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As the snow settled on the Square Mile early on Wednesday, equity markets in London lost ground, taking their cue from a late selloff on Wall Street as disappointing earnings from ITV and Taylor Wimpey weighed.
At 0840 GMT, the FTSE 100 was down 0.5% to 7,246.87, while the pound was flat against the euro at 1.1374 and down 0.2% versus the dollar at 1.3878.
Stocks in the US finished lower as Jerome Powell’s first congressional testimony did little to soothe investors’ worries about inflation. A hawkish tone from the new Federal Reserve chairman signalled that US interest rates were set to continue rising, adding weight to expectations of four rate hikes this year rather than three.
Spreadex analyst Connor Campbell said: “With Jerome Powell’s hawkish appearance in front of Congress on Tuesday dragging the Dow Jones back below 25,500, before sparking losses in Asia, the European indices didn’t stand much chance of avoiding a red start.”
Investors were also mulling the latest data releases from China, as both the manufacturing and non-manufacturing PMIs for February came in lower than expected at 50.3 and 54.5, respectively. This dragged on miners, with Glencore, Rio Tinto, Anglo American, BHP Billiton and Antofagasta shares all lower.
The latest GfK survey was also in focus. It showed consumer confidence in the UK fell in the UK slipped in February, with the long-running index down one point to -10 from January, as expected.
“Ongoing concerns about sluggish household income, rising prices paid by consumers in the shops, and the prospect of inflation-busting council tax and interest rate hikes has dented confidence after last month’s surprising rally,” said GfK’s Joe Staton. “The two-year trend of negative sentiment – the overall index score has bounced between zero and -13 since February 2016 – proves consumers feel pessimistic about the state of household finances and the wider UK economy.”
In corporate news, ITV slumped as the broadcaster said profits fell last year amid a squeeze on advertising sales, although the dividend was lifted 10% as a ‘strategic refresh’ got underway under new chief executive Carolyn McCall.
Campbell said: “The good news for ITV investors, however, might be that any further fall in price could reignite the takeover rumours that have lingered around the company for a while now.”
Taylor Wimpey was in the red as it posted a drop in full-year pre-tax profit, while engineer Weir slipped even as it reported a 47% rise in full-year pre-tax profits.
Builders merchant Travis Perkins suffered heavy losses as it said adjusted full-year pre-tax profit dropped 10%.
Premier Inn and Costa owner Whitbread slipped as it announced the acquisition of a portfolio of 19 hotels in Germany from Foremost Hospitality Group for an undisclosed sum.
On the upside, insurer Admiral rallied after posting a 43% jump in full-year pre-tax profit and declaring a special dividend amid record customer numbers.
Business information group Informa rose as it said revenue in the 12 months to the end of December grew 30.7% to £1.76bn and UBM gained as its full-year numbers came in in line with expectations.
Wealth manager St James’s Place advanced as it posted a 36% increase in full-year operating profit, while FTSE 250 hedge fund Man Group ticked higher as it reported a rise in full-year funds under management amid record net inflows.
In broker note action, James Fisher was lifted by an upgrade to ‘buy’ at Canaccordand British American Tobacco was weaker after a downgrade to ‘neutral’ at Citi.
