London open: Stocks fall ahead of UK GDP, Fed policy decision
London stocks fell on Wednesday ahead of UK economic growth data and the Federal Reserve’s announcement on interest rates.
The Office for National Statistics is forecast to reveal at 0930 BST that gross domestic product slowed in the first quarter to a 2.0% year-on-year increase from a previous 2.1% gain. The quarter-on-quarter growth is expected to ease to 0.4% from 0.6%.
In the US, the Fed is widely expected to keep interest rates unchanged amid a slowdown in global economic growth.
Many analysts are pricing in no chance of a rate hike over the next few meetings, and less than one full hike by the end of the year amid worries about the slowdown in the global economy.
“Back in October, the market was pricing in a probability of three hikes in 2016, and now we are pricing in just one hike by end-2017,” said Society Generale.
Bank of America Merrill Lynch expects the Fed will raise interest rates this summer, potentially in June if the global market selloff ahead of the Brexit vote is limited. Otherwise, it sees an increase in July. The bank said global economic and financial conditions “have generally stabilised if not improved, and we expect further progress toward the Fed’s dual mandate objectives over the coming months”.
On the corporate front, shares in Barclays advanced on news that it has agreed to hold exclusive negotiations to dispose of its French retail banking and wealth businesses, according to European private equity group AnaCap Financial Partners.
Antofagasta climbed after saying first quarter copper production rose 7.3% year-on-year to 157,100 tonnes, adding that movements in the copper price over the period suggesting the market was beginning to stabilise.
Croda declined despite reporting a rise in first-quarter sales and reaffirming its outlook for the full year amid continued growth in the group’s core businesses.
Standard Chartered reversed the previous day’s rally after it reported a 59% drop in first quarter profit amid depressed commodity prices, volatility in Chinese markets and weak emerging market sentiment.
Meanwhile, oil prices rose with Brent crude up 1.78% to $46.57 per barrel and West Texas Intermediate up 1.5% to $44.75 per barrel.
Market Movers
FTSE 100 (UKX) 6,267.80 -0.27%
FTSE 250 (MCX) 16,948.81 0.02%
techMARK (TASX) 3,080.15 -0.10%
FTSE 100 - Risers
Barclays (BARC) 178.80p 2.79%
Worldpay Group (WI) (WPG) 264.10p 2.25%
Informa (INF) 670.50p 1.59%
easyJet (EZJ) 1,483.00p 1.51%
ITV (ITV) 235.60p 1.20%
TUI AG Reg Shs (DI) (TUI) 1,015.00p 0.89%
Randgold Resources Ltd. (RRS) 6,355.00p 0.87%
Whitbread (WTB) 4,000.00p 0.78%
BT Group (BT.A) 432.45p 0.78%
ARM Holdings (ARM) 934.50p 0.75%
FTSE 100 - Fallers
Standard Chartered (STAN) 554.30p -2.99%
Tesco (TSCO) 179.15p -2.34%
BHP Billiton (BLT) 911.20p -1.68%
Rio Tinto (RIO) 2,186.00p -1.55%
Sainsbury (J) (SBRY) 284.40p -1.35%
Standard Life (SL.) 329.00p -1.23%
Lloyds Banking Group (LLOY) 69.16p -1.20%
Provident Financial (PFG) 2,918.00p -1.15%
HSBC Holdings (HSBA) 464.15p -1.12%
Berkeley Group Holdings (The) (BKG) 3,041.00p -1.07%
FTSE 250 - Risers
Centamin (DI) (CEY) 104.40p 3.26%
Amec Foster Wheeler (AMFW) 500.50p 3.09%
Grafton Group Units (GFTU) 714.50p 2.66%
Entertainment One Limited (ETO) 199.60p 2.46%
Balfour Beatty (BBY) 242.00p 2.37%
Paysafe Group (PAYS) 378.70p 2.35%
Tullow Oil (TLW) 248.30p 2.27%
OneSavings Bank (OSB) 292.50p 2.20%
Aldermore Group (ALD) 189.00p 2.16%
Pendragon (PDG) 35.00p 2.01%
FTSE 250 - Fallers
McCarthy & Stone (MCS) 236.20p -5.71%
Stagecoach Group (SGC) 259.90p -3.02%
Polar Capital Technology Trust (PCT) 569.50p -2.98%
CLS Holdings (CLI) 1,646.00p -2.89%
Weir Group (WEIR) 1,129.00p -2.42%
Millennium & Copthorne Hotels (MLC) 458.00p -2.39%
Elementis (ELM) 225.00p -2.39%
Workspace Group (WKP) 829.50p -2.07%
Michael Page International (MPI) 404.20p -1.65%
Essentra (ESNT) 824.50p -1.55%