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London open: Stocks edge up ahead of Budget; Thomas Cook tanks
London stocks edged tentatively higher in early trade on Wednesday as investors sifted through corporate releases ahead of the Autumn Budget.
At 0825 GMT, the FTSE 100 was up 0.2% to 7,427.58, while the pound was down 0.1% against the euro at 1.1262 and 0.1% firmer versus the dollar at 1.3251.
Konstantinos Anthis at ADS Securities said: “The focus for traders today will be the UK budget and any changes to the Chancellor’s fiscal policy linked to a potential downgrade of the growth outlook. The Chancellor is in a tight spot as he is expected to deliver a fiscal package which will boost spending; however, this might be a rather difficult exercise due to the uncertainty caused by the Brexit negotiations and the unclear future relationship between the UK and the European Union.
“The pound will react to any increased spending but the most likely scenario is that Hammond will present a balanced bill that will not satisfy those asking for significantly less austerity, which would be treated as a bearish development for sterling.
“Moreover, there’s significant risk to the downside for the pound today as the Office for Budget Responsibility is likely to downgrade their growth expectations for the new year in light of the uncertain future between UK and EU after Brexit takes place.”
The Autumn Statement is due at 1230 GMT, while the minutes from the latest Federal Reserve meeting are at 1900 GMT.
In corporate news, Hammerson ticked up after the company sold its 64.5% share of the Place des Halles shopping centre in Strasbourg, France for a total net vendor price of £258m, slightly above June’s book value.
United Utilities edged higher as it said profit rose 10% in the first half as the water and waste management company increased revenue and cut costs.
Business information and events group Euromoney advanced after posting a rise in annual profit and announcing the sale of its stake in Dealogic, while housebuilder and regeneration partner Countryside Properties rallied after it reported a jump in annual operating profit as revenue and completions grew amid strong demand.
Kingfisher was boosted by an upgrade from Jefferies while Ferguson and Bunzl were up following upgrades at HSBC. Reckitt Benckiser, Informa and Qinetiq were trading higher after upgrades from JPMorgan, Kepler Cheuvreux and Berenberg, respectively.
On the downside, Thomas Cook tanked after the travel company released its full-year results, which showed margins declined due to a more competitive market in holidays to Spain. FTSE 100 peer TUI was also in the red.
GlaxoSmithKline slipped after saying that ViiV Healthcare, the global specialist HIV company which it majority owns with Pfizer and Shionogi as shareholders, has announced that the US Food and Drug Administration has approved Juluca.
Accounting software developer Sage fell despite saying it kept revenue growth and margins above their annual target and announcing that the launch of its Business Cloud software suite would enable it to “accelerate momentum” in 2018.
Hill & Smith nudged lower after saying trading in the period from 1 July to the end of October was in line with its expectations, with revenue up 4% on an organic basis.
Nostrum Oil & Gas was in the red after Panmure Gordon cut the stock to ‘hold’.
