London open: Stocks steady ahead of retail sales data; RBS gains after results

London stocks were steady in early trade on Friday as investors mulled the Commons' rejection of Theresa May's latest Brexit deal and eyed the release of UK retail sales data.

At 0820 GMT, the FTSE 100 was flat at 7,194.90, while the pound was up 0.1% against the dollar at 1.2815 and 0.3% firmer versus the euro at 1.1363, shrugging off Prime Minister Theresa May's defeat in Commons on Thursday, after MPs voted 303 to 258 against a motion endorsing the government's Brexit negotiating strategy.

Neil Wilson, chief market analyst at Markets.com, said: "May's authority looks shot but her demise has been erroneously predicted many times in the past and I would not write her off just yet. She is bloody minded and will press on regardless.

"However, plotters will sense an opportunity now and - as we keep saying - the countdown to a no-deal exit is on and a lot has to change to avoid it."

Investors were also eyeing any developments across the pond as US President Trump was set to sign a compromise spending deal to avert another government shutdown, but also declare a national emergency in an effort to secure funds to build a Mexico border wall.

Trade relations between the US and China were also in focus as high-level talks between the two were due to conclude in Beijing later.

Oanda analyst Craig Erlam said: "Negotiations in Beijing are likely to attract more of the attention of the investing community as President Xi joins the talks in an attempt to deliver the kind of progress that will ensure a 60-day extension to the truce. A deal after only 90 days of talks was always unlikely making this the more realistic target from day one, something that if achieved will reassure investors."

On the UK data front, retail sales figures are out at 0930 GMT. Pantheon Macroeconomics said it expects the run of downbeat news on the UK economy to be interrupted by the January retail sales figures.

"Our forecast for a 1.0% month-to-month rise in sales volumes, following December’s 0.9% drop, is well above the consensus, 0.2%," it said.

In corporate news, Royal Bank of Scotland was in the green as it declared a 7.5p special payout on top of an ordinary dividend after doubling profits last year. RBS reported an operating profit before tax of £3.4bn and an attributable profit of £1.62bn for 2018, more than double the £752m from the year before and higher than £1.58bn that analysts expected.

Paper and packaging group Mondi was also on the front foot after saying it expects full year underlying EBITDA to be higher than 2017's €1.482bn.

Centamin shone as the Egyptian gold miner announced a significant resource increase from its move into Cote d'Ivoire, while Millennium & Copthorne Hotels rose even as it reported a 28% slump in full-year profit.

On the downside, Plus500 was weaker following a report that the company may have misled shareholders over some losses. According to The Times, the financial betting group told investors it had not suffered losses from client trading activity in 2017 when it had taken a $103m hit.

Property investment and development group Segro fell as it posted a 24% jump in full-year pre-tax profit and announced plans to raise £450m in a placing to fund new developments.

Along with Marks & Spencer, Kingfisher and Ocado, Tesco was among a number of big retail names among the big fallers on Friday, with the supermarket retailer also saying the new IFRS16 accounting standard will have no economic impact on the company.

In broker note action, Capita was boosted by an upgrade to 'overweight' at Barclays, while Drax was knocked lower by a downgrade to 'sell' at Citi.

DFS Furniture and Restaurant Group were both lifted to 'buy' at Berenberg, while Domino's Pizza was downgraded to 'sell'.

Market Movers

FTSE 100 (UKX) 7,194.90 -0.03%
FTSE 250 (MCX) 18,908.61 0.06%
techMARK (TASX) 3,530.98 0.37%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 2,500.00p 1.50%
Royal Bank of Scotland Group (RBS) 245.10p 1.45%
Mondi (MNDI) 1,923.50p 1.37%
BT Group (BT.A) 232.05p 1.31%
Smurfit Kappa Group (SKG) 2,370.67p 0.71%
TUI AG Reg Shs (DI) (TUI) 814.80p 0.69%
Reckitt Benckiser Group (RB.) 6,037.00p 0.65%
GlaxoSmithKline (GSK) 1,573.40p 0.47%
Pearson (PSON) 933.60p 0.45%
ITV (ITV) 135.35p 0.44%

FTSE 100 - Fallers

Antofagasta (ANTO) 852.30p -1.72%
Ocado Group (OCDO) 900.88p -1.54%
Kingfisher (KGF) 230.10p -1.07%
Barratt Developments (BDEV) 560.40p -0.67%
Marks & Spencer Group (MKS) 286.60p -0.66%
Tesco (TSCO) 216.55p -0.62%
Johnson Matthey (JMAT) 3,010.00p -0.53%
Anglo American (AAL) 1,914.00p -0.52%
Hargreaves Lansdown (HL.) 1,650.00p -0.51%
St James's Place (STJ) 937.40p -0.51%

FTSE 250 - Risers

Vivo Energy (VVO) 132.86p 4.37%
Capita (CPI) 119.60p 3.91%
Restaurant Group (RTN) 134.20p 3.39%
Centamin (DI) (CEY) 122.26p 2.83%
Ascential (ASCL) 393.00p 2.56%
Contour Global (GLO) 169.00p 2.55%
Ted Baker (TED) 1,889.00p 2.33%
Premier Oil (PMO) 78.17p 2.32%
Clarkson (CKN) 2,480.00p 2.27%
TalkTalk Telecom Group (TALK) 100.60p 1.82%

FTSE 250 - Fallers

Drax Group (DRX) 377.40p -4.70%
Convatec Group (CTEC) 115.90p -3.58%
Plus500 Ltd (DI) (PLUS) 1,022.61p -2.61%
Mediclinic International (MDC) 314.20p -1.38%
Baillie Gifford Japan Trust (BGFD) 732.20p -1.32%
Moneysupermarket.com Group (MONY) 328.88p -1.27%
Fidelity China Special Situations (FCSS) 210.50p -1.17%
Dixons Carphone (DC.) 129.50p -1.11%
Inmarsat (ISAT) 359.00p -1.05%
OneSavings Bank (OSB) 360.20p -1.04%