ADVFN Morning London Market Report: Tuesday 10 December 2019

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London open: Stocks edge lower ahead of GDP data; Ashtead slumps

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London stocks edged lower in early trade on Tuesday as investors eyed a slew of key UK data releases, including the latest GDP reading.

At 0840 GMT, the FTSE 100 was down 0.4% at 7,207.15, while the pound was flat against the dollar at 1.3143 and 0.1% lower versus the euro at 1.1871.

On the data front, industrial and manufacturing production figures are due at 0930 GMT, along with the trade balance and gross domestic product for October.

Investors were likely to be wary ahead of interest rate decisions by the European Central Bank and the US Federal Reserve this week, the general election in the UK and the US tariff deadline on China. The US is due to implement tariffs on more than $150bn of Chinese imports on 15 December.

According to the South China Morning Post, it is increasingly unlikely that a trade deal between the US and China will be reached this week. However, it also cited sources as saying that the tariffs due to kick in this week are unlikely to come into force.

Spreadex analyst Connor Campebll said: “After a pretty boring start to the week the markets took a turn on Tuesday, notably slipping into the red.

“It’s perhaps hard to pinpoint an exact reason for that decline – beyond what the week has so far been missing, i.e. the announcement of a ‘phase one’ agreement between the US and China. With the latter set to impose tariffs on another $156 billion in goods from the later this Sunday, the lack of a deal is only going to become more of an issue as the week goes on. Tuesday’s losses may well be a sign of that already.”

In equity markets, equipment rental firm Ashtead lost ground as it posted a slump in first-half profit at its UK business, A-Plant and warned of “challenging” trading conditions.

Rolls-Royce was under pressure as the aerospace and defence company announced the departure of non-executive director Bradley Singer, a representative of its largest shareholder, ValueAct Capital.

Segro was weaker after saying it had sold a portfolio of UK big box warehouses for £241m to a fund advised by Morgan Stanley Real Estate Investing in joint venture with Thor Equities Group.

Morrisons was in the red as Kantar data showed that sales at the supermarket retailer fell 2.9% in the 12 weeks to 1 December .

Hunting was knocked lower by a downgrade to ‘neutral’ at Credit Suisse, while Shaftesbury was hit by a downgrade to ‘underweight’ at Barclays.

In small caps, shares of fashion retailer Ted Baker tumbled after it announced the departure of its chief executive officer and chairman, scrapped its dividend payments and warned on profits.

Going the other way, Ocado was a high riser after the Kantar data showed that it continues to be the fastest-growing grocer, with sales in the last 12 weeks up 13.7% compared to the same period last year.

Just Eat ticked higher as the online food delivery firm rejected a sweetened £5.1bn bid from Amsterdam-listed Prosus.

Computacenter surged after saying that results for 2019 would be “well ahead” of current market expectations in terms of profitability and earnings per share.

 

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