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London open: Stocks flat ahead of jobs data, Fed rate announcement
London stocks were little changed in early trade on Wednesday as investors kept their powder dry ahead of UK jobs data and a widely expected rate hike from the US Federal Reserve.
At 0840 GMT, the FTSE 100 was flat at 7,503.60, while the pound was steady against the dollar and the euro at 1.3315 and 1.1339, respectively.
The Office for National Statistics will reveal the ILO unemployment rate, average earnings and claimant count at 0930 GMT.
The average earnings index is expected to see its best reading since February, with analysts forecast a jump to 2.5% including bonuses. The unemployment rate, meanwhile, is set to fall from 4.3% to 4.2%, while the claimant count change is expected to rise from 1.1k to 3.3k month-on-month.
Spreadex analyst Connor Campbell said: “If all these estimates are accurate, then sterling may be able to get its mojo back. However, the fact that this afternoon sees a pre-Fed meeting inflation reading from the US – one that could dictate whether the statement accompanying the near-guaranteed rate hike is on the dovish or hawkish end of the spectrum – might prevent the pound from getting too carried away.”
The Fed will make its rate announcement at 1900 GMT amid expectations of a 0.25% hike.
In corporate news, TUI Group was the standout gainer after it saying it expects to achieve at least 10% earnings growth in 2018 after reporting a healthy increase for last year, while Serco rose after saying it expects underlying trading profit for 2017 to be at the top end of its previous guidance.
British American Tobacco nudged higher after saying it is continuing to perform well, in line with expectations.
Dixons Carphone surged as it pledged to simplify its mobile business after a slump in profits in the first half, with the retailer clinging onto market share and maintaining its dividend.
Essentra was a little higher as it announced the acquisition of Micro Plastics for an undisclosed cash consideration.
Quality assurance provider Intertek Group ticked lower as it announced the acquisition of US-based security certification solutions provider Acumen Security for an undisclosed consideration.
Wood Group was in the red after saying proforma earnings before interest, tax, depreciation and amortisation will be in the region of $590m to $610m.
On the broker note front, Ashmore was lifted by upgrade to ‘neutral’ at JPMorgan, while NEX was boosted by an upgrade to ‘overweight’ from the same outfit.
Berkeley Group and Sports Direct were hit by downgrades to ‘hold’ at Jefferies, while Britvic was weaker after Shore Capital cut the stock to ‘sell’.
