London open: Stocks rise but Sainsbury's tanks on merger woes
London stocks rose in early trade on Wednesday, buoyed by some solid results from Lloyds, as investors eyed developments from Prime Minister Theresa May's latest Brexit mission to Brussels and the release of the latest Federal Reserve minutes.
At 0820 GMT, the FTSE 100 was up 0.5% at 7,215.60, while the pound was down 0.2% against the dollar at 1.3043, having rallied in the previous session as the greenback took a hit from expectations that the FOMC minutes later in the day will underpin the recent dovish stance of Fed policymakers.
On home shores, investors will be watching out for any Brexit-related headlines as May heads back to Brussels for more discussions with European Commission President Jean-Claude Juncker.
Sterling rose more than 1% against the dollar overnight, with cable trading to a 1.3075 high. However, market analyst Konstantinos Anthis at ADSS, said these gains will be now put to the test.
"The British PM is said to be considering today's meeting a key part of her plan to secure legally binding changes to the Brexit agreement in place but the mood on the other side of the Channel is not encouraging.
"The EU side seems in no hurry to offer concessions and should the meeting today prove fruitless then the pound will correct and look to test the 1.30 mark once more."
In corporate news, Lloyds rallied as it posted a 24% jump in 2018 profit to £4.4bn. Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Lloyds is still in good shape, despite what its share price performance might suggest. The bank has managed to grind some extra income out of a static loan book, and has controlled costs while investing to become more efficient."
Glencore was on the up as it reported improved full year earnings and announced plans for a $2bn share buyback.
Indivior nudged up after saying it was releasing an authorised generic version of its Suboxone opiod addiction treatment in the US after losing a court bid to stop a copycat version made by India-based rival Dr Reddy’s Laboratories.
Elsewhere, HSBC was bouncing back from its results-induced losses a day earlier, firmly on the front foot even as JPMorgan cut the stock to ‘underweight’ from ‘neutral’.
On the downside, Sainsbury’s tanked as the UK competition watchdog warned that its proposed merger with Asda could result in higher prices and reduced ranges in hundreds of local areas.
Sainsbury's immediate response was that "we fundamentally disagree" with the provisional findings from the Competition & Markets Authority, which suggested possible remedies including selling off one of the Sainsbury's or Asda brands, divesting large chunks of stores or even prohibition of the merger.
Shore Capital analyst Clive Black downgraded Sainsbury’s to ‘sell’ from ‘hold’ on the news, which it said was "a major blow and one that removes the merger premium".
Intu Properties also suffered heavy losses as the shopping centre operator said it swung to a full-year loss amid a challenging retail backdrop.
Market Movers
FTSE 100 (UKX) 7,213.23 0.47%
FTSE 250 (MCX) 19,092.03 0.12%
techMARK (TASX) 3,533.01 0.18%
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 59.85p 2.54%
Glencore (GLEN) 310.05p 2.41%
easyJet (EZJ) 1,298.50p 2.20%
Standard Life Aberdeen (SLA) 235.85p 2.08%
Antofagasta (ANTO) 907.60p 1.98%
Wood Group (John) (WG.) 523.00p 1.95%
Kingfisher (KGF) 233.20p 1.75%
Johnson Matthey (JMAT) 3,153.00p 1.58%
Micro Focus International (MCRO) 1,839.68p 1.53%
BHP Group (BHP) 1,823.00p 1.51%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 249.55p -13.32%
Morrison (Wm) Supermarkets (MRW) 228.15p -4.94%
Tesco (TSCO) 222.00p -2.03%
British Land Company (BLND) 574.60p -1.51%
Land Securities Group (LAND) 872.40p -1.02%
SEGRO (SGRO) 640.60p -0.99%
Standard Chartered (STAN) 611.60p -0.59%
NMC Health (NMC) 2,730.00p -0.58%
Vodafone Group (VOD) 140.70p -0.57%
Reckitt Benckiser Group (RB.) 6,119.00p -0.50%
FTSE 250 - Risers
Restaurant Group (RTN) 131.80p 2.97%
Euromoney Institutional Investor (ERM) 1,334.00p 2.46%
Plus500 Ltd (DI) (PLUS) 737.62p 2.45%
Sanne Group (SNN) 530.00p 2.32%
Bakkavor Group (BAKK) 163.40p 2.12%
Just Eat (JE.) 738.20p 1.99%
Superdry (SDRY) 519.63p 1.99%
UDG Healthcare Public Limited Company (UDG) 569.00p 1.97%
Daejan Holdings (DJAN) 5,970.00p 1.88%
Spectris (SXS) 2,655.00p 1.80%
FTSE 250 - Fallers
Intu Properties (INTU) 106.95p -9.48%
Funding Circle Holdings (FCH) 331.76p -3.84%
Hammerson (HMSO) 364.80p -3.26%
Stobart Group Ltd. (STOB) 143.80p -2.18%
Amigo Holdings (AMGO) 235.00p -2.06%
Rathbone Brothers (RAT) 2,204.00p -2.04%
Energean Oil & Gas (ENOG) 650.20p -1.89%
IP Group (IPO) 103.60p -1.52%
FirstGroup (FGP) 94.00p -1.52%
FDM Group (Holdings) (FDM) 833.01p -1.42%