London open: Stocks edge higher as pound drifts lower

Stocks in London started lower but quickly moved back into the black following gains in the previous session.

As of 0819 BST the FTSE 100 was up by 18.81 points or 0.26% to 7,115.87.

On a light day for economic data, all eyes were on central bank speakers and the gyrations of the pound on foreign exchange markets.

Speaking overnight, the president of the US Federal Reserve bank of Chicago, Charles Evans, said progress on meeting the central bank's inflation target had been "unsatisfactory".

The newest member of the Monetary Policy Committee, Michael Saunders, was due to testify before the Treasury Select Committee later in the day.

As regards the pound, after appearing to find some stability on Monday following the flash crash on Friday, on Tuesday it continued to drift lower, down by close to half a percent so far and approaching 1.23 against the dollar.

Oanda’s Craig Erlam said: “While we may see it find support soon, there appears to be little faith in sterling right now due to the huge uncertainties around Brexit and therefore further turbulence likely lies ahead for the pound.”

One nugget of data emerged from the British Retail Consortium, which showed like-for-like retail sales grew by 0.4% month-on-month in September, after a fall of 0.9% in August (consensus: -0.3%).

Nonetheless, economists at Pantheon Macroeconomics said: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars. Indeed, sterling’s further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."

Clothing retailers put in strong performance

In corporate news, profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter.

The interim dividend was held flat as the company revealed the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".

Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.

In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.

Residential property investment and management company Grainger provided an update on trading for the year to 30 September on Tuesday, reporting “good rental growth” and “strong sales performance” as a result of cost reductions.

The FTSE 250 firm said it expects recurring profit for the year to be above £50m, at the higher end of management expectations, as well as high single digit year-on-year growth in NNNAV for the full year.

Retirement housebuilder McCarthy & Stone said trading had improved in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years.

In a trading update for the first five weeks of the new financial year, the company said trading was ahead of the previous year as reservations have been stronger and the cancellation rate has returned to normal levels.

Market Movers

FTSE 100 (UKX) 7,111.93 0.20%
FTSE 250 (MCX) 18,020.63 0.23%
techMARK (TASX) 3,584.07 0.20%

FTSE 100 - Risers

Whitbread (WTB) 3,884.00p 3.08%
Burberry Group (BRBY) 1,521.00p 2.84%
Next (NXT) 4,636.00p 2.25%
Travis Perkins (TPK) 1,455.00p 1.82%
Rio Tinto (RIO) 2,779.00p 1.70%
Merlin Entertainments (MERL) 446.50p 1.00%
Antofagasta (ANTO) 564.50p 0.98%
Taylor Wimpey (TW.) 145.20p 0.97%
Anglo American (AAL) 1,052.00p 0.91%
Barratt Developments (BDEV) 474.90p 0.87%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 618.50p -1.01%
Informa (INF) 668.00p -0.74%
easyJet (EZJ) 869.00p -0.74%
Mediclinic International (MDC) 913.00p -0.54%
Sainsbury (J) (SBRY) 232.70p -0.47%
Tesco (TSCO) 202.15p -0.47%
Standard Life (SL.) 349.80p -0.46%
International Consolidated Airlines Group SA (CDI) (IAG) 361.20p -0.41%
Shire Plc (SHP) 5,303.00p -0.38%
Mondi (MNDI) 1,686.00p -0.35%

FTSE 250 - Risers

Brown (N.) Group (BWNG) 194.00p 10.29%
McCarthy & Stone (MCS) 175.00p 7.36%
Victrex plc (VCT) 1,727.00p 6.47%
Ted Baker (TED) 2,550.00p 5.59%
Euromoney Institutional Investor (ERM) 1,026.00p 4.16%
Pagegroup (PAGE) 361.90p 3.76%
Jupiter Fund Management (JUP) 450.40p 2.71%
Tullow Oil (TLW) 286.50p 2.18%
Inmarsat (ISAT) 724.50p 2.04%
Thomas Cook Group (TCG) 67.60p 1.81%

FTSE 250 - Fallers

Allied Minds (ALM) 344.60p -1.66%
Worldwide Healthcare Trust (WWH) 2,150.00p -1.38%
Crest Nicholson Holdings (CRST) 413.80p -1.36%
OneSavings Bank (OSB) 266.50p -1.30%
Hochschild Mining (HOC) 263.80p -1.27%
CYBG (CYBG) 260.70p -1.25%
Shawbrook Group (SHAW) 238.60p -1.12%
St. Modwen Properties (SMP) 260.70p -0.99%
Big Yellow Group (BYG) 711.00p -0.97%
Spectris (SXS) 2,155.00p -0.97%