London open: Stocks drop on downbeat US and Asian cues; pub groups buck the trend

London stocks fell in early trade on Thursday, taking their cue from weak sessions in the US and Asia amid ongoing worries about Sino-US trade relations, with all eyes on the release of UK retail sales data.

At 0840 BST, the FTSE 100 was down 0.5% at 7,501.73, while the pound was up 0.2% against the dollar at 1.2457 and 0.1% firmer versus the euro at 1.1087.

Spreadex analyst Connor Campbell said: "The catalyst for all this was a report from the Wall Street Journal claiming that the US-China trade talks had stalled due to the tech-elephant in the room: Huawei.

"The White House is trying to figure out how to handle Beijing’s demands regarding de-black listing the smartphone maker, apparently the key reason why there has been so little movement since the latest truce was announced in Osaka."

Overnight results from Netflix also weighed on sentiment as the company's quarterly subscriber growth disappointed.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Revenues continue to climb rapidly, up 26% year-on-year to $4.9bn, and operating profits of $706m have come in well above market expectations. However, subscriber growth has been subdued this quarter. Net additions of 2.7m new subscribers is well below both market expectations and the company’s own guidance of 5m."

On home turf, UK retail sales figures for June will be in focus at 0930 BST. Month-on-month, retail sales are expected to have slipped 0.3% compared to 0.5% decline the month before. On the year, they're expected to have fallen 2.6% versus a 2.3% drop in May.

In equity markets, equipment rental firm Ashtead was in the red after US peer United Rentals cut the top of its guidance range on Wednesday, while software company Sage was weaker after German software maker SAP's second-quarter profits missed expectations.

Anglo American fell after saying it was lowering full-year production guidance to the bottom end of forecasts at its De Beers diamond operation in response to weaker market conditions.

Price comparison website Moneysupermarket traded lower even after it posted a jump in interim profit and revenue, as it helped more customers to switch energy after the implementation of the price cap.

InterContinental Hotels and Whitbread were hit by downgrades to 'underperform' at RBC Capital Markets, while Greggs was lower after a downgrade 'reduce' by Peel Hunt.

Outside the FTSE 350, Asos shares tumbled after the online fashion retailer warned that annual pre-tax profit was now expected to come in between £30m and £35m, down from £102m last year, partly due to warehouse transition work costs of £35m to £47m.

On the upside, EI Group was the standout gainer on the FTSE 250 after it agreed to be bought by Slug & Lettuce owner Stonegate for £1.3bn. The rest of the pub sector fizzed higher, with Mitchells & Butlers, Martston's and Greene King all up.

EasyJet flew higher as the budget airline hailed a "robust" third quarter, with revenue up 11%, while Hochschild Mining shone as it said it was "firmly on track" to meet full-year production.

SSE nudged up after reiterating its outlook for 2019/20 despite "some short-term challenges", while Hilton Food was also in the green after a well-received trading update.

Market Movers

FTSE 100 (UKX) 7,501.73 -0.45%
FTSE 250 (MCX) 19,577.52 -0.19%
techMARK (TASX) 3,673.77 -0.18%

FTSE 100 - Risers

British American Tobacco (BATS) 2,957.00p 1.09%
Kingfisher (KGF) 222.50p 0.68%
SSE (SSE) 1,159.50p 0.56%
Imperial Brands (IMB) 2,108.00p 0.55%
BT Group (BT.A) 190.66p 0.40%
Centrica (CNA) 88.46p 0.36%
Vodafone Group (VOD) 126.50p 0.33%
Marks & Spencer Group (MKS) 205.20p 0.29%
SEGRO (SGRO) 757.40p 0.26%
Persimmon (PSN) 1,953.00p 0.13%

FTSE 100 - Fallers

NMC Health (NMC) 2,230.00p -2.53%
Ashtead Group (AHT) 2,222.00p -1.94%
United Utilities Group (UU.) 750.00p -1.94%
Sage Group (SGE) 803.60p -1.74%
Burberry Group (BRBY) 2,305.00p -1.71%
TUI AG Reg Shs (DI) (TUI) 768.60p -1.66%
Micro Focus International (MCRO) 1,674.80p -1.49%
BP (BP.) 520.70p -1.38%
InterContinental Hotels Group (IHG) 5,486.00p -1.35%
Rentokil Initial (RTO) 415.80p -1.33%

FTSE 250 - Risers

EI Group (EIG) 285.20p 38.58%
Mitchells & Butlers (MAB) 307.50p 3.19%
Hilton Food Group (HFG) 960.50p 2.07%
Greene King (GNK) 655.20p 1.68%
Marston's (MARS) 122.00p 1.67%
Oxford Instruments (OXIG) 1,344.34p 1.54%
Syncona Limited NPV (SYNC) 236.50p 1.28%
Ultra Electronics Holdings (ULE) 1,755.00p 1.21%
Hochschild Mining (HOC) 205.00p 1.08%
Bakkavor Group (BAKK) 110.70p 1.00%

FTSE 250 - Fallers

PayPoint (PAY) 882.01p -3.18%
Premier Oil (PMO) 76.50p -2.30%
Cranswick (CWK) 2,470.00p -2.14%
John Laing Group (JLG) 377.94p -2.09%
Greggs (GRG) 2,428.00p -1.94%
McCarthy & Stone (MCS) 137.30p -1.93%
Woodford Patient Capital Trust (WPCT) 53.95p -1.90%
Equiniti Group (EQN) 217.10p -1.85%
CYBG (CYBG) 194.70p -1.67%
Bodycote (BOY) 747.50p -1.64%