LONDON MARKET OPEN: Miners Climb But BT Dips On Nationalisation Threat

(Alliance News) - Stocks were in the green early on Friday in London, with miners rising on US-China trade hopes, though BT Group fell after partial nationalisation plans were announced by the UK opposition Labour Party.

The FTSE 100 was 31.42 points, or 0.4%, higher at 7,324.18.

The FTSE 250 was 48.99 points, or 0.2%, higher at 20,280.97, and the AIM All-Share up 0.2% to 889.93.

The Cboe UK 100 index was 0.3% higher at 12,410.65. The Cboe UK 250 was 0.2% higher at 18,205.70, and the Cboe UK Small Companies was down 0.1% at 11,274.16.

In European equities, the CAC 40 index in Paris was up 0.6% and the DAX 30 in Frankfurt up 0.5%.

In London, FTSE 100 telecommunications firm BT Group was down 2.5%, the worst performer in the index, after the Labour Party announced plans to nationalise parts of the company.

Labour has promised a British Broadband public service that will deliver free full-fibre internet to every home and business by 2030, if it wins the general election.

The party intends to bring parts of BT into public ownership under plans it said will result in a massive upgrade in the UK's internet infrastructure.

Berkeley Group was 1.9% lower, as Goldman Sachs cut the housebuilder to Sell from Neutral.

Conversely, Premier Inn-owner Whitbread gained 2.4%, as Barclays raised the stock to Overweight from Equal Weight.

Miners were in the green following positive noises from the US regarding an initial trade deal with China. Glencore rose 1.7%, Evraz by 1.0%, Anglo American 1.2%, Antofagasta 1.0%, Rio Tinto 1.7%, and BHP 1.9%.

White House adviser Larry Kudlow on Thursday said the long-awaited mini trade deal with China was on track as part of a wider pact.

"The deal is not complete but we've made enormous progress," he told reporters, adding the talks were "coming down to the short strokes".

Kudlow's comments follow a week of unease about the much-vaunted talks, after Trump dismissed Chinese claims of a plan to roll back tariffs as the negotiations progress, while reports said Beijing was uneasy about some aspects of the developing deal.

FTSE 250 telecommunications firm TalkTalk Telecom fell 1.5% as it reported a 0.9% drop in revenue for the half-year to September, to GBP764 million.

Pretax profit was GBP4 million excluding an accounting change, and GBP1 million including the new accounting standard, from a GBP4 million pretax loss a year before.

TalkTalk said the fall in revenue was in part due to a decline from Carrier operations. Fibre net adds rose 52% to 292,000, including a record 174,000 new customers in the second quarter.

TalkTalk, which held annual earnings guidance, said it was "pleased" with profit performance. It has kept the interim dividend flat at 1.0 pence per share.

Also in the FTSE 250, publisher Future was up 1.0% after it reported a 70% rise in revenue for the year to September to GBP221.5 million in what it described as a "transformational" year. Organic growth was 11%, with the rest provided by a number of acquisitions. Future described the results as "outstanding".

Future's pretax profit approximately trebled to GBP12.7 million, with the adjusted figure also roughly trebling to GBP50.3 million.

Future, which did not pay an interim dividend, has proposed a 1p per share payout for the year. It restarted dividend payments this time last year after a five-year hiatus, returning 0.5p.

Transport operator FirstGroup rose 2.6% as the UK Competition & Markets Authority said it is considering proposals made by the firm related to the award of the West Coast rail franchise.

FirstGroup was awarded the deal alongside partner Trenitalia in August. The CMA said there are "reasonable" grounds to believe undertakings offered by the pair could remedy competition concerns.

Workspace Group fell 2.1% in the FTSE 250, after Berenberg cut the office space firm to Sell from Hold.

Elsewhere, oil firm Amerisur Resources has agreed a GBP242 million takeover by GeoPark, a Latin American oil and gas firm which has assets in Colombia, where Amerisur is focused, as well as several other countries in the region.

Amerisur rose 4.6% in early trade in London to a price of 18.84 pence. GeoPark is paying 19.21p per Amerisur share, a 59% premium to Amerisur's closing price in mid-July when an offer period began of 12.1p.

Carpetright climbed 15% to 4.83p as it agreed to takeover offer from Meditor Holdings, which already owns just under 30% of the company.

Meditor is paying 5p per Carpetright share it does not own, which values the struggling carpet retailer at GBP15.2 million. The company said the deal is "the only viable route" to make Carpetright a sustainable entity going forward.

Fuller, Smith & Turner fell 7.6% as it said costs associated with the sale of its beer business to Japan's Asahi have been higher than expected. It needs "additional resources" to assist it through a "complex separation" of brewing and the remaining pub chain.

As a result, Fuller's said profit for its year ending March 28, 2020, will be broadly flat year-on-year, giving an adjusted pretax profit figure around GBP31 million.

In the US on Thursday, Wall Street ended broadly flat, with the Dow Jones Industrial Average ending flat, the S&P 500 up 0.1%, and the Nasdaq Composite also closing flat.

The Japanese Nikkei 225 index closed 0.7% higher on Friday. In China, the Shanghai Composite ended down 0.6%, while the Hang Seng index in Hong Kong finished flat.

The US economy is a global standout at the moment, showing none of the signs of trouble that have preceded other recessions, at least not yet, Federal Reserve Chair Jerome Powell said Thursday.

On a day when Germany and China each reported growth in the latest quarter of just 0.1%, Powell said, "the US economy is the star economy these days" with growth of about 2%.

And "there is no reason to think that cannot continue", he told the House Budget Committee, quickly adding that he was worried about "jinxing" the outlook.

In the final day of back-to-back appearances before Congress, Powell noted that while US manufacturing is in recession – partly due to lingering trade tensions – the consumer remains strong.

The economic calendar on Friday has eurozone inflation at 1000 GMT and US retail sales at 1330 GMT.

By George Collard; georgecollard@alliancenews.com

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