ADVFN Morning London Market Report: Tuesday 13 March 2018

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London stocks nudged lower in early trade on Tuesday following an uninspiring session in the US, as investors eyed Chancellor Philip Hammond’s spring statement and the latest inflation reading from across the pond.

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At 0830 GMT, the FTSE 100 was down 0.1% to 7,209.78, while the pound was flat against the euro at 1.1273 and off 0.1% versus the dollar at 1.3895.

There will be no spending or tax announcements in the statement, due at 1230 GMT, so attention is likely to fall on the updated OBR economic and public spending forecasts, with the OBR expected to adjust down its target for UK government borrowing by at least £10bn.

Rabobank said Hammond is likely to be on his feet for no more than 20 minutes, with the focus firmly on the need to reduce government debt, which stands at a “worrying” 86.5% of GDP in the UK.

“That said, the UK’s budget deficit has shrunk by more than expected over the past year on the back of stronger growth and this has supported calls for more funding for the National Health Service and for defence. In response Hammond has signalled that there will be no tax or spending announcements today and instead he will only be offering signals regarding the areas which he wants to consult on ahead of the Budget later in the year.”

The US consumer price index for February, due at 1230 GMT, will also garner some attention as investors continue to keep an eye on inflation prospects for the rest of this year.

In corporate news, interdealer broker TP Icap tumbled as its full-year adjusted results fell short of consensus, while Computacenter dropped sharply as it posted a 23% jump in full-year pre-tax profit but said the growth outlook for 2018 remains challenging.

Irish food company Greencore tanked after it issued a profit warning and said chief executive Patrick Coveney will spend half his time in the US as part of a restructuring.

Retirement specialist Just Group nudged lower as it said deputy chairman Tom Cross Brown will retire at the next annual general meeting in May.

FTSE 250 merchant bank Close Brothers edged down even as it posted a 6% jump in first-half adjusted operating profit thanks to a good performance across its businesses.

Legal & General Group fell after announcing that its Legal & General Capital division has acquired the 52.1% of CALA Homes which it did not previously own.

Anglo American was in the red as production at the company’s Minas-Rio mine in Brazil was halted due to a ruptured slurry pipeline.

Old Mutual slipped as it said it would resist a claim made against it in the US by Travelers and St Paul Fire and Marine Insurance related to dispose of assets.

On the upside, Antofagasta gained as it increased its dividend 177% for last year as cash flow surged, though the Chilean copper miner is facing strike action at its Los Pelambres mine.

International plastics engineer RPC Group ticked up after saying it bought polythene film maker Nordfolien for €75m, while Cairn Energy racked up healthy gains after saying it swung to a profit last year.

In broker note action, Barclays was added to Deutsche Bank‘s short-term ‘buy’ list, while LondonMetric Property was raised to ‘equalweight’ at Morgan Stanley. Industrial flow-control equipment maker Rotork was downgraded to ‘sell’ at Investec.

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