London open: Stocks rise on China tariff cut; NMC Health surges

(Sharecast News) - London stocks rose in early trade on Thursday, taking their cue from positive sessions in the US and Asia as investors welcomed China's plans to cut tariffs on $75bn of US goods.
At 0830 GMT, the FTSE 100 was up 0.6% at 7,525.90.

Lukman Otunuga, senior research analyst at FXTM, said: "The panic seems to be over. US stocks are back to record highs, Treasury yields have risen, gold has sold off and equities across Asian and European markets are recovering from last week's sell-off.

"Interestingly though, no vaccine for the coronavirus which triggered the sell-off has been discovered yet, with the death toll jumping to 563 as of Wednesday night. Infections also continue to be on the rise with 2,987 new confirmed cases. So what is driving risk assets?

"Multiple factors may have been attributed to the change in investors' mood over the past couple of days. The latest economic data has highlighted a pick-up in global manufacturing and services activity, particularly in the US. State-owned Chinese companies are likely to intervene through buying stocks if markets experience a massive meltdown, hence preventing big investors from selling their holdings.

"But it is the expectation that central banks and governments are ready to ease monetary and fiscal policies which is contributing the most to the latest surge in risk assets. The People's Bank of China has already pumped billions of Dollars into the financial system and Thailand's central bank was the first to cut interest rates on Wednesday in response to the virus outbreak."

He said China's announcement overnight that it would halve tariffs on more than 1,700 US products was the latest factor to push equities higher in the Asian session. "Whether this will translate into a 'phase two' US-China trade agreement remains to be seen," he added.

In equity markets, NMC Health was sitting pretty at the top of the FTSE 100, up more than 12% following a report that the company's founder is looking to buy out his Emirati partners and return to an "active leadership position" at the UAE private healthcare operator. According to the Financial Times, Indian-born entrepreneur BR Shetty is conducting an operational review ahead of formal talks to explore various options with shareholders and regulators.

Compass rallied after it said organic revenue for the three months ended 31 December grew 5.3%, driven by strong levels of new business wins and good retention rates, particularly in North America.

Insurer Beazley was the best performer on the FTSE 250 after it posted a 250% surge in full-year pre-tax profit as three of its six divisions achieved double-digit growth.

Tate & Lyle gained after saying it expected full-year earnings per share growth to be in a range of flat to low single digits on a constant currency basis as it maintained guidance for the full year.

Wood Group rose after announcing late on Wednesday the sale of its industrial services business for up to $118m, while Victrex advanced after reporting a solid start to 2020 but warning that demand at its energy business was weak.

On the downside, GlaxoSmithKline was weaker again after disappointing full-year results a day earlier.

Royal Mail was the worst performer on the FTSE 250 as it said recent trading was broadly in line with expectations but warned that its outlook was challenging. Letter volumes will fall faster than expected next year and the parcels and letters business is more likely to be loss-making, it said.

Software company Sage was under the cosh as its stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,525.90 0.58%
FTSE 250 (MCX) 21,673.42 0.71%
techMARK (TASX) 4,142.44 0.07%

FTSE 100 - Risers

NMC Health (NMC) 1,091.00p 12.47%
Compass Group (CPG) 1,958.00p 2.70%
Kingfisher (KGF) 212.90p 2.45%
Melrose Industries (MRO) 253.60p 2.13%
Glencore (GLEN) 241.75p 2.13%
Pearson (PSON) 591.40p 1.79%
Ashtead Group (AHT) 2,638.00p 1.77%
Hargreaves Lansdown (HL.) 1,784.50p 1.65%
Evraz (EVR) 400.60p 1.65%
Aviva (AV.) 415.10p 1.64%

FTSE 100 - Fallers

Flutter Entertainment (FLTR) 8,514.00p -1.57%
Sage Group (SGE) 766.80p -1.52%
GlaxoSmithKline (GSK) 1,715.00p -1.41%
Polymetal International (POLY) 1,219.00p -1.18%
Imperial Brands (IMB) 1,804.40p -0.94%
Smurfit Kappa Group (SKG) 2,880.00p -0.69%
Aveva Group (AVV) 5,115.00p -0.49%
Smith (DS) (SMDS) 372.70p -0.35%
SSE (SSE) 1,561.50p -0.32%
AstraZeneca (AZN) 7,646.00p -0.22%

FTSE 250 - Risers

Beazley (BEZ) 576.50p 7.76%
Aston Martin Lagonda Global Holdings (AML) 468.40p 3.54%
Vivo Energy (VVO) 115.40p 3.41%
Tullow Oil (TLW) 52.84p 3.36%
Finablr (FIN) 75.00p 3.16%
Wood Group (John) (WG.) 393.30p 2.72%
SIG (SHI) 94.75p 2.43%
Hiscox Limited (DI) (HSX) 1,360.00p 2.41%
Cineworld Group (CINE) 179.85p 2.19%
Kaz Minerals (KAZ) 501.20p 2.16%

FTSE 250 - Fallers

Royal Mail (RMG) 171.95p -9.19%
Brewin Dolphin Holdings (BRW) 351.80p -2.22%
Energean Oil & Gas (ENOG) 740.00p -1.99%
Lancashire Holdings Limited (LRE) 739.50p -1.66%
Micro Focus International (MCRO) 763.90p -1.32%
PZ Cussons (PZC) 196.00p -1.01%
Morgan Advanced Materials (MGAM) 313.00p -0.82%
Dunelm Group (DNLM) 1,198.00p -0.66%
Worldwide Healthcare Trust (WWH) 3,220.00p -0.62%
JPMorgan Emerging Markets Inv Trust (JMG) 1,042.00p -0.57%