4th Dec 2018 08:53
LONDON (Alliance News) - Stocks in London opened marginally higher on Tuesday, building on gains from Monday, after the US and China called a truce in their trade spat. BT and Rightmove were leading the FTSE 100, following broker upgrades, while Ferguson fell after a mixed first quarter performance. The FTSE 100 index was up 13.68 points, or 0.2%, at 7,076.09. The FTSE 250 was up 0.27 point at 18,563.94. The AIM All-Share was down 0.4% at 934.33.The Cboe UK 100 was up 0.1% at 12,017.14 and the Cboe UK 250 down 0.1% at 16,593.49. The Cboe UK Small Companies was flat at 11,391.96.On the London Stock Exchange, BT Group was the best blue-chip performer, up 2.8% after Goldman Sachs upgraded the telecommunications stock to Buy from Neutral. Rightmove was just behind, up 2.7% after Deutsche Bank raised the property portal to Buy from Hold.At the other end of the large cap index, Ferguson was the worst performer, down 2.5% after the plumbing and heating products supplier reported a weaker performance in the UK, taking the gloss off a strong showing in the US.The company reported revenue for the three months to the end of October of USD5.55 billion, up 9.0% from USD5.12 billion the year before, with organic growth of 6.7%.At constant exchange rates, US revenue rose by 12%, while Canada revenue increased by 8.9%; however UK revenue fell by 9.5%.US trading profit saw a double-digit rise, up 10%, as did Canada, increasing by 25%; however trading profit in the UK declined by 7.8%. The UK lagged as a result of weak repair, maintenance and improvement markets, as well as closed branches and the exit of low-margin businesses, Ferguson explained."There may be concerns regarding any slowdown in the US housing market, whilst the UK part of its operations, which currently represents 11% of revenues, remains finely balanced. In addition, acquisitions in the quarter totalling USD284 million present further integration risks, whilst restructuring costs in the UK continue to linger," Interactive Investor Richard Hunter said. BAE Systems was down 2.3% after Merrill Lynch cut the defence contractor to Neutral from Buy late Monday.Rolls-Royce was down 2.1% after the jet engine maker was cut to Underperform by Merrill Lynch. In the FTSE 250, Greencore Group shares opened flat despite the convenience food company pledging to return GBP509 million to shareholders via a tender offer following the sale of its US business. The capital return is expected to be completed during the second quarter of financial 2019. For the financial year ended September 28, revenue rose 4.2% to GBP1.50 billion from GBP1.44 billion last year, and pretax profit grew 13% to GBP17.8 million from GBP15.8 million last year. Operating profit was up 9.5% to GBP49.8 million from GBP45.5 million.Greencore proposed a total dividend of 5.57p, up 1.8% from 5.47p last year.Kier Group was down 6.6% after Canaccord downgraded the construction company to Hold from Buy. In mainland Europe, the CAC 40 stock index in Paris and the DAX 30 in Frankfurt were both down 0.4%.Asian stock markets were mixed despite the strong overnight gains on Wall Street as doubts surfaced over whether the world's two largest economies would be able to resolve their differences in the 90-day truce period.US President Donald Trump and Chinese President Xi Jinping met at the G20 summit in Buenos Aires and agreed to a 90-day truce in their trade war to allow time for negotiations between the world's two biggest economies.According to media reports, Trump has appointed Robert Lighthizer, one of his cabinet's most strident trade hawks, to oversee the next round of trade negotiations with China.The Japanese Nikkei 225 index closed down 2.4% on Tuesday. In China, the Shanghai Composite closed up 0.4%, while the Hang Seng index in Hong Kong closed down 0.1%.Japanese shares fell sharply with export-linked issues dragged down by a stronger yen and investors selling stocks to lock in profits following recent gains.The pound was firm against the dollar quoted at USD1.2762 from USD1.2740 at the London equities close Monday.In early economic news, a record GBP1 in every GBP3 of non-food purchases in the UK were made online in November, according to a report.But aggressive promotional activity by retailers ahead of Black Friday failed to lure shoppers, with like-for-like sales in November decreasing by 0.5% on last year, the British Retail Consortium-KPMG retail sales monitor found.Those behind the report said UK retailers now face a "nerve-wracking" run-up to Christmas. The report said the proportion of non-food purchases taking place online increased to 33.8% in November - an all-time high.In political news, UK Prime Minister Theresa May will plead with MPs to back her Brexit deal as her government was embroiled in a constitutional row with Parliament.May will begin five days of Commons debate on her Brexit plan before a major test of her authority in a crunch vote on Tuesday next week.But before she even addresses MPs her government will come in for intense criticism over claims it is in contempt of Parliament by refusing to publish the full legal guidance given to ministers about the Withdrawal Agreement and Political Declaration negotiated with the EU.Commons Speaker John Bercow said there had been an "arguable case that a contempt has been committed" and ruled MPs should debate the issue on Tuesday.The economic events calendar on Tuesday has UK construction PMI at 0930 GMT and eurozone producer prices at 1000 GMT.In addition, Bank of England Governor Mark Carney, alongside deputies Ben Broadbent, Jon Cunliffe and Sam Woods appear before the UK Treasury select committee in response to the central bank's Brexit analysis at 0915 GMT.
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