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London open: Stocks in the red as pound ticks up in quiet trade
London stocks fell in early trade on Friday – the first anniversary of the Brexit vote – as the pound ticked higher, with little due in the way of market-moving news and a quiet corporate calendar.
At 0830 BST, the FTSE 100 was down 0.4% to 7,410.76, while the pound was up 0.4% against the dollar at 1.2732 and 0.3% firmer versus the euro at 1.1403. A stronger pound tends to dent the index as around 70% of its constituents derive their earnings from overseas.
In her meeting with leaders at the EU summit on Thursday, Prime Minister Theresa May unveiled what she called a “fair and serious” offer for EU citizens living in the UK. May said that around three million EU citizens living in the UK would be allowed to stay on after Brexit, but this would depend on Britons being granted the same rights by EU states.
The plan, which will be published in full on Monday, would allow EU migrants living in the UK for more than five years to stay, with the same rights as UK citizens to healthcare, education, pensions and benefits. Meanwhile, those who have been in the UK for less than five years will be given the chance to meet the five-year threshold for “settled status”.
May said: “The UK’s position represents a fair and serious offer, one aimed at giving as much certainty as possible to citizens who have settled in the UK, building careers and lives and contributing so much to our society.”
German Chancellor Angela Merkel said the proposals were a “good start” but added that there were still many issues that needed to be resolved.
Accendo Markets analyst Mike van Dulken said: “In focus today will be the second day of the EU leaders meeting in Brussels. Having laid out on the table the UK’s plans to protect the rights for EU workers in the country, PM May will be hoping for a reciprocal offer today that helps keep negotiations on track.”
In corporate news, Rio Tinto nudged up after saying it has completed its bond tender and redemption exercises and has cut gross debt by a further $2.5bn (£1.97bn).
Workspace Group slipped as it announced the acquisition of Salisbury House at 28-31 Finsbury Circus, London EC2, for a cash consideration of £158.7m.
In broker action, Centrica and ITV were boosted by upgrades at JPMorgan Cazenove and Morgan Stanley, respectively, while Ascential got a leg up from a Peel Hunt upgrade to ‘add’.
On the downside, however, BAE Systems fell after JPM cut the stock to ‘neutral’ while Domino’s Pizza slumped on a Berenberg downgrade.
