London open: Stocks drop as sterling gains; jobs data eyed

Wed 13 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks fell in early trade on Wednesday, dented by a stronger pound as investors eyed the release of key UK unemployment and wages data.
At 0830 BST, the FTSE 100 was down 0.6% to 7,355.79, while the pound was up 0.2% versus the euro at 1.1125 and 0.3% firmer against the dollar at 1.3326, having shot higher on Tuesday after data showed inflation spiked to a six-year high in August, raising expectations that the Bank of England will lift rates sooner rather than later.

A strong pound tends to hurt the index as around 70% of its constituents derive their earnings from overseas.

Spreadex analyst Connor Campbell said: "The next big test for the pound will be this morning's jobs report. The unemployment rate is set to remain unchanged at 4.4%, while the claimant count change is expected to jump from -4.2k to 0.8k month-on-month. Most importantly, wage growth for the 3 months to the end of July is forecast to hit 2.3% - an improvement June's 2.1% reading, but still a fair whack below July's 2.6% inflation figure.

"It'll be interesting to see how sterling reacts to the wage growth data. While any improvements will help mitigate fears about the sharp fall in real wages, a weak reading would put more pressure on the Bank of England to try and curb inflation with a rate hike."

The ILO unemployment rate, claimant count and average earnings are at 0930 BST.

In corporate news, retirement-focussed financial services firm Just Group nudged lower despite reporting 39% growth in its adjusted operating profit for the first half, while infrastructure and construction company Balfour Beatty was in the red after selling Blackpool Airport for 4.25m.

ITV was lower after being cut to 'underperform' at Macquarie, while Esure was under the cosh after UBS downgraded the stock to 'sell' from 'neutral'.

On the upside, Halfords was in the black after it poached fellow retailer Dixons Carphone's software boss, Graham Stapleton, to take up the chief executive role vacated by the soon-to-depart Jill McDonald.

Dunelm rallied as it said full-year profits dropped to towards the lower end of expectations, but that the new financial year had started well.

Galliford Try gained ground after the housebuilder reported a 57% drop in full-year pre-tax profit, but the figure was at the upper end of its guidance

Market Movers

FTSE 100 (UKX) 7,355.79 -0.61%
FTSE 250 (MCX) 19,593.30 -0.37%
techMARK (TASX) 3,453.97 -0.44%

FTSE 100 - Risers

Micro Focus International (MCRO) 2,413.00p 0.63%
Ashtead Group (AHT) 1,768.00p 0.51%
easyJet (EZJ) 1,199.00p 0.42%
Smurfit Kappa Group (SKG) 2,393.00p 0.29%
Marks & Spencer Group (MKS) 323.70p 0.28%
CRH (CRH) 2,661.00p 0.26%
Pearson (PSON) 588.50p 0.26%
Provident Financial (PFG) 833.00p 0.12%
AstraZeneca (AZN) 4,929.00p 0.08%
Royal Bank of Scotland Group (RBS) 249.80p 0.04%

FTSE 100 - Fallers

Tesco (TSCO) 181.80p -1.76%
ITV (ITV) 158.60p -1.55%
Whitbread (WTB) 3,703.00p -1.54%
Diageo (DGE) 2,546.00p -1.34%
Glencore (GLEN) 367.75p -1.28%
HSBC Holdings (HSBA) 727.30p -1.21%
Mediclinic International (MDC) 739.50p -1.20%
BHP Billiton (BLT) 1,421.00p -1.18%
BAE Systems (BA.) 588.00p -1.18%
Intertek Group (ITRK) 4,960.00p -1.10%

FTSE 250 - Risers

John Laing Group (JLG) 298.00p 2.05%
Carillion (CLLN) 45.82p 1.94%
Nostrum Oil & Gas (NOG) 389.60p 1.70%
TBC Bank Group (TBCG) 1,613.00p 1.64%
Galliford Try (GFRD) 1,380.00p 1.25%
Sanne Group (SNN) 810.00p 1.19%
Polypipe Group (PLP) 391.50p 1.03%
IP Group (IPO) 120.90p 0.83%
Card Factory (CARD) 345.30p 0.70%
CYBG (CYBG) 288.40p 0.70%

FTSE 250 - Fallers

esure Group (ESUR) 252.40p -4.43%
Hochschild Mining (HOC) 262.00p -3.53%
Rank Group (RNK) 230.80p -2.41%
Booker Group (BOK) 199.00p -2.31%
Petra Diamonds Ltd.(DI) (PDL) 83.35p -2.06%
Genus (GNS) 1,940.00p -1.97%
Travis Perkins (TPK) 1,452.00p -1.76%
Restaurant Group (RTN) 306.90p -1.63%
Ascential (ASCL) 359.90p -1.59%
Sirius Minerals (SXX) 25.55p -1.54%
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