ADVFN Morning London Market Report: Tuesday 14 November 2017

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London Open: Stocks Edge Higher Ahead Of Inflation Data; Vodafone Rallies


London stocks edged higher in early trade on Tuesday as investors eyed key inflation data and sifted through a slew of corporate releases.

At 0830 GMT, the FTSE 100 was up 0.2% to 7,430.69, while the pound was flat against the dollar at 1.3112 and down 0.3% versus the euro at 1.1210 ahead of the release of the consumer price index, retail price index and producer price index at 0930 GMT.

The consensus forecast is for the key CPI reading to come in at 3.1% year-on-year for October, up from the 3.0% seen in September.

Spreadex analyst Connor Campbell said: “After Monday’s empty economic calendar left the pound to soak in Theresa May’s trademark political uncertainty, today provides a different challenge for the currency in the form of the latest inflation reading.

He added: “It is going to be fascinating to watch how the pound greets such a number. For the past few months the rapid rise in inflation has reached the market through a Bank of England rate hike-focused filter. However, now that the MPC have raised rates, and aren’t likely to do so again any time soon, sterling has lost its road map for reacting to the figure. There’s every chance, then, that these 3.0%-plus readings won’t be taken as a positive by the pound, but rather as a drain on the UK’s consumers.”

In corporate news, Vodafone rallied after it lifted its full-year earnings growth guidance to around 10% from 4-8%, while Tescoadvanced after its takeover of wholesaler Booker was given provisional clearance by the UK competition authority following an in-depth review.

Broadcaster ITV was on the front foot as it reported an easing in the television advertising crunch in the third quarter and further good growth in online and overseas sales of its Studios productions.

Housebuilders were boosted by a well-received update from Bovis Homes, which said it’s on track to meet its expectations for the full year 2017 and to deliver “significant improvements” in profits for FY18 amid robust demand.

Intermediate Capital Group advanced as it posted a 14% jump in first-half assets, while Computacenter gained after saying results for 2017 will now be “comfortably in excess” of its previous expectations.

Land Securities edged higher as it reported a solid first half despite Brexit headwinds, while Royal Mail was boosted by an upgrade to ‘outperform’ at Bernstein.

Polypipe was in the black as said revenue for the ten months ended 31 October was up 8.2% on the prior, while BBA Aviation was higher after a well-received trading statement.

Retirement housebuilder McCarthy & Stone was also firmer after it posted a drop in full-year profit amid increased build and incentive costs, but a rise in revenue that beat analysts’ expectations.

Diversified engineer Smiths Group was in the red as it reported a drop in revenue for the first quarter mostly due to order timing, while Hikma Pharmaceuticals declined after announcing the acquisition of six products from Boehringer Ingelheim GmbH.

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