London open: Stocks nudge up ahead of inflation data but housebuilders under pressure

Tue 12 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks nudged higher in early trade on Tuesday as investors sifted through corporate news and looked to the release of key UK inflation data.
At 0830 BST, the FTSE 100 was up 0.1% to 7,416.95, while the pound was 0.3% higher versus the dollar at 1.3197 and 0.2% firmer against the euro at 1.1028. The positive tone followed a record session on Wall Street, where the S&P 500 jumped more than 1.1% to close at an all-time high of 2,488.11 as worries about North Korea and Hurricane Irma receded.

On the data front, the UK retail price index, producer price index and consumer price index are all due at 0930 BST.

Spreadex analyst Connor Campbell said: "How much of a boost the currency could get from such a reading is perhaps up for debate. The Bank of England was reluctant to hike rates at that aforementioned May high, and it's unlikely they'll be moved by anything lower. However, it would still be a move in the right direction, helping to explain why the pound is up 0.3% against the dollar and 0.2% against the euro (where the pound has also rebounded, if not with the same vigour as it has against the greenback).

"All this explains why the FTSE hasn't quite been able to join in with its eurozone and US peers in the last couple of sessions."

Market participants were also digesting news that MPs have backed the EU Withdrawal Bill - often referred to as the Repeal Bill - by 326 votes to 290, despite accusations that it was a "power grab" by ministers, with Labour calling it an "affront to parliamentary democracy". The bill's aim is to transpose relevant EU law onto the UK statute book when the UK eventually leaves the block in 2019. It will also overturn the 1972 act that took Britain into the European Economic Community.

However, there are concerns over the so-called Henry VIII powers in the bill, which grant ministers power to amend the law without normal parliamentary scrutiny.

Geopolitics was likely to remain in focus after the UN imposed a fresh series of sanctions on North Korea late on Monday, restricting oil imports and banning textile imports.

In corporate news, the AA rallied as it confirmed that it held "preliminary talks" with insurer Hastings over a potential merger of the motor association's insurance business. Responding to press speculation, the AA said it "regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders' interests".

JD Sports Fashion surged after it reported "another record result" for its half year, with sales up 41% to 1.4bn and pre-tax profit up 33% to 102.7m.

Construction equipment specialist Ashtead also racked up health gains as it reported strong growth in rental revenue and profits in the first quarter of its financial year, adding that clean-up efforts after Hurricanes Harvey and Irma were likely to increase levels of demand for its fleet.

Equiniti edged higher as it launched a 122m rights issue to buy the Wells Fargo Share business.

Wood Group and Amec Foster Wheeler were in focus after the Competition and Markets Authority approved their merger plans, with both stocks just a touch lower.

Housebuilders were in the red, with Taylor Wimpey, Persimmon, Barratt Developments, Berkeley and Bellway all lower. But it was Redrow dragging the sector down, after The Steve Morgan Foundation - a charitable trust founded by the housebuilder's chairman - and Morgan's investment vehicle, Bridgemere Securities, sold 25.9m existing ordinary shares at 590p each, representing around 7% of the issued share capital. Traders also pointed to news that Cairn Homes founders Michael Stanley, Kevin Stanley and Alan McIntosh have decided to sell a 2.1% stake in the housebuilder, saying the placings could suggest a market top for housebuilders.

Costa and Premier Inn owner Whitbread was under the cosh after Citi downgraded its stance on the stock to 'sell' from 'buy'.

Market Movers

FTSE 100 (UKX) 7,416.95 0.05%
FTSE 250 (MCX) 19,693.37 -0.00%
techMARK (TASX) 3,467.47 0.05%

FTSE 100 - Risers

Ashtead Group (AHT) 1,768.00p 4.99%
Smurfit Kappa Group (SKG) 2,372.00p 1.76%
Sainsbury (J) (SBRY) 239.10p 1.27%
Old Mutual (OML) 202.30p 1.10%
Mondi (MNDI) 2,072.00p 1.07%
Johnson Matthey (JMAT) 2,891.00p 0.94%
Tesco (TSCO) 187.90p 0.94%
Associated British Foods (ABF) 3,129.00p 0.84%
Barclays (BARC) 188.10p 0.78%
BHP Billiton (BLT) 1,429.50p 0.70%

FTSE 100 - Fallers

Whitbread (WTB) 3,637.00p -3.68%
Taylor Wimpey (TW.) 190.70p -2.60%
Persimmon (PSN) 2,495.00p -2.35%
Barratt Developments (BDEV) 592.50p -2.23%
International Consolidated Airlines Group SA (CDI) (IAG) 597.00p -1.73%
St James's Place (STJ) 1,136.00p -1.22%
Randgold Resources Ltd. (RRS) 7,935.00p -0.81%
Fresnillo (FRES) 1,595.00p -0.75%
Carnival (CCL) 5,145.00p -0.68%
InterContinental Hotels Group (IHG) 3,768.00p -0.66%

FTSE 250 - Risers

JD Sports Fashion (JD.) 373.00p 8.87%
Nostrum Oil & Gas (NOG) 392.00p 3.10%
Fisher (James) & Sons (FSJ) 1,567.00p 2.55%
Polypipe Group (PLP) 396.70p 2.48%
AA (AA.) 166.20p 2.09%
Softcat (SCT) 410.10p 2.01%
TBC Bank Group (TBCG) 1,637.00p 1.80%
PayPoint (PAY) 940.00p 1.79%
Sirius Minerals (SXX) 26.61p 1.56%
Tullow Oil (TLW) 157.00p 1.55%

FTSE 250 - Fallers

Redrow (RDW) 576.00p -8.93%
Petra Diamonds Ltd.(DI) (PDL) 81.85p -3.54%
SSP Group (SSPG) 515.50p -2.55%
Berkeley Group Holdings (The) (BKG) 3,509.00p -2.31%
Bellway (BWY) 3,105.00p -1.86%
Ascential (ASCL) 369.00p -1.76%
Countryside Properties (CSP) 344.00p -1.71%
Lancashire Holdings Limited (LRE) 664.00p -1.48%
Acacia Mining (ACA) 180.30p -1.48%
Crest Nicholson Holdings (CRST) 528.00p -1.40%
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