London open: Stocks nudge lower as volumes thin out; consumer confidence in focus

London stocks nudged lower in early trade on Thursday as investors digested the passing of the US tax reform bill and the latest reading on UK consumer confidence, with trading volumes thin in the run-up to Christmas.

At 0830 GMT, the FTSE 100 was down 0.1% to 7,521.62, while the pound was down 0.1% versus the dollar and the euro at 1.3367 and 1.1261, respectively. Meanwhile, volumes on the top-flight index were 23% lower compared to the 100-day average.

On Wednesday, the House and the Senate passed a $1.5trn tax reform bill, sending it to President Donald Trump for his signature.

The bill, which Trump hailed as a “historic victory for the American people", will see corporate tax cut to 21% from 35%, while income tax rates will be reduced across all seven individual tax brackets. It will give individuals and married couples who fall into the highest income bracket of $500,000 and over the largest tax cut, to 37% from 39.6%,

"I promised the American people a big, beautiful tax cut for Christmas. With final passage of this legislation, that is exactly what they are getting,” Trump said.

CMC Markets analyst David Madden said: "The long awaited US tax reforms were approved last night the reaction was relatively muted. The major US indices closed slightly lower on the session even though the House of Representatives voted 224 to 201 in favour passing the tax reforms. Donald Trump pledged tax cuts on his campaign trail to get to the White House, and now one of his major promises was been agreed upon less than one year into his premiership.

"US equities have been driving higher throughout 2017 as the prospect of substantial tax cuts was fuelling investor sentiment. The cooling of the US stock market when the vote on the tax cuts was passed suggests that traders are ‘buying the rumour and selling the fact’."

According to a survey released earlier, consumer confidence in the UK fell to a four-year low in December.

GfK's consumer confidence index declined to -13 this month from -12 in November, missing expectations for it to remain unchanged and hitting its lowest level since December 2013. The index was also sitting lower than it had been following the Brexit vote.

Meanwhile, the index tracking expectations for the general economic situation over the next 12 months remained weak, at -28, five points lower than last year. The index measuring changes in personal finances during the last 12 months fell two points to -3, while the forecast for personal finances in the next year stayed the same at +2.

Joe Staton, head of market dynamics at GfK, said: "We need to see several issues move on before the downward trend of the consumer mood changes. We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise. But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”

In corporate news, Holiday Inn owner InterContinental Hotels slipped after it commented on the impact of US tax reform bill. Based on initial estimates, the reforms are expected to reduce IHG's group effective tax rate "by mid to high single digit percentage points" from 1 January 2018. For 2017, IHG's group effective tax rate is still expected to be in the low 30s.

Babcock nudged lower as its longstanding board executive Bill Tame announced his retirement from the defence contractor, where he is currently chief executive of global growth and operations. Tame.

Shares in McCarthy & Stone tumbled after the retirement housebuilder said that the Department for Communities and Local Government's proposal to set all ground rents to zero will result in a disruption of housing supply and contradicts the government's stated objective of seeking new sources of housing.

Home furnishings retailer Dunelm was in the red after saying it has appointed Nick Wilkinson - a former chief executive of Evans Cycles - as it new CEO.

On the upside, Balfour Beatty advanced after announcing the sale of a 12.5% stake in Connect Plus, the company which operates the M25 orbital motorway, for £103m.

Greencoat Renewables rose after agreeing to buy the Dromadda More wind farm from Impax Asset Management for €88.4m funded by a €250m credit facility.

Euromoney Institutional Investor edged higher as it appointed Wendy Pallot as its chief financial officer, succeeding finance director Colin Jones on a date to be confirmed.

Kaz Minerals was on the front foot as it said that the expansion of its Aktogay copper mine has been approved.

On the data front, UK public sector net borrowing figures are at 0930 GMT. In the US, the Philadelphia Fed manufacturing survey is at 1230 GMT, while initial jobless claims are at 1330 GMT and third-quarter gross domestic product is at 1330 GMT.

Market Movers

FTSE 100 (UKX) 7,521.62 -0.05%
FTSE 250 (MCX) 20,311.17 -0.19%
techMARK (TASX) 3,488.78 -0.11%

FTSE 100 - Risers

Anglo American (AAL) 1,502.00p 0.81%
NMC Health (NMC) 2,759.00p 0.77%
BHP Billiton (BLT) 1,444.00p 0.66%
Coca-Cola HBC AG (CDI) (CCH) 2,368.00p 0.64%
Antofagasta (ANTO) 957.50p 0.47%
Glencore (GLEN) 371.95p 0.39%
Vodafone Group (VOD) 232.80p 0.34%
Rio Tinto (RIO) 3,721.50p 0.31%
Sky (SKY) 1,020.00p 0.29%
DCC (DCC) 7,400.00p 0.27%

FTSE 100 - Fallers

United Utilities Group (UU.) 807.00p -2.30%
Burberry Group (BRBY) 1,734.00p -1.42%
Berkeley Group Holdings (The) (BKG) 4,153.00p -1.35%
Persimmon (PSN) 2,688.00p -1.25%
Taylor Wimpey (TW.) 203.50p -1.21%
Barratt Developments (BDEV) 636.50p -1.01%
Mediclinic International (MDC) 581.50p -0.94%
Mondi (MNDI) 1,857.00p -0.91%
G4S (GFS) 256.00p -0.74%
Admiral Group (ADM) 1,914.00p -0.67%

FTSE 250 - Risers

Balfour Beatty (BBY) 287.28p 1.98%
Barr (A.G.) (BAG) 654.00p 1.32%
Saga (SAGA) 125.00p 1.30%
Vesuvius (VSVS) 575.00p 1.14%
NewRiver REIT (NRR) 338.00p 1.11%
Euromoney Institutional Investor (ERM) 1,295.00p 0.78%
Wetherspoon (J.D.) (JDW) 1,279.50p 0.75%
National Express Group (NEX) 381.70p 0.71%
Hiscox Limited (DI) (HSX) 1,402.34p 0.67%
Kaz Minerals (KAZ) 805.25p 0.66%

FTSE 250 - Fallers

Dechra Pharmaceuticals (DPH) 1,995.00p -1.97%
Howden Joinery Group (HWDN) 455.80p -1.34%
Stobart Group Ltd. (STOB) 272.80p -1.34%
FDM Group (Holdings) (FDM) 920.50p -1.29%
Dunelm Group (DNLM) 685.65p -1.20%
Bellway (BWY) 3,601.00p -1.07%
Card Factory (CARD) 277.70p -1.03%
Ladbrokes Coral Group (LCL) 172.50p -0.98%
Inchcape (INCH) 780.00p -0.89%
Grafton Group Units (GFTU) 772.90p -0.85%