September 6, 2018 / 9:36 AM / 2 months ago

Britain's FTSE stable as trade war escalation looms

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* FTSE 100 up 0.1 pct

* Ex-dividend trading weighs

* UK regulator sets cap, utilities rise

By Julien Ponthus

LONDON, Sept 6 (Reuters) - British shares were stable on Thursday morning as investors assessed turmoil on emerging markets and waited to see whether the United States would take its trade dispute with China to a new level and impose tariffs on another $200 billion of imports.

At 0900 GMT the FTSE 100 was up 0.1 percent at 7391.65 points, a roughly five-months low which represents a fall of about 4 percent since the beginning of the year.

With little to gnaw on in economic indicators or policy announcements in Europe, “investors are just going to have to sit and stew in this particularly unpleasant trading broth”, said Connor Campbell, an analyst for Spreadex.

Some of the biggest losses on the FTSE were due to the fact that some stocks were trading ex-dividend, which trimmed 9.24 points off the FTSE 100 according to Reuters calculations.

In that vein, BHP Billiton and Admiral Group lost 2.9 percent and 2.7 percent respectively.

Centrica and Melrose were the best performing stocks both up about 4 percent.

The rise in the value of the energy supplier came as Britain’s regulator proposed a price cap on default energy bills to save households about a billion pounds ($1.3 billion) a year and aims to implement it in time for winter following a government promise to tackle “rip-off” prices.

“A price cap which will limit the amount Centrica’s British Gas operation can charge customers hardly seems like cause for celebration, but the key point is that it will address the uncertainty which has dogged the stock in the last couple of years”, said Russ Mould, an investment director at AJ Bell.

“There’s nothing the market hates more than a lack of clarity and now the level of the price cap is known analysts can reflect it in their earnings estimates”, he added.

Centrica was not the only company to benefit from the announcement of the new regulation with the sector as a whole adding 3.5 points to the FTSE index.

For its part, turnaround specialist Melrose Industries saw its shares rise after it said it made significant progress in reorganising engineering group GKN since its hostile 8-billion-pound takeover.

Shares in Dixons Carphone, the troubled British electricals and mobile phone retailer, were up 2 percent after it said it was on track to make its full year profit targets as sales of televisions during the soccer World Cup helped it meet quarterly forecasts. (Reporting by Julien Ponthus; Editing by Alison Williams)

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