ADVFN Morning London Market Report: Monday 16 October 2017

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London open: Stocks nudge higher as miners gain on China data


London stocks nudged higher in early trade on Monday, with miners lifted by Chinese inflation data, as investors eyed Prime Minister Theresa May’s trip to Brussels for what appears to be a potential Brexit intervention.

At 0835 BST, the FTSE 100 was up 0.1% to 7,540.69, while the pound was up 0.4% against the euro at 1.1286 and 0.2% firmer versus the dollar at 1.3308.

May’s dinner party with European Commission president Jean-Claude Juncker and the EU’s chief Brexit negotiator Michel Barnier will be closely watched after the latter said last week that Brexit negotiations had reached “deadlock”.

The rest of the week’s economic calendar is already pretty chock-a-block, with UK inflation, wage growth and retail sales readings, as well as the latest GDP data from China and a potentially crucial EU summit on Thursday and Friday.

Spreadex analyst Connor Campbell said the meeting had been convened in order to help break the ‘disturbing deadlock’ between the two sides and, in turn, help nudge the EU towards green-lighting trade talks at the end of the week. “This news seems to have helped buoy the pound, which is keeping above $1.33 against the dollar.”

Spanish politics were also in focus amid reports that Catalan leader Carles Puigdemont – who had been asked by Spanish Prime Minister Mariano Rajoy to announce by 0900 BST on Monday whether the region had declared independence – said in a letter that he wants to hold a dialogue and negotiate over the next couple of months.

Market participants were also likely to be digesting the latest news from Austria, where the conservative Austrian People’s Party’s Sebastian Kurz’s looked set to become Europe’s youngest leader.

On the corporate front, heavily-weighted mining stocks racked up the strongest gains after China’s consumer price index rose 1.6% in September from the year before, in line with expectations, according to data from the National Bureau of Statistics. Meanwhile, the producer price index was up 6.9% last month from a year ago, beating expectations.

ConvaTec tanked after it warned that revenues and profit margins for the full year will be lower than it had previously guided and that growth targets in 2018 may need to be adjusted.

Ultra Electronics edged lower despite saying that its Cheltenham-based Precision Control Systems business has received contracts valued $16m from Boeing and Lockheed Martin.

Financial technology company NEX Group was in the red after it announced that – having put into motion the “significant restructure” of the company’s post trade division ‘NEX Optimisation’ – Jenny Knott has decided to step down as the division’s CEO.

Polymetal advanced after saying it was on track for the full year as it posted a jump in third-quarter sales.

ITV was boosted by an upgrade to ‘buy’ at HSBC, while AstraZeneca was in the black after Credit Suisse upgraded the stock to ‘outperform’ and Sky nudged up as AlphaValue lifted it to ‘add’.

GKN was hit by a downgrade to ‘hold’ at Societe Generale and Aldemore slipped just a touch after Investec cut the stock to ‘hold’.

There are no major UK macroeconomic releases due on Monday apart from Rightmove house prices data showing asking prices in England and Wales rose 1.1% to £313,435 in the four weeks to 7 October, following a 1.2% drop the previous month.

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