London open: Stocks flat amid worries over US tax bill passage
London stocks were little changed in early trade on Friday amid worries about the passing of the US tax bill and as investors eyed the next phase of the Brexit saga.
At 0830 GMT, the FTSE 100 was steady at 7,446.70, while the pound was down 0.1% against the euro at 1.1397 and flat versus the dollar 1.3431, with EU leaders expected to formally agree to start the next phase of Brexit negotiations later in the day.
Spreadex analyst Connor Campbell said: “While the fact that it is almost a given at this point might dampen the sterling’s enthusiasm, considering its rocky December form the currency shouldn’t turn its nose up at any good news, however predictable.”
Meanwhile, investors were mulling the possibility that the highly anticipated tax plan being drafted in the US may be on the point of starting to unravel after Republican Florida senator Marco Rubio said on Thursday that he would not vote for the package without changes to some tax credits.
“With only a slim majority it would appear that some senators might be starting to waver on some of the changes being proposed,” said Michael Hewson, chief market analyst at CMC Markets.
The Bank of England’s quarterly bulletin is due at 1200 GMT while BoE chief economist Andy Haldane will make a speech at 1315 GMT.
In corporate news, Standard Life Aberdeen ticked a touch higher after its first update since the merger was finalised, with outflows lessening year on year.
Sky and BT were both in the black after reaching a deal to sell their channels on each other’s platforms, while Segro was boosted by an upgrade to ‘buy’ from ‘hold’ at Liberum.
Tritax Big Box edged up after the real estate investment trust agreed terms to extend the maturity on its existing loan facility with Landesbank Hessen-Thüringen Girozentrale.
On the downside, Persimmon retreated after the housebuilder said chairman Nicholas Wrigley will retire following a dispute over an incentive scheme for executive pay.
Aveva slipped as it said its £3bn agreed merger with Schneider Electric is expected to gain final regulatory approval by mid-February, though the industrial software group was disappointed by a UK tax ruling on the deal.