London open: Stocks edge lower amid Sino-US trade tensions
London stocks fell in early trade on Tuesday amid renewed Sino-US trade tensions, although losses were fairly contained as news that talks between the two nations will still go ahead this week helped to assuage investors' fears.
At 0835 BST, the FTSE 100 was down 0.3% at 7,360.92, while the pound was up 0.2% against the dollar at 1.3123 and 0.1% firmer versus the euro at 1.1706.
Traders in London were getting their first chance to react to comments over the weekend from US President Trump, who threatened to raise tariffs on $200bn of Chinese goods to 25% from 10% as early as Friday. In addition, US trade representative Robert Lighthizer has accused China of reneging on its commitments in trade talks, although he also insisted that a deal is still possible.
Neil Wilson, chief market analyst at Markets.com, said: "Quite where this leaves us is hard to say. There is a sense that the US is working extremely hard to extract last-minute concessions from China ahead of a planned visit by Vice-premier Liu He. That visit has been confirmed - he is to visit the US May 9-10. Equity futures in Europe rose on the news of the Chinese visit still being a go, but risks remain skewed to the downside today it would seem.
"Whether that will be enough to avert the tariffs being raised on Friday is unclear, but at least it means the two sides are continuing to talk and a deal is still possible. However, we don’t know if this is a last-ditch rescue mission to save talks or something that moves talks on in a more substantive way. The optics suggest the former, but one cannot but sense that Mr Trump is playing us a little. He may well be making a deal seem further away in order to make the achievement seem all the more impressive when it comes.
"The market has been juiced by expectations the US and China would do a deal, combined with a much more dovish sounding Fed. Those two key planks are what the all-time highs rest upon - remove one and we should expect more downside."
On home shores, Brexit was in focus again as traders returned to their desks after the Bank holiday weekend, with a number of Conservatives threatening to attempt to oust Prime Minister Theresa May should she unite with Labour over a customs union style arrangement with the EU.
"However the PM could have enough support to be able to ignore those backbenchers and get the Brexit deal through Parliament. This is what pound traders are focusing on, lifting sterling," said London Capital Group analyst Jasper Lawler.
In equity markets, banks were the standout losers, with Standard Chartered, HSBC and Barclays all lower.
Shares in Domino's Pizza slid as it posted a 4.5% rise in group systems sales for the first quarter but warned that it no longer expects a breakeven turnout in its international business his year due to a "disappointing" performance.
Security services G4S suffered heavy losses as it confirmed that Canadian rival Garda World had not made a bid for the company but said it had received additional expressions of interest to acquire its cash solutions business, which will be evaluated alongside the separation review.
Hiscox nudged lower even after it said it made a solid start to the year as the specialist insurer’s gross written premiums rose 3.3% in the three months to the end of March to $1.165bn.
Vodafone was on the front foot as it agreed to supply high-speed broadband to Telefonica Deutschland as it looks to address European Commission concerns about its merger with Liberty Global's cable networks in Germany and Central Europe.
AstraZeneca gained as it said its treatment for chronic lymphocytic leukaemia had met its primary endpoint, delivering an improvement in the time patients live without disease progression compared to an alternative combination treatment.
Doorstep lender Provident Financial advanced after it reaffirmed its financial targets as it looks to fend off a hostile bid from smaller rival Non-Standard Finance.
In broker note action, Persimmon was lifted to 'buy' at Citi, while Hammerson was cut to 'reduce' at AlphaValue.
Centrica was downgraded to 'reduce' at HSBC, while Acacia Mining was lifted to 'buy' at Peel Hunt.
Market Movers
FTSE 100 (UKX) 7,360.92 -0.27%
FTSE 250 (MCX) 19,681.24 -0.12%
techMARK (TASX) 3,617.12 0.47%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK) 1,794.00p 1.96%
Micro Focus International (MCRO) 1,813.00p 1.61%
Persimmon (PSN) 2,217.00p 1.33%
Barratt Developments (BDEV) 601.60p 1.31%
Taylor Wimpey (TW.) 183.55p 1.30%
BT Group (BT.A) 229.32p 1.25%
Smith & Nephew (SN.) 1,588.00p 1.21%
Ocado Group (OCDO) 1,396.50p 1.16%
Rio Tinto (RIO) 4,458.00p 1.15%
Vodafone Group (VOD) 141.66p 1.14%
FTSE 100 - Fallers
Standard Chartered (STAN) 693.00p -2.45%
United Utilities Group (UU.) 799.80p -1.99%
HSBC Holdings (HSBA) 667.75p -1.89%
Johnson Matthey (JMAT) 3,287.00p -1.65%
Melrose Industries (MRO) 197.35p -1.57%
Intertek Group (ITRK) 5,206.00p -1.36%
DCC (DCC) 6,744.00p -1.32%
Glencore (GLEN) 294.55p -1.29%
Barclays (BARC) 161.80p -1.15%
Severn Trent (SVT) 1,981.00p -1.15%
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 539.60p 1.73%
Worldwide Healthcare Trust (WWH) 2,627.40p 1.64%
Great Portland Estates (GPOR) 767.60p 1.62%
Telecom Plus (TEP) 1,446.00p 1.40%
TalkTalk Telecom Group (TALK) 123.60p 1.39%
Sirius Minerals (SXX) 15.98p 1.33%
Amigo Holdings (AMGO) 240.00p 1.27%
Britvic (BVIC) 914.00p 1.22%
JD Sports Fashion (JD.) 639.20p 1.20%
Wizz Air Holdings (WIZZ) 3,451.00p 1.20%
FTSE 250 - Fallers
Domino's Pizza Group (DOM) 239.70p -8.09%
G4S (GFS) 202.90p -6.06%
CYBG (CYBG) 197.10p -3.99%
Essentra (ESNT) 401.40p -3.93%
Fidelity China Special Situations (FCSS) 234.05p -3.49%
Electrocomponents (ECM) 625.00p -2.59%
Ferrexpo (FXPO) 214.90p -2.54%
Schroder Asia Pacific Fund (SDP) 456.04p -1.61%
888 Holdings (888) 139.34p -1.46%
Just Group (JUST) 67.17p -1.43%