London open: Stocks edge down amid trade war worries; services data eyed

London stocks edged lower in early trade on Wednesday amid ongoing trade war jitters, as investors eyed the latest reading on the UK services sector.

At 0830 BST, the FTSE 100 was down 0.4% to 7,566.05, while the pound was flat against the euro at 1.1321 and 0.2% higher against the dollar at 1.3216. Volumes were expected to a be a little lighter than usual as US markets will be closed for the Independence Day holiday.

London Capital Group analyst Jasper Lawler said: "With just two days to go until the US-Sino trade war threats start to take effect, relations between the US and China remain hostile, rattling investors. Further blocks and red tape this time on the likes of Micron Technology and China Mobile, highlighted the likelihood of increased friction between the two nations, as we move towards Friday’s US imposed deadline."

On the data front, Markit's services purchasing managers' index for June at 0930 BST is expected to be unchanged from May at 54. With the clock ticking until the Brexit deal October deadline, Lawler said the "mind-boggling" number of uncertainties to resolve meant the pound was likely to find any service sector PMI-inspired rally drastically limited by the lack of Brexit progress.

"Alternatively a weaker-than-forecast services PMI print could see the pound plunge sharply lower, with Brexit uncertainty and concerns over the UK economy being too much for the pound to cope with, sending it back towards $1.31."

Data released out of China earlier showed that services sector growth accelerated to a four-month high this month. The Caixin China services purchasing managers' index pushed up to 53.9 in June from 52.9 the month before, putting it comfortably above the 50 mark that separates contraction from expansion.

On the corporate front, BP slipped as it entered into agreements with ConocoPhillips that will significantly increase its holding in the Clair field, a core asset of BP's North Sea business in the UK, while also selling its non-operating interest in the Kuparuk and satellite oilfields in Alaska.

Building products supplier SIG was in the red after it reported a slight improvement in UK sales in the second quarter but a slowing of growth in Europe.

Compass Group slid after announcing that Johnny Thomson will step down from his role as finance director and leave the catering company by the end of December.

On the upside, Anglo American was the standout gainer following a report that Anil Agarwal, who owns 19.35% of the company, is preparing a plan to merge Vedanta Resources and Anglo American's South African business via a share swap.

Sainsbury’s also gained despite saying that revenue growth slowed in the first quarter as the supermarket chain cut prices to sell more items to customers.

FTSE 250 bus and rail operator National Express rose after saying that its Spanish and Moroccan division, ALSA, has been awarded a "major" bus contract worth €1bn that will see it become the largest transport operator in Morocco.

There wasn't much to write home about on the broker note front, although Petra Diamonds did get a boost from an upgrade to 'outperform' at RBC Capital Markets.

Market Movers

FTSE 100 (UKX) 7,566.05 -0.36%
FTSE 250 (MCX) 20,627.93 -0.18%
techMARK (TASX) 3,496.11 -0.47%

FTSE 100 - Risers

Anglo American (AAL) 1,693.20p 3.26%
Sainsbury (J) (SBRY) 320.60p 0.63%
Land Securities Group (LAND) 959.50p 0.36%
Fresnillo (FRES) 1,142.00p 0.35%
Antofagasta (ANTO) 973.40p 0.35%
Morrison (Wm) Supermarkets (MRW) 251.40p 0.28%
BT Group (BT.A) 223.41p 0.18%
International Consolidated Airlines Group SA (CDI) (IAG) 664.40p 0.18%
BHP Billiton (BLT) 1,672.80p 0.17%
Royal Bank of Scotland Group (RBS) 249.60p 0.16%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,212.00p -1.90%
Compass Group (CPG) 1,595.50p -1.63%
Pearson (PSON) 881.80p -1.32%
Rolls-Royce Holdings (RR.) 967.00p -1.19%
HSBC Holdings (HSBA) 697.20p -0.99%
Glencore (GLEN) 317.85p -0.98%
Smurfit Kappa Group (SKG) 3,044.00p -0.91%
GVC Holdings (GVC) 1,040.00p -0.86%
Rightmove (RMV) 5,200.00p -0.80%
Paddy Power Betfair (PPB) 8,155.00p -0.79%

FTSE 250 - Risers

Alfa Financial Software Holdings (ALFA) 174.80p 2.58%
Assura (AGR) 57.70p 2.30%
Charter Court Financial Services Group (CCFS) 344.64p 2.27%
FirstGroup (FGP) 86.63p 1.68%
CYBG (CYBG) 334.80p 1.39%
National Express Group (NEX) 402.20p 1.31%
Virgin Money Holdings (UK) (VM.) 389.70p 0.96%
Card Factory (CARD) 193.40p 0.78%
Sports Direct International (SPD) 406.30p 0.77%
JD Sports Fashion (JD.) 449.20p 0.69%

FTSE 250 - Fallers

Vesuvius (VSVS) 567.50p -3.65%
Euromoney Institutional Investor (ERM) 1,352.00p -2.73%
Ibstock (IBST) 289.00p -2.43%
Rank Group (RNK) 184.40p -2.02%
Dunelm Group (DNLM) 490.20p -1.96%
SIG (SHI) 136.00p -1.73%
Polypipe Group (PLP) 372.60p -1.43%
Computacenter (CCC) 1,432.00p -1.24%
Senior (SNR) 299.00p -1.19%
RDI Reit (RDI) 35.15p -1.13%