London open: Stocks rise on strong US cues; Just Eat tumbles
By Michele Maatouk
Date: Friday 21 Sep 2018
(Sharecast News) - London stocks rose in early trade on Friday, taking their cue from a record session on Wall Street as the dollar weakened and worries about the trade conflict between the US and China eased.
At 0825 BST, the FTSE 100 was up 0.6% to 7,414.37, while the pound was down 0.2% against the dollar at 1.3234 and 0.4% lower versus the euro at 1.1228, following strong gains the day before on the back of better-than-expected retail sales data.
Market analyst Jasper Lawler at London Capital Group said sterling is proving to be resilient as the thorny issue of the Irish border threatens to completely detail Brexit talks.
"Yet even if Theresa May bows to European Council President Donald Tusk's unexpected ultimatum to find an Irish border solution in the next four weeks, she could struggle to get any deal through parliament, with David Davis lining up MPs who will vote against May's plans to leave the European Union.
"Despite the negative headlines, both the EU and Theresa May seem more motivated than ever to get a deal done and this is ultimately what is offering support to the pound."
Lawler said any Brexit positivity could see the pound reach $1.3360 before targeting $1.35.
The Dow Jones and the S&P 500 hit all-time highs on Thursday thanks to a solid performance from the tech sector, as investors brushed aside escalating tensions between the US and China, choosing instead to focus on recent strong economic data.
Lawler said: "Concerns over the trade war continued to ease overnight after the latest round of tit for tat measures, announced earlier in the week, were lower than what traders had been expecting.
"The reality is we will need to wait until Chinese export data early next year to see the real impact of the tariffs on the Chinese economy and before then we have the US midterm elections to get through, making any resolution to the trade spat unlikely after November. This has become a long-term issue for the markets, which they are able to shrug off for the time being."
On the data front, public sector net borrowing figures are due at 0930 BST while the Bank of England's quarterly bulletin is at 1200 BST.
In corporate news, SIG was a touch higher even after it said profits shrank 22% in the first half of the year as the building products supplier continues its transformation and reported that it was "starting to see evidence of delivery".
Just Eat tumbled following reports that Uber is in early-stage talk to buy Deliveroo. Peel Hunt said that while this is isn't a done deal, it would be a shift in the paradigm of the cooked food delivery market in the UK and beyond and could put enormous pressure on "the poster child for takeaway aggregation", Just Eat.
Still, it argued that Just Eat's buying power to get discounts for its restaurants, its invaluable big data assets, and the large swathe of customers that use and continue to use the platform is still a huge barrier to entry for the smaller players.
Smiths Group traded sharply lower after saying it returned to growth last year as revenue increased but currency swings and reclassification of costs sent annual profit down 8%. The company also announced the sale of its medical division's water bottling business for an enterprise value of $40m.
Rare disease specialist Shire ticked up as it announced that the Ministry of Health, Labour and Welfare (MHLW) in Japan has granted manufacturing and marketing authorisation for its treatment for hereditary angioedema attacks in adult patients.
In broker note action, Burberry was cut to 'neutral' from 'outperform' by Credit Suisse, while Paragon Banking Group was initiated at 'sector perform' by RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 7,414.37 0.64%
FTSE 250 (MCX) 20,608.77 0.28%
techMARK (TASX) 3,499.73 0.36%
FTSE 100 - Risers
Kingfisher (KGF) 249.80p 2.93%
Glencore (GLEN) 329.20p 2.33%
Anglo American (AAL) 1,729.20p 1.99%
Royal Bank of Scotland Group (RBS) 264.30p 1.85%
Rio Tinto (RIO) 3,885.00p 1.78%
BHP Billiton (BLT) 1,645.60p 1.71%
WPP (WPP) 1,149.50p 1.37%
3i Group (III) 965.20p 1.34%
Standard Chartered (STAN) 638.30p 1.32%
Micro Focus International (MCRO) 1,343.00p 1.28%
FTSE 100 - Fallers
Smiths Group (SMIN) 1,465.50p -7.89%
Just Eat (JE.) 660.00p -6.78%
Burberry Group (BRBY) 1,978.00p -1.49%
Next (NXT) 5,280.00p -0.79%
Severn Trent (SVT) 1,865.00p -0.40%
National Grid (NG.) 779.60p -0.29%
Halma (HLMA) 1,387.00p -0.29%
SEGRO (SGRO) 639.20p -0.28%
SSE (SSE) 1,126.50p -0.22%
Admiral Group (ADM) 2,022.00p -0.10%
FTSE 250 - Risers
Kaz Minerals (KAZ) 550.82p 3.73%
Fidelity China Special Situations (FCSS) 213.68p 2.73%
Marshalls (MSLH) 448.40p 2.28%
Morgan Advanced Materials (MGAM) 334.40p 2.08%
Just Group (JUST) 76.60p 2.07%
Ferrexpo (FXPO) 180.90p 2.03%
Go-Ahead Group (GOG) 1,701.00p 1.73%
Hochschild Mining (HOC) 162.00p 1.57%
Centamin (DI) (CEY) 102.26p 1.55%
Bank of Georgia Group (BGEO) 1,902.35p 1.49%
FTSE 250 - Fallers
Rank Group (RNK) 167.80p -2.44%
TI Fluid Systems (TIFS) 261.40p -2.39%
Renewi (RWI) 62.10p -2.20%
Ted Baker (TED) 2,158.00p -1.91%
Contour Global (GLO) 206.20p -1.81%
Spire Healthcare Group (SPI) 153.50p -1.29%
SIG (SHI) 119.70p -1.16%
Serco Group (SRP) 94.40p -1.05%
Countryside Properties (CSP) 349.67p -1.00%
Wood Group (John) (WG.) 744.20p -0.96%
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