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London open: Stocks edge lower ahead of May speech, inflation figures
Stocks in London edged lower in early trade as investors eyed the release of UK inflation data and a speech by Prime Minister Theresa May on her plans for Brexit.
At 0830 GMT, the FTSE 100 was down 0.3% to 7,305.56. Meanwhile, oil prices were little changed, with West Texas Intermediate and Brent crude down 0.2% to $52.52 and $55.77 a barrel, respectively.
Spreadex‘s Connor Campbell said: “The main focus is, of course, Theresa May’s Brexit speech. In what is likely to be the clearest indication yet that the government is pursuing a hard Brexit, the Prime Minister will reportedly place controlling immigration and leaving the jurisdiction of the European court of justice as the country’s top priorities when negotiating. That would almost certainly confirm Britain’s exit from the single market, a move that is going to court just as much controversy in the Tory party as it does appease those members from the Leave campaign looking to burn all EU bridges.
“Beyond that May’s speech seems set to be filled with meaningless buzz words, the PM wanting to remain Europe’s ‘best friend’ while aiming to create a ‘global Britain’.”
In currency markets, the pound was trading higher ahead of May’s speech, rebounding from heavy falls in the previous session.
Neil Wilson, senior market analyst at ETX Capital, said: “The dollar index has eased to its weakest since Thursday and that’s helped to send the pound a little higher this morning, scrubbing some of the worst of Monday’s losses. Cable is trading around $1.21135, a little more than a cent above yesterday’s lows.”
In corporate news,aerospace and defence group Rolls-Royce advanced after agreeing to pay £671m to settle bribery and corruption cases with UK and US authorities.
British American Tobacco edged higher after confirming it was acquiring the remaining 57.8% of Reynolds American it does not already own in an agreed cash-and-shares offer worth $49.4bn.
Greggs shares were looking pretty tasty after the FTSE 250 baker said full-year results are likely to be slightly ahead of previous expectations following particularly strong sales over the Christmas period.
Cairn Energy ticked up after it reported $335m group net cash at 31 December, with its reserves-based lending bank facility remaining undrawn and debt availability to fund UK development assets increasing with project progress.
Tullow Oil gushed a little higher as it made a new oil discovery at the Erut-1 well in Block 13T in Northern Kenya.
On the downside, Provident Financial pushed lower despite saying full-year results would be in line with market expectations as the non-standard lender grew customer numbers 9% at its Vanquis Bank arm.
Mining giant Rio Tinto was in the red after saying it experienced a “strong” operational performance in 2016 with increases in iron ore, bauxite and aluminium production in the fourth quarter.
Drug giant AstraZeneca nudged down as it rejigged the target of clinical trials for its immuno-oncology treatment for non-small cell lung cancer after “strong efficacy” of its durvalumab drug shown in recent internal and external data as well as “significant opportunities in the competitive landscape”.
Standard Chartered rallied on the back of an upgrade to ‘buy’ by Bank of America Merrill Lynch, but Intertek slumped as Credit Suisse cut the stock to ‘underperform’.
The UK producer price index, consumer price index and retail price index are due at 0930 GMT, while May’s speech is reported to be at 1145 GMT.
