London open: Stocks edge lower as miners retreat amid Sino-US trade woes
London stocks fell in early trade on Wednesday, with miners pacing the decline amid fresh concerns about Sino-US trade relations.
At 0830 GMT, the FTSE 100 was off 0.3% at 7,299.76, while the pound was down 0.3% against the dollar at 1.3226 and 0.2% lower versus the euro at 1.1666, with Prime Minister Theresa May due to write to European Union chiefs to request a short extension to Article 50.
An extension until 30 June is expected, as that is the last day Britain could remain in the EU without taking part in the European elections. May is off to Brussels later in the day to discuss the matter, as any delay will need to be approved by the 27 EU member states.
Neil Wilson, chief market analyst at Markets.com, said: "The clock is ticking and the default position remains that we exit on March 29.
"I would still anticipate a last-minute reprieve as the EU will ultimately not wish to create further instability, but this is going down the wire. Whilst FX markets are calm, volatility in sterling crosses will start to pick up unless the EU quickly agrees to an extension and/or MV3 passes (unlikely). If neither of these scenarios happens soon, we could start to see support for the pound crumble."
More broadly, sentiment was dented following a report from Bloomberg overnight that China was pushing back against key US demands in the trade talks ahead of the next round of negotiations in Beijing next week.
Bloomberg cited people familiar with the negotiations as saying that Chinese officials have shifted their stance because after agreeing to their intellectual property policies, they haven't had any assurances from the Trump administration that tariffs on their imports would be lifted.
Market participants will also be keeping an eye out for the Fed rate announcement, which is due after the London close at 1800 GMT.
Konstantinos Anthis, head of research at ADSS, said: "There are three main points of interest today: the Fed's dot plot, their inflation and growth projections and Powell's press conference. Starting with maybe the most important of the three, the dot plot chart is the main way the Federal Reserve policymakers express their expectations in regards to future interest rates. Back in December, the Fed updated their dot plot to project two rate hikes in 2019 but this is widely expected to change today.
"The Fed will most likely change their expectations to project one move in 2019 while the markets are currently pricing in no rate hikes this year, or even a rate cut, as seen on the Fed fund futures. Given market participants' expectations, a reduction from two expected hikes to one this year will not catch investors' off guard but still the dollar should respond with an initial move lower."
On UK the data front, the retail price, producer price and consumer price indices are due at 0930 GMT.
In equity markets, miners were under the cosh amid worries about the US-China trade war and weaker copper and iron ore prices, with Rio, Antofagasta, Glencore and BHP all down. Antofagasta was also hit by a downgrade to 'reduce' at HSBC.
Meanwhile, Imperial brands and British American Tobacco were in the red after US Food and Drug Administration commissioner Scott Gottlieb, who is due to step down on 5 April, said in Washington on Tuesday that a nicotine ruling is likely to be ready by the summer. He did not specifically promise a menthol ban, but he did say the FDA may consider pulling pod-based e-cigarettes.
Construction, services and property group Kier saw its shares slip after saying it swung to a first-half loss of £35.5m from a profit of £34.3m the year before.
On the upside, B&Q owner Kingfisher edged higher after it said that profits last year fell less than expected as it completed the third year of its five-year turnaround plan. It also said the search for a new chief executive to take over from Véronique Laury has begun but a departure date has not yet been decided.
TI Fluid Systems was on the rise as it hiked its dividend and posted a jump in full-year profit, while travel operator TUI was on the front foot after an upgrade to 'buy' at Oddo.
Elsewhere, Inmarsat shares surged after the satellite communications group confirmed that it was in talks with a consortium of private equity companies after receiving a takeover proposal in January.
The proposal from Apax Partners, Warburg Pincus International, and Canada Pension Plan Investment Board was about a possible cash offer of $7.21 per Inmarsat share, assuming no further dividends would be paid by Inmarsat following the date of the proposal.
FTSE 100 - Risers
Vodafone Group (VOD) 146.66p 0.74%
Kingfisher (KGF) 247.00p 0.69%
Standard Life Aberdeen (SLA) 270.55p 0.61%
Reckitt Benckiser Group (RB.) 6,269.00p 0.56%
Hikma Pharmaceuticals (HIK) 1,638.84p 0.51%
WPP (WPP) 877.20p 0.37%
TUI AG Reg Shs (DI) (TUI) 827.80p 0.36%
Unilever (ULVR) 4,272.50p 0.35%
BT Group (BT.A) 228.75p 0.33%
Micro Focus International (MCRO) 1,907.41p 0.31%
FTSE 100 - Fallers
Rio Tinto (RIO) 4,156.00p -3.46%
Antofagasta (ANTO) 936.00p -3.07%
Glencore (GLEN) 311.00p -2.86%
BHP Group (BHP) 1,739.80p -2.31%
Anglo American (AAL) 1,962.60p -2.14%
Imperial Brands (IMB) 2,608.00p -1.53%
British American Tobacco (BATS) 3,151.00p -1.45%
Ocado Group (OCDO) 1,197.00p -0.99%
Carnival (CCL) 4,179.00p -0.67%
Burberry Group (BRBY) 1,883.00p -0.63%
FTSE 250 - Risers
TI Fluid Systems (TIFS) 181.85p 5.91%
Drax Group (DRX) 386.20p 1.69%
Diploma (DPLM) 1,472.00p 1.59%
Woodford Patient Capital Trust (WPCT) 80.19p 1.51%
IP Group (IPO) 99.07p 1.30%
Syncona Limited NPV (SYNC) 244.00p 1.24%
Sports Direct International (SPD) 295.80p 1.13%
Just Group (JUST) 78.80p 1.03%
Card Factory (CARD) 191.90p 1.00%
Safestore Holdings (SAFE) 598.50p 0.93%
FTSE 250 - Fallers
Ferrexpo (FXPO) 247.90p -4.47%
Kier Group (KIE) 474.70p -1.92%
Centamin (DI) (CEY) 89.78p -1.73%
Kaz Minerals (KAZ) 625.00p -1.70%
Investec (INVP) 469.00p -1.51%
Hays (HAS) 153.60p -1.48%
Domino's Pizza Group (DOM) 234.07p -1.24%
Hochschild Mining (HOC) 193.35p -1.23%
IntegraFin Holding (IHP) 350.45p -1.23%
Rank Group (RNK) 163.20p -1.09%