UK stock markets stayed virtually flat at the start of a relatively quiet Wednesday with investors having relatively thin corporate news to provide direction and eyes firmly being fixed on the imminent signing of an initial US-China trade deal.

US Treasury Secretary Steven Mnuchin said tariffs on Chinese goods would not be repealed until the completion of a Phase 2 agreement, planting some doubt in the minds of investors, who were betting on a quick de-escalation of tensions. Any eventual removal of tariffs by Washington is not anticipated to come into effect until after November's presidential elections.

The UK benchmark FTSE 100 index clawed out modest single-digit gains in early deals, nudging barely six points higher,, or about 0.08%, at 7,628.76, while the mid cap FTSE 250 had dipped a couple of points to 21,754.10.

QUIZ ADDS TO RETAIL GLOOM

Among the more lively stocks on Wednesday is fashion retailer Quiz (QUIZ:AIM), which slumped nearly 10% as investors react to news of a sharp drop in sales over the key Christmas trading period.

Sales for the seven weeks to 4 January fell 9.6%, something of a shock after seeing strong demand during Black Friday week. Quiz said sales subsequently were weaker than expected, and unusually in the retail space, online sales fell faster than those in high street stores.

Online sales fell 14.8% after Quiz said it ‘terminated unprofitable revenue streams’ through some third-party websites, while sales through some of the firm's other online partners were weak, sending the shares price plunging to 16.95p.

Energy firm SSE (SSE) has completed the sale of its retail business to Ovo, which will now take on SSE's 3.5m customers and 8,000 staff. The£500m deal will make Ovo the UK's second largest energy supplier behind Centrica’s (CNA) British Gas.

SSE shares nudge 0.9% higher to £14.715, having rallied from around £10 last May, as investors pin their hopes on the agreement providing a more stable footing for the group’s all-important dividends.

HOUSEBUILDERS IN FOCUS

Housebuilder Persimmon (PSN) firmed 2% to £28.50 despite its annual revenue falling 2.4% as the company curbed its rate of home completions to improve customer service and build quality.

Vistry (VTY), the house builder formally known as Bovis Homes, nudged 3p higher to £13.45, after announcing that it expected to deliver record annual profits slightly ahead of market consensus.

Energy producer Tullow Oil (TLW) jumped almost 6% in early trade despite facing hefty impairment charges and exploration write-offs of around $1.5bn. This comes after the company lowered its oil price assumptions and reserves estimates.

The company also stuck to its recently-downgraded production and cash flow forecasts.

Rival oil company Cairn Energy (CNE) rose 1.6% to 198.5p as it and joint venture partners Woodside and FAR made a final investment decision to develop the Sangomar oil field in Senegal.

ELSEWHERE ON THE MARKET

Technical products supplier Diploma (DPLM) was having a tougher day, reversing 3% to £18.43, despite its first quarter revenue rising 9% year-on-year. Strong growth at Diploma's seals sector was offset by a more subdued performance at its life sciences business.

Emerging markets fund manager Ashmore (ASHM) firmed 1.3% to 554p after its assets under management were boosted in the fourth quarter by positive investment returns and fresh fund inflows.

Builders merchant Travis Perkins stayed virtually flat at £16.185 as it appointed Christopher Rogers as chairman designate of soon-to-be separated DIY chain Wickes.

Subprime lender Provident Financial (PFG) rallied 7% to 452p on flagging full year results in line with market forecasts, as a better-than-expected performance at its Vanquis Bank unit offset a weaker showing at Moneybarn.

Bowling alley operator Ten Entertainment (TEG) added 1.3% to 314p on growing its annual sales by 10.2% after refurbishing some of its sites.

Legal and professional services minnow Ince (INCE:AIM) saw its share price plunge more than 46% in early trade after the company launched a cash call at a huge discount to the prevailing price.

The company is looking for up to £16m at 45p per share to slash debt and bolster working capital resources, with £12m hoping to come from a institutional bookbuild and another £4m from an open offer to existing shareholders and staff.

Ince shares crashed from 89p to 47.5p.

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Issue Date: 15 Jan 2020