London open: Quarter-end blues hit stocks despite data out of China
Stocks slipped at the start of the session, with market operators apparently taking their cue from a lacklustre trading session overnight in Asia despite the release of better-than-expected data out of Asian hegemon China, with news of an unexpected drop in UK house prices in March perhaps serving to dampen sentiment further.
As of 0812 GMT the FTSE 100 was down by 22.21 points at 7,347.31.
"Calls for a negative open come after a down session in Asia overnight at odds with a positive US finish, the latter benefiting from upward GDP revisions. Market weakness may be explained by an element of risk-off into the week-, month- and quarter-end following one of the best starts to the year since 2013," said Mike van Dulken, head of research at Accendo Markets.
According to traders, the key to the last trading session of the quarter - window-dressing by fund managers permitting - would be the latest reading on US inflation later in the day, given the assertion from many Federal Reserve officials over recent days that price pressures were now on the rise in a "sustained" manner, justifying calls for further interest rate hikes.
In all things China, the 'official' manufacturing sector PMI rose from 51.6 in February to 51.8 for March (consensus: 51.7) - a five-year high.
Meanwhile, the official non-manufacturing PMI advanced from 54.2 to 55.1.
Looking to the medium-term, markets' focus would be on the European Union's announcement of its opening bargaining stance heading into at least two years of negotiations with the UK.
On that note, on Friday morning German Finance Minister Wolfgang Schaeuble told German daily Osnabruecker Zeitung the EU should adopt a tough stance in its negotiations with Britain.
"We want to keep the Brits close but there are no rights without obligations."
Linked to the above, remarks from David Davis on Thursday triggered speculation in some quarters that parliament would be given a vote on whether the UK left the single market, or not.
Acting as a backdrop, home prices in the UK fell by 0.3% month-on-month in March according to figures from Nationwide (consensus: 0.5%), which pulled the year-on-year rate of gains down from 4.5% to 3.5%.
A key gauge of UK consumer confidence on the other hand was steady in March at a reading of -6.0.
Calendar heavy with key data releases
On the economic calendar for Friday are the latest estimates for the UK's fourth quarter 2016 gross domestic product and current account deficit.
They will be followed later in the day by a barrage of data in the States, including reaadings on personal income and spending and inflation at 1330 GMT, followed by the Chicago PMI at 1445 GMT and the results of the University of Michigan's consumer confidence survey at 1500 GMT.
In the euro area all eyes will be on preliminary CPI data for the month of March at 1000 GMT.
MicroFocus to load up on debt
Software firm Micro Focus International has launched a $5.5bn leveraged loan in relation to its proposed acquisition of Hewlett Packard Enterprise’s software business. Last September, Micro Focus agreed to buy HP's software business by way of a merger with a subsidiary of HP incorporated to hold the software business.
AstraZeneca said it had completed an agreement with TerSera Therapeutics for the commercial rights to its cancer treatment Zoladex in the US and Canada. Under the terms of the agreement, AstraZeneca has received a payment of $250m from TerSera. It will receive future sales-related income through milestones up to $70m, as well as recurring quarterly sales-based payments at "mid-teen percent of sales".
Smiths Group will be asked to let go of Morpho Detection LLC and Morpho Detection International in order to get the 'green light' from the US Department of Justice for its $710.0m purchase of French rival Safran's Morpho arm.