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London open: Stocks in the red as airlines drop, Trump threatens Iran
London stocks fell in early trade on Monday, with sentiment taking a knock once again from comments by US President Donald Trump and airlines lower after disappointing results from Ryanair.
At 0845 BST, the FTSE 100 was 0.7% lower at 7,624.26, while the pound was up 0.2% against the dollar at 1.3147 and flat versus the euro at 1.1208.
In a tweet to Hassan Rouhani late on Sunday, Trump warned the Iranian President to “never, ever threaten the US again”. The tweet came after Rouhani reportedly cautioned that Americans “must understand that war with Iran is the mother of all wars and peace with Iran is the mother of all peace”.
Trump retaliated by tweeting: “Never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history have ever suffered before. We are no longer a country that will stand for your demented words of violence and death. Be cautious!”
Spreadex analyst Connor Campbell said: “As ever Donald Trump set the tone for what would have otherwise been a quiet start to the week on Sunday night, an all-caps rant from the unhinged President forcing the markets lower.
“Following on from another testy G20 meeting highlighting the wealth of risks – chief among them the ‘heightening trade and geopolitical tensions’, endangering economic growth – Trump saw it fit to provide the markets with a fresh example of what the international forum was talking about with his latest tweet-storm.”
Looking ahead to the rest of the week, European Commission President Jean-Claude Juncker is due to meet Trump at the White House on Wednesday.
On the corporate front, airlines were under the cosh, with EasyJet and British Airways parents IAG the top fallers after budget carrier Ryanair posted a 20% drop in first-quarter pre-tax on the back of higher costs, lower fares and strikes. Ryanair was down nearly 6%.
BHP Billiton nudged down after saying it would defend a class action by investors over the Samarco dam disaster of 2015 that killed 19 people. The claim, served in Australia, alleges BHP breached disclosure obligations and engaged in misleading and deceptive conduct.
Shopping centre owner Hammerson dropped as it exchanged contracts for the sale of two retail parks for £164m to Capreon, while Ascential, formerly EMAP, retreated after the release of its interim results.
FDM Group fell despite reporting a 12% increase in first-half profit as it invested in expanding its more profitable “Mountie” IT consultancy operation.
Anglo American slipped as Anglo American Platinum upped its stake in the Mototolo joint venture project after buying out Glencore’s 39% share.
Paragon Banking Group ticked higher after saying it was on track to deliver expected year-end results, while IWG edged up after saying that its suitors – TDR Capital, Terra Firma and Starwood – have been given more time to make an offer for the serviced office group, as Prime Opportunities dropped out of the race.
In broker note action, Hargreaves Lansdown retreated after a downgrade to ‘underperform’ at Jefferies, while Elementis was hit by a downgrade to ‘neutral’ from ‘buy’ at Bank of America Merrill Lynch.
