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CATEGORY: MARKET REPORT - OPENING

London open: Miners pace the advance amid China-US trade hopes

Mon 25 Nov 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks rose in early trade on Monday, with miners pacing the advance amid renewed hopes over a China-US trade deal.
At 0830 GMT, the FTSE 100 was up 0.6% at 7,368.37, taking its cue from gains in Asia, where sentiment was boosted after China said it will raise penalties on intellectual property violations.

Neil Wilson, chief market analyst at Markets.com, said: "We've had progress in an important area - China has appeared to relent to a degree on intellectual property, a key sticking point to the talks thus far.

"Beijing on Sunday said it will increase penalties for IP violations, and lower the bar for criminal proceedings to be brought in cases of alleged IP theft. This could be an important step forward, but we as ever will only believe it when we see it. The focus is on agreeing some kind of phase one deal before the Dec 15 deadline for about $150bn in tariffs to raise."

The mood was also lifted after China's state-run Global Times reported that the two nations were "very close" to a phase one trade deal.

Investors were also digesting a landslide victory over the weekend for pro-democracy parties in Hong Kong.

"The pro-democracy candidates controlled all but one of the 18 districts it seems. This is a humiliation to Beijing - there is no silent majority backing Carrie Lam and co - it will only embolden the protest movement further, which of course carries risks for investors," said Wilson.

On home turf, sterling was doing well following the release of the Conservative manifesto over the weekend. The pound was up 0.3% against the dollar and the euro at 1.2871 and 1.1674, respectively.

"In contrast to the launch of the Labour Party manifesto, which came across as a pick and mix wish list of giveaways, with another 58bn being pledged at the weekend on pensions, the Conservative party's offering came across as a much more safety-first affair," said CMC Markets analyst Michael Hewson.

In equity markets, miners were the standout gainers amid China-US deal optimism, with Rio Tinto, Anglo American, Glencore, Antofagasta and BHP all firmly in the green, while Russian steelmaker Evraz racked up the strongest gains.

Sirius Real Estate was trading higher after the property company lifted its interim dividend as it posted a jump in pre-tax profit.

On the downside, Restaurant Group was under pressure after an update on trading from its restaurant chain Wagamama, with Citi noting a slowdown in sales. Wagamama said second-quarter UK like-for-like sales were up 6.3%. Citi pointed out that this was a marked slowdown from the 12.9% growth reported in the first quarter, albeit against tougher comparatives.

In broker note action, Hochschild Mining was hit by a downgrade to 'underperform' at Bank of America Merrill Lynch and Softcat was weaker after a downgrade to 'hold' at Berenberg.

Recruiter Hays was cut to 'underperform' at Credit Suisse, while AstraZeneca was lifted to 'buy' at Bryan Garnier and Direct Line was upgraded to 'buy' at Deutsche Bank.

Market Movers

FTSE 100 (UKX) 7,368.37 0.57%
FTSE 250 (MCX) 20,569.28 0.41%
techMARK (TASX) 4,040.42 0.12%

FTSE 100 - Risers

Evraz (EVR) 371.30p 3.51%
Rio Tinto (RIO) 4,280.50p 2.29%
NMC Health (NMC) 2,515.00p 2.28%
Anglo American (AAL) 2,104.50p 2.26%
Glencore (GLEN) 252.35p 2.21%
Antofagasta (ANTO) 907.80p 2.09%
Centrica (CNA) 83.92p 1.97%
International Consolidated Airlines Group SA (CDI) (IAG) 565.20p 1.80%
Barratt Developments (BDEV) 671.20p 1.79%
BHP Group (BHP) 1,740.20p 1.75%

FTSE 100 - Fallers

Fresnillo (FRES) 551.00p -1.78%
Coca-Cola HBC AG (CDI) (CCH) 2,470.00p -0.60%
Imperial Brands (IMB) 1,680.00p -0.59%
Unilever (ULVR) 4,491.00p -0.56%
Vodafone Group (VOD) 155.78p -0.51%
Hikma Pharmaceuticals (HIK) 1,891.00p -0.50%
Intertek Group (ITRK) 5,480.00p -0.44%
SEGRO (SGRO) 865.60p -0.32%
Experian (EXPN) 2,503.00p -0.32%
Polymetal International (POLY) 1,154.00p -0.30%

FTSE 250 - Risers

Ferrexpo (FXPO) 150.00p 3.34%
Kaz Minerals (KAZ) 505.20p 2.68%
FDM Group (Holdings) (FDM) 887.00p 2.66%
Hastings Group Holdings (HSTG) 174.70p 2.46%
Tullow Oil (TLW) 142.45p 2.30%
Weir Group (WEIR) 1,425.50p 2.30%
Cineworld Group (CINE) 205.30p 2.24%
Essentra (ESNT) 433.00p 2.12%
Synthomer (SYNT) 311.20p 2.10%
Sirius Real Estate Ltd. (SRE) 77.90p 2.10%

FTSE 250 - Fallers

Restaurant Group (RTN) 137.20p -6.03%
Hochschild Mining (HOC) 160.80p -5.47%
Finablr (FIN) 174.30p -4.28%
Kainos Group (KNOS) 554.00p -4.15%
Workspace Group (WKP) 1,047.00p -2.06%
Softcat (SCT) 1,141.00p -1.72%
Petrofac Ltd. (PFC) 395.10p -1.32%
JPMorgan American Inv Trust (JAM) 467.00p -1.27%
PayPoint (PAY) 945.00p -1.15%
Grainger (GRI) 268.20p -1.11%
 
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