London open: Stocks edge lower ahead of retail sales; Unilever drops on results

London stocks edged lower in early trade on Thursday despite positive cues from the US, as investors kept a watchful eye on Spain and looked ahead to the release of UK retail sales data and the first day of the EU summit.

At 0840 BST, the FTSE 100 was off 0.3% to 7,521.04, while the pound was down 0.3% against the euro to 1.1169 and 0.2% weaker versus the dollar at 1.3185.

As deadline day arrived in Catalonia, CMC Markets analyst Michael Hewson highlighted the prospect that Spanish Prime Minister Mariano Rajoy could be forced to trigger article 155 of the Spanish constitution and seize direct control of the Barcelona parliament unless Catalan President Carlos Puigdemont clarifies what he meant in his speech last week.

“As if to pre-empt that, there were reports last night that any attempt to do that would prompt a declaration of independence in response. It’s hard to see how this one can end well,” Hewson said.

He added: “It’s also EU summit day today and for all the talk of compromise there seems to be precious little of either coming from either side, with the EU side actually tightening up their guidelines when it comes to money. With nerves starting to fray on the part of business there is a concern that politicians on both sides are playing with fire. A hard Brexit would not only be damaging for the UK but also for Europe, and Ireland in particular.”

Investors were also digesting steady economic data out of China. According to the National Bureau of Statistics, third-quarter GDP growth was 6.8% compared to the same period a year ago, in line with expectations.

Meanwhile, September industrial production and retail sales from the People's Republic came in at 6.6% and 10.3% respectively, both beating expectations, while investment growth grew at its slowest rate in 18 years.

On the UK data front, retail sales are due at 0930 BST.

In corporate news, Unilever retreated as its sales growth fell short of expectations for the third quarter, with turnover negative, though the consumer goods colossus returned to volume growth after five quarters of price-driven expansion.

Property investment and development company Segro slipped despite saying it saw solid rental growth in the third quarter, while Schroders also lost some ground despite posting a 9% jump in assets under management and administration in the first nine months of the year.

London Stock Exchange was in the red as it reported an 18% rise in third-quarter revenue and said chief executive officer Xavier Rolet will step down next year.

Rentokil fell even though the royal ratcatcher reported a 13.7% rise in third-quarter ongoing revenue as the company’s pest control division performed well.

NEX Group was hit by a downgrade to ‘underperform’ from ‘sector perform’ at at RBC Capital Markets, while BAE Systems and Intu were weaker as their shares were among those going ex-dividend.

IWG, the company formerly known as Regus, took a battering after it warned that 2017 profit is now expected to be materially below market expectations and in a range of £160m to £170m.

On the upside, equipment rental company Ashtead was boosted by some well-received third-quarter earnings from US peer United Rentals.

HomeServe edged higher after saying it plans to raise up to £125m to fund the acquisition of some of the trade and assets of the home assistance cover business of US-based Dominion, a wholly owned subsidiary of Dominion Energy.

Travis Perkins, the builders' merchant, rallied as it said it was on track to achieve full-year expectations despite a cautious outlook.

Domino’s Pizza gained as it snapped up Germany's largest pizza chain Hallo Pizza into its local franchise joint venture.

Market Movers

FTSE 100 (UKX) 7,521.04 -0.29%
FTSE 250 (MCX) 20,205.79 -0.27%
techMARK (TASX) 3,555.28 -0.06%

FTSE 100 - Risers

Ashtead Group (AHT) 1,907.00p 1.76%
Pearson (PSON) 692.00p 0.73%
BT Group (BT.A) 273.05p 0.63%
Antofagasta (ANTO) 997.50p 0.50%
BP (BP.) 490.10p 0.43%
Smith & Nephew (SN.) 1,427.00p 0.42%
Experian (EXPN) 1,561.00p 0.39%
Severn Trent (SVT) 2,138.00p 0.38%
CRH (CRH) 2,733.00p 0.37%
SSE (SSE) 1,392.00p 0.36%

FTSE 100 - Fallers

Unilever (ULVR) 4,396.00p -3.35%
BAE Systems (BA.) 604.50p -1.79%
Smiths Group (SMIN) 1,545.00p -1.78%
Kingfisher (KGF) 304.60p -1.36%
WPP (WPP) 1,389.00p -1.35%
Convatec Group (CTEC) 214.00p -1.15%
London Stock Exchange Group (LSE) 3,878.00p -1.07%
Rentokil Initial (RTO) 309.80p -0.86%
British American Tobacco (BATS) 4,834.50p -0.74%
Imperial Brands (IMB) 3,143.00p -0.73%

FTSE 250 - Risers

Travis Perkins (TPK) 1,527.00p 3.74%
Sirius Minerals (SXX) 26.50p 2.91%
Brown (N.) Group (BWNG) 317.40p 2.62%
Grafton Group Units (GFTU) 845.00p 2.30%
Hochschild Mining (HOC) 232.10p 2.16%
Riverstone Energy Limited (RSE) 1,275.00p 2.00%
Dignity (DTY) 2,339.00p 1.87%
Marshalls (MSLH) 449.90p 1.74%
Inmarsat (ISAT) 621.50p 1.30%
OneSavings Bank (OSB) 413.40p 1.20%

FTSE 250 - Fallers

IWG (IWG) 215.70p -32.40%
Nex Group (NXG) 637.00p -2.90%
Intu Properties (INTU) 228.20p -2.69%
Grainger (GRI) 269.40p -2.07%
Rank Group (RNK) 225.70p -1.70%
Pets at Home Group (PETS) 187.30p -1.63%
Tritax Big Box Reit (BBOX) 145.90p -1.55%
Capita (CPI) 536.50p -1.47%
Senior (SNR) 280.90p -1.44%
NewRiver REIT (NRR) 344.00p -1.38%