FTSE100 slightly lower early on as the US stand-off continues

MORNING REPORT: The headline index was slightly lower in early deals today, as the US budget impasse drags on into another week still unresolved, with miners hit by bad news from China and banks losing ground.

In early trade, the FTSE100 fell just 7.69 points to 6,479.5 and the FTSE250 edged up 1.5 points at 14,971.3.

US & ASIA

In the US Friday, the Dow rose 111 points to 15,237, the Nasdaq added 31 points at 3,792 and the S&P500 advanced 10 points to 1,703.

In Asia today, markets in Tokyo and Hong Kong are closed for public holidays.

LONDON MARKETS

After Friday’s mild bout of optimism, investor sentiment sank today as the US budget impasse rolls into a third week without resolution. Disappointing export data from China added to the mix of downbeat news.

Banks took an early hit, with Royal Bank of Scotland the worst of them, down 4.5p at 372.4p after Bank of America Merrill Lynch downgraded the stock to underperform from neutral and trimmed its target price to 325p from 345. Elsewhere, Lloyds lost 0.89p at 75.13p and Barclays fell 0.82p to 27.18p.

The downbeat economic data from China sent the miners lower, with Glencore Xstrata the poor relation, off 4.87p at 331.03p, additionally hit by a Liberum Capital downgrade to hold from buy. Meanwhile, Anglo American dropped 13.25p to 1,498.75p and Antofagasta retreated 5.75p to 853.25p.

Distribution and outsourcing group Bunzl slumped 19p to 1,315p when JP Morgan Cazenove dropped its rating for the stock to neutral from overweight.

SABMiller was also hit by a broker downgrade, down 41.25p at 2,972.75p when Citigroup cut the global brewer to neutral from buy and pared its target price to 3,200p from 3,550p.

Chemical group Croda International was took the blue chip wooden spoon, losing 46p at 2,431p when JP Morgan Cazenove dropped the shares to neutral from overweight and reduced the target price to 2,450p from 2,850p.

On the upside with blue chips, supermarket operators were in demand, with Tesco the best of the bunch, up 2.43p at 360.33p, while Sainsbury added 1.4p at 389.9p as investors welcomed news it is to beef-up its online offering and Morrisons edged ahead 0.25p at 275.85p.

Johnson Matthey topped the early leaderboard, climbing 126.5p to 2,947.5p after JP Morgan Cazenove upgraded the precious metals processor to overweight from neutral and hiked its target price to 4,000p from 2,800p.

Oil producers progressed, despite continued weakness in crude prices, with Shell up 9.25p at 2,125.25p, BG Group ahead 7.5p at 1,198p and BP 0.83p better at 440.48p.

Travis Perkins improved 65p at 1,743p when Bank of America Merrill Lynch lifted the building materials group to buy from underperform and raised its target for the shares to 1,900p from 1,460p.

Meanwhile, newly launched Royal Mail Group continued to attract buyers, the shares adding a further 11.88p (2.6%) to Friday’s stellar gains, taking it to 466.88p.

Story provided by StockMarketWire.com

MoneyWeek magazine

Latest issue:

Magazine cover
Cheaper oil

Who benefits?

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Vote in the MoneyWeek Readers' Choice Awards

Vote for your favourite financial services companies in the inaugural MoneyWeek Awards, and you could win a year's subscription to MoneyWeek magazine. Find out more and vote here.


Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.