London open: Stocks fall as Brexit, trade concerns weigh on sentiment

London stocks fell in early trade on Monday as investors reassessed the Sino-US trade agreement reached last week, while worries about Brexit and uninspiring Chinese data weighed on sentiment.

At 0840 BST, the FTSE 100 was down 0.4% at 7,215.67. The pound was 0.7% weaker against the dollar at 1.2582 and 0.4% lower versus the euro at 1.1418, having surged on Friday, after European negotiators said over the weekend that Prime Minister Boris Johnson's Brexit plan was not good enough.

The EU's chief Brexit negotiator, Michel Barnier, said technical-level talks had been "constructive" but "a lot of work remains to be done".

Neil Wilson, chief market analyst at Markets.com, said: "Sterling has softened as complicated Brexit negotiations have yet to produce a result. The lack of progress has just taken the shine off things a touch but the market remains ever hopeful and there’s support as long as talks are still going.

"The more Boris gives ground to the EU, the harder the sell to the European Research Group and Democratic Unionist Party. Labour seems all but certain to block whatever the government agrees with EU."

Away from Brexit, relations between the US and China remained in focus after the two nations agreed a limited trade deal on Friday.

CMC Markets analyst Michael Hewson said: "While this week’s tariff increases have been postponed, this was always going to be the low hanging fruit when it came to a potential de-escalation, while President Trump announced that any further trade progress was likely to come in phases, with the December tariff increases remaining very much on the table. So while things aren’t likely to get any worse in terms of an escalation in the short term, they also haven’t got any better, as all the existing tariffs remain in place."

Market participants were also digesting weak data out of China, which showed that imports and exports fell more than expected in September.

In equity markets, Ocado was the worst performer on the FTSE 100 after a downgrade to 'underweight' at JPMorgan.

Ferrexpo was in the red after saying it would "take any actions that are needed" in the interests of shareholders and the company over allegations surrounding chief executive and majority shareholder Kostyantin Zhevago. Ukrainian investigators last week started a process to add Zhevago to an international wanted list after he did not appear for questioning about his former banking business last month.

Banks and housebuilders - which rallied on Friday amid hopes of a Brexit deal - were weaker. Lloyds, RBS, Barclays, Barratt Developments, Taylor Wimpey and Persimmon were all trading lower.

On the upside, cybersecurity company Sophos surged as it agreed to be bought by US private equity firm Thoma Bravo for $4bn (£3.2bn).

Dollar earners were on the rise as sterling slid, with Diageo, GlaxoSmithKline, British American Tobacco and Reckitt Benckiser all up.

Market Movers

FTSE 100 (UKX) 7,215.67 -0.43%
FTSE 250 (MCX) 19,804.85 -1.18%
techMARK (TASX) 3,844.37 -0.10%

FTSE 100 - Risers

WPP (WPP) 949.60p 2.00%
Diageo (DGE) 3,238.50p 0.89%
Sage Group (SGE) 698.40p 0.78%
GlaxoSmithKline (GSK) 1,687.60p 0.75%
British American Tobacco (BATS) 2,728.50p 0.68%
Relx plc (REL) 1,848.50p 0.65%
Rentokil Initial (RTO) 457.40p 0.59%
Reckitt Benckiser Group (RB.) 6,130.00p 0.57%
Fresnillo (FRES) 634.20p 0.54%
Unilever (ULVR) 4,671.50p 0.53%

FTSE 100 - Fallers

Ocado Group (OCDO) 1,266.50p -4.20%
Lloyds Banking Group (LLOY) 56.95p -3.69%
Auto Trader Group (AUTO) 520.60p -3.52%
International Consolidated Airlines Group SA (CDI) (IAG) 482.00p -3.39%
Royal Bank of Scotland Group (RBS) 211.60p -3.07%
NMC Health (NMC) 2,635.00p -2.70%
Taylor Wimpey (TW.) 159.35p -2.69%
Persimmon (PSN) 2,227.00p -2.62%
St James's Place (STJ) 978.40p -2.60%
Barratt Developments (BDEV) 637.40p -2.60%

FTSE 250 - Risers

Sophos Group (SOPH) 583.19p 37.06%
Sirius Minerals (SXX) 3.80p 4.57%
Avast (AVST) 386.40p 4.26%
PayPoint (PAY) 880.00p 1.62%
FDM Group (Holdings) (FDM) 677.00p 1.04%
Senior (SNR) 177.70p 0.97%
Hochschild Mining (HOC) 180.50p 0.78%
Fidelity China Special Situations (FCSS) 213.11p 0.76%
Ultra Electronics Holdings (ULE) 1,976.00p 0.61%
Templeton Emerging Markets Inv Trust (TEM) 784.85p 0.49%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 424.30p -6.75%
Rank Group (RNK) 193.80p -6.15%
Watches of Switzerland Group (WOSG) 277.50p -5.61%
Airtel Africa (AAF) 50.70p -5.23%
Grafton Group Units (GFTU) 777.50p -5.18%
Countryside Properties (CSP) 335.00p -5.10%
CYBG (CYBG) 121.30p -4.49%
Hammerson (HMSO) 290.10p -4.45%
Travis Perkins (TPK) 1,337.50p -4.09%
Ibstock (IBST) 243.20p -3.95%