ADVFN Morning London Market Report: Thursday 15 August 2019

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London open: Stocks nudge lower ahead of retail sales


London stocks were a touch weaker in early trade on Thursday, steadying after recession worries sparked heavy losses in the previous session, as investors eyed the latest retail sales data.

At 0820 BST, the FTSE 100 was down 0.2% at 7,137.10, while the pound was up 0.1% against the dollar and the euro at 1.2069 and 1.0831, respectively.

Oanda analyst Craig Erlam said: “It seems everyone is an expert in yield curve inversions these days. Apparently a trade war, economic slowdown and Brexit, among other things, are not reason to panic but the moment the 10-year yield drops below the 2-year, all hell breaks loose.

“I’m in no way playing down the risk of recession, the data has been warning about the risks for some time and equity markets have been in denial as they’ve continued to scale new highs. It’s often said that the bond market is a step ahead which is why the panic has set in but I do believe we read too much into trends at times at the 2-10 year fear certainly falls into this bracket.

“Markets look a little steadier at the start of trading today but days like today can be like the good old British weather, sunny in the morning and storms by lunch time. In these markets, I wouldn’t be surprised to see a rollercoaster of a day and there’s plenty of data coming throughout to provide the catalyst.”

On the UK data front, July retail sales are at 0930 BST. On a monthly basis, sales are expected to have slipped 0.2%, which would be a sharp decline from 1% growth in June.

In equity markets, Kaz Minerals was in the red as it said continued copper sales growth partially offset lower commodity prices in the first half of 2019 as revenues and core earnings both fell.

Ex-dividends weighed, with RBS, Anglo American, Ashtead, Aviva, Evraz, Ferrexpo, HSBC, Ibstock, Legal & General, Mondi, Pearson, Phoenix Group, Provident Financial, Royal Dutch Shell, Segro and TI Fluids all in the frame.

On the upside, GVC Holdings was a high riser as it lifted its guidance for the full year and reported an increase in first-half revenues, while TBC Bank gained as it posted a jump in first-half underlying net profit.

FTSE 250 landscape products specialist Marshalls rallied after saying that first-half profit and revenue rose and it is confident of “at least achieving” its expectations for the year.

In broker note action, RBS was cut to ‘hold’ at HSBC, while Glencore and Hunting were downgraded to ‘underweight’ ‘neutral’, respectively, at JPMorgan. Capital & Regional was cut to ‘hold’ at Berenberg.


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