ADVFN Morning London Market Report: Thursday 3 August 2017

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London open: Stocks steady as investors eye BoE announcement

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London stocks were steady in early trade on ‘Super Thursday’ as investors awaited some key data on the UK services sector and a rate announcement from the Bank of England.

At 0830 BST, the FTSE 100 was flat at 7,413.74, while the pound was up 0.2% against the euro at 1.1174 and 0.1% firmer versus the dollar 1.3234.

Markit’s services purchasing managers’ index survey is the starter dish of the day before the main course from the Monetary Policy Committee at lunchtime.

Following a strong manufacturing survey and an 11-month low for construction earlier in the week, analysts are forecasting a slight increase in services PMI from 53.4 to 53.6 month-on-month.

“Once that’s out of the way attention will turn to the main course,” said Spreadex analyst Connor Campbell. “An unexpected dip in inflation in June will likely mean that there’s little drama in this midsummer MPC meeting. However, there has been enough hawkish squawking in the last few weeks and months that any decision could be far from unanimous. Just how split Carney and co. are will help dictate the pound’s movements this afternoon and, therefore, play a role in whether the FTSE ends the day above or below 7,400.”

The BoE rate decision is at 1200 BST, along with the minutes and the quarterly inflation report, while governor Mark Carney is due to give a speech at 1230 BST. Before that, the PMI is at 0930 BST.

In corporate news, clothing retailer Next surged as full price sales were up in the second quarter and the company confirmed a third special dividend of 45p and said £307m of surplus cash is expected this year, up from guidance of £255m in May.

London Stock Exchange was on the front foot as it posted a 19.5% rise in first-half profit and lifted its dividend by 20%.

Randgold Resources shone as it said both profit and production grew in the second quarter, while Serco rallied as it said first-half profit fell but kept its full-year guidance unchanged.

Aerospace and defence group Cobham surged as it said it swung to an operating profit in the first half, with the company’s underlying pre-tax profit of £69.5m and revenue of £1bn both ahead of expectations .

Medical products and technologies company ConvaTec tanked after it posted a decline in first-half operating profit and earnings.

Paper and packaging company Mondi was in the red as it reported a fall in first-half profit, mainly due to a significantly lower forestry fair value gain in South Africa and the impact of mill maintenance shutdowns.

Halfords and Berendsen retreated as their stock went ex-dividend.

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