ADVFN Morning London Market Report: Monday 5 March 2018

At 0830 GMT, the FTSE 100 was up 0.1% to 7,078.02, while the pound was 0.1% lower versus the dollar at 1.3792 and flat against the euro at 1.1204.

Meanwhile, in Milan the FTSE MIB index was off 0.8% at 21,733.03 as Italy looked set for a hung parliament after voters backed right-wing and populist parties. According to projections based on partial results of the election, the anti-establishment Five Star Movement has won the biggest share of the vote, while ex-Prime Minister Silver Berlusconi’s right-wing coalition is on course to win the most seats in the lower house of parliament.

Rebecca O’Keeffe, head of investment at Interactive Investor, said: “Global equity markets are fragile, and investors are wary as the increasing rhetoric over the weekend on tariffs and a potential escalation of a full-blown trade war make it possible that things could get very ugly very quickly. History has not been kind to investors during periods of protectionism and recent tweets suggest that President Trump is leaning in rather than stepping back from threats to unleash a global trade war.

“This all makes it very difficult for investors to know what to do. Any global company could instantly and significantly suffer if its principal products suddenly become subject to retaliatory trade restrictions. Downside risks are therefore widespread and elevated, and it will be tricky to find sectors or companies that offer a genuine safe haven against such risks.”

On the data front, results from the UK services PMI survey at 0930 GMT is expected to show a slight improvement to 53.3 in February from 53 the month before.

Housebuilders were in focus as Prime Minister Theresa May was set to reveal a new planning policy framework to force councils to hit house-building targets. According to reports, May is expected to say in a speech in London that developers need to do their bit, with those slow to build new homes at risk of being refused planning permission in future. She’s also expected to say that the bonuses being paid to the heads of some of the biggest developers are based not on the number of homes built but on their profits or share price.

“In a market where lower supply equals higher prices, that creates a perverse incentive, one that does not encourage them to build the homes we need,” she will say.

Ultra Electronics fell sharply following a damp squib set of annual results and as it revealed that its agreed takeover of US-based rival Sparton has been nixed over competition concerns from the Department of Justice.

Fenner edged down after saying it had bought the assets and business of US-based National Bearings Company, a small specialist manufacturer of custom engineered polymer and metal bearings, for an undisclosed sum.

Paddy Power Betfair slipped as it confirmed that chief financial officer Alex Gersh would leave the company once a successor was found.

Sports betting and gaming group GVC Holdings was a little weaker after agreeing to initially acquire 51% of the equity capital of Mars LLC – doing business as Crystalbet – with a commitment to acquire the remaining 49% in 2021.

On the upside, Morrison and Tesco were the standout gainers, boosted by upgrades to ‘buy’ at Jefferies.

Wizz Air flew higher after the FTSE 250 low-cost airline reported a 23.5% jump in passenger numbers in February, although the load factor nudged lower.

Ryanair was also trading up after announcing a 5% rise in February as the load factor held steady.

3i Infrastructure ticked higher as it said it was investing another £125m in electricity supplier Infinis to help fund its purchase of independent power generator Alkane Energy.

Elsewhere in broker action, Segro and Unite were higher after upgrades to ‘buy’ at Stifel, while Travis Perkins was in the black following an upgrade to ‘add’ at Peel Hunt.

Spectris slipped after a downgrade to ‘hold’ at Liberum.