|
London stocks were steady in early trade on Monday as investors eyed the latest round of trade talks between the US and China, with Brexit also firmly in focus ahead of next week's Commons vote on Theresa May's deal.
At 0830 GMT, The FTSE 100 was flat at 6,840.42, while the pound was up 0.1% against the dollar at 1.2739 and 0.2% lower versus the euro at 1.1143.
Officials from the US and China were due to meet for talks in Beijing later in the day in what will be the first discussions since Trump and Xi Jinping agreed a temporary truce in December.
Mike van Dulken, head of research at Accendo Markets, said: "Hopes are high for a long-term deal after weeks of optimistic tweets from President Trump, although an existing three-month/early-March truce deadline could reduce the need for urgency and the two-day meeting in Beijing is relatively brief."
On home turf, Brexit was at the forefront of investors' minds ahead of next week's Commons vote.
London Capital Group analyst Jasper Lawler said: "A failure by Theresa May to secure further reassurances from Brussels over the Irish border means the probability of the Brexit deal being voted through Parliament remains extremely slim.
"However, it is also becoming more apparent that ministers are against a no deal Brexit. A cross party group are urging May to guarantee that the UK won’t leave without a deal. Optimism of Parliament not accepting a no deal Brexit, or even a second referendum being on the cards, is offering the pound support as it begins what promises to be another turbulent week."
In the US, meanwhile, the government shutdown entered its third week.
In corporate news, homewares group Dunelm surged as it struck a note of caution about full-year results due to "unprecedented" uncertainty caused by Brexit, but posted 9% growth in total like-for-like sales for the second quarter, with LFL store revenue up 5.7% year-on-year and online revenue 37.9% higher.
Equiniti was in the green as it won a contract to run the UK media and telecoms watchdog's scheme to compensate users of radio spectrum that is being cleared for use in 5G mobile services.
ContourGlobal rallied after saying it has agreed to buy Alpek's Mexico portfolio of two natural gas-fired combined heat and power plants, together with development rights and permits for a third plant, for $724m in cash.
In terms of sector, miners put in a solid performance as copper prices rose, with Anglo, Rio Tinto and Antofagasta all on the front foot.
In broker note action, Centrica was hit by a downgrade to 'hold' at Jefferies, while St James's Place, Hargreaves Lansdown and Standard Life Aberdeen were lower after downgrades at Deutsche Bank.
HSBC was also in the red after a cut to 'sell' at Citi while Funding Circle was knocked lower by a downgrade to 'neutral' at Bank of America Merrill Lynch.
On the upside, Petrofac was boosted by an upgrade to 'buy' at Jefferies, while Mediclinic rose on the back of an upgrade to 'overweight' at JPMorgan and Hays gained as HSBC bumped it up to 'buy'.
|
|
|
Award winning trading platform
For a limited time only we are offering a 2 week FREE Trial of our Trading Alerts.
Register now
|
|
|
Top 10 FTSE 100 RisersSponsored by Interactive Investor | | |
Top 10 FTSE 100 FallersSponsored by Interactive Investor | | |
|
|
|
Are you looking for a profitable trading strategy?
Do you have 20 minutes a day to follow this strategy?
Yes! Then you need to watch this session.
In fact for the past 6 months this strategy has been averaging +1275 pips per month!
Book A Free Place To Find Out More
|
|
Europe open: Stocks slip ahead of Sino-US trade talks
|
|
|
European stocks were in the red in early trade on Monday, unable to hold on to opening gains as investors eyed the latest trade talks between the US and China.
At 1000 GMT, the benchmark Stoxx Europe 600 index, Germany's DAX and France's CAC 40 were down 0.3% at 342.36, 10,739.13 and 4,722.23, respectively, having kicked the session off higher.
Officials from the US and China were due to meet for talks in Beijing later in the day in what will be the first discussions since Trump and Xi Jinping agreed a temporary truce in December.
"Even if sufficient progress is made by the beginning of March to assuage market fears as regards this particular issue, we would still be loath to signal the all clear," said Rabobank. It pointed to the fact that higher local wages have eroded China’s competitive advantage.
"The country simply must move up the value chain if output is to be maintained and this will make it hard to avoid treading on the US’ toes through intellectual property infringements," it said.
It also noted that the slowdown in growth already in train will increase the political imperative to safeguard output over the longer run.
In the US, meanwhile, the government shutdown entered its third week. Trump promised over the weekend to build his Mexico border wall out of steel as a compromise and repeated the threat that he may seek the necessary funding by declaring a state of emergency.
"While the direct impact of the shutdown is arguably limited, indirectly the fact that the president is considering bypassing Congress entirely by declaring an emergency highlights the elevated degree of policy paralysis in the US which is a further negative from a growth outlook perspective," Rabobank said.
In corporate news, France's Alstom was in the red following a report in Les Echos that the Alstom-Siemens rail deal is not likely to be approved by European Authorities.
Elsewhere, Heineken fizzed lower as Goldman Sachs cut the stock to 'sell' from 'buy'.
On the data front, figures out earlier showed that German retail sales rose 1.4% on month in November, beating expectations for a 0.4% increase. The headline non-working day adjusted year-over-year rate fell to 1.1% from a revised 5.2% in October.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "German consumers’ spending appeared to have picked up in Q4, a bit, though we have to be careful making too much of the retail sales data given their usual volatility.
"Two points are important to make at the outset. First, Black Friday almost surely boosted today’s headline - seasonals haven’t yet caught up to this trend - so we have to expect a reversal in next month’s report. Second, the plunge in the headline year-over-year rate is misleading. The fully adjusted rate fell only marginally, by 0.2pp to 0.7%. Factoring in a 0.8% month-to-month dip in December, we estimate that retail sales increased 0.3% quarter-on-quarter in Q4, modest, but significantly better than the 0.5% fall in Q3."
Meanwhile, factory orders in the country fell 1% on the month in November, falling short of consensus expectations for a 0.1% dip. On the year, factory orders were down 4.3% compared to a 2.7% drop in October.
Elsewhere, the headline Sentix investor sentiment index for the eurozone slipped to -1.5 in January from -0.3 in December last year, coming in ahead of consensus expectations for a reading of -2.0. The index for the current situation edged up to 18.0 from 20.0 in December, but the expectations index fell to -19.3 from 18.8 last month.
"These are levels not seen since the sovereign debt crisis, highlighting just how depressed investor confidence is at the moment," said Vistesen.
|
|
Monday newspaper round-up: US-China talks, Brexit, Morrisons, manufacturing
|
|
|
US officials arrived in China for the first face-to-face negotiations since a 90-day truce was declared in a trade war between Washington and Beijing, in the hope of ending a bruising confrontation between the world’s two largest economies. Hopes that the sixth round of negotiations between the two sides could yield a breakthrough helped Asian shares rise on Monday, combined with optimism about the state of the global economy on the back of strong US jobs figures on Friday. - Guardian
Theresa May is preparing to make another desperate plea to EU leaders to offer a concession on the Irish backstop as she attempts to win over Brexiters who have vowed to vote down the government’s deal. The prime minister on Sunday promised to hold the meaningful vote in parliament in the week beginning 14 January despite growing opposition from Conservative backbenchers and the Democratic Unionist party, whose votes are required to push the deal through parliament. - Guardian
One in three financial services companies in Britain is considering or has confirmed plans to relocate its operations abroad because of Brexit, according to a report from EY. As uncertainty over Britain’s future relationship with the European Union grows, companies are seeking to shield themselves from the consequences of a damaging Brexit by relocating staff and assets away from the City. - The Times
Most politicians want to see companies that repeatedly fail to pay their suppliers within 30 days hit with fines and back making the voluntary Prompt Payment Code a legal requirement for large businesses. A survey of 100 MPs across all parties found that almost three quarters backed the measures, which were also endorsed by the business select committee last month. - Telegraph
More small energy suppliers will be pushed to collapse by rules forcing them to pick up the tab for those that have gone bust already, an industry boss has warned. Eight suppliers ceased trading last year, owing tens of millions of pounds between them to their customers and to industry schemes. Ofgem rules mean that much of this debt will fall to rivals. - The Times
Britons will send back a quarter of the online purchases made between Black Friday on November 29 and Boxing Day, adding to the woes of retailers, according to analysis from the Centre for Economics and Business Research in London. This would equate to about £4.8 billion of the estimated £19 billion in online sales. - The Times
Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC. The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing. - Guardian
More than half of manufacturing companies anticipate more risks than opportunities this year, according to a survey. Almost three quarters of manufacturers said Brexit was their biggest source of uncertainty, with exchange rate volatility, delays at customs and loss of clients cited as major risks, EEF, the trade body for manufacturers, said. Only a quarter of businesses surveyed said they saw more opportunities than risks. - The Times
Morrisons has announced it is slashing the price of more than 900 products, as a week of retail trading updates is expected to show that Aldi and Lidl’s low prices helped the two German chains win the Christmas battle among supermarkets. On Monday, Bradford-based Morrisons said it would continue to defend its market share by cutting an average 20% off “store cupboard favourites” such as tinned tomatoes, cereal, sandwich fillers, ready meals and multivitamins.
The value of higher-end private equity deals fell in Britain last year, despite a global increase because investors are shying away from doing business in the country amid Brexit uncertainty. Research by Unquote Data, a European private equity specialist, show that the value of private equity deals in the UK was 34 per cent lower, at €27.2 billion, last year compared with 2017. - The Times
The German owner of one of Britain’s biggest rail franchises is demanding compensation from Network Rail for extensive delays in electrifying the ailing Northern franchise. Deutsche Bahn, the parent company of Northern operator Arriva Rail North, blamed Network Rail for plunging profits in accounts filed last week. - Telegraph
Hydrogen trains will be introduced in as little as two years under ambitious plans to phase out dirty diesel engines. A deal has been struck to convert more than 100 trains into the first fleet powered by hydrogen fuel cell technology, with Alstom, the French multinational, leading the project alongside Eversholt Rail, the rolling stock company. - The Times
Bitcoin’s energy consumption has dropped dramatically amid its falling price, easing concerns about the cryptocurrency’s environmental impact. The virtual currency’s rapid rise had triggered warnings that the huge amounts of electricity used to maintain the network could worsen climate change after economists calculated that it uses more electricity than most countries. - Telegraph
Lord Sugar’s property and trading vehicle restarted dividend payments last year, despite posting a pre-tax loss of £40 million on the back of a decline in the value of its assets. According to accounts filed at Companies House, Amshold Group, wholly owned by the star of The Apprentice, reported a loss of £40 million for the year to the end of June 2018, compared with a profit of £54 million in the same period the previous year. - The Times
A sharp fall in prices after a bumper harvest, competition from other countries and a trade deal between Brussels and South Africa have created a devastating perfect storm for Spain’s orange farmers. Tonnes of oranges lie on the ground at farms across the country because producers say it is not worth paying workers to pick the fruit now that the price has fallen so low. - The Times
|
|
|
ADVFN Disclaimer
Although we have sent you this email, ADVFN does not endorse any product or company nor is it responsible for the content of this news bulletin. We have not independently reviewed the information; claims or testimonials provided within the news bulletin and make no guarantee or warranty regarding its content. The opinions and recommendations expressed in this email are not those of ADVFN.
|
|
|
|
|
Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
|
|
Support Tel: 0207 0700 961 Company registered in England and Wales: Number 2374988 VAT No: GB 549 2130 49
|
|
|
|
|
|
|
|
|
|
|
|