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ADVFN Morning London Market Report: Wednesday 26 July 2017

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London open: Stocks edge higher ahead of UK GDP, Fed rate announcement

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London stocks edged higher in early trade on Wednesday as investors waded through a deluge of earnings ahead of the release of UK gross domestic product data and a policy announcement from the Federal Reserve.

At 0830 BST, the FTSE 100 was up 0.4% to 7,466.04, while the pound was flat against the euro at 1.1188 and down 0.1% versus the dollar at 1.3013.

The first estimate of second-quarter UK GDP is due at 0930 BST, while the Fed’s rate announcement is at 1900 BST.

Oanda analyst Craig Erlam said: “A positive surprise on the GDP report could be what the pound needs to finally break significantly above 1.30 against the dollar, with the pair once again struggling to make any serious move above here.

“Another factor here today will be the FOMC decision later, or more likely the statement that accompanies it. The Fed is unlikely to raise interest rates again today having just done so in June, but we could get some insight into whether it will start reducing its balance sheet from September. The Fed has been discussing this for some months now and it may use today’s statement to warn markets ahead of the next meeting.”

Corporate news came thick and fast on Wednesday, with broadcaster ITV trading higher after upping its interim dividend as a show of confidence in the underlying business as first-half profits fell 8%, with a decline in advertising sales joined by fall in production profits due to higher investment and timing of shows.

Retail property developer Hammerson edged higher after it reported a rise in first half pre-tax profits of £289.7m from £167.2m boosted by record leasing activity and positive capital value growth helped by high-growth markets in Ireland and premium outlets.

Catering company Compass gained as it reported a 3.9% rise in third-quarter organic revenue, while Metro Bank advanced after saying late on Tuesday that it swung to a profit in the first half.

Tullow Oil gushed higher as it said revenue rose but it swung to a pre-tax loss in the first half, with the numbers in line with expectations.

Brewin Dolphin edged up after it said third-quarter total assets increased 3.7%, while Petrofac got a boost as it said it had won Iraq contracts worth $100m.

On the downside, 3i Group slipped a touch after posting net asset value per share of 628p and a total return of 4.1% and Fresnillo fell despite reaffirming its 2017 production guidance and reporting a rise in second-quarter silver and gold production.

Engineer GKN ticked lower even as it posted a jump in first-half profits and said it has closed its UK defined pension scheme, while Sage Group was lower as it disappointed with slowing third quarter trading and its guidance for the full year.

Antofagasta nudged down despite reporting growth in copper and gold production in the second quarter and commercial laundry group Berendsen was a smidgen lower after posting a 5.6% drop in half-year profit amid a deteriorating UK performance.

Pub and brewing company Marston’s declined despite reporting a rise in sales in the 42 weeks to 22 July, while Vedanta Resources lost some ground after a production update.

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