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London pre-open: Stocks set for slightly lower start

By Alexander Bueso

Date: Friday 18 Oct 2019

(Sharecast News) - London traded stocks are set to dip at the end of the week as investors play it safe heading into the weekend and Saturday's parliamentary vote on the Brexit deal that was agreed just the day before between the UK and the European Union.
Also weighing on sentiment were data revealing a slightly greater than expected slowdown in China's economy over the latest quarter, although economic reports out of the Asian giant overnight were more upbeat.

Against that backdrop, the FTSE 100 was being called to start the session five points lower at 7,177.

"Amidst all the excitement around yesterday's EU, UK Brexit deal it was easy to forget that the US and China are also trying to settle their own differences, at a time when China's economy is showing a lot more stresses than the US economy," said Michael Hewson, chief market analyst at CMC Markets UK.

"This morning's latest China data has merely served to reinforce the importance of trying to advance the progress of some form of limited trade deal."

"Mr. Johnson will spend today trying to drum up support for his deal, but on our numbers he is likely to fall just short of the majority he needs to ratify the deal. If so, an extension to Article 50 is very likely," chipped in analysts at UniCredit.

In the background, according to China's National Bureau of Statistics, the year-on-year rate of growth in the country's gross domestic product slowed from a clip of 6.2% for the second quarter to 6.0% over the three months ending in September (consensus: 6.1%).

However, separate figures showed that industrial production in China grew at a 5.8% pace last month (consensus: 4.9%), after rising by 4.4% in August.

Retail sales meanwhile increased at a pace of 7.8% (consensus: 7.5%), although with year-to-date growth of 5.4%, fixed asset investment was a smidgen weaker than the 5.5% rise that economists had penciled in.

Refinitiv purchase on track, LSE says

Third quarter income at the London Stock Exchange rose 12% to £587m driven by a strong performance in its clearing division. Gross profit for the period rose 14% to £529m as the company said its planned £22bn takeover of data provider Refinitiv was still expected to complete in the second half of 2020.

InterContinental Hotels Group disappointed investors with its third quarter trading update, reporting a 0.8% drop in revenues per available room, alongside a 4.7% year-on-year increase in its net system size to 865,000 rooms. Notably, the company's RevPAR in Hong Kong SAR plumetted by 36.0%.

Avast reported third quarter adjusted revenue growth of 5% to £220.3m, consistent with the expectations laid out in its half year results in back in August.The global cybersecurity provider consequently reaffirmed its full year guidance for adjusted revenue to be at the upper end of high single digit growth, when excluding FX, discontinued business and the sale of its managed workplace business.

Dechra Pharmaceuticals said it remained confident about its prospects for the current financial year in a trading update on Friday. The FTSE 250 company, which was holding its annual general meeting later in the day, said work was continuing to resolve the supply issues it had previously highlighted, with many of those having now been mitigated. It said it would announce its interim results for the six months ended 31 December on 24 February.


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