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London open: Stocks flat as Trump ramps up trade war; Ocado rallies
London stocks were steady in early trade on Tuesday, with investors seemingly keeping their cool as US President Donald Trump slapped more tariffs on China.
At 0850 BST, the FTSE 100 was flat at 7,300.83, while the pound was down 0.2% against the dollar at 1.3134 and 0.1% lower versus the euro at 1.1249.
Trump announced late on Monday that he was imposing 10% tariffs on $200bn worth of Chinese imports, a levy that will be raised to 25% from January. If Beijing retaliates, the US will impose tariffs on an additional $267bn of Chinese goods.
“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly,” Trump said in a statement. “But, so far, China has been unwilling to change its practices.”
Mike van Dulken at Accendo Markets, said: “Piling further pile pressure on Beijing, and just like last time, Trump has already laid the groundwork for more tariffs, saying he has his eye on the remaining $267bn of Chinese imports to the US if Beijing retaliates.
“Nonetheless, sentiment resilient with Chinese equities staging a late rally and Japan reacting as a potential beneficiary.”
In corporate news, Ocado was the standout gainer after saying it kept up the pace of growth in the third quarter as its fourth robot-operated warehouse got up to speed in record time. Revenues of £348.6m in the 13 weeks to 2 September rose 11.5% on the same period last year, as average orders per week grew 11.4% to 283,000
BBA Aviation rallied as it acquired Firstmark, an aerospace focused aftermarket service provider, for $97m.
Specialist lender Paragon Banking Group advanced as it reiterated its guidance for the year and said it continues to operate in line with the board’s expectations.
Shares in Jardine Lloyd Thompson surged more than 30% after the insurance broker agreed to be bought by Marsh & McLennan for around £4.3bn.
Spire Healthcare tumbled as it reported a drop in first-half profit and downgraded its annual guidance after an “unprecedented decline” in admissions of NHS patients.
Aerospace engineer Meggitt fell as it said that Louisa Burdett, former group finance director of Victrex, will succeed Doug Webb as chief financial officer.
In broker note action, Polymetal was lifted to ‘outperform’ at RBC Capital Markets, Fresnillo was upgraded to ‘top pick’.
Centrica was upgraded to ‘buy’ at Goldman Sachs, while Spectris was boosted to ‘outperform’ and IMI was downgraded to ‘underperform’ at Exane BNP Paribas. CYBG was cut to ‘hold’ at Berenberg, which also initiated coverage of Wizz Air and IAG at ‘buy’, Ryanair at ‘hold’ at EasyJet at ‘sell’.
Imperial Brands and BAT were reinstated at ‘underweight’ and ‘equalweight’ by Morgan Stanley.
