17th Dec 2019 08:39
(Alliance News) - Stock prices in London opened lower on Tuesday, following a strong close on Monday, with Unilever shares being sold after the consumer goods giant warned it will miss sales growth expectations amid difficult trading conditions in its largest markets.
The FTSE 100 index was down 7.75 points, or 0.1%, at 7,510.30. The blue-chip index closed up 165.61 points, or 2.3%, at 7,519.05 on Monday, its best closing price since the beginning of August.
The mid-cap FTSE 250 was down 177.88 points, or 0.8%, at 21,742.74, and the AIM All-Share was down 1.30 points, or 0.1% at 928.15.
The Cboe UK 100 index was down 0.4% 12,733.20. The Cboe UK 250 was down 0.6% at 19,715.66, and the Cboe UK Small Companies was flat at 11,811.40.
In European equities, the CAC 40 in Paris was down 0.2% and the DAX 30 in Frankfurt was down 0.4%.
Stocks had surged on Monday as investors cheered a phase one US-China trade deal agreement.
"The FTSE was also on a big of a comedown after the bell...This, perhaps, a natural reaction to the market's recent trade deal celebrations - a trade deal, remember, that is far from the conflict-resolving agreement investors would like," said Spreadex analyst Connor Campbell.
In the FTSE 100, Interek was up 1.9% after the quality assurance provider entered into the travel and tourism sector by acquiring security risk management business Check Safety First for an undisclosed sum. Intertek said that it expects Check Safety First to generate around GBP10 million of revenue in 2019.
At the other end of the large-cap index, Unilever was the worst performer, down 5.5% after the Dove soap maker issued a sales warning.
The Anglo-Dutch company said it is now expecting 2019 underlying sales growth to fall short of guidance due to economic slowdown in south Asia and tough trading conditions in West Africa.
Unilever said it now expects underlying sales growth for 2019 to be slightly below its previous guidance of sales coming in at the lower half of its 3% to 5% forecast range.
In addition, Unilever said it was in for a tough start to 2020, expecting growth to be weighted to the second half.
Royal Bank of Scotland was down 3.5% after Citigroup downgraded the state-backed lender Neutral from Buy.
Whitbread was down 2.9% after UBS cut the Premier Inn hotel chain owner to Neutral from Buy.
The pound was quoted at USD1.3180 early Tuesday, sharply lower than USD1.3329 late Monday, as no-deal Brexit fears returned to the fore.
UK Prime Minister Boris Johnson is to legislate to prevent members of Parliament extending the Brexit transition period beyond the end of 2020, government sources said Monday.
Ministers are understood to have re-worked the Withdrawal Agreement Bill - due to come before the Commons this week - to "legally prohibit" any further extension.
The move comes as MPs gather at Westminster for the first sitting of the new Parliament on Tuesday following last week's general election victory for the Conservatives.
Under current plans, the government intends to end Britain's EU membership on January 31, with an implementation to run to the end of 2020 while it negotiates a free trade agreement with Brussels. However key EU figures - including chief negotiator Michel Barnier - have expressed scepticism a deal can be agreed in time, raising the fresh prospect of a break-up without an agreement, unless there is an extension.
The euro was quoted at USD1.1144 early Tuesday, firm from USD1.1139 late Monday. Against the yen, the dollar was trading at JPY109.55, soft against JPY109.65 at the London close Monday.
Brent oil was quoted at USD65.46 early Tuesday, unchanged from late Monday.
Gold was was quoted at USD1,477.87 early Tuesday, firm from USD1,473.50 late Monday.
The Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite closed up 1.3%, and the Hang Seng index in Hong Kong closed up 1.1%.
The economic events calendar on Tuesday has UK jobs data at 0930 GMT. The unemployment rate is expected to edge up to 3.9% from 3.8%.
By Arvind Bhunjun; [email protected]
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