11th Sep 2018 08:46
LONDON (Alliance News) - Stocks in London opened flat with the FTSE 100 hindered by a stronger pound, which firmed amid Brexit deal hopes, with UK unemployment data to come later Tuesday morning. Supporting investor sentiment, the governments of the US and North Korea are preparing for a second summit between US President Donald Trump and North Korean leader Kim Jong Un, White House spokeswoman Sarah Sanders said Monday.Trump received a letter from Kim last week, which Sanders said is related to the summit. The president thanked Kim for the letter and said he was looking forward to seeing him soon.In addition, US and Canadian officials are set to meet in Washington for another round of talks in a bid to renew the NAFTA trade pact later Tuesday. The FTSE 100 index was down 0.1%, or 6.95 points, at 7,272.35. The mid-cap FTSE 250 index was flat at 20,262.32. The AIM All-Share index was flat at 1,098.21.The Cboe UK 100 was down 0.1% at 12,322.22, the Cboe UK 250 was up 0.1% at 18,419.40, and the Cboe UK Small Companies was flat at 12,143.28."The FTSE 100 slipped back on a slightly firmer pound, looking to stabilise just above five-month lows from last week, helped in no small part by the lack of any new developments in the trade story. The delay in implementing new tariffs could be tempting some investors to dip their toes back into the water so to speak on a very selective basis," commented CMC Markets analyst Michael Hewson.Ashtead Group was the best performing blue chip, up 5.1% after the equipment rental firm said it saw a strong first quarter supported by its strategy of combining organic growth and bolt-on acquisitions. For the quarter ended July 31, revenue was up 22% to GBP1.05 billion from GBP880.1 million last year, and rental revenue was up 19% to GBP961 million from GBP828.8 million the year before. Additionally, pretax profit rose 23% to GBP274.4 million from GBP228.9 million last year. Ashtead said the results were driven by strong organic growth, supplemented by bolt-on acquisitions, most notably the purchase of bulldozer retailer CRS in August last year.Ashtead said it expects its annual results to be ahead of its expectations and looks to the medium term with confidence. As a result, it said it will extend its current buyback plans. "We have spent GBP300 million to date under the share buyback programme announced in December 2017. In line with our capital allocation priorities, we have decided to increase and extend our current buyback plans. The level of share buyback will be increased to GBP125 million per quarter resulting in a total outlay of GBP675 million under the programme announced in December 2017. The programme will be extended for financial year 2019-20 with an anticipated spend of at least GBP500 million," said Chief Executive Geoff Drabble.At the other end of the large cap index, BHP Billiton was down 1.1% after Deutsche Bank downgraded the Anglo-Australian miner to Hold from Buy.In the FTSE 250, JD Wetherspoon was the best performer, up 2.9% after Berenberg raised the pub chain to Buy from Hold. At the other end of the midcap index, Cairn Energy was the worst performer, down 4.0% after the oil and gas company swung to an interim loss on the back of constrained production and downtime and fair value losses.Cairn also said it expects expenses of USD124 million for its Kraken, Catcher, Senegal and Nova developments, as well as exploration and appraisal expenditure of USD72 million across its portfolio, until the end of the year.For the half year ended June 30, the company reported a pretax loss of USD602.9 million, compared to profit of USD77.7 million last year.The pound was firm against the dollar, quoted at USD1.3051 compared to USD1.3022 at the London equities close Monday, with UK unemployment data to come at 0930 BST.The headline UK unemployment rate dropped to a multi-decade low of 4.0% in the three months to June and is expected to remain unchanged in the three months to July, to be reported on Tuesday.Sterling hit a six-week high against the dollar of USD1.3063 in early trade on the back of positive comments from the European Union on Monday.EU Brexit negotiator Michel Barnier expressed optimism of striking a deal with the UK within the next six to eight weeks on its departure from the EU."I think that if we are realistic, we are able to reach an agreement on the first stage of this negotiation, which is the Brexit treaty, within six or eight weeks," Barnier said at a conference in the Slovenian town of Bled on Monday.In mainland Europe, the CAC 40 in Paris was up 0.2% while the DAX 30 in Frankfurt was up 0.2%.The euro was firm against the greenback, quoted at USD1.1623 from USD1.1604 at the European equities close Monday.In the economic calendar on Tuesday has the ZEW survey in Germany at 1000 BST, with the survey for the eurozone also due at the same time. In the afternoon is the US Redbook index at 1355 BST and JOLTS job openings at 1500 BST.The Japanese Nikkei 225 index closed up 1.3%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong is down 0.4%.Related Shares:
Wetherspoon (J.D)BHP Billiton PLCCapricorn Energy PLCAshtead Group