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London open: Stocks nudge lower amid barrage of earnings
London stocks ticked a touch lower in early trade on Thursday as investors waded through a barrage of earnings reports, while the pound nudged higher against the euro and the greenback.
At 0840 BST, the FTSE 100 was down 0.1% to 7,441.57, while the pound was up 0.1% against the dollar at 1.3138 and 0.2% firmer versus the euro at 1.1206.
Although earnings were the main focus in London, market participants were also mulling over the Federal Reserve rate announcement late on Wednesday.
Spreadex analyst Connor Campbell said: “Despite the Federal Reserve stating that it would start shrinking its balance sheet from September, ostensibly a dollar-positive move, investors instead focused on the central bank’s grumblings about weak inflation. Given that the previous month’s meeting minutes had highlighted the CPI-performance as a key issue for more than a few Fed members this was taken as a rate hike-delaying comment, doing further damage to an already gaunt greenback.
“The news helped cable briefly surge above $1.315 for the first time since September last year, before settling slightly below that landmark level. This led to a muted start from the FTSE, though the weight of the pound’s gains is being somewhat negated by a largely positive morning for the index’s reporting companies.”
Lloyds Banking Group was in the red despite reporting underlying first-half profits ahead of consensus forecasts, in the first set of results since returning to full private ownership.
AstraZeneca was the biggest faller, however, after one of its key lung cancer studies failed to meet its primary endpoint. The pharmaceutical giant also released its first-half results on Thursday.
Mining conglomerate Glencore declined as it said first half own-sourced copper production fell 9% to 642,900 tonnes, while SSE was weaker as its stock went ex-dividend.
On the upside, Diageo racked up impressive gains as it announced a £1.5bn share buyback and posted an increase in full-year profits and sales.
Wealth manager Schroders rallied as it said first half pre-tax profit rose to £342.8m from £282.3m in the same period a year ago, with assets under management at an all-time high of £418.2bn, up from £343.8bn.
Anglo American was also on the front foot after saying it was resuming its dividend payments early after it managed to take its debt well below its year-end target, as it reported a 68% jump in earnings.
Royal Dutch Shell gushed higher as its second-quarter profits beat expectations, while Rentokil gained ground as its first-half profit got a boost from disposals.
British American Tobacco advanced as a weaker pound helped to lifts its first-half profits, while St James’s Place pushed up after posting a 27% jump in funds under management for the first half.
Drug maker Indivior surged after its second-quarter numbers beat estimates and the company lifted its full-year guidance.
Ladbrokes rose as it reported an increase in first-half revenue, while Mitchells & Butlers fizzed higher after its third-quarter trading update.
Broadccaster Sky was little changed after reporting a 10% increase in revenue on a comparable 52-week basis to £12.9bn.
On the data front, the CBI distributive trades survey is at 1100 BST.
