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ADVFN Morning London Market Report: Tuesday 28 February 2017

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London open: Stocks little changed amid deluge of earnings; Trump eyed

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Stocks in London were little changed in early trade on Tuesday as investors sifted through a deluge of corporate news and looked ahead to US President Donald Trump’s address to Congress later in the day.

At 0830 GMT, the FTSE 100 was flat at 7,255.72.

On Monday, US stocks shook off early losses to end higher after Trump said he would make a “big” infrastructure announcement the next day, so market participants will be keeping a close eye on what he has to say to Congress for any further clues about his plans.

Spreadex‘s Connor Campbell said: “Already investors have been given a sense of what the Orange One is going to announce, with the President confirming a huge boost to defence spending as promised during his campaign. This has green-lit some decent gains from the relevant companies, with the likes of BAE Systems climbing 2.5% on the news. Now Trump has to deliver on slightly more complicated matters, namely healthcare and tax reforms – failure to do so could plant some further seeds of doubt in those indices sent to highs on the back of his bombastic claims.

“Of course, that’s not until much, much later. For now the FTSE has to deal with a far duller economic agenda, barely managing to move after the bell.”

The pound, meanwhile, showed little signs of clawing back the previous day’s losses, falling 0.2% against both the dollar and the euro.

In corporate news, engineering services company Babcock said it had traded in line with expectations for the quarter to the end of February and the outlook for the full year remained unchanged.

Engineer GKN made gains as it posted a 12% jump in full-year pre-tax profit as sales rose and the company expressed confidence over its prospects for 2017.

Croda International was a high riser after the specialty chemicals group said full-year pre-tax profit was boosted by the weak pound, rising to £288m from £275m the year before.

Virgin Money was also on the front foot after posting a 33% rose in full-year underlying pre-tax profit.

Gold and silver miner Fresnillo shone after saying it more than doubled its profits on a surge in revenue due to higher meal prices in 2016.

FTSE 250 engineer Meggitt gained ground after it reported a drop in full-year pre-tax profit on Tuesday as it highlighted a difficult oil and gas market, but lifted its dividend.

Housebuilder Taylor Wimpey nudged higher as it said it had made a “very good” start to 2017 and suggested the UK housing market will remain supportive for its bump dividend programme for some time.

On the downside, Go-Ahead Group tumbled after lowering its full-year expectations for the bus and rail divisions and reporting a drop in first-half pre-tax profit as operating profit from the rail division slumped due to Southern Rail strikes.

Moneysupermarket was also in the red. Although the price comparison website said profit for the year to the end of December grew and announced a £40m share buyback, it was hit by a downgrade from Credit Suisse. In addition, traders noted the fact that group revenues are currently behind last year and said the stock had had a good run into the results.

Investors were also digesting the latest survey from GfK, which showed UK consumer confidence dropped in February.

GfK’s monthly consumer sentiment index nudged down to -6 from -5 in January, in line with expectations.

“Any momentum behind the post-Brexit, debt-fuelled, consumer spending boom now appears to be softening,” said Joe Staton, head of market dynamics at GfK.

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