London open: Stocks slip as investors sift through earnings

London stocks were a little weaker in early trade on Wednesday as investors sifted through earnings, with Sino-US trade relations still very much in focus after China moved to stabilise its currency.

At 0840 BST, the FTSE 100 was down 0.2% at 7,158.85, while the pound was up 0.1% against the dollar and the euro at 1.2178 and 1.0875, respectively.

Spreadex analyst Connor Campbell said a continued, if mild, rebound from the pound and trouble in the commodity sector ensured the top-flight index "wasn’t able to lift itself back above 7,200".

Meanwhile, CMC Markets analyst David Madden said China's move to stabilise its currency "was the catalyst for the lightened mood throughout yesterday’s session".

"The move by the Chinese central bank was a response to the US accusing the organisation of manipulating the currency markets, which the PBoC has denied.

"That fact the Chinese central bank on Monday allowed the yuan to slide, and then slightly strengthened it suggests that Beijing is letting the US know they can use its currency as a tool to get back at them for the tariffs on Chinese imports.

"The Chinese authorities need to strike a balance of making their currency soft enough to assist exporters, but not so soft it prompts international investors to withdraw funds from the country.

"Overnight, the PBoC set the reference point of the yuan at 6.9996, which was slightly weaker than expected, and in turn we saw stocks in Asia slide a little. We could be in for a bit of back and forth when it comes to the Chinese currency in the near-term, and it is likely to be a driver of volatility."

In equity markets, Phoenix Group was the standout gainer as it reported "strong" cash generation for the first half and said it expects to be towards the upper end of its 2019 cash generation target range of £600m to £700m.

Ultra Electronics also racked up strong gains as the defence and aerospace contractor posted a 6.7% jump in first-half pre-tax profit, thanks in part to strong US defence spend.

Hill & Smith rallied as the infrastructure products supplier said a strong performance in the UK and US helped to drive a rise in interim profits.

On the downside, Standard Life Aberdeen lost ground as the asset manager posted a drop in first-half pre-tax profit to £280m from £311m in the first half of 2018.

Legal & General saw its shares retreat even after the insurer reported an 11% jump in first-half operating profit and a 12% increase in pre-tax profit as it achieved record global annuity sales.

Glencore lost ground as it said it was shuttering its Mutanda cobalt mine in response to a plunge in prices and higher costs as the miner reported a sharp fall in adjusted core earnings. The company said adjusted earnings before interest, tax, depreciation and amortisation fell 32% to $5.6bn, reflecting a “challenging economic backdrop for our commodity mix”.

BHP and Rio Tinto were also under pressure.

Market Movers

FTSE 100 (UKX) 7,158.85 -0.18%
FTSE 250 (MCX) 18,880.03 0.18%
techMARK (TASX) 3,773.87 0.19%

FTSE 100 - Risers

Phoenix Group Holdings (PHNX) 677.40p 3.18%
Fresnillo (FRES) 655.80p 1.71%
InterContinental Hotels Group (IHG) 5,238.00p 1.10%
Coca-Cola HBC AG (CDI) (CCH) 2,792.68p 0.93%
Carnival (CCL) 3,526.00p 0.77%
Compass Group (CPG) 2,014.00p 0.75%
Rentokil Initial (RTO) 438.00p 0.71%
Intertek Group (ITRK) 5,416.00p 0.71%
Croda International (CRDA) 4,618.00p 0.70%
Flutter Entertainment (FLTR) 6,270.00p 0.67%

FTSE 100 - Fallers

Standard Life Aberdeen (SLA) 270.60p -3.97%
Spirax-Sarco Engineering (SPX) 8,275.00p -3.89%
Glencore (GLEN) 224.35p -3.03%
Legal & General Group (LGEN) 240.44p -1.98%
Rolls-Royce Holdings (RR.) 744.40p -1.92%
ITV (ITV) 105.20p -1.13%
BHP Group (BHP) 1,760.00p -1.06%
Rio Tinto (RIO) 4,183.00p -1.05%
BT Group (BT.A) 182.34p -0.96%
Evraz (EVR) 596.84p -0.89%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 1,946.00p 4.85%
Rank Group (RNK) 157.50p 3.62%
Hill & Smith Holdings (HILS) 1,079.00p 2.86%
Plus500 Ltd (DI) (PLUS) 602.40p 2.80%
Rathbone Brothers (RAT) 2,156.75p 2.70%
PayPoint (PAY) 961.00p 2.67%
Clarkson (CKN) 2,495.00p 2.46%
Card Factory (CARD) 162.90p 1.94%
Hochschild Mining (HOC) 218.60p 1.86%
IWG (IWG) 376.00p 1.62%

FTSE 250 - Fallers

Sirius Minerals (SXX) 9.80p -5.77%
Oxford Instruments (OXIG) 1,276.00p -3.04%
Funding Circle Holdings (FCH) 104.20p -2.62%
Premier Oil (PMO) 69.88p -2.59%
Aston Martin Lagonda Global Holdings (AML) 457.80p -2.07%
Cairn Energy (CNE) 146.00p -2.01%
Hunting (HTG) 433.60p -1.81%
Kaz Minerals (KAZ) 484.70p -1.80%
Tullow Oil (TLW) 176.05p -1.54%
Capita (CPI) 135.60p -1.53%