ADVFN Morning London Market Report: Wednesday 24 April 2019

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London open: Stocks fall as traders take profits after Tuesday’s rally

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London stocks fell in early trade on Wednesday as traders took some profits following a solid session the day before, which saw strength in the energy sector propel the top-flight index to six-month highs.

At 0840 BST, the FTSE 100 was down 0.4% at 7,494.81, while sterling was flat against the dollar at 1.2934 and up 0.1% versus the euro at 1.1531.

London Capital Group analyst Jasper Lawler said: “The pound was trading firmly below $1.30 in the previous session and remains there in early trade on Wednesday. Cross party talks are heeding little progress and are in danger of collapsing as soon as next week. Conservatives are also growing increasingly frustrated with Theresa May’s inability to deliver on Brexit. Theresa May potentially bringing the Brexit deal back for a fourth attempt in the Commons shows just how desperate she is.

“The overriding concern for currency traders right now is if Theresa May is ousted, who will replace her? And how far will they be willing to go to achieve Brexit. Suddenly, the no deal Brexit option could be back on the table.”

Across the pond, the S&P 500 and Nasdaq closed at record levels on Tuesday following the release of well-received earnings, with TwitterHasbro and Lockheed Martin beating forecasts.

“There is a heavy focus right now on the health of corporate America and the US economy. Companies are surprising to the upside, the US GDP on Friday will also be a big test,” said Lawler.”There is a lot of positivity that has pushed US equities to these levels. Traders will be looking to the US GDP to support these levels or gains could be pared fairly quickly.”

In UK equity markets, Anglo American and Direct Line were hit by downgrades to ‘neutral’ at JPM.

Antofagasta was a touch weaker as it reported copper production of 188,600 tonnes in its first quarter, which was in line with expectations and up 22.6% year-on-year, thanks to higher throughput and the anticipated higher grades, particularly at Centinela.

Miners were on the back foot on the whole, with BHP and Rio Tinto also lower.

On the upside, Primark owner Associated British Foods was trading up as it reported a big drop in first half earnings as the company’s bottom line was hammered by one-off costs, but said full-year profits were still expected to be in line with the prior year’s result.

Building materials group CRH was in the green as posted a 7% jump in first-quarter like-for-like sales, said second-half earnings were set to be ahead of last year and extended its buyback programme. It also announced an agreement to divest its European Shutters & Awnings business to StellaGroup for more than €0.3bn.

Centamin shares shone as it said its Sukari gold mine produced 116,183 ounces of gold in the first quarter, above forecast of 105,000 – 115,000 ounces.

Hastings and Saga were boosted by upgrades to ‘overweight’ and ‘neutral’, respectively, at JPMorgan.

 

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