London open: Stocks edge higher as Sino-US trade talks remain in focus
London stocks rose in early trade on Tuesday, but gains were unspectacular as initial enthusiasm over the Sino-US trade truce agreed over the weekend gave way to some doubts.
At 0835 BST, the FTSE 100 was up 0.3% at 7,518.92, while the pound was down 0.1% against the dollar at 1.2628 and 0.2% weaker versus the euro at 1.1182.
Trade relations between the US and China were still very much in focus after US President Trump said on Monday that talks between the two nations were underway again following last week's G20 summit in Japan.
Spreadex analyst Connor Campbell said: "By the end of Monday’s session the enthusiasm for the US/China trade truce had waned somewhat, investors turning to the tougher questions surrounding the likelihood of an actual deal being reached any time soon.
"After all, the superpowers have been here before, with the most recent set of tariffs in part such a surprise because there two sides had reportedly been so close to an agreement earlier in the year."
On home turf, investors were digesting the latest survey from Nationwide, which showed house price growth remained subdued in June.
House prices were up just 0.1% on the month. Although this was an improvement on the 0.2% decline seen in May, it was a touch below consensus forecasts of 0.2% growth.
On the year, house price growth eased to 0.5% in June from 0.6% in May, in line with consensus.
Nationwide's chief economist , Robert Gardner, said: "Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.
"Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Prices likely will continue to flatline in Q3, given that Rightmove reported that asking prices were unchanged year-over-year in June. Nonetheless, households’ disposable incomes are rising at a solid pace this year, largely thanks to the recent pick-up in wage growth.
"In addition, the recent fall in banks' wholesale funding costs- for instance, the 5-year LIBOR swap rate has fallen by 30bp over the last two months- should at least partially feed through to mortgage rates in Q3, improving affordability further.
"Meanwhile, the stability of mortgage lending this year has demonstrated that households are fairly relaxed about the possibility of a no-deal Brexit, even if in reality it would be very damaging for house prices. So provided a no-deal Brexit is avoided, we still expect year-over-year growth in house prices to recover to about 1.5% by the end of this year."
In equity markets, shares of online trading platform Plus500 rallied as it said second-quarter revenue rose to $94m from $53.9m in the first quarter, which was hit by lower volatility and EU rules on leveraged betting.
Advertising giant WPP was in the red after confirming late on Monday that it was in exclusive discussions with private equity firm Bain Capital about the sale of its majority stake in market research group Kantar, in a deal that would value the business at $4bn.
Funding Circle suffered heavy losses as it slashed full-year revenue growth expectations from 40% to approximately 20%, warning that an increasingly uncertain economic outlook has reduced demand for loans.
Auto Trader was knocked lower by a downgrade to 'hold' at Peel Hunt.
Market Movers
FTSE 100 (UKX) 7,518.92 0.29%
FTSE 250 (MCX) 19,684.89 0.26%
techMARK (TASX) 3,688.94 0.29%
FTSE 100 - Risers
Aveva Group (AVV) 4,178.00p 1.41%
Hiscox Limited (DI) (HSX) 1,740.00p 1.28%
Rolls-Royce Holdings (RR.) 867.40p 1.17%
Reckitt Benckiser Group (RB.) 6,230.00p 1.10%
Prudential (PRU) 1,753.00p 1.04%
Rio Tinto (RIO) 4,966.00p 1.03%
Severn Trent (SVT) 2,073.00p 1.02%
RSA Insurance Group (RSA) 592.40p 1.02%
St James's Place (STJ) 1,111.00p 1.00%
Admiral Group (ADM) 2,251.00p 0.99%
FTSE 100 - Fallers
Croda International (CRDA) 4,970.00p -2.36%
Flutter Entertainment (FLTR) 6,038.00p -2.17%
NMC Health (NMC) 2,465.00p -2.10%
InterContinental Hotels Group (IHG) 5,230.00p -1.80%
Auto Trader Group (AUTO) 546.00p -1.19%
Antofagasta (ANTO) 938.20p -1.16%
WPP (WPP) 1,001.00p -1.09%
Schroders (SDR) 3,077.00p -0.93%
Mondi (MNDI) 1,809.00p -0.82%
British American Tobacco (BATS) 2,839.00p -0.79%
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 566.80p 5.16%
Stagecoach Group (SGC) 122.25p 4.22%
Metro Bank (MTRO) 575.25p 3.84%
Bakkavor Group (BAKK) 124.40p 2.81%
Vivo Energy (VVO) 130.00p 2.52%
Sophos Group (SOPH) 395.40p 2.38%
Lancashire Holdings Limited (LRE) 715.00p 2.00%
Playtech (PTEC) 456.20p 1.85%
Sabre Insurance Group (SBRE) 275.00p 1.85%
Grafton Group Units (GFTU) 835.50p 1.70%
FTSE 250 - Fallers
Funding Circle Holdings (FCH) 147.06p -9.78%
Jupiter Fund Management (JUP) 416.70p -3.54%
Premier Oil (PMO) 80.20p -2.12%
Ferrexpo (FXPO) 274.60p -1.89%
Capita (CPI) 106.00p -1.53%
Rank Group (RNK) 161.80p -1.34%
Kaz Minerals (KAZ) 607.60p -1.24%
Contour Global (GLO) 178.00p -1.11%
Investec (INVP) 513.60p -0.93%
William Hill (WMH) 155.50p -0.86%