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London open: Stocks nudge lower as dollar weakens on Trump comments
London stocks nudged lower in early trade on Tuesday as investors digested US President Trump’s latest attack on the Fed and looked ahead to US-China trade talks.
At 0820 BST, the FTSE 100 was down 0.1% to 7,582.31, while the pound was up 0.2% against the dollar at 1.2826 and down 0.1% versus the euro to 1.1139.
The US dollar weakened overnight after Trump criticised the Federal Reserve again for lifting interest rates. In an interview with Reuters, Trump said the Fed should do “what’s good for the country”.
Accendo Markets analyst Artjom Hatsaturjants said: “The Fed is independent in setting monetary policy and markets were spooked by yet another comment from Donald Trump criticising higher interest rates (his property magnate background seeping through?).
“GBP strength this morning is pressuring the FTSE, though there is silver lining to this cloud, as the corresponding Greenback weakness is proving beneficial to USD-denominated commodities, as oil, copper and gold prices are higher this morning.”
Trump also accused Europe and China of manipulating their currencies again. The US President told Reuters that China was doing so to make up for having to pay US tariffs. He also said he does not expect much from the US-China trade talks and has no time frame for ending the dispute.
As far as the UK is concerned, Jeremy Hunt will set off on his first trip to the US as foreign secretary on Tuesday. He is due to make a speech at a Q&A in Washington during which he is expected to warn Brussels that a failure to strike a Brexit deal would destabilise the international order and urge President Trump to impose wider sanctions against Russia.
In addition, international trade secretary Liam Fox will launch Britain’s new export strategy, with a speech and Q&A at the Institute of Directors in London.
On the data front, public sector net borrowing figures are due at 0930 BST and the CBI industrial trends survey is at 1100 BST.
In corporate news, BHP Billiton was in the red even as it declared a record final dividend as higher prices and volumes sent the miner’s underlying annual profit up by a third.
Persimmon advanced after it reported a 13% increase in profits from the first half of the year as the housebuilder sold 4% more homes and the average selling price increased 1% to £215,813.
AstraZeneca ticked up as it announced that the Japanese Ministry of Health, Labour and Welfare has approved ‘Tagrisso’ (osimertinib) for the first-line treatment of patients with inoperable or recurrent epidermal growth factor receptor mutation-positive non-small cell lung cancer, following priority review.
Wood Group nudged higher as it posted a loss for the first six months of the year but a rise in revenues.
Polymetal rallied as it reported a 46% jump in first-half net income, while Charter Court Financial Servicesgained ground after it posted a rise in first-half profit as loans roses and the company announced an inaugural dividend.
In broker note action, Aggreko was upgraded to ‘buy’ at HSBC, while Weir was lifted to ‘outperform’ at Credit Suisse. Bodycote was downgraded to ‘sell’ at Panmure Gordon.
