London open: Stocks little changed, sterling slumps after Boris scrapes through

London stocks were little changed in early trade on Tuesday amid ongoing concerns about inflation and economic growth, with sterling weaker against the dollar after Prime Minister Boris Johnson scraped through a confidence vote.

At 0915 BST, the FTSE 100 was down just 0.1% at 7,601.23 and faring better than its European counterparts - the benchmark Stoxx Europe 600 was down 0.4% - thanks to a solid performance from heavily-weighted mining stocks.

Meanwhile, the pound was 0.5% lower against the greenback at 1.2474 after Johnson survived a confidence vote on Monday evening, with a margin of 211 to 148.

Victoria Scholar, head of investment at Interactive Investor, said: "The pound is under pressure as traders digest Boris Johnson’s unconvincing confidence vote victory and as the US dollar marches higher.

"The currency is suffering amid a lack of international investor confidence in the UK both economically and politically with criticism of Johnson’s leadership expected to continue and the potential for government legislation to be blocked by members of his own party.

"Given that markets hate uncertainty more than anything, the fact that sterling rallied on Monday morning after the no confidence vote was triggered speaks to Johnson’s lack of popularity among investors. However it is worth noting that some of the gains for GBPUSD were driven by a softer US dollar and although there was an initial spike, cable pared gains during the session as markets began to realise that firstly Johnson may win the vote and secondly the alternative may not be much better."

Investors were also mulling the latest data from the British Retail Consortium, which showed that retail sales fell in May as the cost-of-living crisis and soaring inflation squeezed consumers further.

In equity markets, retailers were under pressure, with B&Q owner Kingfisher, online supermarket Ocado and discount retailer B&M European Value Retail all trading lower, most likely on the back of the BRC data.

JD Sports was also under the cosh after the Competition and Markets Authority said it had provisionally concluded that JD and rival retailer Elite Sports fixed the retail prices of a number of Rangers-branded replica kits and other clothing products from September 2018 until at least July 2019.

National Express lost ground as the transport operator said revenue continues to track close to pre-pandemic levels but reiterated that in the short-term, the recovery in profitability will lag the revenue recovery.

In deal news, waste management specialist Biffa surged to the top of the FTSE 250 after saying it had given the green light to a proposed takeover approach worth £1.36bn. The company said it had received a series of unsolicited, indicative proposals from affiliates of Energy Capital Partners, the private equity firm, and following talks, a possible cash offer of 445p per share has been proposed.

Outside the FTSE 350, Ted Baker shares tumbled after the fashion retailer said its preferred bidder had pulled out of takeover talks. Ted Baker had not named the preferred bidder, but it was widely reported to be Authentic Brands, the owner of Juicy Couture and Reebok.

Market Movers

FTSE 100 (UKX) 7,601.23 -0.09%
FTSE 250 (MCX) 20,449.13 -0.28%
techMARK (TASX) 4,388.34 -0.24%

FTSE 100 - Risers

Airtel Africa (AAF) 159.20p 1.66%
British American Tobacco (BATS) 3,573.50p 1.16%
Rio Tinto (RIO) 6,023.00p 1.12%
Ashtead Group (AHT) 4,214.00p 1.10%
International Consolidated Airlines Group SA (CDI) (IAG) 126.44p 0.91%
Anglo American (AAL) 4,001.00p 0.87%
Glencore (GLEN) 545.70p 0.78%
AstraZeneca (AZN) 10,150.00p 0.77%
Severn Trent (SVT) 2,893.00p 0.73%
British Land Company (BLND) 533.80p 0.72%

FTSE 100 - Fallers

London Stock Exchange Group (LSEG) 7,172.00p -2.13%
Kingfisher (KGF) 261.40p -2.02%
Ocado Group (OCDO) 932.80p -1.96%
Scottish Mortgage Inv Trust (SMT) 783.00p -1.90%
Harbour Energy (HBR) 377.00p -1.90%
JD Sports Fashion (JD.) 121.10p -1.74%
Intermediate Capital Group (ICP) 1,571.50p -1.72%
Abrdn (ABDN) 193.50p -1.58%
3i Group (III) 1,232.00p -1.44%
B&M European Value Retail S.A. (DI) (BME) 377.40p -1.44%

FTSE 250 - Risers

Biffa (BIFF) 417.20p 28.37%
NB Private Equity Partners Ltd. (NBPE) 1,470.00p 2.08%
Apax Global Alpha Limited (APAX) 186.00p 1.86%
Henderson Smaller Companies Inv Trust (HSL) 937.00p 1.85%
Ultra Electronics Holdings (ULE) 3,266.00p 1.68%
Pennon Group (PNN) 1,042.00p 1.46%
ICG Enterprise Trust (ICGT) 1,090.00p 1.30%
Telecom Plus (TEP) 1,742.00p 1.28%
Hochschild Mining (HOC) 112.40p 1.26%
Murray International Trust (MYI) 1,300.00p 1.25%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 141.20p -4.21%
National Express Group (NEX) 259.40p -4.14%
Greencore Group (CDI) (GNC) 111.50p -2.71%
Bridgepoint Group (Reg S) (BPT) 328.00p -2.67%
Clarkson (CKN) 3,120.00p -2.65%
Auction Technology Group (ATG) 960.00p -2.54%
Trustpilot Group (TRST) 93.80p -2.49%
Wizz Air Holdings (WIZZ) 2,715.00p -2.27%
Marks & Spencer Group (MKS) 147.50p -2.19%
Genus (GNS) 2,666.00p -2.06%