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London open: Stocks edge lower after Fed minutes; NMC Health surges
London stocks edged lower in early trade on Thursday as investors mulled over the minutes from the latest Federal Reserve meeting, but NMC Health bucked the trend on deal news.
At 0840 BST, the FTSE 100 was down 0.3% at 7,185.85.
Spreadex analyst Connor Campbell said: “Though the CME Group’s FedWatch tool continues to have the chances of a September rate cut at 98.1%, July’s meeting minutes gave investors cause for pause.
“It appears that the Federal Reserve was deeply divided last month. According to the minutes, a ‘couple’ of FOMC members wanted a larger cut, while ‘several’ attendees wanted no cut at all, despite the eventual vote coming in at 8-2 in favour of slashing rates. On one aspect there appeared to be more unity – the avoidance of suggesting the central bank is ‘following a preset course’.
“While certain factors may have changed things since the meeting actually occurred – the last few weeks have seen another round of trade war flare-ups AND the recession warning of an inverted yield curve – this uncertainty led to a muted session in Asian, and a similarly awkward start in Europe.”
In currency markets, sterling was flat against the dollar at 1.2133 and 0.1% lower versus the euro at 1.0935 as Prime Minister Boris Johnson was set to hold talks with French President Emmanuel Macron in Paris.
Campbell said the pound was being “gently lifted” by news of “frank” talks set to take place between the two.
In equity markets, ex-dividends were a drag, with Prudential, Schroders, Berkeley, CLS Holdings, Carnival, Croda, Hikma Pharmaceuticals, Imperial Brands, Reckitt Benckiserand Stagecoach all in the frame.
Elsewhere, Chilean copper miner Antofagasta fell even after it posted a rise in first-half profit as higher copper sales offset lower prices, as it warned the outlook for the copper market remains uncertain amid the ongoing Sino-US trade spat.
Online supermarket Ocado was in the red as it said a “small fire” reported at its customer fulfilment centre in Erith on Wednesday evening had been extinguished. Back in February, the company’s warehouse in Andover, Hampshire, suffered a huge fire that was later found to have been sparked by an electrical fault that set a robot on fire.
On the upside, UAE-based healthcare provider NMC Health surged to the top of the FTSE 100 following a Reuters report that two groups, including one backed by China’s Fosun, have made competing offers to buy a 40% stake in the company worth up to $1.9bn. UAE also released its half-year results.
Building materials group CRH ticked higher as it reported record first-half earnings and said it expects to buy back a further €350m in shares by the end of the year.
