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London open: Stocks flat as miners weigh; UK inflation data in focus
London stocks were steady in early trade on Wednesday as investors eyed the latest UK inflation data for July, with worries about Turkey receding for now as the lira regained some poise.
At 0840 BST, the FTSE 100 was flat at 7,613.17, while the pound was unchanged against the dollar at 1.2727 and 0.1% higher versus the euro at 1.1224 ahead of the release of consumer, producer and retail price indices at 0930 BST.
Although the mood was lifted by a strengthening Turkish lira – which rose against the dollar after the country announced that it will implement retaliatory tariffs on some US products – weakness in the mining sector weighed, with BHP, Glencore, Antofagasta, Anglo American and Rio Tinto all in the red amid weak copper prices.
“Risk on sentiment returned and traders were once again in the mood for buying overnight,” said London Capital Group analyst Jasper Lawler. “As the lira moved higher, Wall Street rebounded snapping a four-day losing streak on the Dow.
“Whilst the markets have regained their cool towards Turkey for the time being, it is highly unlikely that the whole crises can now be swept under the carpet. These confidence issues are rarely a one or two-day event, never to raise their head again. Not only is it unlikely that hostilities between Turkey and the US will simmer down quickly, but fundamentals are stacked against emerging markets right now as they struggle in a rising US interest rates climate.”
As far as the UK data is concerned, the consumer price index is expected to print at 2.5% year on year in July, up slightly from June’s 2.4%, while core CPI is expected to remain constant at 1.9%.
In corporate news, insurer Admiral topped the FTSE 100 as it racked up strong gains as its first-half pre-tax profit beat expectations.
GlaxoSmithKline was not far behind as it reported positive results from clinical trials of its once-monthly injectable treatment for HIV, while generic pharmaceuticals maker Hikma Pharmaceuticals surged after lifting its full-year revenue forecasts for its top two businesses.
RBS was on the front foot as it confirmed it will pay an interim dividend of 2p a share on 12 October after reaching a final settlement with the US Department of Justice.
Europe focused property investment company CLS Holdings ticked higher as it said interim EPRA NAV increased 3.0% to 294.7p a share mainly through EPRA earnings and revaluation uplifts.
FTSE 250 infrastructure group Balfour Beatty rallied after reporting a rise in first-half profit as its turnaround programme bears fruit, hiking its interim dividend by 33% and saying it was confident of meeting its full-year expectations.
Hochschild Mining nudged higher as it raised its interim dividend by 42% following a solid first half.
On the broker note front, Mitchells & Butlers and Greene King fizzed higher after upgrades at HSBC, while Esure was boosted to ‘hold’ by Berenberg.
