London open: Stocks fall as Burberry, Rio Tinto lead the decline

London stocks fell in early trade on Tuesday as investors continued to mull political developments in the US, with Burberry and Rio Tinto on the back foot.

At 0915 BST, the FTSE 100 was down 0.4% at 8,154.70.

Patrick Munnelly at TickMill Group said: "Asian stocks declined, counterbalancing the gains in Wall Street, amid speculation about Donald Trump's potential running mate JD Vance and the resulting new trade and geopolitical concerns. The MSCI AC Asia Pacific index experienced its third consecutive day of losses, dropping by 0.2%. Hong Kong witnessed the largest decline in stocks, while certain Chinese companies continued to fall due to investor anticipation of Trump's tariffs. On the other hand, Japan's stocks rose as exporters benefited from the weakening Yen.

"Jerome Powell, the Federal Reserve Chair, comments were seen as leaning towards a more cautious approach, leading to expectations of an interest rate cut in September. The possibility of Donald Trump returning to the White House has influenced trading and is on the minds of investors. Powell's remarks, possibly his last before the Fed's policy meeting, indicated that recent inflation data may lead to the inflation rate reaching the Fed's target of 2%. This has caused a shift in market expectations, with traders now anticipating a significant easing of rates."

In UK equity markets, Rio Tinto fell as the mining giant’s second-quarter iron ore shipments were worse than expected due to a train derailment during the period.

Burberry was under the cosh again, after Cartier owner Richemont highlighted weak demand in China and Germany’s Hugo Boss cut its annual sales guidance.

Experian was weaker even as it backed its full-year expectations and said revenue grew 7% in the first quarter.

United Utilities and Severn Trent lost ground as Ofwat said it was expanding its investigation into how companies manage their wastewater treatment works and networks to include them both.

Trustpilot slumped after Vitruvian Partners sold 12.5m shares in the company in placing at 220p each. The placing shares represent around 3% of Trustpilot’s issued share capital.

Vanquis Banking tumbled as it warned it does not expect to meet its FY24 guidance of low single digit return on tangible equity due to additional write-downs.

On the upside, online grocer and technology company Ocado surged as it reported narrower interim losses and lifted full-year guidance as revenue grew across all its divisions.

It lifted the full-year EBITDA margin at its technology solutions division to mid-teens from previous guidance of more than 10% and also forecast underlying cash flow to improve by £150m from £100m.

Losses before tax came in at £154m from a loss of £289.5m for the 26 weeks to June 2. Core earnings more than trebled to £71.2m, while sales were up 12.6% to £1.54bn.

B&M European Value Retail gained as it reported a 2.4% increase in group revenues for the first quarter, driven by volume growth and its store opening programme.

Precision measurement tools group Spectris rose after announcing the acquisition of US-based Micromeritics Instrument Corporation for $630m to bolster its offering in particle characterisation for advanced materials analysis.

Airtel Africa was the standout gainer on the FTSE 100 after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan Cazenove.

Market Movers

FTSE 100 (UKX) 8,154.70 -0.35%
FTSE 250 (MCX) 21,139.03 -0.24%
techMARK (TASX) 4,804.70 -0.29%

FTSE 100 - Risers

Airtel Africa (AAF) 119.60p 3.10%
B&M European Value Retail S.A. (DI) (BME) 455.00p 1.88%
Marks & Spencer Group (MKS) 303.80p 1.30%
Sainsbury (J) (SBRY) 263.80p 1.00%
Centrica (CNA) 137.15p 0.55%
Smith (DS) (SMDS) 425.60p 0.52%
Mondi (MNDI) 1,580.00p 0.45%
Berkeley Group Holdings (The) (BKG) 4,854.00p 0.41%
Kingfisher (KGF) 269.00p 0.37%
SSE (SSE) 1,827.50p 0.33%

FTSE 100 - Fallers

Burberry Group (BRBY) 716.00p -3.76%
Rio Tinto (RIO) 5,076.00p -2.23%
Experian (EXPN) 3,565.00p -2.06%
Prudential (PRU) 704.00p -1.54%
United Utilities Group (UU.) 1,020.00p -1.45%
Frasers Group (FRAS) 831.50p -1.42%
Glencore (GLEN) 464.60p -1.42%
Severn Trent (SVT) 2,562.00p -1.39%
CRH (CDI) (CRH) 6,106.00p -1.33%
Beazley (BEZ) 658.50p -1.27%

FTSE 250 - Risers

Ocado Group (OCDO) 380.50p 11.78%
Indivior (INDV) 793.00p 2.45%
XPS Pensions Group (XPS) 329.00p 1.86%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 81.90p 1.61%
Bridgepoint Group (Reg S) (BPT) 258.00p 1.42%
Spectris (SXS) 3,080.00p 1.38%
Ascential (ASCL) 356.80p 1.08%
Moonpig Group (MOON) 203.00p 1.00%
Diversified Energy Company (DEC) 1,220.00p 0.99%
Kainos Group (KNOS) 1,078.00p 0.75%

FTSE 250 - Fallers

Trustpilot Group (TRST) 215.50p -8.10%
Bakkavor Group (BAKK) 150.00p -3.54%
GCP Infrastructure Investments Ltd (GCP) 80.00p -2.68%
W.A.G Payment Solutions (WPS) 64.00p -2.14%
Lancashire Holdings Limited (LRE) 603.00p -2.11%
Jlen Environmental Assets Group Limited NPV (JLEN) 91.00p -2.05%
Pennon Group (PNN) 637.50p -1.92%
Spirent Communications (SPT) 178.40p -1.87%
Auction Technology Group (ATG) 475.00p -1.66%
BlackRock World Mining Trust (BRWM) 584.00p -1.52%