London open: Stocks little changed as Gilts see small bounce

Stocks were little changed in early trading, following the excitement of the last few sessions and a big move higher for the Footsie on Thursday, as traders were increasingly eyeing the upcoming close of the year which typically results in calm trading conditions amid thin trading volumes.

Against that backdrop, as of 0837 GMT the FTSE 100 was down by 0.01% or 0.44 points at 6,998.57.

The run-up to negotiations ahead of Brexit was again in focus after European Union leaders on Thursday agreed to move swiftly in the talks and promised to stick together to keep the UK from cherry picking a better deal.

On a related note, in remarks made overnight in South Korea the Chancellor, Philip Hammond, said access to the EU for Britain along the lines of its status as a member of the World Trade Organisation would not be the best outcome for the country.

Government bond yields were falling back modestly in early trading, with that on the 10-year Gilt down by four basis points to 1.45% while that on similarly-dated US debt was off by three basis points to 2.57%.

The European single currency was bouncing back from its steep falls on Thursday that saw it drop to its weakest level against the US dollar in over a decade.

Nevertheless, the potential for a widening divide between economic policies in the States and the rest of the world was increasingly a talking point among market participants.

"Nowhere is this policy chasm better illustrated than in the spread differential between US 10 year treasuries and the German bund which has reached levels last seen in 1989, the year the Berlin Wall came down. This is wider than when the euro hit its all-time low at 0.8230 in December 2000, which suggests that the euro could well have further to fall," CMC chief market analyst Michael Hewson told clients.

Friday was set to be very light in terms of data.

However, an index compiled by YouGov and the Centre for Economic and Business Research (CEBR) revealed that business confidence in the UK hit its second-highest level post-Brexit in November, improving from 109.1 to 111.1.

Data on US housing starts referencing the month of November was scheduled for release at 1330 GMT.

IP Group buys out competitor

In corporate news, developer of intellectual property-based businesses IP Group announced on Friday that it has agreed to acquire Parkwalk Advisors, the UK's leading university spin-out focused EIS fund manager, for an initial consideration of £10m.

The FTSE 250 company said Parkwalk, founded in 2009, is the largest EIS growth fund manager focused on university spin-outs, having raised over £100m to date with the majority of funds coming from leading private wealth platforms and having backed over 60 companies across its managed funds since inception.

In 2016, Parkwalk committed over £40m to UK university spin-outs and has been a long-term co-investment partner of IP Group, having co-invested over £17m in 14 investment rounds during 2015/2016.

Rentokil Initial has agreed to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co..

The joint-venture will bring together Rentokil Initial's Workwear and Hygiene businesses in 10 countries principally in the Benelux and Central & Eastern Europe regions, with Haniel's businesses in 17 countries which operate under the CWS-boco brand.

Rentokil said the JV will have combined revenues of about €1.1bn and adjusted profit before interest, tax and amortisation of about €130m.

Construction company Balfour Beatty has sold its 80% stake in five street lighting private finance initiative projects to funds managed by Equitix, an investment firm, for £33m.

Market Movers

FTSE 100 (UKX) 6,998.11 -0.01%
FTSE 250 (MCX) 17,768.80 -0.00%
techMARK (TASX) 3,331.87 0.27%

FTSE 100 - Risers

Old Mutual (OML) 195.10p 1.51%
London Stock Exchange Group (LSE) 2,798.00p 1.12%
AstraZeneca (AZN) 4,443.50p 0.99%
Hikma Pharmaceuticals (HIK) 1,763.00p 0.92%
Mediclinic International (MDC) 730.00p 0.83%
GKN (GKN) 333.30p 0.73%
Standard Chartered (STAN) 692.50p 0.71%
Polymetal International (POLY) 782.50p 0.71%
GlaxoSmithKline (GSK) 1,526.00p 0.69%
Vodafone Group (VOD) 199.65p 0.66%

FTSE 100 - Fallers

Micro Focus International (MCRO) 2,181.00p -2.42%
Antofagasta (ANTO) 674.00p -1.39%
Imperial Brands (IMB) 3,472.00p -1.29%
Reckitt Benckiser Group (RB.) 6,594.00p -1.21%
Dixons Carphone (DC.) 341.80p -1.19%
BHP Billiton (BLT) 1,297.50p -1.11%
Taylor Wimpey (TW.) 153.60p -1.09%
International Consolidated Airlines Group SA (CDI) (IAG) 446.10p -1.02%
Barratt Developments (BDEV) 459.90p -0.86%
Next (NXT) 4,902.00p -0.81%

FTSE 250 - Risers

Rentokil Initial (RTO) 226.80p 7.34%
CMC Markets (CMCX) 108.10p 5.98%
PayPoint (PAY) 939.50p 3.19%
Telecom Plus (TEP) 1,226.00p 2.94%
Berendsen (BRSN) 832.50p 2.52%
Aldermore Group (ALD) 228.50p 2.51%
Centamin (DI) (CEY) 117.00p 1.83%
Indivior (INDV) 286.00p 1.67%
Redefine International (RDI) 38.38p 1.67%
Mitie Group (MTO) 218.60p 1.63%

FTSE 250 - Fallers

Hochschild Mining (HOC) 214.70p -4.41%
Just Eat (JE.) 580.00p -3.25%
International Personal Finance (IPF) 169.60p -2.53%
Petrofac Ltd. (PFC) 874.00p -2.07%
Berkeley Group Holdings (The) (BKG) 2,775.00p -1.77%
Ocado Group (OCDO) 250.20p -1.61%
Amec Foster Wheeler (AMFW) 449.60p -1.47%
Kaz Minerals (KAZ) 373.00p -1.37%
GVC Holdings (GVC) 654.00p -1.36%
Countryside Properties (CSP) 232.80p -1.36%