London midday: Stocks decline after FOMC statement, before US GDP

The London stock market was sitting lower on Thursday as investors continued to weigh the Federal Reserve’s policy statement and looked ahead to US economic growth data.

The Fed decided to keep interest rates unchanged on Wednesday at 0.25%, as expected by analysts, but left the door open to an increase in December.

The US central bank downplayed global economic headwinds in its statement on the policy decision, saying that it was monitoring developments abroad.

"We see this statement as a clear attempt by the FOMC to keep December on the table," analysts at Barclays said.

"In some sense, any softer of a statement would likely have pushed December out of consideration as the Fed would likely be hesitant to raise rates with very low market-implied probabilities of policy action."

Investors are now turning their attention to the release of US gross domestic product data at 1230 GMT which is expected to show a slowdown to an annualised 1.6% in the third quarter from 3.9% the previous quarter.

US personal consumption expenditure will also be released at the same time with analysts predicting a 1.4% quarter-on-quarter increase in the third quarter.

Pending US home sales will come at 1400 GMT. Economists predict a 7.4% rise in September after a 6.7% gain the previous month.

Closer to home, Nationwide revealed UK house prices rose 3.9% in the year to October, compared to expectations for a 3.8% gain in line with the previous month. Compared to a month ago, prices rose 0.6% in October, more than the 0.5% estimated.

In contrast, British mortgage approvals declined from 70,664 to 68,874 last month, compared with analysts’ expectations for a 72,500 reading, according to data published by the Bank of England.

Business confidence in the Eurozone beat expectations in October, according to the European Commission. The index monitoring economic confidence in the 19-bloc country rose from 105.6 to 105.9 this month, reaching its highest level since June 2011 and exceeding forecast for a slight decline to 105.1.

German unemployment fell 5,000 in October, more than the 4,000 that was forecast following a revised 1,000 increase in September, Destatis revealed. The unemployment rate remained at 6.4%, as expected.

German inflation figures at 1300 GMT are expected to show an improvement in October, with analysts seeing a 0.1% month-on-month dip compared to the prior month’s 0.2% fall. Year-on-year the consumer price index may have risen 0.2% in October following after zero growth in September, analysts estimate.

Among companies, miners declined as gold, silver, copper and platinum prices fell. The drop came amid reports that China may lower its long-term target for gross domestic product growth to 6.5% per year from the current 7%, according to rumours emerging from the fifth plenum meeting of senior policymakers in Beijing. BHP Billiton, Glencore and Anglo American were among the fallers.

Meggitt continued to slide a day after warning that full-year profit will be well below forecasts.

Barclays slumped after reporting a drop in third-quarter pre-tax profit as the cost of claims settlements weighed on results and revenues fell.

Smith & Nephew dropped after posting a drop in third quarter reported revenue on currency headwinds and announcing the acquisition of robotics company Blue Belt Technologies.

Aviva jumped after Panmure Gordon reiterated its ‘buy’ rating on the insurer and the company reported a 25% increase in new business.

Playtech rallied after the gambling, software and services supplier reported strong trading in both of its divisions in the three months to September.

Market Movers

FTSE 100 (UKX) 6,372.75 -1.01%
FTSE 250 (MCX) 17,116.36 -0.16%
techMARK (TASX) 3,083.65 -0.79%

FTSE 100 - Risers

Merlin Entertainments (MERL) 407.10p 1.67%
Coca-Cola HBC AG (CDI) (CCH) 1,563.00p 1.49%
Sage Group (SGE) 552.00p 1.38%
Inmarsat (ISAT) 992.00p 1.22%
Aviva (AV.) 484.90p 1.15%
Carnival (CCL) 3,633.00p 0.92%
Hikma Pharmaceuticals (HIK) 2,126.00p 0.90%
Reckitt Benckiser Group (RB.) 6,403.00p 0.83%
Diageo (DGE) 1,882.50p 0.70%
Whitbread (WTB) 4,935.00p 0.69%

FTSE 100 - Fallers

Meggitt (MGGT) 343.30p -6.46%
Barclays (BARC) 240.10p -5.16%
BHP Billiton (BLT) 1,044.00p -4.83%
Glencore (GLEN) 109.95p -4.76%
Anglo American (AAL) 536.20p -4.76%
Smith & Nephew (SN.) 1,098.00p -4.52%
Randgold Resources Ltd. (RRS) 4,491.00p -4.16%
Fresnillo (FRES) 741.50p -3.45%
Antofagasta (ANTO) 519.00p -3.26%
Rio Tinto (RIO) 2,338.50p -3.17%

FTSE 250 - Risers

Playtech (PTEC) 853.00p 7.63%
Ocado Group (OCDO) 374.90p 4.17%
Sophos Group (SOPH) 264.40p 3.16%
Allied Minds (ALM) 462.70p 2.82%
Wizz Air Holdings (WIZZ) 1,919.00p 1.86%
National Express Group (NEX) 290.20p 1.82%
Henderson Group (HGG) 286.90p 1.77%
Electrocomponents (ECM) 205.00p 1.49%
Jimmy Choo (CHOO) 144.00p 1.41%
Savills (SVS) 911.00p 1.39%

FTSE 250 - Fallers

Premier Oil (PMO) 67.85p -6.93%
Tullow Oil (TLW) 198.10p -4.90%
Kaz Minerals (KAZ) 113.90p -4.77%
TalkTalk Telecom Group (TALK) 240.10p -4.72%
Nostrum Oil & Gas (NOG) 432.50p -4.71%
Pace (PIC) 366.00p -4.49%
Vedanta Resources (VED) 480.70p -3.80%
International Personal Finance (IPF) 377.40p -3.70%
Evraz (EVR) 80.45p -3.65%
Hunting (HTG) 360.90p -3.63%