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London stocks fell in early trade on Wednesday as investors reacted to the resignation of US President Trump’s chief economic advisor, Gary Cohn.
At 0830 GMT, the FTSE 100 was off 0.3% to 7,122.62, while the pound was down 0.1% against the dollar at 1.3871 and 0.2% weaker versus the euro at 1.1179.
Cohn, an advocate of free trade, quit over Trump’s decision to impose tariffs on steel and aluminium imports. His resignation was announced after the close of US markets on Tuesday.
London Capital Group analyst Jasper Lawler said: “The resignation of Trump’s top economic advisor Gary Cohn over fierce disagreement to Trump’s tariffs, goes some way to highlighting the rift that Trump is creating, not just on the global platform but also within his own administration. Furthermore, if Cohn, who has been actively opposing protectionism, is resigning, this naturally leads to the conclusion that Trump has won and is serious about his tariffs.
“With Cohn’s steadying influence no longer steering economic policy in the Trump administration, in addition to Trump’s recommitment to his nationalist trade agenda, market participants are growing increasingly nervous of where the Trump administration is going.”
In UK economic news, house prices were revealed by Halifax to have risen 1.8% in the three months to February compared to the same three months a year earlier, slowing from the 2.2% annual growth recorded in January.
In corporate news, NMC Health lost ground despite reporting a jump in full-year net profit and revenue, while Paddy Power Betfairdeclined after saying it swung to a net profit in 2017 as operating profit and revenue grew, but warning that sporting results favouring bookies have hit customer activity.
DS Smith, whose shares rallied on Tuesday after peer Smurfit Kappa said it had rejected a takeover offer from International Paper, was a touch lower after saying its overall trading in the third quarter was in line with expectations.
FTSE 250 recruiter PageGroup was weaker as it posted an 18% jump in pre-tax profit in a year that saw record gross profit in 22 countries, but warned of challenging conditions in the UK.
Equiniti slipped as it said profit after tax declined 53% in 2017 to £15.6m, while Rank Group fell after announcing the resignation of its chief executive Henry Birch.
On the upside, Rolls-Royce rocketed after it reported 25% profits growth thanks to solid revenues and the engine-maker’s cost-saving programme.
Legal & General ticked higher as it said its annual profit rose by almost a third as the insurer sold more pension services and released £332m from its reserves. Operating profit for the year to the end of December increased 32% to £2.1bn as new annuity and pension risk transfer business rose to £4.6bn from £4.1bn.
Esure was in the black as it reported a 36% rise in full-year pre-tax profit, while CLS Holdings edged up as the property investment company posted a 17% increase in full-year EPRA net asset value.
Hill & Smith surged after saying it delivered its “best ever” trading performance in 2017 and following an upgrade to ‘buy’ at Investec.
Tritax Big Box gained as the real estate investment trust reported a 10.3% increase in 2017 EPRA net asset value.
In broker note action, EasyJet and IAG were both initiated at ‘neutral’ at Citi, while Informa was lifted to ‘add’ by Peel Hunt. Superdry and Card Factory were both upgraded to ‘buy’ at Liberum.
Metro Bank was cut to ‘sell’ at Investec, Diageo was downgraded to ‘neutral’ by Natixis and Hunting was cut to ‘market perform’ atBernstein.
