London open: Stocks nudge lower amid trade concerns; sterling rallies

Tue 03 Dec 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks nudged a touch lower in early trade on Tuesday, with miners under pressure amid trade concerns, while sterling strengthened.
At 0830 GMT, the FTSE 100 was down 0.1% at 7,279.58, while the pound was up 0.3% against the dollar and the euro at 1.2978 and 1.1709, respectively after a poll by Kantar showed that the Conservatives have increased their lead over the Labour Party over the last week.

The poll put the Tories' support at 44%, up one point from last week, while Labour's support was steady at 32%.

Pound strength tends to weigh on the Footsie, as around 70% of its constituents derive most of their earnings from overseas.

Escalating trade tensions also weighed on the mood after US President Donald Trump threatened to slap tariffs on $2.4bn worth of French products such as champagne, handbags and cheese in response to the country's new tax on US technology firms. Sentiment had already taken a knock after Trump said he would reimpose tariffs on steel and aluminium from Brazil and Argentina.

"Tariff man strikes," said Neil Wilson, chief market analyst at "Trump upped the stakes in the trade war and broadened his field of fire to include allies in Europe and South America. After heavy losses on Monday, bulls are trying to rally the troops but sentiment is pretty shaky after taking such a bruising.

"What we are seeing is the weaponisation of trade and using it for diplomatic purposes. It is no coincidence that these announcements come as Trump lands in London for the Nato summit and a chance to demand European allies spend more on defence.

"It will also draw attention away from the Chinese talks, which clearly are not yielding the necessary outcome as far as the White House is concerned."

On home shores, all eyes will be on Markit's construction purchasing managers' index for November, due at 0930 GMT.

"Yesterday manufacturing picked up more than expected, rising to 48.9, still in contraction territory but a decent improvement from 48.3. Expectations are for construction activity to come in at 44.5, a modest uptick from the 44.2 in October," said CMC Markets analyst Michael Hewson.

In equity markets, Ocado was under the cosh for the second day in a row after announcing a 500m bond offering on Monday.

Miners were the worst performers amid worries about a trade war, with Anglo American, BHP and Glencore all weaker, while steelmaker Evraz also fell.

Travel company TUI was in the red after a downgrade to 'neutral' at Oddo, while Aston Martin retreated after Goldman cut the stock to 'neutral'.

On the upside, Rightmove was the standout gainer after an upgrade to 'neutral' at Goldman Sachs, while Auto Trader rallied on the back of an upgrade to 'neutral' at UBS. Serco was higher after an upgrade to 'overweight' at JPMorgan.

Cineworld was higher even as it warned that full-year trading will be "slightly below" management's expectations due a "weaker full year box office" and posted a 9.7% drop in group revenue for the period from 1 January to 1 December. The cinema chain also said the second half of the year started "strongly", with the release of The Lion King, Spider-Man: Far from Home, the record-breaking Joker and Frozen 2, and sounded an upbeat note over the rest of the year.

Centamin was sitting pretty at the top of the FTSE 250 after Canada's Endeavour Mining said it would take a 1.5bn buyout offer straight to shareholders after the London-listed gold miner refused to engage.

Market Movers

FTSE 100 (UKX) 7,279.65 -0.09%
FTSE 250 (MCX) 20,701.93 0.01%
techMARK (TASX) 4,045.80 -0.05%

FTSE 100 - Risers

Rightmove (RMV) 636.20p 2.68%
Severn Trent (SVT) 2,229.00p 1.32%
Aveva Group (AVV) 4,562.00p 1.29%
Halma (HLMA) 2,120.00p 1.15%
Auto Trader Group (AUTO) 574.20p 1.02%
Coca-Cola HBC AG (CDI) (CCH) 2,556.00p 0.99%
Ashtead Group (AHT) 2,343.00p 0.95%
Diageo (DGE) 3,151.50p 0.88%
Johnson Matthey (JMAT) 2,885.00p 0.87%
Taylor Wimpey (TW.) 174.05p 0.87%

FTSE 100 - Fallers

Evraz (EVR) 365.20p -2.12%
Anglo American (AAL) 2,006.50p -1.76%
TUI AG Reg Shs (DI) (TUI) 1,010.00p -1.70%
BHP Group (BHP) 1,691.60p -1.58%
Ocado Group (OCDO) 1,208.50p -1.51%
Glencore (GLEN) 241.85p -1.21%
Fresnillo (FRES) 564.80p -1.16%
Antofagasta (ANTO) 860.40p -1.06%
Carnival (CCL) 3,200.00p -0.99%
RSA Insurance Group (RSA) 537.40p -0.78%

FTSE 250 - Risers

Centamin (DI) (CEY) 119.20p 6.24%
Cineworld Group (CINE) 214.00p 3.93%
Sirius Minerals (SXX) 3.60p 3.63%
Serco Group (SRP) 153.30p 2.54%
Finablr (FIN) 210.20p 2.04%
IP Group (IPO) 61.10p 2.00%
Network International Holdings (NETW) 582.00p 1.93%
Pets at Home Group (PETS) 244.80p 1.66%
Essentra (ESNT) 429.00p 1.61%
Morgan Advanced Materials (MGAM) 292.00p 1.60%

FTSE 250 - Fallers

Ferrexpo (FXPO) 141.00p -4.34%
Aston Martin Lagonda Global Holdings (AML) 510.00p -3.30%
Quilter (QLT) 144.10p -2.57%
Computacenter (CCC) 1,466.00p -2.53%
Ultra Electronics Holdings (ULE) 2,030.00p -2.40%
TalkTalk Telecom Group (TALK) 102.50p -2.38%
Senior (SNR) 178.90p -2.24%
Kaz Minerals (KAZ) 476.10p -2.08%
Go-Ahead Group (GOG) 2,168.00p -1.81%
Vesuvius (VSVS) 438.40p -1.79%
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