London open: Stocks steady as investors eye inflation figures, Fed announcement

London stocks were steady in early trade on Wednesday as investors eyed the latest UK inflation data and a policy announcement from the Federal Reserve.

At 0830 BST, the FTSE 100 was flat at 7,441.55, while the pound remained at five-month lows, trading down 0.1% against the dollar and the euro at 1.2547 and 1.1209, respectively.

Spreadex analyst Connor Campbell said: "Europe was unable to ride the Draghi-rocket into Wednesday, investors instead fretfully turning towards the evening’s potentially huge Fed meeting.

"The indices are hoping that Jerome Powell and his FOMC cronies will be just as dovish as Mario Draghi was on Tuesday morning, with many expecting the Fed to tee-up a July rate cut. However, the central bank’s decision is complicated by Donald Trump, specifically his trade war with China.

"The President is set to meet Xi Jinping for more talks at the G-20 meeting in Osaka next week, the outcome of which could be the key driver of what the Federal Reserve actually does in the coming months."

On home shores, the UK retail price index, consumer price index and producer price index are all due at 0930 BST.

The consumer price index is expected to have eased from 2.1% year-on-year to 2.0% in May, with core inflation seen at 1.6% year-on-year versus 1.8% a month earlier.

"A soft inflation read can only revive the Bank of England doves and increase the selling pressure on the pound," said London Capital Group analyst Ipek Ozkardeskaya.

In corporate news, Whitbread lost ground after saying first-quarter like-for-like revenue per available room at its Premier Inn division fell 6% as Brexit concerns and cost inflation continued to weigh. The food and hotel company, which last year sold the Costa coffee chain to Coca-Cola for £3.9bn, said total UK like-for-like sales were 3.7% lower.

Richard Hunter, head of markets at Interactive Investor, said: "Without the diversification and success that Costa brought, the company is now mostly hostage to the cyclical hotels market. With business confidence under threat from an uncertain economic outlook in the UK, accommodation sales have been weak, particularly in the regions where Premier Inn has a significant presence. Meanwhile, cost inflation generally is a worry and the Food & Beverage part of the business is also under pressure.

"The company itself has provided a cautious short-term outlook and it is not easy to gauge where the next fillip for the share price may come from. With the metrics of occupancy, average room rate and revenue per available room also in current decline, the group clearly has its work cut out."

Over-50s products specialist Saga saw its shares fall sharply as it said it was making good progress with its new fixed price motor insurance but cautioned that conditions in its travel and insurance markets are "challenging".

AstraZeneca ticked down even as the pharmaceuticals giant said it had secured three new drug approvals in Japan, while Ted Baker was knocked lower by a downgrade to 'hold' at HSBC.

On the upside, housebuilder Berkeley Group was on the front foot. Although it posted a 20.7% decline in full-year pre-tax profits to £775.2m, this was still at the top end of market expectations.

CYBG advanced as the owner of the Yorkshire Bank and Clydesdale Bank announced that it will rebrand as Virgin Money by the end of 2021 and said it was targeting an additional £50m of annual net cost savings on top of existing £150m annual savings form the Virgin Money deal.

Market Movers

FTSE 100 (UKX) 7,441.55 -0.02%
FTSE 250 (MCX) 19,319.77 0.04%
techMARK (TASX) 3,636.99 -0.11%

FTSE 100 - Risers

NMC Health (NMC) 2,446.00p 2.73%
Berkeley Group Holdings (The) (BKG) 3,632.00p 2.05%
Ashtead Group (AHT) 2,118.00p 1.78%
Melrose Industries (MRO) 173.50p 1.64%
Smith (DS) (SMDS) 350.30p 1.48%
Taylor Wimpey (TW.) 159.10p 1.34%
Mondi (MNDI) 1,761.50p 1.29%
Royal Bank of Scotland Group (RBS) 217.70p 1.26%
ITV (ITV) 108.90p 1.21%
Legal & General Group (LGEN) 269.50p 0.90%

FTSE 100 - Fallers

Just Eat (JE.) 614.40p -3.73%
Auto Trader Group (AUTO) 562.00p -1.75%
British American Tobacco (BATS) 2,812.50p -1.64%
Whitbread (WTB) 4,524.00p -1.63%
Imperial Brands (IMB) 1,874.80p -1.48%
Rightmove (RMV) 576.40p -1.23%
Rolls-Royce Holdings (RR.) 912.80p -1.19%
International Consolidated Airlines Group SA (CDI) (IAG) 452.22p -1.15%
easyJet (EZJ) 891.20p -1.04%
Coca-Cola HBC AG (CDI) (CCH) 2,910.00p -0.92%

FTSE 250 - Risers

Kier Group (KIE) 127.02p 5.94%
Bakkavor Group (BAKK) 131.40p 2.66%
CYBG (CYBG) 190.05p 2.48%
IP Group (IPO) 74.60p 1.91%
Hastings Group Holdings (HSTG) 180.70p 1.80%
Just Group (JUST) 57.41p 1.70%
Galliford Try (GFRD) 660.00p 1.69%
Bank of Georgia Group (BGEO) 1,652.00p 1.66%
William Hill (WMH) 140.95p 1.59%
Contour Global (GLO) 190.80p 1.49%

FTSE 250 - Fallers

Saga (SAGA) 35.23p -6.29%
Amigo Holdings (AMGO) 241.00p -2.03%
Ted Baker (TED) 880.00p -1.68%
Indivior (INDV) 43.77p -1.62%
Hill & Smith Holdings (HILS) 1,190.00p -1.57%
Homeserve (HSV) 1,229.00p -1.36%
Sanne Group (SNN) 685.00p -1.30%
Greggs (GRG) 2,254.00p -1.23%
Entertainment One Limited (ETO) 386.00p -1.08%
Woodford Patient Capital Trust (WPCT) 53.24p -1.05%