London open: Stocks in the red as ex-divs weigh; ECB in focus

Several large stocks going ex-dividend took a toll on London equity markets on Thursday as investors eyed the latest policy announcement from the European Central Bank and developments in Sino-US trade relations.

At 0845 GMT, the FTSE 100 was down 0.5% at 7,163.69, while the pound was flat against the dollar at 1.3165 and 0.1% lower versus the euro at 1.1640. Spreadex analyst Connor Campbell said sterling was "relatively stoic" in the face of the fractured Brexit landscape.

"The EU has reportedly given the UK ‘48 hours’ to offer a Brexit solution if an altered deal is to be worked out in time for the promised ‘meaningful’ vote next Tuesday," he noted.

The ECB interest rate decision at 1245 GMT and press conference at 1330 GMT will be watched closely amid expectations that the central bank may prolong or extend its current Targeted Long Term Refinancing Operations programme to provide extra liquidity to banks.

Neil Wilson, chief market analyst at Markets.com said key things to watch for are the forward guidance on rates, growth and inflation forecasts, and anything on a new round of TLTROs.

"Whilst there will be no overt change in policy, it does seem likely that the central bank will have to acknowledge greater downside risks," he said.

Meanwhile, relations between the US and China were in focus again as Chinese tech company Huawei filed a lawsuit against the US government over the ban that restricts federal agencies from using its products.

In UK equity markets, ex-dividends clipped 22 points off the FTSE 100 and nine off the 250.

Companies whose stock went ex-dividend accounted for most of the FTSE 100 fallers, with Rio, Evraz, Persimmon, BHP Group, RSA and Standard Chartered all in the frame. In mid-caps, Redrow and Renishaw took a hit.

Elsewhere, UAE-based private healthcare operator NMC Health suffered heavy losses even as it hailed another year of record revenue on profits thanks in part to the successful integration of acquisitions.

Admiral fell as the insurer reported record profits for 2018, with the results flattered by the government's decision to unwind partially the change in the Ogden discount rate.

In the year to the end of December 2018, pre-tax profit rose 18% to a record £479.3m, given a £66m boost from a change in assumption on the Ogden discount rate - used to calculate compensation for personal injuries - to 0% from the previous 0.75%. Without the benefit, pre-tax profit was up just 2% to £410.2m.

Aviva was also on the back foot as its full-year results came in in line with expectations but the insurer warned that growth this year would be more muted amid Brexit uncertainty.

On the upside, Melrose Industries was a high riser as it said results for 2018 were ahead of the board's previous expectations eight months after the acquisition of engineer GKN.

On an adjusted basis, the FTSE 100 group generated revenue of £9.1bn for 2018, which fed through to a profit before tax of £703m, up 172%. Adjusted diluted earnings per share rose 36% to 13.3p, though this was short of the 14.1p expected by analysts.

On a reported basis, the turnaround specialist swung to a loss before tax of £550m and lost 12p per share after the acquisition was completed last April, resulting in significant acquisition-related items from the GKN deal.

Informa gained ground as its full-year earnings per share beat expectations, while shares in Premier Oil gushed higher after the company said it swung to a net profit of $133.4m in 2018 from a net loss of more than $250m the year before.

In broker note action, BHP was cut to 'hold' at SocGen, while Rio Tinto was downgraded to 'sell'. Just Eat was reduced to 'equalweight' by Barclays and Morgan Stanley, while Centamin was cut to 'equalweight' at MS.

Ultra Electronics was boosted to 'overweight' at JPMorgan.

Market Movers

FTSE 100 (UKX) 7,163.69 -0.45%
FTSE 250 (MCX) 19,240.61 -0.61%
techMARK (TASX) 3,490.24 -0.26%

FTSE 100 - Risers

Melrose Industries (MRO) 190.44p 5.77%
Informa (INF) 730.00p 2.59%
Diageo (DGE) 3,023.00p 1.04%
Reckitt Benckiser Group (RB.) 6,123.00p 0.96%
Rightmove (RMV) 499.75p 0.94%
BT Group (BT.A) 218.55p 0.74%
Pearson (PSON) 829.00p 0.61%
British American Tobacco (BATS) 3,066.00p 0.52%
United Utilities Group (UU.) 856.00p 0.40%
National Grid (NG.) 849.60p 0.39%

FTSE 100 - Fallers

Rio Tinto (RIO) 4,146.00p -7.41%
NMC Health (NMC) 2,794.00p -6.87%
Persimmon (PSN) 2,291.00p -5.84%
Evraz (EVR) 577.00p -5.41%
Schroders (SDR) 2,658.00p -3.63%
BHP Group (BHP) 1,726.60p -2.95%
Aviva (AV.) 421.17p -2.80%
Admiral Group (ADM) 2,130.00p -2.78%
RSA Insurance Group (RSA) 510.00p -2.49%
Standard Chartered (STAN) 617.00p -2.22%

FTSE 250 - Risers

Premier Oil (PMO) 76.97p 4.15%
Spirent Communications (SPT) 156.00p 3.17%
Funding Circle Holdings (FCH) 361.80p 3.08%
Bakkavor Group (BAKK) 141.40p 2.61%
Ultra Electronics Holdings (ULE) 1,476.00p 2.43%
Indivior (INDV) 113.66p 1.53%
CYBG (CYBG) 202.80p 1.50%
Clarkson (CKN) 2,580.00p 1.18%
Energean Oil & Gas (ENOG) 705.14p 0.94%
Fidelity European Values (FEV) 225.00p 0.90%

FTSE 250 - Fallers

Vietnam Enterprise Investments (DI) (VEIL) 433.97p -6.27%
Superdry (SDRY) 530.00p -4.16%
Elementis (ELM) 160.00p -3.79%
Redrow (RDW) 625.50p -2.65%
Renishaw (RSW) 4,172.00p -2.57%
TBC Bank Group (TBCG) 1,470.00p -2.52%
Metro Bank (MTRO) 895.00p -2.40%
Amigo Holdings (AMGO) 212.85p -2.36%
Safestore Holdings (SAFE) 581.50p -2.35%
Halfords Group (HFD) 242.00p -2.34%