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London open: Stocks flat ahead of services data
London stocks were steady in early trade on Wednesday as investors eyed the release of some key services data.
At 0830 BST, the FTSE 100 was flat at 7,355.78, while the pound was down 0.3% against the euro at 1.1357 and 0.1% lower versus the dollar at 1.2905.
Markit’s services purchasing managers’ index is at 0930 BST, while in the US, the latest FOMC minutes are due at 1900 BST.
Spreadex analyst Connor Campbell said: “Both the manufacturing and construction readings fell faster than expected in June, suggesting the month’s election uncertainty had a material impact on confidence. Of the 3 PMIs the services figures is easily the most important, and will give the clearest indication of how the UK performed in Q2; it’s frustrating, then, that analysts are forecasting a fall from 53.8 to 53.5, continuing the siphoning off of energy from the 55.8 reading that had opened the quarter.”
Investors were also digesting services data out of China, as the latest Caixin survey showed the services PMI came in at 51.6 in June, down from 52.8 in May but above the 50 mark that separates contraction from expansion.
In UK corporate news, shares in online grocery specialist Ocado rose as it increased order volumes and revenues in the first half of the year but saw profits shrink due to investments in its Andover ‘customer fulfilment centre’.
Housebuilder Persimmon was also on the front foot after laying an excellent foundation to its financial year, reporting resilient consumer confidence and strong momentum moving into the second half. The group expanded revenues 12% to £1.66bn as the volume of new homes sold grew 8% to 7,794 and it was able to hoist average selling prices 3.5% to £213,000. Peers Barratt Developments and Taylor Wimpey were lifted by the news.
Retirement housebuilder McCarthy & Stone advanced as it said the UK general election led to a slowdown in sales momentum in recent weeks but that underlying trading conditions remained stable.
Building products distributor SIG surged as it said trading in the first half was as expected and the second half should be stronger, while food wholesaler Booker was higher after it reported growth in like-for-like sale in the first quarter thanks to the late Easter and favourable weather.
