London close: Stocks take a breather, pound weighs on Footsie
(ShareCast News) - London stocks took a breather after the previous day's gains with remarks from the Monetary Policy Committee's most vocal hawk weighing on sentiment a tad.
In the previous session, Federal Reserve chief Janet Yellen said the US central bank won't be rushing to tighten monetary policy, sending both stocks and Sterling higher.
At the closing bell, the FTSE 100 was lower by 0.05% to 7,413.44. The second tier index added 0.78% to leave it at 19,418.34.
David Madden, market analyst at CMC, said: "McCafferty called for an early unwinding of the quantitative easing programme. Mr McCafferty has a track record of being a hawk, and he hinted he would be voting in favour of increasing interest rates at the August meeting.
"The UK central bank appears to be divided over its monetary policy, and while there is division the pound will remain volatile. The hawks are in a minority at British central bank, but the toing and froing will keep traders on their toes."
Acting as a backdrop, the Institute for Fiscal Studies's Carl Emmerson told an audience the Chancellor was facing some very difficult trade-offs in trying to meet his targets for cutting the deficit while minimising the resulting pain for households and companies.
Nonetheless, the possibility did exist of continuing to run similar deficits as at present - worth about 2.4% of GDP - if the economy grew as at present.
That would allow public debt to continue falling as a proportion of GDP, although it would limit the government's ability to respond if the economy were to suffer badly, Emmerson said.
Investors were also digesting news that British house price inflation slowed to its weakest in June since the aftermath of the Brexit vote as political worries took their toll. The Royal Institution of Chartered Surveyors's monthly house price index fell to +7 from +17 in May.
In corporate news, BT was the standout gainer after Ofcom said it will establish a separate unit to monitor the performance of the company's broadband network operator Openreach.
LondonMetric Property ticked a touch higher as it announced the acquisition of two Marks & Spencer stores in Newport, Isle of Wight and Kendal, Lancashire for £24.6m, while specialist healthcare company BTG edged up after saying it was on track to achieve double digit sales growth in the 12 months to 31 March 2018.
Go-Ahead was in the black as it struck an agreement with the UK Department for Transport regarding the strike impact on train performance at its partially-owned Govia Thameslink Railway franchise. Unions criticised the penalty as merely a "slapped wrist".
On the downside, a bounce in shares of construction and support group Carillion after two days of heavy losses after a dismal trading update on Monday gave way heading into the close.
AstraZeneca was under pressure following a report that its chief executive officer Pascal Soriot is leaving the company to go to Teva Pharmaceuticals.
N Brown slumped after saying it would take a £35-40m one-off charge this year to cover expected customer compensation after finding it had sold 'flawed' product protection insurance to customers between 2006 and 2014.
Online fashion retailer ASOS slipped after it said sales in the four months to the end of June rose 32% and that it expects sales growth for the current financial year to be at the upper end of its 30-35% range.
Marine and aerospace engineer Babcock moved lower, reversing earlier gains after saying its new financial year has begun well, with 82% of revenues for the full year already booked.
FTSE 100 (UKX) 7,413.44 -0.05%
FTSE 250 (MCX) 19,418.34 0.78%
techMARK (TASX) 3,488.96 -0.14%
FTSE 100 - Risers
BT Group (BT.A) 301.60p 3.96%
Marks & Spencer Group (MKS) 327.00p 3.42%
Taylor Wimpey (TW.) 183.20p 3.33%
Burberry Group (BRBY) 1,669.00p 2.39%
Persimmon (PSN) 2,399.00p 2.13%
Royal Bank of Scotland Group (RBS) 256.80p 2.11%
Next (NXT) 3,694.00p 2.10%
Lloyds Banking Group (LLOY) 67.40p 2.06%
Barratt Developments (BDEV) 600.50p 1.87%
Kingfisher (KGF) 298.70p 1.74%
FTSE 100 - Fallers
AstraZeneca (AZN) 5,013.00p -3.45%
Shire Plc (SHP) 4,175.00p -2.22%
Sky (SKY) 975.00p -2.06%
Randgold Resources Ltd. (RRS) 6,780.00p -1.53%
Babcock International Group (BAB) 857.00p -1.44%
Smurfit Kappa Group (SKG) 2,336.00p -1.43%
Fresnillo (FRES) 1,458.00p -1.29%
Rio Tinto (RIO) 3,420.00p -0.96%
BP (BP.) 446.85p -0.84%
Royal Dutch Shell 'B' (RDSB) 2,074.50p -0.84%
FTSE 250 - Risers
Tullow Oil (TLW) 160.70p 5.58%
RPC Group (RPC) 808.00p 5.41%
JD Sports Fashion (JD.) 341.00p 4.12%
Euromoney Institutional Investor (ERM) 1,112.00p 3.66%
IWG (IWG) 326.60p 3.55%
TalkTalk Telecom Group (TALK) 188.50p 3.51%
Aldermore Group (ALD) 226.90p 3.46%
Marshalls (MSLH) 377.40p 3.42%
Bellway (BWY) 3,063.00p 3.34%
Dunelm Group (DNLM) 562.00p 3.12%
FTSE 250 - Fallers
Petra Diamonds Ltd.(DI) (PDL) 98.90p -4.07%
Nostrum Oil & Gas (NOG) 434.60p -3.27%
Carillion (CLLN) 55.45p -3.06%
Kaz Minerals (KAZ) 578.50p -1.62%
Hikma Pharmaceuticals (HIK) 1,360.00p -1.45%
Centamin (DI) (CEY) 157.40p -1.38%
Dechra Pharmaceuticals (DPH) 1,647.00p -1.38%
Hunting (HTG) 483.60p -1.19%
Evraz (EVR) 231.10p -1.07%
Electra Private Equity (ELTA) 1,665.00p -1.01%