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London open: Stocks nudge up ahead of inflation data, Fed announcement
London stocks were just a touch higher in early trade on Wednesday, with traders reluctant to make any bold moves ahead of key UK inflation data and the latest policy announcement from the Federal Reserve.
At 0830 BST, the FTSE 100 was up 0.1% at 7,330.59, while the pound was down 0.2% against the dollar at 1.2470 and 0.1% lower versus the euro at 1.1274.
Spreadex analyst Connor Campbell said: “As is typical for Fed days, especially one as anticipated as September’s get together, the markets were rather shy coming out of the gate.
“Wednesday’s Fed statement is an interesting one. At the start of the month, the chance of a rate cut – according to the CME Group’s FedWatch tool – was as close to certain as you could get. Now it sits at 56.5%, itself a sharp decline from the 63.5% likelihood seen just yesterday. Improving relations between the US and China, a one-year high core inflation reading and surging oil prices have all helped cast doubt on the Fed’s next move, making trading the meeting far trickier than, say, its July’s counterpart. As for whether or not Jay Powell and his peers will give a hint about their future path, that’s even less clear.”
On home shores, investors were eyeing the release of producer price inflation, retail price inflation and consumer price inflation, all at 0930 BST.
In equity markets, medical products and technologies provider ConvaTec ticked up as it agreed to buy Southlake Medical Supplies – a Texas-based provider of catheter-related supplies – for an undisclosed consideration.
B&Q owner Kingfisher was in the red as it said half-year profits fell on Brexit worries and the move to a low-price strategy at its French Castorama business as the company warned of a “mixed” full-year outlook. Like-for-like sales fell 1.8% to £5.9bn with growth in Screwfix, Poland and Romania offset by B&Q in the and France as pre-tax profits came in 12.5% lower at £245m.
Defence company Cobham was trading a little lower after the government ordered an investigation into its proposed acquisition by US private equity firm Advent International on national security grounds.
Outside the FTSE 350, shares of Pendragon tanked after the car dealer said it swung to a loss in the first half in “challenging” markets and that it won’t be paying a dividend, as it announced the loss of around 300 jobs.
