London open: Stocks rise on Sino-US trade agreement; Sports Direct rallies

London stocks rose in early trade on Monday as investors cheered news of a ‘phase one’ trade agreement between the US and China.

At 0830 GMT, the FTSE 100 was 1% higher at 7,422.95, while sterling remained underpinned by post-election Brexit hopes, trading up 0.3% against the dollar at 1.3369 and 0.1% firmer versus the euro at 1.2002,

Speaking to CBS’s Face the Nation, US Trade Representative Robert Lighthizer said on Sunday that a deal between the two nations was "totally done" and will nearly double US exports to China over the next two years.

CMC Markets analyst David Madden said: "Beijing agreed to purchase roughly $40-$50bn worth of agricultural goods as a gesture of goodwill. The US said it won’t be imposing tariffs on roughly $150bn worth of imports from China as both sides have come to an agreement. The deal that was brokered should be signed in January, and 30 days after the agreement is signed off, the US will reduce tariffs on $120bn worth of imports to 7.5%.

"The US-China trade spat has been going on for approximately for 18 months, so it has been a major story for some time now. After much toing and froing, progress has been finally made."

Encouraging Chinese data also helped to boost the mood, with industrial production and retail sales up more than expected in November. Retail sales rose 8% year-on-year versus a 7.2% increase the month before and expectations of 7.6% growth. Industrial output increased 6.2% on the year compared to 5% growth in October and expectations of a 4.7% jump.

On home shores, property website Rightmove said UK house prices will rise 2% over the next year as it revealed the smallest decline in December asking prices since 2006.

It said: "Home-mover confidence and activity have been dogged by political uncertainty since the 2016 referendum. With a clear majority in the election, there is now an opportunity to release some of the pent-up demand in the spring, and for some modest upwards price movement.

"Sellers’ pricing power will be enhanced by a lack of choice for potential buyers, with the proportion of estate agent stock that is available for purchase at its lowest for over two years."

Rightmove said asking prices fell 0.9% in December to £300,025, marking the smallest drop at this time of year since December 2006. Prices had fallen 1.3% in November.

In equity markets, RBS was the standout gainer after an upgrade to ‘overweight’ at Morgan Stanley, while Glencore was boosted by an upgrade to ‘buy’ at Societe Generale.

Other miners also gained, with Antofagasta and BHP both higher following the release of encouraging Chinese data.

Sports Direct rallied as it posted a rise in half-year profit and revenue and warned of more House of Fraser store closures.

FirstGroup ticked higher after the bus and train operator said it had appointed advisors to look at the future of its US business, including a sale.

Education publisher Pearson was on the back foot as Berenberg slashed its price target on the stock and said 2020 could be another testing year for the company.

Advertising giant WPP was under the cosh after Japanese peer Dentsu Inc downgraded its full-year net profit forecast.

Cineworld was weaker after saying it had agreed to buy Canadian cinema chain Cineplex for $2.1bn, while Virgin Money was hit by a downgrade to ‘hold’ at HSBC.

Market Movers

FTSE 100 (UKX) 7,422.95 0.95%
FTSE 250 (MCX) 21,603.16 0.44%
techMARK (TASX) 4,119.98 0.66%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 260.80p 3.57%
NMC Health (NMC) 2,527.00p 2.56%
British American Tobacco (BATS) 3,114.50p 2.48%
Melrose Industries (MRO) 239.90p 2.39%
Barclays (BARC) 186.62p 2.27%
Glencore (GLEN) 230.50p 2.08%
Evraz (EVR) 383.60p 1.94%
BHP Group (BHP) 1,771.60p 1.92%
London Stock Exchange Group (LSE) 7,298.00p 1.76%
Hargreaves Lansdown (HL.) 1,985.50p 1.66%

FTSE 100 - Fallers

Pearson (PSON) 648.60p -1.73%
WPP (WPP) 1,014.00p -0.88%
Taylor Wimpey (TW.) 198.07p -0.79%
Severn Trent (SVT) 2,412.00p -0.33%
Barratt Developments (BDEV) 763.20p -0.24%
United Utilities Group (UU.) 905.00p -0.09%
SSE (SSE) 1,416.00p 0.04%
CRH (CRH) 2,990.00p 0.17%
Smith & Nephew (SN.) 1,737.50p 0.17%
Smith (DS) (SMDS) 387.30p 0.21%

FTSE 250 - Risers

Sports Direct International (SPD) 396.60p 10.17%
Aston Martin Lagonda Global Holdings (AML) 577.80p 3.77%
Redrow (RDW) 737.00p 2.93%
PayPoint (PAY) 1,014.00p 2.84%
Computacenter (CCC) 1,640.00p 2.69%
Moneysupermarket.com Group (MONY) 317.80p 2.62%
St. Modwen Properties (SMP) 492.00p 2.50%
Marks & Spencer Group (MKS) 228.70p 2.28%
Hochschild Mining (HOC) 159.70p 2.18%
Bakkavor Group (BAKK) 151.20p 2.16%

FTSE 250 - Fallers

Cineworld Group (CINE) 192.50p -6.60%
Tullow Oil (TLW) 64.24p -5.25%
Airtel Africa (AAF) 78.30p -3.63%
Virgin Money UK (VMUK) 209.60p -3.23%
RHI Magnesita N.V. (DI) (RHIM) 3,714.00p -3.23%
Inchcape (INCH) 669.50p -2.76%
Watches of Switzerland Group (WOSG) 312.20p -2.44%
Morgan Advanced Materials (MGAM) 309.20p -2.03%
Sirius Minerals (SXX) 3.50p -1.41%
4Imprint Group (FOUR) 3,020.00p -1.31%