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ADVFN Morning London Market Report: Monday 15 October 2018

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London open: Stocks edge up as pound hit by stalling Brexit talks

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London stocks edged higher in early trade on Monday as the pound took a hit from stalling Brexit negotiations.

At 0835 BST, the FTSE 100 was up 0.3% to 7,013.42. Meanwhile, sterling was down 0.3% against the dollar at 1.3114 and 0.4% lower versus the euro at 1.1332 after a weekend of Brexit negotiations between Dominic Raab and the EU’s chief negotiator, Michel Barnier, failed to yield any breakthroughs, with the Irish border still the main bone of contention.

Investors will now eye the EU summit in Belgium on Wednesday for any further developments.

As far as sterling is concerned, Konstantinos Anthis, head of research at ADSS, said any disappointing Brexit developments will drive it towards the 1.3050 area against the dollar, and a break below that will expose the 1.2950 level. “Meaningful progress will attract more buying interest and propel sterling towards 1.33,” he said.

A survey released by Rightmove earlier showed that UK house prices rose 1% on the month in October, up from a 0.7% increase in September but marking the lowest monthly rate of increase at this time of year since 2010.

On the year, house prices were 0.9% higher this month, down from a 1.2% rise in September and marking the lowest annual rate since February 2012.

Retail footfall in September, meanwhile, was down 1.7% year-on-year, slightly worse that August’s fall of 1.6%, according to a survey from the British Retail Consortium. High streets visits declined for the second month in a row, while shopping centres saw decreases for the 18th month in a row, while retail parks remained in growth but only just.

In corporate news, convenience food manufacturer Greencore rallied as it struck a deal to sell its entire US business for $1.1bn (£817m) and return a chunk of the cash to shareholders. The Dublin-headquartered, FTSE 250-listed outfit said it would return £509m, or 72p per share, of the £802m net proceeds to shareholders, if they approve the deal.

Polymetal ticked up after increasing its stake in the Veduga gold deposit in Russia to 74.3%.

The tobacco sector was on the rise following heavy losses at the end of last week amid concerns about tighter regulations, with Imperial Brands and British American Tobacco both stronger.

Housebuilders also fell, with Barratt Developments, Persimmon, Taylor Wimpey and Berkeley all lower as it emerged that the government could cap annual ground rents on new leasehold properties at £10 versus the current average of £300.

On the downside, fashion brand Superdry slid 22% after warning that profits for the financial year 2019 would be down around £10m due to unseasonably hot weather and unexpected foreign exchange costs.

Outpacing that fall, Convatec tumbled nearly 28% as it warned on profits and announced the retirement of chief executive officer Paul Moraviec.

Caledonia Investments was in the red after saying it spent £117.2m on a 98.9% stake in Deep Sea Electronics in a transaction that values the business at £162.0m.

In broker note action, Spectris was upgraded to ‘buy’ at Bank of America Merrill Lynch.

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