London close: Stocks fall ahead of Yellen speech

UK stocks fell on Wednesday as investors awaited a speech from Federal Reserve Chair Janet Yellen for clues on the timing of the next change in interest rates.

Yellen’s speech at the Economic Club of New York Luncheon at 1720 BST will be closely scrutinised as economists search for hints on whether the Fed will raise rates at its next meeting.

"While the markets are currently far from convinced that the Fed will raise interest rates again at its April meeting – only 12% chance of a hike priced in based on Fed Funds futures – this could change dramatically this week," said Craig Erlam, senior market analyst at Oanda.

"Fed Chair Janet Yellen is due to speak today on the Economic Outlook and Monetary Policy at the Economic Club of New York luncheon and her comments are likely to be followed very closely, especially given the more hawkish tone we’ve had from a number of other policy makers over the last week."

Closer to home, the Bank of England announced tightened rules for mortgage lending to landlords.

The BoE said on Tuesday that risks around Britain's 23 June referendum on its membership in the European Union could push up borrowing costs and weaken sterling.

The Bank revealed measures that will reduce the number of mortgage approvals by 10-20% over the next three years.

Banks will also need have to hold a 0.5% counter-cyclical buffer by the end of March 2017, up from a previous requirement of 0%.

In economic data, Japan saw a mixed batch of reports including an unexpected rise in unemployment, a better-than- forecast increase in household spending and a worse-than-anticipated increase in retail trade.

Standard & Poor´s Case Shiller US home price index rose 5.4% year-on-year in January compared to 5.74% the previous month and analysts' expectations for 5.75%.

The Conference Board’s index of US consumer confidence rose to 96.2 in March from an upwardly revised 94.0 in February. Analysts had expected a reading of 94.

"The rebound in the Conference Board measure of consumer confidence to 96.2 in March, from 94.0, suggests that the rebound in stock markets more than offset the impact of higher gasoline prices in recent weeks," Capital Economics said.

"It also suggests that the apparent slowdown in real consumption growth to around 2.0% annualised in the first quarter should be short lived."

Meanwhile, oil prices were in the red with Brent crude down 3.4% to $38.91 per barrel and West Texas Intermediate down 3.6% to $38.06 per barrel.

On the corporate front, retailer Marks & Spencer was among the risers. Traders said the push higher was a relief rally following losses last week on the back of Next’s results, which saw the company warn that this year could be the toughest since 2008 amid a deteriorating outlook for consumer spending.

Primark owner Associated British Foods was also in the black following sharp declines after Next’s results.

On the downside, resource stocks suffered the heaviest losses as commodity prices fell.

“Copper, per last Thursday’s note, has failed to push through the 200 day moving average at $2.27/lb, any break below $2.20/oz would negate the recent rally and put the trend on the back foot” said London Capital Group’s Brenda Kelly.

“Weaker growth in developed markets and word that China is building inventories rather than utilising for construction coupled with the strong dollar would indicate that the 15% gain since mid-January has been built on sand.”

Chilean copper miner Antofagasta was also weighed by a research note from Goldman Sachs, which reiterated its ‘sell’ stance on the stock following the company’s full year results earlier this month.

Market Movers

FTSE 100 (UKX) 6,100.81 -0.09%
FTSE 250 (MCX) 16,742.70 0.41%
techMARK (TASX) 3,089.50 0.38%

FTSE 100 - Risers

Mediclinic International (MDC) 883.00p 3.34%
Associated British Foods (ABF) 3,366.00p 3.09%
Ashtead Group (AHT) 850.50p 3.09%
Marks & Spencer Group (MKS) 404.10p 2.96%
Travis Perkins (TPK) 1,812.00p 2.66%
ITV (ITV) 243.30p 2.36%
Berkeley Group Holdings (The) (BKG) 3,267.00p 2.35%
Dixons Carphone (DC.) 426.90p 2.25%
Taylor Wimpey (TW.) 190.60p 2.03%
British Land Company (BLND) 701.50p 1.96%

FTSE 100 - Fallers

Glencore (GLEN) 143.80p -4.89%
Anglo American (AAL) 478.35p -4.48%
Rio Tinto (RIO) 1,860.00p -4.00%
BHP Billiton (BLT) 748.60p -3.83%
Antofagasta (ANTO) 453.40p -3.41%
BP (BP.) 345.75p -2.15%
Royal Dutch Shell 'A' (RDSA) 1,650.00p -1.61%
Royal Bank of Scotland Group (RBS) 220.10p -1.57%
HSBC Holdings (HSBA) 432.50p -1.32%
Randgold Resources Ltd. (RRS) 6,280.00p -1.26%

FTSE 250 - Risers

Sports Direct International (SPD) 364.00p 4.60%
Euromoney Institutional Investor (ERM) 948.00p 4.29%
McCarthy & Stone (MCS) 251.90p 3.71%
Hikma Pharmaceuticals (HIK) 1,955.00p 3.22%
Pendragon (PDG) 35.98p 2.92%
Brown (N.) Group (BWNG) 329.10p 2.78%
Capital & Counties Properties (CAPC) 329.40p 2.78%
Clarkson (CKN) 2,214.00p 2.74%
Aggreko (AGK) 1,064.00p 2.70%
Sophos Group (SOPH) 218.40p 2.68%

FTSE 250 - Fallers

Evraz (EVR) 81.90p -9.90%
Polymetal International (POLY) 656.50p -6.75%
Ocado Group (OCDO) 293.60p -5.23%
Kaz Minerals (KAZ) 157.70p -4.71%
Ophir Energy (OPHR) 78.20p -4.63%
Amec Foster Wheeler (AMFW) 428.00p -4.25%
Polypipe Group (PLP) 317.00p -3.21%
Tullow Oil (TLW) 193.50p -2.91%
Cairn Energy (CNE) 200.40p -2.72%
Wood Group (John) (WG.) 593.00p -2.63%