London open: Stocks flat as investors pause for breath after record highs
London stocks were little changed in early trade on Tuesday, kicking the year off with a whimper rather than a bang after ending 2017 on a high.
At 0830 GMT, the FTSE 100 was flat at 7,671.36, with investors likely pausing for breath after the index ended the year at record high of 7,687.77 on Friday, while the pound was up 0.1% against the euro at 1.1251 and 0.3% firmer versus the dollar at 1.3541.
Upbeat data out of China failed to provide a boost, even to miners, which rallied strongly in the last week of 2017. China’s Caixin manufacturing PMI came in ahead of expectations of 50.6 at 51.7 in December, up from 50.8 the month before.
The UK manufacturing purchasing managers’ index is due at 0930 GMT.
Accendo Markets analyst Mike van Dulken pointed out that of all the countries due to release their manufacturing PMIs on Tuesday - Italy, France and Germany have data out - the UK is the only one expected to report a slowing print, retreating from a six-year highs, while this afternoon, the US reading is seen improving to its best level since 2015.
“Although no speakers are scheduled today, central bankers are expected to reappear from the Christmas woodworks ahead of monetary policy updates later this month, while 2018 will see geopolitics continue to have a central driving role in equity markets, with Brexit, the Trump administration in the US and European elections (Italy) all expected to move markets,” van Dulken said.
In corporate news, Marks & Spencer was in the black after confirming the sale and franchise of its retail business in Hong Kong and Macau to its long-established franchise partner Al-Futtaim.
BP was steady after saying it expects changes to US tax rates to trigger a charge of about $1.5bn (£1.1bn) before benefiting the company in the long run. The oil company said lower corporate taxes under President Trump's plan require it to revalue its deferred tax assets and liabilities. BP expects the $1.5bn one-off cash charge to affect its fourth-quarter income statement.
British Airways and Iberia owner IAG nudged lower as it swooped to buy assets and invest in Niki, a former part of the collapsed Air Berlin group. IAG's Spanish budget arm, Vueling, will buy €20m of assets from the Austrian airline and provide up to €16.5m of liquidity to Niki, which will form part of a new, separately run Austrian subsidiary.
Compass Group slipped as it confirmed the death of its chief executive, Richard Cousins, and four members of his family in a plane accident over the weekend, and said it has brought forward the appointment of his successor. The promotion of the catering group's European chief operating officer, Dominic Blakemore, as chief executive has been moved forward to 1 January from 1 April.
BBA Aviation was on the back foot as it ended a seven-month search for a new chief executive by appointing internal candidate Mark Johnstone to run the company.
Speciality chemicals company Synthomer ticked down after saying it has sold its Leuna site in Germany to Alberdingk Boley Gmbh for an undisclosed price.
BT was the standout gainer after an upgrade to ‘buy’ from Bank of America Merrill Lynch, while ASOS edged higher after being raised to ‘buy’ from ‘hold’ at Deutsche Bank and GVC Holdings was lifted by an initiation at ‘overweight’ from Barclays. However, Carpetright slumped as it was cut to ‘hold’ from ‘buy’ at Deutsche Bank.
FTSE 100 - Risers
Marks & Spencer Group (MKS) 319.80p 1.59%
BT Group (BT.A) 275.80p 1.51%
St James's Place (STJ) 1,244.00p 1.47%
Centrica (CNA) 139.28p 1.44%
Kingfisher (KGF) 340.90p 0.95%
Berkeley Group Holdings (The) (BKG) 4,228.00p 0.74%
Prudential (PRU) 1,919.50p 0.73%
Lloyds Banking Group (LLOY) 68.56p 0.73%
International Consolidated Airlines Group SA (CDI) (IAG) 654.80p 0.58%
Severn Trent (SVT) 2,173.37p 0.53%
FTSE 100 - Fallers
Rio Tinto (RIO) 3,874.00p -1.73%
BHP Billiton (BLT) 1,499.00p -1.54%
Ashtead Group (AHT) 1,961.89p -1.51%
Shire Plc (SHP) 3,851.50p -1.24%
Worldpay Group (WPG) 420.80p -1.22%
Antofagasta (ANTO) 993.00p -1.19%
GKN (GKN) 315.60p -1.19%
G4S (GFS) 263.90p -1.16%
Rolls-Royce Holdings (RR.) 839.20p -0.92%
Unilever (ULVR) 4,089.50p -0.87%
FTSE 250 - Risers
Stagecoach Group (SGC) 168.90p 2.55%
Provident Financial (PFG) 920.00p 2.45%
Capita (CPI) 410.20p 2.32%
Brown (N.) Group (BWNG) 276.63p 2.19%
SIG (SHI) 179.50p 1.87%
Ferrexpo (FXPO) 298.10p 1.71%
Sirius Minerals (SXX) 23.89p 1.67%
Ted Baker (TED) 2,756.00p 1.66%
Tullow Oil (TLW) 210.00p 1.65%
Sophos Group (SOPH) 579.00p 1.58%
FTSE 250 - Fallers
Dairy Crest Group (DCG) 559.00p -3.04%
Euromoney Institutional Investor (ERM) 1,273.60p -2.41%
Drax Group (DRX) 264.40p -2.29%
Barr (A.G.) (BAG) 653.00p -2.03%
Marshalls (MSLH) 446.32p -1.89%
RDI Reit (RDI) 36.15p -1.82%
888 Holdings (888) 277.00p -1.67%
Indivior (INDV) 401.40p -1.67%
Countryside Properties (CSP) 347.28p -1.62%
Polymetal International (POLY) 906.53p -1.52%