London close: Stocks edge higher ahead of US-China trade deal

(Sharecast News) - London stocks were a tad higher on Tuesday as investors caught their breath ahead of the signing of the phase one trade deal between the US and China, which was due to take place on Wednesday, and cheered a positive start to the US corporate earnings season.
The FTSE 100 was up 0.1% at 7,622.35, while sterling advanced 0.15% against the US dollar to 1.30147, steadying a day after after sustaining heavy losses on the back of weak growth figures and expectations for an interest rate cut by the Bank of England.

In parallel, the second-tier index was ahead by 0.18% at 21,756.05.

"With much of the phase one deal factored into market prices, we are instead seeing some hesitancy come into play as traders wonder whether any eventual deal would really live up to expectations," said IG's Josh Mahony.

Investors were also mulling the latest trade data out of China, which showed that imports rebounded in December, up 16.3% and comfortably beating expectations of a 9.6% rise, with US imports of agricultural goods faring particularly well. Exports rose 7.6% following a 1.3% decline in November and versus expectations of a 3.2% jump.

Stateside meanwhile, fourth-quarter earnings from banking giants Citigroup and JP Morgan handily beat analysts' expectations, but not so those of Wells Fargo.

In UK equity markets, Taylor Wimpey was a high riser after the housebuilder said it expected full-year results to be in line with expectations despite economic and political uncertainties caused by Brexit.

Russ Mould, investment director at AJ Bell, said: "A record order book shows that demand for housing in the UK remains strong but higher costs, the lingering effects of the freehold scandal and renewed investment in build quality mean that Taylor Wimpey expects its operating margin to fall in 2019.

"That pattern fits with the analysts' consensus forecast of a very low single-digit percentage improvement in profits for 2019 and the market expects similarly modest progress in 2020."

Games Workshop topped the leaderboard for the second tier index after the miniature wargames manufacturer posted record first-half profit and sales.

Builders' merchant Grafton rallied as it reported better-than-expected trading conditions in November and December despite a weaker UK market and said it now expects full-year adjusted operating profit of around £202m and £190m on a pre-IFRS 16 basis for its continuing operations.

Recruiter PageGroup was in the green after it backed its full-year guidance but said the outlook remains tough.

Dixons Carphone was close behind on the FTSE 250 following an upgrade to 'buy' at Goldman Sachs.

Specialty chemicals company Elementis tumbled after it warned on profits following a "subdued" final quarter of the year.

WPP was hit by a downgrade to 'underperform' at Bank of America Merrill Lynch, while education publisher Pearson was weaker after Credit Suisse cut its price target on the stock.

Market Movers

FTSE 100 (UKX) 7,622.35 0.06%
FTSE 250 (MCX) 21,756.05 0.18%
techMARK (TASX) 4,238.40 0.26%

FTSE 100 - Risers

NMC Health (NMC) 1,385.00p 10.23%
Taylor Wimpey (TW.) 209.90p 3.91%
Vodafone Group (VOD) 156.54p 3.24%
Centrica (CNA) 90.08p 2.47%
Persimmon (PSN) 2,796.00p 2.23%
Kingfisher (KGF) 218.50p 2.10%
Morrison (Wm) Supermarkets (MRW) 192.50p 1.88%
Ocado Group (OCDO) 1,302.00p 1.80%
Barratt Developments (BDEV) 781.00p 1.64%
Next (NXT) 6,840.00p 1.63%

FTSE 100 - Fallers

Evraz (EVR) 395.10p -4.22%
Pearson (PSON) 602.20p -3.29%
Mondi (MNDI) 1,629.00p -2.57%
WPP (WPP) 1,039.50p -2.16%
Smith (DS) (SMDS) 367.60p -2.16%
BT Group (BT.A) 185.60p -2.01%
Johnson Matthey (JMAT) 2,931.00p -1.74%
Smurfit Kappa Group (SKG) 2,826.00p -1.67%
International Consolidated Airlines Group SA (CDI) (IAG) 646.80p -1.37%
ITV (ITV) 145.85p -1.25%

FTSE 250 - Risers

Games Workshop Group (GAW) 6,960.00p 9.18%
Vistry Group (VTY) 1,342.00p 4.44%
Pagegroup (PAGE) 488.60p 4.36%
Grafton Group Units (GFTU) 894.50p 4.25%
Frasers Group (FRAS) 518.00p 4.23%
Dixons Carphone (DC.) 143.90p 3.90%
Finablr (FIN) 131.00p 3.23%
Ashmore Group (ASHM) 547.00p 3.21%
Watches of Switzerland Group (WOSG) 380.00p 3.15%
Cranswick (CWK) 3,382.00p 2.98%

FTSE 250 - Fallers

Elementis (ELM) 140.50p -14.69%
Centamin (DI) (CEY) 118.35p -6.96%
Tullow Oil (TLW) 59.18p -5.01%
Savills (SVS) 1,188.00p -3.57%
Hunting (HTG) 381.20p -3.49%
Hochschild Mining (HOC) 164.10p -3.41%
Sanne Group (SNN) 611.00p -3.02%
Safestore Holdings (SAFE) 760.50p -2.69%
Helios Towers (HTWS) 148.20p -2.57%
William Hill (WMH) 181.40p -2.47%