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London open: Stocks flat as investors eye sterling and ECB
London stocks were steady in early trade on Thursday as investors continued to keep an eye on the pound after its surge against the dollar the previous day dragged the top-flight index down to its lowest level so far this year.
At 0840 GMT, the FTSE 100 was flat at 7,642.75, while the pound was up 0.3% versus the euro at 1.1508 and 0.1% firmer against the dollar at 1.4248.
Spreadex analyst Connor Campbell said: “After an absolutely glorious day of trading on Wednesday the pound has slowed down somewhat this Thursday – though it’s still rising against the dollar and the euro.
“How the pound fairs as the day goes on is likely dependent on the US and eurozone more than anything coming from the UK. Any further dollar-related comments from Davos, especially with Trump arriving in the Alpine town, could aid or undermine the greenback, while the euro will be focused on this afternoon’s ECB rate vote and subsequent press conference, with the currency hoping Draghi and co. build on the slightly hawkish tone used in the last set of meeting minutes.”
On the UK data front, BBA mortgage approvals are due at 0930 GMT while the CBI distributive trades survey is at 1100 GMT.
Meanwhile, the main item on the City’s agenda will be the European Central Bank rate announcement is at 1245 GMT, with President Mario Draghi’s press conference at 1330 GMT.
In corporate news, mining giant Anglo American rose after it reported a 5% jump in 2017 output, while Guinness and Scotch whisky maker Diageo rallied as it toasted stronger first-half sales and profit margins as weakness in Asia Pacific was quashed by growth in all other regions.
Elsewhere, amid an ongoing takeover bid from 21st Century Fox, Sky advanced as it posted a 5% increase in like-for-like revenue for the first half.
Close Brothers was in the black after it reported a rise in its loan book and said it remained well placed for the full 2018 financial year, as it announced the departure of its finance director.
Dechra Pharmaceuticals gained as the company announced the acquisition of Netherlands-based AST Farma and Le Vet for €340m.
Kier Group, formerly a rival of the now collapsed Carillion, surged after saying it had traded in line with expectations in the six months to the end of December.
Wealth manager St James’s Place was on the front foot as it said full-year net inflows rose 40% to £9.5bn as funds under management increased 20% to £90.7bn.
On the downside, Countryside Properties ticked lower after saying it had a “strong” first quarter and is trading in line with expectations for the full year, as it reported a 47% jump in total completions.
Garfunkel’s and Frankie & Benny’s owner Restaurant Group fell as it reported a drop in full-year sales amid a challenging environment, while pub group Greene King was weaker as it said like-for-like sales in the 37 weeks to 14 January fell 1.4% on the back of bad weather.
In broker note action, Smith & Nephew was riding high after an upgrade to ‘overweight’ at JPMorgan Cazenove, while Grainger also rose after an upgrade to ‘overweight’ at JPM.
Bunzl was boosted by an upgrade to ‘buy’ at Goldman Sachs, and Next was up after RBC Capital Markets lifted the stock to ‘outperform’.
