(Alliance News) - Stock prices in London opened lower on Tuesday as hopes for a Brexit deal hang in the balance, while Ashtead Group was higher after raising annual guidance.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen look set to meet in person this week in a bid to break the stalemate in post-Brexit trade deal talks.
Johnson and von der Leyen spoke on the telephone on Monday evening, and agreed to ask their chief negotiators to prepare an overview of the "remaining differences".
The leaders will then discuss them in person in a physical meeting in Brussels "in the coming days". Their second call in a little over 48 hours came after Michel Barnier and his UK counterpart David Frost spent the day talking in Brussels.
The negotiators spent last week talking in London, but failed to break the deadlock - with issues remaining on fishing, governance and the so-called level playing field.
The FTSE 100 index was down 15.51 points, or 0.2%, at 6,539.88, amid a weakened pound that remained steady overnight.
The mid-cap FTSE 250 index was down 14.74 points, or 0.1%, at 19,915.54. The AIM All-Share index was down 0.1% at 1,072.69.
The Cboe UK 100 index was down 0.4% at 651.05. The Cboe 250 was down 0.4% at 17,187.54. The Cboe Small Companies down 0.1% at 11,599.10.
In mainland Europe, the CAC 40 in Paris was down 0.3% while the DAX 30 in Frankfurt was down 0.1% early .
The Japanese Nikkei 225 index ended down 0.3%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong closed down 0.8%.
On the London Stock Exchange, Ashtead Group was up 5.5% after the equipment rentals firm kept its interim dividend unchanged and expressed confidence for the year ahead.
For the half-year ended October 31, revenue was down 3% to GBP2.29 billion from GBP2.45 billion last year and pretax profit was 22% lower to GBP506.2 million from GBP660.2 million.
London-based Ashtead's earnings were hurt by coronavirus lockdown measures, but it expects to report full-year results ahead of previous expectations as the pandemic subsides.
Ashtead raised its full-year cashflow guidance to more than GBP1.2 billion, up from GBP1 billion previously, and annual revenue is now seen falling by 3% to 7% compared to the previous indication of 5% to 9%.
Power utility stocks National Grid and SSE were up 2.6% and 2.1% respectively. UK regulator Ofgem decided not to slash the money that energy networks can give to their shareholders by as much as first indicated, after an initial plan to halve returns met resistance from the companies themselves.
Ofgem said on Tuesday it will allow network companies to pay a return on equity of 4.3% to their investors between 2021 and 2026, down from high returns of between 7% and 8% that are currently allowed.
The decision, which is Ofgem's final say on the matter, is slightly higher than the 3.95% that energy networks were told they could be facing in Ofgem's preliminary decision in July.
The decision, taken with other measures that Ofgem has proposed, will save customers about GBP10 per year on their energy bills. It includes billions of pounds for green investments.
National Grid and SSE both welcomed the Ofgem announcement, saying they would review the final determination in detail before deciding whether to appeal.
Ferguson was up 1.3% after the plumbing and heating products supplier said it delivered a resilient performance in the first quarter and its expectations for the new financial year remain unchanged.
For the three months to October 31, revenue was USD5.37 billion, up 3.1% from USD5.21 billion in the first quarter in financial 2020, and trading profit was up 12% to USD504 million from USD451 million.
Ferguson posted a first-quarter gross margin of 29.6%, down 0.1 of a percentage point from last year driven by product mix, but it said operating costs continued to be well controlled which led to a good overall trading performance.
"The group remains somewhat guarded on prospects for the year as a whole, inevitably citing current pandemic trends which of course are of some concern, especially in the chief US market. Even so, the company has shown resilience during a time which has shaken certain other companies badly and the start to the new trading year has seen the resumption of growth," said Interactive Investor's Richard Hunter.
At the other end of the large caps, InterContinental Hotels Group was the worst performer, down 2.8% after Jefferies downgraded the hotel operator to Underperform from Hold.
The pound was quoted at USD1.3348 early Tuesday, little changed from USD1.3346 at the London equities close Monday, but still down sharply from the USD1.35 mark reached at the end of last week.
"With talks at a deadlock, Boris Johnson is off to Brussels for a face-to-face meeting with European Commission president Ursula von der Leyen - though not until Wednesday or Thursday. That means the pound might have to spend today's trading uncomfortably waiting for any sign or signal that the worst-case scenario can be avoided," said Spreadex analyst Connor Campbell.
The euro was priced at USD1.2105, down from USD1.2137. Against the yen, the dollar was trading at JPY104.14, up from JPY103.94.
Brent oil was trading at USD48.52 a barrel Tuesday morning, down from USD49.04 at the London equities close Monday. Gold was quoted at USD1,864.12 an ounce, a touch lower from USD1,865.82.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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