London open: FTSE flat as pound cancels out positive mood

Tue 19 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks were flat on Tuesday morning as the pound rose against the dollar to counteract positive sentiment after further record highs were posted on Wall Street overnight.
The FTSE 100 index dipped modestly lower initially but after half an hour of trading was just above flat at 7,253.85, with the pound surging back past the 1.35 level with a 0.3% rise against the dollar and flat on the euro to 1.1289.

After sterling suffered a slight hangover the previous day after its strongest weekly performance in eight years last week, Tuesday saw currency traders looking towards the US Federal Reserve as it begins its two-day meeting ahead of a policy announcement on Wednesday as well as mulling an overnight speech at the International Monetary Fund from Bank of England governor Mark Carney.

Carney "didn't deviate too much from last week's script about the potential for an increase in rates, though he did stress that Brexit could prompt a period of higher prices as the economy adapts to a slightly more restrictive outlook as trade relationships change over the coming years", said analyst Michael Hewson at CMC Markets.

"To guard against this it appears that the Bank of England is looking to mitigate some of the impact of higher prices by helping put a floor under the pound in seeking to keep pace with other central banks attempts to start the paring back of their own stimulus packages."

Ipek Ozkardeskaya, an analyst at London Capital Group, noted that pre-Fed announcement the US dollar had swinging between the bulls and the bears.

"Analysts expect the Fed to keep the possibility of a December interest rate hike on the table. There could be discussions on the balance sheet normalisation as well."

The probability of a December rate hike rose to 50%, which Ozkardeskaya said was too low to trigger a panic across the stock markets yet too high to be ruled out by the currency and money markets.

For macro data, we will need to look overseas, where the latest German ZEW economic sentiment survey for September is expected to improve slightly to 12.3, after the surprise slump seen in August.

In the UK, Kantar Worldpanel released data on the food retail industry where sales were shown to have risen 3.6% in the 12 weeks to 10 September, the sixth consecutive period in which sales rose by more than 3% but down slightly from the 4% announced in August. Sainsbury's was among the top risers, with Morrisons not far behind and Tesco up by not much.

Online grocery specialist Ocado was trading lower despite reported a slight acceleration of growth in the third quarter of the year. In the 13 weeks to 27 August, the FTSE 250 group generated 13.1% growth in retail sales from its own websites to 312.7m, up from the 12.5% increase in the first half of the year.

Medical products and technology company ConvaTec announced the European introduction of its new "intermittent catheter".

GlaxoSmithKline announced that the US Food and Drug Administration has approved once-daily, single inhaler triple therapy under the brand name Trelegy Ellipta, for the long-term, once-daily, maintenance treatment of patients with chronic obstructive pulmonary disease.

Market Movers

FTSE 100 (UKX) 7,250.61 -0.04%
FTSE 250 (MCX) 19,477.30 0.20%
techMARK (TASX) 3,418.85 0.01%

FTSE 100 - Risers

Ferguson (FERG) 4,663.00p 1.95%
3i Group (III) 933.00p 1.19%
Sainsbury (J) (SBRY) 239.60p 1.10%
Marks & Spencer Group (MKS) 332.00p 1.03%
Kingfisher (KGF) 297.20p 1.02%
HSBC Holdings (HSBA) 725.80p 0.99%
Smiths Group (SMIN) 1,609.00p 0.94%
Lloyds Banking Group (LLOY) 65.80p 0.77%
Royal Mail (RMG) 375.70p 0.75%
easyJet (EZJ) 1,219.00p 0.74%

FTSE 100 - Fallers

Coca-Cola HBC AG (CDI) (CCH) 2,536.00p -1.55%
Antofagasta (ANTO) 944.00p -1.00%
Diageo (DGE) 2,485.00p -0.90%
BT Group (BT.A) 285.05p -0.89%
Compass Group (CPG) 1,606.00p -0.86%
Paddy Power Betfair (PPB) 7,085.00p -0.84%
Fresnillo (FRES) 1,415.00p -0.77%
Anglo American (AAL) 1,286.50p -0.77%
Associated British Foods (ABF) 3,167.00p -0.72%
British American Tobacco (BATS) 4,675.00p -0.62%

FTSE 250 - Risers

CLS Holdings (CLI) 209.00p 3.57%
Stagecoach Group (SGC) 163.80p 2.89%
Tullow Oil (TLW) 160.40p 2.10%
Dunelm Group (DNLM) 642.00p 1.99%
Cineworld Group (CINE) 629.00p 1.86%
Carillion (CLLN) 43.25p 1.76%
Sophos Group (SOPH) 564.50p 1.71%
Indivior (INDV) 304.70p 1.60%
SIG (SHI) 181.30p 1.51%
Evraz (EVR) 300.40p 1.35%

FTSE 250 - Fallers

Ocado Group (OCDO) 284.20p -5.89%
Petra Diamonds Ltd.(DI) (PDL) 76.50p -3.47%
Softcat (SCT) 391.00p -2.49%
Kaz Minerals (KAZ) 739.50p -2.25%
Euromoney Institutional Investor (ERM) 1,131.00p -2.08%
Hill & Smith Holdings (HILS) 1,226.00p -1.84%
NMC Health (NMC) 2,707.00p -1.60%
Redefine International (RDI) 37.22p -0.91%
Spire Healthcare Group (SPI) 248.00p -0.88%
Centamin (DI) (CEY) 137.00p -0.80%
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