London open: Stocks drift lower on disappointing earnings, softer China data

London equities began the morning slightly lower, weighed down by the latest updates out of Reckitt Benckiser and Travis Perkins, and slightly weaker than expected industrial numbers out of China.

Acting as a backdrop, some traders might were looking ahead to Wednesday night's last televised debate between the two main US presidential candidates.

Chinese industrial production undershot economists' forecasts slightly, rising by 6.1% year-on-year (consensus: 6.4%). Those numbers came alongside other figures showing that gross domestic product grew at a 6.7% year-on-year clip in the third quarter, the same as over the previous two quarters.

At the pan-European level, banks were outperforming early on.

As of 0829 BST the FTSE 100 was lower by 11.32 points or 0.17% at 6,988.34.

Commenting on the Chinese data, Julian Evans-Pritchard, China economist at Capital Economics, said: "The upshot from today’s data is that economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner. Nonetheless, the recent recovery is ultimately on borrowed time given that it has been driven in large part by faster credit growth and a property market boom, both of which policymakers are now working to rein in.

"As the boost from policy stimulus begins to wear off, probably at some point early next year, continued structural drags mean the economy is set to begin slowing again," he said.

In other Chinese data, figures showed retail sales in China were up 10.7%, while urban investment grew 8.2%.

The GDP price deflator rose to a two-year high of 1.1%.

Meanwhile, ahead of the US election debate, strategists at Citi said: "prediction markets suggest 83% probability of Clinton win, though we continue to flag the extraordinary number of black swans in this race, including the potential that doubts cast on the electoral process result undermine the outcome. The boost for Hillary will translate into Democrats gaining Congressional seats, but the chances of a Democratic sweep remain slim in our view."

On the macroeconomic front, UK average earnings, the unemployment rate and claimant count are due at 0930 BST. In the US, housing starts are at 1330 BST and the Fed Beige book at 1900 BST.

A raft of Federal Reserve officials were also scheduled to speak later in the day.

To take note of as well, shares of US chip maker Intel fell 5% following its latest quarterly results published overnight, after the close of trading in New York.

In corporate news, health, hygiene and home products manufacturer Reckitt Benckiser grew in the third quarter but was affected by its ongoing legal issues in South Korea, low demand in Russia and weakness in the Scholl business.

In a trading statement, the company reported 2% like-for-like growth in the third quarter which was impacted by expected headwinds, with total growth increasing 17% due positive foreign exchange rates.

One of the first companies in the construction sector to provide an update on the third quarter, Travis Perkins reported market conditions have worsened and in light of the uncertainty it has decided to close more than 30 branches and launch a cost-cutting programme.

The FTSE 100 group said that its consumer, contracts and general merchanting businesses had outperformed the market, however, with total sales growing 3.4% in the three-months to the end of September and like-for-like growth of 2.0%.

BHP Billiton posted its operational review for the three months to 30 September on Wednesday, with all of its production and unit cost guidance remaining unchanged for the 2017 financial year - though guidance for the Olympic Dam was under review after a state-wide power outage in South Australia.

The firm reported a 15% drop year-on-year for petroleum production in the quarter, to 55 Mboe, with copper down 6% to 355 kt and iron ore flat at 58 Mt.

Market Movers

FTSE 100 (UKX) 6,990.47 -0.14%
FTSE 250 (MCX) 17,938.81 -0.31%
techMARK (TASX) 3,528.53 -0.24%

FTSE 100 - Risers

Persimmon (PSN) 1,756.00p 2.03%
Burberry Group (BRBY) 1,423.00p 1.43%
Polymetal International (POLY) 891.00p 1.31%
Capita (CPI) 609.50p 1.08%
Anglo American (AAL) 1,040.50p 1.07%
Taylor Wimpey (TW.) 148.20p 1.02%
Glencore (GLEN) 239.60p 0.97%
WPP (WPP) 1,819.00p 0.94%
Randgold Resources Ltd. (RRS) 7,025.00p 0.93%
Barratt Developments (BDEV) 488.20p 0.91%

FTSE 100 - Fallers

Travis Perkins (TPK) 1,405.00p -5.58%
Reckitt Benckiser Group (RB.) 7,138.00p -2.58%
Wolseley (WOS) 4,440.00p -1.81%
easyJet (EZJ) 904.50p -1.47%
St James's Place (STJ) 921.00p -1.23%
Centrica (CNA) 213.30p -0.97%
Hargreaves Lansdown (HL.) 1,149.00p -0.95%
International Consolidated Airlines Group SA (CDI) (IAG) 383.10p -0.93%
BT Group (BT.A) 381.25p -0.88%
Tesco (TSCO) 206.50p -0.86%

FTSE 250 - Risers

Bellway (BWY) 2,493.00p 4.48%
Cineworld Group (CINE) 575.00p 3.42%
CMC Markets (CMCX) 206.10p 3.05%
Shawbrook Group (SHAW) 236.90p 2.91%
Computacenter (CCC) 725.00p 2.76%
Rentokil Initial (RTO) 231.00p 2.48%
Hays (HAS) 142.30p 2.15%
Zoopla Property Group (WI) (ZPLA) 329.60p 1.92%
Riverstone Energy Limited (RSE) 1,182.00p 1.90%
Crest Nicholson Holdings (CRST) 415.00p 1.74%

FTSE 250 - Fallers

Laird (LRD) 168.80p -45.28%
SIG (SHI) 113.70p -2.74%
Grafton Group Units (GFTU) 509.50p -2.58%
CLS Holdings (CLI) 1,520.00p -2.00%
Mitie Group (MTO) 197.00p -1.99%
Ocado Group (OCDO) 262.20p -1.98%
Drax Group (DRX) 320.30p -1.90%
Brown (N.) Group (BWNG) 190.60p -1.75%
Aggreko (AGK) 941.00p -1.72%
Paragon Group Of Companies (PAG) 320.50p -1.60%