London open: Stocks tick lower ahead of Fed announcement
London stocks nudged lower in early trade on Wednesday as investors sifted through a raft of earnings news and eyed the latest policy announcement from the US Federal Reserve.
At 0900 GMT, the FTSE 100 was down 0.1% at 7,266.59.
Neil Wilson, chief market analyst at Markets.com, said: "The focus today is squarely on the Fed. It’s certain to announce the start of tapering, and push against interest rate hikes. Sounds easy enough but there are details which could affect the market reaction later.
"Key questions relate to the pace and timing of tapering, and comments about the path of inflation and jobs from chair Jay Powell. The Fed is likely to begin tapering its $120-a-month QE programme this month, or potentially wait until Dec. I don’t think this matters a huge amount, though delay could be marginally negative for the dollar and good for risk. It’s the pace of the tapering that really counts as this will determine when bond buying ends and could help shape expectations for when the Fed will begin raising rates.
"It’s expected that the Fed will reduce asset purchases at a rate of $15bn-a-month, which would mean the taper takes 8 months to complete. However, the Fed could go ahead at $20bn-a-month, ending two months earlier. Markets would likely see $20bn as more hawkish and suggest an earlier rate hike."
In equity markets, Next fell as the retailer reported better-than-expected full-price sales in the last five weeks, but warned that momentum would slow in the final quarter due to diminishing pent-up demand from Covid lockdowns and supply-chain constraints.
Darktrace slumped after private equity firm Vitruvian Partners sold 11m shares in the cybersecurity group in a placing. The shares were sold at 580p each, raising gross proceeds of around £63.8m.
Trainline slid even as the online ticket seller said it had it returned to profitability in the first half as passengers returned to rail and shifted to digital ticketing.
Pets at Home lost ground as it upgraded its full-year profit expectations but announced the departure of chief executive Peter Pritchard.
On the upside, miners were the standout gainers as copper and iron ore prices rose, with Antofagasta, Anglo American and Glencore all higher. Anglo was also boosted by an upgrade to ‘buy’ from ‘hold’ at Liberum.
Micro Focus rose as it agreed the sale of its archiving and risk management portfolio to Smarsh Inc for $375m in cash.
Morgan Sindall was higher after the construction and regeneration group said full-year results were set to be ahead of its expectations amid continued strong trading.
Ibstock and Quilter also rallied after well-received results.
Market Movers
FTSE 100 (UKX) 7,266.59 -0.11%
FTSE 250 (MCX) 23,147.41 0.03%
techMARK (TASX) 4,578.16 0.01%
FTSE 100 - Risers
Anglo American (AAL) 2,798.00p 2.87%
Pearson (PSON) 605.60p 2.64%
Antofagasta (ANTO) 1,395.50p 2.61%
Glencore (GLEN) 362.10p 2.22%
Evraz (EVR) 623.00p 1.93%
International Consolidated Airlines Group SA (CDI) (IAG) 166.48p 1.91%
Royal Mail (RMG) 440.80p 1.87%
Rio Tinto (RIO) 4,537.00p 1.72%
BHP Group (BHP) 1,898.40p 1.67%
Fresnillo (FRES) 865.00p 1.43%
FTSE 100 - Fallers
Darktrace (DARK) 600.00p -5.14%
Next (NXT) 8,078.00p -2.82%
Informa (INF) 522.20p -2.36%
BP (BP.) 339.60p -1.55%
Compass Group (CPG) 1,552.50p -1.15%
Ocado Group (OCDO) 1,747.50p -1.10%
London Stock Exchange Group (LSEG) 7,096.00p -0.98%
ITV (ITV) 105.50p -0.94%
B&M European Value Retail S.A. (DI) (BME) 616.80p -0.90%
Royal Dutch Shell 'A' (RDSA) 1,647.40p -0.85%
FTSE 250 - Risers
Micro Focus International (MCRO) 376.00p 3.47%
Ferrexpo (FXPO) 300.20p 2.95%
Ninety One (N91) 263.60p 2.65%
Diversified Energy Company (DEC) 108.60p 2.45%
4Imprint Group (FOUR) 2,915.00p 2.28%
Morgan Sindall Group (MGNS) 2,280.00p 2.24%
Quilter (QLT) 159.75p 1.88%
TP Icap Group (TCAP) 142.44p 1.74%
Syncona Limited NPV (SYNC) 199.60p 1.63%
Bodycote (BOY) 803.00p 1.45%
FTSE 250 - Fallers
Trainline (TRN) 312.60p -3.04%
Hiscox Limited (DI) (HSX) 789.80p -2.93%
Future (FUTR) 3,400.00p -2.19%
Baillie Gifford Japan Trust (BGFD) 1,014.00p -1.74%
Pets at Home Group (PETS) 491.60p -1.56%
Trustpilot Group (TRST) 310.20p -1.52%
Auction Technology Group (ATG) 1,364.00p -1.45%
Draper Esprit (GROW) 964.00p -1.33%
Cairn Energy (CNE) 186.90p -1.32%
Network International Holdings (NETW) 312.70p -1.26%