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London open: Stocks edge lower but Barclays bucks trend
London stocks edged lower in early trade on Friday following uninspiring US and Asian sessions, at the end of what has been a manic week in terms of corporate earnings.
At 0830 BST, the FTSE 100 was down 0.4% to 7,413.34, while the pound was down 0.2% against the euro at 1.1173 and up 0.1% versus the dollar at 1.3079.
Investors were digesting the latest GfK survey, which showed economic confidence among British people has deteriorated to its lowest print since the Brexit referendum. GfK’s consumer confidence index weakened to -12 in July from -10 the month before, with four of its five segments on the wane.
Consumer confidence about the wider economic situation currently and for the future worsened considerably.
The measures of people’s confidence about the general economic situation over the next 12 months fell five points to -28, while perceptions about the past and current situation plunged six points to -31.
But people’s confidence about their own personal financial situation for the coming 12 months actually rose, climbing two points to +2.
Market participants were also likely to turn their attention to the release of US second-quarter GDP figures in the afternoon.
David Morrison, senior market strategist at SpreadCo, said: “The consensus forecast was coalescing around an annualised increase of 2.5%, although yesterday’s 6.5% surge in headline Durable Goods has led some analysts to hope for an upside surprise. Certainly, that’s what the Atlanta Fed’s GDP now forecasting model is predicting.
“Yesterday it published its latest update which suggests today’s advance GDP could be as strong as 2.8%, up from its forecast of a 2.5% gain last week. If so, this will provide further ammunition for those stock market bulls who, until last night’s Amazon-led tech tumble, were enjoying a strong earnings season.”
In corporate news, Barclays shares initially fell but then spiked higher as underlying second quarter profits beat forecasts but first half numbers fell short as the bank put aside an extra £700m for PPI mis-selling compensation.
Johnson Matthey ticked up after saying the first-quarter saw low single-digit sales growth at constant exchange rates but with the weak pound boosting sales to double-digit growth, which was all in line with expectations.
British Airways and Iberia parent International Consolidated Airlines Group flew higher as it reported a 14% jump in first-half operating profit and said it expects profit for the year to rise by a double-digit percentage.
Going the other way, telecommunications group BT retreated after saying earnings fell in the first quarter, with adjusted EBITDA down 2% to £1.79bn, although reported revenue was 1% higher at £5.84bn.
IMI fell despite reporting an 11% jump in first-half revenue and a 13% increase pre-tax profit, while UBM lost ground after posting an 18% rise in half-year revenue.
Property website Rightmove slipped despite reporting an 11% increase in first-half operating profit and a 16% boost to the interim dividend.
Essentra was in the red as the components manufacturer said half-year profits dropped 49%, while Rotork slumped as it announced the resignation of chief executive Peter France with immediate effect.
