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London open: Stocks edge up amid ongoing US-Iran tensions, ahead of G20
London stocks rose in early trade on Monday but gains were muted amid lingering tensions between the US and Iran, and as investors eyed this week’s G20 meeting.
At 0840 BST, the FTSE 100 was up 0.1% at 7,416.46, while the pound was down 0.1% against the dollar at 1.2726 and 0.2% lower versus the euro at 1.1185.
Relations between the US and Iran were very much in focus after US Secretary of State Mike Pompeo said on Sunday that “significant” sanctions on Iran would be announced on Monday.
In addition, market participants were looking ahead to the upcoming G20 meeting this week, which will bring the Sino-US trade war back into the spotlight.
“In a week that is severely back-weighted, building to the much-anticipated G20 tête-à-tête between Donald Trump and Xi Jinping, the European markets nevertheless made the most of a quiet calendar to maintain June’s gains,” said Spreadex analyst Connor Campbell.
“Despite the weekend papers being full of Tory leadership controversy, the pound kept its losses at the mild end of the spectrum,” he said, adding that that took the edge off of last week’s cable rebound, while keeping sterling near its five-month lows against its single currency rival.
Corporate news was scarce, but Admiral was the standout gainer on the FTSE 100 after a double upgrade to ‘overweight’ from ‘underweight’ at Barclays. Hastings was also on the front foot as Barclays reiterated its ‘overweight’ rating.
“Our analysis suggests insurance prices have reached an inflection point in 2Q 2019, with April-May prices up 4% – a trend that we believe will only be recorded by the wider market when the mainstream quarterly indices are published in the second half of July,” it said. “We see this turn as a positive for Hastings and Admiral, given their share prices have historically been highly correlated to movements in premiums.”
Melrose Industries was also a high riser after Citi initiated coverage of the stock with a ‘buy’ rating and 220p price target, saying it “uniquely” offers investors an opportunity to invest in a FTSE 100 company with “a consistent track record as an industrials turnaround specialist”.
Carnival fell, however, as Barclays downgraded its recommendation on shares of the cruise operator to ‘equalweight’.
