London open: Stocks nudge down but IWG rallies on takeover approaches
London stocks nudged a touch lower in early trade on Monday, although serviced office provider IWG stormed ahead on the prospect of a bidding war.
At 0840 BST, the FTSE 100 was down 0.1% to 7,717.06, while the pound was flat against the euro at 1.1340 and 0.2% firmer against the dollar at 1.3575.
Mike Van Dulken at Accendo Markets said the muted open came despite a broadly positive start to the week in Asia, helped by US President Trump signalling compromise in Sino-American trade disputes, pushing for a rescue of telecom giant ZTE on President Xi’s request.
"This has boosted prospects of a trade deal (despite last week’s setbacks in Beijing) which could support global FTSE equities," van Dulken said, highlighting miners and energy companies.
Investors were digesting events in Italy, where the anti-establishment 5 Star Movement and hard-right League party reached an agreement on a government programme, likely clearing the path for the formation of a governing coalition.
UK economic data was weighing on sentiment, with Visa's UK consumer spending index showed a fall of 2.0% year-on-year for April, the same as seen in Marc.
High street visits declined 3.3% in April, according to the BRC-Springboard survey, following the terrible performance in March where shopper numbers declined 6%. The BRC also highlighted that nearly one in 10 town centre shops are lying empty.
In corporate news, Entertainment One was in the red as it emerged that major TV series Designated Survivor has been dropped by US network ABC, which could affect revenue next year depending on the speed and size of a replacement deal.
Victrex fell despite posting a 26% jump in first-half pre-tax profit, as it said FX would be less of a tailwind for the rest of the year.
Centrica ticked up despite announcing it lost 110,000 customers in the UK in the first four months of the year, as it said the 'Beast from the East' snowstorm in February helped increase customer demand in a tough competitive environment.
On the upside, IWG surged 20% after announcing late on Friday that it had received an approach from private equity group Lone Star and two separate indicative proposals from Starwood and TDR regarding a possible cash offer for the business.
Technical products and services supplier Diploma edged higher as it said half-year revenue and adjusted operating profit rose 8% and 9%, to £234.9m and £40.6m respectively.
Funeral services provider Dignity advanced as it reported a better first quarter than expected, while Indivior nudged up as it reached a settlement over its Suboxone treatment for opioid addiction with Par Pharmaceutical, allowing it to begin selling a generic version from 1 January 2023 in exchange for undeclared conditions.
In broker note action, Compass was upgraded to ‘outperform’ at Bernstein, while Zoopla and Uswitch owner ZPG was cut to ‘equal-weight’ at Barclays. Cairn Homes was lifted to ‘buy’ at Investec.
Market Movers
FTSE 100 (UKX) 7,717.06 -0.10%
FTSE 250 (MCX) 20,812.10 0.13%
techMARK (TASX) 3,496.50 0.14%
FTSE 100 - Risers
Mediclinic International (MDC) 700.40p 1.33%
Compass Group (CPG) 1,525.50p 1.16%
NMC Health (NMC) 3,604.33p 0.79%
GlaxoSmithKline (GSK) 1,478.00p 0.79%
DCC (DCC) 7,345.00p 0.75%
Melrose Industries (MRO) 234.60p 0.60%
Sainsbury (J) (SBRY) 308.30p 0.59%
Barclays (BARC) 215.55p 0.51%
Severn Trent (SVT) 1,986.00p 0.51%
AstraZeneca (AZN) 5,305.00p 0.49%
FTSE 100 - Fallers
ITV (ITV) 168.90p -1.80%
Direct Line Insurance Group (DLG) 364.10p -1.75%
Marks & Spencer Group (MKS) 288.70p -1.57%
British American Tobacco (BATS) 3,809.50p -1.31%
Randgold Resources Ltd. (RRS) 5,824.00p -1.12%
Evraz (EVR) 507.00p -1.05%
Pearson (PSON) 913.00p -0.91%
Imperial Brands (IMB) 2,745.50p -0.72%
Admiral Group (ADM) 1,927.00p -0.70%
BT Group (BT.A) 215.50p -0.69%
FTSE 250 - Risers
IWG (IWG) 310.20p 23.10%
Wetherspoon (J.D.) (JDW) 1,201.00p 3.98%
Renewi (RWI) 71.30p 3.33%
TalkTalk Telecom Group (TALK) 136.40p 2.17%
Hikma Pharmaceuticals (HIK) 1,343.50p 1.97%
IMI (IMI) 1,099.00p 1.85%
Thomas Cook Group (TCG) 138.60p 1.84%
Inmarsat (ISAT) 395.60p 1.80%
Sirius Minerals (SXX) 33.54p 1.76%
Herald Investment Trust (HRI) 1,325.00p 1.53%
FTSE 250 - Fallers
Victrex plc (VCT) 2,581.88p -5.36%
Entertainment One Limited (ETO) 287.20p -2.31%
Hunting (HTG) 853.50p -2.07%
Hill & Smith Holdings (HILS) 1,448.00p -1.70%
Tullow Oil (TLW) 236.90p -1.54%
FDM Group (Holdings) (FDM) 1,000.75p -1.31%
Kaz Minerals (KAZ) 1,030.00p -1.25%
Just Group (JUST) 140.30p -1.20%
RHI Magnesita N.V. (DI) (RHIM) 5,240.00p -1.04%
Beazley (BEZ) 614.00p -0.89%