London open: Jump in sterling weighs on stocks

Stocks are dipping following a brief feint upwards at the start of the session, weighed down by a sharp move higher in sterling.

As of 0837 the FTSE 100 was slipping by 0.19% to 5,988.57, while the pound was up by 0.65% at 1.3287 versus the US dollar.

Gold was rallying alongside, climbing 1.22% to $1,956.10/oz. on COMEX

Stoking gains in the pound, the day before the US central bank had signalled that interest rates would remain lower for longer, but contrary to many analysts, Michael Every at Rabobank said the Fed had in fact done less than was expected "that’s it. Not even yield curve control. Not even nominal GDP targeting. Nada."

"Really? By doing nothing for longer against a post-Covid-19 structural backdrop that is far, far worse than it was when the Fed’s policy review began, the odds of it meeting its future goals have improved?" he added.

"That’s an interestingly Panglossian view: perhaps we should all do more of nothing more often!"

Against that backdrop, investors were waiting on a batch of important economic reports, particularly on a final reading on US consumer confidence from the University of Michigan at 1500 BST.

Two days before another survey, from the Conference Board, had revealed an unexpected drop in Americans' levels of confidence.

On home shores, Lloyds Bank Business Barometre on the other hand showed an improvement in overall business confidence for a third consecutive month in August, improving by eight percentage points to -14%, but it remained well below the historical long-term average.

To take note of, Andrew Bailey, the Governor of the Bank of England, is due to speak at the Jackson Hole Economic Symposium 1405 BST.

Investors eye dividend restart at Essentra

Essentra said business was improving and that it would consider restarting dividends in the current year as it posted a 40% decline in underlying profit. Adjusted operating profit for the six months to the end of June fell to £29m from £48m as revenue dropped 11% to £448m. The company paid no interim dividend and said it was on track to meet market expectations for annual profit.

Avon Rubber said on Friday that the US Department of Defence has announced the award of a dual source contract to supply replacement M61 filters for the M50 mask system. Avon will compete for each order of the $127m contract over a duration of up to seven years. The contract has a five-year base period and two further one-year extension periods. The contract and first order are expected shortly, with deliveries set to begin in the 2021 financial year.

Resolute Mining reported a 33% improvement in revenues in its first half on Friday, to $305.29m (£230.24m), as its EBITDA surged 85% year-on-year to $101.11m. The AIM-traded firm declared no interim dividend for the six months ended 30 June, in line with the prior year, as its all-in sustaining cost rose to $1,020 per ounce, from $828 a year earlier.

Video games publisher Frontier Developments said on Friday that year-to-date sales had been consistent with expectations as momentum from its strong close to the prior trading year carried over to the new one. Based on its strong performance to date and projections for the rest of the trading year, the AIM-listed firm now expects to deliver revenues within the top half of current expectations at around £83.0m to £95.0m.

Market Movers

FTSE 100 (UKX) 5,989.38 -0.18%
FTSE 250 (MCX) 17,740.83 -0.12%
techMARK (TASX) 3,845.82 -0.19%

FTSE 100 - Risers

Polymetal International (POLY) 1,973.00p 1.70%
Prudential (PRU) 1,218.50p 1.63%
Fresnillo (FRES) 1,242.50p 1.22%
Experian (EXPN) 2,833.00p 1.00%
Standard Chartered (STAN) 387.90p 0.91%
HSBC Holdings (HSBA) 330.65p 0.79%
Barclays (BARC) 111.26p 0.65%
M&G (MNG) 175.60p 0.57%
Aviva (AV.) 285.30p 0.53%
Anglo American (AAL) 1,813.20p 0.52%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 241.40p -3.44%
Melrose Industries (MRO) 103.40p -1.99%
GVC Holdings (GVC) 806.40p -1.63%
Pearson (PSON) 562.00p -1.58%
WPP (WPP) 654.60p -1.48%
Avast (AVST) 534.50p -1.38%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,462.00p -1.38%
Smith (DS) (SMDS) 263.40p -1.31%
Severn Trent (SVT) 2,318.00p -1.28%
Ocado Group (OCDO) 2,488.00p -1.27%

FTSE 250 - Risers

Helios Towers (HTWS) 156.00p 2.63%
Centrica (CNA) 45.08p 2.52%
Wood Group (John) (WG.) 238.60p 2.23%
Cineworld Group (CINE) 61.50p 2.23%
Wizz Air Holdings (WIZZ) 3,892.00p 1.94%
Petropavlovsk (POG) 34.20p 1.94%
Essentra (ESNT) 316.80p 1.67%
Ferrexpo (FXPO) 183.50p 1.66%
Rathbone Brothers (RAT) 1,714.00p 1.66%
Dunelm Group (DNLM) 1,414.00p 1.65%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 322.90p -3.53%
PureTech Health (PRTC) 274.00p -2.84%
Polypipe Group (PLP) 419.00p -2.78%
Liontrust Asset Management (LIO) 1,270.00p -2.68%
IntegraFin Holding (IHP) 527.00p -2.41%
Contour Global (GLO) 206.00p -2.37%
Henderson Smaller Companies Inv Trust (HSL) 771.00p -2.28%
Capita (CPI) 30.35p -2.22%
Rank Group (RNK) 138.60p -1.98%
Bodycote (BOY) 546.50p -1.97%