London open: Stocks edge up on positive Asian cues as miners rally
London stocks edged up in early trade on Friday, taking their cue from a positive Asian session despite ongoing worries about trade relations between the US and China.
At 0830 GMT, the FTSE 100 was 0.2% higher at 6,831.12 as the pound edged up 0.2% against the dollar to 1.3090 and 0.1% versus the euro to 1.1571, having surged overnight following a report that Northern Ireland's Democratic Unionist Party has privately given support to Theresa May's Brexit 'Plan B' agreement provided it contains a clear timeframe for the Irish backstop.
"While that is wonderfully pragmatic of them," said CMC Markets analyst Michael Hewson, "the EU have consistently said that they were not prepared to put an end date on the backstop, so it’s not immediately apparent we are any further forward, however markets still appear to be pricing in the prospect that something will be agreed to avoid a 'no deal' Brexit." The House of Commons is due to vote on the deal next Tuesday.
Meanwhile, Sino-US relations remained in focus as investors digested conflicting signals.
US Commerce Secretary Wilbur Ross warned that the US and China were "miles and miles" away from ending their trade dispute but also said that there was a fair chance that China will get a trade deal. Meanwhile, Trump's economic advisor Larry Kudlow said the US president is optimistic on trade talks.
On the UK data front, BBA mortgage approvals are due at 0930 GMT and the CBI distributive trades survey is at 1100 GMT.
Miners were the standout gainers, with Glencore, Antofagasta and Anglo American all higher as copper prices rose. Banks also advanced, with HSBC and Lloyds both firmer.
Pharmaceutical company Indivior nudged up as it won a temporary restraining order to prevent US rival Alvogen Pine Brook from launching its generic buprenorphine and naloxone sublingual film product.
Rentokil Initial ticked up after the Competition and Markets Authority said it will need to sell several large supply contracts to satisfy the regulator's concerns about its merger with Cannon Hygiene.
On the downside, Vodafone fell despite saying it managed to keep underlying growth positive in the third quarter as it stemmed some of the customer losses in Italy and Spain. Organic service revenues of €9.8bn in the three months to 31 December were up 0.1% compared to the same period a year earlier, beating analyst expectations for a decline of 0.7%.
Perhaps the shares were hit by the lack of reassurance over the dividend. Hewson noted concerns about the size of its dividend, currently at 9% which in the longer term isn’t sustainable with a dividend cover of 0.5. This means that the company is having to fund the payout by way of borrowing, he said. "A dividend cover of less than 1 means that profits aren’t sufficient to cover the payout to shareholders, something that isn’t sustainable over time."
Irn-Bru maker AG Barr fizzed a little lower despite saying it expects a 5% increase in full-year revenue, as it highlighted ongoing political and economic uncertainty in the UK.
In broker note action, property stocks took a hit as Citi cut British Land, Derwent London, Great Portland Estates, Hammerson, Intu and Land Securities to 'sell', and Shaftesbury to 'neutral'.
AstraZeneca was lifted to 'buy' at Shore Capital, while Land Securities was raised to 'neutral' at Goldman and NCC was boosted to 'buy' at Citi.
Cranswick and Greencore were started at 'buy' by HSBC, while Dairy Crest and Hilton Food were started at 'hold' and Bakkavor was cut to 'hold' by the same outfit.
Intu was cut to 'sell' at Goldman and ITV was downgraded to 'hold' at SocGen.
Market Movers
FTSE 100 (UKX) 6,831.12 0.18%
FTSE 250 (MCX) 18,620.44 -0.04%
techMARK (TASX) 3,344.09 -0.18%
FTSE 100 - Risers
Fresnillo (FRES) 921.95p 3.36%
Antofagasta (ANTO) 813.20p 1.93%
Glencore (GLEN) 293.00p 1.68%
Smurfit Kappa Group (SKG) 2,138.00p 1.33%
Anglo American (AAL) 1,813.78p 1.19%
HSBC Holdings (HSBA) 640.30p 1.14%
NMC Health (NMC) 2,698.00p 1.12%
BHP Group (BHP) 1,586.00p 1.08%
Lloyds Banking Group (LLOY) 58.30p 1.07%
Wood Group (John) (WG.) 528.20p 1.07%
FTSE 100 - Fallers
British Land Company (BLND) 553.40p -2.64%
Land Securities Group (LAND) 828.90p -2.04%
Vodafone Group (VOD) 141.66p -1.65%
InterContinental Hotels Group (IHG) 4,338.50p -1.03%
SEGRO (SGRO) 634.00p -0.94%
Bunzl (BNZL) 2,363.00p -0.76%
Informa (INF) 672.20p -0.74%
Paddy Power Betfair (PPB) 6,075.00p -0.74%
GVC Holdings (GVC) 666.91p -0.68%
British American Tobacco (BATS) 2,409.00p -0.66%
FTSE 250 - Risers
Clarkson (CKN) 2,525.00p 2.43%
Ascential (ASCL) 390.20p 1.88%
IWG (IWG) 227.40p 1.65%
Premier Oil (PMO) 70.53p 1.63%
Hunting (HTG) 535.00p 1.52%
Intermediate Capital Group (ICP) 999.50p 1.42%
Mitchells & Butlers (MAB) 287.60p 1.41%
Man Group (EMG) 147.55p 1.34%
Capita (CPI) 118.10p 1.33%
Kaz Minerals (KAZ) 518.60p 1.29%
FTSE 250 - Fallers
Hammerson (HMSO) 338.90p -3.99%
Great Portland Estates (GPOR) 702.40p -3.79%
Tritax Big Box Reit (BBOX) 134.80p -3.37%
Derwent London (DLN) 2,958.00p -3.08%
Intu Properties (INTU) 103.70p -2.90%
Syncona Limited NPV (SYNC) 260.00p -2.26%
Amigo Holdings (AMGO) 245.00p -2.02%
Inmarsat (ISAT) 368.80p -1.81%
Fisher (James) & Sons (FSJ) 1,848.00p -1.70%
Millennium & Copthorne Hotels (MLC) 479.00p -1.54%