London open: Stocks fall on US rate cut doubts

London stocks fell in early trade on Wednesday following a weaker close on Wall Street, amid growing doubts over US interest rate cuts following solid economic data.

At 0825 BST, the FTSE 100 was down 0.3% at 7,910.54 .

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The Taiwan earthquake has turned markets more skittish, with investors already unnerved by data pointing to inflation staying stubborn in the US.

"The Nikkei fell to its lowest level in two weeks, following a tsunami warning for Japan’s Okinawa island prefecture. It looks set to be hard going for the FTSE 100 to regain its recent mojo and head back towards breaching record levels. After cantering past the psychologically important 8,000 mark on Tuesday, the index lost ground and is set to struggle to find form as uncertainty grips investors. Setting a fresh all-time high remains frustratingly elusive, despite the uptick in crude prices, which are set to benefit energy giants.

"With American factories churning out more goods, it’s another piece of the picture pointing to a highly resilient US economy in the face of high borrowing costs. It’s led to fresh risk-off sentiment spreading, as worries brew about inflation staying doggedly above target and the Fed being potentially forced to hold off from cutting rates by as much as previously forecast this year."

All eyes will be on Fed chair Jerome Powell later in the day, as he is due to give a speech at Stanford.

Investors were also mulling the latest data out of China, which showed that activity in the services sector grew as expected in March.

The Caixin services PMI ticked up to 52.7 from 52.5 in February, in line with expectations. A reading above signals expansion, while a reading below indicates contraction.

Wang Zhe, senior economist at Caixin Insight Group, said: "Growth of supply and demand picked up pace. Improved market demand drove a continuous increase in supply.

"Business activity and total new orders both grew for the 15th straight month, while exports continued to grow amid a recovery of the global economy, pushing the corresponding measure to its highest level since June."

In equity markets, FTSE 250 engineer Renishaw slumped after Germany’s Siemens confirmed it was not planning to make an offer for the company.

On the upside, precious metals miners Fresnillo and Hochschild shone as gold prices reached another record high.

Meat, seafood and meat alternatives group Hilton Foods gained as it said profits rose by a fifth in 2023 despite modest top-line growth, helped by the turnaround in its seafood business.

Outside the FTSE 350, Topps Tiles lost ground as it cautioned that first-half profitability would be hit by a number of factors including a weaker market, and reported a fall in revenues.

Market Movers

FTSE 100 (UKX) 7,910.54 -0.31%
FTSE 250 (MCX) 19,686.40 -0.14%
techMARK (TASX) 4,455.52 -0.52%

FTSE 100 - Risers

Fresnillo (FRES) 511.00p 1.09%
Marks & Spencer Group (MKS) 264.80p 1.07%
Vodafone Group (VOD) 71.04p 1.05%
International Consolidated Airlines Group SA (CDI) (IAG) 175.35p 0.78%
Rightmove (RMV) 536.20p 0.71%
Shell (SHEL) 2,734.00p 0.63%
Burberry Group (BRBY) 1,178.50p 0.60%
CRH (CDI) (CRH) 6,692.00p 0.51%
Standard Chartered (STAN) 681.80p 0.47%
Auto Trader Group (AUTO) 695.60p 0.46%

FTSE 100 - Fallers

Entain (ENT) 746.20p -1.50%
BT Group (BT.A) 108.30p -1.32%
Prudential (PRU) 730.60p -1.27%
Spirax-Sarco Engineering (SPX) 9,750.00p -1.27%
Halma (HLMA) 2,328.00p -1.06%
AstraZeneca (AZN) 10,496.00p -1.02%
Rio Tinto (RIO) 5,068.00p -0.96%
RS Group (RS1) 704.00p -0.91%
London Stock Exchange Group (LSEG) 9,348.00p -0.81%
Compass Group (CPG) 2,235.00p -0.80%

FTSE 250 - Risers

Dr. Martens (DOCS) 94.80p 5.27%
Keller Group (KLR) 1,080.00p 4.25%
Chemring Group (CHG) 369.50p 2.92%
Hilton Food Group (HFG) 878.00p 2.81%
SDCL Energy Efficiency Income Trust (SEIT) 60.00p 1.69%
Watches of Switzerland Group (WOSG) 345.80p 1.47%
LondonMetric Property (LMP) 204.00p 1.39%
TP Icap Group (TCAP) 226.50p 1.34%
Hiscox Limited (DI) (HSX) 1,250.00p 1.30%
Lancashire Holdings Limited (LRE) 615.00p 1.15%

FTSE 250 - Fallers

Renishaw (RSW) 4,110.00p -5.52%
AJ Bell (AJB) 286.00p -4.98%
Bytes Technology Group (BYIT) 484.60p -3.00%
Currys (CURY) 59.95p -2.36%
TBC Bank Group (TBCG) 3,150.00p -2.33%
IntegraFin Holding (IHP) 265.00p -2.21%
Bridgepoint Group (Reg S) (BPT) 251.80p -2.18%
Hays (HAS) 92.00p -1.87%
Future (FUTR) 606.50p -1.86%
Aston Martin Lagonda Global Holdings (AML) 159.00p -1.73%