London open: Stocks rise on positive Asian cues but housebuilders buck trend

London stocks rose in early trade on Wednesday, taking their cue from a positive session in Asia, although trade war fears were expected to continue to weigh on investors’ minds.

At 0835 BST, the FTSE 100 was up 0.9% to 7,672.26, while the pound was flat against the euro at 1.1368 and 0.2% lower versus the dollar at 1.3154, as the EU withdrawal bill returns to the House of Commons.

The government is seeking to defeat a challenge from Conservative party rebels who want to give MPs a “meaningful vote” in the event that Britain could leave the EU without a deal.

This comes as a leaked draft of conclusions for next week’s European Council called for “member states and all stakeholders to step up their work on preparedness at all levels for all outcomes” – with other leaks from officials reported in the media that the talks are expected to fail.

Spreadex analyst Connor Campbell said: "A combination of the ham-fisted way the government is going about Brexit, alongside June’s impending Bank of England meeting, is preventing the pound from ending its ugly losing streak. Really, the currency is in desperate need of a hint of hawkishness from Mark Carney and co. on Thursday - even just the tiniest morsel - if it is going to bounce back any time soon."

As far as the trade spat between the US and China is concerned, London Capital Group analyst Jasper Lawler said "markets have been trading on the same piece of general trade war news for a while, as a result selling exhaustion has started to set in".

He added: "Any fresh news of retaliation could see traders snatch risk back off the table quickly."

On the data front, the CBI industrial trends survey for June is at 1100 BST.

In corporate news, British Land rose after saying that 63% of the estimated rental value of properties were let or under offer across its total development pipeline, with 45% of ERV of committed developments across Broadgate in the City of London.

Legal & General ticked higher as it said it expects its asset management division to increase profit by up to 10% a year in normal markets.

LondonMetric Property advanced after announcing the acquisition of ten single-let properties for £55m from the ACT Foundation.

Sports Direct edged up after saying it had disposed of its stake in US sportswear retailer Finish Line and taken a further 8.6% interest in US brand management company Iconix Brand Group.

Sirius Minerals rallied after announcing a seven-year year supply deal which will see it sell POLY4, the fertilizer product from its Yorkshire mine, to Intercontinental Trade DMCC Dubai.

On the downside, housebuilder Berkeley Group was in the red despite upping its profit guidance after reporting a 15% increase in annual profit, as its outlook was cautious. Other housebuilders also retreated, with Barratt, Taylor Wimpey, Bovis, Redrow and Bellway all weaker.

In broker note action, British American Tobacco and Imperial Brands were started at ‘buy’ by Liberum, while Peel Hunt hiked its price target on Ocado to 1,700p from 610p.

BT was upgraded to ‘buy’ at Jefferies, while Mediclinic was lifted to ‘hold’ at HSBC. Wizz Air was boosted to ‘outperform’ by Davy, but it cut EasyJet to ‘neutral’.

McCarthy & Stone was downgraded to ‘hold’ at Jefferies after the housebuilder’s profit warning on Tuesday, while SSE was cut to ‘sector perform’ by RBC Capital Markets and Auto Trader was pushed down to ‘hold’ at Canaccord.

Market Movers

FTSE 100 (UKX) 7,672.26 0.90%
FTSE 250 (MCX) 20,988.55 0.73%
techMARK (TASX) 3,565.99 0.84%

FTSE 100 - Risers

Ocado Group (OCDO) 1,005.00p 5.92%
Micro Focus International (MCRO) 1,391.00p 2.66%
Evraz (EVR) 528.20p 2.44%
BT Group (BT.A) 213.50p 2.32%
Imperial Brands (IMB) 2,678.00p 2.17%
Glencore (GLEN) 379.66p 2.14%
Severn Trent (SVT) 1,908.00p 2.03%
British American Tobacco (BATS) 3,763.50p 1.96%
United Utilities Group (UU.) 789.60p 1.91%
ITV (ITV) 173.00p 1.82%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 4,020.00p -2.83%
Hargreaves Lansdown (HL.) 1,969.00p -2.19%
Barratt Developments (BDEV) 539.60p -1.24%
Next (NXT) 5,954.00p -0.63%
Informa (INF) 813.80p -0.51%
Persimmon (PSN) 2,614.00p -0.46%
Taylor Wimpey (TW.) 182.95p -0.44%
SSE (SSE) 1,346.00p -0.26%
Sky (SKY) 1,337.00p -0.07%
Smith (DS) (SMDS) 526.00p 0.19%

FTSE 250 - Risers

Sirius Minerals (SXX) 32.84p 4.52%
Energean Oil & Gas (ENOG) 524.39p 3.23%
Cineworld Group (CINE) 257.82p 3.13%
Wizz Air Holdings (WIZZ) 3,745.00p 2.41%
Tullow Oil (TLW) 234.20p 2.40%
Convatec Group (CTEC) 222.20p 2.16%
Renewi (RWI) 82.50p 2.10%
Greencore Group (GNC) 188.00p 2.09%
TBC Bank Group (TBCG) 1,724.00p 2.01%
Virgin Money Holdings (UK) (VM.) 358.00p 1.99%

FTSE 250 - Fallers

Redrow (RDW) 564.00p -1.66%
Marshalls (MSLH) 401.34p -1.15%
McCarthy & Stone (MCS) 107.00p -1.11%
Bellway (BWY) 3,193.00p -1.02%
Crest Nicholson Holdings (CRST) 397.40p -1.00%
Bovis Homes Group (BVS) 1,199.00p -0.95%
Dairy Crest Group (DCG) 491.40p -0.93%
Ted Baker (TED) 2,228.00p -0.54%
Bank of Georgia Group (BGEO) 1,910.00p -0.52%
RHI Magnesita N.V. (DI) (RHIM) 4,748.00p -0.46%