ADVFN Morning London Market Report: Tuesday 9 July 2019

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London open: Stocks edge lower ahead of Powell speech


London stocks edged lower in early trade on Tuesday as investors eyed a speech by Federal Reserve chairman Jerome Powell.

At 0830 BST, the FTSE 100 was down 0.2% at 7,534.20.

Spreadex analyst Connor Campbell said: “Ahead of an appearance from Jerome Powell later this afternoon, the rate cut doubts that appeared last Friday, and came to dominate Monday’s trading, continued to be felt on Tuesday.

“To be fair to the FTSE, it has kept its losses on the lighter end of the scale, even if its early dip puts it under 7,550 and at a one-week low. The avoidance of a more significant decline, despite the red hues of its mining sector, came as sterling fell 0.2% against both dollar and euro.

“Cable is now sitting the wrong side of $1.285 and is nearing levels last seen more than two years ago, the greenback benefiting from emerging concerns that the Fed won’t actually slash interest rates this month. Against the euro, meanwhile, the pound remains in the vicinity of its recent 6 month lows, without quite striking a fresh nadir.

“The tension between the US and UK following Trump’s attack on the latter’s ambassador may be playing its part; ditto the ongoing Brexit uncertainty as the Tory leadership race continues (there is a televised debate between Hunt and Johnson this evening).”

In corporate news, Ocado was the standout gainer after an in-line set of interim results. The company said its interim pre-tax loss widened from £13.6m to £142.8m for the six months ended 2 June as the online retailer dealt with the impact of a fire that damaged property and goods at its Andover distribution centre in February.

Housebuilder Bovis rose after saying it expected to make “significant” progress in the second half to deliver an improved full year operational and financial performance despite Brexit worries. Bovis reported a 4% rise in completions for the half year to 1,647, adding that market fundamentals remained stable with good demand for new homes across all regions.

Software company Micro Focus fell sharply after posting a 5.3% drop in its revenue on a constant currency basis for the six months ended 30 April, to $1.66bn – in line with its guidance – while its adjusted EBITDA was ahead 1.8% to $662.3m.

In broker note action, Just Eat slumped after a downgrade to ‘hold’ at Berenberg, while Antofagasta was hit by a downgrade to ‘neutral’ at Macquarie. Intertek was weaker after a downgrade to ‘sell’ at Goldman Sachs, while Babcock was lifted to ‘neutral’ at Citi and Diageo was cut to ‘hold’ at Kepler Cheuvreux.


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