London open: Choppy start for FTSE 100 ahead of services data

London stocks spiked higher initially on Wednesday despite downbeat US and Asian sessions, as investor attention will move from the raft of global services data to the week's big Bank of England rate announcement.

After half an hour of trading the FTSE 100 was virtually flat at 6,646.22, up less than one point from Tuesday’s close, while the FTSE 250 was 89 points lower at 16,972.22.

Following gloomy economic indicators from the industrial and construction sectors earlier in the week, there is a very small chance the UK services PMI at 0930 BST could provide a lift.

The July services PMI is expected to remain at the 47.4 levels seen in the flash estimate taken between 12-21 July, however CMC Markets analyst Michael Hewson said given the stabilisation in the political climate seen since mid-July there is the outside possibility that these might improve.

“A further deterioration here would certainly raise the stakes further for tomorrows Bank of England rate decision, where expectations remain high that we’ll see a cut in rates for the first time in seven years,” he said.

Over in the US, the ADP employment report is at 1315 BST, while Markit’s services PMI is at 1445 BST and ISM non-manufacturing is at 1500 BST.

In corporate news, HSBC Holdings' shares were on the up in spite of profits falling by more than a quarter amid difficult conditions in the first half of the year. Investors were no doubt pleased with news of a $2.5bn (£1.8bn) share buyback thanks to the sale of the bank's Brazilian business.

In the six months to 30 June, HSBC's pre-tax profits of $9.71bn were down 28.7% from the same period last year earlier and short of the City's expectations of around $10bn.

Fashion retailer Next was also sashaying higher despite a mixed second quarter update, with group sales rising 0.3% on the same period a year ago but retail sales down 3.3%. The retailer warned that cost prices would rise by 5% due to the GBP devaluation and that 2016 sales could fall by 2.5%, which was an improvement on previous guidance.

Total sales, including markdown, were down 0.7% at Next Retail in the year to date and up 5.4% at Next Directory, for a total increase of 1.8%.

Leading a group of miners on the back foot on Wednesday due to growth in China's services sector slowing in July, Rio Tinto was lowest as its interim results showed profits fell to a 12-year nadir as crumbling commodity prices hit home.

But though Rio's numbers were in bang in-line with analyst forecasts the mining behemoth said caution was still required for the medium-term.

In the six months to 30 June, the day after which saw new chief executive Jean Sebastien Jacques officially take the reins, underlying profit fell 47% to $1.56bn, while the miner cut the interim dividend 58% to 45 cents a share.

Market Movers

FTSE 100 (UKX) 6,668.52 0.35%
FTSE 250 (MCX) 17,054.70 -0.05%
techMARK (TASX) 3,449.06 0.05%

FTSE 100 - Risers

Next (NXT) 5,335.00p 4.00%
HSBC Holdings (HSBA) 498.85p 3.32%
Standard Chartered (STAN) 600.30p 1.81%
SSE (SSE) 1,527.00p 1.60%
Fresnillo (FRES) 1,980.00p 1.28%
Sky (SKY) 906.50p 1.17%
Royal Bank of Scotland Group (RBS) 187.90p 1.13%
Aviva (AV.) 390.90p 0.85%
Marks & Spencer Group (MKS) 323.40p 0.84%
Associated British Foods (ABF) 2,739.00p 0.77%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 3,057.00p -1.51%
Pearson (PSON) 875.00p -1.07%
Direct Line Insurance Group (DLG) 396.20p -0.93%
Rolls-Royce Holdings (RR.) 755.00p -0.72%
Informa (INF) 704.50p -0.63%
British American Tobacco (BATS) 4,793.00p -0.57%
Glencore (GLEN) 184.75p -0.57%
Ashtead Group (AHT) 1,162.00p -0.51%
London Stock Exchange Group (LSE) 2,734.00p -0.44%
Intu Properties (INTU) 299.10p -0.43%

FTSE 250 - Risers

Pendragon (PDG) 31.81p 2.81%
Fidessa Group (FDSA) 2,588.00p 2.62%
Laird (LRD) 302.60p 2.51%
Telecom Plus (TEP) 1,066.00p 2.50%
Diploma (DPLM) 837.00p 2.32%
Hastings Group Holdings (HSTG) 195.20p 2.15%
Zoopla Property Group (WI) (ZPLA) 294.10p 2.05%
Riverstone Energy Limited (RSE) 970.00p 1.78%
Tullow Oil (TLW) 187.00p 1.69%
PZ Cussons (PZC) 336.90p 1.48%

FTSE 250 - Fallers

Aggreko (AGK) 1,131.00p -8.12%
Moneysupermarket.com Group (MONY) 294.00p -2.65%
G4S (GFS) 180.00p -2.33%
Shawbrook Group (SHAW) 178.30p -2.25%
NCC Group (NCC) 323.10p -2.09%
Polypipe Group (PLP) 232.90p -1.90%
Millennium & Copthorne Hotels (MLC) 413.40p -1.88%
DFS Furniture (DFS) 208.50p -1.84%
Rank Group (RNK) 214.10p -1.83%
Redefine International (RDI) 42.57p -1.73%