London open: Stocks nudge up as investors digest Fed

Thu 21 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks nudged higher in early trade on Thursday as investors mulled over the latest policy announcement from the Federal Reserve and sifted through corporate news.
At 0835 BST, the FTSE 100 was up 0.1% to 7,275.86, while the pound was flat against the dollar at 1.3492.

Overnight, the Fed stood pat on interest rates, as expected, while Chair Janet Yellen confirmed the central bank will start winding down its $4.5trn balance sheet in October and suggested that one more rate increase is likely by the end of the year.

The Fed's monetary policy update delivered exactly what had been expected by the market, but Ipek Ozkardeskaya at London Capital Markets said the comments from the Fed were surprisingly hawkish.

"Yellen said that the causes of low inflation are not well understood and should be temporary, however the solid labour market and the encouraging economic recovery are supportive of another rate hike in 2017 and three more hikes in the course of 2018."

The probability of a December rate hike surged to 63.8% compared to 53.2% prior to the meeting, while US 10-year yields spiked to 2.28%, and the VIX index slid below August's lows, which Ozkardeskaya said points at a complete lack of anxiety from investors.

In UK corporate news, CRH rallied as it struck a deal to acquire Kansas-based Ash Grove Cement Company for $3.5bn, while speciality chemicals group Johnson Matthey gained after confirming its guidance for the year and saying it expects sales growth of around 6%.

Anglo American was also on the front foot on news that Indian billionaire Anil Agarwal plans to up his stake in the company to just over 20% from 13%.

IG Group was trading higher after saying it generated record revenues in the three months to the end of August, boosted by strong overseas growth for the online trading broker as UK client numbers tailed off.

Kier Group surged as it reported an 8% rise in underlying full-year pre-tax profit as revenue grew and its business remained relatively unaffected by Brexit.

On the downside, Capita shares tumbled even as the company said it grew underlying profits 46% in the first six months of the year, though revenue dropped.

Catering group Compass was in the red after announcing that Richard Cousins will step down as chief executive officer in March. He will be succeeded by current chief operating officer for Europe, Dominic Blakemore.

Mitchells & Butlers was on the back foot as it posted growth in sales for the year to date but said the latter part of the summer was hit by poorer weather, while Fresnillo was weaker despite saying that its headquarters and production facilities in Mexico were not affected by the earthquake there.

Taylor Wimpey, Crest Nicholson, Ladbrokes, Bovis and Redrow were all lower as their stock went ex-dividend.

Still to come on the data front, BBA mortgage approvals and public sector net borrowing figures are at 0930 BST.

Market Movers

FTSE 100 (UKX) 7,275.86 0.05%
FTSE 250 (MCX) 19,502.87 -0.19%
techMARK (TASX) 3,425.36 -0.05%

FTSE 100 - Risers

CRH (CRH) 2,756.00p 3.80%
Anglo American (AAL) 1,326.50p 2.51%
Prudential (PRU) 1,786.50p 1.13%
Royal Bank of Scotland Group (RBS) 259.10p 1.09%
Barclays (BARC) 187.90p 1.08%
Scottish Mortgage Inv Trust (SMT) 422.50p 1.00%
HSBC Holdings (HSBA) 729.70p 0.93%
BP (BP.) 462.30p 0.63%
Royal Dutch Shell 'B' (RDSB) 2,212.00p 0.61%
Aviva (AV.) 504.50p 0.60%

FTSE 100 - Fallers

Compass Group (CPG) 1,567.00p -2.79%
Randgold Resources Ltd. (RRS) 7,275.00p -2.61%
Fresnillo (FRES) 1,408.00p -2.36%
Schroders (SDR) 3,243.00p -2.14%
Antofagasta (ANTO) 924.00p -2.07%
Glencore (GLEN) 342.50p -1.79%
Rio Tinto (RIO) 3,453.50p -1.53%
BHP Billiton (BLT) 1,332.00p -1.48%
Old Mutual (OML) 195.00p -1.32%
Severn Trent (SVT) 2,179.00p -1.31%

FTSE 250 - Risers

Kier Group (KIE) 1,165.00p 6.39%
IG Group Holdings (IGG) 630.50p 1.94%
BGEO Group (BGEO) 3,324.00p 1.71%
Aldermore Group (ALD) 224.30p 1.68%
Inchcape (INCH) 841.00p 1.39%
Woodford Patient Capital Trust (WPCT) 96.50p 1.15%
Tullow Oil (TLW) 169.70p 1.07%
Electra Private Equity (ELTA) 1,657.00p 1.04%
Virgin Money Holdings (UK) (VM.) 270.50p 1.01%
Marshalls (MSLH) 442.30p 0.98%

FTSE 250 - Fallers

Capita (CPI) 600.50p -6.75%
Senior (SNR) 263.50p -3.09%
Kaz Minerals (KAZ) 723.50p -2.82%
Ladbrokes Coral Group (LCL) 118.80p -2.78%
Bovis Homes Group (BVS) 1,037.00p -2.63%
Crest Nicholson Holdings (CRST) 520.50p -2.62%
Computacenter (CCC) 964.00p -2.43%
Centamin (DI) (CEY) 135.90p -2.09%
Redrow (RDW) 549.50p -2.05%
Rathbone Brothers (RAT) 2,547.00p -1.81%
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