ADVFN Morning London Market Report: Thursday 12 October 2017

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London open: Stocks flat as investors digest Fed minutes

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London stocks were little changed in early trade on Thursday despite a solid session in the US, as investors digested the minutes from the latest Federal Reserve meeting.

At 0835 BST, the FTSE 100 was flat at 7,536.68, while the pound was up 0.1% against the euro at 1.1160 and 0.2% firmer versus the dollar at 1.3244.

Minutes from the Federal Open Market Committee’s September meeting showed the central bank was confident that the US economy was now resilient enough to withstand an increase in interest rates before the end of the year.

“Consistent with the expectation that a gradual rise in the federal funds rate would be appropriate, many participants thought that another increase in the target range later this year was likely to be warranted if the medium-term outlook remained broadly unchanged,” the minutes read.

Accendo Markets analyst Mike van Dulken attributed the flat London open to “confusion” among Fed voting members about persistently low inflation in spite of low unemployment, which he said “has muddied the outlook about the pace of further hikes”.

On the corporate front, broadcaster Sky was trading a little higher after it posted a jump in earnings and revenue in the first quarter, while Just Eat surged after being given provisional approval by UK competition authorities to complete its acquisition of rival online food ordering website Hungryhouse.

Analysts’ opinions were providing a lot of the price action, with Burberry the standout gainer after Mirabaud Securities upgraded the stock to ‘buy’, while budget carrier easyJet flew higher after Canaccord upped the stock to ‘hold’.

Spire Healthcare was on the front foot after being upgraded to ‘buy’ at Investec, but shares in the AA were hit by a downgrade to ‘hold’ at Berenberg.

Tullow Oil edged up after announcing the acquisition of 90% stakes in four onshore blocks in Cte d’Ivoire, while recruiter Hays advanced after it posted another record quarterly net fee performance as all its divisions saw solid growth.

GVC Holdings gained after the sports betting and gaming group said daily net gaming revenue was up 10%, or 13% at constant currency in the third quarter, while Booker nudged up after posting an 8.6% increase in first-half pre-tax profit.

Clothing retailer N Brown was in the red despite reporting a 5.6% increase in half-year revenue and consensus-beating profits, while WH Smith fell even as it said full-year profit and revenue rose thanks to a solid performance from its travel business, which helped to offset weakness in high street stores.

Acacia Mining was weaker after it revealed that gold production slowed in the third quarter.

HSBC, Tesco, Close Brothers, TP ICAP and Saga were all lower as their stock went ex-dividend.

Investors were also mulling over the latest survey from the Royal Institute of Chartered Surveyors, which showed the UK housing market continued to lack momentum in September as demand from new buyers and sales fell again and the shift in interest rate expectations contributed caution in a slowing market.

Still to come, the Bank of England credit conditions survey is at 0930 BST.

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