London open: IAG, RBS and Schroders lead UK markets lower

UK stock markets picked up where they left off on Thursday, falling for the third straight day on the back of mostly worse-than-expected corporate earnings and hawkish comments from the Federal Reserve.

The FTSE 100 was trading 0.43% lower at 6,916.69 early on, with heavyweights IAG, RBS and Schroders providing a drag.

The index, which has not closed below current levels since 2 April, continued to pull back from its record closing high of 7,103.98 on Monday.

The Federal Open Market Committee was in focus for UK investors after the US central bank announced its policy decision after the close on Wednesday.

Policymakers issued a cautiously optimistic outlook on the economy in their statement, saying that the current economic slowdown is only temporary. Data on Wednesday showed that annualised US gross domestic product growth slowed to just 0.2% in the first quarter from 2.2% previously.

Analysts at Danske Bank reckon that the Fed is still on track to hike rates by 25 basis points in September.

However, Barclays said that the statement still left the door open for a rate hike as soon as June: "In our view, the lack of any specific calendar time suggests June will be a 'live' meeting, where rate hike deliberations will begin in more earnest."

IAG, RBS and Schroders fall

Airline conglomerate IAG underwhelmed despite making its first-ever profit in the first quarter. The company beat expectations with an operating profit of €25m, compared with a €150m loss the year before.

Royal Bank of Scotland made a £446m loss in the first quarter of the year, more than double what had been feared as it was hit by £453m of restructuring costs and set aside £856m for litigation and conduct charges.

Financial services giant Schroders also fell as profits for the first quarter missed forecasts. The company did however beat estimated with a 6.5% increase in assets under management to £319.5bn.

Royal Dutch Shell revealed a 56% drop in first-quarter earnings to $3.25bn but that wasn't as bad as expected, helping the stock higher early on. Shell also shaved its capital investment budget for 2015 by $2bn to "$33bn or less".

Medical services group Smith & Nephew edged higher as it reported a slight increase in first quarter revenue and reiterated its expectations for 2015.

Shares in RPS Group dropped sharply after the industrial consultancy outfit said the continuing volatility in the oil and gas sector meant its energy business had a slower-than-expected start to the year.

Zoopla, the residential property website group, soared after agreeing to acquire utility price comparison site uSwitch for up to £190m.

A number of stocks were trading lower after going ex-dividend, including Centrica, Fresnillo, ITV, Reed Elsevier and Travis Perkins.

Market Movers
techMARK 3,164.56 -0.71%
FTSE 100 6,916.69 -0.43%
FTSE 250 17,379.37 -0.58%

FTSE 100 - Risers
Royal Mail (RMG) 456.10p +2.68%
CRH (CRH) 1,854.00p +1.70%
Associated British Foods (ABF) 2,829.00p +1.36%
Royal Dutch Shell 'B' (RDSB) 2,088.00p +0.92%
Royal Dutch Shell 'A' (RDSA) 2,068.00p +0.78%
Tesco (TSCO) 222.00p +0.70%
Smiths Group (SMIN) 1,156.00p +0.52%
National Grid (NG.) 882.30p +0.44%
BG Group (BG.) 1,170.00p +0.39%
Sainsbury (J) (SBRY) 269.30p +0.37%

FTSE 100 - Fallers
ITV (ITV) 249.80p -5.20%
Centrica (CNA) 256.90p -4.00%
International Consolidated Airlines Group SA (CDI) (IAG) 540.00p -3.40%
Royal Bank of Scotland Group (RBS) 340.20p -2.66%
Reed Elsevier (REL) 1,062.00p -2.48%
Meggitt (MGGT) 523.50p -2.15%
InterContinental Hotels Group (IHG) 2,787.00p -2.00%
Hargreaves Lansdown (HL.) 1,210.00p -1.71%
Schroders (SDR) 3,206.00p -1.63%
Experian (EXPN) 1,154.00p -1.45%

FTSE 250 - Risers
Zoopla Property Group (WI) (ZPLA) 210.00p +13.51%
Countrywide (CWD) 525.00p +2.14%
Premier Oil (PMO) 177.90p +2.01%
Moneysupermarket.com Group (MONY) 280.20p +1.82%
Bellway (BWY) 1,973.00p +1.60%
AL Noor Hospitals Group (ANH) 896.00p +1.24%
Grafton Group Units (GFTU) 827.50p +1.22%
Amec Foster Wheeler (AMFW) 920.00p +1.21%
Galliford Try (GFRD) 1,486.00p +1.09%
Cairn Energy (CNE) 180.30p +1.01%

FTSE 250 - Fallers
Ophir Energy (OPHR) 141.50p -12.60%
Fisher (James) & Sons (FSJ) 1,179.00p -9.52%
RPS Group (RPS) 216.70p -8.22%
Berendsen (BRSN) 1,047.00p -3.86%
William Hill (WMH) 353.90p -3.49%
Booker Group (BOK) 144.00p -3.36%
Informa (INF) 542.00p -3.21%
Cobham (COB) 293.20p -3.04%
Card Factory (CARD) 320.40p -2.94%
National Express Group (NEX) 285.60p -2.86%