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London market moves lower but investors shop at Morrisons

The FTSE 100 Index dropped due to China’s slowdown, Brexit fears and commodity uncertainty
Amazon's Prime Now and Pantry businesses are to sell food from Morrisons

London shares had a negative start to the week but Morrisons (LON:MRW) got a boost from news of a deal with US web retailer Amazon (NASDAQ:AMZN).

The FTSE 100 Index dropped 42.59 points to 6053 in early trading due to China’s slowdown, Brexit fears and commodity uncertainty.

The Shanghai Composite fell about 2.9% after the G20 meeting failed to come up with any specific stimulus plans for China’s ailing economy.

Back in the UK, a government analysis said a process of agreeing withdrawal and setting up new trade deals if the UK left the EU would hit financial markets, the pound and two million ex-pats.

Oil prices were slightly down, with a barrel of Brent crude hovering around US$35, hitting shares in BP (LON:BP.) by 2.35p to 347.2p and Royal Dutch Shell (LON:RDSB) by 3.5p to 1631.5p.

But a Moody's downgrade of Oman's sovereign credit rating to A3 showed the economic pressure that Middle Eastern oil producers are facing from continued low oil prices.

"The key driver for the rating downgrade is the highly negative impact of the structural shift in lower oil prices, which has continued through the opening months of 2016, on Oman's government finances,

balance-of-payments position, and economic performance," the credit rating agency said.

Morrisons (LON:MRW) ticked up 7.8p to 195.7p on news of a wholesale supply deal with Amazon and a shake-up of its distribution deal with Ocado (LON:OCDO), whose shares fell 17.1p to 264.8p.

GlaxoSmithKline's (LON:GSK) stock drifted 2.5p to 1408p on reports that the drug giant had started succession planning to replace chief executive Andrew Witty, although not until 2017 at the earliest.

Weir Group inflated 16.5p to 949.5p on market rumours that US rival Flowserve Corp (NYSE:FLS) may be rekindling its interest in the Glasgow-based oil industry pump and valve maker.

Flowserve, whose shares dropped 1.6% to US$42.29 on Friday, made a takeover approach to Weir in 1999 but the UK company rejected it and Flowserve pulled out. Weir declined to comment.

Elsewhere, Corero Network Security (LON:CNS) sparked 10.1% to 24.5p as the cyber-security specialist won an order worth more than US$200,000 for its SmartWall Threat Defense System from an unidentified European regional supplier.

Castings and engineering group Chamberlin & Hill (LON:CMH) fired up 4p, or 6.25%, to 68p as it forecast annual profits ahead of market hopes and unveiled a major new automotive contract.


The FTSE 100 Index is poised to start the week lower as Asian shares fell overnight and after the G20 meeting ended.

The UK benchmark has recovered from some early year losses and made it above the 6,000 level again, closing Friday up 83 at 6, 096.

Today, it is tipped by spreadbetters at IG to open around 56 points lower.

The weekend G20 meeting finished with, according to one view at least, no firm plan for a fiscal stimulus to improve global growth, though there was a  wider agreement to use all "policy tools" available.

Asian markets did not seem to react warmly. The Nikkei in Japan closed down 161 points at 16,027, while the Shanghai Composite Index is trailing 115 points at the time of writing.

In the US, the Dow Jones closed Friday 57 points lower at 16,640.

That came despite better than expected US data at the end of the week with consumer spending rising last month and inflation going higher by the most in four years.  All this feeds further into the view will now raise US interest rates.

It is also causing strength in the US dollar.

On the corporate front today, investors will be eyeing 2015 results from newspaper group Trinity Mirror (LON:TRIN).

The key focus in this release will be current trading and outlook comments, particularly given the disappointing January national advertising performance reported in the recent DMGT trading update, reckons broker Numis.


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