LONDON MARKET OPEN: Stocks Mixed; Elementis Falls After Profit Warning

(Alliance News) - Stock prices in London opened on a downbeat note on Tuesday following a mixed close in Asia, while in the FTSE 250, Elementis sank after issuing a profit warning.

The FTSE 100 was down 1.88 points at 7,615.72. The mid-cap FTSE 250 index was up 35.53 points, or 0.2% at 21,752.29. The AIM All-Share index was flat at 965.75.

The Cboe UK 100 index was up 0.1% at 12,911.39. The Cboe 250 was up 0.2% at 19,613.61 and the Cboe Small Companies was down 0.1% at 12,439.02.

In mainland Europe, the CAC 40 in Paris was down 0.4% and the DAX 30 in Frankfurt down 0.3% in opening trade.

In the FTSE 100, Antofagasta and Glencore were up 1.4% and 1.9% respectively after Liberum raised the miners to Buy from Hold.

Taylor Wimpey was up 0.1% after the housebuilder said that despite ongoing economic and political uncertainty during the year in the UK, the housing market remained stable throughout 2019.

Taylor Wimpey said its total home completions increased by 5% to 15,719 in 2019, including joint ventures, from 14,933 in 2018. It ended 2019 with a record total order book valued at GBP2.18 billion, up from GBP1.78 billion in 2018.

"Naturally, there are concerns which will need to be closely monitored. At the higher end of the housing market, there has been some pressure, particularly in London and the South East to which Taylor Wimpey is exposed. In 2020, the company's performance will likely be second-half weighted, while there may be some headwinds developing as negotiations with Europe develop over the year. Further out, the removal of the Help to Buy scheme will undoubtedly punch a large hole in profits, and the sector as a whole will need to take action to replace that income," said Interactive Investor's Richard Hunter.

In the FTSE 250, Dixons Carphone was the best performer, up 5.9% after Goldman Sachs upgraded the electrical goods and mobile phone retailer to Buy from Neutral.

Grafton Group was up 5.8% after the Irish builders' merchant said trading in November and December was better than anticipated, despite end markets remaining subdued.

Games Workshop was up 5.5% after the tabletop games maker said it delivered record sales and profit levels in during the interim period. For the half year ended December 1, revenue rose 19% to GBP148.4 million from GBP125.2 million the year before, and pretax profit increased 43% to GBP58.6 million from GBP40.8 million. Reported sales grew by 19% to GBP148.4 million for the period.

At the other end of the midcaps, Elementis was the worst performer, down 13% after the speciality chemicals company said it expects to report a drop in adjusted operating profit for 2019 following a subdued trading performance in the last quarter.

For the year, Elementis expects adjusted operating profit to be between USD122 million to USD124 million, a 6.8% to 8.2% decline from GBP133 million in 2018.

The Japanese Nikkei 225 index closed up 0.7% on Tuesday. In China, the Shanghai Composite closed down 0.3%, while the Hang Seng index in Hong Kong closed down 0.5%. Markets in Japan reopened after being closed for a holiday on Monday.

The US Treasury Department announced on Monday that it has dropped its designation of China as currency manipulator just days before the two countries are to sign an initial trade agreement.

"China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability," US Treasury Secretary Steven Mnuchin said in a statement.

The pound was quoted at USD1.2972 Tuesday morning, lower than USD1.2989 late Monday.

In UK political news, Prime Minister Boris Johnson's Brexit deal has cleared its first major hurdle in the House of Lords.

The euro was quoted at USD1.1140 Tuesday, flat from USD1.1144 late Monday. Against the yen, the dollar was trading at JPY110.01, up from JPY109.89 late Monday.

Oil was quoted at USD64.0.2 Tuesday morning, lower than USD64.24 late Monday.

Gold was quoted at USD1,538.85 early Tuesday, down from USD1,551.79 late Monday.

The economic events calendar on Tuesday has US inflation readings at 1330 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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