London open: Stocks fall as investors eye Truss speech, OPEC meeting

London stocks fell in early trade on Wednesday following strong gains in the previous session, as investors eyed prime minister Liz Truss’s keynote speech at the Tory conference and an OPEC+ meeting on supply.

At 0830 BST, the FTSE 100 was down 0.5% at 7,053.89, while sterling was 0.4% weaker versus the dollar at 1.1427.

Oanda market analyst Craig Erlam said: "Stock markets are paring gains after a phenomenal rebound on Monday and Tuesday as two weeks of losses were wiped out in just two sessions.

"It's been a very impressive relief rally, albeit one aided by a rose-tinted interpretation of certain economic indicators and a terrible plunge in the weeks before. This isn't the time to get carried away but it is understandable that we're seeing some relief. It all hangs on whether the data is the start of a weakening trend or just a blip, as with the July inflation drop."

Investors were also eyeing an OPEC+ meeting on supply following speculation of a large output cut in response to a dimming economic outlook and lower prices.

Erlam said: "Last month's warning shot of 100,000 barrels per day fell on deaf ears and the alliance may now be prepared to cut by 10 times that, even 20 if some sources are to be believed.

"Adding to the uncertainty is the prospect of a group cut backed up by additional unilateral reductions, which could significantly reduce supply and push prices back towards triple figures. With consumers only just breathing a sigh of relief after being forced to pay record prices at the pump, today's cut is not going to go down well."

On home shores, Truss was due to make her keynote speech at the Tory conference in Birmingham between around 10am and midday. She is expected to tell party members that there will be disruption but that her economic plan will "build a better future".

In equity markets, retailer Tesco edged up despite saying it expects current year profits to be at the lower end of guidance as “significant uncertainties” persisted during the cost-of-living crisis.

The company said it expects full-year retail adjusted operating profit of between £2.4bn and £2.5bn as it said profits fell 65% to £413m in the six months to August 27.

Ascential was knocked lower by a downgrade to ‘hold’ at Deutsche Bank.

Market Movers

FTSE 100 (UKX) 7,053.89 -0.46%
FTSE 250 (MCX) 17,765.98 -0.32%
techMARK (TASX) 4,193.01 -0.52%

FTSE 100 - Risers

Rentokil Initial (RTO) 506.80p 2.43%
BAE Systems (BA.) 826.40p 1.45%
Tesco (TSCO) 212.30p 1.10%
London Stock Exchange Group (LSEG) 7,802.00p 1.09%
Halma (HLMA) 2,187.00p 1.06%
Ocado Group (OCDO) 511.80p 0.95%
Experian (EXPN) 2,776.00p 0.84%
Spirax-Sarco Engineering (SPX) 10,920.00p 0.83%
Rolls-Royce Holdings (RR.) 74.87p 0.54%
Admiral Group (ADM) 2,022.00p 0.50%

FTSE 100 - Fallers

Airtel Africa (AAF) 134.30p -2.82%
Smith & Nephew (SN.) 1,030.00p -2.23%
Coca-Cola HBC AG (CDI) (CCH) 1,889.50p -1.90%
Smurfit Kappa Group (CDI) (SKG) 2,652.00p -1.78%
Endeavour Mining (EDV) 1,586.00p -1.55%
AstraZeneca (AZN) 9,806.00p -1.53%
SEGRO (SGRO) 742.60p -1.51%
Entain (ENT) 1,140.50p -1.47%
Mondi (MNDI) 1,396.50p -1.45%
JD Sports Fashion (JD.) 106.40p -1.44%

FTSE 250 - Risers

IP Group (IPO) 67.40p 8.36%
Polymetal International (POLY) 203.00p 2.27%
Aston Martin Lagonda Global Holdings (AML) 109.85p 2.14%
Hill & Smith Holdings (HILS) 990.00p 1.96%
Hochschild Mining (HOC) 61.95p 1.64%
Hipgnosis Songs Fund Limited NPV (SONG) 94.00p 1.51%
Chemring Group (CHG) 298.00p 1.36%
Sirius Real Estate Ltd. (SRE) 70.70p 1.29%
Countryside Partnerships (CSP) 212.40p 1.14%
NextEnergy Solar Fund Limited Red (NESF) 114.50p 0.97%

FTSE 250 - Fallers

HarbourVest Global Private Equity Limited A Shs (HVPE) 2,130.00p -3.18%
Elementis (ELM) 96.35p -2.58%
Ascential (ASCL) 199.80p -2.54%
PureTech Health (PRTC) 240.00p -2.24%
Urban Logistics Reit (SHED) 134.00p -2.19%
Edinburgh Worldwide Inv Trust (EWI) 171.80p -2.16%
Merchants Trust (MRCH) 515.00p -2.09%
Trainline (TRN) 324.80p -2.08%
Jupiter Fund Management (JUP) 96.00p -2.04%
JPMorgan Global Growth & Income (JGGI) 408.00p -2.04%