London open: Stocks subdued; Burberry rallies on upgrade

London stocks were steady in early trade on Thursday following solid gains the previous day, with a relatively quiet session expected as US markets will be closed for Independence Day.

At 0830 BST, the FTSE 100 was flat at 7,607.47, while the pound was steady versus the dollar and the euro at 1.2574 and 1.1151, respectively.

CMC Markets analyst Michael Hewson said: "The primary drivers continue to be concerns over further escalations over trade and expectations of additional central bank easing, with President Trump continuing to ratchet up the rhetoric on a number of fronts.

"Yesterday he took aim at China and the EU for manipulating their currencies, an early warning if any were needed to potential incoming ECB President hopeful Christine Lagarde, of the difficulties she could face if she does take up the post being vacated by Mario Draghi."

In equity markets, luxury brand Burberry was the standout gainer after an upgrade to 'outperform' from 'neutral' at MainFirst, which also upped its price target on the stock to 2,150p from 1,800p.

Associated British Foods gained after it said group revenue rose 3% for the 40 weeks to June 22 at constant currency as it maintained its outlook for the full year. The company said it expected good profit growth in Primark and, on an underlying basis, in its grocery operations.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Primark continues to deliver a very impressive performance in a tough retail environment without the aid of the online businesses that’s keeping most retailers’ necks above water. Offering shoppers value for money when rivals are struggling has seen Primark seize market share in the UK, and the proposition is proving attractive overseas too, with a reasonable performance in Europe and promising noises emerging from the fledgling US business.

"The retail performance is unfortunately being soured by the struggling sugar operations, where the end of quotas has seen sugar prices plummet. The good news is that conditions seem to be stabilising. Throw in a good performance from ABF’s branded groceries business, which includes Twinings, Ovaltine and balsamic vinegar brand Acetum, and it looks like the rest of the sprawling empire might finally be set to support rather than undermine the success on the high street."

Energean Oil & Gas pushed higher after agreeing to buy Edison's oil and natural gas business for an initial consideration of $750m.

On the downside, Persimmon was in the red as the housebuilder reported a drop in first-half revenue as its focus on improving customer service meant order intake slowed.

Great Portland Estates lost ground even as it hailed "continued positive activity" over the first quarter, with "healthy" leasing.

Wealth manager Quilter was little changed after saying it is mulling the sale of its Old Mutual Wealth Life Assurance business as it announced a strategic review of the unit.

Ex-dividend stocks were taking just under four points off the FTSE 100 and nearly 14 points off the 250, with IAG, Aveva, Coca-Cola HBC, Next, Babcock, Homeserve, Paragon Banking, TalkTalk and Workspace all in the frame.

Market Movers

FTSE 100 (UKX) 7,607.47 -0.02%
FTSE 250 (MCX) 19,800.68 0.05%
techMARK (TASX) 3,747.43 -0.13%

FTSE 100 - Risers

Burberry Group (BRBY) 1,942.00p 1.54%
Sainsbury (J) (SBRY) 200.90p 1.23%
ITV (ITV) 111.35p 1.18%
CRH (CRH) 2,689.00p 1.09%
Schroders (SDR) 3,158.00p 0.99%
Vodafone Group (VOD) 132.62p 0.91%
Tesco (TSCO) 235.80p 0.86%
Flutter Entertainment (FLTR) 6,892.00p 0.79%
Associated British Foods (ABF) 2,463.00p 0.78%
Land Securities Group (LAND) 856.78p 0.77%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 451.90p -7.19%
Coca-Cola HBC AG (CDI) (CCH) 2,875.00p -6.47%
Spirax-Sarco Engineering (SPX) 9,210.00p -2.02%
Evraz (EVR) 659.00p -1.99%
Next (NXT) 5,388.00p -1.54%
Persimmon (PSN) 1,963.50p -1.21%
Aveva Group (AVV) 4,122.00p -1.15%
Rio Tinto (RIO) 4,911.00p -1.12%
BHP Group (BHP) 2,024.50p -0.98%
Glencore (GLEN) 274.35p -0.90%

FTSE 250 - Risers

Energean Oil & Gas (ENOG) 885.76p 5.32%
CYBG (CYBG) 207.80p 2.47%
Hastings Group Holdings (HSTG) 201.80p 2.07%
Hill & Smith Holdings (HILS) 1,200.00p 1.95%
Metro Bank (MTRO) 578.50p 1.94%
Royal Mail (RMG) 215.30p 1.70%
Crest Nicholson Holdings (CRST) 365.51p 1.31%
Acacia Mining (ACA) 177.00p 1.26%
Capita (CPI) 111.45p 1.13%
TI Fluid Systems (TIFS) 202.00p 1.10%

FTSE 250 - Fallers

Babcock International Group (BAB) 450.20p -3.25%
Network International Holdings (NETW) 570.00p -2.40%
Ferrexpo (FXPO) 272.20p -2.09%
Elementis (ELM) 137.50p -2.07%
Workspace Group (WKP) 881.93p -1.68%
Paragon Banking Group (PAG) 442.20p -1.38%
Homeserve (HSV) 1,181.00p -1.17%
Lancashire Holdings Limited (LRE) 715.50p -0.97%
Amigo Holdings (AMGO) 183.57p -0.88%
Spirent Communications (SPT) 159.60p -0.87%