London open: Stocks eke out gains amid ongoing trade concerns
London stocks rose in early trade on Thursday, but gains were minimal amid ongoing worries about trade, with voting for Tory leadership hopefuls set to kick off.
At 0840 BST, the FSTE 100 was up 0.1% at 7,373.95, while the pound was down 0.1% against the dollar at 1.2678 and 0.2% lower versus the euro at 1.1218 as Conservative Party leadership rivals faced their first party vote.
Neil Wilson, chief market analyst at Markets.com, said: "It’ll sort some the wheat from the chaff but still doesn’t get us to the final two. But there will be implications for who’s going to pick up the votes later on from the candidates that don’t make the first pass.
"Sterling had rallied a touch on (leading candidate) Boris Johnson’s speech - algos in overdrive most likely - before slipping back below $1.27 again as parliament refused to back Labour’s motion to take over business and take no-deal off the table."
More broadly, Sino-US trade relations were in focus again after US President Trump said he had a "feeling" that a deal would get done between the two but then reiterated his threat to impose tariffs on $325bn of Chinese imports if no deal is reached.
Wilson said: "There are precious little signs that we are even close to seeing a deal done at the G-20. Maybe a top-level handshake between Trump and Xi but hard to see much more."
On the data front, the latest survey from the Royal Institution of Chartered Surveyors showed that delaying the UK's departure from the European Union helped steady the country's housing market.
The net balance of surveyors reporting an increase in house prices over the last three months rose to -10 in May from -23 in April, coming in above consensus expectations of -21. Meanwhile, the new buyer enquiries balance recovered to -3 - its highest level since July - from -26 in April.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The picture is fairly uniform across UK regions, with demand only continuing to fall rapidly in the West Midlands. Looking ahead, we expect demand to recover further, as lenders pass on some of the recent fall in funding costs and as the recent improvement in consumers’ confidence feeds through fully."
"The volatile political situation will continue to subdue the market, though we still think the October Brexit deadline will be extended by a further six months, creating further room for house prices to recover modestly."
In commodity markets, after slumping to five-month lows overnight on the back of a surprise build in US inventories, oil prices rallied on reports that an oil tanker was on fire in the Sea of Oman. Brent crude was 2.8% higher at $61.70 a barrel and West Texas Intermediate was 2.6% firmer at $52.49.
In equity markets, plumbing and heating equipment supplier Ferguson was the standout performer after US fund manager Trian Investors took a 5.89% stake in the company, while DS Smith gained as the packaging group reported better-than-expected full-year profits.
Retirement products specialist Just Group surged after saying it remains committed to delivering capital self-sufficiency by 2022 and will target further cost cuts in its US care business.
On the downside, ex-dividends weighed, with Persimmon, WPP, Pets at Home, Mediclinic, NMC Health, Assura, Cineworld, Electrocomponents, Ferrexpo, Intermediate Capital, Severn Trent and Shaftesbury all in the frame.
Tesco was in the red as it said UK like-for-like sales growth slowed to 0.4% in the 13 weeks to 25 May, from 1.7% in the previous quarter.
Imperial leather maker PZ Cussons was also trading lower as it announced the departure of its chief financial officer and reiterated guidance that annual profits will drop by around £10m from the previous year.
FTSE 100 - Risers
Ferguson (FERG) 5,616.00p 5.76%
Smith (DS) (SMDS) 349.30p 1.78%
Hargreaves Lansdown (HL.) 1,894.71p 1.48%
Morrison (Wm) Supermarkets (MRW) 197.60p 1.20%
Ashtead Group (AHT) 1,980.50p 1.10%
Intertek Group (ITRK) 5,510.00p 1.06%
Vodafone Group (VOD) 130.68p 1.04%
Rio Tinto (RIO) 4,758.50p 0.98%
Smurfit Kappa Group (SKG) 2,299.00p 0.88%
United Utilities Group (UU.) 822.20p 0.76%
FTSE 100 - Fallers
Persimmon (PSN) 1,936.00p -5.42%
WPP (WPP) 968.20p -3.33%
Marks & Spencer Group (MKS) 213.80p -2.46%
Severn Trent (SVT) 2,028.00p -2.31%
3i Group (III) 1,050.50p -2.19%
Tesco (TSCO) 223.70p -1.67%
Next (NXT) 5,552.00p -1.66%
Barclays (BARC) 149.18p -0.86%
Lloyds Banking Group (LLOY) 57.49p -0.85%
British American Tobacco (BATS) 2,912.00p -0.82%
FTSE 250 - Risers
Just Group (JUST) 55.00p 9.02%
Syncona Limited NPV (SYNC) 241.04p 3.45%
Bank of Georgia Group (BGEO) 1,658.00p 2.35%
Premier Oil (PMO) 71.60p 2.29%
Sabre Insurance Group (SBRE) 261.00p 1.75%
Charter Court Financial Services Group (CCFS) 325.00p 1.72%
IntegraFin Holding (IHP) 385.65p 1.66%
Tullow Oil (TLW) 197.80p 1.59%
Spirent Communications (SPT) 155.60p 1.57%
Pershing Square Holdings Ltd NPV (PSH) 1,376.18p 1.49%
FTSE 250 - Fallers
Pets at Home Group (PETS) 174.70p -3.53%
PZ Cussons (PZC) 195.60p -3.17%
Mediclinic International (MDC) 298.30p -2.68%
Vivo Energy (VVO) 129.40p -2.56%
Card Factory (CARD) 187.00p -2.20%
Ferrexpo (FXPO) 257.30p -2.13%
Redrow (RDW) 553.00p -1.95%
Intermediate Capital Group (ICP) 1,327.00p -1.85%
RHI Magnesita N.V. (DI) (RHIM) 4,594.00p -1.84%
Greene King (GNK) 640.80p -1.75%