London open: Stocks edge higher but retail sales disappoint

London stocks edged higher in early trade on Tuesday, with miners providing much of the upside as investors set aside their worries about Brexit and escalating trade tensions between the US and China.

At 0835 BST, the FTSE 100 was up 0.2% to 7,681.70, while the pound was up 0.1% against the dollar at 1.2960 and 0.1% lower versus the euro at 1.1196.

On the data front, the latest figures from the British Retail Consortium-KPMG sales monitor showed that retail sales growth eased back in July. Sales were up 0.5% on a like-for-like basis compared to the same month last year, down from a 1.1% increase in June and missing expectations of 1.5% growth. Total sales growth dipped to 1.6% year-over-year from 2.3% in June.

BRC chief executive Helen Dickinson said: "Last month’s sweltering temperatures kept shoppers focussed on eating, drinking and keeping cool. Food sales had their best July in five years, while fans and cooling equipment flew off the shelves."

However, she said the heat laid bare the underlying weakness in consumer spending as total sales growth slowed, with non-food sales struggling. "For many in the industry, autumn could not come sooner."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Even when the weather-drag on sales has faded, we continue to expect consumers’ spending to grow at only a modest rate. Real wage growth will strengthen gradually, but business surveys point to a slowdown in employment growth over the next six months, while the recent increase in Bank Rate will take more momentum out of the housing market, hitting confidence."

Elsewhere, the latest figures from Barclaycard revealed that consumer spending was up 5% year-on-year in July, with essential spending up 8.7% compared to July last year, and pub spending 16.8% higher thanks to the World Cup and the heatwave.

Mining stocks were the standout gainers as copper prices rose, with Antofagasta, Anglo American and Glencore all higher.

Standard Life Aberdeen was in the green despite saying that profits fell in the first half amid a challenging environment.

GlaxoSmithKline edged up as it announced that Iain Mackay has been appointed its next chief financial officer, and as an executive director to the board, with both positions starting on 14 January next year.

Moneysupermarket ticked higher after confirming the completion of the UK merger control process phase of its proposed acquisition of Decision Technologies.

On the downside, Hargreaves Lansdown was in the red even as it rewarded shareholders with a 38% hike in its dividend as the pensions and investments provider topped 1m active clients in the 12 months to 30 June. Total assets under administration grew 16% over the year to £91.6bn, up from £88.8bn in the final quarter, as a net £7.6bn of new business inflows was augmented by £5.9m of asset market growth.

InterContinental Hotels Group was on the back foot despite saying that interim operating profit rose to $406m from $370m with RevPAR up 3.7% led by Greater China, where double digit growth in both RevPAR and net system size, as well as record signings, reflected the firm's efforts to focus on that market.

Domino's Pizza shares tumbled despite the release of in-line interim results, with the company posting a 2.5% increase in first-half pre-tax profit to £45.7m.

Steve Clayton, manager of the HL Select UK Growth Shares fund, which holds a position in the stock, said: "On balance, these results will be received with something between grudging acceptance and mild disappointment. Domino’s is executing well in the UK with strong growth in sales and resilient earnings. But overseas, where the group has been expanding rapidly through acquisitions as well as new openings, profits have come in below par. The Norwegian business in particular has struggled to keep control of labour costs."

Meggitt fell after saying first-half pre-tax profit declined 39% as a result of lower gains from disposals, while product testing company Intertek slumped even as it posted a rise in first half-profit thanks to a strong performance from its products divisions and hiked its dividend.

Rotork declined even as the FTSE 250 maker of industrial flow equipment reported a jump in first-half pre-tax profit as revenue and order intake grew on the back of larger orders and favourable market trends.

In broker note action, William Hill was upgraded to 'neutral' at Goldman Sachs, while Ferrexpo was lifted to 'overweight' at JPMorgan.

Ocado was downgraded to 'underweight' at Barclays, while Ultra Electronics was cut to 'hold' at Kepler Cheuvreux and Man Group and Spire Healthcare were both cut to 'neutral' at Bank of America Merrill Lynch.

Hiscox was started at 'hold' by Jefferies.

Market Movers

FTSE 100 (UKX) 7,681.70 0.23%
FTSE 250 (MCX) 20,636.86 -0.01%
techMARK (TASX) 3,598.09 -0.10%

FTSE 100 - Risers

Fresnillo (FRES) 1,005.00p 2.49%
Antofagasta (ANTO) 965.40p 2.42%
Anglo American (AAL) 1,712.80p 2.07%
Evraz (EVR) 556.80p 1.98%
Glencore (GLEN) 319.85p 1.86%
Standard Life Aberdeen (SLA) 311.90p 1.73%
BHP Billiton (BLT) 1,715.20p 1.67%
Rio Tinto (RIO) 3,971.00p 1.22%
Mondi (MNDI) 2,223.00p 1.00%
BP (BP.) 572.00p 0.92%

FTSE 100 - Fallers

Intertek Group (ITRK) 5,500.00p -6.30%
Ocado Group (OCDO) 1,041.00p -3.43%
Hargreaves Lansdown (HL.) 2,053.00p -3.07%
InterContinental Hotels Group (IHG) 4,680.00p -1.45%
Vodafone Group (VOD) 184.74p -0.74%
Taylor Wimpey (TW.) 170.75p -0.61%
Relx plc (REL) 1,676.00p -0.50%
Persimmon (PSN) 2,450.00p -0.45%
Next (NXT) 5,672.00p -0.42%
Croda International (CRDA) 5,210.00p -0.38%

FTSE 250 - Risers

Ferrexpo (FXPO) 172.60p 5.02%
Kaz Minerals (KAZ) 605.60p 2.16%
Ibstock (IBST) 239.00p 1.88%
Games Workshop Group (GAW) 3,135.00p 1.79%
Fidelity China Special Situations (FCSS) 232.67p 1.60%
Convatec Group (CTEC) 211.70p 1.53%
RPC Group (RPC) 788.40p 1.52%
Hastings Group Holdings (HSTG) 248.00p 1.31%
NewRiver REIT (NRR) 277.03p 1.29%
Virgin Money Holdings (UK) (VM.) 407.60p 1.27%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 292.50p -8.02%
Rotork (ROR) 337.30p -4.99%
Ultra Electronics Holdings (ULE) 1,621.00p -4.59%
TP ICAP (TCAP) 285.90p -2.22%
Charter Court Financial Services Group (CCFS) 335.70p -2.16%
Rank Group (RNK) 175.54p -1.93%
Galliford Try (GFRD) 944.00p -1.72%
Capita (CPI) 126.80p -1.59%
Spire Healthcare Group (SPI) 190.40p -1.55%
IWG (IWG) 235.40p -1.30%