LONDON MARKET OPEN: Stocks Mixed As Investors Await China Retaliation

LONDON (Alliance News) - Stock prices in London were mixed on Monday, following a higher close in the US on Friday, as last week's trade talks between the US and China failed to deliver a resolution. The FTSE 100 was up 5.48 points, or 0.1% at 7,208.77. The FTSE 250 was down 95.58 points, or 0.5% at 19,269.52. The AIM All-Share was down 0.1% at 956.33.The Cboe UK 100 index was flat at 12,234.48. The Cboe UK 250 was down 0.1% at 17,385.40, and the Cboe UK Small Companies was flat at 11,722.56.

The pound was trading at USD1.3002, down from USD1.3030 late Friday.In European equities, the CAC 40 in Paris was flat and the DAX 30 in Frankfurt was down 0.2%. In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average and S&P 500 up 0.4% and the Nasdaq Composite ending 0.1% higher.The Japanese Nikkei 225 index closed down 0.7%. In China, the Shanghai Composite closed down 1.7%. Financial markets in Hong Kong is are closed for a public holiday. The US is expecting China to retaliate after trade negotiations ended without a deal on Friday and the US raised tariffs on Chinese goods, White House chief economic adviser Larry Kudlow said Sunday."The expected countermeasures have not yet materialized. We may know more today or even this evening or tomorrow," Kudlow said on Fox News Sunday.On Friday, the White House raised tariffs on USD200 billion worth of Chinese imports from 10% to 25% and announced plans to raise tariffs on USD300 billion of remaining Chinese imports.Kudlow said Sunday that the planned hike in tariffs on remaining Chinese imports could take around two months. China earlier Friday vowed to take "necessary countermeasures" after the tariffs were raised from 10% to 25%, but has not yet detailed exactly how it will respond.CMC Markets analyst Michael Hewson: "Markets in Europe have opened slightly higher this morning largely as a result of the residual effects of a late rally in US stocks from their lowest levels on Friday."Most of this Friday rebound is set to unwind sharply when US markets reopen later today as both the US and China showed little sign of backing away from further confrontations with a lot of the weekend headlines devoted to either side staking out their positions."On the London Stock Exchange early Monday, Centrica was the best blue-chip performer, up 2.5% after the British Gas parent said it traded in line so far in 2019, though the company has faced several headwinds.The UK tariff cap has led to a one-off GBP70 million impact. This has combined with warmer-than-normal weather and falling natural gas prices in the UK to hold back performance in the first four months of 2019.However, the FTSE 100 firm is reiterating 2019 guidance, including for adjusted operating cash flow between GBP1.8 billion and GBP2.0 billion, and net debt of between GBP3.0 billion and GBP3.5 billion. Centrica is holding its annual general meeting on Monday, with Chief Executive Iain Conn facing a potential shareholder revolt over executive pay. Marks & Spencer was up 1.5% after Citigroup raised the food, clothing and homewares retailer to Buy from Neutral. Royal Dutch Shell 'A' and 'B' shares were up 0.6%. HSBC upgraded the oil major to Buy from Hold. At the other end of the large cap index, Evraz was the worst performer, down 2.8% after Morgan Stanley downgraded the Russian steelmaker to Underweight from Equal Weight. In the FTSE 250, Metro Bank was the worst performer, down 6.2% after the challenger bank confirmed its planned GBP350 million equity raise is "well advanced" and it has begun final discussions.The high street bank said it has started its final talks with both shareholder and new investors and received positive feedback, with the equity raise to complete via placing by the end of the second quarter of 2019.Metro Bank claimed to be responding to "recent press speculation". An article in the Financial Times on Friday last week said there had been some concern that the GBP350 million was not enough to support Metro Bank's capital position and it may be "forced to raise a larger amount".Earlier this year, Metro Bank was found by regulators to have miscalculated its risk-weighted assets and over-reported its capital ratios as a result. The stock is down 71% so far in 2019. "Not surprisingly shareholders are furious having already been tapped for GBP300 million last summer and while the bank has announced this morning that the GBP350 million capital raising is well advanced, they haven't answered any of the questions around why the accounting error happened in the first place," CMC's Hewson commented.Victrex was down 4.5% after the speciality chemicals company said its interim results were significantly lower than the previous year due to a weak performance in the Automotive sector.For the six months to March 31, Victrex posted a pretax profit of GBP50.2 million, down 21% from GBP63.3 million in the comparative period a year ago. Revenue reduced to GBP145.7 million from GBP166.6 million, while costs remained stable. Due to the weaker first half and some "key" industrial markets remaining weak, the company proposed a flat interim dividend at 13.42 pence per share.In political news, a cross-party Brexit deal will need to include a second referendum in order to receive the backing of Labour MPs, Keir Starmer said.The shadow Brexit secretary warned it was "impossible" to see how an agreement between the Conservatives and Labour could clear the Commons unless it guaranteed the deal would be put back to the public for a "confirmatory vote".Starmer made the comments ahead of crunch talks between Cabinet ministers and senior Labour figures on Monday, although speculation was growing over whether the negotiations will succeed.Speaking to the Guardian, the leading Labour negotiator said his colleagues and the party leadership would have to decide "in the coming days" if it was worth continuing with the talks.Meanwhile, The Times reported that the prime minister has been urged by Cabinet ministers to pull out of the talks and move to indicative votes by MPs.In economic news, the Irish construction sector growth accelerated in April, achieving the sixty-eight consecutive month of growth, survey data from Ulster Bank showed.The Ulster Bank construction Purchasing Managers' Index rose to 56.6 in April, from 55.9 in March. Any reading above 50 indicates expansion in the sector.