London open: Stocks slip as ex-divs weigh; Melrose rallies on results
London equity markets slipped into the red in early trade on Thursday, unable to hold on to opening gains as ex-dividend stocks took their toll, although losses were small as investors welcomed positive developments in Sino-US trade relations.
At 0840 BST, the FTSE 100 was down 0.1% at 7,301.03. The pound was off 0.2% against the dollar and the euro at 1.2231 and 1.1085 respectively, having rallied in the previous session, after the House of Commons voted to pass through a bill to force Prime Minister Boris Johnson to request a three-month extension if he is unable to agree a Brexit deal with the EU.
Spreadex analyst Connor Campbell said sterling's reticence to cement Wednesday's gains likely stems from the uncertainties regarding an election.
"Though Boris Johnson last night failed in his attempts to force a trip to the polling booth on October 15, a snap vote is still in play," he said.
More broadly, there was some good news on the trade front after US and Chinese delegates announced overnight that they will meet to discuss trade in October.
Neil Wilson, chief market analyst at Markets.com, said: "The news of face-to-face high-level talks between the US and China next month has been seen as a positive but needs to be taken with a good dose of salt.
"It wasn’t that long ago the market was rallying as we thought a deal imminent, now it’s moving on nothing more than confirmation of talks. It highlights the headline risk that traders must contend with and suggests there is very little by way of a strong trend in the markets right now, just a lot of short-termism and uncertainty. A trade deal is a long way away."
In equity markets, ex-dividends were a drag, as is usual on a Thursday, with Micro Focus, Admiral, Glencore, RSA, Land Securities, Antofagasta, Aggreko, Savills, Clarkson, ConvaTec, Dixons Carphone, Domino's Pizza, Elementis, Flutter Entertainment, G4S, Greggs, IWG, Meggitt, Polymetal and Rathbone Brothers all in the frame.
CYBG, the owner of Virgin Money and Clydesdale and Yorkshire Banks, was sharply lower after it warned late on Wednesday that it expects to increase its provision for legacy payment protection insurance costs by between £300m and £450m after a surge in claims ahead of the deadline at the end of August.
On the upside, turnaround specialist Melrose Industries was the standout gainer as it posted a rise in interim pre-tax profit thanks to a strong showing from its aerospace division and hiked its dividend by 10%.
Specialist media publisher Future surged after saying it expects full-year core earnings to be "materially ahead" of expectations driven by trading in the US and forex benefits in the final quarter.
Redrow was in the green as it reported a 7% jump in annual pre-tax profit to £406m as a double-digit increase in legal completions sent revenue to a record high of £2.1bn.
Dixons Carphone shares rose after it maintained its guidance for the year but posted a 10% decline in UK & Ireland mobile like-for-like revenue for the first quarter, while Wood Group was boosted by an upgrade to 'hold' at Jefferies.
Market Movers
FTSE 100 (UKX) 7,301.03 -0.14%
FTSE 250 (MCX) 19,611.07 -0.04%
techMARK (TASX) 3,861.61 -0.29%
FTSE 100 - Risers
Melrose Industries (MRO) 194.65p 4.93%
London Stock Exchange Group (LSE) 7,282.00p 2.05%
Smith (DS) (SMDS) 344.10p 1.30%
Smurfit Kappa Group (SKG) 2,518.00p 1.29%
Evraz (EVR) 505.60p 1.26%
St James's Place (STJ) 936.40p 1.25%
ITV (ITV) 117.85p 1.25%
Legal & General Group (LGEN) 226.70p 1.12%
Royal Bank of Scotland Group (RBS) 186.00p 1.06%
Hargreaves Lansdown (HL.) 1,935.00p 1.04%
FTSE 100 - Fallers
Micro Focus International (MCRO) 1,072.20p -3.13%
BHP Group (BHP) 1,752.20p -3.00%
Admiral Group (ADM) 2,054.00p -1.96%
Glencore (GLEN) 238.70p -1.71%
Centrica (CNA) 68.82p -1.52%
AstraZeneca (AZN) 7,281.00p -1.49%
RSA Insurance Group (RSA) 515.60p -1.26%
Just Eat (JE.) 751.40p -1.00%
Carnival (CCL) 3,439.00p -0.89%
Standard Chartered (STAN) 637.80p -0.87%
FTSE 250 - Risers
Future (FUTR) 1,342.00p 12.58%
Wood Group (John) (WG.) 369.30p 3.30%
Centamin (DI) (CEY) 150.80p 2.62%
Kaz Minerals (KAZ) 411.30p 2.62%
Contour Global (GLO) 187.40p 2.40%
IP Group (IPO) 59.80p 2.40%
Bakkavor Group (BAKK) 110.60p 2.22%
Galliford Try (GFRD) 598.72p 2.00%
Spirent Communications (SPT) 194.00p 1.89%
Dixons Carphone (DC.) 116.05p 1.89%
FTSE 250 - Fallers
CYBG (CYBG) 112.11p -19.90%
Network International Holdings (NETW) 586.00p -6.54%
Pagegroup (PAGE) 409.80p -4.12%
Vivo Energy (VVO) 126.20p -3.52%
Clarkson (CKN) 2,224.75p -2.42%
PPHE Hotel Group Ltd (PPH) 1,700.00p -2.30%
Charter Court Financial Services Group (CCFS) 267.00p -1.84%
Savills (SVS) 819.00p -1.80%
Restaurant Group (RTN) 125.00p -1.73%
PayPoint (PAY) 912.00p -1.72%