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London open: Stocks steady amid trade, Brexit concerns
London stocks were steady early on Wednesday, with investors cautious ahead of this week’s Sino-US trade talks and as hopes of a Brexit deal faded.
At 0830 BST, the FTSE 100 was flat at 7,144.93, while the pound was up 0.1% against the dollar at 1.2235 and 0.1% lower versus the euro at 1.1142.
Sentiment took another hit ahead of Thursday’s trade talks between the US and China, after Washington said late on Tuesday that it was imposing visa restrictions on Chinese officials over the country’s treatment of Muslim minorities in Xinjiang.
Neil Wilson, chief market analyst at Markets.com, said: “Trade and human rights may be separate, but it’s hardly adroit diplomacy. So far we can see nothing that gives hope of even a narrow deal, let alone anything more comprehensive. Hopes of even a truce are fading fast.”
On the Brexit front, meanwhile, things weren’t looking good either after German Chancellor Angela Merkel told British Prime Minister Boris Johnson on Tuesday that a deal was “overwhelmingly unlikely” unless Northern Ireland stays in the customs union.
Wilson said: “Post the Merkel call, Brexit talks are all but dead. We now move onto the more uncertain, and perhaps radical, stage of Revoke versus No deal – the battle lines which are being drawn for the next election.
“Reports indicate there’s Tory unhappiness about running on a no-deal ticket. One feels it wouldn’t go that far, but we’re in very uncertain times…would Boris do the full Peel and split the party over this?”
In equity markets, Just Eat racked up solid gains after Dutch online food delivery firm Takeaway.com posted an 87% jump in third-quarter orders thanks to organic growth and acquisitions.
Gambling company GVC Holdings rallied as it upgraded its full-year profit forecasts after a strong third quarter driven by online revenues. The company said it now expected earnings before interest, tax depreciation and amortisation to be in the range of £670m – £680m, up from £650m – £670m).
Shares of B&Q owner Kingfisher edged up as it announced the appointment of Bernard Bot as its new chief financial officer with effect from 21 October.
Mitchells & Butlers was in the green after Jefferies reinstated coverage of the stock at ‘buy’, but Domino’s was knocked lower after Jefferies started the stock at ‘underperform’. Marston’s was also weaker after a reinstatement at ‘underperform’ by the same outfit, while Savills was down after an initiation at ‘hold’ by HSBC.
