|CATEGORY: MARKET REPORT - MIDDAY
Mon 15 Apr 2019
LONDON (SHARECAST) - (Sharecast News) - London stocks had nudged a touch higher by midday on Monday, but the upside was capped by a weak mining sector, as investors eyed more key US earnings later in the session and important UK and Chinese data due later in the week.
The FTSE 100 was 0.1% higher at 7,442.92, while the pound was up 0.2% against the dollar at 1.3101 and 0.1% stronger versus the euro at 1.1584, underpinned by comments from Foreign Secretary Jeremy Hunt, who said on a visit to Japan that talks with Labour - which are set to continue over the Easter recess - had been "more constructive than people thought".
Investors were eyeing the release of UK inflation data and first-quarter Chinese GDP, both due on Wednesday, while key UK jobs data is out on Tuesday.
In addition, first-quarter earnings from Goldman Sachs and Citigroup were due ahead of the US opening bell following impressive numbers from JPMorgan Chase and Wells Fargo on Friday.
London Capital Group analyst Jasper Lawler said: "After a tough couple of months, economic data and corporate updates are finally providing some ray of light. However, it's questionable whether this can last. Traders will be keeping a close eye on where US earning season goes from here.
"A good run from the banks is half expected given the US rate rises that we have seen last year. Whether the strong start is able to continue beyond the banking sector will be key; right now this is looking unlikely."
Meanwhile, Sino-US relations were in focus again after US Treasury Secretary Steve Mnuchin said over the weekend that he was hopeful talks between the two would soon come to a close. According to Reuters, Mnuchin said on Saturday that a deal between the two nations would go "way beyond" previous agreements and that the two sides were "close to the final round" of negotiations".
Elsewhere, the latest survey from Rightmove showed that house prices rose 1.1% on the month in April compared to a 0.4% increase in March. This marked the biggest month-on-month rise for over a year and the largest at this time of year since 2016.
On the year, house prices were down 0.1% versus a 0.8% decline the month before.
"The uncertain political backdrop continues to hold back the market, with new seller asking prices, the number of properties coming to market and the number of sales agreed all below this time last year," Rightmove said.
"But despite these headline falls, market activity remains resilient with would-be buyers and sellers still having housing needs to satisfy, especially in the family home sector."
Meanwhile, figures from the British Retail Consortium and Springboard showed that footfall increased 1.4% in March compared to the previous year when it fell by 6%, boosted by milder weather.
High Street footfall was up 2.5 versus an 8.6% drop in March 2018, and retail park footfall was 1.5% higher versus a 1.8% decline in March.
Springboard marketing and insights director Diane Wehrle said appearances were deceptive. As while the year on year rise in footfall might appear to signify a reverse in trend from the previous two years, when footfall dropped in all but two of the past 22 months, "it is simply not the case" and the rise "should be regarded as an exceptional circumstance" relating to the dramatic slump in March last year.
In equity markets, B&Q owner Kingfisher was a high riser, with analysts pointing to the forecast for warm weather over the Bank Holiday weekend, which would be expected to get people out working on their gardens and doing DIY.
WPP was the standout gainer following reports that the advertising giant has attracted at least five of the world's biggest private equity firms into an auction for a majority stake in its data analytics unit Kantar. According to Reuters, US private equity funds Bain Capital and Apollo will compete with European funds CVC Capital Partners, Permira and Apax.
WPP was also likely to be finding support from a rise in first-quarter net profit at French peer Publicis and news that it has agreed to buy US-based marketing and data group Epsilon in a $4.4bn deal.
Office space provider IWG, formerly Regus, rallied as it continued its shift towards a franchise model with a £320m deal to sell 100% of its Japanese office space to Tokyo-listed TKP Corporation, with which it has agreed a master franchise agreement.
Mediterranean-focused Energean Oil and Gas saw its shares jump after saying that its Karish North exploration well had made a "significant"" gas discovery.
Construction group Kier was in the green as it said new chief executive Andrew Davies will lead a strategic review to improve cash generation and reduce leverage.
On the downside, mining stocks retreated, with Rio Tinto, BHP, Anglo American and Antofagasta all in the red. "Copper had a strong session on Friday and now we are seeing a bit of profit taking, and that is driving sentiment in the mining sector this morning," said CMC Markets analyst David Madden.
Rio was also in the news as it said it would invest an extra $302m (£231m) to develop its US Resolution copper project as it sought to capitalise on the growing green energy market.
Acacia Mining lost its shine as it said first-quarter gold production fell 13% from the previous year due to lower output at the North Mara and Buzwagi mines.
In broker note action, outsourcer Compass was hit by a downgrade to 'equal-weight' at Barclays and CYBG was knocked lower by a downgrade to 'hold' at Investec. British Gas owner Centrica was cut to 'neutral' at JPMorgan.
FTSE 100 (UKX) 7,442.92 0.08%
FTSE 250 (MCX) 19,788.72 0.39%
techMARK (TASX) 3,560.11 0.24%
FTSE 100 - Risers
easyJet (EZJ) 1,174.50p 2.04%
Prudential (PRU) 1,700.00p 1.67%
Smith (DS) (SMDS) 361.40p 1.63%
TUI AG Reg Shs (DI) (TUI) 797.00p 1.53%
Carnival (CCL) 4,025.00p 1.49%
Kingfisher (KGF) 256.80p 1.42%
Standard Life Aberdeen (SLA) 272.80p 1.41%
Paddy Power Betfair (PPB) 6,244.00p 1.36%
WPP (WPP) 883.60p 1.33%
Coca-Cola HBC AG (CDI) (CCH) 2,652.00p 1.22%
FTSE 100 - Fallers
Compass Group (CPG) 1,758.50p -1.92%
BHP Group (BHP) 1,906.40p -1.48%
Anglo American (AAL) 2,179.50p -1.36%
Rio Tinto (RIO) 4,708.00p -1.33%
Hikma Pharmaceuticals (HIK) 1,738.00p -1.25%
Fresnillo (FRES) 787.00p -1.08%
Reckitt Benckiser Group (RB.) 5,847.00p -0.98%
Marks & Spencer Group (MKS) 276.30p -0.72%
DCC (DCC) 6,870.00p -0.67%
Experian (EXPN) 2,178.00p -0.64%
FTSE 250 - Risers
IWG (IWG) 339.55p 23.16%
Indivior (INDV) 43.07p 22.24%
Energean Oil & Gas (ENOG) 859.00p 10.13%
Kier Group (KIE) 368.51p 5.89%
Metro Bank (MTRO) 821.50p 4.52%
Charter Court Financial Services Group (CCFS) 367.00p 3.38%
Plus500 Ltd (DI) (PLUS) 511.60p 3.35%
McCarthy & Stone (MCS) 131.70p 2.89%
Restaurant Group (RTN) 125.30p 2.70%
Balfour Beatty (BBY) 272.80p 2.63%
FTSE 250 - Fallers
Amigo Holdings (AMGO) 242.50p -3.00%
Funding Circle Holdings (FCH) 320.50p -2.88%
Acacia Mining (ACA) 186.60p -2.81%
Contour Global (GLO) 207.50p -2.12%
TalkTalk Telecom Group (TALK) 120.10p -2.12%
Weir Group (WEIR) 1,717.50p -1.80%
Computacenter (CCC) 1,055.00p -1.77%
Safestore Holdings (SAFE) 645.80p -1.70%
William Hill (WMH) 165.30p -1.69%
Kaz Minerals (KAZ) 727.00p -1.54%