London midday: FTSE dips as investors eye Sino-US trade talks

(Sharecast News) - London stocks had dipped into the red by midday on Monday as investors digested the latest Chinese trade and inflation data and awaited the outcome of US-China trade talks in London.

The FTSE 100 was down 0.1% at 8,825.80, trading in a narrow range.

Figures released earlier showed that Chinese consumer prices declined year-on-year in May for the fourth straight month on the back of weak domestic demand and falling prices, while export growth slowed as a result of the country's ongoing trade war with the US.

Commenting on the trade talks, Richard Hunter, head of markets at Interactive Investor, said: "Despite the President's previous rhetoric, there seems to be some possibility that some of this aggression will be dialled back, not least of which since China has an upper hand especially with regard to its near monopoly on rare earth minerals which are so vital for components in the high-tech industry.

"China may also be keen on conciliation since there are further signs that its economy is struggling to fend off the tariff pressures so far. There are signs of deflation, caused in part by weak consumer sentiment, while the country's exports growth fell sharply in May to 4.8% compared to 8% the previous month, with US shipments in particular decline."

Hunter said that taken together, these seem to give some grounds for optimism on the imminent talks.

In equity markets, M&G gained after an upgrade to 'buy' at UBS.

Alphawave rocketed after agreeing to be bought by US chipmaker Qualcomm in a $2.4bn deal.

Advertising agency WPP lost ground as it announced that chief executive officer Mark Read will retire on 31 December after more than 30 years with the company, including seven as CEO. It said Read "has decided that the time is right for him to hand over to a new leader" and that the search for a successor is underway.

Russ Mould, investment director at AJ Bell, said: "The fact WPP's share price had more than halved over the past three years meant Mark Read's days were always numbered as CEO. Shareholders can be patient, but there reaches a point where they can wait no longer and something has to change in order to revive the share price.

"The share price falling further on Read's departure news is a sign that investors are all too aware of the problems at hand. This isn't a simple situation where all that's needed is fresh thinking from a leadership perspective. WPP needs a complete overhaul and that won't come easily or quickly.

"The fact the company hasn't got a replacement CEO lined up would suggest chaos behind closed doors. It could take another three to six months to find someone else, and by that point, WPP's more tech-savvy rivals could be even further ahead."

Homeware retailer Dunelm slumped after a downgrade to 'sector perform' from 'outperform' by RBC Capital Markets.

"We view Dunelm as a high quality business. It's cash generative, has executed well in recent years and expansion potential has stepped up," RBC said. "But we think this is now more reflected in its valuation."

Trustpilot tumbled after Panmure Liberum initiated coverage of the stock with a 'sell' rating, citing high medium-term execution risk from a complex business transition.

Outside the FTSE 350, Revolution Beauty surged as it confirmed that Mike Ashley's Frasers Group was one of a number of parties conducting due diligence as part of plans to sell the cosmetic retailer, adding that there was no certainty it would result in a firm offer.

Market Movers

FTSE 100 (UKX) 8,825.80 -0.14%

FTSE 250 (MCX) 21,121.55 -0.17%

techMARK (TASX) 4,940.24 -0.04%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 18,905.00p 2.55%

M&G (MNG) 248.40p 1.89%

Diageo (DGE) 1,965.50p 1.68%

JD Sports Fashion (JD.) 81.82p 1.56%

Pershing Square Holdings Ltd NPV (PSH) 3,906.00p 1.09%

3i Group (III) 4,311.00p 1.08%

Ashtead Group (AHT) 4,324.00p 1.00%

Mondi (MNDI) 1,236.00p 0.90%

Fresnillo (FRES) 1,354.00p 0.89%

Croda International (CRDA) 3,051.00p 0.76%

FTSE 100 - Fallers

St James's Place (STJ) 1,108.50p -2.33%

WPP (WPP) 547.80p -1.97%

Melrose Industries (MRO) 460.50p -1.56%

Hikma Pharmaceuticals (HIK) 2,104.00p -1.13%

Aviva (AV.) 620.40p -1.02%

Rolls-Royce Holdings (RR.) 876.60p -0.95%

Severn Trent (SVT) 2,639.00p -0.94%

Relx plc (REL) 3,941.00p -0.86%

Compass Group (CPG) 2,574.00p -0.85%

Haleon (HLN) 402.10p -0.77%

FTSE 250 - Risers

Mitie Group (MTO) 140.60p 3.23%

IP Group (IPO) 47.45p 2.82%

Ninety One (N91) 180.20p 2.39%

Oxford Nanopore Technologies (ONT) 122.50p 2.08%

Indivior (INDV) 1,035.00p 1.97%

Fidelity China Special Situations (FCSS) 254.50p 1.80%

Discoverie Group (DSCV) 685.00p 1.78%

Pagegroup (PAGE) 273.00p 1.41%

RHI Magnesita N.V. (DI) (RHIM) 2,880.00p 1.41%

Harbour Energy (HBR) 191.60p 1.38%

FTSE 250 - Fallers

Trustpilot Group (TRST) 208.20p -12.00%

Mobico Group (MCG) 27.84p -5.18%

Dunelm Group (DNLM) 1,140.00p -4.44%

Trainline (TRN) 267.40p -4.16%

Raspberry PI Holdings (RPI) 458.60p -3.78%

XPS Pensions Group (XPS) 391.50p -2.25%

Caledonia Investments (CLDN) 3,790.00p -2.19%

Wizz Air Holdings (WIZZ) 1,149.00p -2.13%

Auction Technology Group (ATG) 466.50p -2.10%

CMC Markets (CMCX) 242.50p -1.82%