LONDON MARKET OPEN: Sirius Minerals Drops 30% But Other Mid-Caps Rise

(Alliance News) - Stocks were in the red early on Tuesday in London, with investors spooked by US criticism of alleged currency manipulation by China following increased US tariffs. Shares in mid-cap fertilizer project developer Sirius Minerals plunged as it postponed a key part of its stage-two funding, while a number of fellow FTSE 250 firms climbed after well-received interim results. The large-cap FTSE 100 index was 19.91 points lower, or 0.3%, at 7,203.93. On Monday, the index closed down 2.5%, hitting its lowest level in two months.The mid-cap FTSE 250 index was down 7.63 points at 18,863.79, while the AIM All-Share was down marginally at 906.9.The Cboe UK 100 index was down 0.5% at 12,185.56. The Cboe UK 250 was up 0.1% at 16,834.99, while the Cboe UK Small Companies was 0.1% higher at 10,993.85. In Paris, the CAC 40 stock index was up 0.3% while the DAX 30 in Frankfurt was 0.4% higher in early trade.The US Treasury Department has labelled China a currency manipulator after Beijing pushed down the value of the yuan in a dramatic escalation of the trade conflict between the world's two biggest economies.The decision, which came hours after Trump accused China of unfairly devaluing its currency, marks a reversal for the Treasury. In May, it declined to sanction China for manipulating its currency.The US has not put China on the currency blacklist since 1994. The designation could pave the way for more sanctions against China.Earlier on Monday, China allowed its currency to weaken to an 11-year low, giving its exporters a price edge in world markets and easing some of the damage from US tariffs on Chinese products.Trump had gone on Twitter to denounce China's move as "currency manipulation", adding: "This is a major violation which will greatly weaken China over time."The Chinese currency steadied on Tuesday, with the onshore yuan weakening 0.1% to CNY7.0512, and the offshore currency strengthening 0.2% to CNY7.0802 by late morning.In the US on Monday, Wall Street ended firmly in the red, with the Dow Jones Industrial Average closing down 767.27 points, or 2.9%, the S&P 500 down 3.0%, and the Nasdaq Composite 3.5% lower.The Japanese Nikkei 225 index closed 0.7% lower on Tuesday. In China, the Shanghai Composite finished down 1.6%, while the Hang Seng index in Hong Kong is down 0.9% in late trade.On the London Stock Exchange, FTSE 100 engine maker Rolls-Royce fell 0.9%, after it said it is on track for full-year expectations, reporting interim revenue growth and a narrowed pretax loss.Revenue for the six months to June climbed 5% to GBP7.88 billion, with the pretax loss shrinking to GBP791 million from GBP1.23 billion a year before.Rolls-Royce posted an operating profit of GBP83 million, swinging from a loss of GBP747 million a year before, with underlying operating profit up 32% to GBP203 million.The firm half-year saw "further progress", Chief Executive Warren East said, and Rolls-Royce has reiterated 2019 guidance for core underlying operating profit of approximately GBP700 million, and, overall, "the outlook remains positive".However, problems do remain operationally, specifically for the Trent 1000 engines, whose blades were found to have been deteriorating faster than expected.InterContinental Hotels was 1.3% lower as it reported solid interim profit growth, with revenue also rising, in a half-year of "significant" progress.Pretax profit climbed 25% on a year before to GBP375 million, with revenue climbing 8% to USD2.28 billion. Revenue per available room, a key industry metric, climbed by 0.1% in the Americas and by 0.2% in Europe, the Middle East, Asia, & Africa, though it fell 0.3% in China.IHG boosted its interim dividend by 10% on a year before to 39.9 US cents.IHG opened 30,000 new rooms in the period, its fastest pace in over a decade, with the pipeline now standing at over 282,000 rooms. The outlook, it said, is "confident".In the FTSE 250, Sirius Minerals fell 30% after it suspended its USD500 senior secured note offering "due to current market conditions". The firm has said it will go back to the market "when conditions have improved later this quarter".The note offering was part of a key USD2.5 billion funding round needed to develop the Woodsmith polyhalite mine in Yorkshire. Computacenter was down 1.5%, after Berenberg cut its rating on the company to Hold from Buy. Precision instruments firm Spectris also suffered a rating cut, to Sell from Hold by Berenberg, with shares down 0.6%.In the green was flow control equipment firm Rotork, 7.2% higher, as it posted a 3.7% drop in revenue for the first half of 2019, to GBP318.6 million, with orders down 0.6% to GBP362.5 million.Rotork's pretax profit fell 4.5% to GBP52.2 million, with the adjusted figure up 2.2% to GBP65.8 million. The company increased its dividend by 4.5%, to 2.30p.Rotork is "pleased" with the first half performance, despite the expected sales decline, and it now expects flat annual sales on an organic constant currency basis following good recent order intake.Domino's Pizza Group was 6.1% up as it posted 4.7% growth in system sales for the 26 weeks to June 30 to GBP645.8 million. In the UK & Ireland, sales were up 5.5%, and 3.9% on a like-for-like basis, slowing from the year before's 5.9% like-for-like growth.Pretax profit fell 27% to GBP30.5 million, and the underlying pretax profit figure declined 7.4% to GBP42.3 million.Domino's increased its interim dividend by 3.7% to 4.20 pence per share.Chief Executive David Wild said the core UK & Ireland market did well, but the company warned talks with franchisees are "complex", meaning new store openings are going to be delayed into 2020.Furthermore, Wild is to retire, though he will stay until a new CEO is found.Internationally, performance is "very challenging", with trading visibility limited.Chemicals firm Synthomer climbed 2.8%, reporting a 34% drop in pretax profit for the six months to June, reaching GBP56.6 million, as revenue fell 8.5% to GBP762.7 million. Volumes fell 5.7% to 750,800 tonnes.On an underlying basis, Synthomer's pretax profit fell 7.9% to GBP70.2 million.The dividend was increased 8.1% to 4.0p per share.Chair Neil Johnson said the company met expectations in a difficult market, but conditions are set to improve in the rest of 2019. Expectations are unchanged for 2019, Johnson added, and the firm is confident on further progress.Defence firm Meggitt upgraded its 2019 outlook, following a 12% rise in revenue for the six months to June to GBP1.07 billion. Organic growth was 9%, and Meggitt's orders climbed 10%, and 7% organically, to GBP1.19 billion.Shares were 4.4% higher in early trade on Tuesday.Pretax profit fell 31% to GBP73 million, but on an underlying basis climbed 7% to GBP145 million.Meggitt boosted the interim dividend by 5% to 5.55 pence per share.Meggitt said the Civil Aerospace and Defence businesses did well, and, following the better than expected first half, it has upgraded revenue growth guidance for 2019 to 4% to 6%.In UK economic news, shops suffered the worst July consumer spending since the British Retail Consortium-KPMG retail sales monitor began, data showed on Tuesday.On a total basis, sales in July were up just 0.3% year-on-year, coming up against an increase of 1.6% in July a year ago."This is the lowest figure recorded for the month of July since our records began in 1995 and comes after the worst June on records," the BRC and KPMG said.On a like-for-like basis, sales were up 0.1% year-on-year in July."Whereas last year's glorious sunshine and World Cup Finals led to strong consumer demand over the summer, this year has been weak in comparison, with both June and July showing the lowest sales on record for their respective months. And it is not just high streets that are suffering, with non-food online growth also one percentage point below the 12-month average," commented BRC Chief Executive Helen Dickinson.Big cinema releases and a surge in holiday flights pushed consumer spending higher in July, although retail spending continued to plunge, according to Barclaycard's latest consumer spending report.Consumer spending grew by a modest 1.7% in July, as it was boosted by high ticket sales for summer blockbusters including Toy Story 4 and The Lion King.Spending was also boosted by a raft of holidaymakers buying flights, as airline expenditure bounced back from three consecutive months of decline to grow by 3.7%.However, the figures remained subdued and represent a decline in real terms when accounting for inflation.Industrial orders in Germany rebounded strongly in June, official data showed Tuesday, although the relief for the troubled manufacturing sector came mainly from a few large contracts.Producer firms reported 2.5% more orders month-on-month, after a 2.0% fall in May, federal statistics authority Destatis said in figures adjusted for seasonal and calendar effects.That far outstripped forecasts of a 0.3% lift from analysts surveyed by Factset.The overall figure remained 3.6% lower than in June 2018, when the unexpectedly strong growth seen through the previous year was finally running out of steam.In a quiet economic calendar, the US Redbook index comes out at 1355 BST.