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London open: Stocks slip after Wall Street sell-off as trade worries persist
London stocks fell in early trade on Thursday, taking their cue from a late selloff in the US amid ongoing trade war concerns.
At 0830 BST, the FTSE 100 was down 0.4% to 7,588.88, while the pound was off 0.1% against the euro at 1.1334 and 0.2% lower versus the dollar at 1.3083.
Stocks on Wall Street kicked off Wednesday’s session in the black as investors welcomed an apparent softening of President Trump’s stance on China after he suggested he might use the Committee on Foreign Investment in the US to monitor the country’s investment in key US sectors, rather than implement tough new measures aimed specifically at China.
However, the mood quickly soured after White House economic adviser Larry Kudlow said in an interview with Fox Business Network that Trump’s announced plan did not signal a softened stance.
“It’s not meant to be harder or softer,” Kudlow said. “It’s going to be very comprehensive and very effective at protecting our technological family jewels in the United States.”
There are no major UK data releases due, but investors will look to the two-day EU summit that kicks off later in Brussels.
“With the UK dragging its feet over the publication of its paper on the UK-EU post- Brexit relationship, which is now not expected until July, no progress is expected on any major issues surround the UK exiting the EU at this meeting,” said London Capital Group analyst Jasper Lawler.
“Instead the EU is expected to give a stern and fierce warning to the UK over its lack of progress on major issues, such as the Irish border policy. With the clock ticking a no deal Brexit is looking increasingly more likely, which makes it almost impossible for the pound to make any serious headway.”
In corporate news, transport operator Stagecoach was weaker after it posted a drop in full-year profit as it took a £85.6m hit from the loss of the East Coast rail contract and cut its full-year dividend.
Tullow Oil gushed lower despite a positive update which saw the group lift its production guidance.
Retailer JD Sports Fashion slipped even as it said it continues to be on track to deliver a full year in line with consensus market expectations.
BCA Marketplace lost ground despite reporting a 19.8% jump in full-year revenue and a 17.6% increase in adjusted earnings before interest, taxes, depreciation and amortisation.
On the upside, Shire was the standout gainer after a group of Takeda Pharmaceutical shareholders failed in their bid to try to block the Japanese company’s $62bn takeover of the London-listed biopharmaceutical group.
Greene King fizzed higher as it said the World Cup and warm weather helped to revive sales at the pub operator after squeezed household budgets and rising costs contributed to falling profit in its last financial year.
Wood Group gained after saying it was on track to deliver growth in 2018 and maintaining its full-year outlook, while Hunting advanced as it highlighted a strong US performance in the first half, but said Europe and Canada remain challenging.
In broker note action, oil giant BP was upgraded to ‘buy’ at Kepler Cheuvreux, while Kaz Minerals was lifted to ‘outperform’ at BMO.
British American Tobacco, British Land, Burberry, Coca-Cola HBC, International Consolidated Airlines Group, B&M European Value Retail, Babcock, JD Sports and Renewi were among the companies whose stock went ex-dividend.
