London open: Stocks edge lower after hawkish Fed; corporate news rolls in
London stocks edged down in early trade on Thursday following heavy losses in Asia, after the US Federal Reserve struck a hawkish note overnight.
At 0840 GMT, the FTSE 100 was down 0.2% at 7,454.07, as investors waded through a raft of corporate news.
CMC Markets analyst Michael Hewson said: "While there were no surprises around the statement and the decision to keep monetary policy on hold, the Powell press conference saw the heat quickly come out of the rally, as Powell indicated that while a rate hike was likely to come in March, the FOMC wouldn’t hold back from continuing to do so at a faster pace than it did in the last tightening cycle, and that it would be appropriate to start shrinking the size of the balance sheet, as well at the same time.
"The press conference also sent the message that the Fed could well raise rates at every meeting, or even consider a 50bps hike if the need arose, as Powell passed up the opportunity to rule out any of those possibilities. While this keeps the Feds options open, which seems entirely sensible, rule nothing out and everything in, it wasn’t the message increasingly nervous markets wanted to hear.
"In essence it was the Fed saying to markets that the days of handholding are over; our priority now is inflation."
In equity markets, iconic boot maker Dr Martens slumped even as it posted an 11% increase in third-quarter revenues and backed its full-year expectations.
Low-cost airline easyJet flew a little lower after saying it halved first-quarter losses as Covid-19 travel restrictions were eased and reported a step-up in bookings after the UK government lifted pre-departure testing requirements. The company reported a headline loss before tax for the quarter ending December 31 of £213m, compared with £423m a year ago.
Victrex and Paragon Baking lost ground as they traded without entitlement to the dividend.
On the upside, Diageo gained after the brewer reported a rise in first-half sales and profits as people quaffed more spirits at home during the Covid pandemic, but warned of persistent headwinds from the virus and supply-chain constraints.
Outsourcer Mitie rallied after it lifted its annual profit guidance again as it highlighted higher-than-expected revenue from Covid-related contracts in the third quarter.
Online trading platform IG Group advanced after well-received interim results, while Britvic fizzed higher as the drinks maker reported better-than-expected first-quarter revenues, driven by growth in the GB segment.
HSBC was in the black after an upgrade to ‘outperform’ at Exane, while Rentokil and Man Group were knocked lower by a downgrade to ‘neutral’ by the same outfit.
FTSE 100 - Risers
Standard Chartered (STAN) 538.20p 2.71%
Diageo (DGE) 3,696.50p 1.43%
NATWEST GROUP PLC ORD 100P (NWG) 247.10p 1.19%
British American Tobacco (BATS) 3,184.50p 1.03%
Imperial Brands (IMB) 1,759.50p 0.92%
HSBC Holdings (HSBA) 527.30p 0.88%
Rio Tinto (RIO) 5,481.00p 0.86%
Sainsbury (J) (SBRY) 294.20p 0.86%
Barclays (BARC) 203.90p 0.84%
Avast (AVST) 605.40p 0.60%
FTSE 100 - Fallers
Pershing Square Holdings Ltd NPV (PSH) 2,580.00p -5.67%
Fresnillo (FRES) 660.40p -3.98%
Aveva Group (AVV) 2,782.00p -2.76%
Scottish Mortgage Inv Trust (SMT) 1,049.50p -2.60%
London Stock Exchange Group (LSEG) 7,052.00p -2.38%
JD Sports Fashion (JD.) 179.70p -2.34%
WPP (WPP) 1,130.50p -2.33%
Rentokil Initial (RTO) 499.60p -2.19%
Sage Group (SGE) 697.60p -2.16%
Barratt Developments (BDEV) 596.40p -2.13%
FTSE 250 - Risers
Mitie Group (MTO) 62.50p 4.87%
IG Group Holdings (IGG) 848.50p 3.22%
Quilter (QLT) 134.40p 3.19%
Britvic (BVIC) 883.00p 2.02%
Hammerson (HMSO) 38.19p 1.65%
Direct Line Insurance Group (DLG) 305.40p 1.23%
Ferrexpo (FXPO) 236.80p 1.02%
Euromoney Institutional Investor (ERM) 923.00p 0.98%
Rank Group (RNK) 150.00p 0.81%
Tate & Lyle (TATE) 720.00p 0.76%
FTSE 250 - Fallers
Dr. Martens (DOCS) 284.00p -12.13%
Victrex plc (VCT) 2,028.00p -5.50%
Man Group (EMG) 195.20p -5.06%
Baltic Classifieds Group (BCG) 166.50p -4.86%
JPMorgan Japanese Inv Trust (JFJ) 543.00p -4.57%
Paragon Banking Group (PAG) 590.50p -4.37%
Trainline (TRN) 214.00p -4.12%
BB Healthcare Trust (Red) (BBH) 163.60p -3.88%
Baillie Gifford US Growth Trust (USA) 225.50p -3.84%
Hochschild Mining (HOC) 105.00p -3.40%