London midday: Stocks slip ahead of US earnings; trade deal in focus
London stocks were a little lower by midday on Tuesday as details emerged of the 'phase one' Sino-US trade deal due to be signed this week, with investors cautious ahead of a slew of key US bank earnings.
The FTSE 100 was down 0.2% at 7,605.30, while sterling was up 0.2% against the dollar and the euro at 1.3010 and 1.1692, respectively, steadying after heavy losses on the back of weak growth figures and expectations of an interest rate cut by the Bank of England.
Market participants were looking ahead to the signing of the trade deal, which is due to take place on Wednesday.
Spreadex analyst Connor Campbell said: "With the agreement all ready to be signed tomorrow, Washington removed the ‘currency manipulator’ label from China - a symbolic gesture rather than tangible one, but nevertheless another example of thawing relationships between the two superpowers.
"The trouble is, the positive aspects of the trade deal are pretty thoroughly priced in. In contrast, any rogue comments from Donald Trump in the coming days - especially those related to ‘phase two’, if the US and China ever get to that point - may then have a disproportionate impact on the markets, good or bad."
Investors were also mulling the latest trade data out of China, which showed that imports rebounded in December, up 16.3% and comfortably beating expectations of a 9.6% rise, with US imports of agricultural goods faring particularly well. Exports rose 7.6% following a 1.3% decline in November and versus expectations of a 3.2% jump.
Later in the session, attention will turn to the US, where fourth-quarter earnings are due from banking giants Citigroup, JP Morgan and Wells Fargo.
In UK equity markets, Taylor Wimpey was a high riser after the housebuilder said it expected full-year results to be in line with expectations despite economic and political uncertainties caused by Brexit.
Russ Mould, investment director at AJ Bell, said: "A record order book shows that demand for housing in the UK remains strong but higher costs, the lingering effects of the freehold scandal and renewed investment in build quality mean that Taylor Wimpey expects its operating margin to fall in 2019.
"That pattern fits with the analysts’ consensus forecast of a very low single-digit percentage improvement in profits for 2019 and the market expects similarly modest progress in 2020."
Dixons Carphone surged to the top of the FTSE 250 after an upgrade to ‘buy’ at Goldman Sachs.
Builders’ merchant Grafton rallied as it reported better-than-expected trading conditions in November and December despite a weaker UK market and said it now expects full-year adjusted operating profit of around £202m and £190m on a pre-IFRS 16 basis for its continuing operations.
Games Workshop advanced after the miniature wargames manufacturer posted record first-half profit and sales.
Recruiter PageGroup was in the green after it backed its full-year guidance but said the outlook remains tough.
Specialty chemicals company Elementis tumbled after it warned on profits following a "subdued" final quarter of the year.
WPP was hit by a downgrade to ‘underperform’ at Bank of America Merrill Lynch, while education publisher Pearson was weaker after Credit Suisse cut its price target on the stock.
FTSE 100 - Risers
NMC Health (NMC) 1,317.00p 4.81%
Taylor Wimpey (TW.) 207.60p 2.77%
Centrica (CNA) 89.22p 1.87%
Vodafone Group (VOD) 154.44p 1.86%
Next (NXT) 6,832.00p 1.55%
Antofagasta (ANTO) 985.00p 1.46%
Morrison (Wm) Supermarkets (MRW) 191.60p 1.40%
Bunzl (BNZL) 2,100.00p 0.91%
Land Securities Group (LAND) 961.60p 0.88%
Croda International (CRDA) 5,160.00p 0.88%
FTSE 100 - Fallers
Pearson (PSON) 609.20p -2.62%
Mondi (MNDI) 1,633.50p -2.36%
WPP (WPP) 1,043.00p -1.84%
Evraz (EVR) 405.10p -1.79%
International Consolidated Airlines Group SA (CDI) (IAG) 644.40p -1.74%
Johnson Matthey (JMAT) 2,935.00p -1.61%
Ashtead Group (AHT) 2,431.00p -1.54%
Halma (HLMA) 2,083.00p -1.51%
Smith (DS) (SMDS) 370.20p -1.46%
BT Group (BT.A) 186.82p -1.36%
FTSE 250 - Risers
Dixons Carphone (DC.) 146.75p 5.96%
Grafton Group Units (GFTU) 900.50p 4.95%
Games Workshop Group (GAW) 6,670.00p 4.63%
Finablr (FIN) 132.50p 4.33%
FirstGroup (FGP) 127.70p 3.74%
Micro Focus International (MCRO) 1,126.80p 3.62%
Pagegroup (PAGE) 483.40p 3.25%
Kaz Minerals (KAZ) 581.40p 3.09%
Watches of Switzerland Group (WOSG) 378.60p 2.77%
Frasers Group (FRAS) 509.00p 2.41%
FTSE 250 - Fallers
Elementis (ELM) 141.20p -14.27%
Centamin (DI) (CEY) 121.30p -4.64%
Tullow Oil (TLW) 59.68p -4.21%
Ferrexpo (FXPO) 151.50p -3.90%
Savills (SVS) 1,200.00p -2.60%
Hochschild Mining (HOC) 165.50p -2.59%
Contour Global (GLO) 190.40p -2.36%
Fresnillo (FRES) 604.40p -2.36%
Premier Oil (PMO) 113.25p -2.16%
Victrex plc (VCT) 2,404.00p -2.04%