London open: Stocks drift lower ahead of key speech by Fed´s Yellen

London stocks started the session marginally lower on Friday as investors eyed a speech by Federal Reserve chair Janet Yellen at Jackson Hole later in the day for any clues on the timing of an interest rate hike.

As of 0822 BST the FTSE 100 was trading lower by 6.62 points to 6,810.28.

CMC Markets’ Michael Hewson said: “As we look ahead to this afternoon’s Jackson Hole speech it would be surprising if Mrs Yellen was either dovish or hawkish, though given the odds currently assigned to the prospect of a move in September the risk is likely to be towards the hawkish side, for no other reason than the Federal Reserve will want to keep markets guessing in the event we see an improvement in the economic data between now and September 21st.

“The ability of the Fed to move also continues to be constrained by other central banks and potential future policy moves on their part as they look to ease further, with the Bank of Japan expected to come under further pressure after Japanese CPI fell further into deflationary territory. Some in the markets are slowly coming to the realisation that central bankers the world over are fumbling around in the dark as they try to introduce reinvigorate their economies.”

On the data front, the second release of second-quarter UK gross domestic product is at 0930 BST. In the US, the same is due at 1330 BST, while University of Michigan consumer sentiment is at 1500 BST.

Fresh data published overnight revealed a 0.5% drop (consensus: -0.4%) in Japanese 'core' consumer prices, which strip out the cost of food, in July.

In corporate news, landscape products group Marshalls said it remained confident of meeting full year expectations after delivering a 21% rise in half year pre-tax profits to £25.1m.

The company said underlying medium to long-term market indicators remained supportive “notwithstanding the heightened economic and political uncertainty since the EU referendum”.

Revenue rose 2% to £202.4m, while earnings before interest, tax, depreciation and amortisation jumped 9% to £32.4m. The interim dividend increased by 29% to 2.90p a share.

SEGRO said it has exchanged contracts to sell the Heston & Airlinks Industrial Estate near Heathrow Airport to Capital Industrial Four BV for £79.5m.

Heston Industrial Estate is a multi-let industrial estate comprising 481,000 sq ft of warehouse space across 47 units. The estate has a vacancy rate of around 1 per cent and a weighted average lease length to break of 5.4 years.

The disposal price reflects a topped-up net initial yield of 5.1% and a small premium to the book value at 30 June 2016. Completion is expected by the end of September.

Restaurant Group swung to a pre-tax loss in the first half on the back of restructuring costs, while like-for-like sales fell but the company said trading remains in line with its full-year expectations.

Chairman Debbie Hewitt said: “This has been a challenging trading period for our Leisure brands, albeit with a good performance from our pubs and concessions businesses. The board has moved quickly to undertake a review of the operating strategy and we now have clarity on the issues facing our Leisure brands, particularly Frankie & Benny's.

Strong performances in France and Germany drove a 2.8% rise in Computacenter´s revenues at the half-year stage to £1.48bn.

However, management said business conditions in the UK were "challenging", with a reduction in services volumes driving a drop in that segment´s margins.

Mike Norris, Computacenter´s boss, commented: "The first half of 2016 finished slightly better than we had anticipated at the time of our Q1 Trading Update in April 2016, mainly due to the better performance of Computacenter in France."

In adjusted terms, profits before tax for the six-month stretch ending 30 June were off 13.1% to £25.3m and by 66.6% at the statutory level to reach £23.6m. Cash on the other hand shot higher by 115% to £96.6m.

Market Movers

FTSE 100 (UKX) 6,804.09 -0.19%
FTSE 250 (MCX) 17,831.13 -0.29%
techMARK (TASX) 3,456.82 -0.37%

FTSE 100 - Risers

Rio Tinto (RIO) 2,422.50p 1.40%
BAE Systems (BA.) 534.00p 1.04%
Fresnillo (FRES) 1,772.00p 0.91%
Glencore (GLEN) 180.60p 0.75%
Antofagasta (ANTO) 529.50p 0.47%
WPP (WPP) 1,810.00p 0.39%
BHP Billiton (BLT) 1,050.50p 0.33%
Johnson Matthey (JMAT) 3,304.00p 0.33%
Randgold Resources Ltd. (RRS) 7,645.00p 0.33%
Persimmon (PSN) 1,887.00p 0.32%

FTSE 100 - Fallers

Shire Plc (SHP) 4,829.00p -1.49%
CRH (CRH) 2,503.00p -1.46%
Intertek Group (ITRK) 3,535.00p -0.92%
Burberry Group (BRBY) 1,321.00p -0.90%
London Stock Exchange Group (LSE) 2,777.00p -0.86%
St James's Place (STJ) 954.50p -0.83%
Schroders (SDR) 2,723.00p -0.80%
Reckitt Benckiser Group (RB.) 7,392.00p -0.73%
Sainsbury (J) (SBRY) 240.70p -0.70%
TUI AG Reg Shs (DI) (TUI) 1,026.00p -0.68%

FTSE 250 - Risers

Amec Foster Wheeler (AMFW) 556.00p 3.54%
Restaurant Group (RTN) 420.20p 3.14%
Marshalls (MSLH) 323.70p 3.06%
OneSavings Bank (OSB) 297.80p 2.65%
Hochschild Mining (HOC) 276.40p 2.37%
Aldermore Group (ALD) 163.50p 2.12%
Ladbrokes (LAD) 160.10p 2.04%
NMC Health (NMC) 1,308.00p 1.40%
Millennium & Copthorne Hotels (MLC) 432.35p 1.25%
Centamin (DI) (CEY) 166.00p 1.16%

FTSE 250 - Fallers

Allied Minds (ALM) 367.80p -4.27%
Carillion (CLLN) 271.30p -3.69%
McCarthy & Stone (MCS) 192.80p -2.63%
Euromoney Institutional Investor (ERM) 1,034.00p -2.45%
Essentra (ESNT) 512.50p -2.38%
PayPoint (PAY) 972.00p -2.36%
Pagegroup (PAGE) 346.50p -2.23%
BBA Aviation (BBA) 246.20p -2.22%
Computacenter (CCC) 749.50p -2.15%
Hays (HAS) 127.70p -2.00%