The London morning session started positively enough with the signing of the US-China trade deal and the Dow Jones Industrial Average breaking above 29,000 both sending a positive signal for UK shares. But the rally ended up being a bit unconvincing and the index seesawed around the flat line as mixed corporate news kept making the headlines.
Publisher Pearson clocked a 10% drop in its share price after it warned investors that it expects lower profits next year and that the company’s chief financial officer is stepping down later this year. The hardest hit were the firm’s US higher education courseware sales, a segment which makes up a quarter of Pearson’s total revenue.
Hotel group Whitbread also slipped in early trade as a Brexit-related drop in demand affected the company’s hotel and pub sales.
Speculators again showed interest in the contested NMC Health and the health operator gained over 5% making up for a dip last week. Mining and metal firms were also among the gainers.
More corporate earnings to set the tone for US session
There is likely to be some caution in the US market later today as yesterday’s banks earnings provided a mixed set of signals. Goldman Sachs and Bank of America reported declines for the last quarter in contrast to JP Morgan and Citigroup, both of which revealed large increases in fourth quarter revenue. However, the DJIA’s break above 29,000 is likely to trump that and set a positive tone for Wall Street’s session later today.
Sterling was a touch firmer against the dollar and the euro helped by the stronger UK housing data for December when sales started rising for the first time since May.