London open: Stocks edge lower amid earnings spree; construction data eyed

London stocks edged lower in early trade amid a raft of corporate news, with Brexit and the French election firmly in focus as investors looked to the latest policy announcement from the Federal Reserve.

At 0830 BST, the FTSE 100 was down 0.2% to 7,235.13, while the pound was off 0.2% versus the dollar at 1.2914.

Brexit was very much on investors' minds following news that the UK's divorce bill could be as much as €100bn.

Although the net bill would be lower than €100bn once the UK's rebate is taken into consideration, the gross amount will be much more than the €60bn originally proposed by European Commission president Jean-Claude Juncker back in February, according to the Financial Times.

Meanwhile, the French election was also in focus as presidential front-runner Emmanuel Macron will go head to head with Marine Le Pen later in a televised debate before Sunday's runoff vote.

The highlight on the UK macroeconomic front will be the release of construction PMI at 0930 BST.

Spreadex analyst Connor Campbell said: "Current estimates have the reading hitting an eight-month nadir of 52.1, a slight decline from the 52.2 revealed last month. However, after yesterday’s UK manufacturing PMI left analysts looking a bit silly, avoiding the predicted five-month low to instead hit a three (and a bit) year high, investors will be hoping for a similar disconnect between expectation and reality this time around."

After the UK close, at 1900 BST, attention will turn to the Fed's latest policy announcement. Although no change to interest rates is expected, investors are likely to eye the accompanying statement for any clues on the outlook for further rate hikes.

In corporate news, supermarket chain Sainsbury’s was on the back foot after it said full-year profit dropped 8.2%, while broadcaster ITV was in the red as chief executive Adam Crozier stepped down from his role after seven years, with no direct replacement appointed yet.

Paddy Power Betfair slipped back despite posting an 87% rise in first-quarter earnings as revenues were boosted by the weaker pound and favourable results at Cheltenham, and Galliford Try slumped as it took a £98m hit for legacy contract costs.

Halfords Group retreated as it lost another chief executive to a larger retailer, with Jill McDonald poached by Marks & Spencer to be managing director of its non-food business.

Gold miner Centamin lost its shine as it said first-quarter pre-tax profit fell 28%.

Burberry was lower after RBC Capital Markets cut the stock to 'underperform', while Aggreko and Spirax Sarco were hit by downgrades at Morgan Stanley and UBS, respectively.

On the upside, Direct Line pushed higher as it said business continued to motor ahead during the first quarter of the year, driven by strong demand for its own brand motor insurance, with the company reiterating its guidance for key metrics in fiscal year 2017.

Imperial Brands nudged up as it rolled another fat dividend for the first half of the year as earnings came out ahead of expectations despite continued tobacco volumes declines and a major increase in investment.

Software company Sage Group was on the front foot as it reported a rise in first-half profit as subscriptions grew and it said it expects to exceed its full-year revenue guidance.

Outsourcer Mitie was higher despite announcing job cuts and £50m in writedowns, while pub operator JD Wetherspoon was trading higher as it said third-quarter like-for-like sales rose 4%, up from 3.8% growth the same time a year ago.

InterContinental Hotels was lifted by an initiation at 'outperform' by Bernstein.

Market Movers

FTSE 100 (UKX) 7,235.13 -0.21%
FTSE 250 (MCX) 19,732.20 -0.37%
techMARK (TASX) 3,526.58 0.06%

FTSE 100 - Risers

InterContinental Hotels Group (IHG) 4,214.00p 2.46%
Pearson (PSON) 655.50p 1.55%
Micro Focus International (MCRO) 2,649.00p 1.42%
Shire Plc (SHP) 4,710.50p 1.28%
Sage Group (SGE) 692.00p 1.24%
Johnson Matthey (JMAT) 3,041.00p 1.10%
Direct Line Insurance Group (DLG) 357.60p 0.53%
Tesco (TSCO) 183.95p 0.52%
Kingfisher (KGF) 341.70p 0.32%
TUI AG Reg Shs (DI) (TUI) 1,129.00p 0.27%

FTSE 100 - Fallers

Ashtead Group (AHT) 1,567.00p -2.18%
ITV (ITV) 206.90p -2.17%
Sainsbury (J) (SBRY) 274.30p -1.86%
Anglo American (AAL) 1,065.00p -1.30%
BHP Billiton (BLT) 1,155.00p -1.24%
Antofagasta (ANTO) 798.50p -1.24%
Old Mutual (OML) 192.90p -0.92%
Fresnillo (FRES) 1,398.00p -0.92%
Rio Tinto (RIO) 3,019.00p -0.89%
Burberry Group (BRBY) 1,581.00p -0.88%

FTSE 250 - Risers

Wetherspoon (J.D.) (JDW) 1,029.00p 1.88%
Hochschild Mining (HOC) 244.80p 1.24%
Countryside Properties (CSP) 277.40p 0.95%
NewRiver REIT (NRR) 352.50p 0.86%
Computacenter (CCC) 826.50p 0.79%
Just Eat (JE.) 575.00p 0.79%
Greggs (GRG) 1,074.00p 0.66%
Virgin Money Holdings (UK) (VM.) 309.40p 0.52%
Telecom Plus (TEP) 1,227.00p 0.49%
JPMorgan Indian Investment Trust (JII) 716.50p 0.49%

FTSE 250 - Fallers

Galliford Try (GFRD) 1,360.00p -6.98%
Aggreko (AGK) 841.00p -4.05%
Halfords Group (HFD) 361.30p -3.60%
Centamin (DI) (CEY) 167.80p -3.29%
Nostrum Oil & Gas (NOG) 457.30p -2.08%
Pagegroup (PAGE) 493.70p -1.85%
Allied Minds (ALM) 152.90p -1.74%
Rank Group (RNK) 209.90p -1.69%
Thomas Cook Group (TCG) 93.50p -1.37%
Sophos Group (SOPH) 339.00p -1.37%