London open: Stocks nudge lower amid US-China hopes, weak China data

London stocks nudged a touch lower in early trade on the final trading day of 2018, as investors weighed up signs of improving relations between the US and China against disappointing Chinese manufacturing data, amid a dearth of UK corporate and macroeconomic news.

At 0820 GMT, the FTSE 100 was down 0.1% to 6,730.22, while the pound was up 0.2% against the dollar at 1.2729 and 0.3% firmer versus the euro at 1.1129.

Indications of improving Sino-US relations provided some cheer, after US President Donald Trump hailed "progress" in trade talks over the weekend.

Trump tweeted on Saturday: "Just had a long and very good call with President Xi of China. Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!"

After the tweet, the Wall Street Journal cited sources familiar with the negotiations as saying that Trump "may be overstating how close the two sides are to an agreement". However, a statement on Sunday from Lu Kang, the spokesperson for China’s foreign ministry, lent support to Trump's optimism.

"China stands ready to work with the US to implement the important consensus reached by President Xi Jinping and President Trump in Argentina, expand co-operation on the basis of mutual benefit, manage differences on the basis of mutual respect," Lu said.

On the downside, Chinese manufacturing figures disappointed. The National Bureau of Statistics’ official manufacturing purchasing managers’ index printed at 49.4 this month from 50.0 in November, falling short of expectations for a reading of 49.9 and marking the lowest level since February 2016.

Meanwhile, the sub-index for total new orders declined to 49.7 in December from 50.4 the month before, moving into contraction territory and hitting its lowest level since February 2016, while the sub-index for production fell to 50.8 from 51.9 in November.

Mike van Dulken, head of research at Accendo Markets, said, the data "may fan the flames of concern about slowing global growth".

Still, London’s mining stocks fared pretty well, with Rio Tinto, BHP, Glencore and Antofagasta all in the green.

Brexit was in focus following reports that the deadline could be pushed back if Prime Minister Theresa May’s deal gets voted down by Parliament in January. Meanwhile, International Trade Secretary Liam Fox said in a Sunday Times interview that the chances of Britain leaving the EU were 50-50 if Parliament rejects May’s withdrawal agreement.

Parliament is set to vote on the Brexit deal in the week starting 14 January.

The London stock market will only trade for a half day on Monday, with little notable movement amid low volumes.

Rolls-Royce was slightly higher on reports that it has secured the contract to power the US military’s next-generation squadron of unmanned fighter drones.

Rightmove was top of the mid-caps as early figures indicated record numbers of people have visited the property portal since Christmas.

Market Movers

FTSE 100 (UKX) 6,730.22 -0.06%
FTSE 250 (MCX) 17,501.26 0.21%
techMARK (TASX) 3,304.05 -0.07%

FTSE 100 - Risers

Rightmove (RMV) 438.50p 2.44%
Ocado Group (OCDO) 777.60p 1.25%
Glencore (GLEN) 293.00p 1.03%
Rio Tinto (RIO) 3,800.50p 1.01%
Johnson Matthey (JMAT) 2,803.00p 0.86%
Morrison (Wm) Supermarkets (MRW) 216.48p 0.83%
RSA Insurance Group (RSA) 514.20p 0.82%
BHP Group (BHP) 1,650.20p 0.81%
Fresnillo (FRES) 876.80p 0.78%
Smith & Nephew (SN.) 1,461.50p 0.76%

FTSE 100 - Fallers

Ferguson (FERG) 4,896.50p -1.45%
Barclays (BARC) 148.08p -1.37%
HSBC Holdings (HSBA) 641.90p -1.28%
Hargreaves Lansdown (HL.) 1,808.75p -1.08%
Reckitt Benckiser Group (RB.) 6,002.00p -1.06%
Shire Plc (SHP) 4,522.00p -0.83%
Unilever (ULVR) 4,091.00p -0.82%
CRH (CRH) 2,065.00p -0.72%
3i Group (III) 789.67p -0.72%
Standard Chartered (STAN) 597.05p -0.66%

FTSE 250 - Risers

G4S (GFS) 202.90p 3.71%
Kaz Minerals (KAZ) 540.00p 3.17%
Premier Oil (PMO) 62.65p 2.87%
Daejan Holdings (DJAN) 5,800.00p 2.65%
Primary Health Properties (PHP) 112.40p 2.18%
Halfords Group (HFD) 259.18p 2.12%
Pagegroup (PAGE) 460.00p 2.00%
Diploma (DPLM) 1,204.00p 1.86%
Synthomer (SYNT) 358.24p 1.60%
Dunelm Group (DNLM) 543.50p 1.59%

FTSE 250 - Fallers

Equiniti Group (EQN) 205.00p -2.84%
Fisher (James) & Sons (FSJ) 1,710.00p -2.51%
Amigo Holdings (AMGO) 292.05p -1.83%
Euromoney Institutional Investor (ERM) 1,160.00p -1.69%
IWG (IWG) 205.80p -1.44%
Bellway (BWY) 2,470.00p -1.44%
Civitas Social Housing (CSH) 105.50p -1.40%
Superdry (SDRY) 447.40p -1.37%
Woodford Patient Capital Trust (WPCT) 81.28p -1.36%
CYBG (CYBG) 183.50p -1.34%