London open: Stocks fall amid trade war fears; Burberry in the red
London stocks fell in early trade on Wednesday as concerns about trade tensions between the US and China weighed on sentiment.
At 0830 GMT, the FTSE 100 was down 0.4% to 6,873.15, following a downbeat Wall Street session overnight. The pound was up 0.1% against the dollar and the euro at 1.2960 and 1.1412, respectively, amid hopes that a no-deal Brexit will be avoided.
Worries about Sino-US relations resurfaced following reports late on Tuesday that the White House had cancelled a planned trade meeting this week with Chinese officials due to ongoing disagreements over intellectual property rules.
"While these reports were refuted by Larry Kudlow, Donald Trump’s chief economic advisor, he did say that the important meeting was the one at the end of the month with Chinese Vice Premier Liu He, which would suggest the potential for failure still remains fairly high," said CMC Markets analyst Michael Hewson.
In corporate news, Burberry was in the red as sales disappointed slightly over the festive quarter but the luxury fashion house maintained that it was successfully building "brand heat" ahead of the launch next month of its new creative director's debut collection.
Richard Hunter, head of markets at Interactive Investor, pointed to the fact that total retail revenues dipped slightly, whilst the Americas business suffered from softer footfall.
"Meanwhile, growth in Europe, the Middle East, India and Africa was pedestrian and the scale of the planned transformation at Burberry inevitably comes with implementation risks. In the meantime, the dividend yield of 2.3% is not of particular attraction, and whilst there are clear objectives in mind on the company’s rebrand, this has yet to filter through to the numbers in any meaningful way."
Antofagasta and Fresnillo were both weaker following the release of production reports, while wealth manager Brewin Dolphin lost ground after it reported a 7.7% drop in total first-quarter funds amid falling markets.
Pub group Wetherspoon fell as it said first-half pre-tax profit is expected to be lower than the previous year, while Sanne slumped as it updated the market on its financial year and announced the retirement of its chief executive.
Metro Bank was the biggest faller on the FTSE 250, however, as it said underlying pre-tax profit for 2018 grew 138% to £50m - around 16% below analysts' expectations.
On the upside, RPC Group rallied as it finally confirmed that it has received a take-private offer from US private equity group Apollo, valuing the plastics company at £3.3m. Apollo's Rome UK bid vehicle has offered 782p per share in cash, with each shareholder also receiving the recently announced 8.1p per share interim dividend.
Computacenter racked up strong gains after saying that it materially outperformed its expectations for the year to 31 December 2018.
WH Smith advanced as it posted a 6% rise in sales for the 20 weeks to 19 January as a solid performance from its travel business offset lacklustre high street trading.
In broker note action, Anglo American was started at 'neutral' by Oddo, while BHP Group was initiated at 'buy'. Jefferies started coverage of Cineworld at 'buy' and MainFirst initiated Compass at 'neutral'.
Market Movers
FTSE 100 (UKX) 6,873.15 -0.41%
FTSE 250 (MCX) 18,587.12 -0.51%
techMARK (TASX) 3,373.10 -0.43%
FTSE 100 - Risers
Evraz (EVR) 458.40p 2.41%
Sainsbury (J) (SBRY) 279.20p 0.90%
Tesco (TSCO) 222.33p 0.88%
SSE (SSE) 1,129.00p 0.53%
Wood Group (John) (WG.) 527.60p 0.53%
Direct Line Insurance Group (DLG) 332.20p 0.51%
Severn Trent (SVT) 1,953.00p 0.46%
Ocado Group (OCDO) 919.20p 0.46%
ITV (ITV) 133.15p 0.45%
Pearson (PSON) 924.40p 0.43%
FTSE 100 - Fallers
Smiths Group (SMIN) 1,427.00p -2.03%
Burberry Group (BRBY) 1,741.00p -1.97%
Ferguson (FERG) 5,206.00p -1.85%
Centrica (CNA) 131.75p -1.75%
Fresnillo (FRES) 896.80p -1.69%
Melrose Industries (MRO) 166.75p -1.56%
Smith (DS) (SMDS) 330.60p -1.46%
Reckitt Benckiser Group (RB.) 5,952.00p -1.28%
British American Tobacco (BATS) 2,497.50p -1.27%
Barclays (BARC) 161.20p -1.26%
FTSE 250 - Risers
Computacenter (CCC) 1,070.84p 5.19%
RPC Group (RPC) 769.80p 4.88%
IG Group Holdings (IGG) 602.50p 3.88%
Hilton Food Group (HFG) 940.00p 3.07%
Bakkavor Group (BAKK) 141.80p 2.75%
IP Group (IPO) 108.20p 2.08%
WH Smith (SMWH) 1,913.00p 1.97%
CLS Holdings (CLI) 240.63p 1.53%
Rank Group (RNK) 152.00p 1.33%
Fisher (James) & Sons (FSJ) 1,910.00p 1.27%
FTSE 250 - Fallers
Metro Bank (MTRO) 1,644.00p -25.34%
Sanne Group (SNN) 500.00p -8.59%
G4S (GFS) 198.50p -4.34%
Indivior (INDV) 117.50p -2.69%
TI Fluid Systems (TIFS) 156.60p -2.67%
CYBG (CYBG) 188.40p -2.43%
OneSavings Bank (OSB) 379.60p -2.22%
Spectris (SXS) 2,400.00p -2.08%
Brewin Dolphin Holdings (BRW) 308.40p -1.97%
Marshalls (MSLH) 490.00p -1.80%