Hot Features
Premium
Register to chat with like-minded investors on our interactive forums.
London open: Stocks rise on positive Asian cues; Ryanair flies high
London stocks edged higher in early trade on Monday, taking their cue from an upbeat session in Asia, although concerns about Brexit, rising interest rates and Italy were never far from investors’ minds.
At 0840 BST, the FTSE 100 was up 0.3% to 7,072.38, while the pound was flat against the dollar at 1.3081 and down 0.1% versus the euro at 1.1331.
CMC Markets analyst Michael Hewson said it’s likely to be another week of ups and downs for the pound with respect to any Brexit talks, after last week’s failure to reach an agreement on the Irish border. He pointed to rising rumblings over the leadership of Prime Minister Theresa May, with some suggestions that she might be on the verge of facing a leadership challenge from disgruntled MPs unhappy at her negotiating strategy with the EU.
“On Wednesday there is a meeting of the Conservative party’s 1922 committee where this unhappiness could be given further oxygen with reports that as many as 46 Tory MPs have written letters demanding the Prime Minister be replaced. That is two short of the 48 needed, however the question of who might replace her remains an open one as any new candidate will need the support of over 159 MPs to win any final ballot.”
Investors will also be keeping an eye on Italy after Moody’s downgraded the country’s credit rating on Friday to Baa3, one notch above “junk”. The Italian government is due to give its response later on Monday to the EU’s rejection of its budget plan to lift the deficit to 2.4% of domestic output next year from 1.8% in 2018.
In corporate news, Ryanair flew higher even as it posted a 7% drop in profit for the six months to 30 September, as its half-year numbers were broadly in line with expectations. EasyJet and British Airways parent IAG were also in the green.
Defence company QinetiQ nudged up as it agreed buy 85% of Inzpire Group – which provides operational training and mission systems for military customers in the UK and internationally – with an agreement to acquire the rest after two years, for a total of £23.5m.
Gulf region hospital operator NMC Health advanced as it provided an improved set of revenue and earning guidance for this year and next after perking up in the second half of the year.
AstraZeneca was higher after it and partner Merck said results from a phase 3 clinical trial for their ovarian cancer treatment showed a reduction of disease progression or death by 70%.
Department store chain Debenhams was a touch weaker following a report that it’s preparing a radical overhaul of its 200-year-old business that will include reviewing its store portfolio and slashing its dividend to zero.
Standard Life Aberdeen shares were sharply lower as they went ex a special dividend of 33.9p but also underwent a seven-for-eight consolidation.
In broker note action, Fresnillo was the standout gainer after an upgrade to ‘buy’ at Bank of America Merrill Lynch, while Hunting was upgraded to ‘outperform’ at Macquarie. Ophir Energy and Tullow Oil were boosted to ‘buy’ at Jefferies, but Cairn Energy was cut to ‘underperform’.
AIM-listed double glazing group Safestyle was lifted to ‘buy’ at Liberum and Intu Properties was cut to ‘hold’ at Berenberg.
