London open: Stocks edge higher as investors eye inflation data, Fed

London stocks edged higher in early trade on Wednesday, taking their cue from a positive session on Wall Street as investors eyed key UK inflation and the latest policy announcement from the Federal Reserve.

At 0850 GMT, the FTSE 100 was up 0.3% at 6,722.26, while the pound was up 0.2% against the dollar at 1.2663 and down 0.2% versus the euro at 1.1106.

All eyes in the UK will be on inflation data coming later in the morning, Brexit developments in Westminster throughout the day but most of all on the Federal Reserve, which is due to give its monetary policy announcement after the London close. The market is pricing in a 72.3% probability of an interest rate hike.

"However, the real concern for the market is what comes next," said analyst Jasper Lawler at London Capital Group. "With growing fears over the health of the global economy, the markets simply don’t think the US economy can handle higher rates.

"Traders will be watching for dovish signs, such as the dropping of the phrase 'further gradual rate rises' from the statement and a softening of the dot plot from three hikes to at most two. In short, if the Fed must hike today, and they will struggle to justify not hiking on current US economic strength; then it will need to be a dovish hike to prevent the US equity markets dumping once more. The dollar has traded lower across the week in anticipation of a dovish hike."

Back in the UK, the Office for National Statistics will publish November inflation numbers at 0930 GMT, where economists are expecting the headline figure to dip to 2.3% from 2.4%. The core CPI reading is tipped to decline to 1.8% from 1.9%.

In company news, GlaxoSmithKline was sitting pretty at the top of the FTSE 100 after agreeing a deal with Pfizer to combine their consumer health businesses into a joint venture generating £10bn of annual sales, before spinning it off as a separately listed company within three years.

GSK, which will have controlling stake of 68%, said the combination of the two businesses is expected to generate annual cost savings of £0.5bn by 2022 at a cash cost of £0.9bn and non-cash costs of £0.3bn.

Sports betting and gaming group GVC Holdings followed close behind as the government’s £2 limit on fixed-odds betting terminals kicked in, meaning it avoids a £676m payment over its takeover of Ladbrokes Coral.

Online gambling firm 888 Holdings rallied after saying it expects full-year adjusted EBITDA to be in line with expectations as the second half delivered further progress against the group's strategic objectives. 888 said it had continued its momentum in Sport, Casino and across regulated European markets.

James Fisher & Sons edged up as it won a £30m contract with Daewoo Shipbuilding & Marine Engineering to design, build and deliver a deep search and rescue vehicle for the Korean navy, together with training and in-service support. The vehicle will be delivered in 2021.

Elsewhere, energy-related shares got some respite following heavy falls on Tuesday, as oil prices steadied, having tanked the day before on reports that Russia was planning to increase output.

Market Movers

FTSE 100 (UKX) 6,722.26 0.31%
FTSE 250 (MCX) 17,480.56 -0.08%
techMARK (TASX) 3,317.09 0.50%

FTSE 100 - Risers

GlaxoSmithKline (GSK) 1,530.00p 5.65%
GVC Holdings (GVC) 711.41p 2.29%
Evraz (EVR) 470.60p 1.86%
National Grid (NG.) 770.70p 1.58%
Barratt Developments (BDEV) 445.10p 1.37%
Shire Plc (SHP) 4,424.50p 1.22%
Persimmon (PSN) 1,891.50p 1.20%
easyJet (EZJ) 1,090.00p 1.11%
TUI AG Reg Shs (DI) (TUI) 1,157.50p 1.09%
Tesco (TSCO) 196.15p 1.00%

FTSE 100 - Fallers

Royal Mail (RMG) 278.30p -2.96%
Randgold Resources Ltd. (RRS) 6,730.00p -2.27%
Smurfit Kappa Group (SKG) 1,996.00p -1.77%
Just Eat (JE.) 572.00p -1.04%
Paddy Power Betfair (PPB) 6,360.00p -0.93%
Experian (EXPN) 1,842.50p -0.89%
Johnson Matthey (JMAT) 2,727.00p -0.87%
Imperial Brands (IMB) 2,297.00p -0.73%
Smith & Nephew (SN.) 1,425.50p -0.66%
AstraZeneca (AZN) 5,948.00p -0.62%

FTSE 250 - Risers

Contour Global (GLO) 186.70p 3.78%
888 Holdings (888) 176.40p 3.76%
CLS Holdings (CLI) 217.50p 2.84%
CYBG (CYBG) 190.80p 2.75%
Daejan Holdings (DJAN) 5,740.00p 1.77%
Elementis (ELM) 173.10p 1.70%
Ferrexpo (FXPO) 188.75p 1.53%
Dechra Pharmaceuticals (DPH) 2,146.00p 1.42%
Computacenter (CCC) 977.00p 1.35%
AA (AA.) 82.51p 1.19%

FTSE 250 - Fallers

Millennium & Copthorne Hotels (MLC) 462.50p -2.84%
IntegraFin Holding (IHP) 266.75p -2.75%
Avast (AVST) 259.75p -2.48%
Intu Properties (INTU) 116.95p -2.38%
Weir Group (WEIR) 1,303.00p -2.32%
Vivo Energy (VVO) 120.50p -1.47%
Superdry (SDRY) 443.40p -1.47%
Kier Group (KIE) 408.60p -1.40%
Cairn Energy (CNE) 147.90p -1.33%
BCA Marketplace (BCA) 199.80p -1.33%