In a sign of where markets are heading, the FTSE 100 opened below the 7,200 mark as investors worry over a big escalation in the US/China trade war.
For the first time since 1994, the United States has officially called China out as a currency manipulator. In response, China has accused the US of ‘deliberately destroying international order’.
Investors around the world are clearly spooked. Asian markets extended yesterday’s global selloff, with the Shanghai Composite in particular struggling, sinking 2.4% in afternoon trading.
The UK’s benchmark index opened 27 points, or 0.4% down, at 7,198. But the FTSE 250, considered more representative of the UK economy, opened flat at 18,869.
LOWER LOSSES
Aerospace engineering company Rolls-Royce (RR.) fell 1.8% to 800p despite considerably narrowing losses in the first of the year. In the six months to 30 June, the firm reported a pre-tax loss of £791m, reduced from £1.23bn the same period a year ago.
The firm is still feeling the impact from the fault with its Trent 1000 engines, which grounded planes at several airlines, but said it has found a solution to the problem.
In what will be something of a relief to investors, Rolls-Royce chief executive Warren East told the BBC this morning that the firm has ‘always been prepared’ for a no-deal Brexit, and is in a ‘much stronger business’ than others when it comes to dealing with Brexit.
Elsewhere, InterContinental Hotels (IHG) dropped 2.8% to £51.43 despite reporting a 12% rise in revenue to $1bn in the first half of the year.
The firm said demand in Greater China had declined following the impacts from the Hong Kong protests, as well as fewer business travellers in China.
FUNDING KI-BOSHED
In the FTSE 250, potash miner Sirius Minerals (SXX) dropped a whopping 26% to around 10.8p after it suspended its $500m bond offering due to ‘current market conditions’.
Sirius Minerals needs to raise that $500m of cash if it is to build its mine in North Yorkshire, as getting that money is key to unlocking the other sources of funding which had been promised by investment banks.
Domino’s Pizza (DOM) jumped 3.5% to 242p after announcing its chief executive David Wild plans to retire. It came as Domino’s also reported a 4.7% rise in group sales to £645.8m for the 26 weeks to 30 June.
ENGINEERS ON THE UP
Industrial flow-control equipment manufacturer Rotork (ROR) rallied 6.8% to 305p, even as it booked a 4.5% fall in first-half profit on lower sales. The company also forecast flat sales for the full year, implying an improved performance in the second half.
Specialist engineering for the defence, aerospace and energy sectors Meggitt (MGGT) advanced 4.6% to 598p, as it upped its revenue growth guidance for the full year amid a modest rise in first-half adjusted profits.
Serviced office provider IWG (IWG) fell 0.8% to 358p as it detailed plans to buy back up to £100m of shares.
It came after it reported a 4% decline in pre-tax profits in the first half of the year, as revenue rose 12% to £1.3bn amid efforts to boost sales and investment in new products and services.
Chemicals company Synthomer (SYNT) rose 1.9% to 285p despite reporting an 8.5% fall in revenue to £762.7m and an 8% drop in adjusted pre-tax profit to £70.2m in the first half of the year.
The firm did however declare an interim dividend of 4p per share, up 8.1% compared to last year.
