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London open: Stocks edge lower as investors eye Queen’s Speech
London stocks edged lower in early trade on Wednesday amid weaker oil prices, while UK investors awaited the Queen’s Speech.
At 0830 BST, the FTSE 100 was down 0.2% to 7,459.81, while the pound was off 0.2% against the euro and the dollar at 1.1320 and 1.2605, respectively. Meanwhile, oil prices were weaker after hitting nine-month lows and entering a bear market on Tuesday. West Texas Intermediate was off 0.8% to $43.15 a barrel and Brent crude was down 1.1% at $45.54.
The Queen’s Speech, which was pushed back from last week, is due at around 1130 BST. On Tuesday, Northern Ireland’s Democratic Unionist Party cautioned that a deal with Prime Minister Theresa May’s Conservative party was “not imminent”. Reports quoted senior DUP sources as saying that talks haven’t proceeded in a way that the DUP would have expected. Still, a source told the the Press Association that an agreement before Wednesday’s State Opening of Parliament could not be entirely ruled out if there was movement in the talks between the parties.
Spreadex analyst Connor Campbell said: “Despite the state opening of parliament being just a few hours away, Theresa May is yet to fully secure the support of the DUP, the Irish party unhappy with what they see as a lack of respect from certain sections of the Conservatives.
“The Queen’s speech is set to outline a legislative programme much changed from the Tory election manifesto, with more controversial policies, like grammar schools and social care cuts, given the axe. What does end up in the speech is going to be of great interest to the markets, namely what it says about Brexit and whether it will allow May to form a government.”
Parliament will vote on the speech in one week’s time.
On the data front, public sector net borrowing is at 0930 BST, while US existing home sales are at 1500 BST.
In corporate news, Whitbread rallied after saying it booked in a strong start to its new financial year, with revenues at its Premier Inn hotels accelerating and Costa coffee shops sales returning to like-for-like growth.
Biopharmaceutical company Shire was on the front foot as it announced that the US Food and Drug Administration approved Mydayis – mixed salts of a single-entity amphetamine product – which the company’s board described as a once-daily treatment comprised of three different types of drug-releasing beads for patients 13 years and older with attention deficit hyperactivity disorder .
Berkeley Group advanced as it reported a 53% jump in full-year pre-tax profit, while British Gas parent Centrica gained as it agreed to sell its operational Langage ad South Humber Park combined cycle gas turbine power stations to EP UK Investments for £318m in cash.
Other utilities were also doing well, with SSE and United Utilities in the black amid speculation that the UK government may not proceed with the energy bill price cap. Analysts said the policy could be watered down or abandoned entirely in the Queen’s Speech.
On the downside, lower oil prices hit the likes of BP and Shell, whose shares were trading down 0.9% and 0.8%, respectively.
Elsewhere, subprime lender Provident Financial tanked after it cautioned that its consumer credit division will see profits nearly halve in 2017 compared to a year ago, mostly due to restructuring costs.
