London open: Stocks edge up as investors mull stress tests but miners cap upside

London stocks edged higher in early trade on Tuesday as investors breathed a sigh of relief that all major UK banks have passed the Bank of England's stress tests, but upside was capped by weakness in the mining sector.

At 0830 GMT, the FTSE 100 was up 0.2% to 7,400.03, while the pound was flat against the euro at 1.1188 and 0.1% against the dollar at 1.3332.

The Bank of England said none of the seven high street banks needs to strengthen its capital position as a result of its stress tests, the first time this has happened since tests were launched in 2014.

In the test, banks incurred hypothetical losses of around £50bn in the first two years of the stress, which, the Bank said, would have wiped out the common equity capital base of the UK banking system ten years ago.

Although none of the banks failed the stress tests, Barclays and Royal Bank of Scotland fell below their systemic reference points, which are the capital ratios required to withstand any shocks to the financial system without needing a bailout. Last year, both banks were told to build up their finances.

Spreadex analyst Connor Campbell said: "While all seven lenders passed for the first time since 2014, Barclays and RBS only did so by the skin of their teeth, with both banks reliant on capital raised throughout 2017 rather than their 2016 end-point like their peers."

He pointed out that "neither were too fussed," however, with RBS shares nudging a touch higher and Barclays just a little weaker.

Elsewhere, Royal Dutch Shell gushed higher after saying it will begin paying a cash dividend again in the fourth quarter of this year as a strategy update from the oil giant saw cash flow targets and pledge to continue cutting debt.

Budget airline EasyJet flew higher after upgrades from Kepler Cheuvreux and Societe Generale, while SIG was boosted by upgrade to 'buy' at Jefferies and Cineworld rose after Numis lifted it to 'buy'.

AstraZeneca ticked up after saying that the European Medicines Agency has accepted a variation to the Marketing Authorisation Application for Tagrisso.

Shares in Ocado surged as much as 27% after the online grocery retailer said has signed an agreement with Groupe Casino to develop its Smart Platform in France.

Real estate investment trust Shaftesbury was in the black as it posted a jump in full-year profit, while food producer and supplier Cranswick rallied as it reported a rise in profit and revenue for the first half and hiked its dividend by 15%.

On the downside, heavily-weighted miners declined as copper prices fell, with Glencore, BHP Billiton and Antofagasta all on the back foot.

Irish food company Greencore was in the red as it posted a 74% drop in pre-tax profit for the year to the end of September,

Pets at Home slipped after its interim results and as it announced CEO Ian Kellett will step down from the role, to be replaced by Peter Pritchard, who is currently CEO of the retail division.

Provident Financial nudged down as the doorstep lender announced boardroom changes, while UDG Healthcare was weaker despite reporting a 17% increase in full-year profit.

Associated British Foods was hit by a Morgan Stanley downgrade and Dixons Carphone by a downgrade from Stifel.

Market Movers

FTSE 100 (UKX) 7,400.03 0.22%
FTSE 250 (MCX) 19,933.17 0.26%
techMARK (TASX) 3,475.07 0.27%

FTSE 100 - Risers

Royal Dutch Shell 'A' (RDSA) 2,356.00p 1.75%
Royal Dutch Shell 'B' (RDSB) 2,400.00p 1.65%
easyJet (EZJ) 1,405.00p 1.44%
Ashtead Group (AHT) 1,930.00p 1.37%
Worldpay Group (WPG) 421.50p 1.27%
Morrison (Wm) Supermarkets (MRW) 213.90p 0.80%
International Consolidated Airlines Group SA (CDI) (IAG) 608.00p 0.75%
Unilever (ULVR) 4,267.50p 0.73%
AstraZeneca (AZN) 5,001.00p 0.65%
Kingfisher (KGF) 318.90p 0.63%

FTSE 100 - Fallers

Glencore (GLEN) 351.25p -1.89%
Rolls-Royce Holdings (RR.) 869.50p -1.47%
BHP Billiton (BLT) 1,374.00p -1.33%
Antofagasta (ANTO) 933.50p -1.22%
Associated British Foods (ABF) 2,999.00p -0.96%
SSE (SSE) 1,344.00p -0.74%
British Land Company (BLND) 615.50p -0.73%
Rio Tinto (RIO) 3,585.00p -0.72%
Anglo American (AAL) 1,420.50p -0.66%
Land Securities Group (LAND) 915.92p -0.66%

FTSE 250 - Risers

Ocado Group (OCDO) 327.60p 27.87%
SIG (SHI) 173.80p 5.65%
Ascential (ASCL) 371.60p 4.41%
Cineworld Group (CINE) 676.10p 3.30%
Euromoney Institutional Investor (ERM) 1,178.00p 3.15%
Grafton Group Units (GFTU) 762.50p 2.42%
Genus (GNS) 2,258.00p 2.13%
Bovis Homes Group (BVS) 1,110.97p 1.92%
Cranswick (CWK) 3,075.00p 1.92%
Fisher (James) & Sons (FSJ) 1,596.00p 1.92%

FTSE 250 - Fallers

Sophos Group (SOPH) 595.50p -7.82%
Dixons Carphone (DC.) 152.60p -2.99%
Greencore Group (GNC) 186.90p -2.61%
UDG Healthcare Public Limited Company (UDG) 839.00p -2.56%
Inmarsat (ISAT) 467.90p -2.36%
Kaz Minerals (KAZ) 788.00p -1.68%
Renewi (RWI) 102.00p -1.16%
Dignity (DTY) 1,835.00p -1.13%
Vedanta Resources (VED) 748.30p -1.08%
Derwent London (DLN) 2,689.00p -0.96%