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London open: Stocks in the red despite encouraging house price data
London stocks fell in early trade as investors sifted through corporate news and the latest survey on UK house prices.
At 0835 BST, the FTSE 100 was down 0.5% to 7,399.45, while the pound was off 0.3% against the euro at 1.1272 and flat against the dollar at 1.2819 as Bank of England deputy governor Jon Cunliffe said now is not the right time to raise interest rates.
Spreadex analyst Connor Campbell said: “Though this may have pushed sterling to a fresh seven and a half month low against the euro, cable is still sitting pretty above $1.28 after Donald Trump’s domestic agenda was dealt another blow with the latest delay to the Senate healthcare vote on Tuesday night.”
Meanwhile, oil prices fell after the latest report from the American Petroleum Institute showed US crude inventories rose by 851,000 barrels last week versus expectations for a 3.3 barrel drop. West Texas Intermediate was down 0.9% to $43.86 a barrel and Brent crude was off 0.7% to $46.34.
Investors were also digesting the latest survey from mortgage lender Nationwide, which showed house prices in the UK rebounded in June.
Prices were up 1.1% on the month following a 0.2% drop the month before. On an annual basis, they rose 3.1%, up from 2.1% growth in May. Economists had been expecting prices to be flat on the month and up 1.8% on the year.
The average price of a house in the UK increased from £208,711 in May to £211,301 in June, with prices in London rising at the slowest annual pace since 2012, 1.2% higher on the year.
In corporate news, distribution and outsourcing group Bunzl rallied after it said revenue for the half year was expected to have increased by 7% at constant exchange rates due to the improved underlying growth of between 3% and 4% and a similar impact from acquisitions. It also announced the acquisition of three further businesses in Spain and Canada.
Electronics retail group Dixons Carphone was also in the black after its preliminary results beat expectations, with headline profit before tax of £501m, up 10%.
On the downside, Tullow Oil gushed lower after a disappointing trading statement and operational update, while Stagecoach retreated after it posted a 15% decline in full-year profit.
Shares in Petra Diamonds slumped after it warned that its full-year results are likely to be below market expectations, with revenue around 8% to 9% below consensus on the back of lower production.
Property construction and services company Kier nudged down after saying it expects full-year underlying profits to be in line with expectations.
