London stocks higher as packaging firms lead the way
London stock are higher after a positive close on Wall Street helped by a good set of US corporate earnings Monday and signals that China and the US are about to restart talking about disputed trade issues and that the US might alleviate some pressure on China’s technology giant Huawei.
South African packaging firm Mondi (LON:MNDI) was among the top gainers on the FTSE and helped lift packaging companies to the top of the index after the firm said it expects its half year earnings to be higher than last year. Dublin-based Smurfit Kappa and Smiths DS also followed suit.
Retailers slipped to the bottom of the FTSE following data which showed that British grocery sales fell for the first time since the summer of 2016. Worst hit was Tesco (LON:TSCO) with a decline of 3.19% while Sainsbury and Ocado (LON:OCDO) declined to a lesser degree. Premier Inn owner Whitbread (LON:WTB) also continued to lose ground, building on Monday’s losses which were triggered by news that hedge funds are taking short positions on the hotel chain.
Sterling slides ahead of Conservative Party vote tally
Sterling is 0.3% lower this morning as the currency market sits under the dark cloud of the Conservative Party leadership election. Shortly after 11.00 the markets will find out whether Boris Johnson or Jeremy Hunt will officially become the new Prime Minister tomorrow. Sterling’s slide continues to reflect concerns that a Johnson win will result in a messy Brexit despite the fact that Parliamentarians have been putting legal breaks in place to prevent this outcome. A lot of the weakness has already been discounted in the currency and if Johnson does win sterling may continue to slide but not actually crash as some analysts seem to expect.
The dollar also pushed higher against the euro, yen and the Canadian dollar boosted by an increase in US Treasury yields. In contrast the euro slipped as investors grew increasingly concerned that at its next policy meeting the European Central Bank may indicate it plans to cut rates in September to balance out risks from global trade tensions.
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