London open: Stocks edge up as pound retreats, supermarkets rally on upgrades

Michele Maatouk WebFG News | 05 Dec, 2017 08:49 - Updated: 08:49 | | |

London Stock Exchange AIM LSE shares

London equity markets edged higher in early trade on Tuesday, helped along by a weaker pound as hopes waned over Brexit talks, while supermarket stocks put in a solid performance and investors eyed the latest reading on the services sector.

At 0825 GMT, the FTSE 100 was up 0.3% to 7,362.80, while the pound was down 0.5% against the dollar at 1.3416 and 0.4% lower versus the euro at 1.1312.

Spreadex analyst Connor Campbell said: "The pound is looking a bit queasy after its latest ride on the Brexit rollercoaster, with sterling pulling back as the DUP forced Theresa May to dump her latest attempts at a deal with the EU.

"The Tories are really taking a sticky tape and cardboard approach to government, patching over problems - i.e. bringing the DUP in to prop-up their parliamentary majority - with seemingly little-to-no foresight into what issues such solutions might cause in the future. So it should come as no surprise that, like so many other things in the past few months, the DUP deal has come to bite May in the behind, with the right-wing party scuppering an agreement on the Irish border - where Northern Ireland would be allowed to stay in the customs union and single market - that could have potentially unlocked trade talks between the UK and EU."

Market participants were also digesting the latest services figures from China, where the Caixin purchasing managers' index rose to 51.9 in November from 51.2 the month before, comfortably surpassing expectations for a reading of 51.5.

Markit's services PMI for the UK is due at 0930 GMT, while eurozone services PMI is at 0900 GMT.

Supermarkets were the standout gainers, with Tesco and Morrisons boosted by upgrades from Goldman Sachs, and Sainsbury tagging along for the ride after the bank upped its price target on the stock but kept the rating at 'sell'. Goldman said margin pressure in the UK grocery market is easing, adding that while competitive intensity is still high, multiple data points suggest 2018 will see greater industry margin expansion than 2017.

Housebuilders were also on the rise, with Persimmon and Taylor Wimpey lifted by upgrades to 'buy' at Canaccord Genuity, while Standard Chartered was higher on the back of an upgrade to 'overweight' at JPMorgan.

Plumbing and heating products distributor Ferguson, formerly Wolseley, was in the black after saying said it was on track to meet annual profit expectations after strong growth in the US offset tough trading in the UK during the first quarter.

Telecommunications giant Vodafone ticked higher after saying it has entered into a strategic alliance with SoftBank Corp, focussing on mobile services for enterprise customers.

IG Group as it said it saw growth slow in the second quarter after a barnstorming first, though revenues were still higher and costs lower than the same period last year.

Budget carrier Wizz Air flew higher as it reported 22% growth in passenger numbers for November, with load factor rising to 88.3% from 86.8%.

Victrex racked up healthy gains after its full-year numbers, with the dividend ahead of expectations, while Wood Group nudged up as it won a multi-million dollar contract to support GlaxoSmithKline in Germany.

On the downside, Provident Financial was under the cosh after it said its Moneybarn motor finance arm is being investigated by the financial watchdog, the second of the embattled sub-prime lender's businesses to be probed.

Cineworld shares fell after it reached an agreement to buy US rival Regal Entertainment Group for $3.6bn (£2.7bn), creating the world's second largest cinema operator.

Market Movers

FTSE 100 (UKX) 7,362.80 0.32%
FTSE 250 (MCX) 19,948.28 0.06%
techMARK (TASX) 3,420.65 -0.14%

FTSE 100 - Risers

Tesco (TSCO) 201.80p 3.41%
Morrison (Wm) Supermarkets (MRW) 220.80p 3.18%
Sainsbury (J) (SBRY) 238.20p 2.28%
Persimmon (PSN) 2,623.00p 2.22%
Taylor Wimpey (TW.) 200.10p 1.94%
Standard Chartered (STAN) 740.00p 1.76%
Barratt Developments (BDEV) 616.81p 1.70%
Ferguson (FERG) 5,565.00p 1.55%
Old Mutual (OML) 198.30p 1.28%
Berkeley Group Holdings (The) (BKG) 3,902.26p 1.23%

FTSE 100 - Fallers

Antofagasta (ANTO) 881.50p -2.00%
Worldpay Group (WPG) 414.54p -1.70%
Glencore (GLEN) 336.15p -1.64%
Rio Tinto (RIO) 3,501.00p -1.10%
Shire Plc (SHP) 3,613.01p -0.92%
Anglo American (AAL) 1,373.50p -0.83%
Micro Focus International (MCRO) 2,438.00p -0.69%
AstraZeneca (AZN) 4,726.00p -0.40%
Pearson (PSON) 712.00p -0.35%
Land Securities Group (LAND) 931.00p -0.27%

FTSE 250 - Risers

Victrex plc (VCT) 2,505.00p 3.51%
IG Group Holdings (IGG) 669.82p 2.65%
Galliford Try (GFRD) 1,217.00p 2.44%
TBC Bank Group (TBCG) 1,638.00p 2.38%
Tullow Oil (TLW) 187.60p 2.35%
Clarkson (CKN) 2,880.00p 2.35%
Euromoney Institutional Investor (ERM) 1,150.00p 1.95%
Rank Group (RNK) 245.80p 1.95%
Ted Baker (TED) 2,652.00p 1.80%
Booker Group (BOK) 223.10p 1.78%

FTSE 250 - Fallers

IP Group (IPO) 148.10p -2.76%
Sports Direct International (SPD) 371.60p -1.85%
Vedanta Resources (VED) 665.00p -1.85%
Cairn Energy (CNE) 210.80p -1.82%
Ferrexpo (FXPO) 248.30p -1.35%
Cineworld Group (CINE) 539.50p -1.19%
Stagecoach Group (SGC) 180.56p -1.06%
Rotork (ROR) 261.00p -1.02%
Ocado Group (OCDO) 344.90p -1.00%
Hikma Pharmaceuticals (HIK) 968.00p -0.97%

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