight of its commodity stocks."

London's blue chip index also saw a drag from the housing sector, with Barratt Developments dropping 4% despite posting record annual profit, better than forecast revenue and a 39% hike to its dividend.

The company's shares had climbed 30% since the start of the year while the prospect of only "modest growth" in the next financial year was another reason for the shares' correction.

Barratt wasn't the only housebuilder in the red, with Berkeley Group also lower as it reported in-line trading but warned that uncertainty around Brexit, stamp duty and mortgage interest deductibility continued to weigh on the London market.

But retirement housebuilder McCarthy & Stone saw its shares advance as it said it saw a "strong" recovery in the second half of the year, with revenue and the order book up on the previous year despite uncertainty brought about by Brexit and the general election.

Pharmaceuticals group Vectura tumbled after saying its first-half operating loss widened to 41.3m from 24.1m in 2016.

On the upside, Micro Focus racked up impressive gains following the release of third-quarter results for Hewlett Packard Enterprise's software arm.

Petrofac rallied after saying it has been awarded a contract worth more than $700m by Sakhalin Energy Investment Company for its onshore processing facility on Sakhalin Island.

Sports Direct edged higher as it reiterated its full-year guidance, expressed optimism over its outlook and confirmed that it now owns 100% of Flannels.

EasyJet nudged up after the budget airline reported a 9.4% jump in passenger numbers in August as the load factor - which gauges how full the planes are - increased to 96.3% from 94.9%.

Amec Foster gained after it was awarded a $604m engineering, procurement and construction fixed price contract for part of a $1.85bn methanol plant being developed by Yuhuang Chemical, a US-based subsidiary of China's Shandong Yuhuang Chemical Company.

FSTE 250 network security solutions provider Sophos rose as it lifted its full-year billings guidance.

There are no major UK data releases due so investors will turn their attention to the US, where Markit's services purchasing managers' index and the ISM non-manufacturing PMI are scheduled for release at 1445 BST and 1500 BST, respectively.

Market Movers

FTSE 100 (UKX) 7,339.61 -0.45%
FTSE 250 (MCX) 19,652.46 -0.38%
techMARK (TASX) 3,417.50 -0.32%

FTSE 100 - Risers

Micro Focus International (MCRO) 2,355.00p 6.71%
easyJet (EZJ) 1,166.00p 0.87%
ITV (ITV) 157.00p 0.51%
Carnival (CCL) 5,185.00p 0.39%
AstraZeneca (AZN) 4,589.50p 0.35%
Associated British Foods (ABF) 3,300.00p 0.33%
WPP (WPP) 1,411.00p 0.14%
Tesco (TSCO) 184.95p 0.14%
Babcock International Group (BAB) 817.00p 0.12%
InterContinental Hotels Group (IHG) 3,810.00p 0.08%

FTSE 100 - Fallers

Barratt Developments (BDEV) 604.50p -3.12%
Standard Chartered (STAN) 739.50p -2.05%
BAE Systems (BA.) 603.00p -1.23%
Ashtead Group (AHT) 1,673.00p -1.18%
Glencore (GLEN) 359.30p -1.02%
Prudential (PRU) 1,757.50p -1.01%
3i Group (III) 937.50p -1.00%
Anglo American (AAL) 1,408.00p -0.98%
Taylor Wimpey (TW.) 196.90p -0.96%
Old Mutual (OML) 202.60p -0.93%

FTSE 250 - Risers

Petrofac Ltd. (PFC) 429.00p 4.35%
Sophos Group (SOPH) 554.50p 3.84%
Workspace Group (WKP) 901.00p 2.39%
McCarthy & Stone (MCS) 164.20p 2.37%
Big Yellow Group (BYG) 800.00p 2.37%
Victrex plc (VCT) 2,335.00p 1.52%
Softcat (SCT) 396.50p 1.41%
Rathbone Brothers (RAT) 2,764.00p 0.91%
Inmarsat (ISAT) 693.50p 0.87%
Diploma (DPLM) 1,104.00p 0.82%

FTSE 250 - Fallers

Vectura Group (VEC) 98.80p -9.44%
Euromoney Institutional Investor (ERM) 1,096.00p -2.40%
Berkeley Group Holdings (The) (BKG) 3,665.00p -2.32%
FDM Group (Holdings) (FDM) 890.00p -2.14%
Cairn Energy (CNE) 173.40p -2.03%
Morgan Advanced Materials (MGAM) 291.10p -1.99%
Evraz (EVR) 323.90p -1.85%
Safestore Holdings (SAFE) 415.60p -1.75%
Sanne Group (SNN) 747.00p -1.71%
Ashmore Group (ASHM) 362.00p -1.60%
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