London open: Stocks nudge down ahead of data slew, Powell testimony

London stocks nudged down in early trade on Wednesday as investors eyed a slew of UK data releases, a testimony by Federal Reserve chair Jerome Powell and minutes from the latest Fed meeting.

At 0840 BST, the FTSE 100 was down 0.1% at 7,528.37.

On the data front, UK industrial production and manufacturing figures are due at 0930 BST, along with trade balance and gross domestic product for May. Market participants will also be eyeing Powell’s semi-annual monetary policy testimony at 1500 BST .

"He is expected to keep the possibility of an interest rate cut on the table despite the latest rebound in US nonfarm payrolls data," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

"Powell will probably repeat that the Fed will ‘act appropriately’ to prevent the economy from slowing amid US-China trade tensions. US policymakers will likely question the Fed’s action plan beyond its July meeting, when it is expected to lower the interest rates by 25 basis points. Powell may well leave the door open for further rate cuts, without however precising when and by how much. This is the beauty of the ‘act as appropriate’ formula."

The FOMC minutes will be released at 1900 BST.

As far as sterling is concerned, Spreadex analyst Connor Campbell said it continues to find itself "in a bad way, with last night’s televised Tory-off failing to lift the currency’s spirits".

"Cable is trapped at $1.245 for the first time in more than two years, while after a week or so of treading water against the euro, the pound is now at a fresh six-month nadir, barely keeping its head above €1.11."

In equity markets, DIY group Grafton was on the back foot as it said first half group revenue increased by 2.4% to £1.48bn, with like-for-like revenue up 3.9%, but also pointed to signs of weaker UK markets in May and June due to Brexit concerns.

Micro Focus was lower after Citi and Credit Suisse reiterated their 'sell' ratings on the stock.

Recruitment company PageGroup was under the cosh, dragging rival Hays down with it as it said it expects full-year operating profit to be towards the lower end of market expectations, with Brexit worries and weaker macro-economic conditions hitting candidate and client confidence.

Superdry was in the red after the fashion brand said it swung to a pre-tax loss of £85.4m in 2019 from a profit of £65.3m the year before as it took a previously-announced non-cash charge of £129.5m relating to onerous leases and other impairments. The company also said it expects revenues to drop in 2020 as the retail environment remains "difficult".

Barratt Developments gained as the housebuilder hailed a "record" full-year performance, with pre-tax profit anticipated to come in ahead of market expectations of £884m, at around £910m.

Pub chain Wetherspoons fizzed higher as it posted a 6.9% rise in comparable sales for the 10 weeks to 7 July and a 6.6% jump in total sales.

In broker note action, Ashtead was downgraded to ‘equalweight’ at Morgan Stanley, while Boohoo was initiated at ‘buy’ at Societe Generale and Playtech was started at ‘overweight’ by JPMorgan.

Market Movers

FTSE 100 (UKX) 7,528.37 -0.11%
FTSE 250 (MCX) 19,452.44 -0.08%
techMARK (TASX) 3,659.70 -0.39%

FTSE 100 - Risers

Hargreaves Lansdown (HL.) 1,999.25p 1.13%
Barclays (BARC) 158.20p 1.13%
Sainsbury (J) (SBRY) 203.20p 1.09%
Glencore (GLEN) 269.05p 1.07%
TUI AG Reg Shs (DI) (TUI) 776.40p 1.04%
International Consolidated Airlines Group SA (CDI) (IAG) 447.30p 0.95%
Anglo American (AAL) 2,148.50p 0.92%
Antofagasta (ANTO) 855.60p 0.90%
Lloyds Banking Group (LLOY) 58.30p 0.88%
Standard Life Aberdeen (SLA) 301.70p 0.84%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,908.20p -3.92%
Ocado Group (OCDO) 1,201.50p -2.83%
National Grid (NG.) 844.30p -1.17%
Coca-Cola HBC AG (CDI) (CCH) 2,751.00p -1.11%
Diageo (DGE) 3,416.50p -1.00%
Ashtead Group (AHT) 2,242.00p -0.97%
Fresnillo (FRES) 882.00p -0.94%
Experian (EXPN) 2,368.00p -0.92%
Aveva Group (AVV) 3,878.00p -0.87%
Intertek Group (ITRK) 5,550.00p -0.86%

FTSE 250 - Risers

Vivo Energy (VVO) 129.40p 4.35%
Wetherspoon (J.D.) (JDW) 1,449.00p 2.91%
Rank Group (RNK) 156.16p 2.74%
Playtech (PTEC) 443.25p 2.60%
Premier Oil (PMO) 77.24p 2.49%
Metro Bank (MTRO) 527.78p 1.99%
Daejan Holdings (DJAN) 5,660.00p 1.98%
CYBG (CYBG) 200.90p 1.98%
Bakkavor Group (BAKK) 117.07p 1.80%
Hunting (HTG) 534.50p 1.62%

FTSE 250 - Fallers

Pagegroup (PAGE) 443.60p -12.16%
Polymetal International (POLY) 954.80p -5.65%
Hays (HAS) 148.80p -5.16%
Charter Court Financial Services Group (CCFS) 282.00p -2.76%
Funding Circle Holdings (FCH) 131.13p -1.55%
Hikma Pharmaceuticals (HIK) 1,779.50p -1.41%
PayPoint (PAY) 905.00p -1.31%
Travis Perkins (TPK) 1,240.50p -1.23%
Homeserve (HSV) 1,151.00p -1.20%
Future (FUTR) 893.33p -1.18%