London open: Stocks fall after US losses; B&M bucks trend

London stocks fell in early trade on Wednesday, taking their cue from a weak session on Wall Street following the release of disappointing US data.

At 0905 BST, the 100 was down 0.4% at 7,293.15.

Richard Hunter, head of markets at Interactive Investor, said: "Attempts at sustaining recent rallies were short-lived, with investors unable to avoid the pervasive fear of a global slowdown.

"After a strong opening the major indices were unable to hold on to the gains, with a disappointing [US] consumer confidence reading taking the wind out of investors’ sails. The reading of 98.7 was below estimates of 100 and down from 103.2 in May, with the immediate outlook for the next six months also dipping. At the same time, inflation expectations remain elevated for the next year.

"With the consumer being central to US economic growth, the recent raft of pessimistic readings has led to some concerns that sentiment could become self-fulfilling as consumers hunker down in the face of higher prices, especially fuel and food. The Federal Reserve will of course be aware of the deteriorating sentiment, but for the moment is showing no signs of abandoning its primary objective of battling inflation head-on.

"The debilitating effect of the consumer confidence reading resumed the main markets’ decline and, in the year to date, the Dow Jones remains down by 15% and the S&P 500 by 20%. The Nasdaq is on course for its worst quarterly performance since 2008 and is currently down by 28%."

In equity markets, greeting cards and gifts retailer Moonpig was weaker after it posted a drop in full -year adjusted pre-tax profit and revenue.

Cruise operator Carnival tumbled after Morgan Stanley slashed its price target on the shares and reiterated its ‘underweight’ rating.

British Land and Land Securities both slid after rating downgrades at Bank of America Merrill Lynch.

Drinks maker Diageo was knocked lower by a downgrade to ‘sell’ from ‘hold’ at Deutsche Bank, while Anglo American was off after a downgrade to ‘hold’ from ‘buy’ by the same outfit.

On the upside, Severn Trent and United Utilities were higher, recovering some ground after being hit on Tuesday by a research note from JPMorgan.

Variety goods retailer B&M European Value Retail was also in the black even as it said that UK first-quarter like-for-like revenue fell 9.1% as "exceptionally high sales" last year during Covid lockdowns distorted comparatives.