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Markets steady despite Davis departure

European stock markets are higher after a strong finish in Asia overnight.

Investors are taking their cues from the far east, and it seems the sell-off in Asia was overdone in the run up to the tariffs being imposed.

Just Eat shares are in demand this morning after RBC raised it to ‘top pick’ from ‘outperform’. The bank added the stock to its European large capitalisation ‘best ideas’ list. The share price has been pushing higher since April, and if the bullish move continues it could target 900p.

Mothercare shares are in the red after the company revealed its plans to raise £32.5 million from existing shareholders through a share issue. The announcement comes nearly two months after the firm struck a deal with creditors, which gave the company some much-needed breathing space. Mothercare now plans to close 60 stores by June 2019, compared with the 50 that were originally selected. The share price has been in decline for five years, and if the bearish move continues it could target 13.1p.

The bounce-back in copper today has lifted Antofagasta, BHP Billiton and Anglo American. Last week the red metal fell to its lowest level in nearly a year, and today’s short squeeze could assist the mining sector in the short-term. 

GBP/USD is higher even though David Davis has resigned as Brexit secretary. Sterling lost some ground overnight, but it has recouped those losses and the move in the pound has been relatively measured The announcement came as a surprise, and it will weaken Theresa May’s premiership. The political uncertainty surrounding the prime minister is likely to keep pressure on the pound.

EUR/USD is slightly higher after Germany released better-than-expected trade figures. The May report showed that the trade surplus ticked up to €20.3 billion from €19.4 billion.

We are expecting the Dow Jones to open up 124 points at 24,580 and we are calling the S&P 500 up 11 points at 2,770.

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