London open: Stocks tread water ahead of jobs data; Unilever slides
London stocks were little changed in early trade on Tuesday as investors eyed the release of key UK jobs data, but consumer goods giant Unilever slumped after warning it will miss its 2019 sales growth target.
At 0830 GMT, the FTSE 100 was down 0.1% at 7,509.15, while the pound was off 0.6% against the dollar and the euro at 1.3257 and 1.1899, respectively, following news that Prime Minister Boris Johnson plans to add a clause to the Brexit bill to make it illegal to extend the transition period beyond the end of next year, reviving the threat of a no-deal Brexit.
Danske Bank said: "This supports our view that the no-deal risk is still present as Boris Johnson will not exploit his huge majority to be flexible on the end-2020 deadline for negotiating a trade agreement with the EU.
"This new legislation will eliminate the option of extending the transition by two years. In fact, this may at the end of the day turn out to be pure political symbolism, as the law can always be amended, but it shows Johnson is intent on honouring the Tory manifesto commitment to terminate the transition in just over a year from now."
Investors were erring on the side of caution ahead of the release of the unemployment rate, claimant count and average earnings at 0939 GMT.
The unemployment rate is expected to have edged up to 3.9% in the three months to October from 3.8%, while average earnings excluding bonuses are expected to have eased to 3.4% from 3.6%.
"It is worth noting, the latest CPI reading slipped to 1.5% - it’s lowest since late 2016. While average earnings are conformably above the CPI rate that should bode well for the British economy," said CMC Markets analyst David Madden.
Elsewhere, trade relations between the US and China were still in focus after the two agreed a ‘phase one’ trade deal. According to the South China Morning Post, China faces a "huge challenge" living up to US trade promises.
"We see reasons to be cautious about the prospects of the two sides getting over the finish line and see bumps on the road in the coming talks toward finalisation of the deal possibly in early new year," said Danske Bank.
In equity markets, Unilever was under the cosh after it cautioned that full-year underlying sales growth would be "slightly below" guidance of the lower half of its 3-5% multi-year range amid challenges in some of its markets.
Oilfield services firm Petrofac was in the red as it said full-year group revenue was expected to be approximately $5.5bn and that it continues to expect a decrease in group revenue in 2020, reflecting low new order intake in recent years.
RBS and Virgin Money were hit by a downgrade to ‘neutral’ at Citi. More generally, banks and housebuilders were on the back foot, most likely due to the renewed threat of a no-deal Brexit. Lloyds, Barratt Developments and Taylor Wimpey were all down.
Hunting gushed lower as the oilfield services group said expectations for annual profit were under threat from a sharpening slowdown in the US onshore oil and gas market as the company approaches its year end.
Market Movers
FTSE 100 (UKX) 7,509.15 -0.13%
FTSE 250 (MCX) 21,728.47 -0.88%
techMARK (TASX) 4,152.53 0.02%
FTSE 100 - Risers
Royal Dutch Shell 'B' (RDSB) 2,190.00p 1.39%
Rentokil Initial (RTO) 448.30p 1.36%
London Stock Exchange Group (LSE) 7,424.00p 1.25%
Royal Dutch Shell 'A' (RDSA) 2,201.50p 1.20%
CRH (CRH) 3,048.00p 1.09%
Intertek Group (ITRK) 5,752.00p 1.09%
Experian (EXPN) 2,534.00p 1.08%
Relx plc (REL) 1,889.50p 1.02%
National Grid (NG.) 942.00p 0.96%
Sage Group (SGE) 749.20p 0.94%
FTSE 100 - Fallers
Unilever (ULVR) 4,390.00p -5.19%
Lloyds Banking Group (LLOY) 64.47p -4.13%
Royal Bank of Scotland Group (RBS) 252.20p -3.37%
Barratt Developments (BDEV) 751.40p -2.94%
International Consolidated Airlines Group SA (CDI) (IAG) 621.20p -2.94%
Legal & General Group (LGEN) 309.60p -2.55%
Barclays (BARC) 187.78p -2.43%
Next (NXT) 7,180.00p -2.18%
Berkeley Group Holdings (The) (BKG) 5,108.00p -2.03%
Taylor Wimpey (TW.) 197.25p -1.96%
FTSE 250 - Risers
TalkTalk Telecom Group (TALK) 113.30p 1.16%
JPMorgan Japanese Inv Trust (JFJ) 473.00p 0.85%
Stagecoach Group (SGC) 164.20p 0.74%
Hastings Group Holdings (HSTG) 183.00p 0.66%
Plus500 Ltd (DI) (PLUS) 861.00p 0.65%
Sophos Group (SOPH) 553.40p 0.58%
Big Yellow Group (BYG) 1,159.00p 0.52%
Wetherspoon (J.D.) (JDW) 1,661.00p 0.48%
Schroder Oriental Income Fund Ltd. (SOI) 252.00p 0.40%
European Opportunities Trust (JEO) 834.00p 0.36%
FTSE 250 - Fallers
Hunting (HTG) 388.20p -5.13%
Virgin Money UK (VMUK) 194.80p -5.02%
Tullow Oil (TLW) 58.14p -4.53%
Senior (SNR) 178.60p -4.13%
Ferrexpo (FXPO) 150.45p -4.11%
Crest Nicholson Holdings (CRST) 430.00p -3.37%
Marks & Spencer Group (MKS) 221.40p -3.28%
Airtel Africa (AAF) 78.35p -2.97%
Vivo Energy (VVO) 125.60p -2.94%
Grafton Group Units (GFTU) 890.50p -2.89%