London open: Stocks flat; housebuilders hit by JPM note

London stocks were steady in early trade on Tuesday, with the session likely to be fairly quiet as US markets will be closed for Independence Day, and as investors mulled news of China’s export restrictions on metals.

At 0855 BST, the FTSE 100 was flat at 7,528.93.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Just when the battle to tame inflation appears to be working, a fresh skirmish in the trade war between the US and China, threatens to snarl up supply chains, potentially pushing up prices.

"China’s move to restrict exports of some rare earth metals, used in highly sought-after products such as semi-conductors, appears to be a tit-for-tat move, in response to US curbs on the sales of chips which are in high demand for AI capabilities.

"Coming just days before Janet Yellen, the US Treasury Secretary is due to visit Beijing, the policy is likely to have been designed to put pressure on the US to release its current export bans and drop further curbs which are expected."

In equity markets, supermarket chain Sainsbury’s was in the red as it reported an 11% rise in grocery sales in the four months to June 24 and maintained annual guidance.

The company said total like-for-like sales were up 9.8% in the period, adding it had spent £60m lowering prices amid criticisms that supermarkets were fuelling inflation by widening profit margins during the cost-of-living crisis.

Sainsbury's said it still expected underlying pre-tax profit of £640 - 700m in 2023-24, compared with £690m a year earlier.

Housebuilders were also under the cosh on the back of a downbeat note by JPMorgan Cazenove, which reiterated its cautious stance on the sector, arguing that valuations are still above October 2022 levels and that it sees "incremental downside risks to estimates".

The bank downgraded Persimmon to ‘neutral’ and placed Taylor Wimpey and Vistry on ‘negative catalyst watch’.

Homeware retailer Dunelm was knocked lower by a downgrade to ‘underperform’ at RBC Capital Markets.

Market Movers

FTSE 100 (UKX) 7,528.93 0.02%
FTSE 250 (MCX) 18,520.76 0.07%
techMARK (TASX) 4,410.78 0.17%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,210.50p 1.30%
Centrica (CNA) 125.95p 1.00%
Entain (ENT) 1,276.00p 0.91%
Prudential (PRU) 1,117.00p 0.86%
Informa (INF) 734.20p 0.85%
London Stock Exchange Group (LSEG) 8,320.00p 0.82%
Ocado Group (OCDO) 606.20p 0.73%
SEGRO (SGRO) 731.60p 0.72%
St James's Place (STJ) 1,103.00p 0.55%
Land Securities Group (LAND) 591.20p 0.54%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 269.90p -1.71%
Taylor Wimpey (TW.) 102.00p -1.45%
Rio Tinto (RIO) 5,032.00p -1.16%
Anglo American (AAL) 2,304.00p -1.09%
Barratt Developments (BDEV) 413.20p -0.98%
Persimmon (PSN) 1,019.50p -0.92%
Airtel Africa (AAF) 107.50p -0.83%
IMI (IMI) 1,616.00p -0.80%
Rolls-Royce Holdings (RR.) 152.50p -0.72%
Croda International (CRDA) 5,620.00p -0.67%

FTSE 250 - Risers

Tritax Eurobox (GBP) (EBOX) 52.70p 1.93%
SDCL Energy Efficiency Income Trust (SEIT) 76.00p 1.60%
Molten Ventures (GROW) 259.40p 1.57%
TUI AG Reg Shs (DI) (TUI) 594.00p 1.54%
Sirius Real Estate Ltd. (SRE) 85.80p 1.54%
Drax Group (DRX) 592.20p 1.37%
TP Icap Group (TCAP) 151.90p 1.27%
BH Macro Ltd. GBP Shares (BHMG) 376.00p 1.21%
Centamin (DI) (CEY) 93.25p 1.19%
Great Portland Estates (GPE) 426.60p 1.19%

FTSE 250 - Fallers

Dunelm Group (DNLM) 1,062.00p -5.18%
Petershill Partners (PHLL) 161.60p -4.60%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 76.50p -1.92%
Helios Towers (HTWS) 88.25p -1.51%
Vistry Group (VTY) 660.50p -1.42%
Redrow (RDW) 438.40p -1.39%
Mobico Group (MCG) 99.95p -1.24%
Henderson Smaller Companies Inv Trust (HSL) 734.00p -1.21%
Synthomer (SYNT) 74.00p -1.20%
Ferrexpo (FXPO) 92.25p -1.18%