London open: Stocks edge up as Pearson pushes ahead
London stocks edged up in early trade on Friday, helped along by well-received results from Pearson, as investors eyed more Brexit-related headlines and news on trade talks between the US and China.
At 0830 GMT, the FTSE 100 was up 0.2% at 7,179.02, while the pound was down 0.1% against the dollar at 1.3035 and 0.2% lower versus the euro at 1.1486.
As far as Sino-US relations are concerned, market participants were keen to see some progress ahead of next week’s trade truce deadline. Chinese Vice Premier Liu He is due to meet President Trump at the White House on Friday, following reports that both sides have started to outline commitments in principle on six issues that could halt a trade war.
Konstantinos Anthis, head of research at ADSS, said: "There's still one week to go before the US is supposed to impose higher tariffs on Chinese goods and risk sentiment will depend on whether this takes place or the US side defers at this time.
"Given that enough headway seems to have been made to warrant a meeting between Trump and the Chinese negotiator today, it appears more likely that the US will not raise the levies, which should help high beta currencies and equities push higher."
On home shores, the pound was not building on its gains earlier in the week, despite reports that Theresa May will request a three-month extension to the Brexit date. May is under pressure to make the move amid a potential Cabinet revolt, while she also battles to head off more defections from the party.
Leaderships of both main parties have been shaken after eight Labour MPs quit at the start of the week to form the Independent Group, before being joined by three Tories on Wednesday. Overnight, May met former ministers Justine Greening and Phillip Lee in Downing Street in an attempt to persuade them to stay, while also sitting down with Justice Secretary David Gauke and Business Secretary Greg Clark, both of whom warned her about opposition to a no-deal Brexit scenario.
On the equity market, miners were the standout gainers, with Rio, Glencore and BHP all higher as copper prices rose.
In individual company news, publishing group Pearson was the star performer as it said underlying full-year adjusted operating profit rose 8% to £546m for 2018, in the in the upper half of the guidance range of £520m to £560m.
Construction products manufacturer Hill & Smith advanced as it announced the acquisition of bollard marker ATG Access from LDC and private shareholders, for £22.5m in cash.
Metro Bank made ground as it was awarded £120m from the fund set up with cash from Royal Bank of Scotland designed to boost competition in the business banking sector, with Starling Bank getting £100m and ClearBank £60m. The funds will be used to help the banks in the Incentivised Switching Scheme, which goes live next Monday.
But one of the 13 banks that missed out on funds distributed by the Banking Competition Remedies body, CYBG, saw its shares dive into the red.
Legoland and Madame Tussauds owner Merlin Entertainments fell as it announced the sale of its Australian ski resorts, Hotham and Falls Creek, to Vail Resorts, for AUD174m (£95m).
In a busy day for M&A, Dairy Crest surged as it agreed to be bought by Canadian dairy Saputo Inc for 620p a share, around £975m. The shares have already climbed above the offer price, indicating investors anticipate a bid battle.
That was not all, as sub-prime lender Provident Financial was also on the rise after receiving a £1.3bn offer from smaller London-listed rival Non-Standard Finance.
In broker note action, Centrica was hit by a downgrade to ‘neutral’ from ‘buy’ at Goldman Sachs, while Kaz Minerals was downgraded to ‘sell’ from ‘hold’ at VTB Capital. RSA Insurance was started at ‘equalweight’ by Morgan Stanley.
Market Movers
FTSE 100 (UKX) 7,179.02 0.16%
FTSE 250 (MCX) 19,256.02 0.10%
techMARK (TASX) 3,511.52 0.18%
FTSE 100 - Risers
Pearson (PSON) 906.80p 2.65%
Fresnillo (FRES) 1,014.10p 2.39%
Evraz (EVR) 542.60p 2.11%
Glencore (GLEN) 306.30p 1.93%
Burberry Group (BRBY) 1,970.00p 1.73%
Anglo American (AAL) 2,022.00p 1.62%
BHP Group (BHP) 1,814.40p 1.51%
Rio Tinto (RIO) 4,452.50p 1.38%
Melrose Industries (MRO) 172.30p 1.35%
Vodafone Group (VOD) 143.00p 1.27%
FTSE 100 - Fallers
Barclays (BARC) 158.06p -1.69%
Centrica (CNA) 119.15p -1.65%
Kingfisher (KGF) 235.60p -1.42%
Tesco (TSCO) 223.40p -1.19%
United Utilities Group (UU.) 844.00p -0.71%
Severn Trent (SVT) 2,006.00p -0.69%
GlaxoSmithKline (GSK) 1,527.60p -0.68%
Reckitt Benckiser Group (RB.) 5,932.00p -0.62%
British American Tobacco (BATS) 2,823.00p -0.62%
Unilever (ULVR) 4,234.50p -0.49%
FTSE 250 - Risers
Dairy Crest Group (DCG) 625.01p 12.61%
Metro Bank (MTRO) 1,358.53p 4.18%
Serco Group (SRP) 126.40p 3.86%
TBC Bank Group (TBCG) 1,460.00p 3.40%
McCarthy & Stone (MCS) 130.10p 2.68%
Indivior (INDV) 101.65p 2.33%
Just Eat (JE.) 713.00p 2.00%
Entertainment One Limited (ETO) 418.60p 1.75%
Playtech (PTEC) 404.70p 1.58%
Hill & Smith Holdings (HILS) 1,195.00p 1.44%
FTSE 250 - Fallers
CYBG (CYBG) 186.10p -5.68%
Plus500 Ltd (DI) (PLUS) 790.00p -4.07%
Travis Perkins (TPK) 1,257.50p -2.10%
St. Modwen Properties (SMP) 392.80p -2.09%
Morgan Advanced Materials (MGAM) 267.00p -1.91%
Dixons Carphone (DC.) 129.75p -1.26%
TalkTalk Telecom Group (TALK) 98.50p -1.15%
Wetherspoon (J.D.) (JDW) 1,277.18p -1.07%
IG Group Holdings (IGG) 603.00p -1.07%
RHI Magnesita N.V. (DI) (RHIM) 4,400.00p -0.99%