ADVFN Morning London Market Report: Friday 29 June 2018

The euro was underpinned by news that EU leaders at the summit in Brussels reached a deal on migration in the early hours of Friday, after more than 10 hours of negotiations.

As part of the deal, which is voluntary, new migrant centres would be set up in EU countries to process migrants and determine those who are genuine refugees, with those deemed “irregular” returned. The leaders also agreed to tighten their external border and increase financing and local assistance for Turkey, Morocco and North African states to prevent migration to Europe.

Konstantinos Anthis, head of research at ADSS, said: “Clearly, the agreement in Brussels removes one of the major risks for European equities but whether it will resolve the migration crisis remains to be seen. Nevertheless, this is a good opportunity for stock bulls to jump into the fray again after sitting on the side-lines for a few days as markets were trading in the red.”

Meanwhile, analysts at Rabobank said: “While we won’t pretend to be experts on immigration, the document seems very light on any firm (rather than voluntary) commitments. However, what is important from a trading perspective is the political reaction rather than the exact substance. On this front, Italian PM Conte appears to have gone away happy and so we would seem set to see some less aggressive headlines from the country on the issue (although, of course, Salvini may not be as happy about the deal). Merkel seems much more circumspect though and it would still appear that the stability of the CDU/ CSU will rely on the striking of bilateral deals with various EU countries.”

Investors shrugged off the latest survey from GfK, which showed consumer confidence in the UK fell in June as Britons grew increasingly gloomy about the economy.

GfK’s long-running consumer confidence index fell two points this month to -9, missing expectations for it to remain unchanged at -7 and with all five of the key measures dropping. Of the five key metrics, the measure for the general economic situation over the last 12 months and the one for the general economic situation over the next 12 months saw the biggest declines, each falling four points to -28 and -25, respectively.

Client strategy director Joe Staton said: “Scores on personal finance are down but there is a more marked deterioration in our levels of optimism about the general state of the economy, with the verdicts on the past year and the coming year each tumbling four points. When will the strong jobs market and low interest rates boost the economic mood? That’s the key to confidence increasing more generally. ”

Still to come on the UK data front, a final reading on first-quarter GDP, plus net lending, consumer credit and mortgage approvals are due at 0930 BST.

Miners were the best performers amid rising copper prices, with Anglo American, Glencore and BHP Billiton all higher.

BHP also agreed to pay $158m to a fund set up in Brazil to deal with remediation and compensation from the 2015 bursting of the Samarco tailings dam that killed 19 people. The mining giant, which jointly owns local mining outfit Samarco Mineração with Brazil’s Vale, has also offered up to $53m to the joint venture to carry out ongoing repair works, maintain facilities and support the restarting of operations.

Indivior ticked higher after a US court extended its temporary restraining order blocking Dr Reddy’s Laboratories from launching a generic version of its opioid addiction treatment in the US prior to a decision on a full injunction.

BAE Systems was on the front foot after saying it has been awarded an AUD35bn (£20bn) contract by the Australian government to build its fleet of nine new navy frigates, while John Laing advanced after maintaining its full-year investment commitments at around £250m.

Elsewhere, British American Tobacco and Imperial Brands were both in the green even as Australia won in a major trade dispute over its pioneering tobacco plain packaging law, after a panel of judges at the World Trade Organisation rejected arguments from Cuba, Indonesia, Honduras and the Dominican Republic that the laws violated international trade.

On the downside, outsourcer Serco slumped as it said it was still on track for underlying profit of £80m for 2018 but cut its revenue guidance.

Elementis was in the red after the specialty chemicals group announced plans to buy Netherlands-based Mondo Minerals from Advent International for an enterprise value of $600m.

In broker note action, BAE was upgraded to ‘neutral’ at JPMorgan, while Hunting was cut to ‘underweight’ at Morgan Stanley and Diageo was downgraded to ‘market perform’ at Bernstein.