LONDON MARKET OPEN: Stocks Lower But Sirius Minerals And Greggs Gain

(Alliance News) - London stocks started the week on the back foot amid some rising unease over the US-China trade situation following a week of mixed headlines, with the FTSE 250 lower despite Sirius Minerals, Greggs and Aston Martin all racking up share price gains.

The FTSE 100 was 39.32 points lower, or 0.5%, at 7,320.06 early Monday. The FTSE 250 was down 65.24 points, or 0.3%, at 20,292.39, and the AIM All-Share was down 0.1% at 890.78.

The Cboe UK 100 index was up down 0.6% at 12,406.34. The Cboe UK 250 was down 0.1% at 18,233.01 and the Cboe UK Small Companies was flat at 11,258.26.

In European equities, the CAC 40 index in Paris was down 0.1% and the DAX 30 in Frankfurt down 0.3% in early trade.

In Asia on Monday, the Japanese Nikkei 225 index closed down 0.3%. In China, the Shanghai Composite ended down 1.8%, while the Hang Seng index in Hong Kong finished 2.6% lower.

"Civil unrest in Hong Kong and mixed signals on the progress of US/China trade talks has dampened sentiment across financial markets. Most Asian equity markets have started the week lower as a result, with Hong Kong stocks leading the decline following violent clashes this morning," said Lloyds Banking.

Though there were broad-based losses in the FTSE 100, AstraZeneca was sat atop the index, up 0.9% after reporting positive results for an anaemia drug.

Astra said analyses of a Roxadustat drug trial for the treatment of patients with anaemia from chronic kidney disease showed positive efficacy and no increased risk of major adverse cardiovascular events.

The FTSE 250 was lower despite some solid share price gains from the likes of Sirius Minerals, Greggs and Aston Martin.

Sirius Minerals shares surged 14% after outlining a new two-stage development plan for its North Yorkshire polyhalite mine as it looks to secure funding for the first stage of the project.

In September, Sirius announced it struggled to secure the required funding for its current project plan due to "market conditions." Consequently, the firm intended to slow the development of its polyhalite mine.

Sirius remains focused on extracting first polyhalite from the mine in order to remove the "greatest perceived construction risk associated with deep shaft construction." This will allow Sirius to explore a wider and cheaper range of long-term financing options for the ramping-up of production.

The Scarborough-based firm expects the initial phase to require around USD600 million in investment in addition to its current cash reserves.

Baker Greggs was up 6.9% after upgrading its guidance again.

In the period to November 9, total sales were up 12% year-on-year and the bakery chain registered like-for-like growth of 8.3% in its company-managed shops. In the same period last year, total sales rose by 8.3% and by 4.0% on a like-for-like basis.

The FTSE 250 firm now expects its full-year pretax profit, excluding exceptional costs, to be higher than previous internal expectations.

Greggs explained: "Sales growth continues to be driven by increased customer visits and has been stronger than we had expected given the improving comparative sales pattern that we saw in the fourth quarter last year. Operational costs remain well controlled and, whilst the comparative sales become stronger still in the balance of the year."

The company previously hiked its 2019 pretax profit guidance in February, after reporting a sales surge helped by its vegan sausage rolls.

Aston Martin shares rose 5.0% after HSBC raised the stock to Buy from Hold.

In Monday's economic calendar, there are UK GDP, manufacturing production, industrial production and trade balance reports at 0930 GMT.

"Given the weak PMIs, growth seems to remain sluggish but there might have been a positive contribution from stockpiling ahead of the previous 31 October Brexit deadline," commented Danske Bank.

Consensus, according to FXStreet, is for UK GDP in the third quarter of grow 0.3% quarter-on-quarter, after a 0.2% contraction in the preceding three months. Any reading which indicates the UK economy shrank in the three months to September will put the country into a technical recession.

The data comes after Moody's Investors Service on Friday downgraded the outlook for Britain's debt, citing mounting policy challenges amid the Brexit debate.

The agency cut the outlook to negative from stable but kept the debt at the investment-grade Aa2. Ratings agency Fitch had similarly put Britain on "negative watch" in February.

Pointing to "paralysis that has characterised the Brexit-era policymaking process," Moody's said London has "struggled to cope with the magnitude of policy challenges that they currently face."

The pound was quoted at USD1.2799 early Monday, up from USD1.2784 late Friday.

By Lucy Heming; lucyheming@alliancenews.com

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