London open: Miners pace advance on US-China progress, builders slide
London stocks rose in early trade on Monday, with miners pacing the advance amid progress in Sino-US trade talks, but overall gains were unspectacular as housebuilders slumped and Brexit concerns weighed.
At 0830 GMT, the FTSE 100 was up 0.4% at 7,205.04, while the pound was 0.2% higher against the dollar at 1.3074 and 0.1% firmer versus the euro at 1.1524.
There was some good news on the trade front after US President Trump said overnight that the 1 March deadline for the implementation of higher tariffs on Chinese imports will be delayed.
Trump tweeted: "I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.
"As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement."
However, worries about Brexit continued to weigh on investors’ minds as Prime Minister Theresa May delayed the meaningful vote on her deal until 12 March - just two weeks before the UK is set to leave the EU.
"This is a gamble that she hopes will buy her more time for negotiations," said London Capital Group analyst Jasper Lawler. "But she risks infuriating ministers who are already prepared to revolt against her."
In equity markets, miners - which are heavily dependent on demand from China - were the standout gainers, with Glencore and Antofagasta racking up healthy gains.
However, housebuilders were under the cosh as Persimmon tanked following a report that it could lose its right to sell Help to Buy homes. According to The Times, housing minister James Brokenshire is reviewing the company’s participation in the scheme following allegations of poor building standards and punitive leasehold charges.
Neil Wilson, chief market analyst at Markets.com, said: "This scheme has been central to Persimmon's recovery last year as the company is expected to report solid full-year results tomorrow, ahead of market expectations. However housebuilders all looking to wean themselves off the Help to Buy drug ahead of the scheme's planned finish in 2023, Persimmon is not entirely out on a limb."
Peers Taylor Wimpey, Barratt Developments, Berkeley and Bovis Homes were also in the red.
Elsewhere, Associated British Foods was weaker as it said like-for-like sales at its Primark retail arm fell 2% in the first half of the year but full year guidance remained unchanged. At the top line, Primark grew sales 4% due to expansion of selling space, while the grocery, agriculture and ingredients divisions all reported improved revenues, while sugar sales have been strongly diluted by the new EU price regime.
Doorstep lender Provident Financial was on the back foot as it rejected a £1.3bn offer from smaller rival Non-Standard Finance, calling it "highly opportunistic".
Distribution group Bunzl retreated after saying it was stockpiling goods to mitigate against border delays if the UK crashed out of the European Union without a deal as it reported a rise in full year pre-tax profits.
Centamin lost its shine as it reported a slump in full-year earnings, revenue and gold production.
Market Movers
FTSE 100 (UKX) 7,205.04 0.37%
FTSE 250 (MCX) 19,262.03 -0.04%
techMARK (TASX) 3,519.11 0.11%
FTSE 100 - Risers
Glencore (GLEN) 314.95p 1.98%
Antofagasta (ANTO) 956.80p 1.14%
Standard Chartered (STAN) 615.80p 1.10%
Micro Focus International (MCRO) 1,885.50p 1.07%
Prudential (PRU) 1,551.00p 1.04%
Fresnillo (FRES) 1,003.00p 0.97%
Smith (DS) (SMDS) 336.40p 0.90%
GVC Holdings (GVC) 633.50p 0.88%
BP (BP.) 541.50p 0.82%
CRH (CRH) 2,408.00p 0.75%
FTSE 100 - Fallers
Persimmon (PSN) 2,312.33p -6.31%
Evraz (EVR) 542.31p -1.43%
Taylor Wimpey (TW.) 165.25p -1.37%
Barratt Developments (BDEV) 568.40p -1.18%
Berkeley Group Holdings (The) (BKG) 3,803.00p -0.76%
Bunzl (BNZL) 2,520.00p -0.75%
Wood Group (John) (WG.) 530.00p -0.45%
SEGRO (SGRO) 648.20p -0.31%
Pearson (PSON) 900.40p -0.29%
Rolls-Royce Holdings (RR.) 979.20p -0.26%
FTSE 250 - Risers
Fidelity China Special Situations (FCSS) 224.00p 2.52%
Premier Oil (PMO) 75.75p 1.95%
Ferrexpo (FXPO) 274.00p 1.44%
Acacia Mining (ACA) 253.30p 1.40%
Investec (INVP) 494.10p 1.35%
Man Group (EMG) 140.42p 1.28%
Rotork (ROR) 287.00p 1.20%
Plus500 Ltd (DI) (PLUS) 789.32p 1.20%
IWG (IWG) 234.00p 1.04%
CYBG (CYBG) 188.90p 0.96%
FTSE 250 - Fallers
Centamin (DI) (CEY) 128.76p -4.16%
Provident Financial (PFG) 565.00p -4.14%
Card Factory (CARD) 188.10p -2.89%
Morgan Advanced Materials (MGAM) 263.60p -2.37%
Bank of Georgia Group (BGEO) 1,660.20p -2.17%
John Laing Group (JLG) 369.12p -2.04%
Dairy Crest Group (DCG) 627.00p -2.03%
Ted Baker (TED) 1,976.00p -0.95%
Bovis Homes Group (BVS) 1,010.50p -0.93%
Royal Mail (RMG) 284.10p -0.91%