London open: Stocks rise as Trump's Brexit comments weigh on sterling

London stocks rose in early trade on Friday as the pound took a hit after US President Trump said the Prime Minister's soft Brexit plan would "probably kill" any trade deal with the US.

At 0830 BST, the FTSE 100 was up 0.5% at 7,692.43, while the pound fell 0.5% against the dollar to 1.3136 and 0.2% versus the euro to 1.1296.

A weaker pound tends to benefit the top-flight index as around 70% of its constituents derive their earnings from overseas.

Sterling slumped after Trump said in an interview with The Sun that if the UK goes ahead with the soft Brexit strategy revealed on Thursday - which would stick to a common rulebook with Brussels on goods and agricultural produce - any future trade deal with the US would likely be off the cards.

"If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal," he said. "We have enough difficulty with the European Union. We are cracking down right now on the European Union because they have not treated the United States fairly on trading. No, if they do that I would say that that would probably end a major trade relationship with the United States."

London Capital Group analyst Jasper Lawler said: "Let’s not forget that the hope of a quick trade deal with the US was a significant factor in Theresa May’s decision to invite Trump in the first place. Another embarrassment that May could have done without.

"Trump’s words of no deal have confirmed the fears of Brexiteers and will have stoked the fire in the hard Brexit camp, making Theresa May’s future in charge look doubtful once more. This fear was reflected in the pound as it dropped sharply in late night trading. With no high impact UK economic data due for release today, pound traders will continue to watch political developments. Trump and May are expected to hold a joint press conference after lunch where they will both be pressed for trade comments. In the absence of any encouraging trade comments, gains in the pound going forward could be limited, and a meaningful move over $1.32 could be doubtful."

In corporate news, DCC was the standout gainer after saying that first-quarter group operating profit was "well ahead" year-on-year, driven by completed acquisitions. It also announced the acquisition of a US distributor of professional audio-visual products and a UK distributor of mobile and accessory products for an undisclosed sum.

Flexible office space provider Workspace was on the rise after it said it saw good customer demand in the first quarter, with enquiries up but lettings a touch lower, and that it is actively exploring acquisition opportunities.

Antofagasta edged higher as it confirmed that its subsidiary Mineral Centinela was selling Centinela Transmisión, the company that holds its electricity transmission lines, for $117m.

Recruiter Hays rallied as it said it expects full-year operating profit to be "marginally" ahead of current consensus market expectations following a record final quarter, while Ashmore rose even as it posted a drop in assets under management in the fourth quarter.

Halfords gained after announcing the appointment of Waitrose finance director Loraine Woodhouse as its new finance chief.

Diageo was boosted by an upgrade to 'buy' at Goldman Sachs while Evraz and IMI were up after upgrades by Renaissance Capital and HSBC, respectively.

On the downside, credit checker Experian ticked a touch lower after reporting an acceleration in sales growth in the first quarter of its new trading year but saying currency swings looked likely to have a bigger impact on full year profits than first expected.

Market Movers

FTSE 100 (UKX) 7,692.43 0.54%
FTSE 250 (MCX) 20,852.60 0.35%
techMARK (TASX) 3,584.29 0.65%

FTSE 100 - Risers

DCC (DCC) 7,045.00p 2.10%
Ashtead Group (AHT) 2,376.00p 1.41%
Diageo (DGE) 2,823.50p 1.40%
Smith (DS) (SMDS) 490.40p 1.26%
Barratt Developments (BDEV) 516.40p 1.25%
Scottish Mortgage Inv Trust (SMT) 550.57p 1.21%
WPP (WPP) 1,240.00p 1.14%
Croda International (CRDA) 4,972.00p 1.12%
easyJet (EZJ) 1,637.50p 1.11%
GVC Holdings (GVC) 1,117.61p 1.05%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 5,558.00p -0.25%
Sky (SKY) 1,541.80p -0.21%
National Grid (NG.) 859.90p -0.17%
Experian (EXPN) 1,919.50p -0.05%
Reckitt Benckiser Group (RB.) 6,497.00p -0.00%
Micro Focus International (MCRO) 1,221.50p 0.00%
Smurfit Kappa Group (SKG) 3,130.00p 0.00%
Bunzl (BNZL) 2,301.00p 0.04%
Sainsbury (J) (SBRY) 329.80p 0.12%
Fresnillo (FRES) 1,110.27p 0.25%

FTSE 250 - Risers

IMI (IMI) 1,118.00p 2.19%
Inmarsat (ISAT) 571.20p 1.64%
Hays (HAS) 194.30p 1.62%
AA (AA.) 126.20p 1.61%
Serco Group (SRP) 96.85p 1.47%
Renewi (RWI) 74.18p 1.34%
Cobham (COB) 129.74p 1.24%
Convatec Group (CTEC) 209.20p 1.21%
FirstGroup (FGP) 86.85p 1.16%
Superdry (SDRY) 1,339.00p 1.13%

FTSE 250 - Fallers

Rank Group (RNK) 174.28p -2.09%
Tate & Lyle (TATE) 658.60p -1.53%
Premier Oil (PMO) 128.20p -1.08%
Grainger (GRI) 301.80p -0.85%
IP Group (IPO) 135.20p -0.73%
Mercantile Investment Trust (The) (MRC) 217.09p -0.65%
Petrofac Ltd. (PFC) 559.20p -0.50%
CYBG (CYBG) 332.60p -0.48%
GCP Infrastructure Investments Ltd (GCP) 119.04p -0.47%
JPMorgan Indian Investment Trust (JII) 697.40p -0.37%