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London open: Stocks nudge, sterling falls as DUP rejects Brexit deal
London stocks nudged higher in early trade on Thursday as sterling fell amid renewed concerns over Brexit.
At 0830 BST, the FTSE 100 was up 0.1% at 7,173.89. Meanwhile, the pound was down 0.4% against the dollar at 1.2782 and 0.6% lower versus the euro at 1.1523, having rallied to five-month highs a day earlier, after Northern Ireland’s Democratic Unionist Party said it cannot support Prime Minister Boris Johnson’s Brexit deal with the current customs terms.
The DUP also said there was a “lack of clarity on VAT”.
Spreadex analyst Connor Campbell said: “Either Johnson needs to compromise further, the EU needs to accept the DUP’s demands, or the DUP themselves need to back down.
“The party did end its statement claiming it will ‘continue to work with the Government to try and get a sensible deal that works for Northern Ireland’, so progress is still possible. It just might need an extension to allow a deal to blossom.”
Boris Johnson will attend a summit of EU leaders in Brussels later in the day.
In corporate news, Rentokil Initial was the standout gainer on the FTSE 100 as it posted its highest level of quarterly organic growth for more than a decade and said it was on course to meet full-year expectations.
Consumer goods giant Unilever was also up even as its third-quarter sales came in weaker than expected, while Domino’s Pizza gained as it announced that it will be exiting international markets following a “disappointing” third quarter.
Premier Oil gushed higher after saying it had encountered gas at its Tolmount East well in the UK Southern North Sea.
WH Smith rallied as it announced the acquisition of US travel retailer Marshall Retail Group for $400m and posted a 7% jump in full-year headline pre-tax profit.
On the downside, building materials group Grafton tumbled as it warned that full-year profit would be below market expectations.
Price comparison website Moneysupermarket slumped as it reported a rise third-quarter revenue thanks to a solid performance form its home services segment, but said the money business underperformed.
Kaz Minerals was knocked lower by a downgrade to ‘neutral’ at Goldman Sachs, while Bellway was hit by a downgrade to ‘hold’ at Jefferies.
Smiths Group and BAE Systems were both weaker as their stock went ex-dividend.
